Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

[Chris Coles]

Chairman Ben S. Bernanke

Current economic and financial conditions and the federal budget

Before the Committee on the Budget, U.S. House of Representatives, Washington, D.C.

June 3, 2009


Chairman Spratt, Ranking Member Ryan, and other members of the Committee, I am pleased to have this opportunity to offer my views on current economic and financial conditions and on issues pertaining to the federal budget. Economic Developments and Outlook

The U.S. economy has contracted sharply since last fall, with real gross domestic product (GDP) having dropped at an average annual rate of about 6 percent during the fourth quarter of 2008 and the first quarter of this year. Among the enormous costs of the downturn is the loss of nearly 6 million jobs since the beginning of 2008. The most recent information on the labor market--the number of new and continuing claims for unemployment insurance through late May--suggests that sizable job losses and further increases in unemployment are likely over the next few months.

However, the recent data also suggest that the pace of economic contraction may be slowing. Notably, consumer spending, which dropped sharply in the second half of last year, has been roughly flat since the turn of the year, and consumer sentiment has improved. In coming months, households' spending power will be boosted by the fiscal stimulus program. Nonetheless, a number of factors are likely to continue to weigh on consumer spending, among them the weak labor market, the declines in equity and housing wealth that households have experienced over the past two years, and still-tight credit conditions. cont....

http://www.federalreserve.gov/newsev...e20090603a.htm

[thedanimal]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

An interesting snippet towards the end under the heading "Federal Reserve Transparency" :eek: - not words you often hear uttered in the same sentence.

Let me close today with an update on the Federal Reserve's initiatives to enhance the transparency of our credit and liquidity programs. As I noted last month in my testimony before the Joint Economic Committee, I asked Vice Chairman Kohn to lead a review of our disclosure policies, with the goal of increasing the range of information that we make available to the public. That group has made significant progress, and we expect to begin publishing soon a monthly report on the Fed's balance sheet and lending programs that will summarize and discuss recent developments and provide considerable new information concerning the number of borrowers at our various facilities, the concentration of borrowing, and the collateral pledged. In addition, the reports will provide quarterly updates of key elements of the Federal Reserve's annual financial statements, including information regarding the System Open Market Account portfolio, our loan programs, and the special purpose vehicles that are consolidated on the balance sheet of the Federal Reserve Bank of New York. We hope that this information will be helpful to the Congress and others with an interest in the Federal Reserve's actions to address the financial crisis and the economic downturn. We will continue to look for opportunities to broaden the scope of the information and supporting analysis that we provide to the public.

[Slimprofits]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

We continue to expect overall economic activity to bottom out, and then to turn up later this year. Our assessments that consumer spending and housing demand will stabilize and that the pace of inventory liquidation will slow are key building blocks of that forecast.

It sounds as if Bernanke is counting on a boost from the "back-to-school" shopping, Christmas shopping and foreclosure fire sales. Maybe not, but If I'm close that demonstrates a total disconnect from reality on his part (nothing new) as far as the first two are concerned.

And it isn't a bit ironic that Bernanke is lecturing the administration and Congress on their spendthrift ways?

He is presented by the MSM, similarly to the way Greenspan was, as a God of money.

[ax]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

It sounds as if Bernanke is counting on a boost from the "back-to-school" shopping, Christmas shopping and foreclosure fire sales. Maybe not, but If I'm close that demonstrates a total disconnect from reality on his part (nothing new) as far as the first two are concerned.

And it isn't a bit ironic that Bernanke is lecturing the administration and Congress on their spendthrift ways?

He is presented by the MSM, similarly to the way Greenspan was, as a God of money.

He wasn't too forthcoming in answering Kaptur's questions, wonder why Geithner is asking to speak before Congress 6/18?

[Slimprofits]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

Probably to show off his slides from the China trip.

There is something about the way Geithner speaks, especially when being interviewed by a journalist or by members of Congress. I can't quite put a finger on it, but get the feeling he doesn't want to be questioned by anyone ever. You know, he wants to be left alone to run the economy for us. I think it would be fascinating to get a glimpse of his real personal life.

[cjppjc]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

Probably to show off his slides from the China trip.

There is something about the way Geithner speaks, especially when being interviewed by a journalist or by members of Congress. I can't quite put a finger on it, but get the feeling he doesn't want to be questioned by anyone ever. You know, he wants to be left alone to run the economy for us. I think it would be fascinating to get a glimpse of his real personal life.

I think it's guilt. Like how sometimes you can't look someone in the eye.

[lurker]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

Or maybe Asperger.

Since I have a child with autism and hang out with many other such parents I'd like to remind everyone to try not to be too quick to judge someone by the way they present themselves.

[ax]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

Probably to show off his slides from the China trip.

There is something about the way Geithner speaks, especially when being interviewed by a journalist or by members of Congress. I can't quite put a finger on it, but get the feeling he doesn't want to be questioned by anyone ever. You know, he wants to be left alone to run the economy for us. I think it would be fascinating to get a glimpse of his real personal life.

Well, we know he has 2 homes he can't afford and 1 he can't sell.

[Slimprofits]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

Well, we know he has 2 homes he can't afford and 1 he can't sell.

I mean along the lines of how he deals with people on a daily basis.

[charliebrown]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

I empathise. I have a brother with asperger. Brilliant, can do anything. When we lived togehter as boys, he composed music, wrote complex computer programs, Could fix anything, (he fixed our mother's 2nd hand piano with no training. I mean really fixed it, In the middle of the project there were no two parts left together.) He Can't function in society. If he has a protective father figure can do well. Makes sure he gets to work, keeps giving him positive feedback on his work, handles customer interaction etc Then he does great work. If you're mean to him even once will quit in an instant. This is not how the world works, so he is now a mechanic with a father figure as his boss.

[surfersdsb]

Re: Federal Reserve - Bernanke Current economic and financial conditions & the Federal Budget

The attached link is a must read to understand the balance sheet of the FED. Difficult read but lays out the structure and the trouble the FED has if the assets on its balance sheet go south.

http://www.imf.org/external/pubs/ft/wp/2009/wp09120.pdf