Thursday, April 16, 2015

Exasperation in Three Acts: Act 2 -- Ben Bernanke Goes to Citadel

Exasperation in Three Acts:  Act 2 -- Ben Bernanke Goes to Citadel

The former Chairman of the Federal Reserve will become a consultant to Citadel, a large hedge fund complex.  After hitting the hedge fund speaking circuit at $200,000 an appearance, Mr. Bernanke will provide economic advice to Citadel’s investment committee and meet with their clients.[1]  Mr. Bernanke defended his decision to join Citadel by pointing out that he will not be lobbying for the firm and that the Federal Reserve doesn’t regulate Citadel.  I don’t think these distinctions are terribly meaningful. 

It is hard to see how Mr. Bernanke is going to add any real value to Citadel’s portfolios.  Rather, he’ll give Citadel a nice intellectual veneer that will help lure investors and placate regulators.  Better yet from Citadel’s perspective, Mr. Bernanke’s compensation will be rounding error.


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