Federal Reserve’s Emergency Actions Need Exit Strategy or Economy Suffers More
Filed under: Ben Bernanke, Recession, U.S. Economy, U.S. Financial Crisis
You should read this story out on the Reuters wire today regarding the $1.3 Trillion the U.S. Federal Reserve has thrown at the financial markets over the last year. It’s lede:
NEW YORK (Reuters) - When U.S. central bankers eventually move to wean markets off the emergency support put in place to rescue the economy, they will face the difficult and delicate task of timing it right.
If they wait too long, they risk sky-high inflation or another asset bubble. If they move too fast, they risk undermining any incipient economic recovery.
Even against the current backdrop of a miserable economic outlook and the specter of deflation, a growing number of voices are warning that the Federal Reserve needs a clear and credible exit strategy for its unprecedented policies.
You may also want to refer to this post regarding the emergency support actions the Fed has taken recently.
If the Fed doesn’t get this right we may be in store for a longer recession, hyper-inflation or the collapse of yet another economic bubble.
Text: Ben Bernanke Testimony to House Financial Services Committee | November 18, 2008
Filed under: Bailout Bill, Ben Bernanke, U.S. Congress, U.S. Economy, U.S. Financial Crisis
Click this link for PDF of Chairman Bernanke’s testimony.
Cat bounces Monday – Dies again today – What’s in store for tomorrow?
Filed under: Bailout Bill, U.S. Economy, U.S. Financial Crisis
DOWn over 700
- Dow loses 8% over recession fears – CNBC
- U.S. stocks plunge most since 1987 – Bloomberg
- Dow declines 733; S&P 9% - Wall Street Journal
- Plunge in stocks Highlights ailing economy – New York Times
- Most of Monday’s gain is erased – New York Times
- Wall Street plummets – Reuters
One Year DJIA Chart
Bernanke, Other News & Analysis
- Economic activity weak across U.S.: Beige Book – Reuters
- Bernanke says U.S. economy faces big threat – Reuters
- Fed considers more cuts – Wall Street Journal
- Bernanke says bailout will need time to work – New York Times
- Video Link: Bernanke’s Address Courtesy of CNBC
Full Text: Ben Bernanke Speech | Economic Club of New York, NY | October 15
Filed under: Bailout Bill, U.S. Economy, U.S. Financial Crisis
(Source: U.S. Federal Reserve Board of Governors)
Stabilizing the Financial Markets and the Economy
Good afternoon. I am pleased once again to share a meal and some thoughts with the Economic Club of New York. I will focus today on the economic and financial challenges we face and why I believe we are well positioned to move forward. The problems now evident in the markets and in the economy are large and complex, but, in my judgment, our government now has the tools it needs to confront and solve them. Our strategy will continue to evolve and be refined as we adapt to new developments and the inevitable setbacks. But we will not stand down until we have achieved our goals of repairing and reforming our financial system and restoring prosperity. Read more
Full Text: Ben Bernanke Speech to National Association for Business Economics, Washington D.C., October 7, 2008
Filed under: Bailout Bill, U.S. Economy, U.S. Financial Crisis
Current Economic and Financial Conditions
Good afternoon. I am pleased to have once again the opportunity to address the National Association for Business Economics. My remarks today will focus on recent developments in the financial sector and the economy and on the challenges we face.
As you know, financial systems in the United States and in much of the rest of the world are under extraordinary stress, particularly the credit and money markets. The losses suffered by many banks and nonbank financial firms have both constrained their ability to lend and reduced the willingness of other market participants to deal with them. Great uncertainty about the values of financial assets, particularly more complex and opaque assets, has made investors extremely reluctant to bear credit risk, resulting in further declines in asset prices and a drying up of liquidity in a number of funding markets. Even secured funding has become expensive and difficult to obtain, as lenders worry about their ability to sell collateral in illiquid markets in the event of default. In addition, many securitization markets, such as the secondary market for private-label mortgage-backed securities, remain closed or impaired. Read more
Text: Ben Bernanke Statement to Congressional Joint Economic Committee, Sept. 24
Filed under: U.S. Congress, U.S. Economy, U.S. Financial Crisis
Click Here to Download PDF of Ben Bernanke Testimony
Paulson pulls the trigger on Fannie & Freddie
Taxpayers left on the hook for how much?
