I am full of bull, by “Ben Bernanke”:  After my bold and decisive economic action yesterday, Wall Street is at ease again knowing Ben Bernanke is looking after them like the precious economic actors they are. I put the hand chains on the cruel invisible hand of the market that spanked them once yesterday, but not again today. Stocks have bounced back. Willem Buiter at the Financial Times is surely regretting his words from yesterday accusing me of “buttock-clenching monetary policymaking”. — Newsgroper

Has Ben Bernanke played an ace? As my colleague David Litterick writes this morning, Ben Bernanke played his ace card yesterday. The dramatic move from the former Princeton economics professor has halted a slide in equity prices and Asian markets have rebounded overnight. But here in the UK will markets be listening to the rather different message coming from Mervyn King. — Ben Bland, Telegraph blog

Ben Bernanke hits the panic button. In fairness, the prospect of a “Great crash of 2008” isn’t a particularly appealing prospect. But assuming the Fed cuts another 50 next week, you’d have to think that the dollar down bubble could soon reassert itself.
As an aside, is Macro Man the only one whose Bloomberg utterly froze for 5 minutes as soon as the announcement of the 75 cut hit the tape? Mikey, before you pursue further political ambitions, sort out your bread and butter! —Macro Man 

Boom Boom Bernanke steps in. It seemed that nothing would be able to stop the decline, that is until Boom Boom Bernanke stepped in with his wonderful Fed speak. Haven’t we already heard this story? The market initially plunged 464 points and gyrated all over the place like a go-go dancer finally coming to rest at a 128 point loss. Not exactly the best outcome given that Ben Bernanke did an emergency liquidity injection the likes that have not been seen in over 25 years. And by the way, they are still meeting next week and will probably cut again. — Dr Housing Bubble

What would Milton Friedman say to Ben Bernanke? Milton Friedman died in 2006. If he were living, what would he say about the current economic situation? It may be instructive to review what he said about the dot.com bubble in 2000. Friedman believed that in the event of an equities bubble burst, the Federal Reserve should pour in money to cushion the economy – but not indefinitely. For example, using the Great Depression as an example, when the bubble burst in 1929, from peak to trough, the equities market lost about 80% of its value over about 3 years. Friedman believed that had the Federal Reserve followed “correct” policy, the market would have bottomed sooner and not fallen so far. Friedman was quick to point out that precisely how much and how long to “pour money in” is tricky to figure out, and that the Fed should not pour money in for so long that it creates another bubble. — Sidetalk