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Bernanke Promises More Of The Same, Warns Of Fiscal Cliff - Live Webcast

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The week's most anticipated speech (given Obama's absence from DC) is here. Bernanke's Economic Club of New York extravaganza - where he has previously hinted at new or further policy - is upon us. Sure enough, it's a smorgasbord of we'll do whatever-it-takes (but won't bailout Congress) easing-to-infinity, housing's recovering but we want moar, simply re-iterating his comments from last week...

  • *BERNANKE SAYS FISCAL CLIFF WOULD POSE `SUBSTANTIAL THREAT'
  • *BERNANKE SAYS CONGRESS, WHITE HOUSE NEED TO AVERT FISCAL CLIFF
  • *BERNANKE SAYS FED TO ENSURE RECOVERY IS SECURE BEFORE RATE RISE
  • *BERNANKE SAYS HOUSING RECOVERY `LIKELY TO REMAIN MODERATE'
  • *BERNANKE SAYS CRISIS REDUCED ECONOMY'S POTENTIAL GROWTH RATE

However, as we have noted previously, once you've gone QE-Eternity, you never go back... and we would this is the 3rd time in a row that someone from the Fed has spoken and stocks have sold off.

 

 

 

 

Full speech:

The Economic Recovery and Economic Policy

Good afternoon. I am pleased to join the New York Economic Club for lunch today. I know that many of you and your friends and neighbors are still recovering from the effects of Hurricane Sandy, and I want to let you know that our thoughts are with everyone who has suffered during the storm and its aftermath.

My remarks today will focus on the reasons for the disappointingly slow pace of economic recovery in the United States and the policy actions that have been taken by the Federal Open Market Committee (FOMC) to support the economy. In addition, I will discuss some important economic challenges our country faces as we close out 2012 and move into 2013--in particular, the challenge of putting federal government finances on a sustainable path in the longer run while avoiding actions that would endanger the economic recovery in the near term.

The Recovery from the Financial Crisis and Recession
The economy has continued to recover from the financial crisis and recession, but the pace of recovery has been slower than FOMC participants and many others had hoped or anticipated when I spoke here about three years ago. Indeed, since the recession trough in mid-2009, growth in real gross domestic product (GDP) has averaged only a little more than 2 percent per year.

Similarly, the job market has improved over the past three years, but at a slow pace. The unemployment rate, which peaked at 10 percent in the fall of 2009, has since come down 2 percentage points to just below 8 percent. This decline is obviously welcome, but it has taken a long time to achieve that progress, and the unemployment rate is still well above both its level prior to the onset of the recession and the level that my colleagues and I think can be sustained once a full recovery has been achieved. Moreover, many other features of the jobs market, including the historically high level of long-term unemployment, the large number of people working part time because they have not been able to find full-time jobs, and the decline in labor force participation, reinforce the conclusion that we have some way to go before the labor market can be deemed healthy again.

Meanwhile, inflation has generally remained subdued. As is often the case, inflation has been pushed up and down in recent years by fluctuations in the price of crude oil and other globally traded commodities, including the increase in farm prices brought on by this summer's drought. But with longer-term inflation expectations remaining stable, the ebbs and flows in commodity prices have had only transitory effects on inflation. Indeed, since the recovery began about three years ago, consumer price inflation, as measured by the personal consumption expenditures (PCE) price index, has averaged almost exactly 2 percent, which is the FOMC's longer-run objective for inflation. Because ongoing slack in labor and product markets should continue to restrain wage and price increases, and with the public's inflation expectations continuing to be well anchored, inflation over the next few years is likely to remain close to or a little below the Committee's objective.

As background for our monetary policy decisionmaking, we at the Federal Reserve have spent a good deal of effort attempting to understand the reasons why the economic recovery has not been stronger. Studies of previous financial crises provide one helpful place to start. This literature has found that severe financial crises--particularly those associated with housing booms and busts--have often been associated with many years of subsequent weak performance. While this result allows for many interpretations, one possibility is that financial crises, or the deep recessions that typically accompany them, may reduce an economy's potential growth rate, at least for a time.

The accumulating evidence does appear consistent with the financial crisis and the associated recession having reduced the potential growth rate of our economy somewhat during the past few years. In particular, slower growth of potential output would help explain why the unemployment rate has declined in the face of the relatively modest output gains we have seen during the recovery. Output normally has to increase at about its longer-term trend just to create enough jobs to absorb new entrants to the labor market, and faster-than-trend growth is usually needed to reduce unemployment. So the fact that unemployment has declined in recent years despite economic growth at about 2 percent suggests that the growth rate of potential output must have recently been lower than the roughly 2-1/2 percent rate that appeared to be in place before the crisis.

There are a number of ways in which the financial crisis could have slowed the rate of growth of the economy's potential. For example, the extraordinarily severe job losses that followed the crisis, especially in housing-related industries, may have exacerbated for a time the extent of mismatch between the jobs available and the skills and locations of the unemployed. Meanwhile, the very high level of long-term unemployment has probably led to some loss of skills and labor force attachment among those workers. These factors may have pushed up to some degree the so-called natural rate of unemployment--the rate of unemployment that can be sustained under normal conditions--and reduced labor force participation as well. The pace of productivity gains--another key determinant of growth in potential output--may also have been restrained by the crisis, as business investment declined sharply during the recession; and increases in risk aversion and uncertainty, together with tight credit conditions, may have impeded the commercial application of new technologies and slowed the pace of business formation.

