ben bernanke's intelligence and knowledge served him well as chairman. but his grit and willingness to take a stand were just as important. i hope you never are confronted by challenges this great, but you too will face moments in life when standing up for what you believe can make all the difference. having dwelt for a moment on failure and grit, let me turn to the deeper meaning that underpins grit and can carry us beyond failure. the hard work of building a life that makes a difference is much easier to sustain when you are passionate about what you pursue. when i first came to the federal reserve 37 years ago, i was struck by the passion of my colleagues for the mission of the fed. and these many years later, each day at work, i see the importance of that passion to carrying out the fed's duties

secondly, the statutory authority that ben bernanke no longer exists. thehe argument is that chairman of the federal reserve and the secretary of the treasury would he pressed by overwhelming political pressure to violate the law to give more money to a large failing bank. no. >> do you think that congress would support something right now? >> they would impeach and convict of impeachment any official who did that. we had a hard enough time getting -- we had a republican president, a democratic congress. that was before bipartisanship ended. what ended it was the election of barack obama and the republican response. orked hard -- we w on something that was essential. i think it is very clear. history will record that the tarp program was the most highly successful, widely unpopular thing the federal government ever did. the notion that you can do it again is bizarre. >> we have definitely had a conversation this morning about too big to fail and the remain some skepticism. one of the things that has been discussed is raking up the big banks, restoring -

corp. 2014] >> the chairman of the federal reserve, janet yellen, paid to beat her predecessor, ben bernanke. she talked about his courageous actions during the 2008 financial crisis. genet yellen is the first woman -- janet yellen is the first woman to lead the fed and its history. this is about 10 minutes. marks. this is about 10 minutes. thank you, president sexton. on behalf of the honorees, let me express my thanks to nyu. and congratulations from all of us to you, the class of 2014, and to your families, especially your parents. this is a special day to celebrate your achievements and to look forward to your lives ahead. your nyu education has not only provided you with a foundation of knowledge; it has also, i hope, instilled in you a love of knowledge and an enduring curiosity. life will continue to be a journey of discovery if you tend the fires of curiosity that burn brightly in all of us. such curiosity led eric kandel, here at nyu, to his lifetime goal, to discover the chemical and cellular basis of human memory. a few years after his graduation, he was doing research on cats. bu

. >> the chair of the federal reserve, janet yellen, paid tribute to her predecessor, ben bernanke, during her commencement address at new york university. she talked about his courageous actions during the 2000 eight financial crisis. she is the first woman to lead the fed and its 100 year history. she was awarded an honorary doctorate from nyu prior to her remarks. this is about 10 minutes. thank you, president sexton. on behalf of the honorees, let [applause] and congratulations from all of us to you, the class of 2014, and to your families, especially your parents. this is a special day to celebrate your achievements and to look forward to your lives ahead. your nyu education has not only provided you with a foundation of knowledge; it has also, i hope, instilled in you a love of knowledge and an enduring curiosity.

february, 2011, chairman ben bernanke said the fed's balance sheet will be normalized. the fed balance sheet will return to a normal level because what was happening at the fed at that time buzz a temporary measure. again, mr. speaker, you won't be able to read these numbers but i want to help you find february, 201 , on this chart. it's right here, right here. it was at this point where you see a mild dip, mr. speaker, where chairman bernanke said the balance sheet, which has risen to not twice its normal levels but three times its normal levels, it's a temporary measure and the balance sheet will begin to return to normal. mr. speaker, we're three years later and far from returning to normal, the size of the balance sheet has doubled. temporary measure, don't worry about it, we're on our way, going to return to normal. rather than return to normal, the size of the balance sheet has again doubled. not one vote in this chamber, not one vote across the capitol in the senate. not one signature by the united states president. not one bit of consent from the 300 million ame

john, start with you, the fed always denies ben bernanke did and janet yellen denied it influenced thee yellen was asked by peter barnes whether or not the stock market itself was overvalued. listen to what she said. >> i still don't see that -- i still don't see that for equity prices broadly. david: she doesn't see the market overvalued. of course the market reacted in a very positive way. didn't she anticipate that that would be good news for the market? >> well, she's actually said that before she's been asked about, she talked about p/e ratios and congressional testimony earlier this year. i think what the market was reacting to today was the fact that the fed policy is pretty much steady as she goes, there were no surprises. mark carney the head of the bank of england suggested that interest rates might go up sooner than expected in the u.k. the market didn't suggest that today, so the market breathed a sigh of relief. on market valuations, i think that's what we've seen from the fed before. david: jerry, is this fed different others starting with ben bernanke in the qe program,

