Financial Dispatch: Bernanke sees an end to the recession
Program Note: Tune in tonight for the "Road to Rescue," Anderson is on the road reporting on the economy from around the country. Tonight he'll anchor AC360° live from L.A. at 10 p.m. ET.
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Andrew Torgan
CNN Financial News Producer
Fed Chairman Ben Bernanke, in a rare TV interview, said the recession “probably” will end this year if the government succeeds in bolstering the banking system.
In an interview broadcast Sunday on CBS’ “60 Minutes,” Bernanke seemed to express a bit more optimism that it can be done and that a "depression" can be avoided.
“We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year. And it will pick up steam over time,” Bernanke said.
A new national poll indicates that worries about unemployment have tripled over the past year.
Thirty-six percent of people questioned in a new CNN/Opinion Research Corp. survey released Monday say unemployment is the most important economic issue facing the country today, almost three times higher than the 13% who felt the same way last April.
Unemployment is the top economic concern in the new poll. Inflation is second at 20%, followed by the mortgage crisis at 16%, the stock market at 14%t and taxes at 11%.
Under pressure from the Treasury, troubled insurance giant AIG - the recipient of at least $170 billion in federal bailout money - is scaling back bonuses and compensation for some of its top-earning employees.
CNN on Saturday obtained a letter from AIG Chairman and CEO Edward Liddy to Treasury Secretary Timothy Geithner, in which Liddy pledges to reduce 2009 bonus payments - which AIG refers to as "retention payments" - by at least 30%.
AIG also succumbed to congressional pressure over the weekend and identified banks that received chunks of the company's billions in federal bailout funds last year.
In releasing the list, AIG said in a statement that it "recognizes the importance of upholding a high degree of transparency with respect to the use of public funds."
Stocks on Wall Street are riding a four-session winning streak and are looking to make it five-for-five today. Banking and financial stocks are leading the charge amid more talk of reinstating the so-called “uptick rule” that target short-sellers, or investors who profit when a stock price falls.
OPEC oil ministers agreed on Sunday to leave existing output targets unchanged, but promised to enforce those curbs more strictly and said they would meet again at the end of May to review progress.
Crude is trading down about $1 this morning, back below $45/barrel.
And after falling for the last 7 days, gas prices rose 2-tenths of a cent overnight to $1.910 a gallon. 9 states and the District of Columbia have regular unleaded gas prices of $2 and higher. 41 states have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.498). The cheapest gas prices are in Wyoming ($1.725)
Finally, the government's economic recovery efforts have brought many new and unfamiliar financial terms into the national conversation. CNNMoney.com has compiled a glossary of some terms that are vital to understanding the recession and the government's attempts to fix it:
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Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Oil • Road to Rescue • Unemployment • Wall St. |
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dear AC
If they want to stand in front of a jury of their peers then we should let them. No, "I dare them".
AIG bonus packages represent the worst of corporate accountability and bad judgment causing our current problems. This is a "I got mine, the heck with the rest of you!" situation that requires an adult "common-sense" response, not legal mumbo-jumbo about contract requirements. If ever the justice department could administer "justice" this would be the time.
Bernanke is off the mark. Last time we had what I would consider a "mild" recession in 2002 ish, It took me 2-3 years to recover what I "lost" in annuites and stock.
The recovery of jobs in this country will take longer that 2-3 years...
Or maybe better – Bernanke is nuts....
Vera
N.C.
In response to Larry's comment about letting AIG file chapter 11 and forcing them to sell off policies to more stable companies, I agree. If legally the government can make this happen, they should force AIG into this. If AIG succeeds with these bonuses, AIG has all the power and AIG and other companies will do it again because they know there are no consequences.
We are the taxpayers and our voices should be heard to our government. We need to tell our government that we don't care who was head of the government when this deal was made, but you need to find a solution so AIG executives and other companies receiving help from the government do not receive bonuses. The government needs to find a way to eliminate this type of behavior.
After all, the government doesn't hesitate to tell people who are losing their homes, losing jobs, lost money in 401k"s, and are struggling that we are only going to give you $13 more a week because we feel you deserve no more, but we will allow these companies to give away millions in bonuses.
If government can not find a loophole so AIG and other companies will not receive bounuses, perhaps they need to find other legal respresentation.
