June 2008

The de facto nationalization of the housing bust

Submitted by on

Congress may be still debating a bailout bill, but the bailout of the housing market is already in progress.

Freddie Mac and its fellow GSE Fannie Mae are now financing more than 80 percent of all mortgages in the U.S., up from 40 percent a year ago.

As lenders rely on Freddie Mac to buy their loans, the company is charging higher prices and increasing market share. Freddie Mac, which has a $738 billion portfolio of mortgage bonds and guarantees $1.78 trillion in home loans, is raising prices next month for the fourth time.

"We are nearly the only game in town, and we think we are going to be able to enjoy that position for a number of years," Piszel said.

Considering the implied promise of taxpayer backing for these government-sponsored entities combined with the collapsing real estate market, this should scare everyone.

China in the Bull Shop

I am glad to read my co-contributor midtowng's latest contribution to this site's coverage of the oil and commodity crisis. In the last few days, other bloggers -- Calculated Risk, Russ Winter -- have run stories on the collapse of the Shanghai stock market, but readers of this blog got the story first, becuase two months ago I was already telling you about the importance of the Shanghai stock market crash.

Indeed, the pivotal importance of China in the parabolic Bull market for oil, and for commodities in general, has only been confirmed by more news stories in the last few days.

The REAL reasons for high gas prices

Submitted by on

Just a quick glance at the headlines will tell you all you need to know about high gas prices. Senate Dems aim to stop oil speculators, Stop the oil speculators, These Are the Folks Behind the Price Spike.

Yep, it's pretty clear that all of our energy woes can be attributed to a small group of evil speculators who are driving up the price of gas. They must have made a fortune when the price of oil spiked $16 a barrel just Friday to $139 (an entire barrel of oil was going for $11 in 1998).

Well, actually... reality is slightly different. In fact, reality is pretty much the opposite of what the media and politicians are telling you.

Obama hires free trader for Economic Policy adviser

Submitted by on

Well, well, well. Now that this pesky primary is out of the way, ya know with all of those NAFTA, bad trade deal buzz words and campaign rhetoric you have to say to convince people to vote for you....

No problem to hire yet another corporate representative to push more bad trade deals per the demands of multinational corporations!

That's right,
Obama Names Rubin Ally Furman to Economic Policy.

Furman is director of the Hamilton Project, a well known corporate Democrat economic think tank pushing more bad trade deals, more globalization per the agenda of multinational corporations and special interests. Robert Rubin, Treasury Secretary under Bill Clinton, is well known to push bad trade deals like entry into the WTO, the China PNTR. Rubin was chair of Citigroup. Robert Rubin started the Hamilton Project.

Gas Prices - DO SOMETHING!

Submitted by on

People, how hard is it? While candidates spew and describe the problem, people are going broke and the economy can potentially grind to a halt over gas prices! Here we are in an election and when almost every American knows what to do, our government cannot even get it together to pass initiatives and emergency legislation!

Here are some ideas to do something and do something right now!

  1. Telecommuting

Lehman Brothers - Death Watch?

Submitted by on

Bloomberg

It's kind of sobering for people who have been listening to the company these last six to nine months that they had everything under control,'' said David Hendler, an analyst at CreditSights Inc. in New York. ``They've got to start thinking about selling a strategic stake or selling the firm because there's just not enough business to go around

Your Kids are Mental, Seriously, We're Harvard, it must be true

Submitted by on

Harvard Doctors Failed to Disclose Fees:

Harvard Medical School doctors who helped pioneer the use of psychiatric drugs in children violated U.S. government and school rules by failing to properly disclose at least $3.2 million from drugmakers led by Johnson & Johnson and Eli Lilly & Co., a U.S. senator said.

Joseph Biederman, Timothy Wilens and Thomas Spencer conducted studies on how kids are affected by drugs such as Lilly's attention deficit treatment Strattera. They filed yearly disclosure forms with the Boston school showing they got a total of $120,000 from several drugmakers, Senator Charles Grassley said in the Congressional Record. When Grassley sought added documentation in March, they admitted getting more, he said

Result of the Fed's rate cuts: global inflation, US stagnation

University of Oregon economist Tim Duy is rapidly becoming one of my favorite reads. His insight into how loosey goosey low interest rates in the US have engendered blowback unforeseen by the Fed is a great example:

For my part, I am concerned that the Fed appears to have written off the dollar. My concern stems from rising international tensions - the Fed is dumping additional liquidity into the system at a time when most central banks are attempting to turn off the faucet. The Fed is implicitly, if not explicitly, relying on countries with fixed exchange rates to absorb that additional liquidity at the cost of inflation in those economies. Moreover, those economies with floating rates become the anti-Dollar bets.…

Job Losses, Wages Worsened - No End in Sight

Submitted by on

Loss of jobs and real wages worsened in May with no end in sight; an ominous sign for financially strapped households.

 

Today’s BLS jobs report revises down their previous estimate of the number of jobs in March and April (by a total of -15k) and shows another loss of -49k jobs in May. Indeed, local governments kept adding jobs in May while the number of private sector jobs fell by -66k.

Widespread local government budget shortfalls for the fiscal year ahead will soon eliminate this much-needed, tax-payer-dependent source of job growth. 

 Over the past 12 months, the private sector has added only 16k jobs despite the fact that bars and restaurants added 227k and private education and health services added another 577k jobs. That is, excluding bars, restaurants and private education and health care, the private sector in the US has lost roughly 800k jobs over the past year.

Confessions of a Trade Negotiator's Mind

Submitted by on

Robert Cassidy is a former Clinton administration assistant trade representative responsible for the entry of China into the WTO and the China PNTR trade agreement.

Today he Confessed.

As the principal negotiator for the landmark market access agreement that led to China’s accession to the World Trade Organization (WTO), I have reflected on whether the agreements we negotiated really lived up to our expectations. A sober reflection has led me to conclude that those trade agreements did not

And of a Dangerous Mind?

Pages