President Obama is of the view this Wednesday that:

“There’s still too little credit flowing to our small businesses”

The measures, announced by Mr. Obama at a small records storage company in Maryland, would allow smaller community banks to borrow at low rates from the Treasury Department’s Troubled Asset Relief Program. It would also raise the loan caps on several popular Small Business Administration programs. Under the administration plan, banks with less than $1 billion in assets could borrow from the program at a lower interest rate than financial institutions are required to pay.

In exchange, banks must demonstrate how they would increase lending to small businesses and follow up with quarterly reports. According to the White House, most business loans by the community banks that are eligible for the new rules are made to small businesses. In addition, community groups that lend to small businesses in low-income areas under a Treasury Department program will be able to borrow relief money at just 2 percent annually for eight years. The proposal as described Wednesday caps the infusions at $20 million.

Gene Sperling, senior counselor to Treasury Secretary Timothy F. Geithner, said in an interview that the small institutions would be subject to the same compensation rules as any other relief recipient but “for these smaller community banks, the executive bonus restrictions will usually affect only their single most highly compensated employee.” Read more…

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Federal Reserve Chairman Ben Bernanke said on Sunday at a Fed conference on Asia that the financial crisis has spotlighted the importance of dealing with global imbalances in trade and capital flows. In his brief introductory remarks, he was of the view that:

“The crisis has … highlighted the need for many policy reforms that range from improving financial regulation to addressing global imbalances”.

The US officials have sought to pressure China, which has a massive trade surplus with the United States, to allow the value of its Yuan currency to appreciate against the dollar and to foster greater domestic demand in its economy.

That campaign has become more muted during the crisis because of China’s importance as a holder of U.S. government and mortgage agency debt and as an engine of growth in the world economy. Bernanke did not mention China specifically in his speech. He said that:

“The global financial crisis and the recession of the past two plus years have challenged policy makers and economists and have made us keenly aware of the linkages between America, Europe, and Asia”.

San Francisco Fed President Janet Yellen, speaking to the same conference, did not comment on the outlook for monetary policy or the economy in brief remarks. Read more…

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After a busy September, members of the Senate Finance Committee remain in a legislative holding pattern at least for the next couple of days, awaiting additional financial data from the Congressional Budget Office and keeping at bay plans for a vote.

Committee Chairman Max Baucus (D-Mont.), who last week steered his health reform package through the amendment process, said he’s uncertain when the CBO will deliver a price tag, or “score,” for the bill. “They haven’t reported back to us yet,” he said. Until they do, committee members won’t hold a final vote on legislation despite having wrapped up the amendment process early this past Friday.

In the meantime, Baucus pledged that other senators would have ample time to review the CBO’s numbers before moving ahead with the process.  Sen. Olympia Snowe (R-Maine), who’s seen as a potential swing vote on reform, echoed the chairman’s comments.

“The Congressional Budget Office needs the time to do its job and not be encumbered by artificial constraints,” she said. “So that’s honestly very important to me. And how it comes out does have material impact on my vote.” Read more…

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The dollar has come under attack from abroad as the economic crisis has played out, thanks to the Federal Reserve’s decision to flood a seized-up financial system with liquidity last fall. The central bank’s moves likely staved off deflation, but the massive influx of new dollars has devalued existing ones.

Foreign nations are worried that the massive U.S. national debt and rising shortfalls are not being addressed. And though inflation is not yet a concern in the United States, a prolonged slide in the dollar’s value could lead to higher prices for consumers.

Watch the video “Oil producers to oust dollar?”

For the American consumer, a falling dollar means U.S. exports sell better overseas, which can lead to more jobs here. But it also means imports costs more, which means higher prices at U.S. stores. Read more…

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The USA is the most effected country in the world from the current economical and financial crisis and its most of the industries are still suffering from the current bad economical situation and on the other hands some other countries like India, Canada and etc are recovering nicely. In the Canada the consumer confidence ticked higher but lower in the United States this month as worries about rising unemployment took hold. In the Conference Board of Canada, this tracks consumers’ sentiments on personal finance, major purchases and jobs, a rise of 2.5 percentage points to 90.9/100 for September, continuing a seven-month long upward streak – the longest since 2002. “The U.S.A consumer is still struggling to adjust after a very difficult period that has seen home prices collapse. Many are still in a very difficult financial situation even though a recovery is starting to get under way.” According to the U.S. Conference Board’s confidence index dropped to 53.1 from a revised 54.5 in August, the New York-based group reported Tuesday.

“The Canadian household experience is quite a bit different from what’s going on in the U.S.,” said Meny Grauman, senior economist at CIBC World Markets. Now, it’s time for the President Obama and his administration to observe more seriously that why other countries are recovering quickly as compared to his country as we know that the increase in the Canadian Index.

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