Bernanke threatens Congress with mental anthrax.....

[marmar]

Bernanke Says Normal Markets Needed or Growth to Halt (Update2)

By Scott Lanman and Craig Torres

Sept. 23 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the U.S. economy will shrink if markets don't begin functioning normally, joining Treasury Secretary Henry Paulson in urging skeptical lawmakers to quickly pass a $700 billion rescue for financial institutions.

``I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover,'' Bernanke told the Senate Banking Committee today. ``My interest is solely for the strength and recovery of the U.S. economy.''

Lawmakers have balked at rubber-stamping the Treasury plan to remove illiquid assets from the banking system, with Democrats demanding it include support for homeowners and limits on executive pay and Republicans resisting the plan's reach and size.

Bernanke, putting aside prepared remarks released earlier today, said the Treasury should buy illiquid assets at ``hold-to- maturity'' values rather than at discounted ``fire-sale'' prices.

The suspension of ``mark-to-market'' accounting for assets, a change backed by ``many banks,'' would instead hurt investor confidence, Bernanke also said.

The comments are the first indication by both Bernanke and Paulson about the price Treasury is willing to pay financial institutions for toxic assets. Growth in gross domestic product, or GDP, may slow to 1.5 percent next year, the slowest since the last recession in 2001 and its aftermath in 2002, according to the median of 80 economist forecasts compiled by Bloomberg. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=agciQviVP4dY&refer=home

[dhpgetsit]

1. Let them fail!

Lay the blame on Republicans' deregulation efforts where it belongs.
Let Democrats fix it next year like FDR did.

[Joe Chi Minh]

2. That's perhaps the only sensible way forward. It sounds as if , at best,

all this proposed bail-out can do, is to delay an economic China Syndrome (What an appropriate term, if I say so myself)! And this election needs to be put beyond fraudulent rigging by the Neocons.

[onethatcares]

3. does he lay out a rosy scenario if it does pass, like

9 million jobs will be created, the Chinese will begin borrowing from us, the school system will become praiseworthy and we'll have universal single payer health care by 2009?

Fuck Bernanke too, another pig, no make that a hog, at the trough.