Skip to comments.Bernanke sees 'green shoots' of US recovery
Posted on 03/15/2009 6:30:49 PM PDT by NormsRevenge
WASHINGTON (AFP) In his first television interview, Federal Reserve chairman Ben Bernanke predicted that America's worst recession in decades likely will end this year, and that the economic recovery would gather steam next year.
In the "60 Minutes" interview broadcast by CBS late Sunday, which the network said was the first by a sitting Fed chairman in 20 years, Bernanke said the "green shoots" of economic revival were already evident.
Predicting that no more big banks will fail, Bernanke also called on Washington's squabbling politicians to show the will needed for recovery as he spelled out just how close the world came to financial meltdown last autumn.
The US central bank chief, whose decision to sit down last Wednesday for the rare interview underscored the gravity of the crisis, said much depends on fixing the crisis-hit US banking system.
"We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year," Bernanke said.
"We'll see recovery beginning next year. And it will pick up steam over time," he said.
Asked if the United States had avoided a repeat of the 1930s Great Depression, Bernanke said: "I think we've averted that risk.
"I think we've gotten past that and now the problem is to get the thing working properly again."
(Excerpt) Read more at news.yahoo.com ...
Green shoots? Is that the new term for inflated currency? I guess that works as well as anything.
>> “...we’ll see the recession coming to an end probably this year,” Bernanke said.
On the record.
Isn’t that special.
I wonder how he’ll spin it if (dare I say when) his prediction proves inaccurate.
Oh, Please. This past week was a ‘Dead Cat Bounce.’
12-16 months at the EARLIEST for ANY signs of ‘recovery.’
Unless, of course, they’ve all been LYING to us via the complicit Main Stream Media... ;)
Translation: We have killed off the oil and energy companies and forced termination of their employees through fear, but we have 6 figure green energy jobs sprouting up all over paid from those taxes oil companies will be paying.
This is propaganda. Until the American people have confidence in the future, we will not see a recovery. People have to want to start buying automobiles because they have confidence they will keep a job long enough to pay for it.
I hope he’s right, but this is the same guy who kept repeating over and over again that subprime was contained.
“We will not have any more crashes in our time.”
- John Maynard Keynes in 1927
“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
“There will be no interruption of our permanent prosperity.”
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
“No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding.”
- Calvin Coolidge December 4, 1928
“There may be a recession in stock prices, but not anything in the nature of a crash.”
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929
“This crash is not going to have much effect on business.”
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
“There will be no repetition of the break of yesterday... I have no fear of another comparable decline.”
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929
“We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices.”
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“Buying of sound, seasoned issues now will not be regretted”
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929
“Some pretty intelligent people are now buying stocks... Unless we are to have a panic — which no one seriously believes, stocks have hit bottom.”
- R. W. McNeal, financial analyst in October 1929
“The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin.”
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929
“Hysteria has now disappeared from Wall Street.”
- The Times of London, November 2, 1929
“The Wall Street crash doesn’t mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.”
- Business Week, November 2, 1929
“...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation...”
- Harvard Economic Society (HES), November 2, 1929
“... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
- HES, November 10, 1929
“The end of the decline of the Stock Market will probably not be long, only a few more days at most.”
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929
“In most of the cities and towns of this country, this Wall Street panic will have no effect.”
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929
“Financial storm definitely passed.”
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929
“I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.”
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929
“I am convinced that through these measures we have reestablished confidence.”
- Herbert Hoover, December 1929
“[1930 will be] a splendid employment year.”
- U.S. Dept. of Labor, New Year’s Forecast, December 1929
“For the immediate future, at least, the outlook (stocks) is bright.”
- Irving Fisher, Ph.D. in Economics, in early 1930
“...there are indications that the severest phase of the recession is over...”
- Harvard Economic Society (HES) Jan 18, 1930
“There is nothing in the situation to be disturbed about.”
- Secretary of the Treasury Andrew Mellon, Feb 1930
“The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity.”
- Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930
“... the outlook continues favorable...”
- HES Mar 29, 1930
“... the outlook is favorable...”
