Join The Fed's Chat Board Alongside The Chairman During His Address At The Community Affairs Research Conference

Tyler Durden's picture

As the Fed Chairman is about to commence his luncheon address (and yes, take more moronic questions) at the Community Affairs Research Conference, it has offered readers the option of joining in and commenting alongside in realtime on the Fed's very own chat board. Everyone is suggested to participate and tell the Chairman what they really think. The chatboard link is here.

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Chairman Ben S. Bernanke

At the Federal Reserve Community Affairs Research Conference, Arlington, Virginia

April 29, 2011

Community Development in Challenging Times

As always, I'm pleased to join you at the Federal Reserve's
biennial Community Affairs Research Conference. This meeting brings
together researchers, community development professionals, and
public-sector officials to explore how best to strengthen struggling
communities. Needless to say, that endeavor is more crucial than ever.
The past few years have been very difficult. Weak economic conditions at
the national level have translated into hardships in many communities
at the same time that communities have fewer resources available for
stabilization and revitalization. Considerable good work is going on
nonetheless, and I will offer a few examples of that today.

At the national level, the economy is recovering at a moderate
pace. In particular, the labor market has been gradually improving and
the unemployment rate has declined somewhat. But unemployment remains
quite high, particularly among minorities, the young, and those with
less education. What's more, long-term unemployment remains at
historically high levels. Nearly half of the unemployed have been out of
work for six months or more. The housing market is also holding back
the recovery. The foreclosure rate remains very high, and many
homeowners who have avoided foreclosure find themselves "under water,"
meaning their mortgage debt exceeds the value of their homes. Obviously,
the problems in the labor market and the housing market are not
unrelated. In particular, lost income from unemployment is causing many
families to fall behind on their mortgage payments.

The Challenges to Communities
As families have struggled, so have their communities. In some
areas, for example, high foreclosure rates have produced significant
numbers of vacant properties, depressing surrounding home prices,
attracting crime, and creating financial burdens for local governments.
Thus, some community development groups now are simply trying to hold
onto past progress that they have made in building up the physical
infrastructure and human capital of their communities, while others have
lost ground and are beginning the process of rebuilding.

While the scale of the problems has been exceptional, many of the
problems themselves are not new for lower-income families and
communities that were already struggling. People who were vulnerable to
begin with--those with low incomes, few assets, and less education--have
had a more difficult time weathering the financial storm or recovering
from setbacks. The same is true for communities that were already
relatively poor, with fewer community assets and insufficient drivers of
economic growth.

To solve problems, we must first understand them. Like many of
you here today, the Federal Reserve has been engaged for some time in
research and analysis of the economic challenges faced by neighborhoods
and communities as well as by individuals and families. For example, in
2008, the Federal Reserve Banks and the Board of Governors, in
partnership with the Brookings Institution, published a study of the
effects of concentrated poverty on communities.1
 The communities studied included older inner cities in the North,
smaller cities in the South and West, Native American reservations,
"gateway" neighborhoods that are entry points for immigrants, and rural
areas in Appalachia and the Mississippi Delta. What these diverse
communities had in common was that they did not share in our country's
general prosperity, even in good times. Our research identified some of
the barriers to economic progress shared by these communities, including
inadequate schools and workforce skills, lack of investment in
infrastructure and business development, and limited institutional
capacity. Not surprisingly, these communities were particularly
ill-equipped to deal with the recession.

Of course, economic conditions in a given community both affect
and are affected by the economic status of the individuals and families
in that community. One of the most valuable sources of data on family
finances is the Federal Reserve Board's triennial Survey of Consumer
 To better understand the effects of the crisis on households, the
Board, in a special update to its 2007 survey, asked the participants
about their financial and personal circumstances two years later, in
2009.3 The findings help illustrate the challenges facing families and communities.

According to this special survey, lower-income households
continued to experience significantly more unemployment than
higher-income households. In 2009, nearly one-fourth of the families in
the bottom half of the income distribution had at least one member who
was out of work for some portion of the year prior to the survey; this
rate was about double that of higher-income households. 

