{"id":1004135326,"date":"2016-01-22T08:37:33","date_gmt":"2016-01-22T16:37:33","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004135326"},"modified":"2022-12-08T09:57:18","modified_gmt":"2022-12-08T17:57:18","slug":"bernanke-recession-not-imminent","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/bernanke-recession-not-imminent\/","title":{"rendered":"Bernanke: Recession Not Imminent"},"content":{"rendered":"

By\u00a0Paul Fiorilla, Yardi Matrix<\/p>\n

\"Ben<\/a>

Ben Bernanke, former Federal Reserve Chairman<\/p><\/div>\n

Recent worrisome\u00a0financial news\u2014including the 10 percent sell-off in U.S. stock prices and plummeting oil prices\u2014are not a sign that a recession is imminent, according to former Federal Reserve Chairman Ben Bernanke.<\/p>\n

Speaking at the 2016 National Multifamily Housing Council (NMHC<\/a>) Annual Meeting in Orlando, Bernanke, now a distinguished fellow in residence at the Brookings Institution<\/a>, was fairly bullish about the state of the U.S. economy. He pointed to strong job growth, low unemployment, the country\u2019s demographic profile (such as the healthy birth rate and immigration), the healthy\u00a0U.S. technology industry and the entrepreneurial culture as positives that should produce growth in upcoming years.<\/p>\n

\u201cOverall, there is a lot to be optimistic about,\u201d Bernanke\u00a0said. \u201cThe U.S. isn\u2019t going gangbusters, but we are the envy of the world right now.\u201d<\/p>\n

Bernanke attributed the stock market drop to fears of a hard landing in China\u2019s economy, the potential collapse of the Chinese financial system and the effect of lower energy prices on countries that rely on commodities for income. He said the stock declines are a \u201cnegative on the margins,\u201d because they\u00a0could lead to a loss in\u00a0consumer confidence and willingness of consumers and businesses to spend and write loans.<\/p>\n

\u201cOn the one hand, the decline in the stock market is not a recession,\u201d he said. \u201cThat being said, it\u2019s not a good thing that the stock market is going down.\u201d<\/p>\n

Asked if the markets could be predictive, Bernanke said, \u201cpossibly, but there is no evidence we are in or about (to start) a recession.\u201d Later, he said, \u201cmy advice is to stay calm and pay attention to what is going on\u201d in the economy.<\/p>\n

Bernanke likened China to a larger version of Pittsburgh, an economy evolving from a manufacturing base to a more consumer-oriented model, plus its evolution from a central planning model to a more market-oriented model. The result will take time to get straightened out and go through some rough patches.<\/p>\n

Bernanke said he expected change in the government sponsored enterprises (GSEs) to move slowly because of partisanship that has made it more difficult to craft legislative compromises. He said the end result will likely be a form of the Corker\/Warner bill in which mortgages would be securitized with a government-backed guarantee from the agencies such as Fannie Mae and Freddie Mac. But it will be years before any structure is finalized. \u201cCompromise is a dirty word right now,\u201d he said.<\/p>\n

Moderator Bob DeWitt, president of GID<\/a>, asked a number of questions about Bernanke\u2019s role in the financial crisis. Along with former Treasury Secretary Henry Paulson and others, the regulators crafted solutions that prevented a global financial market meltdown.<\/p>\n

Bernanke recounted the skittishness of former President George W. Bush and the reactions of Congressional officials to the proposals that they largely did not understand and were extremely unpopular with the public. He also downplayed the idea that the crisis was caused by origination of subprime mortgages, noting that the actual loss of wealth on defaulted subprime mortgages was less than \u201ca bad day at the stock market\u201d and not nearly enough to tank the financial system. Instead, the bigger problem was the fact that the mortgages were tied up in complex securities and derivatives that multiplied the losses. He said banks did not have the ability to evaluate their exposure to derivatives and complex instruments.<\/p>\n

Bernanke saved his biggest ire for the derivatives team at AIG, which was insuring huge amounts of financial derivatives without setting aside sufficient reserves to pay in the event of losses. He said the AIG trading team seemed to assume that it\u00a0would be bailed out if its\u00a0bets went bad. \u201cTheir attitude was \u2018heads I win, tails you lose,\u2019\u201d he said. AIG lost more than $100 billion in one year and was bailed out by the government, which was eventually repaid.<\/p>\n

Asked by DeWitt if he still considered himself as a \u201cNew Keynesian,\u201d Bernanke said he did because he believes monetary and fiscal policy can help the economy. \u201cA stable, well-functioning financial system is critical to the health of the overall economy,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

At the 2016 National Multifamily Housing Council’s Annual Meeting, former Fed Chairman Ben Bernanke shared his insights on the state of the U.S. economy. <\/p>\n","protected":false},"author":463,"featured_media":1004135664,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23891,21742],"tags":[],"class_list":["post-1004135326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national","category-latest"],"acf":[],"yoast_head":"\nBernanke: Recession Not Imminent - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/bernanke-recession-not-imminent\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bernanke: Recession Not Imminent\" \/>\n<meta property=\"og:description\" content=\"At the 2016 National Multifamily Housing Council's Annual Meeting, former Fed Chairman Ben Bernanke shared his insights on the state of the U.S. economy.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/bernanke-recession-not-imminent\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2016-01-22T16:37:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T17:57:18+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/01\/Ben_Bernanke_official_portrait.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"765\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Paul Fiorilla\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/bernanke-recession-not-imminent\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/bernanke-recession-not-imminent\\\/\"},\"author\":{\"name\":\"Paul Fiorilla\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/7a0713651835ec0bfacc572b322a7eac\"},\"headline\":\"Bernanke: Recession Not Imminent\",\"datePublished\":\"2016-01-22T16:37:33+00:00\",\"dateModified\":\"2022-12-08T17:57:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/bernanke-recession-not-imminent\\\/\"},\"wordCount\":714,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/bernanke-recession-not-imminent\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2016\\\/01\\\/Ben_Bernanke_official_portrait.jpg\",\"articleSection\":[\"National\",\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/bernanke-recession-not-imminent\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/bernanke-recession-not-imminent\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/bernanke-recession-not-imminent\\\/\",\"name\":\"Bernanke: Recession Not Imminent - 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