Fed's Outlook Darkens On Economy

Policy makers at the Federal Reserve appeared almost stunned by an economy that was sinking faster than they had expected on almost every front in December, so much so that they even toyed with the idea of not announcing an official target for overnight interest rates, according to minutes of the meeting released on Tuesday.

At the meeting on Dec. 15 and 16, Fed policy makers jumped through the looking glass and slashed the benchmark federal funds rate on overnight loans between banks virtually to zero. Vowing to use "all available tools" for stimulating the economy, the Fed then outlined a radical new approach of pumping money into the economy through its own lending programs and through heavy purchases of mortgage-backed securities and possibly longer-term Treasury bonds.

Read the whole story here.

Comments

[ObjectiveRealist]

These arrogant scumbags tell us drastic times call for drastic measures when they're receiving our money and re-distributing it amongst themselves, but the times are never drastic enough to give the money back to the mortgage borrowers, whose debts are the fault of these national-economy-runners who rigged the system to inflate real estate.

quote:
Despite having already created a raft of new lending programs to financial institutions and even corporate borrowers, (but not to a single citizen) Fed policy makers as well as the Fed"s staff forecasters began the meeting with sharply reduced forecasts. They all expected a severe economic contraction that was likely to last through at least the first half of 2009.
/quote

Unforgivable, Bernanke.

[MyTake]

Well, of course the outlook is dark.

Bernanke attended the powerful Bilderberg meeting in Virginia and the "dark" script handed to him there is now going to unfold.

Here are some real nice pictures of that conference and take note of their security photo's: http://cryptome.info/bilderberg08/bilderberg08.htm .

The Federal Reserve is a privately owned bank and is illegal according to the constitution. John Kennedy likely lost his life in writing Executive Order No. 11110 on June 4, 1963 to strip The Reserve of its power to loan money to the government at interest and returned the power to issue currency to the U.S. Government.

[OB-GYN]

As ugly as it sounds, a better fiscal solution is to raise taxes now (I hear you) and cease the big government spending. Propping us up will be in vain. We have bitter medicine to swallow: delaying this has a high probability of advancing our recession to a second great depression. Do we not know this in our hearts?

[satyriasis]

People make comparisons to the depression but they don't work. The depression of the 30's took a while to play out, now the effects of a depression can be felt instantaneously all over the world. The moment orders are canceled factories shut down immediately. Then people are out of work, which means they spend less, which means more orders are canceled, which means more jobs are lost. It's a vicious cycle. I'd say we've been in a depression that has been spiraling downward for some time. Obama is our FDR. God help us all if he isn't.

[mrcontinental]

The current economy is based on conning us into spending money that we don't have and no one is buying that drivel now. The only way that we will have any money is to save it; and the economy be damned. Only about five percent of the population benefits from the current economy anyway. I hope every bank and hedge fund goes belly-up so people will finally see that we don't need them.

[nogimmicks]

Exactly right. The real economy, namely technology, engineering, production, construction, infrastructure, can re-grow only if the parasitic "sectors" like banking, funds, insurance, would disappear and get replaced by straight non-profit services (e.g. from the government).

[ExRepublican]

Amen. There is a lot of truth in what you said.

Except for (maybe) "no one is buying that drivel now". A sucker is born every minute. Lot's of ignorant folks out there STILL more the willing to buy/buy/buy, even if they have no money.

[LINY516]

1st the Republicans change the bankruptcy laws for individuals knowing the economy is heading to disaster. The people are distrated by the usual bread and circuses.

Next, the Republicans yell fire, the economy is going to crash and we need to give $700 Bill to wall street. The dumb Dems don't think to tie in relief for the middle class into this bill. They ignorantly state the middle class relief will be next. So, the Bush friends get their $700B gift. The gift Bush couldn't give them by privitizing social security.

Now, with the eonomy tanking the Republicans are whining that we can't give the middle class relief because of deficits. The Dems will roll over and allow the Republicans to scratch their tummy., and the middle class will shrink to nothing. We are all to blame for this fiasco.

[tomas0808]

It's all comin down baby. Better go reread your copy of "When Things Fall Apart." The rich got greedy and forgot that even the best laid plans "Of Mice and Men" get shredded. Life/God will always find a way to bring you down a few pegs

[bluguy8]

this man is a joke. he has no idea what to do . They should get him out and get someone capable in that position . But we all owe Bush and his GOP cronies a big round of applause for ruining our country--thanks for nothing you jerks

[Rule Of Law]

The FED can't fix the problem--The FED is the problem.

[ObjectiveRealist]

Yes!

[senorlou]

We need to silence the obviously ill Republican partry - minimize their power as much as possible so that the Dems can completely change the entire US economy so it isn't a ponzi scheme. This will take time and effort, and it will take a complete crushing of the Republican party of the next few elections. Anything short of that, and we're going to hit Great Depression II, sure to be better than the first.

[JoeBlough]

We need to shrink the Republican party until we can drown it in a bathtub.

[senorlou]

That's right. Toss in the health insurance and financial "industry" as well along with it. We'll all be much better off.

