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It’s only going to get worse before it gets better. That’s Ben Bernanke’s somewhat dire prediction to Congress regarding the state of the economy.
On a day when stock prices swung wildly, the dollar hit another new low against the euro and further signs emerged that consumers are growing more cautious about spending, Mr. Bernanke warned that the economy is about to “slow noticeably” as the housing market continues to spiral downward and financial institutions tighten up on lending.
But in a disappointment to investors, Mr. Bernanke offered no signal that the central bank might soften the blow by lowering interest rates for a third time this year at its next policy meeting on Dec. 11.
Stock prices, which had plunged Wednesday, went on a roller-coaster ride after Mr. Bernanke testified. The Dow Jones industrial average first fell 205 points by mid-afternoon, but then clawed back most of the way and ended the day at 13,266.29, down just 33 points.
So what does this all mean for the economy?
Mr. Bernanke offered a rocky outlook for the months ahead. He said that the battered housing market had yet to hit bottom, that delinquencies and foreclosures were likely to rise and that the downturn in home building was “likely to intensify.” He predicted that personal spending would advance more slowly, because consumers are less confident and because of tighter credit conditions.
On top of all that, he said, “further sharp increases in crude oil prices have put renewed upward pressure on inflation and may impose further restraint on economic activity.”
Despite all that, Bernanke believes the economy will remain resilient and not drift into a recession: “We have not calculated the probability of a recession. Our assessment is for slower growth, but positive.”
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Ben will probably be right but the economy will slow dramatically in this and next quarter. It remains to be seen if we fall into a mild recession. I am betting we will, especially if it continues to look like the left will gain the presidency late next year and picks up more house and senate seats. At least they will have a hard time raising taxes if we are in the recession they will have created since taking control of the House and Senate last November.
Have you noticed that the only thing that has gone right since they took over is the War in Iraq has improved with the Surge - a war they oppose and try to undermine at every opportunity. Housing and credit collapse, $100 a barrel oil, rising unemployment, collapse of the dollar. This is what Socialists cause when they are in power - it only took them a year to mess everything up. And don’t tell me we did fine economically under President Clinton either. The Republicans controlled congress then, balanced the budget and created that prosperity.
As a final note, all TALARI for Dummy investors should have sold their UUPIX Profunds Ultra EM’s and moved into UVPIX Profunds Ultra Short EM’s before close of markets yesterday. If you followed the 2 rules you will be rewarded. The international markets are down big overnight and US markets opened very weak - which is good for the shorts and bad for everyone else.
Wonderful.
The company I work for had to lay off 4 workers, and may have to do it again. I’m not entirely sure that my job is secure, but it’s probably as secure as any. (They won’t have anyone to repair computers or ask about the design program unless they hire someone else to take my place.) Being an employee of a medium sized cabinet shop, the housing bust will pretty much affect us.
And I’m needing to put a roof on the house and repair the septic fields, not to mention buy a new vehicle… Good thing I almost have the house paid off - it’s time for repairs and upgrades now.
But still….I’m thankful as always that I have a job and a house.
Some poor folks just got burned out in California, and some folks got laid off… as well as facing a slowing economy.
When congress questioned Bernanke, it became apparent that he doesn’t know how to do anything except take people’s hard-earned money through inflation. Ron Paul corrected him, and Bernanke was clueless. The encounter was put on YouTube 24 hours ago, and it already has over 50,000 views.
Ron Paul is right, Ben Bernanke is a price fixer. He fixes interest rates at an artificially low level.
Why exactly is it simply going to “slow noticeably”? Looks more like the beginning of a recession to me, and we’re about due for one. Methinks the only reason nobody’s saying that is that they don’t want to spook it into existence.
I think there is more churn in the economy than there has been in the past, people switching jobs more often, markets oscillating more, but the US economy is still strong overall for those who have the long view. Heck, my company hired a thousand people this year, but it never made the papers because it was in small batches of 20-100. That’s the way hiring happens, whereas layoffs come in bigger chunks.
If the Ds manage to raise taxes, they’ll slow the economy faster (as revenues plummet).
It remains to be seen.
I’ve been reading in the wsj the last few days about huge turmoil in the credit markets and huge failures in judgment at various large banks and investment companies with many millions in dollars in losses to both large investors and gullible home buyers who got way over their heads, but also to ordinary middle class consumers and investors
Do liberals screw up? Of course. The conservatives here tell us about it all the time.
Does government screw up? Of course. The conservatives here tell us about it all the time.
However, if the world of private enterprise and private capital screw up, it’s just no harm, no foul, and the business cycle that blows in and out like hurricanes and cyclones, acts of You Know Who or something.