Importantly, however, although the nation's potential output may have grown more slowly than expected in recent years, this slowing seems at best a partial explanation of the disappointing pace of the economic recovery. In particular, even though the natural rate of unemployment may have increased somewhat, a variety of evidence suggests that any such increase has been modest, and that substantial slack remains in the labor market. For example, the slow pace of employment growth has been widespread across industries and regions of the country. That pattern suggests a broad-based shortfall in demand rather than a substantial increase in mismatch between available jobs and workers, because greater mismatch would imply that the demand for workers would be strong in some regions and industries, not weak almost across the board. Likewise, if a mismatch of jobs and workers is the predominant problem, we would expect to see wage pressures developing in those regions and industries where labor demand is strong; in fact, wage gains have been quite subdued in most industries and parts of the country. Indeed, as I indicated earlier, the consensus among my colleagues on the FOMC is that the unemployment rate is still well above its longer-run sustainable level, perhaps by 2 to 2-1/2 percentage points or so.

A critical question, then, is why significant slack in the job market remains three years after the recovery began. A likely explanation, which I will discuss further, is that the economy has been faced with a variety of headwinds that have hindered what otherwise might have been a stronger cyclical rebound. If so, we may take some encouragement from the likelihood that there are potentially two sources of faster GDP growth in the future. First, the effects of the crisis on potential output should fade as the economy continues to heal. And second, if the headwinds begin to dissipate, as I expect, growth should pick up further as many who are currently unemployed or out of the labor force find work.

Headwinds Affecting the Recovery
What are the headwinds that have slowed the return of our economy to full employment? Some have come from the housing sector. Previous recoveries have often been associated with a vigorous rebound in housing, as rising incomes and confidence and, often, a decline in mortgage interest rates led to sharp increases in the demand for homes.7 But the housing bubble and its aftermath have made this episode quite different. In the first half of the past decade, both housing prices and construction rose to what proved to be unsustainable levels, leading to a subsequent collapse: House prices declined almost one-third nationally from 2006 until early this year, construction of single-family homes fell two-thirds, and the number of construction jobs decreased by nearly one-third. And, of course, the associated surge in delinquencies on mortgages helped trigger the broader financial crisis.

Recently, the housing market has shown some clear signs of improvement, as home sales, prices, and construction have all moved up since early this year. These developments are encouraging, and it seems likely that, on net, residential investment will be a source of economic growth and new jobs over the next couple of years. However, while historically low mortgage interest rates and the drop in home prices have made housing exceptionally affordable, a number of factors continue to prevent the sort of powerful housing recovery that has typically occurred in the past. Notably, lenders have maintained tight terms and conditions on mortgage loans, even for potential borrowers with relatively good credit.8 Lenders cite a number of factors affecting their decisions to extend credit, including ongoing uncertainties about the course of the economy, the housing market, and the regulatory environment. Unfortunately, while some tightening of the terms of mortgage credit was certainly an appropriate response to the earlier excesses, the pendulum appears to have swung too far, restraining the pace of recovery in the housing sector.

Other factors slowing the recovery in housing include the fact that many people remain unable to buy homes despite low mortgage rates; for example, about 20 percent of existing mortgage borrowers owe more on their mortgages than their houses are worth, making it more difficult for them to refinance or sell their homes. Also, a substantial overhang of vacant homes, either for sale or in the foreclosure pipeline, continues to hold down house prices and reduce the need for new construction. While these headwinds on both the supply and demand sides of the housing market have clearly started to abate, the recovery in the housing sector is likely to remain moderate by historical standards.

A second set of headwinds stems from the financial conditions facing potential borrowers in credit and capital markets. After the financial system seized up in late 2008 and early 2009, global economic activity contracted sharply, and credit and capital markets suffered significant damage. Although dramatic actions by governments and central banks around the world helped these markets to stabilize and begin recovering, tight credit and a high degree of risk aversion have restrained economic growth in the United States and in other countries as well.

Measures of the condition of U.S. financial markets and institutions suggest gradual but significant progress has been achieved since the crisis. For example, credit spreads on corporate bonds and syndicated loans have narrowed considerably, and equity prices have recovered most of their losses. In addition, indicators of market stress and illiquidity--such as spreads in short-term funding markets--have generally returned to levels near those seen before the crisis. One gauge of the overall improvement in financial markets is the National Financial Conditions Index maintained by the Federal Reserve Bank of Chicago. The index shows that financial conditions, viewed as a whole, are now about as accommodative as they were in the spring of 2007.

In spite of this broad improvement, the harm inflicted by the financial crisis has yet to be fully repaired in important segments of the financial sector. One example is the continued weakness in some categories of bank lending. Banks' capital positions and overall asset quality have improved substantially over the past several years, and, over time, these balance sheet improvements will position banks to extend considerably more credit to bank-dependent borrowers. Indeed, some types of bank credit, such as commercial and industrial loans, have expanded notably in recent quarters. Nonetheless, banks have been conservative in extending loans to many consumers and some businesses, likely even beyond the restrictions on the supply of mortgage lending that I noted earlier. This caution in lending by banks reflects, among other factors, their continued desire to guard against the risks of further economic weakness.

