Bush Press Conference to address Concerns about the Economy - Updated

Submitted by cho on July 15, 2008 - 09:50

Actually, from the quick little blurb from the WSJ this morning, it sounds more like President Bush will use the opportunity of terrified markets to push for ...

more oil drilling.

The press conference will start at 10:20 a.m. Mr. Bush is expected to press Democrats in Congress hard on the need for more oil exploration, particularly in the Outer Continental Shelf. He's also likely to criticize Congress for failing to move on most annual spending bills.

Stay tuned. (and more updates below the fold)

In other WSJ news about the markets this morning...

About forty minutes before the start of trading, Dow Jones Industrial Average futures fell 106 points to 10929. S&P 500 futures skidded 12 to 1216.30, and Nasdaq 100 futures lost 8.5 to 1794. Futures trading doesn't always accurately predict early market moves after the opening bell.

Regulators' move to seize IndyMac Bancorp has left investors wondering how many more banks might be on the brink ...1

Update: Just now, the WSJ published Bernanke's testimony this morning which indicates the printing presses will remain on full power -- and dollars will be dropped from helicopters 2 over the roofs of banks and all other financial institutions deemed too big to let fail (notice that small taxpaying individuals are allowed to fail -- left and right).

WASHINGTON -- Federal Reserve Chairman Ben Bernanke on Tuesday warned the U.S. economy faces "numerous difficulties," suggesting those risks remain his top priority despite a significant upward revision to the Fed's 2008 growth forecast.

Mr. Bernanke also dwelled on an "unusually uncertain" inflation outlook, and cautioned that the Fed is watching for any sign that higher energy and commodity prices are becoming embedded in wages and expectations.

Second update: From the WSJ's Bush Presses Lawmakers to Act On Mortgage Giants, Offshore Ban, Bush's points:

  • lawmakers should quickly pass legislation to prop up mortgage giants Fannie Mae and Freddie Mac.*
  • the nation's financial system is "basically sound"
  • Democratics should lift a ban on offshore drilling
  • "It's been a difficult time for many American families."
  • the nation's economy continues to grow, if slowly.**
  • U.S. depositors should not worry because their deposits are insured by the government up to $100,000.

* Methinks he protests too much, see Plunge Protection Team and The Wheels Are Coming Off -- hat tip to Carol White.
**The reason it grows, is because the numbers are cooked. The reason it grows slowly is because even the cooked numbers can't outpace the real situation on the ground.

1Fears About Banks Sink Futures A Wall Street Journal News roundup.
2 Bernanke Focuses on Growth Risks, Inflation in Congressional Testimony by Brian Blackstone for the WSJ

oil, Federal Reserve, Bernanke, Freddie Mac, Indy Mac, Fannie Mae
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Comments

rba

July 15, 2008 - 12:55

Mortgage mess: Reuters/FT: FDIC halts foreclosure on IndyMac mortgages

Sheila Bair is becoming one of my favorite people. Advocating a freeze of resets when that action could have mitigated the losses, FDIC has now put their policies where the money is. Unfortunate the rest of the money-sellers prefer a guillotine instead of a "haircut".

Oil plungers: Adam Schreck/AP: Oil prices plunge more than $10 a barrel

"Traders are always looking for signals. . . " . . . "Traders get spooked."

Reality long gone.

cho

July 15, 2008 - 13:29

there Blair was, in October of 2007, advocating:

THERE have been many proposals to deal with the problems in the mortgage market. But the best place to begin is by looking at the poor lending standards and weak consumer protections at the root of the problem — in particular, the troubling loans called 2/28 and 3/27 subprime hybrids. They have starter interest rates of 7 percent or more for the first two or three years, and “resets” that raise rates to as much as 12 percent, causing monthly payments to increase by at least 30 percent.

Thanks for the link!

cho

July 15, 2008 - 13:31

Federal Reserve Chairman Ben Bernanke told Congress that "numerous difficulties" are racking the economy of the world's largest oil consumer, and warned that rising prices for energy and food are heightening the risk of inflation accelerating.
At the same time, the Labor Department reported that wholesale inflation jumped by 1.8 percent last month, a larger-than-expected gain. Over the past year, wholesale prices have risen 9.2 percent, the most since 1981.

GreyHawk

July 15, 2008 - 13:36

...that reality is what they say it is, and happens when they say it does:

http://www.businessweek.com/magazine/content/04_08/b3871044.htm

Magickal thinking and all that.

Here's an interesting flashback to 2004, too:
http://findarticles.com/p/articles/mi_m2633/is_2_18/ai_n6118637

cho

July 15, 2008 - 14:14

President George W. Bush's Council of Economic Advisers, chaired by Harvard economist N. Gregory Mankiw, is trying to get away with exactly such revisionist history. The CEA's Economic Report of the President, released Feb. 9, unilaterally changed the start date of the last recession to benefit Bush's reelection bid. Instead of using the accepted start date of March, 2001, the CEA announced that the recession really started in the fourth quarter of 2000

I don't like such liberties with facts in the John Adams HBO series, I don't like it in the fudging the CPI numbers, and I don't like it in commentaries that seem to know what most folks think.

carol white

July 15, 2008 - 15:06

I don't know with "recession" as it is defined, but I remember that their was a lot of noise about the tech bubble being over when I was in England in December 2000. At that time I pooh pooed the possibility because I foolishly believed Alan Greenspan was in control.

Wouldn't it be pretty moot changing the date from March back to December. Bush after all would have been in office less than a month, and you can't really expect that he would have been on top of the situation then. Doesn't the buck really stop here with Greenspan. Woodward wrote such a bad, adulatory book about Greenspan and at the time I believed every word of it.

I think it is very good to have the crash now before the election so that there is no lack of clarity about who is responsible for what. This is definitely Bush's bubble-busting.

carol

cho

July 15, 2008 - 15:16

A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income, and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's GDP.

carol white

July 15, 2008 - 16:48

But I really don't see why. I wasn't doing anything I can figure to have reposted.

carol