Video: Ben Bernanke Interview on 60 Minutes – Depression Averted, Recovery Soon

Bernanke on 60 Minutes Part 1:

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Bernanke on 60 Minutes Part 2:

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Finally, Bernanke Tells Us How He Really Feels …

From Bloomberg Tuesday afternoon:

“If there is a single episode in this entire 18 months that has made me more angry, I can’t think of one other than AIG,” Bernanke told lawmakers today. “AIG exploited a huge gap in the regulatory system, there was no oversight of the financial- products division, this was a hedge fund basically that was attached to a large and stable insurance company.”

Bernanke’s comments foreshadow tougher oversight of systemically important financial firms, and come as President Barack Obama seeks legislative proposals within weeks for a regulatory overhaul. The U.S. government has had to deepen its commitment to prevent AIG’s collapse three times since September as the company accumulated the worst losses of any U.S. company.

The company “made huge numbers of irresponsible bets, took huge losses, there was no regulatory oversight because there was a gap in the system,” Bernanke said. At the same time, officials “had no choice but to try and stabilize the system” by aiding the firm.

AIG is getting as much as $30 billion in new government capital and relaxed terms on its bailout announced yesterday.

Full Text: Ben Bernanke Testimony on Economy and Federal Budget, March 3

(Source: Board of Governors of the Federal Reserve System)

As Prepared for Delivery

Chairman Conrad, Senator Gregg, and members of the Committee, I am pleased to be here today to offer my views on current economic and financial conditions, the federal budget, and related issues.

Recent Financial and Economic Developments and the Policy Responses
Over the past 18 months, the global economy has experienced a period of extraordinary turbulence. The collapse of a global credit boom, triggered by the end of housing booms in the United States and other countries and the associated problems in mortgage markets, has led to a deterioration of asset values and credit conditions and taken a heavy toll on business and consumer confidence.

Read more

Full Text: Fed Chairman Bernanke Testimony to Senate Banking Committee – Feb. 24 – Monetary Policy Report to Congress

(Source: Board of Governors of the Federal Reserve)

Chairman Dodd, Senator Shelby, and members of the Committee, I appreciate the opportunity to discuss monetary policy and the economic situation and to present the Federal Reserve’s Monetary Policy Report to the Congress.

Recent Economic and Financial Developments and the Policy Responses
As you are aware, the U.S. economy is undergoing a severe contraction.  Employment has fallen steeply since last autumn, and the unemployment rate has moved up to 7.6 percent.  The deteriorating job market, considerable losses of equity and housing wealth, and tight lending conditions have weighed down consumer sentiment and spending.

Read more

Text: Fed Chairman Bernanke at National Press Club, February 18

(Source: Board of Governors of the Federal Reserve System)

Federal Reserve Policies to Ease Credit and Their Implications for the Fed’s Balance Sheet

We live in extraordinarily challenging times for the global economy and for economic policymakers, not least for central banks such as the Federal Reserve. As you know, the recent economic statistics have been dismal, with many economies, including ours, having fallen into recession. And behind those statistics, we must never forget, are millions of people struggling with lost jobs, lost homes, and lost confidence in their economic future. In examples that resonate with me personally, the unemployment rate in the small town in South Carolina where I grew up has risen to 14 percent, and I learned the other day that what had once been my family home was recently put through foreclosure.

Read more

Federal Reserve’s Emergency Actions Need Exit Strategy or Economy Suffers More

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

Click this link for PDF of Chairman Bernanke’s testimony.

Cat bounces Monday – Dies again today – What’s in store for tomorrow?

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

(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

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

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

• 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

• 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