WASHINGTON (MarketWatch) -- Federal Reserve Board Chairman Ben Bernanke said the causes of the recent slowdown in growth remain a puzzle. In a question-and-answer session following a speech in Princeton University, Bernanke said history shows that recoveries that follow a financial crisis tend to be slower than other recoveries. "Unfortunately, this is just kind of an observation that comes from looking at lots of different experiences and it doesn't necessarily tell you why," Bernanke said. "Why it is slow is a very good question," he said. After healthy growth in the beginning of the year, the U.S. economy slowed to a tepid 1.6% growth rate in the second quarter and economists don't expect much of a pickup in the current quarter. The Fed has tried to be "quite aggressive" and "very proactive" and is "hopeful" for a better result than has been seen so far, Bernanke said. At its meeting earlier this week, the Fed opened the door for further quantitative easing if growth continues to disappoint. http://www.elitetrader.com/vb/thread.php?s=&action=newthread&forumid=44
Bernanke said. "Why it is slow is a very good question," Because we are not allowed to do anything unless we are wearing our helmet.
We the general population (those who have not borrowed to hilt and enjoying free housing) are looking at the sky and looking for the sound of the rotors. <a href="http://content.screencast.com/users/Zeroforever/folders/Default/media/329f1e9b-efb2-489f-b279-8afa661bb3a8/helicopter-ben.jpg"><img class="embeddedObject" src="http://content.screencast.com/users/Zeroforever/folders/Default/media/329f1e9b-efb2-489f-b279-8afa661bb3a8/helicopter-ben.jpg" width="602" height="800" border="0" /></a> All insolvent TBTF banks sold all their junk mortgage bonds(1:100 times their capital) to BEN at 100 cents to the $ (worth only 0.15 cents. TBTF Banks are improving their balance sheet with Free money @0%. We the prudent saving population afraid of loosing jobs any time can only go to Walmart nowadays.
I would suggest that if what is going on in the US economy isn't abundantly clear to him that he should resign and hand over the reins to someone who has a clue.
Isn't it common sense that when there is no profitable investment in U.S. except palying Wall Street games, in other words what ever you do with your money you more likely to lose than gain, people would hord money for raining days or better investment opportunities rather than used it for growth? No matter how much QE or how low the interest rate is, the real economy would only move toward one direction, shrinking.
Ben is suffering from "Obama ignorance". Everyone else knows what the problem is. Threat of higher taxes on business More business regulation More business healthcare costs Uncertain what the govmnt is going to do next No mystery here, Ben.
Only someone who has spent an entire career worshipping at the alter of failed Keynesian economic models would be puzzled by the slowdown.
Exactly what I was going to post but you beat me to it. If Bernanke doesn't understand what is happening then we are in big trouble. But many of us already knew that.
all he did was re-inflate the prices for assets like real estate and stocks and oil gold to same price as 2007 but this time few people are buying stocks, gold oil as before...it's all paper wealth for fund managers..it's iliquid assets. this time however banks are not lending money to hedge funds or real estate specultors to speculate.
"Housing contributes to GDP in two basic ways: through private residential investment and consumption spending on housing services. Historically, residential investment has averaged roughly 5 percent of GDP while housing services have averaged between 12 and 13 percent, for a combined 17 to 18 percent of GDP." http://www.nahb.org/generic.aspx?genericContentID=66226 scroll down to view 'Housing Starts' chart - http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=41308 i thought the 'combined' was a lot higher than 17-18% - 40%, the smaller amount may be due to the way the amount is calculated as well as the amount of manufacturing that is being done off-shore and possibly change of materials - plastic plumbing rather than copper, Chinese gyprock etc however the 17-18% does relate to the 'U-6 Total unemployed' currently 16.7% according to the BLS: http://www.bls.gov/news.release/empsit.t15.htm