AIG executives receive $ 165 million in bonuses.
If AIG can pay these bonuses – why the government need to help??
Not only the President was indignant ... Any reasonable person was too!
As President Obama said: will worsen before improving.
Despite the optimism of Ben Bernanke saying that the recession ends in 2009, the picture outlined by Fed indicates other things. Anyway, the statement brought cheer, which is always good!
After hearing about AIG's plan to give some of the bailout money as bonuses, I have a better plan. The government should get the money back and AIG should give the executives their bonuses in the form of AIG stock.
I don't understand why Congress did not include a rider nullifying any "legally required" bonus commitments for the financial institutions accepting government bailouts. Is it remotely possible that Congress has no idea how the financial industry works internally? No idea at all? Whoops, maybe that's the problem. It might be worthwhile having some EX-financial industry employees and/or whistleblowers be the ones suggesting how to monitor and control these organizations. Congress either has no idea or is motivated to let the tail wagging dog do its thing.
I said it once before and I will say it again. Time to seek legal action against AIG, demanding they repay all of the billions in bailout they have received, from there force them to sell off policies to more stable companies, such as state farm, allstate, farmers, etc. and let AIG file chapter 11. Letting them go under will not be a major issue to the economy if they are required to sell policies off. They clearly do what they want and think the money wil allways keep coming. They are like a spoiled child and we keep giving them a free pass. Time to reverse the trend, pull the plug.
Dear Anderson
If any of the traders getting bonuses are still with the company, I hope their pink slips are in the envelopes with their checks. I can't imagine what company would want to hire them away from AIG? Maybe if they offered to return their bonuses, AIG could give them their jobs back and they could show the world how smart they really are. The Republicans and Executives have been telling us for years they were worth their big salaries and bonuses, I would like to see one of them come on CNN and tell what he has come up with as a solution to the mess they got us all in and why he didn't warn Congress & the public what was going on. NO ONE AT AIG HAD A HINT WHAT WAS GOING TO ENVENTUALLY HAPPEN ? COME ON.
Fed Chairman Ben Bernanke, in a rare TV interview, said the recession “probably” will end this year if the government succeeds in bolstering the banking system--there is no known cure for "greed and usury,"--and as Donald Trump said, "one can never be to greedy,"--and with no accountability and corporations constantly sending ransom notes to Congress--probable--well to me that means "it will never succeed."
I really hope the President is successfull in blocking the bonuses to be given by AIG. AIG is the underwriter of an auto policy for my niece who was involved in an auto accident. Her mother was a passenger and sustained serious injuries requiring reconstructive surgery. Under her policy her mother can receive up to 50K in benefits. AIG is refusing to give the benefits a pay off on the coverage by using the excuse that both are living in the same household. This was not the case because AIG was given sufficient evidence to show the daughter was living on a separate household at the time of the accident. In the meantime my sister-in-law did not have sufficient insurance to cover her costs and she does not have the funds and she had to suffer for about four months of waiting in pain to get surgery because of the insurance that has failed to pay. AIG does not care about its commitments under the policies it writes.
Receesion has ushered new terminologies, and I had made a glossary of such terms earlier, under the captions Flow of terms and terminology 2008 in my blog , Meenas17's Weblog.
Unemployment is high, AIG has faltered,gasoline has risen , and stocks are trading high.
Good and bad news are in the air. Bernanke has assured an economic upsurge in no time.Let us pray for prosperity
It seems that no one in Washington is thinking. This is doing little to restore confidence in leadership which after all is the root cause of the so called "credit crisis."
The latest debacle is AIG giving $165 million in bonuses to reward executive failure. The only action the US taxpayer would support is a 100% tax rate on these executives. How about Congress demonstrate that they are on the side of right by passing emergency legislation to make it so?
Ben Bernanke is now telling us when failed Federal Reserve policies will end?
Huh? Say what? Come again? you can't make this stuff up; priceless.
And we should believe Bernanke why!!?? I think he really is full of it and is just trying to blow smoke up our butts to quell the fear that is creeping in.
And he said they have a plan and are going by it then why is he and Obama no telling us, the American people, this plan? UMM..didn't they say they'd be transparent!? Yeah right! LOL
Cindy..Ga.
The government should require bonuses to be issued in AIG stock.
Would that, perhaps, be motivating?