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“After the Music Stopped” author Alan Blinder on the impact on the markets of Cyprus and the Federal Reserve.
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Percent Federal Reserve policy -- beginning their two day meeting.
My next guest says the Fed's role has been substantial and don't expect changes anytime soon that should be music to the ears of most investors.
Joining -- former Federal Reserve vice chair.
Princeton economist Alan Blinder also the author of the book.
After the music stopped the financial crisis the response.
And the work that great to have you might -- -- Let's start with Cyprus.
Case this little place a million -- And they're creating quite.
Are quite a mess of 400 billion dollars -- or global markets yesterday.
And we should blame the cypriots.
Which are a hundred billion is multiple of the GDP of Cyprus I think I actually think.
Unlike what's usually the case the markets are taking this relatively calmly you could well of imagine.
Real panic who runs on banks outside upside nevermind inside in the short to get Israel is trying to get us to imagine -- yellow they always do -- make money.
But you know markets tend to go overboard and I don't think they did go overboard.
In this -- I think -- was a real danger who knows what kind of a precedent this might.
-- It as a precedent.
-- I I think it's worrisome that the that them all people.
-- drawing the head of the European Central Bank would apparently.
Sign off on a tax.
-- confiscation.
Of small depositors money.
In Cyprus or any other.
Any other jurisdiction throughout the European Union that's the kind of president.
That I think is giving a lot of people income concerned.
-- -- denying advice that I wasn't surprised -- also -- some people are so while I knew that was gonna happen I didn't know that was gonna happen that really is if you make a list.
Of what's called PSI public sector involvement how you -- money from other people.
So the government doesn't have to do it all that's pretty way he weighed down the list that something say in the United States or in the Greek case.
I don't think anybody ever thought it was.
And they're never been such an appropriation and in any part of the European bail -- this time.
Coming back to this country as we watch her friends in Europe try to deal with.
Well if you will the aftermath of a very bad decision.
How do you feel about our markets they seem to be as I said at the outset.
Working on the housing recovery would favor.
The market seemed to be holding up.
Your parts.
I think they've taken in stride you know we had a big run up in the -- everybody knows -- some people think all you need when you get something like that of light a match somewhere and it just.
Gives up a lot of its game so that was a little match slid it didn't give up much of its.
Games you know frankly you know and I know and everybody knows they're all staring at the Federal Reserve as if something momentous this is different now tomorrow and it won't.
You guarantee you're guaranteed -- -- can guarantee about it.
I think after the last time that Bernanke had to come out and basically say don't misunderstand who's in charge here.
We said we're going to keep the -- -- the battle and we're going to do about it it would be ashamed to undo all the good that's been done by the an arm in the minority.
I have a lot of places and -- them but I think Bernanke's an average of what do you think.
Five he's done a fabulous.
I mean.
I think Lehman Brothers were -- an ancient history was a big mistake.
-- but since Lehman Brothers I think they've been sure footed they've been Smart they've been creative.
And they've shown stick to it.
And sometimes and a very lonely way not much competition relate a lot of criticism.
Alan it's always great to see you we appreciate it thanks so much it to be with -- and Alastair book you can go to Lou Dobbs dot com connect directly.
And make -- small transaction.
After the music stopped -- -- love that title thank you and we recommend the book you highly.
