Wednesday Reads: Have it God’s way…Posted: July 18, 2012 Filed under: #Occupy and We are the 99 percent!, 2012 presidential campaign, Capital Punishment aka Death Penalty, Food, income inequality, Mitt Romney, morning reads, Republican politics, The Bonus Class, the GOP, U.S. Economy, U.S. Politics | Tags: Alzheimer, bernanke, BPA, diet drug, EPA, Gammagard, Germany, HIV, Maastricht Treaty, pentobarbital, Qsymia, RNC, Truvada 45 Comments
Good Wednesday Morning
I have a variety of links for you today, no shared theme or clever connections this morning…let’s just say that my energy level and lack of ambition is at an all time low. (I don’t even think ambition is the correct word. It is like my mind has forgotten how to think.)
Anyway, first a few articles on the new FDA’s approved list of pharmaceuticals…and banned list of plastics.
Plastics. (I bet a few of you will key in on that word…I know I did.) So, I’ve got one word for you…Plastics.
F.D.A. Bans BPA From Baby Bottles and Sippy Cups
The Food and Drug Administration said Tuesday that baby bottles and children’s drinking cups could no longer contain bisphenol A, or BPA, an estrogen-mimicking industrial chemical used in some plastic bottles and food packaging.
Manufacturers have already stopped using the chemical in baby bottles and sippy cups, and the F.D.A. said that its decision was a response to a request by the American Chemistry Council, the chemical industry’s main trade association, that rules allowing BPA in those products be phased out, in part to boost consumer confidence.
But the new prohibition does not apply more broadly to the use of BPA in other containers, said an F.D.A. spokesman, Steven Immergut. He said the decision did not amount to a reversal of the agency’s position on the chemical. The F.D.A. declared BPA safe in 2008, but began expressing concerns about possible health risks in 2010.
Did you know there was a way to tell if the plastic bottle you are using has BPA?
BPA has been used since the 1960s to make hard plastic bottles, cups for toddlers and the linings of food and beverage cans, including those that hold infant formula and soda. Until recently, it was used in baby bottles, but major manufacturers are now making bottles without it. Plastic items containing BPA are generally marked with a 7 on the bottom for recycling purposes.
Fancy that…well, it is a move in the right direction, but there is still no ban on BPA use in baby formula containers.
Next on our list is the anticipated approval of a new diet drug. FDA Approves Diet Drug Qsymia
The U.S. Food and Drug Administration has approved the diet drug Qsymia, the agency’s latest move to give doctors and their patients more tools to fight excessive weight gain as obesity rates continue to bulge in the U.S. and around the world.
An advisory panel voted 20 to two to approve the drug in February, the first time the FDA voted to approve a weight-loss drug in more than a decade. Originally known as Qnexa, the FDA required Vivus, the manufacturer of the drug, to change its name in order to prevent its confusion with other drugs with similar-sounding names. Data presented by the company showed that it helped patients lose about 10 percent of their body weight.
How the hell do you pronounce that name? Qsymia…sounds like a deaf hunchback or something you get after eating a whole box of Ho Ho’s and Ding Dong’s. That queasy, nausea sort of feeling.
Well, what do you know, FDA approves first pill to help prevent HIV
The Food and Drug Administration on Monday approved the first drug shown to reduce the risk of HIV infection, a milestone in the 30-year battle against the virus that causes AIDS.
The agency approved Gilead Sciences’ pill Truvada as a preventive measure for people who are at high risk of acquiring HIV through sexual activity, such as those who have HIV-infected partners.
Public health advocates say the approval could help slow the spread of HIV, which has held steady at about 50,000 new infections per year for the last 15 years. An estimated 1.2 million Americans have HIV, which develops into AIDS unless treated with antiviral drugs. With an estimated 240,000 HIV carriers unaware of their status, doctors and patients say new methods are needed to fight the spread of the virus.
Finally, maybe this new prevention method is signalling the beginning of the end of AIDS.
There was some new information on a drug for Alzheimer patients: Trial Hints Baxter’s Gammagard Can Slow Alzheimer’s
A drug already on the market that treats immune disorders may help stabilize patients with Alzheimer’s disease for up to three years, according to the results of a tiny study presented at a conference on Tuesday.
