Fed Chief Hints At Looming Recession

U.S. Economy May Shrink In First Half Of 2008, Signaling Start Of Recession, Bernanke Warns

(CBS/AP) 
Many private analysts believe the economy contracted in the first three months of this year, signaling the start of a recession. The government releases first-quarter results later this month. The economy lost jobs in January and February, with many economists bracing for more losses when the report for March is released on Friday. Bernanke said he expected unemployment to move "somewhat higher in coming months."

"Clearly, the U.S. economy is going through a very difficult period," he told lawmakers, adding that all the problems have weighed heavily on consumers whose spending is indispensable to economic vitality.

The Fed also has taken a series of extraordinary steps in recent weeks and months to prop up the nation's financial system, which has been in a state of high jeopardy.

In a controversial move, the Fed backed a $29 billion lifeline as part of JP Morgan's deal to take over the troubled Bear Stearns, the nation's fifth largest investment house, which was on the brink of bankruptcy. Bear Stearns had invested heavily in risky mortgage-backed securities that eventually soured with the collapse of the housing market.

Bernanke defended the move. "With financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence," he said. "The damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain."

"Wall Street has been helped. Now it's time to help Main Street," said Rep. Carolyn Maloney, D-N.Y.

Although the taxpayers are on the hook for the $29 billion, Bernanke said he was "reasonably confident we'll be able to recover the full amount." He also said that Bear Stearns' investments that the Fed took control of "are entirely investment grade."

The Fed's unprecedented involvement was meant as a one-time event, Bernanke said. "It has never happened before, and I hope it never happens again."

In addition, the Fed - in the broadest use of its credit authority since the 1930s - agreed to temporarily let big investment firms obtain emergency financing from the Fed, a privilege that previously had been granted only to commercial banks.

Those actions have prompted criticism from Democrats and others who contend that the Fed is bailing out Wall Street and putting billions of taxpayers' dollars at potential risk. Bernanke and the Bush administration argued that the actions were warranted to avert a potential meltdown in the entire financial system, something that would have devastating consequences for the overall economy.

Asked about the Bush administration's plan to revamp the country's creaky financial system, Bernanke said it was vital for the Fed to have sufficient enforcement powers. Under the plan, the Fed would become a top cop in charge of financial market stability but would lose its day-to-day supervision of U.S. banks.

The dollar is near all-time lows against the euro amid worries about the fallout from the U.S. subprime lending crisis and the possibility of a recession.

Also, orders to U.S. factories fell for a second straight month, a worse-than-expected performance that reinforced worries that the risk of recession is rising.

[swwils]

Looming recession.just go to the store and it yells depression.Reminds me of the 70''s when bread and milk was hard to locate.Well the rich don''t care they can afford the gas and expensive food.

[noloyalisti]

Bushoccio and his GOP henchmen like McBush have been the greatest thing for Al Quada and worldwide terrorism.

What a boon for Osama bin Laden and his buddies. They got to spread to Iraq, Pakistan, Indonesia and all over the world with the recruiting assistance of the neocon Republicans. Way to go!

[prinzowhales]

I could make the official unemployment rate less than 1% at the stroke of a pen...the same way the Regime makes it less than 5%...Country is doing fine, is it? I know we have record levels of Food Stamp usage, that is quite an accomplishment. If you work one hour a week, you are not counted as unemployed.
The Sh*theads who are providing the statistics on unemployment are from the same Regime as the Sh*theads that told 935 lies to involve us in Iraq and Afghanistan..."Move along folks, nothing to see here..."

[tulcak]

Al Qaeda''''''''''''''''s No. 2 Defends Deadly Attacks
In Response To Online Questions, Al-Zawahiri Says Terrorist Organization Doesn%u2019t Kill Innocents

When is the enemy going to come out and endorse their favorite candidates? They came out for John Kerry right about now in 2004. I%u2019ll bet they pick Obama over Hillary this time.....
_______________________

How can you say this? The best thing that ever happened to terrorism and terrorists is bush and cheney. bush and company knew about a call from an Afganistan safehouse about the 9/11 attack BEFORE the attack happened! and then, instead of taking the fight to Afganistan WHERE osama bin forgotten and al quaeda were and are, he attacks and occupies Iraq based on lies. Now, by his occupation of Iraq (where there were NO al quaeda) he has inflamed all the Islamic world... and you wonder why they hate us... get a grip on reality

[Gary Kempf]

Al Qaeda''''''''s No. 2 Defends Deadly Attacks
In Response To Online Questions, Al-Zawahiri Says Terrorist Organization Doesn%u2019t Kill Innocents

When is the enemy going to come out and endorse their favorite candidates? They came out for John Kerry right about now in 2004. I%u2019ll bet they pick Obama over Hillary this time.....




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Posted by hillaryin012 at 07:49 AM : Apr 03, 2008
+ report abuse


He is already in office, You elected him President,twice.....

[naucoming4u]

But it all won''''t mater if we don''''t stop wasting our resources on illegal wars designed for war profiteers. When McCain''''s people try to "bomb Iran", they will cause the immediate collapse of the US dollar.

Then, even the fat lady''''s song will be finished.

Posted by brianbwb at 05:06 AM : Apr 03, 2008
.............

Perhaps, when the American population at large can no longer afford their cable/satellite TV... forcing them to forgo their 24/7 reality shows...

...then maybe the majority of Americans will begin to get mad at the very system that have screwed them for decades.

Until then... it will be raping as usual.

[brianbwb-2009]

America has been in recession since the mid 70s. Despite a few upticks, and the fact that corruption has made some people insanely rich, the general population has seen their purchasing power shrink to a third of pre 1972 levels.

