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Obama Endorses Bernanke for a Second Term as Federal Reserve Bank Chairman

Tue, Aug 25 2009, 12:03 GMT
by ecPulse.com analysis team

ecPulse.com

Stock markets dropped yesterday as fears over the outlook for the financial institutions increased amid expectations credit losses will widen and that the real estate sector won’t be able to rebound until next year, meanwhile President Obama endorsed the current Federal Reserve Bank Chairman Ben. S Bernanke for a second term, even as the Feds were forced by court order to disclose the companies in its emergency lending programs.

President Obama signaled that Bernanke managed to lead the Fed through one of the worst financial crisis in the history of world economy, and Obama also signaled Bernanke’s expertise on the causes of the Great Depression; Bernanke managed to lead the economy to safety and accordingly he has full trust in Bernanke’s ability to lead the Feds for a second term.

Bernanke’s nomination still needs Senate approval however it was also endorsed by the head of the Banking Committee, Christopher Dodd, who signaled his endorsement despite the serious differences that he and Bernanke have, as Christopher Dodd believes reappointing Bernanke is the “right choice.”

Bernanke managed indeed to lead the Feds in one of the most critical phases of the United States history, as without the Feds unorthodox measures, the U.S. economy would have fallen in depression, as the pace of this crisis proved to be rather drastic and accordingly extreme measures had to be taken in order to avoid total devastation.

On the other hand, the Feds lost a Freedom of Information Act lawsuit and are now required to name companies under its emergency lending programs, as Judge Loretta Preska rejected the “argument that loan records aren’t covered” since revealing such information would harm the competitive position for borrowers.

The Feds so far rejected to disclose the names of companies on fears that doing so would lead to a run on deposits and would make shareholders rather worried; however the Feds now have five days to disclose the documents.

As for the data that will be released today, the S&P/CaseShiller house price index is expected to show that house prices dropped in the second quarter by 19.8% following the prior reported drop of 19.1%, while the S&P/CS Composite-20 index which measures prices of houses in 20 metropolitan areas is expected to drop by 16.40% in June following the prior reported drop of 17.06%.

Meanwhile, the Conference Board will release its consumer confidence index for the month of August, consumer confidence is expected to rise slightly to 47.9 from the prior reported estimate of 46.6, as improving economic conditions continue to provide consumer with hope that the worst recession since WWII is coming to an end.

Consumer confidence started to increase recently as activity started to increase in different parts of the economy, as the manufacturing, the services, and the housing sector started to show signs of recovery, and this could mean that the U.S. economy is indeed on its way to recover from the worst financial crisis since the Great Depression…

Published on  Tue, Aug 25 2009, 12:03 GMT