Risk Rap

Rapping About a World at Risk

The "R" Word and the Power of Semantics

Well he finally almost said it. Fed Head Bernanke hinted at the “R” word.

“Recession is possible” he said. “Our actions appear to have stabilized the situation in the markets somewhat, but markets remain under considerable stress.”

Now don’t you feel better? I do. But my level of warmth and fuzziness would be enhanced if his declarative statements on our current political economic condition weren’t clouded in such existential nuance.

Words like “possible”, “appear to”, “somewhat” gives me the feeling he’s hedging his words. Evidently he takes his role as the nation’s supreme fiduciary seriously. He will stop at nothing to protect Jim Cramer’s innocent day traders as they madly thumb the volume button on TV clickers while they eagerly finger the enter key on their E-Trade accounts.

You are allowed to say the “R” word Mr. Bernanke. Just because you say it, don’t make it so. You are a powerful man no doubt. You must adhere to restrictions as to what you say particularly during times of acute precariousness of the capital and credit markets. But great leaders take a stand. They articulate a vision and make known a course of action that your constituents (tax payers’ aka free citizens) can understand and believe so as they can prepare to take the action to protect themselves, their assets and liberties during times of great national duress.

Let me say that the “R” word is being spoken on Main Street. Particularly in neighborhoods surrounding Detroit where I understand the moral hazard casualty list is excessively high and continues to mount.

Say the “R” word Mr. Bernanke. It would be a refreshing departure from the “don’t ask, don’t tell”mantra that guides the American psyche deep into denial and an administration that is mired in a Pollyannaish view of its self created reality.

People do tend to blame the messenger. I guess it’s the association and connection with the awareness of a pending or present malady that requires considered action to mitigate. That’s not a bad thing. That is a good thing and is what effective risk managers do. They honestly assess risk factors and take earnest action to adapt to fluid situations. And by doing so, risk managers triumphantly overcome the pressing challenge by transforming it into an opportunity.

This is your opportunity Mr. Bernanke.

God speed on your endeavor.

Risk Rapper

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April 4, 2008 - Posted by | Bernanke, recession

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