The Bernanke 60 Minutes interview lived up to billing with his comments that the country has avoided a Depression lifting market averages this morning. More importantly he revealed what may be the key for this bear bounce to transform into a new bull.
Scott Pelley asked him, "What will be the first signs of recovery?"
Bernanke answered: "One sign would be that a large bank is successful in raising private equity. Right now, all the private money is sitting on the sidelines saying, 'We don't know what these banks are worth. We don't know that they're stable.' And they're not willing to put their money into the banks."
Financials up strongly again today as investors anticipate this event happening soon. It's possible that once the government puts its toxic asset buyback plan on the table, private capital will feel more comfortable about stepping in. Steve Liesman reports that Geithner's plan could come as early as this week.
If you still hear crickets from private equity next week, then it may be a sign there's more trouble ahead.
ALSO WORTH MENTIONING
Give the administration credit where credit is due. The Bernanke interview was the height of an ongoing White House PR offensive that seems to be taking hold and deserves some of the credit for this rebound. FM viewers like yourself overwhelmingly believe that President Obama is on his way to winning back Wall Street.
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