The highly-anticipated Fed Chairman’s testimony before the Joint Economic Committee did not produce a splash: Bernanke was just cautiously optimistic.  In his view, the current economic contraction is abating, but the growth will be modest, maybe fore years to come, although he did indicate that the economy will recover yet this year.

The markets were preoccupied with the results of the “stress tests” performed on the nation’s 19 leading banks.  The results of the tests have not been actually revealed yet (they will be after the markets close on Thursday), but the traders are already anticipating that at least 10 of the leading banks will be shown not to have sufficient capital.  That put a damper on the markets’ mood, and for the most part of the day the Dow, NASDAQ and S&P 500 spent the day in the red.  The losses were not huge, certainly not large enough to wipe out yesterday’s gain of 214 points for DJIA, or 2.6%; or over 3% gains the S&P 500 made yesterday.

Apparently, Congressional Democrats reached an agreement on the shape of the “cash-for-clunkers” proposal that will encourage American consumers to purchase new more fuel-efficient cars in exchange for turning in their older vehicles.  The proposal includes consumer vouchers worth as much as $4,500 toward newer models.  That is meant to stimulate domestic auto sales and also curb emissions. 

And remember the little agency called Consumer Product Safety Commission that was all over the news last fall when toxic toys imported from China made their debut on the U.S. store shelves? Well, the Commission will be getting a new Chairwoman soon, Inez Moore Tenenbaum, South Carolina’s former school superintendent.  Hopefully, the Commission will get some new staff scientists, too, since in 2007, amidst massive Chinese toy recalls, CPSC had one—count him: one!—staff scientist to deal with all the product testing.