Bernanke defends his record

My trusty Tivo has about an hour-and-a-half head start on me but, unlike NFL games, it's hard to make up that gap by zipping through huddles and commercials.

They are now well into the Question & Answer portion of Fed chief Ben Bernanke's confirmation hearings (you can watch the live stream on CSPAN-3) and, so far, the headlines that it has generated seem pretty tame:

• Bernanke defends record during financial crisis - Reuters
• Bernanke claims tools, will to reel in stimulus - AP
• Bernanke Says Fed Bank Oversight Role Key to Fighting Crisis - Bloomberg

Yves at Naked Capitalism raised the following point about the impact on capital markets if Bernanke is not reappointed, one that few seem to have considered and what may make his confirmation all but inevitable despite some uncertainty.

1. As with the TARP, the threat is that if action is not taken, the markets will go to hell. With the TARP, the markets went to hell after its passage anyhow. If the markets are significantly misvalued as some feel (Roubini, John Hussman, to name a few), they will correct. If confirming or not confirming Bernanke is part of this dynamic, all it will affect is the timing, not the outcome.

2. This notion of Bernanke being “critical” further suggests that Wall Street believes or knows he has and will manipulate markets on their behalf. Of course, Bernanke did so in an explicit way with the $1 trillion Treasury/Agency market intervention that started in March and is tailing off now. And of course, there has been the raft of special facilities, but those are supposedly being wound down now. Has there been even more, as some have charged, than what has been made public?

It should come as no surprise that in this Rasmussen poll that found dwindling support for the Fed chief by the population at large, those who classify themselves as "investors" support a second term for Bernanke by more than two-to-one over "non-investors."