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Fed Chairman Gets Standing Ovation
October 07, 2008 5:50 PM
ABC News’ Daniel Arnall reports: Fed Chairman Ben Bernanke addressed the 50th annual gathering of the National Association of Business Economics today, getting a standing ovation before he began his prepared remarks.
Bernanke, whose team at the Fed has been working overtime coming up with novel responses to a growing, global economic meltdown, received generally good reviews from most of the 400 or so economists in attendance.
"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," Bernanke said in his prepared remarks. "The losses suffered by many banks and non-bank financial firms have both constrained their ability to lend and reduced the willingness of other market participants to deal with them."
The Fed Chairman went on to explain the importance of the recent changes in the government's toolbox to deal with distressed financial markets and the overall economy. He also said the economy continues to face major problems beyond the immediate credit issues.
Growth, according to Bernanke, is likely to be subdued for the rest of 2008 and into early 2009.
His next comments were interpreted by professional Fed Watcher as an indication that there might be some rate cuts in the next few months. "In light of these developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate."
The brief question and answer session from the conference attendees didn't yield any news. Bernanke's boldness -- in actions if not words -- gave the Chairman a rock star-like appeal to this audience of business people hoping for something to turn things around.
"These are momentous steps, but they are being taken to address a problem of historic dimensions," said Bernanke about the actions of the past few months. "In one respect, however, we are fortunate. We have learned from historical experience with severe financial crises that if government intervention comes only at a point at which many or most financial institutions are insolvent or nearly so, the costs of restoring the system are greatly increased. This is not the situation we face today."
Click here to read the full speech text.
October 7, 2008 | Permalink | User Comments (4)
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I can't say whether Bernanke is doing a good job or not, but I can say that lower the interest rates did not have the intended effect for most people seeking credit. The banking system is ccrooked to the core and that's why ther were laws in put in place. Unfortunately, the laws weren't enforced by Cox and Paulson played Cheney-style politics and cronism to the maximum.
Fannie and Freddie became a self-fulfilling prophecy of these right-wing bigots that spewed bias against minority home ownership (which has performed well). Paulson's and his former employer, Goldman Sachs, were the leaders of this band of thieves. That's the real reason Paulson let Lehman fail, too.
Fuld asked the obvious question. Why was Lehman the ONLY one allowed to fail? Fannie and Freddie asked the obvious questions: Why are you taking me over when we don't want or need your help?
The U.K. is blaming Paulson and Cox. Eventually, us Americans will hold these republican criminals accountable instead of looking for scapegoats based on color.
Your investments and retirement accounts only knew the color green! Paulson and Cox made those accounts red by their inactions and inappropriate actions -- all based on partisanship and cronism.
http://www.reuters.com/article/innovationNews/idUSTRE49735Z20081008
Paulson and Cox need to be put in jail. The bailout money should have gone directly to the tax-paying shareholders to try trickling up for a change. That would have been about $5,000 for each of us (pennies compared to most of our losses this year)!
Posted by: Common Sense | Oct 8, 2008 5:52:23 AM
Once again Americans are thrown under the bus for Wall Street. This Bush Brown Shirt, just cut the interest rate because Bush was worried gas prices were falling to low.That's right Dubya keep the dollar weak.
Ex Republican
Posted by: RGeier | Oct 8, 2008 8:25:23 AM
Law pausing foreclosures.
What do your experts think of this idea.? Could Congress pass a law that would stop and prevent all foreclosures on homes for at least 1 year (or maybe a few more) if the borrower paid at least 6% interest on the loan balance (plus taxes and insurance)? Here is what it could do. It should apply to all residential loans made, owned or serviced by any federally regulated financial institution. With the prime rate at 4.5% a 6% return is fair and much better than nothing. It should slow dramatically the number of foreclosed homes being added to an already flooded market. It will allow homeowners to make reasonable payments for at least a year or more. It will allow Congress to revisit the interest rate at the sunset date of the law. It would apply only to ARM loans made during a certain window, say January 1, 2001 through July 2008. This should not cost us taxpayers anything. This will modify loans that cannot be modified now because they are in large pools of investments owned by many investors. For those homeowners that bought way more than they can afford even at 6%, sorry but this won’t help you. This will give the residential market some time to stabilize and hopefully start increasing in value again. Granted this does not solve the long term problem of what to do with these loans in the future, but it might help our current crisis and give us more time to look for long term solutions.
Posted by: GrampaB67 | Oct 9, 2008 11:08:36 PM
Thank you Bernanke for making America a Third world Banana Republic! Only a geniuis can oversee what Greenspan began namely the financial destruction of America. No wonder Bush and Cheney are building villas in Dubai.
Posted by: hmn | Oct 10, 2008 2:43:13 PM
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