“I would like to know what those damn things are worth”

From Bloomberg:

Bernanke Says Housing to Remain `Drag’ on U.S. Growth

Federal Reserve Chairman Ben S. Bernanke said the housing slump will be a “significant drag” on U.S. growth into next year, though evidence of a broader impact on spending is limited.

“The Federal Reserve will continue to watch the situation closely and will act as needed to support efficient market functioning and to foster sustainable economic growth and price stability,” Bernanke said in a speech to the Economic Club of New York today.

Credit markets have improved, he added, while a full recovery will take time “and we may well see some setbacks.”

Bernanke’s speech, his first on the economy since August, comes as investors pared expectations for an interest-rate cut this month. Retail sales increased in September and jobs and wages picked up, suggesting consumers are weathering the worst housing slump since 1991 and reduced access to credit.

The Fed chief, as Vice Chairman Donald Kohn did two weeks ago, pointed out risks to both growth and inflation, declining to steer investors on whether he favors lower borrowing costs.

“He was not giving away anything about what the Fed was going to do at the next meeting,” said Robert Hormats, vice chairman of Goldman Sachs International, who attended the dinner.
…
“Risk management considerations also played a role in the decision, given the possibility that the housing correction and tighter credit could presage broader weakening in economic conditions that would be difficult to arrest,” he said.

In response to a question by Henry Kaufman, the former Salomon Brothers Inc. economist who now runs a New York firm bearing his name, Bernanke said investment firms “need to be as transparent as possible” about how they value their assets.

“This current financial stress is not likely to disappear overnight; partly it is an information problem,” Bernanke said. “It is going to take a while for investors to appropriately value these assets.”
…
“I would like to know what those damn things are worth,” Bernanke joked, referring to the products that investors have shunned in the credit rout. “This episode has revealed a weakness in structured credit products,” namely the difficulty in coming up with valuations in periods of stress.