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News Flash: Is Bernanke Going to Throw in the Towel?
By, Simon Maierhofer
Wednesday October 24, 2012
Abstract: Former president George W. Bush first appointed Ben Bernanke to run the U.S. central bank on February 1, 2006. President Obama confirmed a second term on January 28, 2010. But latest news suggests that Bernanke is done.

The New York Times reports that Federal Reserve Chairman Ben Bernanke has told close friends he probably will not stand for a third term.

Mitt Romney has made no secret that he would not re-nominate Bernanke if he wins the presidency, but it’s news that Bernanke told friends he wouldn’t go for a third term even if president Obama gets re-elected.

The Fed and the White House declined to comment and Bernanke’s own words from a new conference last month are ambiguous: "I am very focused on my work, I don't have any decision or any information to give you on my personal plans.”

Bernanke’s term as chairman ends in January 2014.

Treasury Secretary Timothy Geithner already stated that he wants to leave by the end of the year.

Why would Bernanke and Geithner want to leave their prestigious jobs?

Here’s my opinion: Bernanke and Geithner are the center of the financial world. They know exactly what’s going on and what the Federal Reserve can and cannot do.

They know how many skeletons banks (corresponding ETF: SPDR S&P Bank ETF – KBE) and financial institutions (corresponding ETF: Financial Select Sector SPDR – XLF) have in their closets.

They know how good or bad the shape of the European financial system is in and realize the implications of the growing U.S. deficit.

The U.S. economy has hit an iceberg. The Federal Reserve’s “pumps are pumping as hard as they can,” but the ship is still taking in too much water. It’s just a matter of time for the inevitable to occur. Who wants to be the captain of a sinking ship?

But does leaving a ship – damaged but afloat – relieve the captain of his accountability? Perhaps we should ask Alan Greenspan.

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