Local analyst back in the news

Gulf Coast investment analyst Dick Bove has dipped into the national debate over the Federal Reserve's efforts to revive the economy, specifically Fed Chairman Ben Bernanke's plan to buy $600 billion in U.S. Treasury bonds.

Bove is one of 24 people who signed an open letter to Bernanke that recently ran as a full-page ad in the Wall Street Journal. Co-signers of the letter include former Congressional Budget Office Director Douglas Holtz-Eakin; Weekly Standard editor William Kristol; Stanford University economist Michael Boskin, who chaired President George H.W. Bush's Council of Economic Advisers; and David Malpass, an official in the Treasury Department under President Reagan. The letter was assembled by e21, a conservative economic policy think tank.

“We believe the Federal Reserve's large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances,” the letter states. “The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.”

The letter goes on to state that tax, spending and regulatory policies are what needs to be corrected, not more stimulus plans. “We disagree with the view that inflation needs to be pushed higher,” the letter states, “and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.”

Bove, who works from an office in Lutz for Stamford, Conn.-based Rochdale Securities, couldn't be reached for comment. This isn't Bove's first connection with national news, however.

Earlier this year, for example, Bove settled a lawsuit with Fort Lauderdale-based Bank Atlantic. The bank claimed a report Bove wrote in 2008 was defamatory in detailing supposed financial problems in the banking industry.