ben bernanke's intelligence and knowledge served him well as chairman. but his grit and willingness to take a stand were just as important. i hope you never are confronted by challenges this great, but you too will face moments in life when standing up for what you believe can make all the difference. having dwelt for a moment on failure and grit, let me turn to the deeper meaning that underpins grit and can carry us beyond failure. the hard work of building a life that makes a difference is much easier to sustain when you are passionate about what you pursue. when i first came to the federal reserve 37 years ago, i was struck by the passion of my colleagues for the mission of the fed. and these many years later, each day at work, i see the importance of that passion to carrying out the fed's duties effectively. if there is a job that you feel passionate about, do what you can to pursue that job; if there is a purpose about which you are passionate, dedicate yourself to that purpose. finally, i hope that you can find joy in the lives you choose. you are

ben bernanke, former fed chief saved the day in the u.s.e exacton sit track and raised interest rates twice because he foolishly thought the continent was coming back strong. europe is still paying for those two rate increases. but just as important our treasury secretary tim geithner forced the recapitalization made them more capable of making loans once the economy rebounds and its banks remain incapable of lending at the pace that can stimulate demand. they didn't clear the decks like our banks did. like a wells fargo or u.s. bancorp. why does this matter? the national headquarters in america that i followed does about 20% of its business in europe. the european operations only stopped hurting them about sick, maybe 12 months ago, but as far as helping the bottom line, that's only happened to a handful so far. i think draghi's forceful by any means necessary approach has turned fannie mae, and lender of first resort that something good won't happen to the european consumer economy. he's a remarkable man who has single-handedly saved euro

the middle east, and the fed, the transition and the monetary policy in the wake of going from ben bernanke yellen. so there are certainly a number of things that could pop up over the summer. >> well, let's go to your buy list, led by alaska air, why do you like it? >> well, the airline companies have found religion. they have rationalized pricing and capacity. this company is very well managed. it has a different root structure. stocks have done well but we believe we could do another 10 or 15% in the next year or so. >> and boeing which is obviously related to the airlines but in a different way. do you like it? >> well, you have about a four-year back log on that new 787 plane which is extraordinarily fuel efficient. so as the airlines continue to make money and look to upgrade their fleet with better technology, better fuel efficiency, this plane is getting a disproportionate amount of interest. >> we started with an a, went to a b, now to an h. home depot and the consumer. >> the consumer is back, it was the worst christmas since 2009, but easter was pretty good, the weather is reboun

. -- ave policies >> coming times did ben bernanke said he needed a dance partner? what do the may employment numbers mean for growth in this quarter? >> there has been a real jet that's real disconnect between gdp and payroll. i have to say, i am looking for three percent gdp growth, a rebound in the second quarter. it is weaker than it should be. overall i think the underlying -- the underlying trend is 2.5%. i think that is consistent with the numbers we have seen today. joining us from stamford connecticut, it is great to see you. have a great weekend. coming up, schools are done. now it is time to look for a job. we will look for job prospects at this year's graduates. >> bloomberg news higher education reporter has been tracking the trends. i almost felt like saying, thank you very much, let's go to something else because that is what their job prospects are. >> you are looking around and you would be very lucky to get a job that is in your field. and that is a paid job. --e students and reached and and recent graduates are looking for jobs. it may last 10 or

important to me, alan greenspan had leading economic indicators which was dumb, i am not sure what ben bernanke if people have nerve to knit their jobs it says something positive about the economy. >> there is something else waiting. >> and better. charles: i'm saying iing in my k where i go in saturdays all of the tellers quit, one went to a rental car place. >> last month job openings are down, people are filling them. charles: catch me every night with the crew aches p.m., and set -- crew at 6 p.m., and set your dc r, up next, the man himself, lo lou dobbs will keepu posted. posted. >> good evening i am ashley webster in for lou dobbs, details revealed in bowe bergdahl controversy, democrats join the chorus of criticism aimed at the president. fox news confirming that obama administration allowed bergdahl family to participate in highly classified videoconferences with military leaders and the intelligence community, former bin laden unit station, and chief, michael showier told us if bergdahl was more than just a private who left his

