INO.com removes its current news briefs from public view shortly after they are published online. That is why I took the liberty of posting the second article in its entirety.
Today, US equities continue their short-term rally in the face of dismal economic news, a falling Dollar, and continued surges in commodity futures prices (most notably, Wheat, Gold, Silver, and Crude Oil). That's the kind of topsy-turvy, nonsensical world we live in.
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January foreclosures up 57%
Filings saw yet another big jump last month, compared to levels a year ago; 45,327 homes were lost to bank repossessions.
By Les Christie, CNNMoney.com staff writer
February 26 2008: 8:40 AM EST
http://money.cnn.com/2008/02/26/real_estate/foreclosures_rise_again/?postversion=2008022607
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Fed's Kohn Addresses Inflation, Economic Concerns
1 minutes ago
(RTTNews) - Federal Reserve Vice-Chairman Donald Kohn spoke about economy Tuesday, discussing the effects of "continued sizable increases in the prices of food, energy, and other commodities" and their impact on rising inflation.
"These have been difficult times for the U.S. economy," he said. "Growth has slowed, and unemployment has increased; both borrowers and lenders are facing problems, and the functioning of the financial markets has been disrupted."
Earlier, the Department of Labor released its report on wholesale price inflation in the month of January, showing that prices rose much more than economists had expected due in part to higher food and energy prices. This recent rise in inflation combined with the slowing economy has some worried about 1970s style stagflation. Kohn recognized that short term risks remain, although he sees an improvement in the long term.
"Inflation has risen," he said. "I believe we will see a return to stronger growth, lower unemployment, lower inflation and improved flows in financial markets, but it probably will take a little while."
Despite his cautious guidance that growth will pick up and inflation will decline, Kohn acknowledged that there are risks to this forecast.
"Adverse risks to this most likely scenario abound: Uncertainty could trigger an even greater withdrawal from risk-taking by households, businesses, and investors, resulting in more pronounced and prolonged economic weakness; events beyond our borders could continue to put upward pressure on inflation rates," he warned.
Kohn attempted to soothe worried financial markets, affirming a now common statement from Federal Reserve Chairman Ben Bernanke.
"As Chairman Bernanke often emphasizes: We will do what is needed."
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