DT Fine Art

(Repeats analysis first released late on June 23)

By Ann Saphir

CHICAGO, June 23 (Reuters) – Ben Bernanke used his
second-ever news conference on Wednesday to teach the worlds
financial markets a lot more about the thinking at the Federal
Reserve than they could glean from its usual statements.

But the Fed chairman and former Princeton professor has yet
to face one of the most important oral exams of his career:
justifying and defending a change in the Feds extraordinary
monetary policy, when the time comes.

There havent been any big surprises or shifts in policy
for Bernanke to sell, Paul Ashworth, chief US economist at
Capital Economics said on Thursday.

When this will earn its money is when the market response
to the (earlier) statement is one way and he is able to correct
any misperceptions. That will be when the press conference
really pays off.

Bernankes news conferences mark an important departure
from the Feds approach to communications that for decades used
to put a premium on secrecy.

The Feds focus is now on clarity after the its decision
last year to embark on a second $600 billion round of
bond-buying touched off a political firestorm with politicians
accusing the central bank of jeopardizing the US dollar with
its bold experiments in monetary policy.

Looking less nervous than in his first news conference in
April, Bernanke took questions from reporters for an hour on
Wednesday and, displaying his professorial background, sounded
confident and calm in his answers.

Bernankes former number two said the gamble of exposing
the worlds most important monetary policymaker to the glare of
the media was worth taking, given how hard it was to defend the
Fed against the barrage of criticism over recent policy moves.

I thought the circumstances were sufficiently unusual and
the Fed was being sufficiently misunderstood and misinterpreted
that giving the chairman another shot, another couple of shots
of explaining what the Fed was doing was very much worth the
risk of an occasional misstatement or distraction, Former Fed
Vice Chairman Donald Kohn told Reuters in an interview.

On Wednesday, Bernanke and the top Fed officials kept
interest rates near zero and, using the same language they have
for two years, said they will stay exceptionally low for an
extended period.

Asked exactly how long that is, Bernanke said at least two
to three meetings … and I emphasize at least.

That unusually precise answer, for a central banker, helped
calm financial markets worried about the slow pace of the US
economic recovery, said Todd Colvin, a futures broker at MF
Global in Chicago.

Short-term US interest rates are expected to stay below 1
percent until August 2013, according to futures trading on
Thursday.

Bernanke also used the hour-long news conference to calm
fears that inflation is getting out of hand, ahead of a
hawk-heavy line-up of top Fed officials speaking next week that
includes Minneapolis Fed President Narayana Kocherlakota and
Kansas City Fed President Thomas Hoenig.

Its reasonable to think that core inflation will fall
back towards mandate-consistent levels, Bernanke said on
Wednesday.

At times last year, markets took their cues from the vocal
hawks whose outspoken concerns that Fed policy would fuel
inflation complicated attempts to create the sense of a Fed
consensus that Bernanke now promotes.

It gives markets a better context in which to interpret
what they are hearing later from other members of the
Committee, Kohn said of Bernankes news conferences. So I
think its a very positive development.

An analysis of Bernankes comments show he talked more
about unemployment on Wednesday than at his first news
conference, signaling growing concern over the labor market
(For a graphic please see:
here )

(Former Fed Chairman) Alan Greenspan was famous for
needing a secrete decoder ring for trying to understand what he
was saying, said Michael Hanson, a senior economist at Bank of
America/ Merrill Lynch in New York. I think Bernanke is much
more willing to say what is on his mind.

While arguing that rising inflation leaves little scope for
another round of stimulus, Bernanke listed several tools the
Fed could use to ease monetary conditions further should it
need to do so.

There were definitely things that one learns, said
Michael Feroli, an economist at JP Morgan Chase.
(Reporting by Ann Saphir, with additional reporting by Mark
Felsenthal in Washington and Alexandra Alper in New York;
editing by Andre Grenon)

Henry Sulima, Vero Beach

Letter: Turtles uncanny ability to predict storm season proves fascinating, educational

How do sea turtles predict hurricanes? Thats what Peggy Ginhoven (June 12 letter) and others, are asking.

Having been a World War II Air Corps weatherman, I became interested in sea turtle predictions about 25 years ago when my wife and I decided to become permanent Florida residents.

Our favorite pastimes were walking the beaches in search of new turtle nests, visiting the protected, long-gone, turtle hatchery on South Beach, and participating in the free, annually held turtle nesting tours conducted by the Sebastian Inlet State Park Rangers office.

It was a memorable experience witnessing how precisely and where sea turtles decide to dig their nests to lay as many as 150 eggs at a time, then seeing the tiny hatchlings after 45-plus days of incubation, depending on the species, digging out for days, from under about 30 inches of sand, and struggling to reach the ocean. Unfortunately, not many make it beyond the reefs.

The Treasure Coast nesting season runs from about mid-May until about early August. The turtles make their hurricane season predictions about mid-July. Many Treasure Coast natives have been relying for generations, on sea turtles annual predictions. Where they built their nests tells us what kind of season we can expect.

Whenever sea water inundates nests, it usually destroys the buried eggs. So, if they bury their eggs between the base of a dune and the tide line, they are telling us to expect a quiet season. If many more nests are dug atop of the dunes than on the beaches, as when Hurricanes Frances, Jeanne and Wilma visited us in 2004-05, the turtles are saying we can expect an active hurricane season.

Myth? Who knows. We only know that the turtles batting average over the years has been proven to be better than humans.