Full Text: Bernanke Congressional Testimony – ‘Unusually Uncertain’ – July 2010
Source: Board of Governors of the Federal Reserve System
Chairman Ben S. Bernanke
Semiannual Monetary Policy Report to the Congress
Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
July 21, 2010
Chairman Dodd, Senator Shelby, and members of the Committee, I am pleased to present the Federal Reserve’s semiannual Monetary Policy Report to the Congress.
Economic and Financial Developments
The economic expansion that began in the middle of last year is proceeding at a moderate pace, supported by stimulative monetary and fiscal policies. Although fiscal policy and inventory restocking will likely be providing less impetus to the recovery than they have in recent quarters, rising demand from households and businesses should help sustain growth. In particular, real consumer spending appears to have expanded at about a 2-1/2 percent annual rate in the first half of this year, with purchases of durable goods increasing especially rapidly. However, the housing market remains weak, with the overhang of vacant or foreclosed houses weighing on home prices and construction.
Full Text: Fed Chairman Ben Bernanke, Testimony to Congress, June 3 – Economic Outlook
(Source: Board of Governors of the Federal Reserve)
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.
Bernanke’s Green Shoots for Boston College Law Grads …
Federal Reserve Chairman Ben Bernanke gave the commencement address today to the Boston College School of Law’s graduating class. His speech centered on the inherent unpredictability in people’s lives and his perspective on how to deal with that. The business press was dismissed for coffee and Bernanke gave a personal speech.
There was no news to move the markets, but there was a personal sentiment on Bernanke’s own enduring confidence in the U.S. economy and his foreshadowing on some of the great challenges to be faced by the class of 2009:
You are lucky also to be living and studying in the United States. There is a lot of pessimistic talk now about the future of America’s economy and its role in the world. Such talk accompanies every period of economic weakness. The United States endured a decade-long Great Depression and returned to prosperity and global leadership. When I graduated from college in 1975, and from graduate school in 1979, the economy was sputtering, gas prices and inflation were high, and pessimism–malaise, President Carter called it–was rampant. The U.S. economy subsequently entered more than two decades of growth and prosperity. The economy will recover–it has too many fundamental strengths to be kept down for too long–and the mood will brighten.
This is not to ignore real challenges. Our society is aging, implying higher health-care costs and fiscal burdens. We need to save more as a country, to reduce global imbalances in saving and investment, and to set the stage for continued growth. Our educational system is strong in some areas, including our university system, but does not serve everyone equally well, contributing to slower growth and greater income disparities. In the diverse capacities for which your training has prepared you, many of you will play a vital role in addressing these problems, both in the public and private spheres.
Transcript: Ben Bernanke Stress Tests Speech, Jekyll Island, Georgia
(Source: Board of Governors of the Federal Reserve)
My remarks this evening will focus on the Supervisory Capital Assessment Program, popularly known as the banking stress test. The federal bank regulatory agencies began the assessment program in late February and concluded their review with the release of the results just last Thursday. This initiative involved an unprecedented, simultaneous supervisory review of the 19 largest bank holding companies in the United States. Its objective was to ensure that these institutions have sufficient financial strength to absorb losses and to remain strongly capitalized, even in an economic environment more severe than currently anticipated. A well-capitalized banking system is essential for the revival of the credit flows that will underpin a sustainable economic recovery.
Full Text: Bernanke Statement on Stress Test Results
(Source: Board of Governors of the Federal Reserve)
This afternoon marks the culmination of the Supervisory Capital Assessment Program. Three independent federal banking supervisory agencies–the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation–have worked closely and collaboratively since late February to simultaneously assess the financial conditions of the 19 largest bank holding companies in the United States. These institutions play a vital role in our economy, holding among them two-thirds of the assets and more than one-half of the loans in the U.S. banking system. More than 150 examiners, economists, accountants, and other specialists conducted a rigorous and comprehensive review of these firms, one unprecedented in scale and scope.
