Rubber Ben-d: Bernanke to bounce back for second term
So much for vacation – President Obama took a quick break from his break today to announce that he was nominating Federal Reserve Chairman Ben Bernanke to a second term in that post.
Asked why the President decided to do it now, Deputy Press secretary Bill Burton said he wanted to quell the rumor mill around Washington about the appointment. Bernanke must be confirmed by the Senate, but he would seem to be a shoo-in, although he has received some criticism for not stepping in soon enough to head off the impending banking crisis.
The President’s full prepared statement is below the video player.
“Good morning everyone. I apologize for interrupting the relaxing I told you all to do, but I have an important announcement to make concerning the Federal Reserve.
The man next to me, Ben Bernanke, has led the Fed through the one of the worst financial crises that this nation and this world have ever faced. As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve. And that is why I am re-appointing him to another term as Chairman of the Federal Reserve.
Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall. Almost none of the decisions he or any of us made have been easy. The actions we have taken to stabilize our financial system, repair our credit markets, restructure our auto industry, and pass a recovery package have all been steps of necessity, not choice. They have faced plenty of critics, some of whom argued that we should stay the course or do nothing at all. But taken together, this “bold, persistent experimentation” has brought our economy back from the brink. They are steps that are working. Our recovery plan has put tax cuts in people’s pockets, extended health care and unemployment insurance to those who have borne the brunt of this recession, and is continuing to save and create jobs that otherwise would have been lost. Our auto industry is showing signs of life. Business investment is showing signs of stabilizing. Our housing market and credit markets have been saved from collapse.
Of course, as I have said before, we are a long way away from a completely healthy financial system and a full economic recovery. And I will not let up until those Americans who are looking for jobs can find them; until qualified businesses, large and small, who need capital to grow can find loans at a rate they can afford; and until all responsible mortgage-holders can stay in their homes. That is why we need Ben to continue the work he’s doing, and that is why I’ve said that we cannot go back to an economy based on overleveraged banks, inflated profits, and maxed-out credit cards.
For even as we have taken steps to rescue our financial system and our economy, we must now work to rebuild a new foundation for growth and prosperity. We must build an economy that works for every American, and one that leads the world in innovation, investments, and exports.
Part of that foundation has to be a financial regulatory system that ensures we never face a crisis like this again. We have already seen how lax enforcement and weak regulation can lead to enormous wealth for a few and enormous pain for everyone else. And that’s why even though there is some resistance on Wall Street from those who prefer things the way they are, we will pass the reforms necessary to protect consumers, investors, and the entire financial system. And we will continue to maintain a strong and independent Federal Reserve.
We will also keep working towards the reform of a health insurance system whose costs and discriminatory practices are bankrupting our families, our businesses, and our government. We will continue to build a clean energy economy that creates the jobs and industries of the future within our borders. And we will give our children and our workers the skills and training they need to compete for these jobs in the 21st century.
Much like the decisions we’ve made so far, the steps we take to build this new foundation will not be easy. Change never is. As Ben and I both know, it comes with debate and disagreement and resistance from those who prefer the status quo. And that’s ok, because that’s how democracy is supposed to work. But no matter how difficult change is, we will pursue it relentlessly because it is absolutely necessary to lift this country up and create an economy that leads to good jobs, broad growth, and a future our children can count on. That is what we are here to do, and that’s what we will continue to do in the months ahead. I want to congratulate Ben on the work he’s done this far, and wish him continued success in the hard work ahead. Thank you.”
Barry Armstrong takes a look at markets
(NECN) - The stock market has rallied since the lows in March.
But we still have an unemployment rate of 9.4%
Ben Bernanke seems to think that the worst is behind us.
Joining Good Morning Live now is Barry Armstrong to talk more about the markets.
Barry is the host of Money Matters on WBIX radio and financial adviser for Securities America.
Stocks set for modestly higher open
NEW YORK (AP) - Stock futures are rising, pointing to a moderately higher open as investors look to build on last week's momentum that sent major indexes to their highest levels of the year.