Noon Sunday
- Paulson lays out plan for Fan-Fred - Wall Street Journal
- Treasury engineers takeover - Bloomberg
- GSE takeover - Reuters
- Bernanke endorses move - Reuters
- U.S. unveils takeover of Fannie, Freddie - New York Times
Tuesday Eve – SF Computer Problems, Wendell Berry, McCain and Romney, More Bernanke
Filed under: John McCain, Presidential Campaign 2008, U.S. Economy
- Disgruntled employee jacks up city’s system – San Francisco Chronicle
Why doesn’t this happen more often?
- Will Romney’s combative style net VP nod? – CBS News
- Bernanke: Risks to Growth, Inflation Rising – Bloomberg
- Wendell Berry On Small Farms, Local Wisdom, And The Folly Of Greed – The Sun
To make yourself a passive receptacle for information, or whatever anybody wants to pour into you, is a bad idea. To be informed used to be a meaningful experience; it meant “to be formed from within.” But information now is just a bunch of disconnected data or entertainment and, as such, may be worthless, perhaps harmful. As T.S. Eliot wrote a long time ago, information is different from knowledge, and it has nothing at all to do with wisdom. – Wendell Berry
If you read one thing this evening, follow the link above and read this interview with Wendell Berry. It will make you think. That’s good.
Tuesday A.M. – National City, State Board of Education, Bernanke, Madrassas, General Motors, Offshore Drilling
Filed under: Ohio Economy, State of Ohio Govt, Terrorism, U.S. Economy
- Economy will stay sluggish: Bernanke – New York Times
- How sound is National City? – Columbus Dispatch
- State Education Board unveils vision – Columbus Dispatch
- Editorial: Confusing the Issue – Columbus Dispatch
- Trudy Rubin: Pakistan’s madrassas are troubling – Columbus Dispatch
- GM ends dividend, takes cash-saving steps – Cleveland Plain Dealer
- Editorial: Regulators’ new rules … finally – Cleveland Plain Dealer
- Ohio unemployment fund needs help – Dayton Daily News
- Editorial: Cost of gas could slow sprawl – Dayton Daily News
- Raise taxes, freeze benefits to shore up unemployment fund – Columbus Business First
- Taliban breached U.S. base – New York Times
- Editorial: Drilling’s Lure – New York Times
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Reuters Business Wire- Wall Street falls as Wal-Mart eclipses Obama
- Wal-Mart and other retailers warn after weak December
- U.S. says Madoff had checks ready, seeks jail
- Treasury sees signs financial rescues working
- Jobless rolls at 26-year high
- Companies face $409 billion pension deficit: study
- Citi mulls endorsing bankruptcy reform: sources
- Satyam in crisis as India vows to end company fraud
- SEC accuses man of $50 million Ponzi scheme
- LyondellBasell says all reorganization options open
- Washington Post - World Headlines
- U.N. Suspends Aid Deliveries to Gaza Strip
- Pakistan Rejects Indian Accusations, Plays Down Tension
- Regulators Begin Probe of Indian Tech Giant
- Sarkozy Seeks Changes That Would Reinforce Presumed Innocence of Suspects
- Gunmen Attack TV Offices in Mexico
- Hamas Pulling Back Into Crowded Cities, Beckoning Israelis
- White House Voices Concern On North Korea and Uranium
- Khmer Rouge Leader May Be Tried in March
- Indian Outsourcing Giant Admits Fraud
- Red Cross Reports Grisly Find in Gaza
