Over the past decade, I admit I have had a love/hate relationship with Ben Bernanke. This was not more evident than it was a few weeks ago when I had the opportunity to hear Ben speak.
For that opportunity, I must first thank both my wife and my in-laws who agreed to push off our night without the kids to a more “convenient” time. If that doesn’t display Ben’s hold on me as a wealth manager, I frankly don’t know what does!
While I do believe Bernanke’s actions during the financial crisis have worked like a charm—so far—his speech was essentially a premature victory lap taken only halfway through the race. The only thing that was missing was the large banner “Mission Accomplished!” hanging in the background.
Investors around the globe are obsessed with the Fed. In turn, the Fed now appears obsessed with hiking interest rates for the first time in a decade.Coupled with investors’ ongoing addiction to low rates, this combination has created a witch’s brew with unknown consequences. Sensing that the second half of the race is now underway, I think Bernanke sees an opportune time to cash in his chips.
Just one day before my non-intimate date with Bernanke, he publicly announced his new career as a blogger. It may seem like an odd choice from his former perch as Fed chairman and from the ivory tower of Princeton. Becoming a blogger just does not seem like the high-paying gig one books after a decade as a sacrificial “public servant.”
Yet, his decision to become just another voice in the vast blogosphere is easier to explain when you realize that only one-year removed from his service to the country, he is also speeding down the well-worn path to financial riches blazed by other government officials who came before him.
Through the combination of his speaking fees of $200,000 to $400,000, his reported book advance of around $10 million and now with his recently announced consulting role for a hedge fund deeply connected to the controversy of Wall Street’s high-frequency trading practices, it appears Ben is striking while the iron’s still hot.
Perhaps he knows how quickly public opinion can shift beneath him. Think of the speed of change experienced by his predecessor, Alan Greenspan, who lost his mantle as The Maestro with the bursting of the housing bubble.
It may be hard to envision now, but the back half of the race may ultimately show that central bankers, like Bernanke, are simply not all-knowing gods of the financial system worthy of such praise and, now, such incredible fortune.
May 2015 | Jason P. Tank