All four patients who received the optimal dose of the drug, Gammagard from Baxter International, had no decline in several measures of cognition and daily function for three years, researchers said.
Dr. Norman Relkin of Weill Cornell Medical College, the lead investigator of the study, said the results were “remarkable” because patients with Alzheimer’s disease typically worsen within 12 months.
“If we have a patient who goes 18 months without changing we begin to doubt they have Alzheimer’s,” Dr. Relkin said in a news conference at the Alzheimer’s Association International Conference in Vancouver, British Columbia, where the results were presented.
The doctors warned that it was an extremely small trial, but they are encouraged by their findings.
Whether the results are a fluke or not could be known by the first half of next year, when the results of a Phase 3 trial are expected.
The results presented Tuesday were from an extension of a 24-patient trial begun a few years ago. In the first six months of the study, those who received the drug did better than those who received a placebo. After that, patients could continue on the study, with all of them receiving the drug.
Sixteen patients completed three years of treatment. Five of those who originally received a placebo declined less rapidly once they shifted to the drug. Of the 11 who received the drug for the entire 36 months, those who got the optimal dose — which was a high dose — for the whole time fared the best.
That evidence “really suggests this is a drug effect and not just an accident,” said Bill Thies, chief medical and scientific officer of the Alzheimer’s Association.
Of course, the Baxter stock rose with the news…almost a whole dollar to $55.68 a share.
I guess I was wrong about this post not having a theme or connection.
In my home state of Georgia, announces switch to single-drug method for executions even as a death penalty case looms
(Your may remember that the death penalty drug of choice was no longer available, and they had to use the same drug veterinarians use on animals to carry out the sentence. )
Georgia announced Tuesday that it is switching immediately to single-drug executions from a three-drug combination, following the lead of several other states even as a death row case loomed.
The Georgia Department of Corrections said it will begin using a single dose of the sedative pentobarbital to carry out court-ordered death sentences. It had been using pentobarbital to sedate inmates before injecting pancuronium bromide to paralyze them and then potassium chloride to stop their hearts.
They announced this change the day before a man was sentenced to die…can you believe it?
Georgia inmate Warren Lee Hill had been set to be executed Wednesday evening, but authorities said that execution has now been rescheduled for Monday.
Hill’s attorney, Brian Kammer, expressed concern about the switch to a single-drug procedure even as he waged legal efforts to spare the inmate. “I think it is troubling to be confronted with a significant change in the execution protocol a day before the scheduled execution of my client,” Kammer said in an email.
Georgia began using pentobarbital as part of its three-drug combination last year after another drug, sodium thiopental, became unavailable when its European supplier bowed to pressure from death penalty opponents and stopped making it. But pentobarbital is now in short supply after its manufacturer said it would try to prevent its use in executions.
The article gives some statistics on how many people have been put to death using the pentobarbital alone. You can read the rest if you like…but the parts that I have quoted above give you the main part of the story I wanted to share with you this morning.
I have three more articles that are full of numbers…and since my mind is a bit off lately, we will just post quick links and no commentary.
Brent slips below $104 as Bernanke offers no signal on stimulus | Reuters
Brent crude slipped below $104 a barrel on Wednesday, snapping five days of gains as Federal Reserve Chairman Ben Bernanke offered no signs of further monetary stimulus to boost growth in the world’s top oil consumer.
Oil also slipped as a 16 percent increase in prices from the the lows for the year touched last month prompted some investors to book profits. Broader markets, from Asian shares to the euro, edged higher as Bernanke in his testimony to the Senate Banking Committee left the door open for more stimulus.
Brent crude slipped 67 cents to $103.33 a barrel by 0258 GMT, after settling 63 cents higher. U.S. oil slipped 40 cents to $88.82 a barrel after ending 79 cents higher.
“Bernanke’s comments were in line with the last set of minutes – examining ways of doing more should that be necessary,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “Oil has recovered from its June lows pretty close to its medium-term equilibrium and that is why we are seeing a bit of softening. There is some profit-taking.”
HARP Refi Numbers Not as Strong as Advertised | FDL News Desk
The Federal Housing Finance Agency engaged in a little back-patting yesterday for improved HARP figures, which they say are a direct result of their changes to the system to allow for more underwater borrowers to take advantage of low refinancing rates. The truth is a little murkier.