i think it is consistent with ben bernanke dropping money from helicopters. is to get my directly into the economy as quickly as you can by handing money to people who will spend every last dime, that is the keynesian model of let's get things going, spend every dime, don't, discourage savings and decreased consumer spending. philosophically i have issues with that and from a very practical or pragmatic standpoint i think it is going to be an inhibitor to long-term growth. jo ling: i want to know why do you think imf director got involved in this, what was the recourse? >> this seems to be the way the economics profession is shifting. i don't, number one it won't change the debate what the imf does or does not do. and i will not break with the rest of your panel and disagree. really the wages are weak and that is a concern in the economy for driving the consumer economy but that is a symptom, it is not the underlining cause. globalization, technological change, these things cannot be legislated away. raising the barrier when you have unemployment, raising the

boyce won the right to depose ben bernanke, tim geithner, hank paulson, all the government officials that are essentially around the bailouts which we have reviewed those depositions. melissa: does it help you or hurt you to have steve cohen? >> that is a great question. melissa: maybe he should be a silent investor. >> let me point out two things. hank hasn't decided whether to go forward with this. they're interested in investing. hank and steve share the same lawyer. david boies is both of their lawyers. here is what we have here. listen, the next step is hank's. does he open it up? we don't know yet. we know this meeting occurred. these guys are interested. this is, we should point out there's a bigger story here in terms of alternative investing. funding of lawsuits is something that occurs quite often now. generally doesn't occur with case, not with this. billion dollar lawsuit against the federal government. there is the news. melissa: that is good news. we look forward to more on that one. meantime, mcdonald's apparently loving the minimum wage hike. done tom san will support

wait, ben bernanke is there. i forgot. neil: you are being very modest. have a feeling that u.s.ips and the like, it was not to the and judge. judge napolitano: so long ago, i don't remember. neil: as it was with me and trucking school. but it drive. judge, thank you, my friend. always a pleasure. he is so thin and fate, it is very annoying, but i digress. the nsa is making a last, and you are probably on it. i always wonder what ron paul would think of that. you know what you think of that. ♪ but if i ys say be thman with the plan but with less ergy, moodiness, i had to do something. i saw mdoctor. a blood test showed it was low testosterone, not age. we talked about axiron the onlynderarm low t treaent that can restore t vels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especlly those who are or who may become pregnant, and children should avoidt where axirons applied as unexpected signs of puberty in children or changes in body hair or incased acne in women may occur. report the

wait, ben bernanke is there. i forgot. neil: you are being very modest. have a feeling that u.s.ips and the like, it was not to the and judge. judge napolitano: so long ago, i don't remember. neil: as it was with me and trucking school. but it drive. judge, thank you, my friend. always a pleasure. he is so thin and fate is very annoying, but i digress. the nsa is making a last, and you are probably on it. i always wonder what ron paul would think of that. you know what you think of that. ♪ but if passion... became your business. at&t can help simplify how you manage it. so you can focus on what you love most. when everyone and everything works together, business just sings. does your mouth often feel dry? a dry mouth can be a side effect of many medications but it can also lead to tooth decay and bad breath. that's why there's biotene. available as an oral rinse, toothpaste, spray or gel, biotene can provide soothing relief, and it helps keep your mouth healthy, too. remember, while your medication is doing you good, a dry mouth isn't. biotene -- for people who suffer from dry mo

. >> until ben bernanke started the process of quantitative easing, until the europe yap central bank tried -- yesterday everything was theoretical. the dallas fed, the cleveland fed, they're all writing about this topic, but how you deal with inflation that is too low. it's been studied in europe. jean-claude trichet, mr. draghi now, they're all talking about it. >> is this draghi's biggest worry? >> it's his only worry officially, right? he's got this 2% mark. one of the interesting thing that ron is saying. his analogy is fascinating comparing fighting inflation and fighting deflation. here's the problem. back then, there was an infinite amount that volume kerr could raise interest rates to. he does not have -- today's fed does not have the same luxury of either infinite amounts of quantitative easing. this is a trickier things. he concept it could go on for a long time is not necessarily perfectly in line with the fed, but there are folks at the fed who are starting to think, you know what? this turnaround, that is not the way it's going to happen. it's going to be a gradual proce