A prominent risk at present--and a major source of financial headwinds over the past couple of years--is the fiscal and financial situation in Europe. This situation, of course, was not anticipated when the U.S. recovery began in 2009. The elevated levels of stress in European economies and uncertainty about how the problems there will be resolved are adding to the risks that U.S. financial institutions, businesses, and households must consider when making lending and investment decisions. Negative sentiment regarding Europe appears to have weighed on U.S. equity prices and prevented U.S. credit spreads from narrowing even further. Weaker economic conditions in Europe and other parts of the world have also weighed on U.S. exports and corporate earnings.

Policymakers in Europe have taken some important steps recently, and in doing so have contributed to some welcome easing of financial conditions. In particular, the European Central Bank's new Outright Monetary Transactions program, under which it could purchase the sovereign debt of vulnerable euro-area countries who agree to meet prescribed conditions, has helped ease market concerns about those countries. European governments have also taken steps to strengthen their financial firewalls and to move toward greater fiscal and banking union. Further improvement in global financial conditions will depend in part on the extent to which European policymakers follow through on these initiatives.

A third headwind to the recovery--and one that may intensify in force in coming quarters--is U.S. fiscal policy. Although fiscal policy at the federal level was quite expansionary during the recession and early in the recovery, as the recovery proceeded, the support provided for the economy by federal fiscal actions was increasingly offset by the adverse effects of tight budget conditions for state and local governments. In response to a large and sustained decline in their tax revenues, state and local governments have cut about 600,000 jobs on net since the third quarter of 2008 while reducing real expenditures for infrastructure projects by 20 percent.

More recently, the situation has to some extent reversed: The drag on economic growth from state and local fiscal policy has diminished as revenues have improved, easing the pressures for further spending cuts or tax increases. In contrast, the phasing-out of earlier stimulus programs and policy actions to reduce the federal budget deficit have led federal fiscal policy to begin restraining GDP growth. Indeed, under almost any plausible scenario, next year the drag from federal fiscal policy on GDP growth will outweigh the positive effects on growth from fiscal expansion at the state and local level. However, the overall effect of federal fiscal policy on the economy, both in the near term and in the longer run, remains quite uncertain and depends on how policymakers meet two daunting fiscal challenges--one by the start of the new year and the other no later than the spring.

Upcoming Fiscal Challenges
What are these looming challenges? First, the Congress and the Administration will need to protect the economy from the full brunt of the severe fiscal tightening at the beginning of next year that is built into current law--the so-called fiscal cliff. The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery--indeed, by the reckoning of the Congressional Budget Office (CBO) and that of many outside observers, a fiscal shock of that size would send the economy toppling back into recession. Second, early in the new year it will be necessary to approve an increase in the federal debt limit to avoid any possibility of a catastrophic default on the nation's Treasury securities and other obligations. As you will recall, the threat of default in the summer of 2011 fueled economic uncertainty and badly damaged confidence, even though an agreement ultimately was reached. A failure to reach a timely agreement this time around could impose even heavier economic and financial costs.

As fiscal policymakers face these critical decisions, they should keep two objectives in mind. First, as I think is widely appreciated by now, the federal budget is on an unsustainable path. The budget deficit, which peaked at about 10 percent of GDP in 2009 and now stands at about 7 percent of GDP, is expected to narrow further in the coming years as the economy continues to recover. However, the CBO projects that, under a plausible set of policy assumptions, the budget deficit would still be greater than 4 percent of GDP in 2018, assuming the economy has returned to its potential by then. Moreover, under the CBO projection, the deficit and the ratio of federal debt to GDP would subsequently return to an upward trend. Of course, we should all understand that long-term projections of ever-increasing deficits will never actually come to pass, because the willingness of lenders to continue to fund the government can only be sustained by responsible fiscal plans and actions. A credible framework to set federal fiscal policy on a stable path--for example, one on which the ratio of federal debt to GDP eventually stabilizes or declines--is thus urgently needed to ensure longer-term economic growth and stability.

Even as fiscal policymakers address the urgent issue of longer-run fiscal sustainability, they should not ignore a second key objective: to avoid unnecessarily adding to the headwinds that are already holding back the economic recovery. Fortunately, the two objectives are fully compatible and mutually reinforcing. Preventing a sudden and severe contraction in fiscal policy early next year will support the transition of the economy back to full employment; a stronger economy will in turn reduce the deficit and contribute to achieving long-term fiscal sustainability. At the same time, a credible plan to put the federal budget on a path that will be sustainable in the long run could help keep longer-term interest rates low and boost household and business confidence, thereby supporting economic growth today.

Coming together to find fiscal solutions will not be easy, but the stakes are high. Uncertainty about how the fiscal cliff, the raising of the debt limit, and the longer-term budget situation will be addressed appears already to be affecting private spending and investment decisions and may be contributing to an increased sense of caution in financial markets, with adverse effects on the economy. Continuing to push off difficult policy choices will only prolong and intensify these uncertainties. Moreover, while the details of whatever agreement is reached to resolve the fiscal cliff are important, the economic confidence of both market participants and the general public likely will also be influenced by the extent to which our political system proves able to deliver a reasonable solution with a minimum of uncertainty and delay. Finding long-term solutions that can win sufficient political support to be enacted may take some time, but meaningful progress toward this end can be achieved now if policymakers are willing to think creatively and work together constructively.