Be sure you read this FDL article by David Dayen. There are some links to charts and statements that even in my diminished capacity, I can understand.
This next link is something Dakinikat and MABlue may find interesting. Chart of the Day: Germany in breach of Maastricht Treaty in 8 of 10 years since 2002 | Credit Writedowns
A recent story in German magazine Der Spiegel highlights the efforts in 2005 of German Chancellor Gerhard Schroeder to relax the penalties for deficits in breach of the euro zone’s stability and growth pact. It is a good review of the contemporaneous actions of the German government within a wider EU political context. However, I feel there is a lot missing to the article in giving the German context to the present European sovereign debt crisis. Therefore, I am giving you a few tidbits here.
And finally, just one quick observation. With the RNC being held in Tampa, FL…the place I was born and raised, this next link made me laugh…why? Because the restaurants that are mentioned are the big expensive places that your average person would not be able to afford. Ha, go figure. Locals Dish About Tampa’s Secret Eats | Heard on the Hill
The Republican National Convention has offered up its version of the culinary frontrunners it’s supporting during next month’s nominating soiree. But Tampa food scribes assure HOH there are certain off-menu specials conventioneers won’t want to miss.
Tampa Tribune food writer Jeff Houck eats his way around the local dining scene like it’s his job (it is) for “The Stew” blog. Which makes it all the more impressive that, come quitting time, he’s still inclined to darken Pelagia Trattoria’s door.
“My favorite thing is to go to Pelagia Trattoria and ask the chef to make whatever he wants. That place is amazing,” Houck tells HOH, adding that he demanded just such a spontaneous tasting menu for an anniversary celebration.
And this is considered “gossip” according to The Hill website…
The open-ended invitations have spawned all manner of gustatory whimsy, including Kumato tomatoes showered with goat cheese “snow” (frozen and hand grated), tripe fritters partnered with pizzaiola sauce, juniper-marinated squab escorted by pickled white cherries and sweet corn polenta and a “coffee and cigars” closer featuring espresso panna cotta and chocolate tuiles inundated with Bailey’s Irish Cream.
“Tasting Tampa” food blogger Todd Sturtz offered up two under-the-radar gems surreptitiously served at the award-winning Bern’s Steak House: the house-made steak sandwich and burger.
According to Bern’s chef de cuisine, Habteab Hamde, the sandwich weaves together 4.5 ounces of chargrilled tenderloin served plain, fully loaded (cheese, lettuce, tomatoes, apple-smoked bacon, sauteed mushrooms and caramelized onions) or anywhere in between, all on a whole-wheat bun. He described the burger as an 8-ounce patty forged from freshly ground 80/20 USDA Prime flap meat, which is then cooked to order and dressed accordingly.
Hamde confirmed that neither item appears on any menu, while noting that bar patrons have been savoring both for years.
Houck certainly has.
“The Bern’s sandwich tastes like God intended beef to taste,” he raves. “And in a setting where you don’t expect to get a burger, which always makes it fun.”
Ah, so this is what Romney probably is used to when it comes to that all American burger? No pink slime for you people…they leave that crap for the serfs.
You know, there are many good, no strike that, fabulous restaurants in Tampa that aren’t reserved for the rich and GOP millionaire class. And I can bet the owners of these “dives” are part of that group of people who would appreciate some business thrown their way.
Yeah…I know that Romney and the rest of them are rich, but it is attitudes like this link above that makes their obvious lack of understanding even more apparent when it comes to us real folks out there. Wish I could afford beef the way “God” intended it to taste, unfortunately I am one of the little people who don’t get to experience life the way “God” intended it to be…by that I mean the way these 1%ers do. Anyone up for a 99 cent Whopper, made the way you like it? I’ll have my the way God likes it…all the way, with everything!
Friday ReadsPosted: August 26, 2011 Filed under: 2012 presidential campaign, Economy, Environment, Environmental Protection, morning reads, U.S. Economy, unemployment | Tags: bernanke, fiscal policy, fracking, Mitt Romney, monetary policy, Oil companies guilty of killing birds 29 Comments
We’ve talked about the earthquake in Virginia some. This is one of the most interesting op eds I’ve seen for some time and it’s written by Dr. Stuart Jeanne Bramhall who is actually a psychologist but has done some research on the subject. She argues that fracking in neaby West Virginia could’ve been responsible for the unusual and unusually large quake. I know there’s a lot of controversy about fracking but I had no idea it could cause earthquakes. Actually, fracking itself doesn’t, its another step in the process and it’s happened before in Arkansas.
