Dear Trident Press Reader,
Wednesday, 25th February 2009
Good News for once – US Federal Reserve Chairman predicts the end of the recession this year!
Federal Reserve Chairman Ben Bernanke has given Wall Street a double dose of reassurance. Bernanke told Congress Monday that the recession might end this year, and that regulators aren't planning to nationalise banks.
This was sent to clients in response to the following:
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke warned on Tuesday the "severe" U.S. recession could drag into next year, but said banks should be able to weather the downturn without being nationalized, cheering markets.
"I don't see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when it just isn't necessary," Bernanke told the Senate Banking Committee.
"What we can do is make sure they have enough capital to fulfill their function and at the same time we exert adequate control to make sure that they are doing what is necessary to become healthy and viable over the longer term," he added.
U.S. stocks, which hit a 12-year low on Monday, jumped as investors set aside fears bank shareholders could get wiped out as the government moves to prop up the sector. The broad Standard & Poor's 500 Index shot up 4 percent.
"The plan out of the administration with Bernanke's backing seems to have some rationality and the market is factoring that there is something here that might potentially work," said Greg Palmer, head of equity trading at Pacific Crest Securities in Portland, Oregon.
Still, Bernanke was somber in his assessment of the economy. If efforts to stabilize banks failed, he said, the fast-shrinking economy could enter a mutually reinforcing cycle of weak growth and financial strain.
"To break the adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets," he said.
"If actions taken by the administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability -- and only if that is the case, in my view -- there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," Bernanke added.
in particular to the last paragraph!!!
...Good News?????? predict the end of the recession this year!??? Hardly!
Read it and try to rationalise the statement made by Trident Press!
What does this tell us?
To me it says to beware of any advice unless you have done your research!
Unfortunately, the people most in danger of following that Trident Press misdirection above are not members of this forum, I guess...but one can only try!