Llama - for the life of me, I can’t see why you blame everything bad on liberals. For someone who puports to be financially savvy, you seem to heap scorn on the Democratic Congress for everything that is going bad - even though there is scant or no evidence for your conjectures.
$100 oil? Is that the fault of liberals or rising demand as the economies of China and India grow?
Housing and credit collapse - how did liberals cause that? Cite three sources blaming it on the liberals. I can cite numerous sources saying it stemmed from an out-of-whack housing market, extending mortgage credit to those who shouldn’t have received it and CDO/SIV problems.
Rising unemployment? Are you serious? Employment is UP. Find me one release in the past year showing a decrease in employment. Then show me how the liberals caused it.
—
As for the credit crisis, if you have good credit and little to no debt, then you should be fine. If you have money in the bank for a rainy day, you might actually make a little more. Many banks are raising their rates on CDs because they are short on cash. Take advantage of this.
Money will be tight because oil and food prices are going up sharply - remember, you won’t see those prices in any official government inflation rates (even though food and energy account for about 25% of most American’s expenses).
Bernake would be wise to let the credit crisis solve itself. No cash from helicopters. Banks have been raking in the dough for a while and will be able to weather the crisis. Those that can’t shouldn’t be in business anyway.
If you want to stall the falling dollar, start at home. Start saving more and spending less.
However, if the world of private enterprise and private capital screw up, it’s just no harm, no foul, and the business cycle that blows in and out like hurricanes and cyclones, acts of You Know Who or something.
Though you might have read the WSJ of late, you obviously didn’t comprehend it. Read the article in today’s recently about the deposed heads of Merrill Lynch and Citibank after tens of billions of writeoffs on the books of their companies due to sub-prime lending exposure.
These people made serious mistakes of judgment and leadership for which they’ve paid the price of their jobs and serious loss of professional respect.
In the world of private enterprise and capital investment one is held rigorously accountable for real performance. Thousands of high-level executives move up and down the ladder often due to performance factors.
In the above sub “Journal” for “recently.”
Solon, as usual, you overwhelm me with your charm and good nature.
Yes, there is more instant feedback and correction in the world of free investment and capital investment.
Sometimes, once great titans and and leaders of industry fall from great heights of power, and have only their golden parachutes, summer homes, yachts, and trophy wives to comfort them in their distress and gloom. I suppose some of them are forced to turn to their Bibles for comfort.
Lester, the price of oil is up because ten years ago, the liberals wouldn’t let us drill in ANWAR nor any other place. They prevented us from building refineries.
They, not alone, so-called conservative business men joined in conspiring to promise people that they could afford houses they couldn’t really pay for. That is because the person who originates the loan isn’t really responsible for it.
It’s like those guys on the street in Charleston or Orlando who offer free tickets or something. You take something free and end with a hard sell for time share property. The guy who got you there doesn’t care, he got his bennies for just getting you there. The guy who originates that loan did the same thing.
The government is now going to tell us that there is no penalty for making a stupid decision. The stupid ones turn out to be like me, who only bought what he could pay for.
Though you might have read the WSJ of late, you obviously didn’t comprehend it. Read the article in today’s recently about the deposed heads of Merrill Lynch and Citibank after tens of billions of writeoffs on the books of their companies due to sub-prime lending exposure.
Lester
Save your breath. Anything bad that happens or anything good that fails to happen from now on will be due to the fact that “it continues to look like the left will gain the presidency.” Set aside the fact that “The Left” can’t do anything without Republican cooperation (which logically, doesn’t absolve the The Left for the terrible things it does), Llama needs you to account for the fact that the economy went to hell in 2000-04 without Democrats in power, simply because Democrats exist. Try to explain that away!
Thousands of high-level executives move up and down the ladder often due to performance factors.
They get off the ladder before it falls. “Performance” and talent are standardized and ubiquitous — what varies are the conditions and the weather. This is why CEO’s get an ever-growing piece of the pie. If they don’t demolish their companies, they survive.
Lester, the price of oil is up because ten years ago, the liberals wouldn’t let us drill in ANWAR nor any other place. They prevented us from building refineries.
No Chas, oil production is UP from a decade ago. The problem is consumption - pure and simple. When the recession hit Asia in the late 1990s, oil prices went down. Now that those economies are growing, prices are going up.
If you think ANWAR has anything to do with it, you’ve been duped by politicians.
There’s plenty of oil out there - see the recent report that Brazil just found offshore reserves that would bring it on par with Saudi Arabia and Venezuela.
