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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Bernanke: Let In More Foreign Scientists, Engineers

UPDATED at 11:58 A.M.:

Fed Chairman Ben Bernanke went off on a bit of a tangent when asked during a meeting of Congress's joint economic committee underway right now what else could be done to stimulate the flagging economy.

"I know it's not very popular to say, but our immigration laws discriminate pretty heavily against talented scientists and engineers" from other countries, Bernanke said.

"If you allow more people with high-tech skills to come here," you get more innovation and more growth, Bernanke said, adding, "I know that's controversial."

Bernanke: Unemployment Won't Hit 10%

11:34 A.M.: Bernanke said that he anticipates that U.S. unemployment will peak in early 2010 but not hit 10 percent. It currently stands at 8.5 percent.

"Currently, we don't think it will get to 10 percent," Bernanke said, while testifying before Congress's joint economic committee, currently underway. "Our current number is somewhere in the 9s."

Bernanke: No More 'Stress Tests'

10:58 A.M.: Bernanke said he does not anticipate any more "stress tests" beyond those that have been performed on the nation's 19 largest financial institutions.

"It is not our intention to do stress tests on additional banks," Bernanke said while testifying before Congress's joint economic committee underway now.

However, Bernanke said that all of the nation's banks will have the same access to emergency backstop federal funding as the top 19 banks if they have to raise additional capital.

Bernanke: I Did Not Tell Ken Lewis To Hide Information

10:44 A.M.: Bernanke said -- in exceptionally strong language for him -- that he did not tell Bank of America chief executive Ken Lewis to hide the huge losses associated with his acquisition of troubled brokerage Merrill Lynch last year, as Lewis has claimed.

"I absolutely did not in any way ask Mr. Lewis to obscure any disclosure or fail to report information he should be reporting," Bernanke said moments ago while testifying before Congress's joint economic committee.

Further, Bernanke offered to turn over all "papers, documents and notes related to those meetings." Bernanke said he detailed all this in a letter sent to Congress last week, which we'll try to find.

For the mild-mannered Bernanke, this was stern language. You could tell he had his anger up when he began his answer, "So..." Whenever Bernanke is angry or feels he may be backed into a corner or is doubting the intelligence of the question, he begins his answer with "So..."

Bernanke: 'Stress Test' Accurate Gauge of Bank Health

10:27 A.M.: Bernanke said the federal government's "stress test" of the 19 largest U.S. financial institutions -- due to be delivered to banks today -- "is an accurate reflection of the financial indication of those banks."

Bernanke is testifying before Congress's joint economic committee right now.

Per the results of the stress test, some of the banks will need to raise new capital.

However, Bernanke said the believes that many of the banks in the stress test will be able to meet their need for new capital without new federal infusions or the selling of assets.

Bernanke: I Still See Late '09 Turnaround

10 A.M.: Bernanke said he continues to expect that economic activity will "bottom out" then "turn up" later this year, during testimony he plans to deliver to Congress's joint economic committee beginning now.

Bernanke pointed to a first-quarter rise in consumer spending and signs that the housing market is starting to bottom, as well.

"The recent data also suggest that the pace of contraction may be slowing," Bernanke's testimony reads.

However, Bernanke said, business investment remains "relatively weak" and "conditions in the commercial real estate sector are poor," he said.

Bernanke said he expects inflation to remain low -- despite the volume of money he has pumped into the system since September.

Check back here fro live updates as Bernanke's testimony continues.

-- Frank Ahrens
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By Frank Ahrens  |  May 5, 2009; 11:58 AM ET
Categories:  The Ticker  | Tags: Ben Bernanke, Federal Reserve  
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Next: How Fiat Became the Savior Of the Auto Industry. Maybe.

Comments

encouragement.....anyway. albeit, many of us questioned, and still have reservations of the approach taken by, the treasury and the fed....i trust bernanke. there is much to be said about having a scholar in charge. the "from the gut", "god guides me" philosophy of the previous administration was disastrous. history's lessons were ignored, and even "rewritten" to fit idealogy. a tragic mistake fueled by greed and hubris. again, i trust this guy

Posted by: disillisioned | May 5, 2009 10:46 AM | Report abuse

If the markets sincerely believed that the FED had a shot at stimulating economic growth and "getting the credit markets functioning normally again" you would see Gold trading at $3K per ounce.

But its not. None of this new money and credit and stimulus can possibly affect the overwhelming gravity of the debt collapse that is taking hold. They are shooting BBs into a hurricane. Asset prices are headed right back to where they were in 1980-1981 - which is when the financial industry took over Washington.

The FED + US Treasury + IRS working together through the transmission mechanism of Wall Street has created an elaborate criminal enterprise that has finally collapsed under its own weight. Too many ticks on the dog have finally killed the dog.

Our political leaders are now called upon to extricate our economy and political system from corrupt people, institutions, and ideas. Honesty and transparency are prerequisites for moving forward. Now that we all realize that future economic activity and incomes are going to come down by 60%, we need to recognize that the size and scope of Federal Government needs to be reduced by the same amount.

Posted by: Madcow22 | May 5, 2009 3:56 PM | Report abuse

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