janet yellen's pretty much following the road map that was left by ben bernanke whether for good or for bad. we're going to see more taper. and eventually we'll move more toward what carney may have hinted at. and i think what mr. carney talked about from the bank of england on that talk the night before last is super important for a number of reasons because many look at the world as multispeed. you have the u.s. and the uk moving one way. you have stimulus in china, japan, and europe. i don't necessarily look at it that way. i think all stimulus is fungible, and i think that the relationship i would pay most attention to is how the guilt yields running up to the highest levels in april, 2.75, how it affects the relationship between bunds, 10s, and the u.s. securities. those will keep you out of trouble and the markets that still have discovery of sorts which is the global fixed income markets. only of sorts of course. >> i wonder, kelly, if what john manley's saying is the case and the summer really isn't as relevant as it used to be then what accounts for the fact that volumes have d

backwards, and my final "lost in space" comment about central bankers is why janet yellen or even ben bernanke didn't talk more and study more about the effects of what europe's doing to keep our rates done, it would have been a very nice time to call qe a day. for all the great things everybody is saying, we're still in semi-crisis management mode with zero interest rates. >> yeah, yeah. patty edwards, i see here that you're thinking about horse racing, the belmont stakes are tomorrow. wonder if california chrome can win the triple chrome. i'm wondering why you're not thinking about hockey though. >> i'm absolutely thinking about hockey. you'll notice i'm wearing rangers colors, right. >> since my kings are leading your rangers right now. >> one game, one game, come on. >> yeah, well. >> what do you make of this market? is it a hockey game? are we going to be duking it out at some point, or are we going to see a horse race here? >> you know, i think eventually we're going to see a hockey game and it's going to get a little bit of rough and tumble. don't see that happen during the sum ir. we t

ben bernanke, some of these famous dinners that he's hosting for big bucks talking about how he doesn'tt rates are ever going to get to levels like 4% again when it comes to fed funds. many would agree with him, but there's always those black swans and unexpected fat tails. now, as for central banks being stewards versus masters of the financial universe, this is a topic that everybody needs to pay close attention to. because just because rates are normalizing, that isn't the issue. the issue is whether it's the deep pocket, the decision-makers of last resort, that global central banks -- and i'm not just talking the biggies with what's going on in japan or the uk or the eurozone or the u.s. i'm talking about all the other hundreds of central banks out there and all the economies, small, medium and large because whether it's the people's bank of china, that entity and their sovereign wealth or their expansion of credit that's gone off the charts the last five years, to me, what we're looking at is a bureaucracy that has evolved. we need to go back to either one pillar or two pillar. you

it was during the ben bernanke taper tantrum.uestion is this -- this carney have a temper tantrum moment? >> who was on the monetary policy if you -- >> i was quite surprised and confused. my assumption is either they have massively upgraded their forecast based on new discussion which we will not know yet. minutes are due out shortly. or even though he's a pro and is very good, he did not quite calibrated right. he said he was trying to say, ok, don't get too carried away. the markets have overreacted. i lean towards the second. it seems he has got that calibration wrong. with this --ve you there are new members coming on. says it will go in the fourth quarter. don't worry yourself. yearrate hike by this possibly above 1.5%. coming.ate cut is chat.snap, snap, it is all about the pace party. >> thanks, manus. it is the oldest underground system in the world. london is going high-tech. it is part of the general move. it is internet of things to help code with an increasing population. caroline hyde report. ♪ carriesn's underground

ben bernanke should make all the money he wants to make.being tame for a long time, i agree with that. we are becoming japan. >> if i could interject, the year over year average hourly earnings is up 2.1%. so that's just about the trend we were talking about earlier. the labor force participation rate unchanged. the unemployment rates ticks up. i would argue that the slack story really hasn't changed. i'm glad that the report hit expectations. that's a good thing. this is not an of the moon report. and slack is as it was. >> this is not a "game change"er. >> can i take the other side of this? rick said this was a disappointing -- i can't remember the exact words he used. 220,000 jobs. >> 222. >> that's probably the underlying trend in job growth now. >>. >> 256. >> any other time, in any other time that would be considered a very good job market. just to give you context. if the labor force was growing at a normal pace, that is double the rate of job growth necessary to get unemployment moving itself. agreed, we have a lot of slack. we need

