mr. bernanke gave his report to the senate. and he dialed things back. mr. rnanke said maybe, all in all, now, meaning right now, maybe now, as in right now is not really the right time for goosing the economy, or helping, or stimulating, or however you want to put it. not necessarily righaway. the hearing started at 10:00 a.m. and then this is what happened. everybody out of the pool. run away. the ship is sinking. pick your metaphor and get out of here with it in a hurry. at least for now wall street is not lying awake nights over this washington, d.c., self-made crisis about republicans refusing to vote that the country shouldn't go into default and shut down. but the real american crisis, the one about jobs and the economy, that is a problem. that is a real problem. you do not always find wall street taking the side of the american people on economic issues. but today, yes. joining us now is democratic congressman barney frank of massachusetts, the ranking member of the house financial services committee and co-sponsor of the dodd-frank wall street reform

mr. chairman, and thank you, chairman bernanke, for being with us today. i have just a couple of questions. the first is based on the fact that it is a parlor game around you, perhaps nobody satisfied them by mr. westmoreland question whether those people were drunk to you in making policy over the last couple of years to attach blame and to try to sow the president or the majority or the minute with responsibly for the economy. i was struck by your testimony that any score in particular there was a significant effect around temporary factors, the earthquake in japan, oil prices, perhaps the drug. i would if you could elaborate on that and give us a sense for with a magnitude of the effect was over the roughly three quarters drop in gdp growth? and though you obviously can't predict events in future health is likely to to taper off in the coming quarters. >> well, we saw pre-significant effects on both the production and sales and prices of automobiles coming from the supply chain disruptions in japan. they were also some effects on the tech industry as wel

over that most recently so for the time being although investors may hope for huey three it seems mr bernanke isn't quite so. well louise cooper thank you very much. part nurse think you so much for your insights. well that's all the businesses who have time for this hour and they excel for their headlines with carrie. forty two thousand americans die each year from car accidents will be a thousand. seven hundred thousand people. and thirty two thousand will kill themselves cancer in all its forms kills five hundred sixty thousand of us here part is easy even more devastating it kills over eight hundred seventy thousand americans every year. you're watching on t.v. will tie for the main headlines now the witch hunting is and then serbia arrests information multimedia countries and also from a u.n. war crimes fugitive on budget. a grim vision. as the man that capable of dealing with the greatest blow winds up dead or an increasing scrutiny of public all too familiar with the sport. and georgian voices of support for three photojournalists accused of espionage are growing louder as critics ques

that most recent me so for the time being although impressed as one hundred sixty we very it seems mr bernanke he isn't quite so. well louise cooper thank you very much in seeing partners thank you so much for your insights. well that's all the businesses who have time for this hour and next up on the headlines with kerry. forty two thousand american strike each year since two thousand. seventeen thousand people. and thirty two thousand will kill themselves cancer in all its forms kills five hundred sixty thousand of us here part is easy the more devastating picture was over eight hundred seventy thousand americans every year.

mr. bernanke, around mr.legarde in charge of the imf say it would be catastrophic, and do you believe their assessment of what will happen? >> no, not really. >> you don't. >> every time this comes up, we are told that it is the end of the world as we know it. well, guess what, if we go the way of greece, it is the end of the world as we know it. how about a better idea.ç let's cut some spending. you know, the government accounting office says there are hundreds of billions of dollars in waste and fraud in government spending right now. let's start by cutting it out. if we start cutting it out, we don't have to por ro-- don't ha to borrow. >> do you want us to default? >> no, i prefer not. what i want is to cut spending, but we have to remember this, when and we are talking about default, when the government cannot borrow anymore money, we can prioritize our debts and pay our debt service, and if we pay the debt service, there is no default. >> this nation has never defaulted on its dets. >> yes, the constit

mr. bernanke testified before the senate banking committee. this is two hours, 15 minutes. >> i called this hearing to order. we are pleased to welcome chairman bernanke who will deliver the federal reserve's semi-annual report to the congress. his testimony comes at an important moment. while our economy is recovering from the disaster created by the financial crisis, the recovery is far from complete. employment is unacceptably low and the unemployment rate remains at 9.2%. the high levels of unemployment are matched by output that is significantly lower than it was thought to be. the cbo estimates of potential gdp showed that the economy is 5.6% below what it could be producing. of course, the housing market, which is an important source of wealth for many families and our economy, has yet to recover from the collapse of the pricing bubble. although prices are down significantly from the 2006 peak levels, inventory of vacant houses remains high and residential investment is below pre-bubble levels. in addition to these domestic economic prob

mr. bernanke. we are always pleased to see you. i would like to ask you a little bit about the tremendous power that you have. it seems that there are about 21,000 transactions that are being examined. basically, it is about the billions that you were able to lend out to banks or hedge funds or what have you. this article, that i am sure it mentionslill see, that the fed spent billions. japanese car companies, $2 trillion in loans each. billionaires and on and on. a loan you made in the cayman islands which has a concern. you know the reputation of the cayman islands. this is what caught my eye, the shadow budget. this was a loan that was reported on under your tax program to something called waterfall opportunity. the chief investors included the wife of morgan stanley, john mack, and a close friend of mr. mack that served as the president of the morgan stanley banking division. neither of these women had any business experience. for an investment of $15 million, they received $220 million in cash. with the investors keeping 100%

mr. bernanke talked about the risk this week, some of the problems that particularly persistent, seem to be continuing and may raise the risk that the slow down that we seem to be experiencing at the moment process. what anxiety level do you think is appropriate for the public and our policymakers right now as we look out to the risk that we see that seem to be percolating over the horizon on any number of different fronts? >> well, i think these are risks but they are subject to our control and influence. if we take some action and make some decisions. i think with the housing market we still have a low level from. these loans need to be restructured whether it makes economic sense for the distressed borrower can make an economically viable payment or if not, there needs to be relocation assistance or some other mechanism to clear the market. .. the industry, this is another promise aligned incentives where a banks don't own a lot of loans. incentive to mitt glit the loss through effective servicing. that is why the government needs to step in more assertively because this is market bre

mr. bernanke also described how the fed would respond to continued slow economic growth. he also restated his opinion that spending cuts and a deficit-reduction bill should be structured so they do not hurt the economy in the short term. this hearing of the house financial services committee is just under three hours. >> this hearing will come to order. we meet today to receive the semiannual report to congress about the chairman of the board of governors of the state of the economy. without objection, all members written statements will be made part of the record. for purposes of opening statements, i recognize myself for five minutes. chairman bernanke, welcome back to the committee. i want to commend you for your service to the country during these challenging economic times. america is confronted with many challenges, not least of which is a crisis of confidence. for the first time in the history of our country, the majority of americans no longer believe that their children will be better off than they are. one great challenges preserved -- the american spirit of ind

mr. bernanke and also to john walsh, the acting comptroller of the currency, asking them to audit these very banks. i have not yet heard from any of them. >> just want to let you know, this hearing continues live online at c-span.org. here on c-span, we're going to break away for our live house coverage. they're coming back in momentarily to continue debate on the 2012 energy and water projects bill. the fifth appropriations bill the house has dealt with so far. a number of amendment votes ahead and more amendments to be considered this afternoon as well. also in washington today, we are covering ben bernanke, the federal reserve chair. he's testifying before the senate banking committee. that's under way now live on c-span3. this just in, u.s. district judge reggie walton declaring a mistrial in the roger clemens perjury case. next up, the u.s. house. we take you live to the floor. the speaker: the house will be in order. the prayer will be offered by our guest chaplain today, reverend george dillard, from the peach tree christian church, peach tree, georgia. the chaplain:, let us pray. alm

mr. bernanke, is indicating that they're going to increase the money supply again. they call it qe-3. but the american people need to know that means they're going to print more money and when they print more money that makes the value of your dollar and your currency worth less. that means milk is going to cost more, bread is going to cost more because the federal government's not living within its means and they're going to print more money that's going to make all of our currency worth less. i want to tell you what's happening in other countries when we've done this. in hungary in 1946 the price of everything doubled every 16 hours. in yugoslavia in 1994 the prices doubled every 34 hours. in germany in 1923 the price of everything doubled every four days. in greece in 1944 it doubled every four days. in zimbabwe in 2008 it doubled every 24 hours. we need to stop this printing of money. we need to control spending in this body instead of letting the fed print more money which is a hidden tax on everybody in this country. i yield back the balance of my time. the speaker pro tempore:

