Markets still react to Bernanke
Okay, I'm going to briefly weigh in again where I probably shouldn't---the macro situation. Apparently in response to Bernanke's speech in Jackson Hole today, the stock market and treasury bills rallied modestly, and the 10-year T-bill rate fell over 6 basis points. I suppose one could argue this was due to something else, but I don't see anything other explanation in the news. Paul Krugman summarized Bernake's speech as: 1. Things are really, really bad. 2. The damage is cumulative; the longer this goes on, the worse the prospects for the future. 3. The Fed has the power to do a lot to help the economy. 4. While you can argue that there are costs to action, the case for major costs is quite weak, and in particular much weaker than the case for major benefits. 5. Therefore, what we at the Fed will do is, um, sit on our hands some more, and think very seriously about maybe, someday, doing something. While Krugman greatly supports the Fed trying