Summer’s Withdrawal – No Surprise

Summers Larry

QUESTION: You said all along Yellen would be in. Why?

ANSWER: The markets have cheered the news that Larry Summers would not replace outgoing Fed Chairman Ben Bernanke. On the Hill, both the Republicans and Democrats were deeply skeptical of Summers because of his connection with the bankers and many blamed him for the 2007-2009 financial crisis because he was behind the repeal of Glass-Steagall during the Clinton Administration being buddy-buddy with Robert Rubin. Summers in his letter to Obama addressed this issue by simply stating that many challenges confronted him during the confirmation process. There would have been pointed questions about his ties with the New York Bankers so from the info I was getting there was no way his confirmation hearing would be anything less than a circus.

There was NO WAY Summers would have made it to the post and he would have to be insane to even put himself in that line-of-fire. The sentiment toward the bankers on the Hill has been changing. We see BAIL-INS now emerging because the politicians will not write a check like that again. Summers was the banker’s pick and Obama does what they say. He is their boy.

As far as the markets rallying because Summers withdrew, right. That is just an explanation attached by the domestic obsessed pundits. The rally is being driven by capital flows with questions rising about the German elections and what kind of coalition will there be when Merkel gets at best 40% of the votes. Then there is the Syrian war. These are just two international issues more important than Summers.