Central Casting

Central banking is fun. That’s why everyone wants to do it.

Ha. Not really. Bernanke’s press conference was a tour-de-force, and not just because he said “Hi” to his mother at the end. Bernanke is a stable, capable spokesman who can give a speech or field a question without batting an eye. He learned early on from a stray comment he made to a financial journalist that “loose lips” can sink markets. Through a combination of self-discipline and rigorous rehearsal, he carried off his historic press conference without a hitch.

At first I questioned whether this was such a good thing. After all, what if we have someone less stable in the driver’s seat? But we just have to put “manages press conferences” into the job description. There are certainly competent, capable adults out there who are financially literate and can take questions without blowing up the markets. If the Europeans can do it—and they have for years—there’s no reason why the Fed can’t.

The ECB will soon be selecting a new leader, and for the most part they have been an institution carved out of the Bundesbank mold: stable, solid, boring. Recently, their currency fell because of what Mr. Trichet didn’t say: he left out the “super-extra-vigilent” language and the Euro fell precipitously. What you don’t say can matter as much as what you do.

Currently, the favorite to be the next ECB president is Mario Draghi of Italy. Apparently, the European leaders don’t want a German to head up the agency. Just so long as he can speak well.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-12T10:48:00+00:00 May 12th, 2011|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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