CAN SOMEONE PLEASE TELL HIM WE ARE ALREADY IN A RECESSION, whats this MORE LIKELY garbage, how much of a fool do you have to be to believe what he is saying, if he thinks this economy isnt in a recession he isnt chairman ben bernanke. Bernanke: Recession more likely without bailout By JULIE HIRSCHFELD DAVIS and JEANNINE AVERSA ââ¬â 10 hours ago WASHINGTON (AP) ââ¬â Federal Reserve Chairman Ben Bernanke bluntly warned reluctant lawmakers Tuesday they risk a recession with higher unemployment and increased home foreclosures if they fail to pass the Bush administration's $700 billion plan to bail out the financial industry. Bernanke sketched a scenario in which neither businesses nor consumers could borrow money as President Bush and top lawmakers leaders in both parties voiced hope for agreement within days on a plan to ease the crisis. "Nobody is happy" about the bailout request, said House Majority Leader Steny Hoyer, D-Md., although he spoke of possible passage of legislation by the weekend. "Nobody wants to have to do this," agreed Rep. John Boehner of Ohio, the Republican leader. He said he was hopeful of a quick agreement, despite withering criticism from conservative GOP lawmakers, some of whom likened the plan to socialism. Financial markets were steadier but cautious as stocks fluctuatied after a huge sell-off. THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below. WASHINGTON (AP) ââ¬â Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday it risks a recession, with higher unemployment and increased home foreclosures, if lawmakers fail to pass the Bush administration's $700 billion plan to bail out the financial industry. Bernanke told the Senate Banking Committee that inaction could leave ordinary businesses unable to borrow the money they need to expand and hire additional employees, while consumers could find themselves unable to finance big-ticket purchases such as cars and homes. But he was greeted with skepticism from some senators as the Bush administration lobbied lawmakers in private and public to act quickly. There has been strong opposition from some conservative Republicans and numerous expressions of anger from lawmakers in both parties over an election-year crisis that has pushed the economy toward the brink. "I understand speed is important, but I'm far more interested in whether or not we get this right," said Sen. Chris Dodd, D-Conn., presiding over a a hearing by the banking panel. "There is no second act to this. There is no alternative idea out there with resources available if this does not work," he added. Bernanke's remarks about the risk of recession came in response to a question from Dodd, who seemed eager to hear a strong rationale for lawmakers to act swiftly on the administration's unprecedented request. "The financial markets are in quite fragile condition and I think absent a plan they will get worse," Bernanke said. Ominously, he added, "I believe if the credit markets are not functioning, that jobs will be lost, that our credit rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover in a normal, healthy way." GDP is a measure of growth, and a decline correlates with a recession. Across the Capitol complex, Vice President Dick Cheney and Jim Nussle, the administration's budget director, met privately with restive House Republicans, some of whom emerged from the session unpersuaded. "Just because God created the world in seven days doesn't mean we have to pass this bill in seven days," said Rep. Joe Barton, R-Texas. Added Rep. Darrell Issa, R-Calif., "I am emphatically against it." Dodd and other key Democrats have been in private negotiations with the administration since the weekend on legislation designed to allow the government to buy bad debts held by banks and other financial institutions. Despite expressions of unhappiness in both parties, the prospects for legislation seemed strong, with lawmakers eager to adjourn this week or next for the elections. The legislation that the administration is promoting would allow the government to buy bad mortgages and other troubled assets held by endangered banks and financial institutions. Getting those debts off their books should bolster their balance sheets, making them more inclined to lend and easing one of the biggest choke points in the credit crisis. If the plan works, it should help lift a major weight off the sputtering economy. Differences remained, though, including a demand from many Democrats and some Republicans to strip executives at failing financial firms of lucrative "golden parachutes" on their way out the door. The administration balked at another key Democratic demand: allowing judges to rewrite bankrupt homeowners' mortgages so they could avoid foreclosure. Treasury Secretary Henry Paulson, seated next to Bernanke at the committee hearing, objected strongly when Sen. Chuck Schumer, D-N.Y., asked if $150 billion might be enough to get the program started, with a promise of more to come. Paulson said that would be a "grave mistake," and would fail to give the markets the confidence they needed to rebound. Paulson repeatedly fielded questions from committee members asking why taxpayers should accept the burdens of a bailout. "You worry about taxpayers being on the hook?" he replied at one point. "Guess what ââ¬â they're already on the hook." Paulson suggested that the fallout from the credit