In return for speaking fees reported to be “at least” $250,000, Ben Bernanke confessed a few of the Fed’s missteps while speaking to guests of the National Bank of Abu Dhabi on Tuesday:
- “Bernanke says he underestimated impact of subprime problem.”
- “This is going to sound very obvious but the first thing we learned is that the U.S. is not invulnerable to financial crises,” Bernanke said.
- “Bernanke says he thought slowdown would be ‘moderate’.”
Bernanke’s gentle mea culpas had us wondering what kind of confessions we may hear next. It’s probably not surprising that we didn’t have to wait long for clues.
Consider this chart created from the household balance sheet in today’s Flow of Funds report: