All Blog Posts from Public Eye

How are his glasses tilted? How thick is his briefcase?

These are among the quirkier indicators that Wall Street and those who reported on it used to determine what the ever-cryptic former chairman of the Federal Reserve, Alan Greenspan, might say about the markets. And his successor, Ben Bernanke, learned pretty early on in his tenure the danger of saying too much. Back in May, CNBC’s Maria Bartiromo reported on the network that she had spoken with Bernanke at the White House Correspondents Dinner, and he had told her that the markets had misinterpreted his testimony to Congress that indicated the Fed was done raising interest rates. And, predictably, no sooner had the words escaped her lips on TV, the market freaked. Bernanke later told a Senate committee that his comments were a “lapse in judgment.”

But, as The Wall Street Journal reports today, that doesn’t mean that Bernanke is going to start getting cryptic. Actually, he'd like to make the Fed a bit more user-friendly. Writes the Journal: “The new chairman is trying to depersonalize the Fed by making its decision-making more democratic and easier to understand,” adding that “His plan is for the Fed to be more clear about its goals and expectations for inflation and economic growth so the markets don't react so much to his every utterance.”

Of course, that doesn’t mean more media appearances.

“In Mr. Bernanke's view, making the Fed more ‘transparent’ doesn't mean talking more, but providing more systematic, specific information, in particular about the Fed's goals -- such as for the inflation rate -- and forecasts.”

Read full post…

BartinankeGate has likely come to an end where many of the ‘Gates of our time often do – during a Senate hearing. In case you don’t recall (and also because I’m pretty sure I just coined the term BartinankeGate) I’m referring to CNBC anchor Maria Bartiromo’s scoop from Fed Chairman Ben Bernanke during the White House Correspondents’ Dinner last month. Following Bernanke’s testimony to Congress in April that the Fed might leave interest rates unchanged at an upcoming meeting, Bartiromo asked Bernanke at the WHCA dinner the following Saturday “whether the media and financial markets were right to think that he had signaled the Fed was done raising interest rates. ‘He said, flatly, no,’ she reported on her program at about 3:15 p.m. the following Monday, triggering a sharp drop in stock prices just before the market closed,” according to The Washington Post.

After a whole lot of hoopla about that – Did he consider the conversation off-the-record? Did he do it on purpose because he knew she would report it? – Bernanke finally commented on the situation, telling a Senate committee yesterday that he made a "lapse in judgment" by discussing the matter with Bartiromo. The Post reports that Bernanke “acknowledged yesterday that the exchange was a mistake after Sen. Jim Bunning (R-Ky.) reminded the Fed chairman: ‘I warned you to be careful about what you say because people are going to follow your words very closely.’" Bernanke told the committee: "In the future, my communications with the public and with the markets will be entirely through regular and formal channels.”

Ah, well. Nobody’s perfect. Even Alan Greenspan, as The Los Angeles Times notes today:

“Bernanke isn't the first freshly minted Fed chairman to give a television interview — and then admit to a faux pas.

Alan Greenspan appeared on ABC's "This Week With David Brinkley" program shortly after taking the central bank helm in August 1987. Stocks fell after Greenspan suggested on the program that inflation could become a problem if consumers and businesses thought it was inevitable.

Greenspan never granted another television interview on the economy during his 19-year term that ended in January — not even to his wife, NBC News reporter Andrea Mitchell.”

Read full post…

For some reporters, the White House Correspondents Dinner is more than just another night at the prom. For CNBC’s Maria Bartiromo, it turned out to be a working dinner – one in which she gained a piece of information from a fellow attendee that ended up having quite the effect on markets (as Fed chairmen’s remarks so often do). From the Financial Times (via TVNewser):

Stocks fell on Monday after CNBC’s Maria Bartiromo revealed on air that Ben Bernanke felt his testimony last week had been “misunderstood.”

The anchor said Mr Bernanke had told her at the White House Correspondents’ dinner in Washington on Saturday that he had not intended the markets to infer that the Fed was nearly done raising interest rates.

“I asked him whether the markets got it right after his congressional testimony and he said, flatly, no,” Ms Bartiromo said. She was reporting live from floor of the Chicago Mercantile Exchange and the resulting trading roar almost drowned out the rest of her remarks.

FT procured one market strategist to interpret the situation. Said Alan Ruskin, a strategist at RBC Greenwich Capital: “It comes off as a great example of over-communication and a possible attempt to over-fine-tune, assuming he was willing to go on the record with these comments - CNBC is not the Fed’s obvious port of call to correct market expectations.”

Read full post…