crisis was so dire it would hit people in their pocketbooks unless forceful action were taken. Moreover, the flawed and outdated regulatory system, which didn't catch abuses, needs to be overhauled, he said. Despite the unresolved issues, President Bush predicted the Democratic-controlled Congress would soon pass a "a robust plan to deal with serious problems." He was speaking to the United Nations General assembly. Stocks held steady in pre-noon trading on Wall Street as Paulson told senators that quick passage of the administration's plan is "the single most effective thing we can do to help homeowners, the American people and stimulate our economy." But even before Paulson could speak, lawmakers expressed unhappiness, criticism of the plan and ââ¬â in the case of some conservative Republicans ââ¬â outright opposition. Sen. Richard C. Shelby of Alabama, the panel's senior Republican, was even more blunt. "I have long opposed government bailouts for individuals and corporate America alike," he said. Seated a few feet away from Paulson and Bernanke, he added, "We have been given no credible assurances that this plan will work. We could very well send $700 billion, or a trillion, and not resolve the crisis." Sen. Jim Bunning, R-Ky., added, "This massive bailout is not a solution. It is financial socialism and it's un-American." But Bernanke said action by lawmakers "is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy." A third witness, Securities and Exchange Commission Chairman Christopher Cox, urged Congress to regulate a type of corporate debt insurance that figured prominently in the country's financial crisis. "I urge you to provide in statute the authority to regulate these products to enhance investor protection and ensure the operation of fair and orderly markets," he said. The debt insurance is known as credit default swaps. So far this year, a dozen federally insured banks and thrifts have failed, compared with three last year. The country's largest thrift, Washington Mutual Inc., is faltering. The U.S. has taken extraordinary measures in recent weeks to prevent a financial calamity, which would have devastating implications for the broader economy. It has, among other things, taken control of mortgage giants Fannie Mae and Freddie Mac, provided an $85 billion emergency loan to insurance colossus American International Group Inc. and temporarily banned short selling of hundreds of financial stocks. "This massive bailout is not a solution. It is financial socialism and it's un-American," said Sen. Jim Bunning, R-Ky.
How can you get more likely than 100%? There is going to be a recession regardless of what the government does. If governments could cure recessions, there wouldn't be any in the first place.
What's it say about our system when the American citizen is on the hook whether they like it or not? I'll tell you what it says...that citizens are merely bait fish placed on the hook by these crooked, ultra greedy pricks. No moral compass whatsoever. Some heads should definitely roll here.
There is nothing wrong with a recession. It gets rid of excesses from the previous economic cycle. We are then stronger when the economy turns up. As I recall, every recession that we have ever encountered has always ended. Is it prudent for traders to continously leverage up to prevent a loss? Or just take the loss, and accept drawdowns as a part of trading?
As I have sat and watched some of the testimony over the last couple of day I thought it would be easier just to tent the place and fumigate, and start fresh. Seriously, who says you need a lot of political experience to have to be a good representative of the the people. Schwarzenegger and Jessie Venture had no previous political experience and did just as well as any professional politician IMO. You need sound advisers, common sense and that's about it. That's the problem both of these parties are nothing more than a bunch of political hacks that owe favors to their cronies and contributors. No different than lawyers professional liars. BTW we have been in recession for awhile, it was just called a slowdown.
Although it's absurd enough for the Academic to make such comments, it's nothing compared to the whopper regarding what the government should pay for assets from troubled banks, Bernanke Signals U.S. Should Pay More for Bad Debt. ``Accounting rules require banks to value many assets at something close to a very low fire-sale price rather than the hold-to-maturity price,'' Bernanke said in testimony to the Senate Banking Committee today. ``If the Treasury bids for and then buys assets at a price close to the hold-to-maturity price, there will be substantial benefits.'' Bernanke's remarks, an unusual departure from his prepared testimony, come as lawmakers and the Bush administration negotiate a rescue plan aimed at easing the worst financial crisis since the Great Depression. The Fed chief said paying prices higher than the bad assets would fetch in the open market would help ``unfreeze'' credit markets and aid the economy. Analysts said Bernanke is essentially advocating that government use a pricing model that assumes that the debt will be paid in full over a long period of time. That is different from the mark-to-market model used by investment banks that prices assets at what they are worth on a given day. ----------- This guy taught economics ?