According to geologists, it isn’t the fracking itself that is linked to earthquakes, but the re-injection of waste salt water (as much as 3 million gallons per well) deep into rock beds.
Braxton County West Virginia (160 miles from Mineral) has experienced a rash of freak earthquakes (eight in 2010) since fracking operations started there several years ago. According to geologists fracking also caused an outbreak of thousands of minor earthquakes in Arkansas (as many as two dozen in a single day). It’s also linked to freak earthquakes in Texas, western New York, Oklahoma and Blackpool, England (which had never recorded an earthquake before).
Industry scientists deny the link to earthquakes, arguing that energy companies have been fracking for nearly sixty years. However it’s only a dozen years ago that “slick-water fracks” were introduced. This form of fracking uses huge amounts of water mixed with sand and dozens of toxic chemicals like benzene, all of which is injected under extreme pressure to shatter the underground rock reservoir and release gas trapped in the rock pores. Not only does the practice utilize millions of gallons of freshwater per frack (taken from lakes, rivers, or municipal water supplies), the toxic chemicals mixed in the water to make it “slick” endanger groundwater aquifers and threaten to pollute nearby water-wells.
Horizontal drilling and multi-stage fracking (which extend fractures across several kilometres) were introduced in 2004.
The op ed provides links and information on the the related research and information on the prior quake experience in Arkansas.
Mitt Romney lost his cool last night in a New Hampshire Town Meeting. The dust-up was over Romney’s support of a balanced budget amendment which is basically anathema to economists. You can watch the video and the resultant hair malfunction that results. Also, interesting to note is Mediate’s use of the word “former” in front of front runner.
Former GOP presidential frontrunner Mitt Romney got into a heated exchange with a voter at a New Hampshire town hall event Wednesday over his support for a balanced budget amendment, and by the mainstream media’s selective standards, lost his cool when she tried to engage him. In clips played on MSNBC’s The Daily Rundownthis morning, Romney certainly appeared angry by those standards, and the full exchange, while slightly less damning, demonstrated a marked contrast with how President Obamadealt with an aggressive questioner recently.
The snippets that MSNBC played, of Romney snippily asking the town hall attendee to let him answer her question, were obviously designed to show the candidate as impatient and besieged, but placing them in context doesn’t change things all that much. Romney aggressively interrupts the woman’s calm, if rambling, question by asking her, “Did somebody in the room say that we don’t need any government?”
When she tries to engage his question, calling the balanced budget amendment “irresponsible,” he interrupts her again, abruptly asking, “Do you have a question, and let me answer your question.”
“Yes, how do you think the government can not provide funds for the people, its citizens?”
Romney begins to answer the question, and from there, you can’t hear what the woman is saying, but Romney reacts angrily to her attempts to follow up, saying, “You had your turn madam, now let me have mine!”
Frum Forum mentions the number of economists that think a double dip recession is inevitable. I want to bring this up now so that when you hear the villagers say most economists didn’t think that it was going to happen that you’ll see that a lot–if not most–of us do think that. Also, note that the majority of us have been saying that the Federal government has been doing the wrong Fiscal Policy things since about 2007 too. Paul Krugman mentions that the fiscal policy response has just been gunning for another recession tool.
At this point the entire advanced world is doing exactly what basic macroeconomics says it shouldn’t be doing: slashing spending in the face of high unemployment, slow growth, and a liquidity trap. It’s a global 1937. And if the result is another recession, the witch-doctors will just demand more bleeding.
Yup, the austerity demons will undoubtedly howl for more budget cuts and more tax cuts for the unjob creators.
The U.N., U.S. and NATO have unfroze Libyan assets so the transitional government can provide critical humanitarian aid to the Libyan People. This news comes from the US State Department.
