As Stocks Rise, Frustrated Investors Vent About Ben Bernanke
Provided by Business Insider's Joe Weisenthal
Earlier this week, a bunch of high-profile investors presented ideas at the Ira Sohn Investment Conference.
One big theme: Bernanke hate.
A lot of big investors HATE the Fed Chairman--or at least his loose-money policies.
Investing legend Stanley Druckenmiller, for example, calls current Fed policy totally outrageous and inappropriate.
Paul Singer says the Fed is creating class warfare.
These two big shots are not alone in their Fed sentiments. If you listen to a lot of old industry veterans, you'll hear a lot of grousing about Bernanke and quantitative easing and so forth. The frustration is so angry and dismissive that these folks often sound like anonymous commenters on a blog.
Why are these investors so angry?
Former Treasury official and trader Mark Dow sent us his thoughts on the matter.
Some guys don't understand monetary policy and think he's doing wrong thing.
Others think it's immoral that markets aren't let to clear (meaning, collapse to a point where someone will swoop in and just buy). Others are pissed because they missed the rally so they blame Bernanke as the exogenous factor that made them wrong. Like "if not for this STUPID policy I'd be making money."
None of those decisively get at the matter.
Via email, Princeton economist Paul Krugman expanded on this theory:
I don't really know, although at some level I'm not surprised: finance types just hate, hate easy money policies, although you would think that these policies are often good for their bottom lines. I do wonder in this case whether there's extra hatred of Bernanke because he keeps proving them wrong: they keep predicting terrible things from QE, runaway inflation, and all that,and instead the bearded academic stuff keeps turning out right.
So it seems to be a combination of things.
Hedge funds are doing badly in this rising-tide-lifts-all-boats market, and they feel that they would be outperforming if the Fed just let things collapse, and they could swoop in when prices "clear."
The inflation and hyperinflation fantasies are another important aspect here. A lot of these investors cut their teeth during the 1980s, when inflation was the enemy, and Fed Chairman Paul Volcker was a hero for fighting it. Thus, being anti-inflation is kind of a nostalgia trip. Also in general, the