Monetary Policy
Let me now turn briefly to monetary policy.

Monetary policy can do little to reverse the effects that the financial crisis may have had on the economy's productive potential. However, it has been able to provide an important offset to the headwinds that have slowed the cyclical recovery. As you know, the Federal Reserve took strong easing measures during the financial crisis and recession, cutting its target for the federal funds rate--the traditional tool of monetary policy--to nearly zero by the end of 2008. Since that time, we have provided additional accommodation through two nontraditional policy tools aimed at putting downward pressure on longer-term interest rates: asset purchases that reduce the supply of longer-term securities outstanding in the market, and communication about the future path of monetary policy.

Most recently, after the September FOMC meeting, we announced that the Federal Reserve would purchase additional agency mortgage-backed securities (MBS) and continue with the program to extend the maturity of our Treasury holdings. These additional asset purchases should put downward pressure on longer-term interest rates and make broader financial conditions more accommodative. Moreover, our purchases of MBS, by bringing down mortgage rates, provide support directly to housing and thereby help mitigate some of the headwinds facing that sector. In announcing this decision, we also indicated that we would continue purchasing MBS, undertake additional purchases of longer-term securities, and employ our other policy tools until we judge that the outlook for the labor market has improved substantially in a context of price stability.

Although it is still too early to assess the full effects of our most recent policy actions, yields on corporate bonds and agency MBS have fallen significantly, on balance, since the FOMC's announcement. More generally, research suggests that our previous asset purchases have eased overall financial conditions and provided meaningful support to the economic recovery in recent years.

In addition to announcing new purchases of MBS, at our September meeting we extended our guidance for how long we expect that exceptionally low levels for the federal funds rate will likely be warranted at least through the middle of 2015. By pushing the expected period of low rates further into the future, we are not saying that we expect the economy to remain weak until mid-2015; rather, we expect--as we indicated in our September statement--that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.13 In other words, we will want to be sure that the recovery is established before we begin to normalize policy. We hope that such assurances will reduce uncertainty and increase confidence among households and businesses, thereby providing additional support for economic growth and job creation.

Conclusion
In sum, the U.S. economy continues to be hampered by the lingering effects of the financial crisis on its productive potential and by a number of headwinds that have hindered the normal cyclical adjustment of the economy. The Federal Reserve is doing its part by providing accommodative monetary policy to promote a stronger economic recovery in a context of price stability. As I have said before, however, while monetary policy can help support the economic recovery, it is by no means a panacea for our economic ills. Currently, uncertainties about the situation in Europe and especially about the prospects for federal fiscal policy seem to be weighing on the spending decisions of households and businesses as well as on financial conditions. Such uncertainties will only be increased by discord and delay. In contrast, cooperation and creativity to deliver fiscal clarity--in particular, a plan for resolving the nation's longer-term budgetary issues without harming the recovery--could help make the new year a very good one for the American economy.

 


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Tue, 11/20/2012 - 13:19 | Link to Comment Shizzmoney
Shizzmoney's picture
Unemployment 2.0-2.5% too high: Bernanke

Basically, he’ll keep easing until businesses start hiring.  And probably keep doing so after that.

What does that mean? Business won't start hiring because....why the hell would anyone not want to ruin the chance of cheap loans and money for acquisitions?

Tue, 11/20/2012 - 13:40 | Link to Comment nope-1004
nope-1004's picture

Fed words and adjectives carry more impact than Fed policy.  They sound like mortgage pawners.  LOL

Empty facade.

 

Tue, 11/20/2012 - 13:46 | Link to Comment TruthInSunshine
TruthInSunshine's picture

What did The Bernank say? I missed his words of wisdom as I had more important things to do, like read a 3 year old article on The Human Genome Project.

Is he going to print more debt? Will he lower the Fed overnight funds rate by 986 basis points?  Is he considering engaging in unconventional monetary policy? Does he think that Yellen's marijuanika is good shit?

 

Inquiring minds want to know.

Tue, 11/20/2012 - 14:15 | Link to Comment Urban Roman
Urban Roman's picture

"Annnd, it's gone."

(uh, what?)

"It's gone. It didn't do too well, it's gone."

Tue, 11/20/2012 - 13:33 | Link to Comment TeamDepends
TeamDepends's picture

Did anyone else hear the speech Hanke Panke gave around a decade ago when he was a budding wanna-be Fed Chief?  He was asked what he would do if faced with dire problems/fiscal cliff.  He rattled off his 5-step plan.  Can't remember them all but it was something like this:  Print, keep interest rates at 0, buy our own debt, and last, devalue the dollar.  Anyone?

Tue, 11/20/2012 - 13:45 | Link to Comment fourchan
fourchan's picture

Bernanke is a fiscal cliff.

Tue, 11/20/2012 - 13:56 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Back when people were rational, a 1.2 Trillion dollar deficit would have been called a fiscal cliff and talk of averting it would have been . . . sharp tax increases and sharp, across-the-board spending cuts.

