Economic Fix? Consumers, Fed Are At Odds - General * US * News * Story

Runway Angels
The superbowl of fashion shows, models walk down the runway at the 2009 Victoria's Secret Show.
Smartphone Guide
Here's a need-to-know guide to nine devices, based on features, price, network and platform.
Wines for the Holidays
Not quite sure what wine to pair with Turkey or Creme Brulee? Our experts do.

FEATURED QUIZZES

A Healthier & Wealthier You
Take the following quiz and find out how much you know about the impact of obesity on the health of the U.S. economy.
The Billionaire BFF's
Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?
The Many Myths of Coca-Cola
Can you tell which statements are true, and which ones are just rumors?

SPECIAL REPORTS

Winterizing Your Portfolio
If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.
Investor's Guide to Real Estate
Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.
Alternative Investing
Stocks and bonds? Sure. But it's a big world out there for investors.

CNBC ON DIGG

Economic Fix? Consumers, Fed Are At Odds

By: Andrew Fisher, Writer | 02 Dec 2008 | 11:04 AM ET

Text Size

What's the fastest way out of the recession?

A. Ease up credit.

B. Tighten credit.

C. Do both.

Brian Battle of Performance Trust Capital Partners says that the answer seems to be "C," with the Federal Reserve and the consumer working at cross-purposes as they attempt to get back to normal.

"The Fed's opinion, and the government's opinion, is that we need to make credit more affordable," Battle told CNBC. "What should make your hair stand on end is when (Federal Reserve Chairman Ben) Bernanke, in his institutional way, says, 'We will invest in the long bonds in substantial quantities.'"

(To hear Battle's full interview, watch the accompanying video.)

Battle cited Oppenheimer's Meredith Whitney for recognizing that consumer attitudes are quite opposite.

"They have a liquidity problem, a solvency problem, and they're peeling back," he said. "They're trying to pay down debt, and get smaller."

The Fed is moving in the wrong direction, he said.

"The Fed's probably going to fail if all they're going to try and do is lower the cost of money," he said.

There is an important element of recovery that no one seems to recognize, according to Battle.

"We need to figure out ways to make the economy bigger to support the debt we have," he said. "We can't borrow our way out of this recession. We need to make the economy bigger."

More from CNBC.com:

Tools: