I don't like Jim Cramer, but, he is entertaining. This clip is from August 6, 2007. That was about the time when it was becoming clear that significant problems were brewing in the financial markets.
"They know nothing!"
Saturday, August 30, 2008
Fed Minutes Show Split on Inflation Risk
By SUDEEP REDDY
August 27, 2008; Page A2
Most Federal Reserve policy makers expect to see weak economic growth and moderating inflation through the end of the year, suggesting little inclination to raise interest rates in the coming months.
In minutes of their August meeting, however, some Fed officials appeared divided over the degree of the inflation threat and the extent to which financial turmoil is weighing on the economy.
Members of the rate-setting Federal Open Market Committee, which left the central bank's interest-rate target unchanged at 2% at its Aug. 5 meeting, continue to expect their next move to be a rate increase, the minutes said. But they remain uncertain about the extent and timing of such an action, indicating they will take their cue from developments in the economy and financial markets....
But policy makers overall disagreed about the extent of the financial stress. Many officials noted the financial system "remained fragile," with some expressing concern about the risk of tighter credit conditions leading to more losses on housing that in turn could lead to still tighter conditions. Other Fed officials "suggested that risks to the financial system had receded," partly because of new Fed lending facilities. Those officials said credit conditions "were broadly consistent with the typical patterns observed during periods of weak growth or recession."
Policy makers appeared to be divided over the inflation threat. Officials overall "expressed significant concerns" about the risk of higher inflation and the chance of higher inflation readings leading to an increase in the public's expectations for inflation.
Some officials believed inflation risks were diminishing with a weaker economy and lower prices for oil and other commodities. Others worried about a reversal in the current trend of energy prices and found businesses being more successful in passing higher costs to consumers. One of those officials, Federal Reserve Bank of Dallas President Richard Fisher, dissented in the 10-1 vote to leave rates unchanged at the August meeting. He preferred a rate increase, saying inflation pressures were a greater risk to the economy even though the financial system remained fragile and the "sluggish" pace of economic growth could weaken further.
URL for this article:
http://online.wsj.com/article/SB121977326088873447.html
August 27, 2008; Page A2
Most Federal Reserve policy makers expect to see weak economic growth and moderating inflation through the end of the year, suggesting little inclination to raise interest rates in the coming months.
In minutes of their August meeting, however, some Fed officials appeared divided over the degree of the inflation threat and the extent to which financial turmoil is weighing on the economy.
Members of the rate-setting Federal Open Market Committee, which left the central bank's interest-rate target unchanged at 2% at its Aug. 5 meeting, continue to expect their next move to be a rate increase, the minutes said. But they remain uncertain about the extent and timing of such an action, indicating they will take their cue from developments in the economy and financial markets....
But policy makers overall disagreed about the extent of the financial stress. Many officials noted the financial system "remained fragile," with some expressing concern about the risk of tighter credit conditions leading to more losses on housing that in turn could lead to still tighter conditions. Other Fed officials "suggested that risks to the financial system had receded," partly because of new Fed lending facilities. Those officials said credit conditions "were broadly consistent with the typical patterns observed during periods of weak growth or recession."
Policy makers appeared to be divided over the inflation threat. Officials overall "expressed significant concerns" about the risk of higher inflation and the chance of higher inflation readings leading to an increase in the public's expectations for inflation.
Some officials believed inflation risks were diminishing with a weaker economy and lower prices for oil and other commodities. Others worried about a reversal in the current trend of energy prices and found businesses being more successful in passing higher costs to consumers. One of those officials, Federal Reserve Bank of Dallas President Richard Fisher, dissented in the 10-1 vote to leave rates unchanged at the August meeting. He preferred a rate increase, saying inflation pressures were a greater risk to the economy even though the financial system remained fragile and the "sluggish" pace of economic growth could weaken further.
URL for this article:
http://online.wsj.com/article/SB121977326088873447.html
Thursday, August 28, 2008
Economy Grew 3.3% in 2nd Quarter, Much Higher Than Initial Reading
Economy Grew 3.3% in 2nd Quarter,
Much Higher Than Initial Reading
By JEFF BATER and BRIAN BLACKSTONE
August 28, 2008 9:22 a.m.
WASHINGTON -- The U.S. economy was much stronger in the spring than first thought because of better exports and less inventory liquidation by businesses, according to a government report that surprised economists.
Gross domestic product rose at a seasonally adjusted 3.3% annual rate April through June, the Commerce Department said Thursday in a new, revised estimate of second-quarter GDP.
Originally, the government had estimated second-quarter 2008 GDP climbed 1.9%. First-quarter GDP increased 0.9%.
Separately, the number of U.S. workers filing new claims for unemployment benefits fell slightly as expected last week but remained at elevated levels consistent with more declines in nonfarm employment. Meanwhile, total continuing claims hit a nearly five-year high, suggesting the weak economy is making it much tougher for the unemployed to find new work.
Corporate profits rose weakly in the second quarter, a sign that rising commodity prices are squeezing businesses. Profits after taxes climbed by 1.0% to $1.361 trillion in the second quarter, after falling by 7.7% in the first quarter. Year over year, profits decreased 5.9% since second-quarter 2007.
Price inflation gauges were basically unchanged in the government's revisions to the economic data.
GDP is a measure of all goods and services produced in the economy. Wall Street was surprised by the adjustment to second-quarter GDP; economists surveyed by Dow Jones Newswires estimated a 2.7% increase....