the federal reserve's policies have been on a course that was lasteder ben bernanke december.ided to taper bond buying and do about $10 billion by every meeting. by the end of 2014, we will be done. janet yellen has followed that plan. they have not converged. theyuestion is -- what did do next year? under janet yellen, when did they raise interest rates? not be fixed,y but we are ready to raise interest rates to get policy back to normal. that is the biggest decision she will make in her first term as fed chair. ton is it time to start withdraw and raise interest rates. people and markets think it will be sometime in 2015. that is the big test for janet yellen, getting the timing right. host: we will try to get in one final question. jim, louisville, kentucky. i would like to hear your comment regarding the fact that housing has normally let us the previous recessions. it seems that we have young people today graduating with so much stupid debt -- so much student debt that it almost makes family formation and how spying an imposter -- and house buying an impossibility. debt w

ben bernanke's intelligence and knowledge served him well as chairman. but his grit and willingness to take a stand were just as important. i hope you never are confronted by challenges this great, but you too will face moments in life when standing up for what you believe can make all the difference. having dwelt for a moment on failure and grit, let me turn to the deeper meaning that underpins grit and can carry us beyond failure. the hard work of building a life that makes a difference is much easier to sustain when you are passionate about what you pursue. when i first came to the federal reserve 37 years ago, i was struck by the passion of my colleagues for the mission of the fed. and these many years later, each day at work, i see the importance of that passion to carrying out the fed's duties effectively. if there is a job that you feel passionate about, do what you can to pursue that job; if there is a purpose about which you are passionate, dedicate yourself to that purpose. finally, i hope that you can find joy in the lives you choose. you are

you have ben bernanke, carney, and janet yellen. there is no mechanical formula. say everything and say nothing and commit to very little is definitely improving. as far as interest rates are concerned, they have raised their views. they will have to get the dots on the matrix. rates will rise more quickly than they originally anticipated. on top of that, they are paring back their view on growth in the longer-term. >> manus cranny on the latest from the fed. has promised no hard landing and no strong stimulus. what was the promise? an honest and a solemn promise to deliver no hard landing for the chinese economy. big promise considering the size of the chinese economy. you rarely hear are world leaders guaranteeing how the economy will fare. that is what you heard. he is in charge of the chinese economy. he says he could promise honestly and solemnly that china will deliver at least 7.5% economic growth this year. inflation will remain in check. it will not exceed 3.5%. china will have medium to high level growth in the long run. he also talks about smart and tar

ben bernanke warned japan about this downward spiral that i just talked about early in the process, andis advice was not heeded. the european central bank also shows a past that was different from the federal reserve. yesterday's announcement in frankfurt does not fundamentally change that picture. the institutional context is the reason for that different chores, and that is the subject of the second point. the interaction between monetary and fiscal authorities was famously modeled three decades ago. a contest between fiscal dominance and monetary dominance under fiscal dominance the government sets the policy, fiscal policy independently of monetary policy. so deficits, debt, and inflation are i, may be very high under the fiscal dominance scenario whereas they are low on their monetary dominance. now, and the euro crisis this took the form of chicken. creditor governments could create a financial facility and bailout the debtor for the ecb could buy bonds. the two actions were close substitutes, at least over the short to medium term, and each side was better off if the other made i

ben bernanke took out an op-ed piece canceled due to take risk. we tried to prove he was wrong.uy printing the money told you to buy them. >> you do forecast for correction of some point. >> we don't know why. trying to make it iraq or anywhere. no one predicted in the summer of 1996 alan greenspan would give us irrational exuberance speech in japan. >> what is great about this conversation is the idea of someone doing this every single day. marty is today's mayor saying do not fight the fed. is exactly what the messages. >> here is the one thing i have to ask you about, you are the baseball and have made that very clear. you also say we will get a five or six. lex that is a great strategist. pretty highly convict and we will get somewhere closer to five percent and 10%. limited upside. typically the seven percent correction. i am looking for that correction. you have to buy it. corrections are only healthy until they actually happen. are -- when it is happening you are to help into good. they're never going to buy it on a correction. until you get -- for the next four years we