Full Text: Fed Chairman Bernanke Testimony to Joint Economic Committee, May 5, 2009 – Economic Outlook
Bernanke Says Economy Begins Growing Near End of 2009, but growth “subpar” for some time
(Source: Board of Governors of the Federal Reserve)
Chairman Ben S. Bernanke
The economic outlook
Before the Joint Economic Committee, U.S. Congress, Washington, D.C.
May 5, 2009
Chair Maloney, Vice Chairman Schumer, Ranking Members Brownback and Brady, and other members of the Committee, I am pleased to be here today to offer my views on recent economic developments, the outlook for the economy, and current conditions in financial markets.
Recent Economic Developments
The U.S. economy has contracted sharply since last autumn, with real gross domestic product (GDP) having dropped at an annual rate of more than 6 percent in the fourth quarter of 2008 and the first quarter of this year. Among the enormous costs of the downturn is the loss of some 5 million payroll jobs over the past 15 months. The most recent information on the labor market–the number of new and continuing claims for unemployment insurance through late April–suggests that we are likely to see further sizable job losses and increased unemployment in coming months.
However, the recent data also suggest that the pace of contraction may be slowing, and they include some tentative signs that final demand, especially demand by households, may be stabilizing. Consumer spending, which dropped sharply in the second half of last year, grew in the first quarter. In coming months, households’ spending power will be boosted by the fiscal stimulus program, and we have seen some improvement in consumer sentiment. Nonetheless, a number of factors are likely to continue to weigh on consumer spending, among them the weak labor market and the declines in equity and housing wealth that households have experienced over the past two years. In addition, credit conditions for consumers remain tight.
New Rise of Executive Pay at Banks Exposes the Folly of Bush & Obama Handling of Financial Crisis
Yesterday the New York Times ran a story reporting that executive pay at the nation’s largest banks is again approaching pre-financial crisis levels. This is simply a signal that management teams in New York, Charlotte and elsewhere in banking headquarters are pursuing a business as usual approach to what many believe is the beginning of the end to the recession.
Krugman’s column today further adds to the case he’s been making all along during this financial crisis – Wall Street’s emperors have no clothes and taxpayers are footing the bill to rebuild their wardrobe.
So why did some bankers suddenly begin making vast fortunes? It was, we were told, a reward for their creativity — for financial innovation. At this point, however, it’s hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes.
Consider a recent speech by Ben Bernanke, the Federal Reserve chairman, in which he tried to defend financial innovation. His examples of “good” financial innovations were (1) credit cards — not exactly a new idea; (2) overdraft protection; and (3) subprime mortgages. (I am not making this up.) These were the things for which bankers got paid the big bucks?
Here’s what I think is most disturbing about recent financial history and the Bush and Obama Administrations’ policies:
Full Text – Documents: Cuomo Letter and Docs Regarding BofA Merrill-Lynch Merger
Paulson Threatened to Fire BofA’s Mgmt & Board
Paulson & Bernanke Demanded Silence from BofA CEO
Dow 6,500?
My last market call was 7,000 for the Dow back on November 19, 2008. Today, I’m calling 6,500 as a potential bottom.
You might recall that last week, Jim Cramer, host of CNBC’s Mad Money, and a very fine guy, said, “Time to buy the Depression is over.“ If you listened to or watched CNBC throughout the work day last week you heard many hosts and invited talking heads saying the same basic thing: It looks like we’ve found the bottom, some day we’ll look back at the first week of April or final week of March 2009 and say that’s when the recovery began.
Fed Chairman Ben Bernanke began the recovery talk on March 15 on CBS News’ 60 Minutes, when he spoke of “green shoots” of economic recovery.
“And I think as those green shoots begin to appear in different markets, and as some confidence begins to come back, that will begin the positive dynamic that brings our economy back,” Bernanke said.
Larry Summers, Timothy Geithner – all the government heavy weights – have sung from the same hymnal recently. Frankly, it’s a little disconcerting.
Mr. President, We’re Not All In The Same Boat
I just read the biggest bunch of horse pucky to come out of the Obama marketing machine since all of the false “outrage” over the AIG bonuses.