mr. gensler and ben bernanke. this has to do with proposed margin rules for swaps under title vii. my understanding is these rules would require the subsidiaries of american banks operating overseas and doing business with non american counterparts that the subsidiaries would be required to hold margin on behalf of their counterparts. it is my understanding the europeans and asians have not imposed comparable requirements. i am concerned that would put our firms at a competitive disadvantage with respect to transactions that don't occur on u.s. soil or have an american counterpart. are you concerned we are in the process of putting ourselves at a competitive disadvantage? >> thank you for the question. not just in the margin area but more broadly we have been working with international regulators to -- there is no geographic border. it will move somewhere else. more specifically we are reaching out with treasury as part of this and the federal reserve to have an international approach to margent the regime's. on the back rules i will defer to ben bernanke because we are only settin

chairman bernanke, please begin. >> thank you, mr. chairman, ranking member shelby, and other members of the committee, i am pleased to present a report to the congress. i will start with current economic conditions, the outlook, and return to policy. the u.s. economy is continuing to recover, but the pace of expansion has been modest. after increasing at an annual rate of 2.25%, real gdp growth is at 2% growth in the first half of this year. incoming data suggest that the pace of recovery remains soft. at the same time, the unemployment rate has moved back above 9%. it had appeared to be on a downward trajectory at the first of the year. in part, the recent weaker than expected economic performance appears to be the result of several actors that are likely to be temporary. notably, the run-up in prices of energy, especially gasoline and food, has reduced consumer purchasing power. the supply chain disruptions that occurred following the earthquake in japan caused u.s. motor vehicle producers to curtail assembly. -- and limited the av

mr. wolin is the assistant secretary department of the treasury. ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic. i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the s

mr. ben bernanke, head of the federal reserve told congress last week. the talks have collapsed according to the papers and those on capitol hill. leaders heading to the white house today to help the president about what they plan to do in order to keep that from happening on august 2. that is our discussion this morning. studio city, california, jane, republican line. >> caller: hi. >> hi. >> caller: isn't it interesting that the budget is being held up by a group of people who want to continue to pay in to the wealthy welfare programs that come out to about $1400 a year for taxpayer when is welfare for the needy and homeless is only about $400. 3.9% of the budget, that's what is holding up these talks? corporations should give up their tax breaks and we should stop attacking the people who have no taking anything for the american people. >> what is the best way? >> caller: i think the best way for the democrats to stop dillydallying around and letting the republicans kick them in the teeth. they need to bring this information to the american people. th

mr. president, chairman bernanke the other day at the banking committee -- i knew the answer, but i asked him anyway when the last time it was that our credit ratings were threatened for downgrade. and his answer was not in the 20th century. i said to him well, we're now in the 21st century. and the answer is never, never in our country's history that i'm aware of has our credit rating, which is the envy of the world and one of the most important assets that we have as a country and as an economy been threatened with a downgrade, and now we find ourselves in the position of potentially being downgraded because on the one hand we might not raise the debt ceiling, which i find unimaginable but it's possible, and on the other hand because our politics look so dysfunctional to everybody that's watching this debate that there is real concern that we can never get to a long-term debt or deficit plan -- debt and deficit plan where the math actually pencils. and what we know about a plan where the math actually pencils is it is going to require a comprehensive approach that involves discretionary

chairman bernanke, please begin. >> thank you, mr. chairman, ranking member shelby, and other members of the committee, i am priest to present a report -- pleased to present a report to the congress. i will start with current economic conditions, the outlook, and return to policy. the u.s. economy is continuing to recover, but the pace of expansion has been modest. after increasing at an annual rate of 2.25%, real gdp growth is at 2% growth in the first half of this year. incoming data suggest that the pace of recovery remains soft. at the same time, the unemployment rate is -- has moved back above 9%. in part, the recent weaker than expected economic performance appears to be the result of several actors that are likely to be temporary. notably, the run-up in prices of energy, especially gasoline and food, has reduced consumer purchasing power. the supply chain disruptions that occurred following the earthquake in japan caused u.s. motor vehicle producers to curtail assembly. looking forward, however, the apparent stabilization of oi

