[Previous] What should government do to stimulate the economy?...

 [Next] 40 Day Fast: Day 18: Why I Hate His Economy...

Some related posts from Technorati and Google.

[Cannon Trading Futures Blog: Daily Support and Resistance Levels Blog] Futures Trading levels and Economic reports for July 15th: *To be removed, please reply with remove daytrading in subject line. Dear Trader,. A day full of economic reports tomorrow. Market is controlled by the bears but as in bear markets, short covering rallies can be vicious so trade wisely! ...

 [remy ma] Fed chief details woes in markets, housing, jobs (AP): At the same time Bernanke testifying before the Senate Banking Committee sounded another warning that rising prices for energy and food are elevating inflation risks This problem looms even as officials try to cope with persistent strains in financial markets rising joblessness and housing problems The situation he said poses significant challenges for Fed policymakers as they try to chart the best course for keeping the economy growing while making sure inflation doesn t dangerously flare up All the economy s problems 151 including slumping home values which threaten to make people feel less wealthy and less inclined to spend in the months ahead 151 represent significant downside risks to economic growth Over the rest of this year the economy will grow appreciably below its trend rate mostly because of continued weakness in housing markets high energy prices and tight credit conditions On Wall Street stocks slumped The Dow Jones industrials were down around 50 points after suffering steeper losses earlier in the morning Bernanke s testimony comes just two days after the Fed and the Treasury Department came to the rescue of mortgage giants Fannie Mae and Freddie Mac offering to throw them a financial lifeline The Fed chief was later joined by Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Chris Cox who were summoned to detail the rescue plan The two companies hold or guarantee more than 5 trillion in mortgages 151 almost half of the nation s total The Bush administration is asking Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock The Fed has offered to let the companies draw emergency loans The pledges of aid have raised concerns about the government s role in such financial problems and the risk to taxpayers Sen Christopher J Dodd D-Conn the Banking Committee chairman called the plan unprecedented Dodd said the rescue raises serious questions about the nature of the economic crisis facing our nation about the ability of these proposals to address this crisis effectively and about the burden that the American taxpayer potentially is being asked to carry Paulson said that if the government extends any financial backing to the two institutions it will be done under terms and conditions that protect the U S taxpayer He didn t provide details This is a backup facility that hopefully it will never be used Paulson said The Treasury chief said he hoped that the pledge itself would help to boost eroding investor confidence in the companies Sen Richard C Shelby of Alabama the panel s senior Republican cautioned I fear that we re sitting on a financial powder keg Officials may envision never using the powers Shelby added but this is not an empty gesture what if they did On the economic front inflation has remained high and seems likely to move temporarily higher in the near term Bernanke warned Indeed before Bernanke delivered his twice-a-year comprehensive economic assessment to Congress the Labor Department reported wholesale prices jumped 1 8 percent in June That left inflation rising over the past year at the fastest pace in more than a quarter-century Given the high degree of uncertainty about the Fed s economic outlook Fed policymakers will need to carefully assess incoming information about inflation and economic growth he said The Fed in June signaled an end to its nearly year long rate-cutting campaign because of growing concerns about inflation Bernanke kept up his tough anti-inflation talk on Tuesday but stressed many other problems that could short circuit economic growth He seemed to be keeping his options open in terms of rates Given all the risky cross currents economists believe the Fed will leave rates alone when they meet on Aug 5 Righting wobbly financial markets is key to getting the economy back on track he said In general healthy economic growth depends on well-functioning financial markets Bernanke said Consequently helping the financial markets to return to more normal functioning will continue to be a top priority he said Strengthening regulatory oversight of Fannie and Freddie Bernanke said is job one Congress is moving ahead on a broad housing rescue package that includes provisions to tighten regulation over the two companies Bernanke said legislative efforts to help stabilize the housing market 151 the biggest threat to the economy 151 are of vital importance Bernanke in the first day of back-to-back appearances on Capitol Hill said investors are nervous in general because of the cloudy outlook for the economy and credit conditions feeding a vicious cycle that can be hard to break Many financial markets and institutions remain under considerable stress in part because the outlook for the economy and thus for credit quality remains uncertain The Fannie and Freddie troubles came on the heels of the failure of IndyMac a big bank Its failure was inevitable Bernanke said because the bank was weighed down by low-quality mortgages All banks are being challenged by credit conditions now he said adding that the Fed is keeping close tabs on the nation s banking sector Earlier this year a run on investment bank Bear Stearns pushed the company to the edge of bankruptcy and into a takeover by JPMorgan Chase backed financially by the Fed That prompted critics to call it a government bailout putting taxpayers money at risk Bernanke defended its decisions in the cases of Bear Stearns as well as Fannie and Freddie and rebuffed claims that the government is helping Wall Street at the expense of Main Street If problems aren t contained they can ripple throughout the economy hurting everyone he said Financial stability is critical to economic stability The Fed in new projections now believes inflation will be higher this year than previously thought with prices rising as high as 4 2 percent under one inflation measure Growth for the year will be sluggish 151 at best 1 6 percent growth 151 but not as bad as previously forecast helped by the government s 168 billion stimulus including rebates The unemployment rate which could rise as high as 5 7 percent this year is the same as earlier projections

 [Chiefbigfaith's Weblog] 3 YEARS IN THE NEWS BY PASTOR KOK III 5/14/06: was subsequently replaced by Sid Vicious, -is now calling for the media to stop using so much profanity””ironic given the Sex Pistols penchant for using profanity themselves to shock people, years ago “When the earth shook and the .

[Truman Group Holdings] Bernanke: economy faces ”˜numerous difficulties’: At the same time, Bernanke, testifying before the Senate Banking Committee, sounded another warning that rising prices for energy and food are elevating inflation risks. This problem looms even as officials try to cope with persistent strains in financial markets, rising joblessness and housing problems.

Reflected tags on Technorati: Blog, Economy, EconWatch.com