Out of Tools, "Backdoor Ben" still flapping lips

TheBrutalTruth · #1 02-24-2009, 10:13 AM

Quote:

February 25, 2009
Fed Chief Vows to Use Every Tool to Stem the Crisis

By CATHERINE RAMPELL
WASHINGTON — While the United States economy is likely to worsen significantly over the next year, the Federal Reserve is “committed to using all available tools” to stanch the financial crisis and unfreeze credit markets, the Fed chairman, Ben S. Bernanke, told the Senate Banking Committee on Tuesday.
But he added that the economy was suffering through a “severe contraction” and could get even worse than recent forecasts.
In the first leg of his twice-annual report to both houses of Congress on the state of the economy and the Fed’s actions, Mr. Bernanke painted a dire picture of the financial markets going forward, but assured the committee that government agencies were taking all necessary actions to thaw credit markets.
“The measures taken by the Federal Reserve, other U.S. government entities, and foreign governments since September have helped to restore a degree of stability to some financial markets,” Mr. Bernanke said in his testimony. “Nevertheless, despite these favorable developments, significant stresses persist in many markets.”
In particular, he said, most securitization markets “remain shut.”
As required by law, Mr. Bernanke addressed both halves of the Fed’s dual mandate: stable prices and maximum employment. The former part of the mission has largely been met, with prices more or less unchanged from their level a year ago, and inflation is expected to glide under 1 percent during 2009.
But labor market conditions continue to deteriorate. Citing projections by the Fed’s Open Market Committee in January, he said the unemployment rate, which soared to 7.6 percent in January, is likely to reach 8.5 to 8.75 percent in the last quarter of 2009. The country’s gross domestic product is projected to decline 0.5 to 1.25 percent this year, he said, and foreclosure rates remain at high levels.
But he added, “This outlook for economic activity is subject to considerable uncertainty, and I believe that, over all, the downside risks probably outweigh those on the upside.”
The international nature of the economic slowdown, plus a “so-called adverse feedback loop” (the idea that economic and financial conditions become mutually reinforcing), threaten to delay recovery, he said.
He urged support for the significant — and in many cases, unpopular — fiscal and monetary interventions the government has made into the economy thus far.
“If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability — and only if that is the case, in my view — there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” Mr. Bernanke said.
The Fed has taken some extraordinary steps in recent months in the hopes of increasing the flow of credit to businesses and households.
In December the Federal Open Market Committee lowered its key interest rate to virtually zero, its floor.
The Fed has been buying mortgage-backed securities — considered the leading cause of the meltdown after the housing bubble burst — that have been guaranteed by the federal government.
It has also begun unprecedented programs as a lender.
It has expanded the Term Auction Facility, which loans to banks. It has also introduced the Term Asset Backed Securities Loan Facility, which finances consumer loans, and which the Fed recently announced it would expand in both size and scope; and the Commercial Paper Funding Facility, which provides loans in exchange for short-term business i.o.u.’s.
Mr. Bernanke said these actions had contributed to improvements in short-term funding markets and the commercial paper market, and declines in the conforming fixed mortgage rate and the London Interbank Offered Rate (Libor), the rate on which borrowing costs for consumers and businesses are often based.
The Fed has also been working in partnership with the Treasury Department, headed by Secretary Timothy F. Geithner, to coordinate intervention in the financial markets.
On Monday, the Treasury, the Fed and federal bank regulatory agencies issued a joint statement announcing that the government might demand direct ownership in major banks after they undergo a “stress test” to determine their viability going forward.
The test, which will be applied to the 20 biggest banks, will be used to measure whether banks have enough capital to survive a worsening downturn.
While Monday’s statement stopped short of announcing a plan to “nationalize” any banks officially, it indicated that banks that failed to pass the test would be forced to accept a plan to return them to solvency using capital from public and private funds.
Officials have also announced a plan to use public and private money to purchase so-called toxic assets from financial institutions, as well a measures to help slow the mass of foreclosures.
In his testimony on Tuesday, Mr. Bernanke addressed criticisms regarding a lack of transparency in the administration of these and other programs.
He discussed additional reports that the Fed has been providing to Congress, and a newly unveiled Web site on the Fed’s lending programs. He also noted that the Fed’s vice chairman, Donald Kohn, is heading a committee to review the agency’s publications and disclosure policies.