mr. gruenberg, geren bernanke earlier a few months ago actually said the federal reserve is committed toiting on resolution authority of the so-called living will reinstitution delete this summer. what is the fbi says the these schedule? >> we have been working in tandem with the federal reserve. there's been a very cooperative process we we are really near -- we issued a joint rule earlier this year and i think we are near completion of the final rule and we do expect to issue a final rule in august. >> very good. thank you. you are the primary regulator of the community banks and they are vital to our economy and you are the ones in the most aggressive lending to the small business and have the best record in terms of the lending to small business and that creates jobs. your view of the impact of dodd-frank on the community banks and community and and many of the provisions of dodd-frank are explicitly excluded across this dynamic contribution to the local economy but can you give me a brief view of where you think this stands? >> yes, senator. >> the fdic is the primary federal regula

mr. chairman. chairman bernanke a few weeks ago or weeks said that the federal reserve is committed to rulemaking on the so-called living wills for large financial institutions by late this summer. what is the fdic schedule for this? >> we have been working in tandem with the federal reserve. it has actually been a very cooperative process. we are fairly complete. we issued a joint world earlier this year, and i think we are near completion, and we do expect to issue the final rule in august. >> very good. thank you so much. community banks are vital to our economy. they are usually the ones doing the most aggressive lending to small business and have the best record in terms of lending to small business, and that creates jobs. your view of the impact of dodd- frank on the community banks and community banking, many of the provisions of dodd-frank were specifically excluded from applications for small banks, given that they were not the major cause and this dynamic contribution they make to local economies, but can you give us a brief view of where you think they stand at the moment? >> padilla yes,

hello mr look i thank you very much for coming welcome thank you i well first question considers a statement by the u.s. federal reserve chairman ben bernanke he who addressed the congress saying a quote if you fail to raise the u.s. debt ceiling by august second the economic fallout could be catastrophic and quote according to your previous statements you don't believe that the u.s. may default on its debt what's your confidence based on. that in a speech if. you see this is quite a bit of policymaking anyway of course a legal legal framework up to august second that should be somehow solved. and no both sides suddenly republicans democrats are doing their best to somehow we in this game this absolutely clear but i myself do not think that's practically they will not be positioned to come to some agreement probably seventy agreement i mean two or is the that. cut off why not so high. asking about but for some compromise. a compromise a line just to win the time probably could be the real compromise but so i would say that the chances to not have it is very close to zero but if even they will be a kind of non agreement it means that for the

mr. wolin is the assistant secretary department of the treasury. ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic. i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the s

mr. mayor, we appreciate your time tonight. best of luck. it's the mayor of atlanta, georgia, with us tonight, kasim reed. >> thank you. >> today, tom, thes were talking about ben bernanke, the disappointing comments. tomorrow my bet is they'll all be talking about google, and excited about it. >> certainly at the opening bell, because that clearly was blowout numbers we mentioned at the top of the program. the day drifted lower, though, ahead of those numbers, susie. let's get right to it with tonight's "market focus." ahead of the blowout google earnings report after the close, stocks floated lower throughout the session. leading the dow industrials lower was alcoa, which reported its own strong earnings report on monday. shares fell 2.5%. alcoa has drifted lower since it kicked off earnings at the beginning of this week. j.p. morgan led the dow gainers, up 1.8%. we detailed the earnings earlier in the program, but those results did not help the other big bank in the dow. bank of america dropped another 1% plus, sending it to fresh two-year lows. very active today trading. according to bloomberg, bank of america has offered to settle with mortgage bond insurer m.b.i.a

mr. wolin is the assistant secretary department of the treasury. ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic. i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the s

mr. wolin is the assistant secretary department of the treasury. ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic. i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the s

mr. wolin is the assistant secretary department of the treasury. ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic. i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the s

mr. chairman, can you repeat the question again? >> sure. federal reserve chairman bernanke recently stated there has been no examination about the impact of the new regulatory environment, what it will have on the overall economy. and has your organization done any studies about when you're tully implemented what impact -- fully implements what impact it will have on the economy? >> well, we're still in the process of, well, building out our processes. as i've said, we've launched our supervision program. we're taking complaints from consumers on credit cards. we're working dill gently to -- diligently, and in the regulations our focus is on regulations that congress has directed us to adopt and implement, directed us under the dodd-frank act. and so, you know, in cases such as that we're doing congress' will where congress has made judgments about the benefits of certain policies for the economy. >> one of my concerns about cfpb is that when you have an agency charged with looking for problems, they have a tendency to find them whether they exist or not. how will we know w