Tue, 11/20/2012 - 13:59 | Link to Comment CCanuck
CCanuck's picture

Bernake is a Lemming heading towards the fiscal cliff.

Tue, 11/20/2012 - 15:59 | Link to Comment John Wilmot
John Wilmot's picture

Bernanke is a lemming-herder herding lemmings over the cliff....his suit's stayin' dry, bank on it.

Tue, 11/20/2012 - 13:47 | Link to Comment Silver Bug
Silver Bug's picture

Rinse and repeat. This dance has been done numerous times before. They will raise the debt ceiling, they will print more money. QE to infinity continues.

 

http://ericsprott.blogspot.ca/

Tue, 11/20/2012 - 14:11 | Link to Comment Awakened Sheeple
Awakened Sheeple's picture

I swear I can see his nose growing as he talks.

Tue, 11/20/2012 - 14:23 | Link to Comment EuroInhabitant
EuroInhabitant's picture

Fiscal cliff is a non-problem. Will be postponed again and again, just like that can called euro. BTW:

"GEAB N°69 is available! Katrina-Sandy: From one hurricane to another, the end of America as we knew it"

http://www.leap2020.eu/GEAB-N-69-is-available-Katrina-Sandy-From-one-hurricane-to-another-the-end-of-America-as-we-knew-it_a12571.html

Enjoy :)

Tue, 11/20/2012 - 13:20 | Link to Comment fonzannoon
fonzannoon's picture

one of his most specefic speeches in a while. punt the cliff, raise the debt ceiling immediately. he sounds a bit desperate.

Tue, 11/20/2012 - 13:27 | Link to Comment greyghost
greyghost's picture

desperate...yes....more of the same inflation pumping.....watch silver and gold dive...lol

Tue, 11/20/2012 - 13:31 | Link to Comment ekm
ekm's picture

He is begging.

 

Fed always did what Congress and WH told them to do, always. They are just advisors, but not decision makers.

 

For the election they sided with the WH this time and that was suicidal, but it turned out well for their jobs. However, what people strangely forget, the Republicans still have the House. There are still two bosses and this time the bad boss (republicans) has constitutionally the right to handle the debt ceiling issue.

The Fed backstabbed the republicans with QE3. Do you thing they've forgotten?

Tue, 11/20/2012 - 14:24 | Link to Comment fonzannoon
fonzannoon's picture

EKM the repubs and very much the tea party folded on the last debt ceiling vote. Why would they not fold again?

Tue, 11/20/2012 - 14:34 | Link to Comment ekm
ekm's picture

Good question.

Time will tell.

Tue, 11/20/2012 - 16:00 | Link to Comment John Wilmot
John Wilmot's picture

As if the Fed and the major parties aren't playing on the same team?

...har har har

Tue, 11/20/2012 - 14:12 | Link to Comment gjp
gjp's picture

Yep more of the same.  Please punt the cliff, raise the debt ceiling, but oh, it's not sustainable.  Hey, that's long-term, though, and we'll all be dead right?

Oh, and by the way, it's all Europe's fault.

Tue, 11/20/2012 - 14:30 | Link to Comment timbo_em
timbo_em's picture

Benny B surely is desperate. Last time the S&P 500 went down 200 points and it took Benny half a year to re-print all the wealth that was lost. And since he's moved all-in, what options does he have this time? Besides, since the "budget" is broken beyond repair and they're gonna have to punt anyway, why not do it on 1st down?

Tue, 11/20/2012 - 13:21 | Link to Comment Cdad
Cdad's picture

When is Ben Bernanke going to figure out that he is waaaaaay behind Japan on QE efforts?  Let's go...print moar money.  

And the BlowHorn [CNBC] now enters its hours long coverage of when the next QE will come...even though no QE is mentioned.  HOPE is most certainly a strategy with the criminal syndicate known as Wall Street.

Sold.  To.  You.

Tue, 11/20/2012 - 13:25 | Link to Comment fuu
fuu's picture

Each hour of their coverage is another $61,200,000 of monetization.

Tue, 11/20/2012 - 13:31 | Link to Comment Cdad
Cdad's picture

NOT ENOUGH!  Let's go Banana Ben...the criminal syndicate known as Wall Street and the US mega corporate world needs moar free money!

Additionally:

"In sum, the U.S. economy continues to be hampered by the lingering effects of the financial crisis..."

So...keep bailing out banks?

Tue, 11/20/2012 - 13:31 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Time to go Full Banana.

Tue, 11/20/2012 - 13:35 | Link to Comment RmcAZ
RmcAZ's picture

You NEVER go full banana

Tue, 11/20/2012 - 13:38 | Link to Comment HD
HD's picture

Too late. There are peels everywhere and a room full of central bankers doing pratfalls.

