WASHINGTON (Reuters) - If 2008 was a tough year for Federal Reserve Chairman Ben Bernanke, 2009 is looking no easier as political battles pile on top of tough economic challenges.
With the end of his term looming in January, Bernanke's skill in avoiding pitfalls on both fronts will influence whether he wins another four years at the helm of the Fed.
First, there's the economy: with the U.S. unemployment rate at 9.4 percent and rising, Bernanke faces the challenge of fostering a recovery from an 18-month-old recession with unconventional policies that some worry will ignite inflation.
Then, there's politics: he must convince Congress the Fed deserves a leading role in a restructured financial oversight system even as he addresses criticism of Fed failings before the financial collapse and some actions since.Full Story
Thursday, June 25, 2009
California Can't Pay Thier Bills
LOS ANGELES — Signaling that California is slipping deeper into financial crisis, the state’s controller said Wednesday that his office would soon be forced to issue i.o.u.’s to scores of the state’s creditors, as lawmakers failed at their first attempt as a body to close the state’s multibillion-dollar shortfall.
If the i.o.u.’s are issued as threatened, it would be the first time since 1992 — when Gov. Pete Wilson paid roughly 100,000 state employees with them — that the warrants were used to hold over those to whom the state owed money. Before that budget crisis, California last issued the warrants during the Depression.
“Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” the controller, John Chiang, said in a written statement. He added, “Unfortunately, the state’s inability to balance its checkbook will now mean short-changing taxpayers, local governments and small businesses.”Full Story
Belated Happy FOMC Meeting
Benjamin Bernanke testifying before congress about the BoF and Merill deal back in Sept before the major decline back in Oct 2008. Posted a video on this and its still there if you can check at the bottom of my blog with Breaking The Bank as title.
So FOMC meeting gone as I thought in previous post i.e pause in the interest rates, not expanding fed's balance sheet and god for the first time they did not see any shoots this time.Y'day's statement predicts "inflation will remain subdued for some time," vs. "inflation will remain subdued," from the last session. Missing: no indication about any exit statergy, And no change to the Fed's Treasury buyback program which way is good for the dollar and overall economy.
We're in crisis
With $7.5 million less to spend, Charlotte's United Way is slashing next year's grants for virtually all of the 90-plus local charities it supports.
The new spending plan, approved Tuesday by United Way board members, focuses the deepest cuts on nonprofits serving children, seniors and the disabled.
The board's reasoning: The recession and banking crisis are pushing basic needs to unprecedented levels, so limited dollars must be used to get food, clothing and shelter to victims of the economic downturn.
Charities across five counties have been dreading the news for months. Last fall, leaders watched while the recession and fallout from a United Way CEO pay scandal wrecked the agency's 2008 campaign.Full Story
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