Declines in the values of homes and stocks sharply reduced the
wealth of many Americans during the crisis. Three-fifths or more of
families across all income groups reported a decline in wealth between
2007 and 2009, and the typical household lost nearly one-fifth of its
wealth, regardless of income group. Moreover, one in eight of the
households in the panel started the crisis with zero or negative net
worth and thus had scant resources to fall back on to maintain their
standard of living during bouts of unemployment.

Unemployment and declines in wealth obviously can make it
difficult for a household to pay its debts on time. The survey update
found that lower-income households fell behind on their payments at a
substantially higher rate than higher-income households. Among
households with debt, about 11 percent of those with incomes in the
bottom half of the income distribution fell 60 days or more behind on at
least one of their obligations in 2009, compared with nearly 3 percent
of those in the highest tenth of the income distribution. 

Just as lower-income households weather financial storms with
more difficulty, the same is true of communities. Even before the
crisis, some neighborhoods, towns, and cities were in distress. Those
areas already lacked sufficient assets such as strong public schools and
community facilities, and rising unemployment and falling tax revenues
reduced the funds available for public services even as needs increased.
Often, residents were disproportionately unbanked or underbanked and
relied on expensive alternative financial service providers. In
communities with already low housing values--due, for instance, to
oversupply caused by population shifts--the wave of foreclosures that
began in 2007 sent the number of vacant properties soaring, causing
additional problems.

In short, the financial crisis and recession touched many
families and communities. But those that were struggling before the
crisis were often disproportionately affected.

Responding to the Challenges
The challenges for those working to address the many evident
problems in troubled communities can be daunting. When so many social
and economic problems are interconnected--high unemployment,
foreclosures, crime, loss of tax revenues and social services, lack of
economic opportunity--deciding where to start to improve the situation
can be quite difficult. Certainly no single program or approach will
address all of the problems. But realistically, we have to pick places
to begin, with the expectation that finding solutions in one area will
confer wider benefits. For example, providing responsible credit for
individuals and small businesses through community development financial
institutions can stimulate economic activity that generates local tax
revenues. Those tax revenues can be spent on programs to put vacant
properties back into active use, helping to reduce crime, or on job
training or economic development programs, leading to more employment
and wage income that can help homeowners avoid foreclosures.

As the Board's eyes and ears around the country, the Federal
Reserve Banks have kept us well informed of the variety of ways local
communities are meeting the challenges of tough times in troubled
communities. Though the following is only a small sampling of the work
going on around the country, I'd like to share a few of these stories
with the hope that one community's success may lead others to emulate

In Massachusetts, for example, a community development financial
institution called Boston Community Capital is pursuing an innovative
strategy to prevent occupied homes from becoming vacant and creating a
strain on the community. Through special financing entities, it buys
foreclosed-upon but still occupied homes from lenders at market value.
The initiative, dubbed Stabilizing Urban Neighborhoods, or SUN, is
focused on six low-income neighborhoods in Boston that have the city's
highest concentration of foreclosures. Taking advantage of the
diminished home values, the group buys the properties and then resells
them at affordable prices to existing occupants--both owners and
tenants--who can demonstrate that they have suffered hardship. This
program prevents properties from becoming vacant and provides families
with a sustainable and affordable housing situation; it is designed to
start small and expand as needed. 

In the South, ACCION Texas-Louisiana, a nonprofit organization,
has been focused on assisting entrepreneurs start small businesses and
helping existing small businesses to expand. ACCION lends to
entrepreneurs whose businesses are too small or too new to qualify for a
regular bank loan. Minority-owned businesses receive more than 80
percent of its loans, and almost half of the lending goes to women-owned
businesses. Since 2009, the organization has expanded from Texas into
Louisiana to respond to small businesses affected by Hurricane Katrina.
The recession put extra pressure on ACCION, as existing borrowers were
having increasing trouble paying back their loans. At the same time,
demand for its services increased, as newly laid-off workers were
seeking loans to start their own businesses. The organization responded
by expanding its services--opening a business support center and
business incubators, providing more comprehensive technical assistance,
developing new business partnerships, reaching into new markets, and
strengthening its underwriting platform to reduce waiting time for
applicants and reduce its own costs.