Tue, 11/20/2012 - 13:25 | Link to Comment francis_sawyer
francis_sawyer's picture

Bernanke to Congress > tut tut ~ avoid fiscal cliff

Chuckie to Bernanke > Help us Shalom, you're our only hope

~~~

What a bunch of incompetent losers... Yesterday ~ In the 'Monday Humor' thread, there was a chagrined comment by someone pining for the 'good ol days' when the [Gashouse Gang] hung around ZH... My comment was that the Tylers, even with a Bloomberg Terminal, cant make filet mignon by putting 'Chuck Steak' [pun intended] in a meat grinder...

I rest my case...

Tue, 11/20/2012 - 13:26 | Link to Comment JonNadler
JonNadler's picture

ok ok Chuckie, I'll print some, i don't want to though

Tue, 11/20/2012 - 13:50 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Chuck "Fuck Flyover Country" Schumer:  Look, Ben, it's Christmas time. Don't be a scrooge! My bankster constituents need their Baby Jesus bonuses.

Ben "QEfinity & Beyond" Bernank:  I'm givin' her all she's got, Capitan of Manhattan!

Tue, 11/20/2012 - 13:22 | Link to Comment mrktwtch2
mrktwtch2's picture

same old shit..new day..lol..im looking to short this around noon tomorrow..

Tue, 11/20/2012 - 13:22 | Link to Comment The Aviator
The Aviator's picture

...AND the metals plunge!  what a f-ing joke!

BTFB(ernanke)D!
Anybody purchased from SDBullion?   Looks like they have silver buffalos for .89 over spot!  http://sdbullion.com/shop/silver/1oz-silver-buffalos/
I've always purchased from APMEX, but can't beat .89!

Tue, 11/20/2012 - 13:37 | Link to Comment nope-1004
nope-1004's picture

Depends if you have dry powder handy.  I'd like them to plunge for a bit because I've got a boat trip planned.

 

Tue, 11/20/2012 - 13:52 | Link to Comment sdmjake
sdmjake's picture

That is some kind of wicked plunge...down $6.

Tue, 11/20/2012 - 13:23 | Link to Comment Dr. Engali
Dr. Engali's picture

Fuck it...drive off the cliff, get rid of the illusionary debt ceiling ,and let's see where this thing will take us.

Tue, 11/20/2012 - 13:51 | Link to Comment kralizec
kralizec's picture

Fuckin'-A, Bubba!  Let's get this fothermucker on, damnit!

Tue, 11/20/2012 - 14:05 | Link to Comment earnyermoney
earnyermoney's picture

Give Barry and the Dems their wish ....

Tue, 11/20/2012 - 13:27 | Link to Comment Everybodys All ...
Everybodys All American's picture

The speech is stale old news. Nothing new is ever going to come from this bag of wind.

Tue, 11/20/2012 - 13:29 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I swear to god Bernanke only owns one fucking tie:

http://www.cnbc.com/id/24494689

Tue, 11/20/2012 - 13:31 | Link to Comment digitlman
digitlman's picture

Is it blood red?  If so, that's fitting.

Tue, 11/20/2012 - 13:34 | Link to Comment alangreedspank
alangreedspank's picture

Translation: While I was mostly wrong on all forecasts and trend prediction, this is due to things I pretend not seeing coming, but you are still to believe my future predictions. Thanks, Ben.

Tue, 11/20/2012 - 13:34 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

And.........

commence with the take down of the only two forms of real money just as once again they were attempting to take out the caps put in place by the debt coupon dollar manufacturers.....

 

SURPRISE!!!!!

Tue, 11/20/2012 - 13:39 | Link to Comment Al Huxley
Al Huxley's picture

Well, it's a real bitch when you cross the 0 line on the 'GDP increase per $debt' relationship.  Imagine everyone's surprise when the faster they print, the faster GDP drops...

Tue, 11/20/2012 - 16:04 | Link to Comment John Wilmot
John Wilmot's picture

You mean redirecting capital from productive enterprises to government boondoggles decreases economic growth? But but but, Keynes had this nifty formula and and and...

Tue, 11/20/2012 - 13:38 | Link to Comment koaj
koaj's picture

KMFMD - Glory

WAR AND SLAVERY
EXPLOITATION
THE COMMON BASIS OF A WESTERN NATION
OFFICIAL VERSION, A FALSIFIED STORY
THE TRUTH LIES BURIED IN A SHROUD OF GLORY

INFLUENTIAL PEOPLE AREN'T SERVING TIME
FOR BEING INVOLVED IN ORGANIZED CRIME
BUT STASHED AWAY IN BEAUTIFUL MANSIONS
GUESS WHO PROVIDES FOR THEIR GENEROUS PENSIONS

OPPRESSION, IGNORANCE, CENSORSHIP RULE
EDUCATION IS MORE THAN WHAT'S TAUGHT IN SCHOOL
FORCED IN A MOLD, HELD DOWN BY THREATS
DECISIONS ARE MADE OVER OUR HEADS

BUT THERE IS A WAY TO REFUSE AND RESIST
WE DON'T NEED TO BE RULED WITH THE IRON FIST
WE ARE THE PEOPLE, WE ARE STRONG
LET'S MAKE UP OUR MINDS AND PROVE'EM WRONG

BLACK MAN WHITE MAN YELLOW MAN
BLACK MAN WHITE MAN RIP THE SYSTEM

RELIGION AND TV, WE'RE UNDER THE THUMB
PRONE TO BELIEVE 'COZ WE'RE ALREADY NUMB

Tue, 11/20/2012 - 13:38 | Link to Comment tooriskytoinvest
tooriskytoinvest's picture

Experts: US Economic Growth Is Over. This Isn’t A Temporary Setback, It Is Gone Forever. Recession, More Taxes In The Coming Decade No Matter Who Is The President And Stock Market Will Loses 20% By Next Election

http://investmentwatchblog.com/experts-us-economic-growth-is-over-this-isnt-a-temporary-setback-it-is-gone-forever-recession-more-taxes-in-the-coming-decade-no-matter-who-is-the-president-and-stock-market-will-loses-20-by-ne/

 

Tue, 11/20/2012 - 13:38 | Link to Comment Conax
Conax's picture

Silver and gold both got punched in the face right at 12:15.. To the second, I was watching for it.

Since his talk says nothing new, it was only cover for this paper dump.