- HES Apr 19, 1930
“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”
- Herbert Hoover, President of the United States, May 1, 1930
“...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent...”
- HES May 17, 1930
“Gentleman, you have come sixty days too late. The depression is over.”
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930
“... irregular and conflicting movements of business should soon give way to a sustained recovery...”
- HES June 28, 1930
“... the present depression has about spent its force...”
- HES, Aug 30, 1930
“We are now near the end of the declining phase of the depression.”
- HES Nov 15, 1930
“Stabilization at [present] levels is clearly possible.”
- HES Oct 31, 1931
“All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S.”
- President F.D. Roosevelt, 1933
Compiled by Colin J. Seymour, June 2001
That’s just a statement to “hold off the complaints” until the end of the year. By then, they’ll have another one waiting to hold off people for another year... LOL..
Here I was thinking Jack and the beanstalk was just a fairy tale.
>> Thats just a statement to hold off the complaints until the end of the year.
I hear the Fed’s “pump and dump” telemarketing “boiler room” is now hiring. Just in time, too; I bet the layoffs in that dubious business are off the charts.
“This is propaganda. Until the American people have confidence in the future, we will not see a recovery.”
People better quit reading most comments at this site then.
I’ve never seen such a bunch of whiny doom and gloom propagandists.
Betting against Americans has been a losing proposition for over 200 years, and it’s still a losing proposition.
Yo Ben! Come on down here where the rubber meets the road little buddy! Those aren’t “green shoots”!
We need that old Greenspan cartoon where he is speaking gibberish that no one can understand.
Those are crocuses, Bernanke, you dumb bastard!
Yes, I have been reading how the liberal media has been parroting that the economy is already recovered.
And lets not forget the impact of the new taxes coming round the bend in a couple of weeks. Also there are cap and trade, plus other regulations that are going to cripple some industries at best and outright kill others.
I’m not expecting a recovery in the next couple years, unless Congress changes hands dramatically in the off year elections.
China has already publicly announced a lack of confidence in US Treasuries. At this point, the only way to finance current spending is by selling debt.
The Chinese statement was serious enough that President Obama went on record in order to try and reassure China.
President Obama was caught in a Catch 22. He couldn’t afford not to make a statement, but, he also shouldn’t have made the statement he made.
What index is used to reset those mortgages?
remember warren buffet several months ago was trying to get the public to buy stocks.
Have to say it is a pretty story but...let’s just say I’m skeptical.
The article link is not working.
I am seeing signs of recovery. 52" TV's going out Walmart's doors. Housing prices starting to slowly inch up again.
Betting against Americans has been a losing proposition for over 200 years, and its still a losing proposition.
Just an FYI, George W. is out of office. It's safe to admit there's actually some economic troubles goin' on.
And he’s basing all this on a Bear Market rally? Where did he get his econ credentials? At Olbermann’s aggie alma mater?
But as you said, then we were dealing with American people. Now we have 50% Obamanites in the mix. Not hardly American in any way, shape or form.
Thanks, having the link corrected.
as to the story.. I hear ya.
Is Bernake ready to cover the banks when the Commercial Real Estate developers default on their 5 year Balloon mortgages and also cover the losses as credit card defaults rise with unemployment rates. We are talking about losses as large or larger than the residential mortgage defaults. Recovery in one year, how? We have a four to five year worth of bank owned foreclosed property, assuming an average healthy real estate market. When those properties are released into the market, home prices will remain depressed or lower. How is the consumer going to refinance and/or recover their lost home equity. Bernake is too optimistic.
Gloom and Doom?? Betting against America. Saxxon should try dealing with reality. I agree with your data because I have seen them before. Saxxon is not doing the public a favor because wrong info will cause some people to invest what ever they have left in their 401k into the stock market when they should not be in it.
“I wonder how hell spin it if (dare I say when) his prediction proves inaccurate.”
* * * *
Der Fuhrer will remind us that we wont be able to get anything done if we continue listening to Rush Limbaugh.
