Bernanke Says The Recession Is "Likely Over"
Good news? Federal Reserve Chairman Ben Bernanke says that the recession is over, but that it won't really stop the rise of unemployment — currently at a 26-year high of 9.7%.
"The recession is very likely over at this point," Bernanke said in responding to questions at the Brookings Institution.
He thinks that the economy is likely growing at this point. He also said that Wall Street reform "will be forthcoming."
What do you think? Is Bernanke right?
Bernanke says recession 'very likely over' [AP]
(Photo:Ed Yourdon)
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Well, he didn't say recession's over -- let's party like it's 1999... he said the technical measures will tell us the recession is probably over but employment instability will continue for some time. (BTW -- the AP statement of this being the worse recession since 1930 is total bunk.)
Good news: the recession may be just about over. Bad news: economy will never again be at the level it was just two years ago, because as it turns out the economy was running on lies, hopes, dreams, and bullspit.
Worse news: due to generations of mismanagement by both Corporate America and idiot politicians from both sides of the aisle, a far, far worse depression is on the horizon. Just to pick the most recent example, the government is gonna spend truckloads on money to stimulate the economy, forgetting that the government doesn't actually make money or produce anything, so they will have to raise taxes to ridonculous levels to pay for it all.
To paraphrase 20th century philosopher Fr. Guido Sarducci, the time to invest in gold is over. Now is the time to invest in shovels (and canned goods too, probably).
Dear Ben,
Just because you keep saying it, does not necessarily make it more true, mmkay?
Sincerely,
Pecan
I don't trust any of these financial people or government people, so I would doubly distrust a government financial person.
which economy is he looking at? commercial real estate bust is just about to hit. all those 5 year ARM's are resetting. real unemployment is closer to 20%. food banks are out of food in many areas. the stock market is in yet another bubble (the QE funds are almost gone folks). consumer spending is flat. savings is non-existent for anyone making under 250k a year. 12% of the worlds shipping fleet is anchored off of Thailand sitting unused. a good portion people on "funemployment" will be at the end of their claim limits soon, and I have not even touched on 90% of the other shitty news. V recovery my ass.
as for reforms, yeah that's going to happen. the SEC is incompetent (madoff) and corrupt (BoFA/ML), HFT's are co-lo with the exchanges, and market volume is in the gutter yet we keep seeing gains. essentially the market is being gamed by the Fed and its propping up of banks that are fundamentally bankrupt. anyone with an ounce of sense can see that they are not even bothering to enforce current laws and restrictions, why would they enact new ones?
just have to keep this circus going till 2010 elections, then they can let it all turn to shit till 2012.
@pecan 3.14159265: Are you kidding, that man has probably had a raging hard-on over this recession and hopes it continues because he can put to use the things he learned about the depression when he was in college.
Well, the banks who have free range to manipulate the rules that they set have allowed them to return to profitability, and they are going to again be getting enormous bonuses. So, yeah he's right. All is well.
Things on the ground floor are just going to keep getting worse, as the rich will keep getting more rich. If that's the end of a recession I guess he's right.
Wait until the mass of defaulted student loans begins to hit.
No jobs for grads=Inability and lack of desire to pay back loans.
If people think the recession is over, they might go out and spend more money, which stimulates the economy, instead of hoarding it, which only hurts the economy. So, I'm fine with him saying that, even if it's baseless.
Freaking Gray's Papaya and their less-good-than-it-used-to-be recession special :(
that's funny, b/c geithner says we're not in a recovery yet.
wish these do-nothings would get on the same page already.
Geithner can't even figure out how to use TurboTax. Discount everything he says.
oh yeah, I didnt bother to mention the coming pension disaster, as well as the collapse of most of the US state budgets over the next two years.
@theblackdog_VerifiesHisEmail:
I suppose he could always lower the fed funds rate again. It's currently .25% abover 0 so he's still got that hand to play.
Now I want Gray's Papaya. Why is NYC on the other side of the freaking country?
@MrDo:
By pension disaster do you mean the fact that almost no one in the private sector gets one anymore but nobody saves any money anyway? Because that TERRIFIES me.
My aunt is 55 years old, has a grand total of $26k saved up, and is planning on retiring in 5 years. On what money, I don't know.
Then, there's my neighbor who cashed in his 401k to get a good deal on a truck.
Will we let these poor people stave to death in the gutters because they didn't save for their retirement? Doubtfull. We will end up bailing them out.
I'll be sure to tell all my unemployed friends that it's over, they'll be quite relieved!
@wgrune: if I had it my way, we would soylent green them and at least that way we could get something of worth from them.
@wgrune: Regardless of what either political party tells you, Social Security WILL NOT be around that long.
Judging by the amount of companies I call for quotes on getting work done that never call me back, they must be so busy that the recession is finally over.
What happens when a government goes bankrupt? Just curious...
@wgrune: reportedly, a lot of people cashed in their pension plans over the past couple of years - not always to buy a new truck - many times just to pay the bills that their unemployment checks weren't covering.
or to fill the income gap between what their old (higher paying) job paid & what their new (lower paying) job now pays.
