Bernanke Faced Stiff Opposition
The US Senate voted on Thursday to reconfirm Ben Bernanke as Fed chairman for another four year term. Bernanke faced the stiffest opposition of any Fed nominee since Paul Volcker in 1083. Bernanke was confirmed by a 70-30 vote in the US Senate. Although the Fed is supposed to be politically neutral and independent there were those who tried to politicize the confirmation process. Chris Krueger of Concept Capital stated, “The politically neutral and independent Fed has really been politicized this week, probably to its detriment.” Bernanke survived a rebellion by Democrats and Republicans displeased by big banks and the lack of oversight.
Obama Pleased by Confirmation
US President Obama was pleased by the senate vote and said he is looking forward to working closely with Bernanke. President Obama said, “As the nation continues to face the consequences of the worst recession in a generation, Ben Bernanke has provided wisdom and steady leadership in the midst of the financial and economic crisis.” Many senators credited Bernanke with guiding the US economy through the worst financial crisis since the great depression. Other senators, mostly Republicans, severely criticized Bernanke. Senator Richard Shelby, the top Republican on the Senate Banking Committee stated, “Bernanke fiddled while our markets burned.”
Bill Clinton Supports Bernanke Confirmation
The strength of the opposition to Bernanke’s confirmation rattled financial markets before the senate vote. Former US President Bill Clinton, who is attending a summit of business and financial leaders in Davos Switzerland, weighed in on Bernanke’s confirmation. In a lengthy statement Clinton said; “To tell you the truth, I have been so caught up in this Haiti job that I have for the U.N. that I have not studied his [Obama's] proposals, and I can’t comment. I will say this: I think he is right to reappoint Mr. Bernanke, for two reasons. One is that I think since this crisis occurred in September of 2008, Bernanke’s decisions have been very good, they have kept the American economy going and given us a chance to heal. Secondly, he said something that is very important to say, that the crisis occurred because regulation in the past had been too lax. So I think the beginning is to confirm him and reward both his acknowledgment of the past lax regulation and his service since the financial meltdown. Now, so what we have to do, what Congress has to do, what the financial community needs to do is not to deny that we need more effective regulation. If they don’t like the specifics that the president has proposed, they ought to say what they are for, but we shouldn’t have any more shams. And we shouldn’t say that things are off-limits that shouldn’t be. I applaud the fact that the president and Congress are trying to deal with this. I can’t offer you an opinion because I’ve hardly slept since the earthquake in Haiti and I would be giving you an uninformed opinion.”
Markets React Positively
By and large financial markets have reacted positively to the Bernanke confirmation and most brokers, currency traders and investors seem pleased with the senate vote.
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