In my home state of South Carolina, as in many parts of the
country, the effects of the crisis varies from community to community.
For instance, the city of Charleston, a popular tourist destination
known for its historic architecture and fine cuisine, is faring
relatively well overall. Even so, both unemployment and poverty in the
greater Charleston area increased significantly between 2007 and 2009.4
 Median income in the nearby city of North Charleston, which has
struggled ever since a naval base closed in 1996, is about three-fourths
that of Charleston. In some older neighborhoods, families have moved
out, leaving behind many vacant properties. Some parts of the
metropolitan area are experiencing economic growth, but the benefits of
that growth do not reach all communities. While some major corporations
have expanded into the area, inadequate education and training, as well
as the lack of public transportation, make it difficult for many
residents of low-income and minority communities to take advantage of
new jobs. Local development groups have been working to ameliorate the
situation. For example, Metanoia CDC, a community development
corporation, is located in the heart of the old naval communities of
North Charleston, and its work has visibly improved the hardest hit
communities. Its holistic range of programs--in community leadership,
quality affordable housing, and economic development--appears to be
contributing to decreasing crime, rising student grades, and homes for
first-time homebuyers. The group focuses on building assets--both
physical and human--such as transforming vacant buildings into homes for
families and helping students in a Young Leaders program improve their
performance in school. 

In the San Joaquin Valley of California, the unemployment rate
hovers around 18 percent. In 2009, in response to the ongoing
foreclosure crisis, nonprofit agencies; local, state, and federal
agencies; academics; real estate professionals; financial institutions;
small business and workforce development professionals; and loan
servicers organized the San Joaquin Valley Foreclosure Task Force. The
original intent was to coordinate efforts on a regional scale to avoid
preventable foreclosures. This work continues, and the group is now
expanding its efforts to also help families that have already gone
through a foreclosure. This year, the task force is beginning a series
of foreclosure recovery workshops across the valley. Families will learn
about local programs and assistance, including job training and
employment assistance. Credit counselors will help them begin repairing
their damaged credit. And, in cases in which they may be victims of
fraud, they will receive guidance and referrals to legal aid attorneys. 

As a final example, in Cleveland, local leaders in the Slavic
Village neighborhood have been dealing with some of the highest
foreclosure rates in the nation since the 1990s. Cleveland saw
population loss for five successive decades, resulting in an oversupply
of housing. With the onset of the financial crisis, the problem began to
worsen dramatically. By 2007, Slavic Village was the Zip code with the
highest number of foreclosures in the nation. By 2010, more than 1,500
properties in a neighborhood of 11,000 homes needed to be demolished.
This community has a history of strong neighborhood organizations, and
as might be expected, its residents, community leaders, nonprofits,
local governments, and companies stepped up their efforts. In one
partnership, community groups are using data provided by a local
university to identify borrowers at risk of foreclosure and are reaching
out to them, door to door, to see what might be done to prevent a
foreclosure. In another example, residents and community leaders in
Slavic Village alerted county prosecutors to fraudulent lending in the
neighborhood. As the crisis continues to play out, community leaders
have found ways to reuse vacant land, adding gardens, yard expansions,
and bike trails among the neighborhood's declining number of homes,
making it safer and more attractive. Business leaders are helping as
well by purchasing and demolishing properties adjacent to the gardens
and trails and supporting the renovation and expansion of a nearby
school and recreation center.

I have cited just a few examples of work that is making a
difference at the grassroots level all around the country. They show
that, though the challenges in troubled communities are indeed daunting,
we are far from helpless, and much good work is being accomplished. 