The UN Security Council’s Libya Sanctions Committee approved a U.S. proposal to unfreeze $1.5 billion of Libyan assets to be used to provide critical humanitarian and other assistance to the Libyan people. The U.S. request to unfreeze Libyan assets is divided into three key portions:
Transfers to International Humanitarian Organizations (up to $500 million):
- Up to $120 million will be transferred quickly to meet unfulfilled United Nations Appeal requests responding to the needs of the Libyan people (including critical assistance to displaced Libyans). Up to $380 million will be used for the revised UN Appeals for Libya and other humanitarian needs as they are identified by the UN or other international or humanitarian organizations.
Transfers to suppliers for fuel and other goods for strictly civilian purposes (up to $500 million):
- Up to $500 million will be used to pay for fuel costs for strictly civilian needs (e.g., hospitals, electricity and desalinization) and for other humanitarian purchases.
Transfers to the Temporary Financial Mechanism established by the Contact Group to assist the Libyan people (up to $500 million):
- Up to $400 million will be used for providing key social services, including education and health. Up to $100 million will be used to address food and other humanitarian needs.
The United States crafted this proposal in close coordination with the Transitional National Council, as they assessed the needs of the Libyan people throughout the country. It responds to humanitarian concerns in a diversified way that prioritizes key needs. The United States will work urgently with the Transitional National Council to facilitate the release of these funds within days.
The President of the AFL-CIO continues his harsh criticism of President Obama. This should be interesting since labor unions provide a lot of GOTV work for elections at all levels.
The most powerful union official in the country offered reporters his harshest critique of President Obama to date Thursday, questioning Obama’s policy and strategic decisions, and claiming he aligned himself with the Tea Party in the debt limit fight.
“This is a moment that working people and quite frankly history will judge President Obama on his presidency; will he commit all his energy and focus on bold solutions on the job crisis or will he continue to work with the Tea Party to offer cuts to middle class programs like Social Security all the while pretending the deficit is where our economic problems really lie,” AFL-CIO President Richard Trumka told reporters at a breakfast roundtable hosted by the Christian Science Monitor.
Trumka dismissed Obama’s recent job creation proposals — an extended payroll tax cut, patent reform, free trade deals — as “nibbly things that aren’t going to make a difference,” and said the AFL-CIO might sit out the Democratic convention if he and the party don’t get serious.
“If they don’t have a jobs program I think we’d better use our money doing other things,” Trumka said.
The editors of Bloomberg are down on monetary policy and are asking for more relevant fiscal policy in this op ed: The U.S. Needs a Jobs Policy, Not More Cheap Money. Well, at least some body gets it. The Federal Government can create jobs. Some one just needs to get the President to believe that and fight for it.
While the Fed can only print money, the government has the power to create jobs directly. And jobs are what the economy needs now, to break the chain in which high unemployment, weak consumer demand and low business confidence reinforce one another. Bloomberg View has laid out some of the best options available for a national jobs policy:
— Public-works spending can lift demand and put people to work in capital-intensive industries such as construction.
— A tax credit for companies that increase their headcount can encourage hesitant employers to hire at minimal cost to taxpayers.
— Programs that pay the wages of new hires as they gain on-the-job training can efficiently target the long-term unemployed.
— Allowing the unemployed to collect benefits while starting up new businesses can prompt older, better-educated people to create their own opportunities.
— For some entry-level jobs, scrapping the reporting of criminal records on applications can help qualified workers get a foot in the door and stay out of prison.
— And to make the spending more palatable to congressional opponents, President Barack Obama could offer to cut some of the red tape holding back hiring and economic growth, such as the outdated Davis-Bacon Act, which artificially raises the cost of public-works projects.
Altogether, a meaningful jobs package might cost taxpayers more than $200 billion over a couple years. To provide the government the leeway it needs to support the economy in the short term, it’s crucial that the congressional supercommittee, which must find $1.5 trillion in deficit reduction over the next 10 years, recommend a combination of new revenue, spending cuts, tax reforms and entitlement changes that would put the government’s long-term finances on a sustainable path.
Whatever Bernanke says today, he can’t rescue the economy alone
Yup. But, we’ve been talking about that here for a long time. I feel a bit blue in the face, do you?
So, here’s some news from North Dakota where seven oil companies are charged with killing birds.
Seven oil companies have been charged in federal court with illegally killing 28 migratory birds in Williams County.
