Bernanke: Help On The Way For Troubled Economy

Federal Reserve Chairman Ben Bernanke will offer assurance Tuesday that help is on the way for the troubled U.S. economy and may offer clues on additional steps that could be taken to halt an ever-steepening dive.

With fears big banks will be nationalized, Bernanke will likely be pressed on government plans to clean up the financial sector when he delivers the Fed’s semiannual monetary policy report to Congress in two days of testimony on Tuesday and Wednesday.

In addition, the Fed chief will face the challenge of making the case that the U.S. central bank, which has chopped interest rates to near zero and flooded markets with hundreds of billions of dollars, still has the ammunition to pull the economy out of its worst downturn since the early 1980s.

“He’s going to talk about the Fed still having tools in its tool kit and that it will do whatever it can to get the economy going,” said Joseph LaVorgna, an economist for Deutsche Bank Securities in New York.

After bringing its main policy lever, the overnight interbank lending rate, as low as it practically can go in December, the Fed has largely ceded the spotlight to the new administration of President Barack Obama.

Obama has already signed into law an almost $800 billion government stimulus package and his team has rolled out bank and housing rescue plans.

Rescue Still Unfolding

Even so, the Fed remains busy behind the scenes and is counting on two massive programs to help spur consumer lending and stir some revival in the depressed housing market.

In one of these, the central bank has begun buying up to $600 billion worth of debt and mortgage securities backed by government-related mortgage finance providers, a program that has helped drive down mortgage costs.

In the other, the Fed is poised to throw a life-line to consumers with an initiative aimed at making it easier to get loans for homes, cars and on credit cards that could be up and running within a couple weeks.

Originally envisioned to provide $200 billion dollars to support lending, the Fed and Treasury said on Feb. 10 that they were ramping up the program to as much as $1 trillion, with the Treasury agreeing to put up $100 billion to protect the central bank from potential losses.

But the economic picture has grown dimmer almost without letup despite the flood of money to financial institutions and promises of cash for households and consumers.

Fed officials acknowledged at their policy-setting meeting at the end of January that the economy was likely to shrink this year and that unemployment would rise to near 9 percent.

Offering a particularly downbeat assessment, officials said they saw no signs of stabilization in the housing market and warned any recovery would be unusually gradual and prolonged.

Bernanke may face some ire from lawmakers whose constituents are being pummeled by plunging stock and home values and who think the government has bungled its efforts to stabilize the economy.

“Disappointment with the prospect of immediate policy responses has helped remove the floor from markets,” Dominic Wilson of Goldman Sachs wrote in a note to clients.

What’s Next

For financial markets, Bernanke’s views on how best to clean up the banks will be eyed particularly closely. The week before last, Treasury Secretary Timothy Geithner sketched out plans for a public-private partnership to mop up bad mortgage-related debts clogging the banking system.

But he provided scant details on how his plan would work and markets tanked as investors’ hopes for bold, quick action were dashed.

Markets will also be listening for any clues on whether the Fed might still be considering buying long-term U.S. government bonds as a way to drive down borrowing costs.

The Fed raised that possibility in December and said after its Jan. 27-28 policy meeting that it was prepared to take that step if it believed it would be “particularly effective” in improving conditions in private credit markets.

Bernanke, however, has not mentioned the possibility of bond purchases in his last two public outings, and many observers think the Fed may be tip-toeing away from the idea.

The minutes from the Fed’s last meeting suggested the central bank was more likely to expand its mortgage-support efforts, since they have already proven effective, and officials have said they want a chance to gauge the impact of their unfolding actions before taking further steps.

Whats Going On In Wilmington

Friday night it is Cape Fear Community College’s first ever Homecoming celebration. If you are an alumni, join in the celebration at the CFCC Schwartz Center lobby before the men’s basketball game. Be there at 6:00 p.m. for free appetizers and your chance to win door prizes. Bring your alumni membership card for free admission to the reception and game. Call 910-362-7659 to RSVP.

The Cameron Art Museum will focus on Civil War history, but not in the form of paintings. The museum is holding a Civil War living history weekend for the 144th anniversary of Battle of Forks Road, which happened on the museum’s historic site. It runs from 10:00 a.m. until 5:00 p.m. The event is free.

The Full Belly Project is holding its Feast Against Famine fundraiser. There will be a buffet, beer, wine, entertainment and live and silent auctions. It is happening at the Coastline Convention Center Saturday night from 6:00 p.m. until 10:00 p.m. Tickets are $50 in advance, $60 at the door. You can buy tickets by calling 910-452-0975.

New Hanover County’s 5th Polar Plunge is taking place at the Carolina Beach Boardwalk Saturday. Music, food and a costume contest begins at 11:00 a.m. At 3:00 p.m., line up to take a dip into the Atlantic. In order to participate, you have to raise at least $50. Money raised goes to the Special Olympics.

This weekend, you can begin gearing up for your St. Patrick’s Day celebration. A pint glass workshop takes place Saturday and Sunday at Burchetta Glassblowing Studio and Gallery in Wilmington. You can design and make your own hand blown pint glass. It runs from 10:00 a.m. until 2:00 p.m. It is $50 per person.

