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"Fed Is Stuck Between Barack and a Hard Place"

By Jim Cramer
RealMoney Columnist
1/27/2010 10:29 AM EST



"Someone want to tell me something positive that can come out of the Fed meeting? In this environment, any statement that says, "No pickup" will be greeted with a selloff, as it means that nothing is working. Any statement that says there is a pickup will be greeted with endless questioning by the media about when the tightening will begin and whether if we tighten while China tightens, won't we have a double-dip?

Anything that says business is actually solid will provoke fears of inflation and a bond selloff. Anything that says employment remains a negative will put the pressure on the president to say something about jobs, but because he seems to be resigned to not focusing on jobs and instead wants to beat up the bankers, that will be a step back. Anything that says banks aren't lending will mean that the banks are the enemy, and why isn't Ben Bernanke doing something about it? Anything that doesn't chastise the bankers will cause a new round of worry about whether he deserves the job.

That's where we are. That's the 2010 theme.

The only reason the market might not get hammered on the statement is that so many hedge fund managers know everything that I have written above, it's inconceivable that most won't come in short.

Bernanke's not a politician. He is not about trying to make the stock market go up or down -- his predecessor wanted it up. Bernanke is not about to appease his newfound critics. He will be able to make earnings a sideshow even though they are pretty darned good.

But the main event tonight will only make things worse, I believe, because I am coming to understand this president. I think he, in actuality, believes that if the stock market isn't coming down, then he isn't doing his job of helping the downtrodden, the sick, the huddled masses yearning to breathe free. It's a barometer of failure for him if he inspires higher stock prices, because those accrue to the rich, not the poor.

I wonder (in addition to the litany traced out in my earlier piece) whether he has a trader tax up his sleeve, or a radical raising of capital gains taxes.

Remember, he means well. I think he believes that the average person does not have much on the line with the stock market. I believe he doesn't understand -- as no one in the public sector all of his life should understand -- that the average working person uses stocks to save for retirement and to put kids through school.

Again, I am saying that Bernanke's in a tough spot. He now stands for the reviled Wall Street that the president needs against him to improve his standing with the masses. (Notice I didn't say "peasantry," but I wonder if Obama is thinking along those lines without knowing it.) A win for "Wall Street" is a loss for this president, and Ben Bernanke cannot change the newfound perception of himself.

All that makes the statement today a negative, not a positive, no matter what. "

(in www.realmoney.com)