Slawson Exploration Company of Kansas, ConocoPhillips Company, Petro Hunt, LLC and Newfield Production Company, all of Texas, Brigham Oil and Gas, LP of Williston, Continental Resources, Inc. of Oklahoma, Fidelity Exploration and Production Company of Colorado face charges of violating the Migratory Bird Treaty Act.
Most of the dead birds were found in un-netted oil reserve pits in May. An employee of one company alerted the Fish and Wildlife service to some of the dead birds. Others were found by inspectors.
In one case, an oil spill leaked into a nearby wetland, where several ducks died as a result of exposure to the oil.
The U.S. Fish and Wildlife Service says netting is the most effective way of keeping birds from entering waste pits.
The maximum sentence they face is six months in federal prison and a $15,000 fine.
So corporations have all these people rights now, how do we get them into prison for those six months? Perhaps Uncle Clarence Thomas has a suggestion?
What’s on your reading and blogging list today?
Via Corrente and Lambert/DC Blogger:
Update on Susie at Suburban Guerilla
Susie was taken to the hospital early this morning for a possible heart attack and is being kept there for observation and testing until tomorrow morning.
Oh to be a Fly on those Fabled Marble WallsPosted: June 23, 2009 Filed under: Global Financial Crisis, Team Obama, U.S. Economy | Tags: bernanke, FOMC, Mishkin, the Fed, the stimulus bill Comments Off on Oh to be a Fly on those Fabled Marble Walls
The Federal Open Market Committee (FOMC) meets today. Those folks are the ‘deciders’ when it comes to monetary policy. This should be an interesting meeting for a number of reasons. First, new regulations proposed by the Obama administration definitely put the Fed in the catbird seat. Second, Bernanke is coming close to his expiration date. Third, a number of prominent economists are wondering about the Fed’s exist strategy from the current wide open floodgates and the pressure is on not to enable another bubble. Fourth, we find that three banks have suspended their Tarp Dividends meaning that all is not happiness and light in bank balance sheet land. The intrigue of all this pulls this financial economist away from her research agenda which is not good for my CV but very good for turning the dismal science into a Walter Winchellesque moment. Now, just where to begin …
‘Good Morning, Mr. and Mrs. North and South America and all the ships at sea…let’s go to press!’
Let’s go to Banking. Headline: The Scam Continues on you, Mr and Mrs. North and South America. Let’s dish the dirt on those banks that are behind in their loan payments to the U.S. taxpayer as reported today by the WSJ who keeps track of that sort’ve thing. It seems three banks have suspended their TARP ‘dividends’. They can miss six before they technically default. (Ask yourselves, if I missed five housepayments would I still be IN my house or out in the street by number six?) The banks are: Pacific Capital Bancorp (CA), Seacost Banking Corp of Florida (FL), and Midwest Bank Holdings Inc (IL).
Treasury spokeswoman Meg Reilly said Monday that “a number of banks” that got taxpayer-funded capital under TARP are no longer paying dividends to the government. “Treasury respects the contractual rights of [TARP recipients] to make decisions about dividend distributions, and that banks are best positioned to decide how to manage their own capital base.”
The moves are a sign of the deepening misery for large swaths of the U.S. banking industry, suffering under bad loans and the recession even as large firms such as J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. rebound from the crisis, including by repaying their TARP funds last week. The halted dividends also raise questions about the Treasury’s assertions that the capital infusions represented sound taxpayer investments because they were only going to healthy institutions.
“Here the government has given the banks money at great terms, but the fact that they can’t keep up with it is worrisome,” said Michael Shemi, an investor at New York hedge-fund firm Christofferson, Robb & Co. “It tells you of the deep problems of community and regional banks.”
Bernanke RulesPosted: April 18, 2009 Filed under: Global Financial Crisis, U.S. Economy, Uncategorized | Tags: bernanke, Credit Default swaps, Credit Derivatives, Fannie Mae, FED, Freddie Mac, Regulations, Subprime mortgages Comments Off on Bernanke Rules
Is The Fed under Chairman Ben Bernanke finally beginning to adopt the tougher lending regulations and rules that would’ve prevented much of the havoc of the last two years? In a speech on April 17, Bernanke stated that damage done to the economy was not likely to be undone any time soon. This gives more credence to the idea that we may see an L-shaped recovery. In other words, be prepared to scuttle across the bottom for a very long time. But did the speech deliver the assurances we need that necessary steps and regulations w lending practices and financial innovations are in the works? I don’t think so.
