By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – Greenspan is talking on the Hill, Merrill is back-riding the bull, and a food bank in North Texas is pleading for help. I'm Maxine Shapiro with KERA Marketplace Midday.
Talking in understandable terms, Fed Chairman Alan Greenspan in his semi-annual monetary report told Congress interest rates will remain low "for as long as it takes" for the economy to respond - and he wants a full-fledged rebound. Short-term interest rates, which are already at a 45-year low of 1%, could go even lower if necessary. Speaking before the House Financial Services Committee, Alan said, "Substantial further conventional easings could be implemented if the (Federal Open Market Committee) judged such policy actions warranted." A little wordy, but actually comprehensible. He senses this last rally in the stock market and a "heavy dose" of tax cuts might be the injection the economy needs to perk up and get going. Wasn't he against the tax cuts? Anyway, in his usual cautious optimism, Greenspan is still disappointed the interest rate cuts have done squat to encourage businesses to get out of their tightwad syndrome and start spending. Hiring a few people back would be nice. More to come from Alan.
One industry that couldn't be happier with the current upswing in the stock market is banking. Yesterday, Bank of America and Citicorp both reported higher earnings, and today Merrill Lynch blew everyone out of the ballpark with much better than expected earnings for the second quarter. How's this for a net income, $1.02 billion or $1.05 a share? Analysts were expecting only a 6 cent rise per share over last year's 66 cents a share. Someone is back in the market, that's for sure.
But another type of bank in the DFW area is on the verge of closing. The Dallas Morning News sadly reports the Metroplex Food Bank, which provides meals for 500 to 1200 families per day, is in dire need of donations of food and money. If they don't get what they need, the food bank will be forced to leave the needy, who now stand in line as early as 5 a.m., standing someplace else without any food. This would be a travesty. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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