UPDATE: DJIA up 400+ points.

WASHINGTON (MarketWatch) — Another shot of fiscal stimulus may be needed now to help the U.S. economy recover from what could be a drawn-out slowdown, Ben Bernanke said Monday.

“With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate,” the Federal Reserve chairman said in prepared testimony to the House Budget Committee.

It was the second time this year that Bernanke had endorsed a fiscal stimulus program, a rare admission from the central bank that monetary policy can’t fix the economy by itself. This spring, Congress passed a stimulus bill that featured a $600 per person tax rebate. The rebates seemed to keep the economy afloat through the summer before the latest credit crunch hit in September.

Repeating the same general principles that he called for in January, Bernanke said any new plan should be designed to be timely, temporary and targeted.

The Fed chief suggested that Congress should include “measures to help improve access to credit by consumers, homebuyers, businesses and other borrowers.” He provided no details in his prepared remarks and was expected to face questions from lawmakers.

Fiscal-stimulus plans generally encompass tax and spending policies by the government to temporarily stimulate demand, either by returning money to taxpayers or by spending the money itself.

Democratic leaders in the House and Senate have said they’d like to pass a second major stimulus plan quickly, either in a lame-duck session after the Nov. 4 election, or more likely, in early January once the new Congress is sworn in.

Democrats say the bill would likely put about $150 billion into the economy, or about 1% of gross domestic product.

The Democratic bill could include such provisions as new temporary tax breaks, money for roads, bridges and other infrastructure projects, aid to cash-strapped state governments, and funds for food stamps and unemployment insurance. Last month, the House passed a $61 billion bill with some of those measures last month, but the measure died in the Senate.

Republicans have generally been less enthusiastic about a new demand-side stimulus plan, preferring to focus their attentions on longer-term supply-side policies to support growth, such as trade deals or permanently extending the tax cuts passed in 2001 and 2003.  In his comments on the economy, Bernanke said he’s seen some encouraging signs that the severe credit blockage is easing after last week’s unprecedented coordinated global effort to recapitalize all major banks and to guarantee short-terms bank debts.

“It is too early to assess their full effects,” he said, adding that he’s confident that the measures will eventually restore trust in the financial system and get normal credit flowing again.

“That said, the stabilization of the financial system, though an essential first step, will not quickly eliminate the challenges still faced by the broader economy,” Bernanke added. “The pace of economic activity is likely to be below its longer-run potential for several quarters.”

Slower global growth and steady expectations for inflation “should bring inflation down to levels consistent with price stability,” he said.

Barney Frank, D-MA, said to be especially excited about any new “stimulus package”.  And for bosco, some accompanying music:

http://news.yahoo.com/…

House Speaker Nancy Pelosi said Wednesday that a $150 billion economic stimulus plan is needed now because of the faltering economy and she may call the House into session after the election to pass it.

“We may have to go back into session before the next Congress,” Pelosi said.

Pelosi said a stimulus package would create jobs by investing in public works, increasing food stamps benefits and extending unemployment insurance for the long-term jobless. She said lawmakers need to “hunker down” and look closely at the federal budget for possible savings, and reconsider whether the U.S. can afford to fight “a war without end” in Iraq.

“We have some very harsh decisions to make and some of them can’t wait until January,” said Pelosi, D-Calif.

“What we can’t wait for is a stimulus package,” Pelosi added. “We may have to go back into session before the next Congress.”

Invest? No… the government doesn’t invest. It steals or borrows and spends. Public works aren’t jobs but make work projects. Food stamps and unemployment insurance increase unemployment and will help prolong the recession.

Someone needs to tie Pelosi down, A Clockwork Orange style, and make her read America’s Great Depression, The Case Against the Fed and Economics in One Lesson.

I love how frank Rogers is. Amazes me these stations continue to ask him on when they should know exactly what he’s going to say and that they won’t like it.

I snapped this photo on 35th and 7th last night in Manhattan:

I’m not sure that World Trade Center building 7 is the greatest example to use. Besides all the controversy around its falling… if you accept the official story it failed after a couple fuel tanks exploded and random crap fell on it. If true that doesn’t sound like the highest quality workmanship.

Up on 37th and 8th I found this:

http://www.reuters.com/article/ousiv/idUSN0952458820080511?pageNumber=1&virtualBrandChannel=0

A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

“Everyone stumbles. I’m not going to hide or run or live in denial, or with regrets,” Forgaard told Reuters in an interview. “On the surface it looks like total devastation but it’s just the opposite. I’m confident our lives will be much, much richer as a result.”

Forgaard bought a house in Santa Cruz, about 60 miles (100 km) south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans — in which payments do not cover the interest so that a borrower’s balance grows over time.

It was those “neg-am” loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.

“I knew I was sitting on time bombs,” Forgaard said. “I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.

“I didn’t anticipate a downturn of epic proportions such that home values are 40 percent less than they were,” he said.

That’s because you’re a fucking idiot.

While this type of scenario is very rare… having one or more investment homes was not and just as many primary homes are foreclosed so too are many many of these investment homes. They will all be counted in those numbers you see on TV when they report how many homes are in foreclosure. I’ve never seen them seperate it down into primary and secondary homes.