Scroop - Yes, unfortunately, Ds do still exist. I can’t explain that away (it is irrational, like Ds, but there is apparently a right to irrationality for as long as one can sustain it).
Bernake’s not going to lower the interest rate for awhile. China has threatened to sell off their dollars for another currency, such as the Euro, which is stronger than the dollar.
Anyway, I don’t think the experts really know what the economy is going to do. They’re like the meteorologists - they can make a good guess.
Llama is so funny! Whether or not the Democrats are in control, he’s gonna slam them coming and going. I wonder if he realizes how irrational his rantings are?
#9 (more)
This is cheating a bit, as Enron is probably one of the worst examples of what I am talking about. (Obviously, none of the conservatives at worldmagblog never “cherrypick” examples of liberal flaws and faults to make their points.) [s]
From a television news story from 2003 (now on the web)
Less than a year and a half ago, the name Enron became synonymous with corporate irresponsibility. After the company’s now infamous executives engaged in risky accounting methods they filed for bankruptcy and laid-off thousands of employees. Now, as Karen Singer reports, many of these people still face devastating circumstances.
Fallout from the collapse of Enron reverberates throughout Houston. Indignities suffered by Enron’s former employees are numerous: 4,000 men and women lost their jobs on a single day with no prior notice. Thousands saw their life savings disappear in evaporated Enron sponsored retirement plans. Now, these same workers find themselves unemployed in a stagnant job market.
A survey conducted in November 2002 by an advocacy group for former Enron employees, found 20 percent of survey respondents remain
Trying to find an update, I found:
Welcome to Keller Rohrback L.L.P.’s Enron ERISA fraud site which is designed to keep those with Enron 401(k) retirement plans informed about their rights. Keller Rohrback’s ERISA team is headed by the firm’s managing partner Lynn Lincoln Sarko and partner Britt Tinglum.
This website provides information and updates regarding Tittle, et al v. Enron Corp., et al.
This class action was the first case filed on behalf of all persons who were participants in or beneficiaries of the Enron Corporation Savings Plan, (401(k) Plan) from January 20, 1998, through December 2, 2001, (the Class Period) and who made or maintained investments in Enron stock. It also includes participants of the Enron Stock Ownership Plan or Cash Balance Plan during the Class Period. See the case for more information regarding the basis of the case.
Case Status:
December 2006…December 7, 2006
Keller Rohrback announces Preliminary Approval of partial settlements with Jeffrey K. Skilling and the Estate of Kenneth L. Lay as well as the apportionment of the fund previously recovered in the settlement with Andersen Worldwide Societe Cooperative (”AWSC”). The proposed partial settlements are on behalf of all participants in Enron’s ESOP and Savings Plan, during the period January 20, 1998 through December 2, 2001.
http://www.enronerisa.com/
So it’s all working out fine for everybody involved.
[Solon, if you ever understand a word I post, instead of seeing it through your puce colored glasses, drop me a line.]
Puce is a colour generally considered to be brownish-purple. A few sources define “puce” simply as “dark brown”.
English usage dates from 1787. The word comes from French; puce literally means “flea”. It is speculated that it refers to the colour of a squashed flea or the colour of a flea full of blood. Another theory is that the colour name comes from the flea’s droppings of digested blood, which spread out in deep red stain when water contacts them.
The colour puce is usually defined with adjectives such as “dark”, “deep”, “intense” and even “brilliant”. The colour example above is a lighter tint. On the other hand, the colour may refer to blue-lavender of the Pennyroyal flower, also named puce in French. The name derives from the use of pungent Pennyroyal to ward off fleas.
Prunes, which are dried plums, can also be said to be dark puce coloured. Chinese salted plums, a popular snack in China and among Chinese Americans, are closer to the actual colour puce. The colour puce can also be described as greyish pink.
Chas is correct. If we could tap into our own supplies of oil (Gulf of Mexico and ANWAR) and build more nuclear power plants, we would not have to depend on the volatile Middle East to satisfy our energy needs.
Actually the US derives most of its oil supply from Canada and Venzuela. The instability in the Middle East (now why is it so unstable and volatile??) affects the oil prices but not the US supply.
As a Canadian who lived through a 65 cent dollar, I can tell you it has its benefits. It makes domestic labour costs low and hence helps domestic manufacturing. In effect it lowers wages in comparison to other nations without affecting purchasing power (if you buy domestic).
However, at the present time with a Canadian dollar worth more than a US dollar, I would like to thank the Bush administration for lowering the value of the US dollar and hence giving me the lowest food bill in years. California produce is now half price. Why the Bush adminsrtation??? The current rise in oil prices due to the lack of Iraqi production has raised the Canadian dollar. Lousy fiscal management and war spending without revenues has increased the debt and lowered the value of the US dollar. US capitalist are also without blame but Random has already given examples and made this point.
