July 21st, 2009
12:55 PM ET

Financial Dispatch: Economy & TARP on Capitol Hill

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Andrew Torgan
CNN Financial News Producer

It’s an extremely busy day on Capitol Hill.

Fed Chairman Ben Bernanke is testifying before the House Financial Services Committee this morning, delivering his semi-annual report on the economy.

Bernanke told lawmakers that the economy has started to show signs of stabilization, although he cautioned that improvement is uncertain and likely to be gradual going forward. He also said the unemployment rate would be higher than preferred levels until at least 2012, but added that steps taken by the Fed to pump money into the economy have started to pay benefits.

Some lawmakers are questioning those steps taken by Bernanke and Co. however, arguing the economy has not yet taken a turn for the better for most Americans.

And down the hall, the oversight czar tracking the $700 billion bailout told lawmakers that he's concerned officials are not doing enough to prevent tax dollars from being wasted or pilfered.

Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program who is testifying before a House Oversight panel, says officials should keep better tabs on how banks are spending taxpayer dollars.

Barofsky wants the Treasury Dept. to force bailout recipients to keep track of how exactly they are spending TARP funds. He also wants officials to erect a "firewall" to prevent private investment managers - the kind hired to manage and invest taxpayer dollars - from taking advantage of insider knowledge.

Caterpillar sees 'signs of stabilization'

Caterpillar, the world's largest maker of construction and mining equipment, posted stronger-than-expected quarterly earnings this morning and raised its full-year outlook, citing what it said were growing signs of stability in the world's credit markets and economies.

Caterpillar says various fiscal stimulus programs around the globe, especially in China, are beginning to pay off and commodity prices were holding in a range that was positive for investment.

The fact that Cat raised its outlook means it thinks its business will begin to pick up when the world’s builders start building again.

Gas prices down for 30 straight days

Gas prices dropped 7- tenths of a cent overnight to $2.458 - the 30th straight day of declines.

In the last 30 days, the average price has decreased 23.5 cents, or 8.73%. The average price of a gallon of gas is also down $1.66, or 40.25%, from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.187). The cheapest are in Missouri ($2.207).

Filed under: Andrew Torgan • Economy • Finance • Gas Prices • U.S. Federal Reserve
soundoff (3 Responses)
  1. earle,florida

    I have two questions that concern me regarding Fed. Chairman Bernanke's testimony today. First, why is the Fed' adamant about yeilding more oversite,and trasparency to the to GAO,and the Congress? Second, their seems to be a real disconnect about just how independent the Fed' should be from the US Treasury- FDIC-SEC-Comptroller of Currency (COC),and various other government oversite committee's. Please be well advised, that to this very day, the Federal Reserve has never been audited. Let me reiterate once again,they are a private entity that only exist because of the United States has granted them a certain privilege of being our "Central Bank", which in my opinion should be revoked. Their lack of guidance,and foresight over the last twenty-years has failed miserably. President Lincoln,and President Andrew Jackson were all to aware of the posibility from their past imperical ( to much power,in to few hands,controlling the countries basic lifeblood for existence) knowledge, gained from their administations. PS. President Kennedy was also aware,...?

    July 21, 2009 at 2:00 pm |
  2. Eugenia - San Francisco

    "And down the hall, the oversight czar tracking the $700 billion bailout told lawmakers that he’s concerned officials are not doing enough to prevent tax dollars from being wasted or pilfered"

    It is insane to me, that the bailout money is being used to make "peoples" wallets fatter, not "the peoples wallets fatter".

    You have people starving, losing their homes, losing their jobs, not add the mental aguish this is causing families. Sometimes I can not believe these people can even look at themselves in the mirror and be ok with the things they have done.

    July 21, 2009 at 1:39 pm |
  3. Waiting for 2010

    The economy is stablizing, but to expect unemployment to go up and stay there until 2012!!

    Translation – In 2012 when Obama is voted out of office the economy can then start to recover. 2010 will be the start of the recovery, when the Democrats lose their stranglehold in Congress.

    July 21, 2009 at 1:02 pm |