But it all won''t mater if we don''t stop wasting our resources on illegal wars designed for war profiteers. When McCain''s people try to "bomb Iran", they will cause the immediate collapse of the US dollar.

Then, even the fat lady''s song will be finished.

[tulcak]

And, bush pushes for the widest expansion of federal control over the "free" market since the 1930''s... what happened to the republicans economic philosophy of "hands off" the market and "let the market decide" what is best... THIS IS AN ADMITTANCE LOUD AND CLEAR THAT THE REPUBLICANS'' ECONOMIC POLICIES ARE FAILURES AND WILL NEVER WORK. they didn''t work in the 1980''s and they didn''t work in the past 8 years. we need to strongly regulate big business and tell them how they can operate, because, it is evident that they will choose profit first over any other consideration, whether that consideration is national security or the well being of the average American.

[watcher269-2009]

And WHEN we are in a FULL BLOWN Depression the Bushit Administration will finally admit that we are in a Recession.

WOW - Watch out Bushit/Cheney - that light ahead is the History Train coming right at you and you won''t be remembered in the same light as Lincoln but more like Stalin or Moosealini.

[tulcak]

"LOOMING RECESSION"? does this mean "we''re in it now and have been for years"? when do these people get anxious about things?... when the big corporations and their executives start experiencing less than maximum profit? until we start using the economic experience of an average American as the yard stick for gauging economic health, this country will remain just the parking lot for big business. Wouldn''t it be great if the rich and big business suffered while the rest of us, just for once, could enjoy good economic times.

[gkc99]

Bu-bye-bye Bushits!

[gkc99]

Nice work Bushits!

[sumarongi]

The first hint that President Bush might be detached from the nation%u2019s economic woes was in February, when he conceded that he had not heard about predictions of $4-a-gallon gasoline.

Duh -bya How dumb is he? My nephews pet lizard has a better grasp on reality.

[sumarongi]

Part 1
While interest rate cuts help the well to do and the rich, the low-income workers in America once again get the shaft. Minimum wage and other low income workers are the ones fighting the hurricane force winds.

A real change needs to happen concerning an increase in minimum wage.
Unlike an interest rate cut or a one-time booster checks, an increase in minimum wage would supply a needed sustainable boost across the board for American workers and communities.
It would be trickle up economics instead of trickle down. Minimum wage workers, over 2 million people, cannot possibly exist much longer at current price levels. People want to complain about the homeless? People want to complain about crime. People want to complain about violence. However, the same people refuse to take the actions that will allow lower income people to help themselves get out of the cycle.

Minimum wage workers are the bedrock of the American labor force. They fill a vital niche that has been abused and neglected for far too long.

Before you disparage what I%u2019m saying do me a favor, PLEASE! Sit down and juggle the figures. As an example, Florida has a current minimum wage of $6.79 per hour. See how far you can make it stretch at today%u2019s prices. Please try it.

[sumarongi]

Part 2
Minimum wage no longer cuts the mustard. Given a 40-hour week, a wageworker in Florida grosses $271.60. Let%u2019s say they take home $240.00 weekly.
Weekly outlay - single person - no children:
Cheap rent%u2013$100.00
Gas-$70.00%u2013one fill up
Utilities-$15.00
Food-$40.00
Phone%u2013$10.00
Car insurance, other bills %u2013 $10.00
Total expenditures = $245.00 that%u2019s - $5.00 per week
This doesn%u2019t figure in any type of payments such as health/dental bills, clothing, or savings. There is no money left over. They can%u2019t make their monthly bills legally; they are stuck with late charges that put them further behind. This means they have to find additional sources of income. Some do it with another job. That%u2019s a quality life, but honest. Others resort to selling drugs, prostitution, or violent crime to make ends meet.
I know, we all suffer, but these people swell the ranks of the homeless daily as they lose ground against rising prices. They aren%u2019t just tightening their belts; they are living in parks and on our sidewalks. The desperate among them are losing their minds and are robbing you at your ATM, or business.
A change in minimum wage would be benefit the entire community. The money would be spent locally nationwide at the corner markets and stores. We as a people really need to address this situation. It would help who most need it. Please do the math and pass this on to everyone you know to get Washington off their seats.

[beehive21-2009]

Earth station calling Fed Chief , where you been ? we been in a recession for years.

[randynason]

Isn''t it an oxymoron to "hint" at something that is "looming?" Why can''t these clowns give a straight answer?

[kissamaarse]

Right. And now the big corporations are piling on. I received two bills today, one from Farmers Insurance and one from Comcast. Farmers raised my premium by 12%, and my agent said, "It''s inflation." Comcast raised my entertainment rates for cable TV by just over 10%, and the rep said it was for "inflation." They are both expendable. I can already get better insurance through several other insurance carriers at 20% less. Comcast? I can switch to one of two satellite providers for less. Or do without. Large corporations providing services should not assume they have the American consumer begging on their knees.

[mcharlton]

I''m going to bet that oil prices will begin to plummet over the next 6 months. The oil and commodities market are grasping for reasons to buy. The dollar looks like it''s finally stablizing. It''s undervalued anyway. A rising dollar means that foreign investors will start losing money if they invest in oil. As a result the price will go back to normal. We just need the feds to leave interest rates alone. If they do much more, they could send the economy into a tailspin.

[element51]

WogerWabbit....Very well said! I have noticed that the same posters post the same thing over and over and it seems to be their intention to do nothing but insult and spread hate. They never offer no answers...just insults.