Gloomy Headline Galore

Bernanke fears recession could extend to 2010

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke warned on Tuesday the "severe" U.S. recession may drag into 2010 unless the government succeeds in stabilizing the banking system and financial markets with strong action.

Delivering a somber assessment to lawmakers, Bernanke said the fast-shrinking economy risked entering a mutually reinforcing cycle of weak growth and financial market strain.

"To break the adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilize financial institutions and financial markets," he told the Senate Banking Committee.

"If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability -- and only if that is the case, in my view -- there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," he said.

Financial markets largely ignored the testimony. U.S. stocks cut early gains on a report that consumer confidence sank to a record low in February, but later turned higher on bargain hunting.

Bernanke said "stress tests" U.S. regulators are readying for the nation's largest banks aim to judge whether they can keep lending even under strained economic scenarios. --> 

Kris: Huh!! You still need stress tests?? The market has been stressing to the point of breaking.  It may withstand the govt's so call paper test but one more market test could plunge DJIA to 6,000 as pundit predicted.

U.S. home price drop at record pace in December: S&P

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged 18.5 percent in December from a year earlier as the monthly pace accelerated, according to a Standard & Poor's/Case-Shiller home price index on Tuesday.

Consumer confidence plummets to new low in Feb.

Consumer confidence plummets to new low in Feb. as consumers grapple with massive layoffs

More Dividend Cuts on the Way - Kris: I waiting for it to happen

Macy's reports 59 percent drop in 4Q profit

Macy's reports 59 percent drop in 4th-quarter profit, hurt by sagging sales, one-time charges

Oil well below $40; consumer confidence plunges

Oil well below $40 a barrel as investor confidence plumbs new depths

AIG looking at alternatives for government loan

AIG discussing potential changes to bailout; Report: bidders emerge for life insurance unit

The report comes a day after CNBC reported that the New York-based insurer will soon report a $60 billion loss.

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