Chas is correct. If we could tap into our own supplies of oil (Gulf of Mexico and ANWAR) and build more nuclear power plants, we would not have to depend on the volatile Middle East to satisfy our energy needs.
No Chas is incorrect. Even the most liberal estimates of ANWAR reserves tops out to about one year of the oil the US uses. Gulf of Mexico? We have about two years there.
Even Dick Cheney and George Bush understand that we cannot sustain our own oil needs.
Seriously Outkast, do some research. You’re boys even disagree with you
Instead of my usual sarcasm, I will post a straightforward post.
I think there are many merits and strengths of the free enterprise system. It motivates people to work hard and to be creative. It tends to allocate resources well and to reward hard work and ability and to punish stupidity, incompetence, and laziness. In this regard it often compares favorably to government.
There are many flaws with government programs; they tend to be the obverse or converse or opposite (or whatever is the correct word) of the virtues enunciated above.
This is the “conventional wisdom” of the conservative Christians at worldmagblog; there is much merit to it.
On the other hand, there are many flaws and problems with the free enterprise system. It does not do nearly as well a job of meeting general social problems where the desired benefits are diffuse and general and specific.
Free enterprise is not something handed down by God. It’s simply a system of organizing our economic life with many variations and many strengths and weaknesses.
There are also issues of values and goals. Whether or not the environment should be protected, for example, is an issue of values. If there is reason to do so, it is difficult for the free enterprise system to do so because there isn’t a profit in it for anyone.
In terms of agriculture for example, there are many problems resulting from applying methods of industrialization to farming. For example, when we apply monoculture on a large scale with products such as soybeans and corn or pigs, we create many problems in terms of safety, environment, and so on.
Many people here are so enraptured by slogans and clichés it is difficult to discuss these matters in an intelligent and discriminating way. If someone criticizes one aspect of free enterprise, the fairly mindless reaction is to assume that the critic is advocating “big government,” statism, socialism, etc.
At that point the discussion breaks down into people hurling clichés at each other.
Gosh,
I just said have you noticed and the left goes nuts.
For years they have blamed everything on Bush what ever wasn’t his fault was the conservatives fault. They did this because they were out of power and they just plain blood lust wanted to insanely blame everything on anyone else but them. They have been talking down the best economy the US has ever had for years while undermining the war at every turn.
Well, now that they are back in power, which requires great responsibility to go with it, and someone does exactly what they have been doing for years - to them - these children just can’t take it. But my point, that they were insanely jealous, hateful and wrong all these years has been proven way beyond a shadow of a doubt - by them. What a bunch of woosies. Stand up and take your lumps kiddies. You only have at least 8 more years of it to take most likely.
What a bunch of twits. The fact is the left hasn’t been able to to anything except fund the war again and again that they hate so much, since they took control a year ago. They make what they called the do nothing Republican congress look like eager beavers.
They have not kept one of their campaign pledges. They spend like drunken republicans when they are sober. They waste money with earmarks they swore to stop. they said they stop the war. They claimed they would turn around a horrible economy. They said that gas was too high and they would fix that too.
If you believed these pack of liars and their little piggies they swill slop to, you deserve what they will give you when they actually do something they said they would do like raise, raise, your taxes on everything they can think of - to the moon. Sadly, these children are woosies and not very good at anything except lying, loafing and fooling the weak minded.
Never forget - do not believe what they say and never ever trust them with your money or your life.
Just look how they fixed that horrible economy for you, those of you that lost your job or will, can’t afford gas even to fart, lost your home, losing your money in the stock market, having your cash made worthless.
The world, just knowing these fools were back in power and might win the presidency is reacting to what these idiots said they would do and nothing more
You have to love it.
By the way, some of us are going to make piles of money and be more successful than ever anyway simply because we because we know them so well and have seen it all before.
By the way the last vote on ANWAR that the the left killed was in 2003. I remember it well, a famous lefty senator said on the floor, whats the big deal, we won’t get a drop of this oil to flow for 5 years anyway. Next year we could have had 10 million barrels of oil flowing to the US from the AWAR field a day - if these insane people could not have had enough power to stop drilling on 2,000 acres of the 19.1 million in the preserve. Saudi pumps 10 million barrels a day. Also, there was another lie put forth above that the entire ANWAR field would only supply America’s needs for a year. Never believe anything they say.
Now buck up lefties - its all your fault now adn has been for nearly a year. You raally need to get that stem cell thing funded so you can grow a backbone and get some tougher skin