[ObjectiveRealist]

We also need to investigate & prosecute Phil Gramm and the other sponsors of the Gramm-Leach-Biley Act and the Commodity Futures Modernization Act, for racketeering and conspiracy, and their lobbyist friends in industry for collusion. And anybody who dismisses this as unrealistic or extreme: borrowers and taxpayers have been defrauded and knowingly possessing stolen goods is always a crime.

quote:
The "Commodity Futures Modernization Act of 2000³ [H.R. 5660 was introduced in the House on Dec. 14, 2000 by Rep. Thomas Ewing [R-IL] and cosponsered by Rep. Tom Bliley [R-VA] Rep. Larry Combest [R-TX] Rep. John LaFalce [D-NY] Rep. James Leach [R-IA] [1] and never debated in the House.

The companion bill [S.3283] was introduced in the Senate on Dec. 15th, 2000 by Sen. Richard Lugar [R-IN] and cosponsored by Sen. Peter Fitzgerald [R-IL] Sen. Phil Gramm [R-TX] Sen. Charles Hagel [R-NE] Sen. Thomas Harkin [D-IA] Sen. Tim Johnson [D-SD] [2] and never debated in the Senate.
/quote

http://cambridgeforecast.wordpress.com/2008/09/18/commodities-futures-modernization-act-of-2000-phil-gramm/
http://thomas.loc.gov/cgi-bin/bdquery/z?d106:H.R.5660:
http://banking.senate.gov/conf/

[markinaz]

We're toast.

[FreedomCorpse]

The moneychangers next "plan" after a few years of unbearable suffering for millions upon millions, they will manufacture a new world war of epic proportions....it IS their modis operandi through history which they profit from. Maybe they'll step up the "plan" to "cure" the crisis, like Germany did in the 1930's.

[bluguy8]

that headset doesn't work anymore--we're in 2 wars and the econmoy is worse then ever

[Rule Of Law]

He means a real war, with a real draft and the entire country mobilised. If they keep demonizing Iran we might see a scenario where the whole Middle East goes up in flames as China and Russia are forced to take sides against us and Britain.

[Rule Of Law]

Freedom, tried to respond here that one of the tried and true (and really frightening considering the potential target) methods of starting a war is with an ass ass in nation, but it went bye bye. Hope this don't. They did Kennedy. They did Lincoln. They started the American Revolution (from the British side) and the War of 1812 (got that central bank approved by Madison) as well as agitating for Southern succession in 1860 and they've created, bet on, funded both sides in, and made more money off of the deaths of millions in unnecessary wars than anyone but organized religion.

My bet is, first we'll go with wheelbarrows of money, then the war.

[JoeBlough]

War helped us when we were an Industrial Nation. We are now a Consumer Nation.

[mrcontinental]

They missed Andrew Jackson though... and he took the bank DOWN! My hero.

[bayviking]

95% of this countrie's economists haven't just "bought into" the Chicago School of Economics Free Market B.S., they've helped sell it to the world. A result of what Noam Chomsky refers to as "filtering", cancelling the careers of intelligent skeptics, to keep the Wall Street Ponzi Scheme going.

But, brilliant independent thinking Economists like Paul Craig Roberts and Michael Hudson have been seeing this coming for years and telling it like it is in their columns. In the fifties the financial sector accounted for 2% of Corporate profits. Today it is taking 40% of the profits, shuffling paper, instead of producing things.

Berenanke, Paulson, Rubin, Summers, all operate with an agenda other than the best interests of the American People.

[Rule Of Law]

When Bush took power--literally--in 2000, the Heritage Foundation, a right wing think tank, told him that the best appointments he could make would be people who were Loyal First, and competent second. So we get FEMA, a former lumber lobbyist at Interior, and this loser.

[Rule Of Law]

"...shuffling paper, instead of producing things."

Don't know how I missed this the first time, Bay, but when you throw in the service economy we've become and the offshoring of industrial corporations that actually CAN produce things of value, we're left with not much at all except a terminally inflated economy.

[LINY516]

I went to one of the top 20 ranked business schools in the 80's and realized the theory was a farce. Of course, I vomited the thoery back to the professor to get my grade. I can't believe that others didn't also realize the lie.

In fact, when I talk to many people, they still believe in this crap theory. It's so sad, but true that so called intelligent people are lemmings who can't really think and reason for themselves.

[littlepuffycloud]

Again, these people claim to be 'stunned'. Nothing like being stunned when America felt this collapse coming last summer. Nimrods.

[barakagirl]

the Feds is a Farce, it is a privately owned bank whose sole purpose it to ensure the control of the economy by a small fringe and huber rich greedy bankers. How can you explain that Paulson would even contemplate asking money for the banks and requesting immunity and no oversight? Where did the money go? the thing is the Fed is a total fraud using fractional reserve banking to influence the economy.
Why hasn't the Feds been audited? Who are the shareholders? why are they allowed to print money and without the proper reserve to back it up? Oh yeah because the american people are the collateral... as long as we slave our productivity assure a strong currency but now that it's no longer the case, what is it going to be....

PEOPLE DO YOUR RESEARCH IT'S PAINFUL AND SCHOCKING , but the passage of TARP was the proof for me....

[FreedomCorpse]

I know all about it, been preparing as best I can since 2004 for the future govt policy created years ago.

[Rule Of Law]

And the real sin is that there were highly qualified and respected people--Economists and business experts warning about this impending Depression since at least 2004! Bush, Cheney, Greenspan all ignored them.

What frightens me now is that not one of those people has been included in Obama's cabinet. They are mostly Clinton free market retreads like Summers and Geithner. H E L L, there were a hundred people here on HuffPo ringing the warning bell 18 months ago. It will take more than any one person to tear down this culture of greed and death.