friday night flight or fight, page-81

Full text of Bernanke's speech available on nytime.com. 24 pages. A quick scan through reveals it is a bit blunter than I expected, but leaves the door open for the possibility of a cut. I think it positions the Fed nicely to let the market down gently on Sept 18... DJIA has recovered to be still up over 104 pts as I type this morning. I think the expectations of a rate cut will have all but evaporated in two weeks time.

I think today's market action owed more to the Bush announcement, which was genuinely surprising, rather than to the Bernanke speech being today. That Bernanke was giving a speech was old news, and there was indication it would provide anything substantially exciting anyway. So not terribly surprising the market just shrugged.

-Mark