@Cameraman: & why should i believe bernanke over him?
i'm not saying i believe geithner - i just don't believe bernanke either.
@MrDo: Ummmm... I make WELL under 250k and have managed to double my rainy day fund over the last year. Sure, I can't buy a new flat screen or Hummer, but it can be done.
@flamincheney: No, student loan debt is permanent. Even after you stop making payments for a year, when it goes to court they will likely just put you on a "pay what you can" system until you get a job. At which point you continue paying the full amount back.
@flamincheney: Or you go to school or do something really magically for the government. The only way to get rid of student government loan debt is..
1) Pay it back
2) There are programs like teaching for X amount of years which the government will then forgive your debt
3) Like #2, but more rare and in a government field.
My apologies. In denigrating Geithner, I accidentally implied that Bernanke was somehow more believable, and he is not. They're all a bunch of lieing scumbags.
Massive inflation followed by civil unrest if we're lucky.
@Xerloq wants to...: Its something you don't want to see. Look at Zimbabwe. You really don't go "bankrupt" but you start to see runaway inflation because to borrow more money to run the government (and pay interest) you must do it at higher and higher rates. To make up for that, you end up printing money... which feeds itself.
About two years ago he insisted that credit losses were safely contained. There will be no spill over. He is just trying to avoid a panic. Alt-a and option arm mortgages are going to start to come due very soon. Many of which will likely default causing further economic distress and deep financial losses for lenders. It is like we are in the eye of the hurricane right now.
No matter how bad the economy is, he always has some positive comment such as "green shoots." I wish he would just knock it off already.
There needs to be a new way to discuss the health of the economy and what a recession is. Both political parties use their quasi-political economists spin isolated bits of data to misrepresent the true state of the economy. Bush did it when we technically has positive GDP, but all other indicators were negative and Obama will use a similar tactic.
We need a meta-indicator. Something that can somehow weigh: GDP, Stocks, employment, average and class based salaries, inflation, cost of living, poverty rates, cost of certain staples (bread, milk, gas, etc.).
Some of these seem redundant, but politics has infected even the basic measures. For example, when gas prices went through the roof, Bush just cut that out of certain economic measures and added an asterick.
Any likely reforms that come out of Washington will be window dressing, and they'll create new loopholes to create the next financial disaster, not to mention that the regulations will only affect companies that aren't politically connected, giving politicians buddies a helping hand.
@pecan 3.14159265: I first read your comment as directed at Ben Popken, and had a big "WTF? moment".
I think he was just channeling Herbert Hoover.
@Cameraman: since when has an "economy" ever been based on anything except lies, hopes, dreams, and spit?
it depends on what you want out of it. You want stability, we can over regulate and stifle growth...but you know what to expect and what you get will be constant. You want massive growth, we can include loop-holes and let you do what you want, but you have to know that there will be massive losses as well.
There's definitely a happy medium to every situation, your prognostication perhaps will not come to pass. Additionally the fact that it's now the 21st century calls the question whether you should take investment advice from a philosopher.
The way that I look at it: if your summary of the economy isn't the size of a book, it's too simplistic. If it is the size of a book, I can't be bothered to read it. I'll continue working my job, getting my raises and keep a stash for later.
@HRHKingFridayXX: Ditto. I may not be spending money like crazy, but I definitely have accumulated much wealth during the current recession.
@Hoss: Wait for it. They have only delayed the ineviable by stealing from the poor and giving it to the rich (bank bailouts). We are now 20+ trillion in debt because of the bailouts. Don't fool yourself into thinking it's over. Because it's not.
YAY the recession is over!!!!!!!!
Oh Dang... it's now a depression.
You see how they word things? They are telling the truth! The recession IS over it's been over... we're in a depression. A depression is a long drawn out recession. This is a depression and it's getting worse.
I don't believe it. They are being duplicitous trying to get people to spend money again. Forget it. People have been burned by this and the money isn't going to flow for a long time. Goldman & the gang are trying like heck to get carbon credits to start trading, but when the economy is tanked like this, it will be difficult to get any momentum. 15 to 20 years is my estimation for any real recovery and then only if there is any kind of market transparency, which I doubt. So any recovery will be due to people forgetting this mess. And this is why I think it will take so long.
@nnj: Because he's lying. He has a stake in covering up the Ponzi scheme. He wants people to continue playing as long as they have hope they will make a buck.
The result of all of this - big companies got bigger and more powerful. The rich with their money in stock market got a nice recovery because the government propped up the financial system. And the commmon people lost their homes, saw their wages decline or got laid off, and can barely make ends meet, if they even can.
Sorry folks, but this isn't sustainable. Go look at the history of Rome for things to come - it's all already happened (but without flat screen TVs).
@nnj: worse yet, imo, are the tens of thousands of people that fall off the unemployment doles in the next couple of months with no nothing indicating job growth.
presumably, quite a few of these people have a mortgage that they won't be able to pay when the checks stop coming.
I think 3rd quarter results are going to be soft across the board and this christmas season will be rough too. Watch for market drops coming soon.
There's a growing disconnect between what Bernanke and Wall Street say and what's happening on the streets. This thing is NOT over.