Meanwhile, Fed Chair Bernanke abandoned his June assessment that the threat of an economic downturn had diminished, telling lawmakers that growth and inflation risks are increasing.
There are ``significant downside risks to the outlook for growth,'' and ``upside risks to the inflation outlook have intensified,'' Bernanke said in semiannual testimony on the economy to the Senate Banking Committee in Washington. Do you need that sentence translated into English? It's something like, "I've been wrong, I've been sitting on my hands as has the Treasury and the Bush Admin, and now things are getting really baaaad."
Bernanke said that stabilizing financial markets remains ``a top priority,''
The Fed chief spoke less than two hours after government figures showed that the economic boost from U.S. tax rebates began to fade in June and inflation pressures increased. To read further, go to Bloomberg.
And despite widespread concern about losses suffered by Fannie Mae and Freddie Mac, the Bush administration’s call for quick passage of legislation to authorize the use of government funds to save them ran into heavy fire, especially among some Republicans concerned about taxpayer liability.
The opposition threatened to slow down the rescue plan if lawmakers insist on making major changes to the package, which would allow the Bush administration to use the United States Treasury to help Fannie and Freddie by lending them money and buying their stock.
And the WSJ says we're not alone, in Europe's Economy Takes a Hit:
The rising risk of recession in Europe shows that despite the strength of emerging-market economies such as Russia and China, the economic downturn that began in the U.S. last year is spreading to other regions, battering hopes that the global economy might have "decoupled" just enough that the rest of the world could coast through a U.S. downturn relatively unscathed.
Want a break from all this? Time to get Shiny, Happy....