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January 28, 2010, 10.25 am (Singapore time)  |
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Obama: worst of economic storm passed
He said his administration's early actions last year had staved off a repeat of the 1930s Great Depression. 'And one year later, the worst of the storm has passed, but the devastation remains,' Mr Obama said. He announced that US$30 billion from a Wall Street bailout fund would be used to help small businesses still reeling from financial crisis. Mr Obama said Iran's leaders will face 'growing consequences' if they ignore international obligations. The war in Iraq is ending and all US troops are coming home, Mr Obama said. 'We will support the Iraqi government as they hold elections, and continue to partner with the Iraqi people to promote regional peace and prosperity,' he said. 'But make no mistake: this war is ending, and all of our troops are coming home.' Mr Obama said he would veto any finance bill that does not contain 'real reform'.
'The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it,' he told lawmakers. 'Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back.' Mr Obama vowed to work with lawmakers 'this year' to repeal the law that bans gays from serving openly in the US military. 'This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are,' he said. As a candidate, Mr Obama promised to scrap the policy that requires gays to keep quiet about their sexual orientation or face expulsion. He said that North Korea was facing increased isolation due to sanctions imposed after its nuclear and missile tests last year. 'North Korea now faces increased isolation, and stronger sanctions - sanctions that are being vigorously enforced,' Mr Obama said, according to the prepared text of his remarks. He spoke as North Korea conducted a second day of live-fire artillery exercises near its tense sea border with South Korea, ignoring US requests to halt the 'provocative' drill. The president pledged to double US exports in five years and boost commerce with South Korea, Panama and Colombia, but stopped short of urging Congress to pass trade pacts. 'Tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America,' Mr Obama said in the annual State of the Union address to a joint session of Congress. He told legislators he was setting up an initiative to help farmers and small businesses increase their exports to meet the goals. Mr Obama said the United States also 'will strengthen our trade relations in Asia and with key partners like South Korea, Panama, and Colombia' but did not explicitly call for Congress to ratify trade treaties with the three countries. -- AFP WASHINGTON - US President Barack Obama declared in his State of the Union address on Wednesday that the worst of the economic storm had passed, but that a trail of devastation was left behind. |
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On the whole, I believe stocks will rise unless we experience policy changes in either China or the US, like we've experienced this past fortnight. Then the bears might have their day. It has been a painful experience thus far.
smartrader ( Date: 28-Jan-2010 22:07) Posted:
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January 28, 2010, 5.46 am (Singapore time) |
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Fed renews vow to keep rates low, with a dissent
The decision to hold rates steady by the Fed's policy-setting Open Market Committee was 9-1, with Kansas City Federal Reserve Bank President Thomas Hoenig dissenting because he wanted the central bank to eliminate a phrase vowing to keep rates exceptionally low for an extended period. The FOMC statement reflected a somewhat brighter tone than previously and appeared to put more faith in the sustainability of a nascent economic rebound. 'Economic activity has continued to strengthen,' the panel said after a two-day meeting, a slight upgrade from a previous statement arguing activity had merely 'continued to pick up.' It also described the pace of economic recovery as likely to be 'moderate for a time,' having previously depicted the recovery as 'likely to remain weak.' 'This is as close an admission that we are likely to see that the FOMC thinks the recession is over and the economy is on a self-sustaining recovery path,' said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi. Tempering its optimism, the Fed removed a reference to an improving housing market after the latest batch of figures revealed a new round of weakness in the sector. Still, the Fed said it will allow its US$1.43 trillion programme of mortgage linked-debt purchases to expire as planned at the end of March. The US dollar extended gains after the Fed's decision, pushing the euro below US$1.40 for the first time since July as investors interpreted Mr Hoenig's dissent as bringing the Fed one step closer to tightening monetary policy. Stocks initially moved lower but then recovered to end higher, while Treasury bond prices dipped. In what appeared to be a nod to its hawkish members, the Fed sounded less certain about the prospects for low inflation. Rather than saying price growth 'will' remain subdued, it said simply that it 'is likely' to do so. Political clouds The Fed's meeting took place as a fight waged in the Senate over Ben Bernanke's nomination to a second term as chairman of the US central bank. Once expected to sail through, his confirmation vote ran into resistance last week, sending Wall Street, which strongly backs the chairman, sharply lower on Friday. Financial markets, which took a drubbing last week, have stabilized as Bernanke's confirmation began looking more certain. The latest Reuters tally showed 49 out of 100 senators were likely to vote for Bernanke, while 21 vowed to vote against him, citing public anger over bank bailouts and the financial crisis. The remaining senators were undecided. The Senate will take up the nomination on Thursday. Closing up shop The Fed reiterated that it was shuttering an array of emergency lending programs on Feb 1 and said its dollar swap arrangements with overseas central banks would also end on that date. It also announced a firm date to end a program for banks to obtain short-term loans. The economy resumed growing in the third quarter and most economists think it expanded at a rapid clip in the final three months of 2009. However, with the unemployment rate at 10 per cent, consumer spending is likely to remain subdued. The housing market, which was at the root of the recession that began in December 2007, has also shown signs of weakness lately. Figures earlier on Wednesday showed sales of new homes fell unexpectedly in December. That came on the heels of another report that showed a steep drop in sales of existing homes. In an effort to stem the worst financial crisis in generations, the US central bank not only slashed interest rates but also undertook a series of emergency actions to soothe ailing credit markets. Many such actions, including bailouts of financial institutions like AIG, have proven controversial in Congress. -- REUTERS WASHINGTON - The Federal Reserve on Wednesday offered a guardedly upbeat view of the US economy and renewed its pledge to keep interest rates near zero despite the objection of one policymaker. |
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