WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke on Thursday hinted that another interest rate cut may be needed to bolster the economy. The worsening credit crunch, a deepening housing slump and rising energy prices probably will create some "headwinds for the consumer in the months ahead," he said.
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Mr. Bernanke, I may not be an economist, shit, I'm not even good with money, but even I know the "headwinds" already are a-blowin'. It's not the fact we might have a recession, the only question is how bad it will be.
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Bernanke said he expects consumer spending will continue to grow and suggested the country can withstand the current problems without falling into a recession. But he indicated that consumers could turn more cautious as they try to cope with all the stresses.
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One question, sir. How? How can you expect the average American to absorb all the hits to their income they're taking (with wages remaining stagnant) and still spend like demons. Don't any of these idiots understand that a lot of the money being pumped into the economy by Joe Six-pack is the result of all that low cost money floating around thanks to cheap home loans? The days of cheap credit are gone for the foreseeable future. People ain't flipping their mortgages every couple years to draw more and more equity out of their homes, that well has dried up and now the bills are coming due.
Gas prices are going up daily and in turn, so are the prices of everything else. The dollar is worth less and doesn't buy what it used to. Do they make these predictions based on fantasy?
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"I expect household income and spending to continue to grow, but the combination of higher gas prices, the weak housing market, tighter credit conditions and declines in stock prices seem likely to create some headwinds for the consumer in the months ahead," Bernanke said in his speech.
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Because everything I've been hearing says this shit will get worse before it gets better:
LOS ANGELES -- U.S. foreclosure filings nearly doubled in October from the same month last year, the latest sign many homeowners are falling behind on mortgage payments and increasingly losing their homes, according to a mortgage research company.
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Tighter lending standards and the ongoing housing slump are making it harder for homeowners who can't afford their mortgage payments to sell their homes or refinance.
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One alarming trend in October was an increase in the number of homes that were repossessed by lenders after they failed to sell at trustee auctions.
Well yes, because if you ask a real estate agent who'll tell you the truth, they'll tell you they are holding the largest inventory of unsold homes ever. That's affecting the trades.
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Now, there are fresh doubts about how solid the labor market will remain. Economists expect November payrolls to increase by just 87,000, or about half the gain in October. So far, job losses are centered in the residential construction, other housing related areas and manufacturing. In the service sector, hiring has held up fairly well, although the pace of job growth has ebbed. However, with businesses feeling and acting less confident about economic and financial conditions, a broader slowdown in overall hiring is likely. [all ems mine]
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While the stock market weenies might love this temporary reprieve, lowering interest rates is only a band aid measure, one that will have other implications down the line, like inflation and an even lower dollar. It's time to take our medicine now but, like everything else this administration does, the collapse will be pushed off as long as possible, hopefully (for the Rethugs, on many levels) onto a Democratic President.