Some one should ask "Backdoor Ben" Bernanke just what tools he's talking about.

The Fed is printing money like there is no tomorrow, so it can't just print more. Even if it can, the Chinese don't want to buy the debt, so we're facing an inflationary bubble.

They can't reduce interest rates (Rates are near 0%)

What tools does "Backdoor Ben" think he has left?

Because if there isn't a way he hasn't said, "BOHICA, America." I'd like to know about it before hand.

ViRedd · #2 02-24-2009, 02:26 PM

Government meddling in the private market got us into this mess ... and government meddling won't get us out of it either.

Vi

kronicsmurf · #3 02-24-2009, 02:54 PM

Damn i have to agree with ViRedd. Nothing good ever comes from the federal government meddling in business affairs. but when has the government ever done anything Right.

max420thc · #4 02-25-2009, 05:20 AM

Quote:

Originally Posted by kronicsmurf

Damn i have to agree with ViRedd. Nothing good ever comes from the federal government meddling in business affairs. but when has the government ever done anything Right.

ben bernake is a political hack.every expert in the world is saying there will not be a recovery for a long long time.bernake is saying the beggining of next year..bernake has never ever ever been right one single solitary time.not one time..it is amazing to me he still has a job.id say its a pretty safe bet hes wrong this time too

TheBrutalTruth · #5 02-25-2009, 07:03 AM

Quote:

Originally Posted by max420thc

ben bernake is a political hack.every expert in the world is saying there will not be a recovery for a long long time.bernake is saying the beggining of next year..bernake has never ever ever been right one single solitary time.not one time..it is amazing to me he still has a job.id say its a pretty safe bet hes wrong this time too

Maybe the government will try engineering a solution to this problem the same way FDR did, by devaluing the dollar by 40% again.

max420thc · #6 02-25-2009, 07:51 AM

im just waiting for this idiot to ban gold ownership again.

TheBrutalTruth · #7 02-25-2009, 04:13 PM

Quote:

Originally Posted by max420thc

im just waiting for this idiot to ban gold ownership again.

Well you know, since Obama clearly wants to emulate FDR and Hoover it would not surprise me if that is his next move... come June, when all this unstimulating spending fails miserably.

4% of the abortion of a spending bill was infrastructure, the other 96% of the spending (outside of tax cuts, which were laughable) were government spending.

bend, bend, bend your ass,
over for the government
prepare to get fiscally raped,
with out KY Jelly
because its not a gov'ment of the people
for the people, by the people
but a gov'ment of the idiots
by the idiots
for the idiots
and life is going to suck.

So, bend, bend, bend your ass
over for the gov'ment
don't worry about a reach
around, cause it just wont happen
cause you count as nothing
more than another tax paying
slave, because it's not a gov'ment
for people like you
and me

medicineman · #8 02-25-2009, 04:33 PM

Quote:

Originally Posted by ViRedd

Government meddling in the private market got us into this mess ... and government meddling won't get us out of it either.

Vi

Bullshit.........free market capitalism with no regulation and greed is what really put us into this crisis.

TheBrutalTruth · #9 02-25-2009, 04:42 PM

Quote:

Originally Posted by medicineman

Bullshit.........free market capitalism with no regulation and greed is what really put us into this crisis.

Free market capitalism wouldn't have taxes.

Free market capitalism wouldn't have millions upon millions of lines of government code regulating what corporations can and can not do.

Free market capitalism would have no entities like Fannie, Freddie and the SEC.

Free market capitalism would not have artificial distinctions drawn between its citizens based on class warfare.

Free market capitalism would have allowed the banks to fail.

Free market capitalism would have allowed GM and Chrysler to go under.

The United States hasn't had free market capitalism in nearly 100 years.

This is a failure of a mixed economy that consistently decreases the rewards of working, while increasing the rewards of FAILURE.

ViRedd · #10 02-25-2009, 05:25 PM

Quote:

Originally Posted by medicineman

Bullshit.........free market capitalism with no regulation and greed is what really put us into this crisis.

And once again, you put your vacuous cranium on display.

Have you ever considered stand-up comedy?

Vi

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