Ben Bernanke testified today that he, "did not anticipate a crisis of this magnitude", and that he, "should have done more". I was going to make an excuse for him because he is really an academic and has no practical market experience. He did however, as head of the Minneapolis Fed, have lots of experience dealing with banks. He is also a student of the Great Depression during which there was, no doubt, a similar liquidity crisis. So, you have to ask yourself, if a bike shop guy could predict that every bank president in the country would all try to jump through the same window at the same time and that they would all panic and stop lending, then how come Ben could not? Huh?
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