Former Federal Reserve Chairman Ben Bernanke was interviewed on CNBC this morning. Bernanke was Fed Chairman during the Financial Crisis of 2007-2009 and is an expert on the Great Depression.
Q4 2019 hedge fund letters, conferences and more
(1) Former Federal Reserve Chairman Ben Bernanke expressed optimism about the longer-term picture for the U.S. economy.
At this year's SALT New York conference, Jean Hynes, the CEO of Wellington Management, took to the stage to discuss the role of active management in today's investment environment. Hynes succeeded Brendan Swords as the CEO of Wellington at the end of June after nearly 30 years at the firm. Wellington is one of the Read More
(2) He sees a ‘very sharp’ recession, followed by a ‘fairly quick’ rebound (Sharp short recession in next quarter or two.) (Sharp recovery in 4th quarter 2020 and 1st quarter 2021)
(3) Interest rates declining for the past 40 years and likely to stay low as a result of a global gut in saving.
(4) Whether or not economy will snap back depends on the course of the virus, and whether we can keep the economy healthy or at least functioning throughout this shutdown period
(5) This is a very different animal from the Great Depression … this has some of the same feel, some of the feel of panic, some of the feel of volatility. But it’s much closer to a major snowstorm or a natural disaster than to a classic 1930s style depression
(6) “We don’t want to put people back to work when the public health situation is still in bad shape,”. “It is important before we put everybody back to work that we feel like we have the public health situation under control.
(7) This is not similar to the Great Depression of the 1930’s which lasted 12 years. The financial system is strong.
(8) There will be a “very sharp” recession in the next quarter or two, former Fed Chair Ben Bernanke says. “You’re going to see some really scary numbers.”
(9) “Low interest rates are something we’re going to have to live with for a while.
(10) “The infection–so to speak– is going in the other direction from the economy to the financial system (as compared to the Financial Crisis of 2007-2009). “The good news is we came into this with a much stronger banking system.”