Well, we should know dinosaurs won't go into the tar pit without a little thrashing and bellowing, and banks aren't going to give up their controls without a fight.

Tue, 11/20/2012 - 14:12 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Punched in the face at 12:15 but the EE began at 6:15 am.

http://finviz.com/futures_charts.ashx?t=GC&p=m5

Tue, 11/20/2012 - 14:53 | Link to Comment Conax
Conax's picture

90 minutes later, on the nose, the bounce back is complete. (silver)

So the buyers were waiting and took the discount.   Sweeeet!

Tue, 11/20/2012 - 13:45 | Link to Comment TideFighter
TideFighter's picture

No Fiscal Cliff - Keep Printing

Fiscal Cliff - Keep Printing.

Please notice the difference. 

Tue, 11/20/2012 - 13:49 | Link to Comment knicks3005
knicks3005's picture

Ready??? 1........2.........3!

 

FUCK YOU BERNANKE!!!!!

Tue, 11/20/2012 - 13:50 | Link to Comment Antifederalist
Antifederalist's picture

Earth to FUCKING BEN.  

You are trapped.  Get out while the getting is good.........

 

Tue, 11/20/2012 - 13:51 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

All I want for Christmas Santa is more QE and a fiscal cliff to drive it over.

Tue, 11/20/2012 - 13:53 | Link to Comment Milton Waddams
Milton Waddams's picture

Here's we go, Bernanke greenlights easier credit conditions for mortgage borrowing:

Unfortunately, while some tightening of the terms of mortgage credit was certainly an appropriate response to the earlier excesses, the pendulum appears to have swung too far, restraining the pace of recovery in the housing sector.

Tue, 11/20/2012 - 14:17 | Link to Comment Blankenstein
Blankenstein's picture

What a great idea!   This worked out so well when standards were lowered back in 2003 -2004.  We are so lucky to have a real man of genius as Fed Chair.

Tue, 11/20/2012 - 16:09 | Link to Comment John Wilmot
John Wilmot's picture

Q: How does the Fed know when lending standards are too high?

A: When they already lowered them at that didn't work.

....

Q: How does the Fed know when more money should be created?

A: When they already created some and that didn't work.

...

Q: How does the Fed know when interest rates should be lower?

A: When they already lowered them and that didn't work.

....are we seeing the pattern here? ;-)

Tue, 11/20/2012 - 14:36 | Link to Comment Vince Clortho
Vince Clortho's picture

Ahhh yes ... the Great Housing Recovery of 2012!

We are all breathless and astounded by the dimensions of the recovery.  Wouldn't want to slow down the recovery.

I just used the word "recovery" four times.  Does that qualify me to work for the Fed?  How bout cnbc?

BLS?

Tue, 11/20/2012 - 13:56 | Link to Comment Count de Money
Count de Money's picture

Great. No income for three years. Fuck you, Ben.

Tue, 11/20/2012 - 13:58 | Link to Comment riphowardkatz
riphowardkatz's picture

Transitory, what a word.

Tue, 11/20/2012 - 14:00 | Link to Comment Al Huxley
Al Huxley's picture

TPTB must be pissed - only 5 bucks off the gold price, and options expiry coming up next week.  Quick, schedule another speech.

Tue, 11/20/2012 - 14:05 | Link to Comment northerngirl
northerngirl's picture

I am so tired of hearing everything is fine.  At what point the does the axis of reality intersect with this alternative universe Bernanke lives in?

Tue, 11/20/2012 - 14:05 | Link to Comment youngman
youngman's picture

And the French Stock exchange was green today....lol....and gold and silver down....crazy man crazy...dig that funky beat...

Tue, 11/20/2012 - 14:14 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

And the GBP and USD atop the forex. What a crock.

http://finviz.com/forex.ashx

Tue, 11/20/2012 - 14:10 | Link to Comment dracos_ghost
dracos_ghost's picture

Hey, wait, the S&P is down. Is that allowed?

Tue, 11/20/2012 - 14:11 | Link to Comment Darksky
Darksky's picture

Who says ummm and ahhhh more when speaking? Heli-ben or the dog eater in chief?

Tue, 11/20/2012 - 14:14 | Link to Comment fonzannoon
fonzannoon's picture

Market selling off another fed speech. wow.

Tue, 11/20/2012 - 14:15 | Link to Comment Gimp
Gimp's picture

Listen to the talking heads they use a lot of non-commital adverbs/phrases:

possibly, maybe, god willing, perhaps, if possible, by any means, conceivably, likely, perchance, could be......

 

Tue, 11/20/2012 - 14:18 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Shits crazy , I am getting 18 month zero percent offers now.   I wish i needed to buy someting dam it.

Tue, 11/20/2012 - 14:48 | Link to Comment sdmjake
sdmjake's picture

Bet they won't give you that offer on a Browning .50 cal....

Tue, 11/20/2012 - 14:51 | Link to Comment yogibear
yogibear's picture

Take all the free and lose money you can and then bankrupt. Easiest game in town. Take it whiile you can.

Ah, the good old days when all the collateral you needed was to fog a mirror. 

 

Tue, 11/20/2012 - 14:19 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

he just finished to applause...

now go out and spend with those "confidence bucks" you accumulated due to BerWancky making u feel mo' rich becuase of the inflated housing and Fraud market....

GET TO SPENDING I SAID!!!!!!

Tue, 11/20/2012 - 14:22 | Link to Comment the not so migh...
the not so mighty maximiza's picture