Second-quarter spending by consumers climbed 1.7%, up from a previously reported 1.5% increase and above the first quarter's 0.9% gain. Spending got a jolt in the spring from federal income-tax rebates given to spur an economy fighting high oil prices and shrinking payrolls. But the last of the checks rolled out in July and the lift given by the stimulus payments will fade, erasing the support to GDP that had been provided during the second quarter.
Consumer spending accounts for about 70% of economic activity. It contributed 1.24 percentage points to GDP in the second quarter; the original estimate was a contribution of 1.08 percentage points....
Much Higher Than Initial Reading
By JEFF BATER and BRIAN BLACKSTONE
August 28, 2008 9:22 a.m.
WASHINGTON -- The U.S. economy was much stronger in the spring than first thought because of better exports and less inventory liquidation by businesses, according to a government report that surprised economists.
Gross domestic product rose at a seasonally adjusted 3.3% annual rate April through June, the Commerce Department said Thursday in a new, revised estimate of second-quarter GDP.
Originally, the government had estimated second-quarter 2008 GDP climbed 1.9%. First-quarter GDP increased 0.9%.
Separately, the number of U.S. workers filing new claims for unemployment benefits fell slightly as expected last week but remained at elevated levels consistent with more declines in nonfarm employment. Meanwhile, total continuing claims hit a nearly five-year high, suggesting the weak economy is making it much tougher for the unemployed to find new work.
Corporate profits rose weakly in the second quarter, a sign that rising commodity prices are squeezing businesses. Profits after taxes climbed by 1.0% to $1.361 trillion in the second quarter, after falling by 7.7% in the first quarter. Year over year, profits decreased 5.9% since second-quarter 2007.
Price inflation gauges were basically unchanged in the government's revisions to the economic data.
GDP is a measure of all goods and services produced in the economy. Wall Street was surprised by the adjustment to second-quarter GDP; economists surveyed by Dow Jones Newswires estimated a 2.7% increase....
Second-quarter spending by consumers climbed 1.7%, up from a previously reported 1.5% increase and above the first quarter's 0.9% gain. Spending got a jolt in the spring from federal income-tax rebates given to spur an economy fighting high oil prices and shrinking payrolls. But the last of the checks rolled out in July and the lift given by the stimulus payments will fade, erasing the support to GDP that had been provided during the second quarter.
Consumer spending accounts for about 70% of economic activity. It contributed 1.24 percentage points to GDP in the second quarter; the original estimate was a contribution of 1.08 percentage points....
Tuesday, August 26, 2008
Bernanke Defends Policy of Low Rates
Bernanke Defends Policy of Low Rates
By SUDEEP REDDY
August 23, 2008; Page A3
JACKSON HOLE, Wyo. -- Federal Reserve Chairman Ben Bernanke defended the central bank's decision to keep interest rates low even as consumer prices rise sharply, saying a weaker economy is likely to bring inflation under control in the medium term.
Mr. Bernanke's comments, at the Kansas City Fed's annual symposium at Grand Teton National Park, suggested the Fed is likely to keep its target for its benchmark interest rate at 2% in coming months.
The Fed chief said the "financial storm" that started last year "has not yet subsided." Financial turmoil and inflation triggered by higher commodity prices have resulted in "one of the most challenging economic and policy environments in memory," he said.
Some Fed officials have called for raising rates before long to address worries about inflation. Consumer prices rose 5.6% in July from a year earlier, a 17-year high. However, most officials believe a weak economy will lessen the inflation threat, and they want to keep rates lower for now to offset tightening credit conditions.
Mr. Bernanke on Friday said the Fed's strategy for keeping its rate target "relatively low" is based on the expectation that prices for oil and other commodities "would ultimately stabilize," in part due to slowing global growth. He said economic weakness would help bring inflation under control "in the medium run," indicating the Fed is looking beyond the recent price surges.
While Mr. Bernanke called the inflation outlook "highly uncertain," he said he's encouraged by the recent price decline in oil and "increased stability of the dollar."
URL for this article:
http://online.wsj.com/article/SB121941429990263697.html
By SUDEEP REDDY
August 23, 2008; Page A3
JACKSON HOLE, Wyo. -- Federal Reserve Chairman Ben Bernanke defended the central bank's decision to keep interest rates low even as consumer prices rise sharply, saying a weaker economy is likely to bring inflation under control in the medium term.
Mr. Bernanke's comments, at the Kansas City Fed's annual symposium at Grand Teton National Park, suggested the Fed is likely to keep its target for its benchmark interest rate at 2% in coming months.
The Fed chief said the "financial storm" that started last year "has not yet subsided." Financial turmoil and inflation triggered by higher commodity prices have resulted in "one of the most challenging economic and policy environments in memory," he said.
Some Fed officials have called for raising rates before long to address worries about inflation. Consumer prices rose 5.6% in July from a year earlier, a 17-year high. However, most officials believe a weak economy will lessen the inflation threat, and they want to keep rates lower for now to offset tightening credit conditions.
Mr. Bernanke on Friday said the Fed's strategy for keeping its rate target "relatively low" is based on the expectation that prices for oil and other commodities "would ultimately stabilize," in part due to slowing global growth. He said economic weakness would help bring inflation under control "in the medium run," indicating the Fed is looking beyond the recent price surges.
While Mr. Bernanke called the inflation outlook "highly uncertain," he said he's encouraged by the recent price decline in oil and "increased stability of the dollar."
URL for this article:
http://online.wsj.com/article/SB121941429990263697.html
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