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By Jason Stipp | 07-29-2010 04:12 PM

Measuring the Impact of Five Big Statements

Morningstar markets editor Jeremy Glaser sizes up the big talk on recessions, EU stress tests, housing, cap-and-trade, and BP's conference call this week.

Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to The Friday Five. I like to think that we have no small statements on The Friday Five, but this week out there in the marketplace there were several big statements. Here with me to do a recap is Morningstar markets editor, Jeremy Glaser.

Jeremy, thanks for joining me.

Jeremy Glaser: You're welcome, Jason.

Stipp: So what do you have for The Friday Five this week?

Glaser: Well, we did have five big statements. One, about governments role in solving the recession and trying to bring the recession to an end; one about the stress test for banks in Europe; on housing prices; on cap-and-trade legislation; and finally, we had a big statement from BP.

Stipp: So for number one, the government obviously had some unprecedented action to try to rein in the recession. They're doing a little bit of a recap on that ... now. What did you see on that front?

Glaser: This week we saw a report from Alan Blinder, Princeton University, and Mark Zandi from Moody's highlight the impact of government programs like the stimulus and TARP and the Fed opening the discount window on ending this so called Great Recession. And their findings using the econometric model were that these programs actually were very effective; that without them the economy would have been much worse than it is now; that the economy might be a little bit uneven for the next year, but that we're on a sustainable recovery. And they think that these programs really on balance did a lot of good.

Now it's a little bit, I think, early to say that absolutely this is the case. We're not out of the recession yet, which is something that they freely admit in the paper. I think, we have to wait until the recovery is fully hold, and we're seeing great growth, before we can really go back and see if these big statements are truth, but it's interesting that people are finally starting to take a constructive look at this data, and I think, it's going to be a debate we're having for some time.

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