Retail sales are going up, but the retailer is forced to take losses to clear inventory. Home prices vary from one location to another. Some places have inched up, but many places it has been stagnate or dropping a bit. Problem for regular sellers is banks are holding up to a 4 to 5 year supply of foreclosed property. They have not released it onto the market yet, hoping for better prices. If the economy does not improve, the banks can not hold onto these foreclosed properties forever and will be forced to sell them in waves. Best indicator for possible recovery is Dec 2009, the Xmas sales numbers. Right now data is too premature and still indicate recession or depression trends.
“Green shoots”? Who’s running the Federl Reserve, Chance the Gardener?
The authors of this piece make it sound that Bernanke was rather much more confident and adamant about these predictions than viewing the interview would lead one to believe.
Bernanke qualified all of his predictions upon “if” we get (NB - he said ‘if’ not ‘when’) the banking system functioning again.
This is where the Obama administration has gone clear off the road and into the weeds — they’ve piled hundreds of billions into dubious social spending, while continuing the ad hoc approach of the Bush administration and squandering whatever confidence the financial world might have had in their plans.
A viable plan for recovering the economy should go like this:
Step 1: fix the banking system.
Step 2: create a climate that creates jobs.
The situation requires that those two issues be addressed; most everything else is optional or of much lower priority. The Obama administration has constantly defered step #1, and they have a very mixed message on step 2. I think Bernanke knows this, which is why he made so many qualified statements in that interview.
“The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis. We’ve seen some progress in the financial markets, absolutely. But until we get that stabilized and working normally, we’re not gonna see recovery. But we do have a plan. We’re working on it. And I do think that we will get it stabilized, and we’ll see the recession coming to an end probably this year. We’ll see recovery beginning next year. And it will pick up steam over time.”
Now, what is unclear is “who is the ‘we’ there, Ben?” If he means “The Federal Reserve has a plan” — then yes, they do.
If he means “The Fed and the Obama administration...” I think he’s being rather generous in his assessment.
Depends. Some use LIBOR, some use 10 year T’s.
For the option-ARM situation tho — heh. It doesn’t matter what interest rate benchmark those loans use to reset - what matters most is that the majority of people who have those loans have been paying the minimum payment, which causes a negative amortization of the unpaid interest to add to the loan’s principle. Even if you hold the interest rates constant, the payments go way up if you’ve been paying the minimum payment since the inception of the loan.
There is no more fiendish mortgage product out there than the option-ARM product. To this day, I cannot for the life of me fathom why any bank would a) create such a product, and b) then allow it to be sold so indiscriminately for such highly priced housing. It was typically used on the higher-end housing markets in CA - so it won’t take nearly as many defaults to crater a balance sheet as with the sub-prime loans.
green shoots? I guess he means that the fruit trees are blooming in California, and the illegals will be picking fruit in a few months..
Still, a change from the recent steady declines.
Balony! There is not going to be a “recovery” . The Democrats and environmentalists already have the mechanism in to destroy the economy.By this summer, the Democtats will have taxed gasoline up to ten dollars a gallon. The new environmental regulationson farmers will take care of them. Look for food shortages, higher prices, and rationing.
The destruction of America has been foretold, hoped for, and predicted for years. How was it accomplished? By allowing idiots to vote.
Wow. That post is a keeper!
Looks like I will need to revise forcast for home prices, it is going down. In the fall 2008, there were concerns for commercial real estate and credit card defaults. Today American Express is reporting a rise in credit card defaults. They usually take people with high incomes and good credit card ratings because they do not allow customers to keep a running balance like VISA and Mastercard. If they are having problems, I do not want to see what is happening with VISA and Mastercard/etc. The other rumbling is commercial real estate. Most of the developers have five year balloons coming due this summer 2009. Some of the major players already are behind their payments. If the US banks are not in position to help them refinance despite the growing vacancy rates in the refi properties, we may face another crisis similar to the subprime crisis as the losses will hit the barely solvent banks. Feds will have their hands full trying to find additional funding to replace these new losses from commercial mortgages and credit card losses hitting our banks again. I think recovery is too premature and a clearer picture will form by June of this year. As it stands now I think the trends is toward a 5 to 10 year recession.
I could keep a balance on my Amex, if I wanted to.
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