U.S. markets are poised Monday to follow sharp gains overseas.
Investors were encouraged by Federal Reserve Chairman Ben Bernanke's declaration Friday that the economy is on the verge of recovery.
Traders will get plenty of data on housing and the consumer to sort through this week to determine if Bernanke's upbeat view can be backed up by actual activity.
White House wants derivatives crackdown
The White House is rolling up its sleeves and calling for a crackdown on derivatives, the New York Times reports.
The new federal oversight would crack down on the elements of the trading world Warren Buffett once called ‘weapons of mass destruction.’
Cheerios says FDA battle is fight over spilled milk
Here’s a story that gave me plenty of food for thought as I enjoyed my two bowls of Cheerios today, as I do every morning.
The Food and Drug Administration is accusing the maker of the popular cereal of over-selling the health benefits of the O’s. The FDA has sent General Mills a letter warning the company to remove language on the big yellow box which suggests Cheerios were designed to prevent or treat heart disease and that eating the cereal can lower your cholesterol in a few weeks time.
The Cheerios folks say it’s all about wording. In a web statement, General Mills says science backs its claims and the company looks forward to working with the FDA to come up with approved language. Stay tuned, and don’t skip breakfast. It is, after all, the most important meal of the day.
Was the market rally a stress test gamble?
By Peter Cohan, DailyFinance.com
When President Obama mentioned in an Oval Office interview on March 3 that he thought stocks were a good long-term buy, I was hoping his timing was good but respectfully doubted that many individual investors would follow his tip. Between then and May 6th, the Dow rose 26.6 percent from 6,726 to 8,512. I have been thinking that this rally may have been a short-term hedge fund trade on the stress test results. If my guess is right, the market will move sideways from here — unless it can find a new game to bet on.
Read more
Whither the rally?
Have we overheated? That seems to be the message in many places today, as people use the down time before a number of major reports this week to release their “fraidy-bull.”
Not that there aren’t reasons to think that maybe just maybe, we’ve forged ahead in an economy that’s not quite ready to catch up. You have the White House chief econokic forecaster telling the New York Times we shouldn’t expect job growth again until next year.
You have banking stocks falling after four of them (US Bancorp, Capital One, BB&T and Keycorp) decided that selling more shares of common stock is the best way to pay back the government for TARP funds they don’t want weighing them down.
You have concerns over commodities and oil demand, which have now shown signs of a pullback.
All of these leads to concerns that our recovery may be ‘W-shaped’, as opposed to a nice V. Of course, none of the concerns are new, as a number of financial bloggers are pointing out. Even Jim Cramer points out:
That’s what makes this moment difficult. Everything that has happened has been done on the backs of sentiment and some not-so-bad employment claims plus some data out of the retailers that showed April was strong.
Both the bulls and the bears know it has gone too far.
Of course, his advice is to keep buying, because the sentiment has been positive even though the “wisdom” on the street has been that we are due for a pullback for weeks.
I’ll leave it to others who know far more than I do decide that. But in the interim, with lots of new data due out on imports, retail, and prices between now and Friday, there will be plenty that could move the market.
Caremark still bad Rx for CVS
CVS reported lower profit for the first quarter on higher revenues, as the company feels the pressure of the economy, its acquisition of Longs Drugs and still struggles under the weight of its $27 billion acquisition of Caremark.
More from the Wall St. Journal.
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Stocks retreat after upbeat week
Stocks are showing modest losses after a report
showing the U.S. unemployment rate jumped in March to its highest
level since 1983.
The pullback Friday follows four straight days of gains and the
quiet tone of trading suggests the market is taking another
time-out from a powerful four-week rally that has swept stocks off
their lowest levels in nearly 12 years.
The Labor Department says the nation’s unemployment rate stands
at 8.5 percent. The report wasn’t good but not as bad as feared.
In midday trading, the Dow is down 31 points to 7,947. The
Standard & Poor’s 500 index is down 3 to 830, while the Nasdaq
composite index is down 1 to 1,602.