Here’s some interesting analysis by Craig Torres at Bloomberg.com.
Federal Reserve Chairman Ben S. Bernanke said the collapse of U.S. lending will probably cause “long-lasting” damage to home prices, household wealth and borrowers’ good credit score.
“One would be forgiven for concluding that the assumed benefits of financial innovation are not all they were cracked up to be,” the Fed chairman said today in a speech at the central bank’s community affairs conference in Washington. “The damage from this turn in the credit cycle — in terms of lost wealth, lost homes, and blemished credit histories — is likely to be long-lasting.”
The U.S. central bank has cut the benchmark lending rate to as low as zero and taken unprecedented steps to stem the credit crisis through direct support of consumer finance and mortgage lending. The Fed plans to purchase as much as $1.25 trillion in agency mortgage-backed securities this year to support the housing market and is providing financing for securities backed by loans to consumers and small businesses.
Bernanke and the Federal Reserve Board approved rules last July to toughen restrictions on mortgages, banning high-cost loans to borrowers with no verified income or assets and curbing penalties for repaying a loan early. The action came after members of Congress and other regulators urged the Fed to use its authority to prevent abusive lending.
This suggests Bernanke does not see home values going back up any time soon. It also suggests that the lending markets are not likely to return to their heyday. Does this mean, however, that we’re finally going to see the regulation and enforcement of prudent underwriting standards and no more hide the trash in a bundle and pass it to the next sucker?
Greenshoots or False Spring?Posted: April 6, 2009 Filed under: Equity Markets, Festivities, Global Financial Crisis, U.S. Economy | Tags: altman, bernanke, cowen, Depression, greenshoot, recession, recovery, thoma Comments Off on Greenshoots or False Spring?
I woke up this morning to a chill in the air. When I came back home from university today it was a chilly 60 in the house. There’s a frost warning for the North Shore and I had to put the heater back on and pull at the flannels. I walked the dog in a fleece jacket and had to put socks on. This weekend was just warm, sunny, and great and the Strawberry Festival was in full swing? WTF happened here in Southeastern Louisiana? One day I’m basking in the first hint of a warm sun enjoying fresh strawberry shortcake and the next I’m hoping that the magnolia blossoms are safe. Yes, there’s a Strawberry Queen, a Strawberry Ball, and Strawberry Royalty. If you gotta work somewhere, it might as well be the Strawberry Capitol of the Word.
So, having been raised in the Great Flyover and spent most of my childhood watching my Dad’s business sell F-150s to the local farmers, I know a lot about a false spring. That’s when Mother Nature messes with you by giving you just enough spring to think the worst of winter is over and then hits you with the cold blast of reality. Thankfully, my cold blast didn’t include the blizzard that hit the heartland, but it is a cold blast. That’s why I’m having so much fun with the economic word-de-jour. That would be Ben Bernanke’s “green shoots”. An Ivy-leaguer from South Carolina should know about about false springs. Bloomberg picks at the analogy too in Bernanke ‘Green Shoots’ May Signal False Spring Amid Job Losses.
April 6 (Bloomberg) — It will be months before it’s clear whether what Federal Reserve Chairman Ben S. Bernanke calls the U.S. economy’s “green shoots” represent the early onset of recovery, or a false spring.
The Labor Department’s April 3 report that the economy shed an additional 663,000 jobs last month, while the unemployment rate rose to 8.5 percent, will be followed by months more of bad-news headlines, economists say. The recession, now in its 17th month, has already cost 5.1 million Americans their jobs, the worst drop in the postwar era; unemployment may hit 9.4 percent this year, according to the median estimate in a Bloomberg News survey, and may top out above 10 percent in 2010.
The risk is that the jobs picture turns even more bleak than forecast or the drumbeat of bad news still to come causes consumers, whose spending has firmed up in recent months, to hunker down again.
“If something happens to spook consumers and they crawl back into their tortoise shells, that would be terrible news,” says Alan Blinder, former Fed vice chairman and now an economics professor at Princeton University.
Consumer spending, which accounts for more than 70 percent of the economy, rose 0.2 percent in February after climbing 1 percent in January, breaking a six-month string of declines.