say christmas of 2012, the dotted line is, what is the guess at that time where janet yellen or ben bernankeng. the headline is, they have been wrong. >> absolutely. is universally wrong. it is interesting we put so much emphasis on these dots from the ,ed and we try to understand there are 13 members that think there will be a rate increase in 2015. let me ask you, if you look back at 2012 when the fed started to make this public, does anyone want to guess the number of fed officials that actually thought you would have an increase before 2015? 11. 11 fed officials thought you would have a writ increase before 2015. now we're going to coalesce in the 2015. that is the point of the chart, too. it.ou your self address i weighed to clarify this. ultimately if during q&a today, this janet yellen is pushed, we think she will of knowledge the reasonableness of a midyear liftoff. she believes in the dotted lines two, in other words. >> i think they all do. they want their key policy pool -- it is one of their key policy tools. referencing that dudley speech a moment ago, he basically said, it seem

he makes other famous faces, abe lincoln, ben franklin, ben bernanke.s was commissioned by "time." >> that was commissioned by time for their man of the year cover. they ended up rejecting it and it sold to the smithsonian. >> reporter: sold to the smithsonian? >> yeah, to the national portrait gallery. >> they're always moving between drawing elements and more painterly effects. >> reporter: at new york's pavel zubak gallery, wagner's collages can fetch tens of thousands of dollars. his shows usually sell out immediately. >> reporter: how many pieces of his do you have? >> probably a dozen. >> frank williams is a collector. >> i keep finding things i like to bring home that i like to look at longer than i can when i see them in a gallery. >> reporter: is it expensive to work with money? you cut up a lot of bills. >> it's no. i let people think it's expensive when they're looking at the bills. the bills aren't the expensive part of the operation. it's the time. >> reporter: the very act of cutting up money raises the question of what it's worth. mark wa

. >> as i do with ben bernanke, they serve in public office and make no money in public office, they nicholas beating fees they get coming up. i totally disagree with the media. >> don't cry poor. >> we're going to be right back with the ceo of morgan trusts. >> looked at you some company news, starting with targeted the new interim ceo has launched a war on bureaucracy. and in >> to employees, john mulligan says he moved the entire leadership team to the same floor. that will lead to faster decisions. we will also gets going back on governance. at&t is settling a lawsuit over its refusal to carry out a zero's u.s. cable news network. according to people familiar with the matter the deal will allow them to shut down at&t universe service. at&t says the dispute was over contract terms. a slow start for -- shares of time fell one percent. -- company poshard -- couple common to times and people. morning's company news. >> it is the most controversial emerging-market. isn talking russia, mark chair of templeton erlang. -- templeton earning. you know mobius, he is perennial. he is funding

last year, when ben bernanke seemed to hint at tapering, the quotes shrank in half.e not holding large boundaries. >> where are you placing capital this morning? when you go into your investment meeting, what is the geography that pimco likes best? >> we like the emerging markets. we bought russia on the backups. we did not think bruton had -- >> do you like argentina? >> we do not. >> i have my argentina blue pom-pom here. >> we like european assets. ofis still the early innings the bank deleveraging story. it is three times the size of gdp. it was shedding assets. there is no bear stearns or lehman. you need to have -- >> when you save them, european assets, which ones? >> investing in the banks. havethough the yields calmed down, there is still opportunity. includingcials, coco's bonds. to 300rket will grow billion. you can have one half percent of your capital. >> are you getting more esoteric? are you staying of and simple at pimco? there are returns relative to volatility. we look at the financial companies and subordinated financial companies and consider how

>> if you look at 2015 and count dotsots - there is 16 there and 19 members of the fmo see and ben bernankeesigned and there were two open seats. the fact that mode, you had different people in their roles and you had shortages of people so the numbers changed. do they meet anything? janet yellen says is a picture of what we think will look like at the end of the year. the markets took it as a forecast and bonds sold off and yields went up. that's part of the communication strategy problem they have. they will release a new dot chart on wednesday. what will it tell you with three new voting members? >> do you likedots. >> i like dots and specific time periods. when we run out of things to do, the dots are helpful. as we progressed to a more normalized monetary policy and away from our very abnormal state come you could argue that the dots become too much information and the fed has expressed a desire to create some volatility around the expectations. maybe this will create some of those problems that we had in the housing area. they are's desk they are stuck with them right now. whether tha

this is what ben bernanke did in the united states.roblem is, there aren't a lot of assets to purchase in europe. theyen do the have a securitization market like we do. securitization was so common in the united states, remember south park did a whole episode about securitization of blenders. but they only have $94 billion worth of assets to buy. they just can't do it. what do we think happens today? he has to tell the market something, i promise you a year from now we'll be able to buy assets. we think, maybe, there's a new acronym, special term refinancing operation, stro, special term means here's 100 million euros, go make 52 million euro loans to small businesses and maybe he does something very creative where he says the haircuts won't be as big when you drop them as collateral. what you'll have to hold as capital, et cetera, et cetera. he has to bypass the banks in some way. >> the question is if he doesn't come up with something new and special that we haven't thought of, how does the market react? >> i think we see the euro --

