Tweet
Look at these two versions of exactly the same story, from supposedly exactly the same news story:
Bernanke: Recession May End This Year
The Federal Reserve chairman said any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again
WASHINGTON --The economy is suffering a "severe contraction," Federal Reserve Chairman Ben Bernanke told Congress on Tuesday. But he planted a glimmer of hope that the recession might end this year if the government managed to prop up the shaky banking system, and Wall Street rallied.
Bernanke said the economy is likely to keep shrinking in the first six months of this year after posting its worst slide in a quarter-century at the end of 2008.
Bernanke said he hoped the recession will end this year, but that there were significant risks to that forecast. Any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again.
"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 told the Senate Banking Committee.
That -- along with the Fed chief's remarks that regulators don't intend to nationalize banks -- was enough to buoy Wall Street. The Dow Jones industrials added more than 236 points and the Standard & Poor's 500 index also rose, a day after both hit their lowest levels since 1997.
Among the risks to any recovery are if economic and financial troubles in other countries turn out to be worse than anticipated, which would hurt U.S. exports and further aggravate already fragile financial conditions in the United States.
Another concern is that the Fed and other Washington policymakers won't be able to break a vicious cycle where disappearing jobs, tanking home values and shrinking nest eggs are forcing consumers to cut back sharply, worsening the economy's tailspin. In turn, battered companies lay off more people and cut back in other ways.
"To break that adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets," Bernanke said.
[....]
The Federal Reserve chairman said any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again
WASHINGTON --The economy is suffering a "severe contraction," Federal Reserve Chairman Ben Bernanke told Congress on Tuesday. But he planted a glimmer of hope that the recession might end this year if the government managed to prop up the shaky banking system, and Wall Street rallied.
Bernanke said the economy is likely to keep shrinking in the first six months of this year after posting its worst slide in a quarter-century at the end of 2008.
Bernanke said he hoped the recession will end this year, but that there were significant risks to that forecast. Any economic turnaround will hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again.
"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 told the Senate Banking Committee.
That -- along with the Fed chief's remarks that regulators don't intend to nationalize banks -- was enough to buoy Wall Street. The Dow Jones industrials added more than 236 points and the Standard & Poor's 500 index also rose, a day after both hit their lowest levels since 1997.
Among the risks to any recovery are if economic and financial troubles in other countries turn out to be worse than anticipated, which would hurt U.S. exports and further aggravate already fragile financial conditions in the United States.
Another concern is that the Fed and other Washington policymakers won't be able to break a vicious cycle where disappearing jobs, tanking home values and shrinking nest eggs are forcing consumers to cut back sharply, worsening the economy's tailspin. In turn, battered companies lay off more people and cut back in other ways.
"To break that adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets," Bernanke said.
[....]
Bernanke fears recession could extend to 2010
WASHINGTON (Reuters) – U.S. Federal Reserve Chairman Ben Bernanke warned on Tuesday that unless government efforts succeed in restoring financial stability, the nation's recession may not end this year.
Bernanke told lawmakers that the fast-shrinking U.S. economy was at further risk from a mutually reinforcing cycle of weak growth and financial market 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 told the Senate Banking Committee.
"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," he said.
Financial markets largely ignored the testimony, focusing instead on a dire reading on U.S. consumer confidence, which the private sector Conference Board said sank to a record low in February. U.S. stock markets cut early gains, while prices for U.S. government debt rose.
Bernanke provided no details on what further steps U.S. officials might take to shore up the nation's creaky banking system. The ill state of U.S. banks has weighed on U.S. stocks, which hit a 12-year low on Monday.
"What the market wants to learn from Bernanke he may not even know, and if he does know, may not be able to tell them, which is 'What's the state of the bank rescue plan?'" said Cary Leahey, an economist with Decision Economics in New York.
GLOBAL SLOWDOWN CRIMPING U.S. GROWTH
Delivering the Fed's semiannual report on monetary policy, Bernanke further warned that another risk to the outlook was the global nature of the economic slowdown, which could sap U.S. exports and harm financial conditions to a greater degree than currently expected.
[...]
WASHINGTON (Reuters) – U.S. Federal Reserve Chairman Ben Bernanke warned on Tuesday that unless government efforts succeed in restoring financial stability, the nation's recession may not end this year.
Bernanke told lawmakers that the fast-shrinking U.S. economy was at further risk from a mutually reinforcing cycle of weak growth and financial market 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 told the Senate Banking Committee.
"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," he said.
Financial markets largely ignored the testimony, focusing instead on a dire reading on U.S. consumer confidence, which the private sector Conference Board said sank to a record low in February. U.S. stock markets cut early gains, while prices for U.S. government debt rose.
Bernanke provided no details on what further steps U.S. officials might take to shore up the nation's creaky banking system. The ill state of U.S. banks has weighed on U.S. stocks, which hit a 12-year low on Monday.
"What the market wants to learn from Bernanke he may not even know, and if he does know, may not be able to tell them, which is 'What's the state of the bank rescue plan?'" said Cary Leahey, an economist with Decision Economics in New York.
GLOBAL SLOWDOWN CRIMPING U.S. GROWTH
Delivering the Fed's semiannual report on monetary policy, Bernanke further warned that another risk to the outlook was the global nature of the economic slowdown, which could sap U.S. exports and harm financial conditions to a greater degree than currently expected.
[...]
Comment