For our part, we at the Federal Reserve will remain closely
attuned to the economic health of all communities, including low- and
moderate-income communities. Each of our Federal Reserve Banks works
with local leaders and community groups to provide relevant research,
data, and support, with the Board backing up these efforts across the

The broader economy is in a moderate recovery, and we have
recently seen some welcome, if gradual, improvement in the labor market.
But our economy is far from where we would like it to be, and many
people and neighborhoods are in danger of being left behind. The work of
community groups, local leaders and businesses, and others is a
critical component to a national economic recovery. In addition to our
work in regulating banks and in conducting monetary policy so as to
achieve maximum employment with price stability, the Federal Reserve
will continue to assist these efforts through local community outreach,
by using its convening power, and through research like that being
discussed at this conference. If we work together, I believe we can find
effective ways to repair the damage done by the crisis to the economic
prospects of families and communities. Until vulnerable families and
troubled communities have regained lost progress, the economic recovery
will remain incomplete.

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ivars's picture

See how nicely USA stimulating effects on DJIA pattern follows those of Greek government on Athens index in 2009. The USA seems to be very close to Greece in some financial behaviour aspects. Hence the future may also be the same:

ivana's picture

So you don't know that GS was in depth involved in Greek public financing, debt and frauds?

Ahmeexnal's picture

Donald Duck is *really* pissed about not being invited to the royal's orgy:


He even uttered the F-word:



During a 30-minute stump speech focused mostly on foreign affairs, Trump blasted Obama's handling of LibyaIraq, China and Afghanistan, and in one of his many curse-bombs, he lamented the nation's focus on building schools in war-torn Iraq, while neglecting education in the United States.

"In the meantime we can't get a f---ing school in Brooklyn," he said.

He also cursed the spike in gas prices: "We have nobody in Washington that sits back and said, you're not going to raise that f---ing price." 

Trump even dropped what's considered the most offensive f-bomb when he promised to use swear words while negotiating with China.

"Listen you mother f---ers, we're going to tax you 25 percent," he said.

Trump also sprinkled in a number of insults directed toward the nation's leaders.

"Our leaders are stupid, they are stupid people," he said. "It's just very, very sad."



Trump/Ventura in 2012???

Dr. No's picture

Listen you mother f---ers, we're going to tax you 25 percent,


Why doesnt he just say he's going to raise consumer prices by 25%?  Same thing, one is more clear and to the point than the other.

knukles's picture

Community Affairs Research Conference.
Ah hah, says I to myself! 
Community Organizer College!

The president is a self-described community organizer.
Could say the NWO folk are community organizers.
Along side the US, UN and NATO in Libya, AfPak, Iraq, tryin' to be community organizers.

How's all that Community Organizin' workin' out these days?

For that matter, could say that Jesus was a community organizer.

Jesus/Palin 2012
Re-appoint the Bernak and Timmah Two Hands
RUn them PM's and commodities....

(Who are screaming on my left?)

slaughterer's picture

This sentence from the Bernank made me choke: "For our part, we at the Federal Reserve will remain closely attuned to the economic health of all communities, including low- and moderate-income communities."'s picture

the Federal Reserve will remain closely attuned to the economic health of all communities, including low- and moderate-income communities."  


It's all part of the Cash for Gold outreach program.

ivana's picture

o yes, they will suck last drop of blood of mid class and when they are all on food stamps - then will forward them to iran

citrine's picture

Apparently, by that he means helping those communities to avoid foreclosures, which he mentions several times. And since the majority of mortgages are at fixed rates, quite soon everyone would be able to pay those mortgages off with the money that he is generously supplying. Result: no foreclosures, positive equity etc etc

EvlTheCat's picture

SquidBot will strip all your personal information from your PC, after you make the connection. Your IQ will also drop about 99.99%.

Cognitive Dissonance's picture

Everyone is suggested to participate and tell the Chairman what they really think. The chatboard link is here.


Can I identify myself as Tyler Durden in the chat or would you prefer to burn your own bridges? Assuming you have any left of course. :>)

redpill's picture

ZH invasion.  This will not end well, lol.

latizziforchizzi's picture

Let's watch gold & silver increase even more after his comments.

ghostfaceinvestah's picture

Gold just took out $1550.