According to a story on the Reuters business wire tonight, President Barack Obama will meet with bankers on Friday and tell them, “We’re all in the same boat.” His press secretary, Robert Gibbs, explains further:
“The president looks forward to getting an update on what they’re seeing happening in the economy,” Gibbs said on Wednesday of the banking chief executives who are slated to meet with the president later this week.
He said Obama’s message at the meeting would be to say that what is good for Wall Street is good for Main Street.
“We’re all in the same boat,” Gibbs said. “We have to understand that … what is good for one has to be also good for the other.”
This is becoming the schizophrenic presidency. One day we get Obama, hero for the middle class. This Obama campaigns on a middle class tax cut – a true middle class tax cut, not Republican trickle down – and puts it in his budget. The next day, after attacks from Capitol Hill, the middle class tax cut is suddenly a “maybe.” One day we get President Outrage – angry beyond belief at those bloodsuckers on Wall Street for taking advantage of the taxpayer. The next day we get a trillion dollar pledge from the President’s treasury secretary to use more taxpayer money to further front toxic assets.
Today, this is just President Bad PR. Do taxpayers want to hear the President coddling bankers? “We’re all in the same boat?” Give me a break. We’re all in a barrel headed over the Niagra Falls – a barrel the bankers and brokers put us into. So far, in this recession, this financial crisis, the bankers and brokers have been sailing aboard the Queen Mary. I mean, come on — they made all the mistakes and we’re stuck footing the bill.
I know I’m not in the same boat with the suits Obama will speak to on Friday. When they fuck up, Hank Paulson, Timothy Geithner and Ben Bernanke are like the OJ Simpson Dream Team, pulling Wall Street’s chestnuts out of the fire. When you or I fuck up – we’re just fucked.
Text: Ben Bernanke – Prepared Testimony on AIG – House Financial Services Cmtee – March 24
(Source: Board of Governors of the Federal Reserve)
Chairman Ben S. Bernanke
American International Group
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
March 24, 2009
Chairman Frank, Ranking Member Bachus, and other members of the Committee, I appreciate having this opportunity to discuss the Federal Reserve’s involvement with American International Group, Inc. (AIG). In my testimony, I will describe why supporting AIG was a difficult but necessary step to protect our economy and stabilize our financial system. I will also discuss issues related to compensation and note two matters raised by this experience that merit congressional attention.
AIG: The PR Nightmare That Keeps on Giving
Last Weekend Bonus Story, This Weekend AIG Suing the IRS
How many WTF? moments will the American International Group give us by the time the company is once again solvent or is finally taken out behind the barn and put out of its misery?
Last Saturday night, with just enough time to allow the Sunday shows to prepare killer questions for Larry Summers, the AIG bonus story entered the media consciousness. If you’ve been in a cave all week the story goes something like this: Since last September the U.S. government has pumped $170-180 billion into the gaping maw of the world’s largest insurer and biggest loser in the reality show known as the credit default swap market. Uncle Sam now owns 80% of AIG. It was revealed last Saturday that the company has paid $165 million in bonuses to executives and staff of its financial products division. This is the division that has essentially ruined the entire company. The American public is royally pissed off and every politician worth his or her salt is “outraged.”
Full Text: Ben Bernanke Speech – The Financial Crisis and Community Banking – March 20
(Source: Board of Governors of the Federal Reserve System)
CHAIRMAN BERNANKE:
When I addressed this convention three years ago, with all of five weeks under my belt as Chairman of the Federal Reserve Board, I opened my remarks with three observations: that community banks played a critical role in the U.S. economy, that community banks were generally doing well, and that community banks faced a changing business environment that posed important challenges. I am struck that all three observations, at least to some degree, still hold true today. Community banks continue to play a critical role in our economy and, in many cases, have an opportunity to step in and make sound profitable loans, where some competitors have pulled back. Relatively speaking at least, community banks are doing better as a group than other segments of our financial system, but at the same time they are far from immune to current conditions. And, surely, it is still true that the business environment poses important challenges to community banks.
