Norris McLaughlin & Marcus, P.A.

Blogs > Business Without Borders

Has the U.S. Market Bottomed Out? Will Fed Chairman Bernanke Commence QE3?

Posted on August 26th, 2011 | Author: Robert C. Gabrielski

U.S. stocks fell on Thursday after a three day run. Are investors trading out of equity to raise cash in anticipation of Fed Chairman Ben Bernanke remarks at the Jackson Hole Wyoming meeting of the Federal Reserve Board of Governors? Will Bernanke’s remarks indicate that the Fed will embark on another monetary push to revive the stagnated U.S. economy? Last year, Bernanke indicated that the Fed would embark on a US$600 Billion bond buying spree Quantitative Easing 2. The market reacted positively. This year, many economists believe that the Fed will only take gradual quantitative measures and not aggressive bond purchases – no QE3. However, Warren Buffet may believe otherwise. Consider that Berkshire Hathaway has agreed to invest US$5 Billion of Berkshire Hathaway money in Bank of America. Berkshire Hathaway gets into Bank of America with its $5 billion stake at a time the bank’s shares are at a two-year low.  (Berkshire’s deal is basically this: US$5 Billion of Preferred shares with warrants to acquire 700 Million shares of common stock at just over US$7.14 per share.) Does Warren Buffett believe that the U.S. market has bottomed out and is poised for a recovery?  Stay tuned for Bernanke’s speech today at 10:00 AM Eastern Time.  Foreign banks certainly will.