Bernanke Speaks Before Senate Banking Committee

Posted: July 15, 2008 at 10:06 am by Lisa

Bernanke says upside risks to inflation has intensified, but downside risk to growth is significant. He sees consumer spending restrained. Here’s some more:

- Financial markets and institutions remain under considerable stress, inflation will more higher "temporarily" over the near term.
- Worried commodity prices may continue rising, as this would pose a key risk to current inflation forecast. Inflation outlook is unusually uncertain.
- Decline in USD value has contributed somewhat to oil prices. However, surge in oil prices have been mainly driven by strong demand and tight supply.

The US Dollar is tumbling. Business inventories are at 0.3% vs 0.5% prior. The Fed’s $75B TAF results:

FED SELL $75B IN TAF AUCTTION, STOP OUT RATE 2.30%, BID TO COVER 1.24X

They also conducted 28 day repo of $20 Billion.

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Comments

4 Responses to “Bernanke Speaks Before Senate Banking Committee”

ecklebob on July 15th, 2008 10:39 am

funny how he can tell the truth when he is under penalty of perjury if his testimony is knowingly false.
Jim on July 15th, 2008 10:42 am

I find it interesting that forecasts based on oversold indicators, support levels, and Fib lines are being thrown out the window.

Three facts. First, the worldwide credit bubble is deflating and asset values are falling. In Japan this process has gone on for 15 years.

Second, there is a limited supply of light sweet crude that is desparately needed throughout the world. Thus the world wide bid price for this quality of crude keeps going higher.

Three, jobs in the USA are disappearing at the State, County, City level. Retail, finance, construction jobs are disappearing. The issue is not job growth, its disappearing jobs.

Its the “perfect storm” …peak credit, peak oil and declining employment.

Until, jobs/employment are created, the housing market will decline, bank losses will soar, and the stock market will decline.

Press releases, quarterly earnings mean nothing without new jobs.
ecklebob on July 15th, 2008 10:44 am

Jim, my favorite is when traders speak of “price to book.” I believe this stat is the biggest joke going. Especially in the financials.
ecklebob on July 15th, 2008 10:56 am

OK, Now now Ben is lying about projected better than expected growth.