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Originally posted by majesticgent
Stocks collapse after Bernanke's speech. No surprise there. Could today be the day? With Irene lurking, debt mounting, could today be the day to change the Watch to a Warning? We'll see... I'm still thinking they have a plan B here.edit on 26-8-2011 by majesticgent because: (no reason given)
Good morning. As always, thanks are due to the Federal Reserve Bank of Kansas City for organizing this conference. This year's topic, long-term economic growth, is indeed pertinent--as has so often been the case at this symposium in past years. In particular, the financial crisis and the subsequent slow recovery have caused some to question whether the United States, notwithstanding its long-term record of vigorous economic growth, might not now be facing a prolonged period of stagnation, regardless of its public policy choices. Might not the very slow pace of economic expansion of the past few years, not only in the United States but also in a number of other advanced economies, morph into something far more long-lasting?...
Finally, and perhaps most challenging, the country would be well served by a better process for making fiscal decisions. The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses. Although details would have to be negotiated, fiscal policymakers could consider developing a more effective process that sets clear and transparent budget goals, together with budget mechanisms to establish the credibility of those goals. Of course, formal budget goals and mechanisms do not replace the need for fiscal policymakers to make the difficult choices that are needed to put the country's fiscal house in order, which means that public understanding of and support for the goals of fiscal policy are crucial.
WASHINGTON (MarketWatch) — As expected, the August nonfarm payrolls report was dreadful.
World stocks fell to a one-week low on Monday and the euro hit a three-week trough against the dollar as investors worried the U.S. jobs market may be beyond easy repair and Europe faced a series of risks that would reignite its debt crisis.
A week packed with political and legal challenges begins with the German Federal Constitutional court ruling on Wednesday on suits claiming Berlin is breaking German law and European treaties by contributing to multi-billion euro bailouts of Greece, Ireland and Portugal.
Data on Friday showed U.S. employment growth ground to a halt in August, sending Wall Street sharply lower. With the jobless rate stuck at 9 percent, President Barack Obama and the Federal Reserve are under pressure to provide more stimulus to aid the frail recovery.
"Jobs have been front and center of this whole recovery debate. The problem is that there simply hasn't been any meaningful jobs growth, which is precisely why markets are so worried about slipping back into recession. The authorities have thrown a lot of stimulus at the problem and to date, it's basically done nothing," said Ben Potter, strategist at IG Markets.
"One of the major reasons why markets are going to struggle to move higher any time soon is the fact that there simply isn't any clarity as to how and where these jobs may come from. Markets are realizing that there probably isn't a lot more authorities can do."