ah be spending as fast as ah can all ye damn hood ratz..

Tue, 11/20/2012 - 14:19 | Link to Comment walcott
walcott's picture

Bernake is right. So is Jamie D. So is Geitner. So is Greenspan.

They all have the best interests of America. Period. This ship is turning around.

So shut the fuck up and stop bashing walstreet. They don't force you to 

roll the dice. It's your choice. And be grateful you have the opportunity.

Blow right through the debt ceiling its an arbitrary number.

If people have the funds and opportunity to rebuild and create businesses again they're

not going to be thinking about how many shitty salt water tin can hams they have in the basement.

How freaking retarded.

 

World peace and Happy Thanksgving!

 

Tue, 11/20/2012 - 14:35 | Link to Comment fonzannoon
fonzannoon's picture

I had not thought about it that way walcott.

Walcott I don't have any money in the market. I keep it in a TBTF bank. My bank pays me 0.25% on my deposits. I have a credit card with that same bank. They charge me 18% interest.

You defending that and claiming it is right makes you retarded. I don't carry a balance on my CC and i barely keep any money in the bank othwise we would both be retarded!

But hey let's end on a high note

World Peace and Happy Thanksgiving to you!

Tue, 11/20/2012 - 19:25 | Link to Comment walcott
walcott's picture

The interest rate is the flat tax. It helps cover expense for your grand parents.

If 18% was charged per month that would be a problem.

But year over year its not bad especially the moves in commodities or stocks.

If there was no credit people would be completely broke.

What would you rather have 10k available now to buy money or wait 10 years to save it?

Real estate is coming back again too people are buying.

Tue, 11/20/2012 - 14:21 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

Ben-gahzi and the 911 Jets just let yuh know the mark of the beast sealing is months away, after the Middle East Black Swan drops the bomb.

Tue, 11/20/2012 - 14:32 | Link to Comment kevinearick
kevinearick's picture

have you noticed those placards at the elevator, use stairs in case of fire...

the empire infrastructure needs to be modified and there is no point in beginning until everyone doing make-work gets out of the way. Capital is not going to change the direction of credit until at least one big city goes down and it cannot bring it back up with the make-work skills of the middle class horde. The middle class is good at bells, whistles and gingerbread, but it has no business working on infrastructure. Have you been watching what's happening to the infrastructure? Capital has everything to lose, labor has nothing to lose, but human behavior being what it is....

"Now technology offers a powerful solution: A huge project is getting millions of Indians biometrically identified and opening accounts for them - Nandan Nilekani, an IT billionaire who is the brains behind it, expects that by the end of 2014 600M Indians will be enrolled, creating the infrastructure for a system of cash welfare."

...and the sheep get slaughtered.

Obviously Mr. Nilekani never worked on the line with an Indian, but he has an army of software engineers up his a-, telling him how brilliant he is, and Bank. If you haven't noticed, the algorithm identifies everything-to-lose against nothing-to-lose and bets on the low probability outcome, every time, accelerating the infrastructure spider-crack. Best business practice reduces out the need to know time and place.

Tue, 11/20/2012 - 15:07 | Link to Comment Catullus
Catullus's picture

There are a number of ways in which the financial crisis could have slowed the rate of growth of the economy's potential. For example, the extraordinarily severe job losses that followed the crisis, especially in housing-related industries, may have exacerbated for a time the extent of mismatch between the jobs available and the skills and locations of the unemployed. Meanwhile, the very high level of long-term unemployment has probably led to some loss of skills and labor force attachment among those workers. These factors may have pushed up to some degree the so-called natural rate of unemployment--the rate of unemployment that can be sustained under normal conditions--and reduced labor force participation as well. The pace of productivity gains--another key determinant of growth in potential output--may also have been restrained by the crisis, as business investment declined sharply during the recession; and increases in risk aversion and uncertainty, together with tight credit conditions, may have impeded the commercial application of new technologies and slowed the pace of business formation.

Sounds like they have no fucking clue why jobs havent recovered. This is just pure speculation. None of that shit makes any sense. How does not investing in new technologies destroy your productive output potential? You can at least be as efficient as you were had you done nothing. It's as if there's a giant organization in the economy right now draining productivity and causing risk aversion and uncertainty. It's locationaly centered somewhere along the Potomac River between Maryland and Virgina.

Tue, 11/20/2012 - 17:01 | Link to Comment Antifederalist
Antifederalist's picture

More Cowbell!

Do NOT follow this link or you will be banned from the site!