Thank GOD for ZH - this site has helped me preserve my wealth.

BTW, where did all the deflationists go, the ones who used to haunt this site back in the early days?

A Lunatic's picture

Up $7 in about the last four minutes, LOL. Long live the Bernanke.

Mesquite's picture

They were probably watching him in China... 

The Axe's picture

Well that was a circle jerk...

the not so mighty maximiza's picture

I am afraid to join, will they suicide me?

Hephasteus's picture

They can't afford the travel voucher since the planes started charging them 90 grand a flight because they screwed their business into hole with perverted TSA agents.

So do you think you can take your postman?

the not so mighty maximiza's picture

Actually my postwomen is kinda hot,  hell yaa I could take her

slewie the pi-rat's picture

somebody wants to thin the herd?

AnarchoCapitalist's picture

ZH has taken over the chat board.

pepperspray's picture

..with more dignitaries than Westminster

lolmao500's picture

In other news, Trump thinks he can control OPEC.

And in other news... Trump gave lots of money to Harry Reid and Charles Rangel.

web bot's picture

Trump is America's equivalent of Ahmadinejad.

Having this take over power in Washington would be a very, very dangerous move. Despite the mess we are in, we need to be able to pick up the phone and call Beijing, Brussels... and oh ya, Ben. I would be remiss if I didn't include the ChairSatan.

RichardENixon's picture

I refer to Trump as "The Bankrupt"

MrPook's picture

beautiful. he and the bears made me so much casheesh i am celebrating with a bottle of bollinger. so i said thank you in the insult style

MrPook's picture

beautiful. he and the bears made me so much casheesh i am celebrating with a bottle of bollinger. so i said thank you in the insult style

X. Kurt OSis's picture

How the hell does this thing work?  All I get is 'standing by'?

Clorox Cowboy's picture

Don't do it!!! This link downloads a virus that gives Ben control of your printer.... AAAAHHH!

Clorox Cowboy's picture

I'm drowning in a sea comprised of ~75% cotton / 25% linen.  HELP!!!

Racer's picture

I don't need this much toilet roll...  HELP MEEeeeee.....

ghostfaceinvestah's picture

No kidding!  I clicked on it and some app opened a brokerage account on my computer and started buying IWN in large quantities.

outamyeffinway's picture

That could get out of hand. What was that one conference call they left the phone lines open and everyone was laughing at the Ceo....? Dam I forget.

FunkyMonkeyBoy's picture

04-29 13:00: Talk in the Pit of CME raising margin requirement for Silver Futures again on Monday - confirmation to follow




HA, HA, HA! they are f**king desperate! COMEX is blown for the crime scene it is.

augie's picture

This is getting to be beyond comical and straight into sad.

Dr. No's picture

Wait for the announcement no purchases allowed except to cover an existing short.

Hephasteus's picture

Let's see what has happened in the past.

There it is under collapse.

Sprott may have just did something really smart. If his silver and gold pool get pumped up to legit status he's going to be making canada happy.

Silver Bug's picture

Wow, after today, they won't be doing this again. What a HORRIBLE idea, on their part. They are going to get flooded with hate.

Hedgetard55's picture

Criminal Bernanke deserves a Turkish prison with a cellie named Mahmu for the rest of his natural life.

Gordon_Gekko's picture

Ooh baby...I'm gonna have some fun with this...

Gordon_Gekko's picture

Ooh baby...I'm gonna have some fun with this...

Hephasteus's picture

I figured 1550 would pull you out of the ether.

Gordon_Gekko's picture

Haha...yeah...looooong time man!

I really don't know why but what I remember most from all the thousands of comments I posted on ZH back then is the one where I used the Matrix analogy and said that Gold would be "the Neo" of "investments", that it was the simple and elegant solution to a complex equation...

THE DORK OF CORK's picture

Thank you Gordon , you are a altruistic F£$Ker really - you just project a selfish alter ego to defend yourself.

Gold is Good.