for example, when ben bernanke was chair, he had a simple message, we are not hiking rates.came up with 18 different ways to say it. janet yellen has a more complex message. over the next several years they will begin to hike. when, by how much, over what metric. it is more complex from a committee with 19 participants. they are learning by doing. >> this is the issue, mark carney came to the job 12 months ago. he turned around and said rates will not rise until 2016. now he is thinking the end of the year. the problem ultimately is how flawed for guidance is. this was meant to be a policy for mainstream, not wall street. if you are listening to these messages and do not think there will be hikes in two years and an overnight the bank of england comes at with this, here's the one for the u.s. and the federal reserve. janet yellen speaks later this week, can we take her word for anything? we have just seen a major central bank to a 180. ofthere are different types forward guidance. i wrote a piece on pimco.com >> shameless plug. >> most central banks have moved away from cale

ben bernanke e. they all say the same thing, central banks are behind the eight ball.ellen behind the eight ball yesterday? any policy is asymmetric and it goes up a lot more slowly than it goes down. we used to call it going up by the escalator and going down by the elevator. but itings are planned is easy to convince yourself to start a little late and go a little slow. you want to make sure the expansionist sustained momentum. early on you don't worry that much about rising wage and costs. it is creating disposable income that makes consumption gains more widespread. inflation isn't such a bad thing if you are below role -- below goal. central banks tend to be asymmetric and they are telling you that because officials are increasingly saying 2% is a goal, not a ceiling. if it is a goal, sometimes you are above it, sometimes you are below it. >> shouldn't this be a sign that things are working and maybe rates auto be reconsidered? >> i believe it was characterized as a noise in the press conference. that is what janet yellen said about inflation. three munch -- three

now, ben bernanke warned japan about this downward spiral that i just talked about early in the process. and his advice was not heated. the european central bank also shows a path different from the federal reserve. yesterday's announcement doesn't change that picture. the constitutional context is the reason for that different choice. that's the subject of the second point. the interaction between monetary and fiscal authorities was famously modeled by sergeant wallace three decades as a contest between fiscal dominance and monetary dominance. high, maybe very high under the fiscal dominance scenario. whereas their low under monetary dominance. in the euro crisis, this game took the form of chicken. creditor governments could create a financial facility and bail out the debtor, or the ecb could buy sovereign bonds. the two actions were close substitutes at least over the short and medium term. and each side was better off if the other made its concession first. and each had a incentive to wait. so the upshot is that the ecb delayed taking aggressive measures much longer than the fed an

i think we should all recall and reare cite tomorrow jamie diamond's admonition or question to ben bernankethree years ago. he said, has anyone considered the cumulative effect of these things meaning the sum total of fed interventions? through dodd frank the banks are admonished not to make markets. we learned likd ti and debt markets is at lows and the fed is out today where at least the internally ruminated scheme to throw down gates innen front of would be sellers of corporate bond mutual funds. the fed launched with a certain amount of excess a repurchase scheme by which the fed lends out securities and takes in hundreds of billions of dollars. that's an invitation to a bank run. the interventions are like lies. you do one and you need another one. you can't just lie once or intervene once. you must keep intervening to negate or counteract or mollify the effects of earlier interventions. it's complicated. >> i suspect i know the answer. are you worried about inflation happening because of the easy money? i ask because the consumer price index and producer price index are picking up. >>

last year, ben bernanke caused a stir when the fed announced he would skip the meeting, raising speculations stepping d n down, which in fact he did. the symposium will focus on labor markets. this is, of course, one of janet yellen's strengths. >>> let's have a look at u.s. futures. we're looking mixed this morning. the s&p 500 taking fair value into account is seen down by two points after it hit another record high in yesterday's trading session. i believe it has hit, how many, 50 record highs so far this year. the dow jones is seen up by 15 points and the nasdaq seen lower by 2. >>> still to come on the show, as the european central bank smr speculation grows, what affect will it have and how should you be positioned? that's coming up next. >>> welcome back to the show. we have breaking news on deutsche bank which has been pricing the new shares as part of the capital hike. 22 euros and 50 cents a share. that was pretty much expected. gross proceeds of 8.5 billion euros. let me get out to annetta standing by in frankfurt. annetta, in line with expectations but a hefty discount, isn't it

