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  • Bailout Ben sees a recession risk

    Others ask "What took you so long?"

    http://money.cnn.com/2008/04/02/news...ex.htm?cnn=yes

    NEW YORK (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke, in his most pessimistic and blunt assessment to date, said Wednesday that a "recession is possible" for the U.S. economy.
    Bernanke, speaking before a congressional committee, said he wasn't yet prepared to declare that the economy has fallen into a recession. Instead, he said that he believed the economy is still "slightly growing at the moment." But he added that he believed it is possible that the economy could shrink over the first half of this year.
    In his opening remarks to the Joint Economic Committee of Congress, Bernanke he also said he expects further rises in unemployment and says the economic outlook has worsened since the Fed's economic outlook was released in January.
    "It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke said, although he said that he believe the economy will rebound in the second half of the year.
    One of the short-hand measures of whether a nation is suffering from a recession are two or more consecutive quarters in which GDP, the broad measure of economic activity, is negative. His statement seems to suggest that could well occur in the just completed first quarter and the second quarter that started Tuesday.
    Bernanke pointed out that the technical determination of a recession won't be made until the National Bureau of Economic Research looks at a variety of detailed economic statistics at some point months into the future.
    "I'm not yet ready to say whether the U.S. economy faces such a situation," he said.
    Bernanke also defended the Fed's role in arranging and helping to finance the fire sale purchase of investment bank Bear Stearns (BSC, Fortune 500) by JPMorgan Chase (JPM, Fortune 500) last month.He denied it was a bailout and said it's not something he ever wants to do again, although he said he couldn't rule out another such rescue.
    He pointed out that Bear Stearns shareholders saw their holdings lose most of their value. "I don't think any company is interested in repeating the experience of Bear Stearns," he said.
    Bernanke said he took the actions not to rescue the company but to provide a smooth functioning of financial markets needed by all Americans.
    "Our financial system is extremely complex and interconnected, and Bear Stearns participated extensively in a range of critical markets," he said. "With financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence."
    The Fed's actions were praised by Sen. Charles Schumer, D-N.Y., the chairman of the committee.
    "Last month you looked into the precipice of financial meltdown and acted," Schumer said. "It is hard to disagree with the need to take quick and dramatic action to spare our financial system of the risk of the kind of meltdown we saw in the Great Depression."
    But Schumer and Sen. Sam Brownback, R-Kan., the ranking Republican on the House-Senate panel, said they both had questions about the decision-making process of the Bear Stearns bailout, and the implication it holds for future rescues.
    Much of Schumer's opening remarks focused on two topics that were not included in Bernanke's opening remarks - the administration's recent proposal to change the regulation of the financial sector, and the proposals now being debated in Congress to provide help for homeowners having problems paying their mortgages.
    "What is the justice of helping Bear Stearns and not millions of homeowners?" Schumer said. "A single homeowner going under does not pose systemic risk, but millions of homeowners going under do."
    Bernanke wouldn't comment on proposals to arrange for that kind of federal help for homeowners.
    "The Federal Reserve is acting in its sphere of influence. Housing is very important; that's Congress' sphere of influence, not the Fed's," he said in response to a question from Schumer.
    He also was limited in his comments on regulatory reform proposals, saying only that it was an appropriate time to have such discussions.

  • #2
    Whaaaaaaaattttt??????

    Moon

    Comment


    • #3
      Lies.

      Everyone keep up spending and maxing out credit to keep our economy strong.
      From this day forward, I no longer shall tinker with the machinery of death.

      For more than 20 years I have endeavored-indeed, I have struggled-along with a majority of this Court, to develop procedural & substantive rules that would lend more than the mere appearance of fairness to the death penalty endeavor.


      I feel morally and intellectually obligated simply to concede that the death penalty experiment has failed.

      The path the Court has chosen lessens us all. I dissent.

      Comment


      • #4
        Its not a recession as long as Bush says it is not.

        He's afraid of being labeled the Recession President.

        Comment


        • #5
          Originally posted by hansolo View Post
          Its not a recession as long as Bush says it is not.

          He's afraid of being labeled the Recession President.
          The economy's strong!

          Comment


          • #6
            "More people own their homes now than at any time in American history!"
            “I’ve always stated, ‘I’m a Missouri Tiger,’” Anderson said March 13 after Arkansas fired John Pelphrey, adding, “I’m excited about what’s taking place here.”

            Asked then if he would talk to his players about the situation, he said, “They know me, and that’s where the trust comes in.

            Comment


            • #7
              Originally posted by Razzy View Post
              "More people own their homes now than at any time in American history!"
              That would be all those baby boomers who have stayed in the same home for 30 years and have paid off their mortgage.

              If you have a mortgage you don't own your home; the bank does.

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              • #8
                Originally posted by Iowa_Card View Post
                That would be all those baby boomers who have stayed in the same home for 30 years and have paid off their mortgage.

                If you have a mortgage you don't own your home; the bank does.
                Even if you paid off your mortgage - there's the property tax you gotta pay every year. Skip the payment, watch the town or county take it from you.

                So what do we end up with then?

                Comment


                • #9
                  Originally posted by hansolo View Post
                  Even if you paid off your mortgage - there's the property tax you gotta pay every year. Skip the payment, watch the town or county take it from you.

                  So what do we end up with then?
                  Good point. But they aren't the extreme that mortgage payments are.

                  Comment


                  • #10
                    I thought it was Americans owned LESS of their homes than at any other point in US History...didn't someone publish that recently???
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                    • #11
                      Originally posted by Blues Fan in SF View Post
                      I thought it was Americans owned LESS of their homes than at any other point in US History...didn't someone publish that recently???
                      Its doesn't help when the home is worth 10-20% less then it was a year ago and some people paid way too much to begin with.
                      Go Cards ...12 in 13.


                      Comment


                      • #12
                        Originally posted by hansolo View Post
                        Even if you paid off your mortgage - there's the property tax you gotta pay every year. Skip the payment, watch the town or county take it from you.

                        So what do we end up with then?
                        In many places, this isn't true. When I bought my house in Washington, the county simply took $32,000 of the money the seller got for his house right off the top for his back property taxes. They had made no attempt to collect them for decades.

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