Local Entrepreneur

Tamar Gilad knows firsthand that her prototype for a new product, a cat hammock suspended inside a sturdy box, can support cats weighing up to 20 pounds.

It’s been cat-tested and owner-approved.

“I have a 19-and-a-half-pound cat,” she said. “My cats in my focus group, they try everything. I have friends who have cats. I had several people test them.”

Kippy, one of Gilad’s seven cats, recently gave a demonstration of the hammock, lying lazily inside the box, which is cut out in front to allow access. Continue reading

Cape Fear Skyway Bridge

The Cape Fear Skyway is likely to be a cable-stayed bridge, like the Cooper River Bridge in Charleston, S.C., and will rise 165 feet to 187 feet above the Cape Fear River south of the Port of Wilmington, according to the latest plans of the N.C. Turnpike Authority.

The latest cost estimate – $1.1 billion to $1.5 billion – is higher than the previous estimate of about $1 billion. Continue reading

AT&T Adding 3G to Wilmington, NC

AT&T said Monday that it plans to launch a speedier and expanded wireless service in New Hanover County.

Its 3G network will allow for such services as sending and receiving videos by cell phone

It comes more than two years after rival Verizon Wireless began its 3G service covering New Hanover, Brunswick and Pender counties in November 2006. In October 2003, Verizon Wireless became the second 3G network operator in the U.S. The first commercial 3G network in this country was by Monet Mobile Networks, which later shut down.

With 3G networks, companies like Verizon Wireless and AT&T can offer a wider range of more advanced services and at the same time gain network capacity. Mobile services include wide-area wireless voice telephony, video calls and broadband wireless data.

Continue reading

Desperate Enough to Sing?

Nicole Nagy had gone back to school hoping that a new career would lead to a better job. When she was turned down for financial aid, Nagy was told she could, as a song goes, “sing for the money.” She was directed to a contest called Careereoki.

Anyone brave enough to videotape themselves singing — and sometimes dancing — about their dream career karaoke-style was qualified to enter the competition.

More than 60 videos were submitted, from which five finalists were chosen to compete for online votes that will determine the winner. Most contestants were from Central Florida, likely because the grand prize includes tuition for a certificate program at an Orange County technical school.

Nagy, a mother of three, was laid off in 2007. When she couldn’t find a job, her husband supported her decision to enroll in nursing school. But tuition and books are costly, and the Nagys are a month behind on the mortgage payment.

So risking embarrassment, Nagy decided a better future might lie in her music video.

“I can’t sing to save my life, but I will go ahead and try this because I am willing to do anything to get school paid for,” Nagy said. Her husband, obviously a good sport, appears in the video along with her children.

Dressed in a bathrobe, she sits on the couch with her kids as her husband starts the video with the bad news, “OK guys, I have to go to work. Sorry we can’t send you to nursing school, Mom. We just don’t have the money.” Nagy replies, “Ahh man.”

Addressing her children, she says, “know what we can do instead, we can sing about it.” Nagy takes off the robe, revealing a nursing uniform and the stethoscope which acts as her microphone.

Nagy then dances around her living room, belting out her tune, “Doctor, doctor give me the news; I got a bad case of nursing blues.” She sings her original lyrics to Robert Palmer’s “Bad Case of Loving You” as her young, obedient children wait for the song to end.

Nagy’s video was good enough to gain her a spot as a Careereoki finalist. But winning the contest won’t be as easy as making it to the finals. The Careereoki competition is stiff.

American Idol judging it was not for this first-time contest. To choose the final five videos, judges considered three categories. Points were awarded based 50 percent on the contestant’s originality, 25 percent on creativity and 25 percent on the video’s humor.

Whether Nagy’s performance will be good enough to win will depend on how many people vote for her on local radio station WPYO’s Web site where the videos are posted.

Fans of the musical Grease may feel inclined to vote for Julia Langston of Lake Mary, Florida. Langston does a nice job singing what is supposed to be a duet, “Summer Nights.” She creatively sings, “Unemployment happened so fast, never thought this recession would last.”

Langston was laid off a few months ago after working for 15 years as an office manager. As with her fellow contestants, the grand prize would be a huge help for her. She is living off the money she had set aside to remodel her kitchen.

Finalist Jennifer Faulk of Deltona, Florida, sums up the recurring theme of the five still standing: “The day does not go by that I don’t go online and look for something and there’s just nothing out there.”

The Careereoki contest was sponsored by the Orange County School Board; Workforce Central Florida, an Orlando-area job placement organization; and a local advertising agency.

Workforce Vice President Kimberly Cornett said her organization’s participation in the singing contest helped spread the word on their “no-cost services” to the community.

“It was a way to connect to job seekers, and also for job seekers to take a little break from the stress of unemployment,” Cornett said. She said she sees that stress first hand; the Orlando organization she works for offers job placement. Unemployment in Central Florida is the highest it has been in 16 years, according to Cornett.

The grand prize is worth $8,000 and includes a career training scholarship, personal and resume makeovers and a $100 gas card. Two first-place winners will also get tuition help, resume makeovers and $50 gas cards. The finalists are keeping their fingers crossed that the song in their heart doesn’t end up a song sung blue.

The winner will be announced on Monday.