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Fed Chairman Ben Bernanke, Come Out, Come Out, Whever You Are

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December 28, 2007

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

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The children’s song “Come out, come out, wherever you are” is a refrain in a very popular time tested child’s game called “Hide and Seek.” .

It can be used to describe what the Fed under the leadership of Ben Bernanke is doing with the American economy.

While there are jobs created by increasing exports and while a cheap dollar is helping to slow import growth, the national economy is, in essence, growing in this fashion, it is true that internal demand could use a nice boost so that the housing, automotive, newspaper and other primarily domestically dependent business interests can come out of their funks, as reflected in their depressing stock prices.

Take Ford, F, and General Motors, GM. They have cut costs but due to interest rate malaise their stocks dawdle at around $7 and $26, respectively, as car sales continue to stagnate. By way of comparison, last year Ford was around $8 and General Motors admittedly reached the high thirties dollar range based on unjustified economic optimism, but, baby, look at them now.

You can also look at individual home builders and related stocks and come to the same conclusions.

Then there are newspaper stocks. I just read about the depressed McClatchy, MNI, stock price. Fewer home, automotive, etc. classified ads hurt revenues. The same problem was hurting Tribune, TRB, before Sam Zell succeeded in taking the company private. The drama involved in reading about revenue problems and political developments at the FCC, where an ownership waiver was sought, can be typical of the experience to be gained watching a stock over time with a desired specific end in mind.

Ironically, though the Mr. Bernanke’s actions and inactions have a far greater impact on these companies, it is this writer for reasons that have been extensively detailed on this web site who has the temerity to explain what is really going on and where the financial action is.

Since the main thrust of this article was to follow up on stocks I have covered in the past year and one half, I must mention Netflix, NFLX, which is up to $27, while Blockbuster, BBI, is foundering at $3.78 based on Netflix’s continuing to grow its internet subscriptions and appearing to have a lead with its on-line broadcasting business while Blockbuster has to deal with the fact its stand alone walk in stores continue to provide much of its revenue and continue to suffer from the changes in the movie rental business.

Then there is Google, GOOG, which continues to wolf down a larger share of on-line search and internet advertising, explaining its stock price roaring to around $700 a share and Yahoo, YHOO, which at about $23 a share is clearly lagging.

But the point I wish to emphasize is that Ben Bernanke should come out, come out wherever he is.