WORLD> America
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WORLD> America
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Bernanke says recession 'very likely over'
(Agencies)
Updated: 2009-09-16 07:15 Bernanke's speech to at Brookings was identical to the one he delivered at the Fed conference. Analysts predict the US economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 to 4 percent. It shrank at a 1 percent pace in the second quarter, much slower than in previous quarters. Bernanke said the economy is coping with "ongoing headwinds," including hard-to-get-credit for consumers and businesses, and households saving more, spending less and trimming their debt. Those forces can weigh down the recovery, he said.
While many on Wall Street have been encouraged by early signs of stabilization in US home prices and hope the housing market may have hit bottom, others aren't so sure. Deutsche Bank analyst Karen Weaver on Tuesday predicted that national home prices won't stop sliding until next summer and likely will fall another 10.5 percent from this summer's levels. Bigger declines are expected in cites like New York, Salt Lake City, Fort Lauderdale, Fla., and Baltimore. Against that backdrop, Michael Williams, dean of Touro College's Graduate School of Business, disagreed with Bernanke's assessment that the recession probably ended. Williams maintains that troubles in both the residential and commercial real-estate markets are prolonging the downturn. Williams believes the economy is still shrinking and won't turn around until later next year. "This recession lingers," he said. Meanwhile, Bernanke said he is optimistic that Congress will enact a revamp of the nation's financial rule book to prevent a future crisis from happening. "I feel quite confident that a comprehensive reform will be forthcoming," Bernanke said. President Barack Obama on Monday urged Congress to enact legislation this year. "This has just been too big a calamity and too serious a problem" over the past year, with the near meltdown of the US financial system, for Congress not to take action, Bernanke added. He spoke one year after Lehman Brothers filed for bankruptcy, the largest in US history. It's collapse roiled financial markets worldwide, nearly halted the flow of credit and almost brought down the entire US financial system.
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