. >> whether it's ben bernanke or janet yellin, we've heard many times the reason they're embarking one heard it from the epa, because congress won't act. if people are allowed to vote for people they send to congress but not necessarily allowed to vote for mel watts or epa officials, it seems to me this is a go around of the checks and promises and constitution, of the checks and balances of government. am i right? >> i think you're right. it goes to this idea of aggregate demand. some way somehow we have to create aggregate demand and each of the individual pieces of the credit apparatus are taking their own signals from the fed and deciding, well, we will do housing, we will do student loans, whatever it is each individual piece wants to do. they're all moving towards the same goal, which is the feds' idea of pump priming or monitorism to create artificial demand from nothing. >> i don't know, after listening to all of this, i think mr. piketty ought to be in charge of the federal reserve. i don't think that will work out. thanks for bringing that to us. >> thanks. rick santelli. ca

now, ben bernanke warned japan about this downward spiral that i just talked about early in the process. and his advice was not heated. the european central bank also shows a path different from the federal reserve. yesterday's announcement doesn't change that picture. the constitutional context is the reason for that different choice. that's the subject of the second point. the interaction between monetary and fiscal authorities was famously modeled by sergeant wallace three decades as a contest between fiscal dominance and monetary dominance. high, maybe very high under the fiscal dominance scenario. whereas their low under monetary dominance. in the euro crisis, this game took the form of chicken. creditor governments could create a financial facility and bail out the debtor, or the ecb could buy sovereign bonds. the two actions were close substitutes at least over the short and medium term. and each side was better off if the other made its concession first. and each had a incentive to wait. so the upshot is that the ecb delayed taking aggressive measures much longer than the fed an

in 2000 eight,is ben bernanke was coming up with a new program to try and fix the banking system and try and stop the credit crisis that was happening. it has maybe created a distorted view on what their powers are and what they can really do. they control the supply of money the -- the economy. ultimately, their power is not to figure out the fix everything that is wrong in the labor market. they are trying to maintain full employment. they try to do that by tweaking these small dials. they are trying hard. we will hear from gregory in dayton, ohio. caller: hello. i had two points. thatve to understand whatever the federal reserve , it does not or will not have an effect on the economy for we do not protect the middle class. if you eliminate the middle class, you have only the rich and the poor. this is definitely not good for america. , livingis getting jobs wage jobs, not worrying about this issue concerning minimum wage. that is an entry-level job. we need sustainable paying jobs familyle can feed their on. it does not matter what kind of formula or strategy the federal reserve c

but we begin this morning with former federal reserve chairman ben bernanke in 2012 signaling that the housing market was showing promising signs of recovery, but warning of remaining challenges. >> while the economic recovery and regulatory policy affect access to credit for all households, some potential borrowers may face the additional burden of discrimination. two types of discrimination continue to have particular significant to mortgage markets. one is red lining in which mortgage lenders discriminate against minority neighborhoods. >> now, this is important. what then chairman bernanke was saying. and it is important that he was even talking about the term red lining in a modern context. red lining is a term you are more than familiar with if you read the "atlantic "magazine article "the case for reparations." if you haven't, let me offer this explanation. the homeowners loan corporation was a federal agency created during the depression to prevent foreclosures and that federal agency developed a series of maps rating neighborhoods, assessing their desirability by assigning a l

at odds with each oh, one is pimco saying new normal interest rates are going to be lower and ben bernanke is out there saying interest rates are going to be lower han we're used to and you guys seem to take the other view which is, no, you know, things aren't quite so different and the ten-year yield will rise back above 3% by the end of this year. is there a fundamental difference between your reading of the economy and those who believe in this new normal concept? >> not so much in the short term i think but -- but i think in the longer term my view is that while i think the -- the average short-term interest rate five years out, ten years out i think is probably going to be somewhat lower than it has been historically, i don't think it's necessarily going to be dramatically lower. when you look historically at where the funds rate has been in real terms on average, been about 2%. if you look outside the u.s. or go back further in u.s. history, you also find similar numbers over very long averages, and i don't think we're necessarily going to be that far below 2% in -- in real terms whi