AARRGGHH!!!!

Fed chief calls for help on housing

Bernanke urges Congress to act, sees growth slowing

By William Neikirk | Tribune senior correspondent

November 9, 2007

WASHINGTON - Federal Reserve Chairman Ben Bernanke offered no immediate relief Thursday to Americans buffeted by a housing-induced credit crunch, record oil prices, a falling dollar and financial market turmoil.

In testimony before the Joint Economic Committee of Congress, Bernanke warned of slowing economic growth and gave no reason for hope that the central bank would cut interest rates again when it meets in December, instead cautioning lawmakers about the potential inflationary consequences of oil prices nearing $100 a barrel.

Good lord, doesn't he know that his rate cuts are causing those "potential inflationary consequences??!!

But Bernanke said there has been discussion about raising limits on the size of the loans that Fannie Mae and Freddie Mac can buy from lenders from the current $417,000, which would allow primary lenders to make larger loans that Fannie Mae and Freddie Mac could lump together and sell as mortgage-backed securities.

The federal government could guarantee the increased loan limit, he said, adding that any such move should be temporary. Jumbo mortgages, those above $417,000, have become harder to get since the troubles over subprime loans.

People cannot afford such outrageous prices! That is why the bubble popped. Increasing the conforming standard will help nothing.

Stagflation fears

One congressman suggested the country could be returning to a 1970s-style "stagflation," when slow growth and high inflation hammered the U.S. economy. But Bernanke said any such outbreak of stagflation now would be mild compared with the 1970s and not to worry.

YA! Someone finally said it! Rising prices + flat wages = STAGFLATION.

"I don't see any significant change in the broad holdings of dollars around the world," he said.

The dollar's value is rooted in the strength of the U.S. economy, America's trade situation and open markets, Bernanke said.

Please don't remind us, Ben.............