June 25th, 2009
02:19 PM ET

Financial dispatch: Bernanke denies threatening BofA

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/06/25/art.bernanke.testify.jpg]
Andrew Torgan
CNN Financial News Producer

Fed Chairman Ben Bernanke today denied accusations that he pressured Bank of America to follow through on its controversial purchase of Merrill Lynch or risk having top management removed.

Testifying on Capitol Hill, Bernanke countered charges made recently by BofA chief Ken Lewis, who maintained that Bernanke threatened him with his job when his company considered pulling out of the deal late last year.

“I did not tell Bank of America's management that the Federal Reserve would take action against the board or management," Bernanke said in prepared remarks.

The Fed chief also rejected charges by Lewis that he asked former Treasury Secretary Henry Paulson to act on his behalf, a charge made by Lewis earlier this year that came to light during a related investigation on Merrill Lynch bonuses.

Jobless claims rise is setback for recovery

The number of Americans filing for initial unemployment insurance rose unexpectedly last week to the highest level in more than a month.

Initial jobless claims rose by 15,000 to 627,000 in the week ended June 20, up from a revised 612,000 the previous week.

And the number of people continuing to receive unemployment insurance for one week or more rose to 6,738,000, an increase of 29,000 from the preceding week's revised level of 6,709,000 and slightly above estimates.

Economy shrinks

The U.S. economy shrank at an annual pace of 5.5% in the first quarter, a slower pace of decline than was previously reported but still the second largest quarterly drop in 27 years.

That marks the third quarter in a row that the economy contracted.

But 5.5% is still an upgrade to the two previous reading on GDP - the broadest measure of the nation's economic activity. The government’s initial read was that GDP fell at an annual rate of 6.1% in the first quarter. Then in its first revision, the government lowered its estimate to 5.7%.  5.5% is the final revision.

Gas prices drop

Gas prices dropped 9-tenths of a cent overnight to $2.67. That’s the fourth straight day of declines.

The average price of a gallon of gas is down $1.447 or 345.1% from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.078) and California ($3.018). The cheapest gas prices are in Missouri ($2.474).

'Cash for Clunkers' mostly a clunker

If you think the new "Cash for Clunkers" law is going to help you buy a new car, you're probably wrong.

As it's written, the law will benefit few car shoppers and those who might actually benefit from it probably shouldn't be buying a new car to begin with.

CNNMoney.com explains that the government refund vouchers for $3,500 or $4,500 are in replacement of - not in addition to - the ordinary trade-in value of the vehicle, which in many instances will be worth more than the voucher.

Filed under: Andrew Torgan • Economy • Gas Prices
soundoff (6 Responses)
  1. Karen

    @Gordon (Fort Myers, Florida)

    It's "TURBO TAX TIM"

    Youtube it!!!

    he uses the classic: "I dont recall" method of getting away from answering questions.

    June 26, 2009 at 4:29 am |
  2. Karen

    Greenspan, the man most responsible is relaxing while everybody else is taking the heat.

    Who's responsible by top to bottom.

    1) Congress

    2) Fannie Mae and Fredie Mac

    3) Federal Reserve

    4) Mortgage Brokers.

    5) Investment Banks

    6) Commerical Banks

    7) The American People for lying about incomes.

    June 25, 2009 at 8:29 pm |
  3. JC- Los Angeles

    I guarantee Benanke and Geithner had a conversation that went something like this:

    "Timothy, since 9/11, our nation was artificially kept afloat by Greenspan's cheap money and pure American mortgage fraud; now what can we do to hide this catastrophe?"

    "Well, Ben, there's a huge hack in North Carolina named Ken Lewis, let's pay him to take Countrywide's fraud factory; that way, no one knows the nation is about to collapse."

    "Great idea Timmy, can we also get Ken the Hack to take Merrill Lynch's fraud factory?"

    "Ben, when Little Timmy wear his cowboy hat and carries his cap gun, he can get anything done."

    June 25, 2009 at 4:30 pm |
  4. earle,florida

    I'd like to make one statement on behalf of Fed. Chairman Bernanke. He was brought solely into the Bush Administration for his expertise regarding the financial history of our country,in particular his vast knowledge of the great depession!This tells me that the Bush Administration (Treasury Sec. Paulson) was well aware,as far back as late 2005 that a impending meltdown,and crises was brewing. Fed. Chairman Bernanke had little time to correct the mess other than raise (Mr. Greespan's mess, and Mr Snow's mess) rates,but for him it was to late. He had to reverse course a year later,which hopefully could forestall the damage done by the Bush Administration's which only exasperated the "Catch 22" dilemma handed to him. He is the fall guy for the inept Greenspan,Snow,and Paulson era,period! Finally the "Four (4) Criteria/Responsibilites of Federal (FOMC) Reserve is as follows: #1) monetary policy influencing money,and credit conditions pursuent to full employment,and stable prices. #2)supervise,and regulate banking institutions insuring soundness,and credibility of the nations financial system,and protecting credit rights of consumers. #3) maintaining stability in our financial system,and containing "Systemic Risk" that may arise in the financial markets. #4) providing liquidity,and certain financial services,and instruments to the," U.S. Government Public Financial Institutions",and to foreign official institutions which include playing a mojor role in the nations payments systems. My anaysis is that the Federal Reserve,and all it's entities failed America's citizens miserably,...! I feel great empathy for Mr Bernanke!

    June 25, 2009 at 4:29 pm |
  5. Lisa in CA

    Gotta love the idea behind Cash for Clunkers. Great in concept ... but reality is always so much different.

    I have to wonder if those who push to implement these ideas really think them through. So let's try this road - I can't afford to buy a new or car ... or I probably would. Giving me $4500 for my current 15 yo, paid off vehicle so that I can make a $300-500/mo payment that I can't afford because I was laid off, took a salary cut to secure employment, etc. doesn't really make a whole lot of sense now, does it? Apparently no one thought about that angle.

    And what's scary ... these are the "experts" the present administration is relying on.

    June 25, 2009 at 4:27 pm |
  6. Gordon (Fort Myers, Florida)

    Bernanke wouldn't threaten anyone...Timmy "Tax Cheat" Geithner can do that all by himself.

    June 25, 2009 at 2:24 pm |