right in order and then come back and then go to my left and that means chairman bernanke, you go first. >> thank you, mr. secretary. on this anniversary of the dodd-frank act, i think it's very important to remember why we're here in the first place. it's only been about 2.5 years since the worst financial crisis -- or certainly one of the worst financial crisis in world history brought many global financial firms to the brink, froze financial and credit markets and had an enormous impact on global production trade and employment two years after the beginning of the recovery, we're still, obviously, feeling the effects of that crisis. comprehensive financial reform was needed. we have very extensive rules that have been put in place. we're working hard together. it's a complex process with many aspects to it. the federal reserve itself, of course, has got many responsibilities but we're working closely and consulting with our colleagues here. on the fsoc and we're involved on an international process because we do not have an international consistency we do not have regulatory arbitrage and the process

mr. chairman, can you repeat the question again? >> sure, federal reserve chairman, bernanke, said there was no no examination about the impact of the new regulatory environment and what it will have on the overall economy. and it has -- has your organization done any studies about its -- when you are fully implemented -- what impact it will have on the economy? >> well, we're still in the process of building out our processes. we have launched our supervision program, we are taking complaints from consumers on credit cards. we are working diligently to -- on the area of regulations, the focus is on regulations that congress has directed us to adopt and implement, directed us under the dodd-frank act. and so, you know, in cases such as that, we're doing congress' will or congress has made judgments about the benefits of certain policies for the economy. >> one of my concerns about cfpb is that when you have an agency charged with looking for problems, they have a tendency to find them. whether they exist or not. how will we know when we have a financial system that is free of

mr. president, our nation is less than two weeks away from a potentially facing what federal reserve chairman ben bernanke has been called a calamitous outcome. unless we act, the united states of america for the first time in history may face the prospect of defaulting on our loans and not make good on the promises we've made to millions of americans. madam president, this outcome is unthinkable, and we should be doing everything we can to avoid it, which is why i am so disappointed that instead of working with us to tackle this issue seriously, the republican-led house of representatives has chosen to put politics ahead of everything else and has sent us a bill they call the cut, cap, and balance. well, first of all, madam president, this is a colossal waste of time at a critical time for our country. the republican house send us a bill that may appeal to their extreme base but now the american people are looking for results, not more rhetoric. "the washington post" reported that this bill as being -- quote -- "a doomed plan." even conservative columnist david brooks said in his column yesterday that th

mr. garamendi: and from texas. sheila jackson lee. ms. jackson lee: thank you for allowing us to really talk about how great america is. i agree with you. and we are not broke. chairman bernanke said, fast, undefined cuts will hamp were the cht economy and -- hamper the economy and he is nonpartisan, as chairman of the federal reserve, so what do we need to do? we need to look at our history. 20 million jobs were created under the democratic presidency of william jefferson clinton and then this president, with the american reinvestment act that we supported, three million jobs. we know how to do this. and what i would say to my friends is that we have the responsibility to be not any party but democrats are here to be for the american people and this weekend democrats will be the ones standing in the gap for the american people. i am proud of that and my last point is, there's no shame in taking care of the vulnerable. the last thing we want to do as we leave this place in these next couple of days with the debt ceiling in place as it should be is to leave behind us seniors that may be thrown out of nursing homes because we didn't do what was right and so i say we can do it a

bernanke. we could never quite get anyone to actually define exactly what we're talking about in this situation. but i appreciate your answer. gentleman's recognized. >> thank you, mr chairman. one striking he is son from the -- lesson from the financial crisis is that there were enormous aspects of the financial system that no one knew anything about. americans in general didn't know anything about it and, really, no one in congress knew anything about it. i don't think including members of this committee, including me. and i don't think it was because we lacked diligence -- well, not in every case. it was because there was nothing to call our attention to some of what was going on, some of the changes in the market, in the financial system. and those who really did know about it, didn't see any percentage at all in calling our attention to it. one of which was the repurchase market, the repo market. at the time of the crisis, that was described as a freeze in be interbank -- as a freeze in interbank lending. but it really was a traditional run. the only proposal that seems to -- and as i understand it, the repo market, um, was approximately the same size every ni