Let me introduce myself. I am not an economist; I am a retired physics professor learning economics on my own. My notes, in the form of a tutorial, exist as a webpage.
I am not sure who first coined the phrase "House of Cards" to describe the financial crisis that we are facing today. There was a brief piece on "60 Minutes" called House of Cards: The Mortgage Mess and a really good book by William Cohan titled "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street". We are left to deal with this ponzi scheme created by financial conglomerates, mortgage industry and to a lesser extent borrowers who lied about their incomes. But the ways we are dealing with this crisis, particularly Treasury Secretary Geithner's Private-Public Investment Program (PPIP), we are just reshuffling the "House of Cards". We are just re-spreading the risk of the "toxic assets" created by the financial conglomerates to different players including us (again).
Shoppertrak reports that YoY retail sales increased 0.2% last week. Although they failed to publish the statistic for the week previous, in this week's press release they note that this is the second week in a row for positive YoY retail sales.
Please note these figures do not adjust for Easter being one week later this year vs. last year, so the comparisons are probably even better.
The New York Fed has just published a study on the predictive power of the yield curve in 3 months vs. 10 year Treasury bonds. (warning: pdf. For an html friendly summary with graphs, see Prof. Mark J. Perrys' claims that the NY Fed research means the recovery has already begun!).
The study updates previous research dating from the 1980's onward to the effect that a negative spread between the 3 month and 10 year Treasury yields (negative means 3 month Treasuries pay more interest than 10 year Treasuries) is means economic contraction - a recession - 1 year later. Conversely, a positive spread means economic expansion 1 year later.
Based on that, the New York Fed says that the recession is over! I disagree.
Forget massive job losses, people losing their homes, homelessness, nope, Obama wants to pass that ultimate cheap labor and very expensive agenda, comprehensive immigration reform.
While acknowledging that the recession makes the political battle more difficult, President Obama plans to begin addressing the country’s immigration system this year, including looking for a path for illegal immigrants to become legal, a senior administration official said on Wednesday.
Bear in mind this means massive guest worker Visa increases, billions in additional costs and the fact that U.S. citizens cannot get a job...well, anyone who points out these realities is simply a racist.
It also means massive increases in immigration levels...again when Americans cannot find a job.
Well, at least that's the plan. I have no idea where that amount of cash might be lying around. More likely we'll be borrowing some and printing the rest.
On March 20, 2009, the bipartisan Congressional Budget Office (CBO) released its latest forecast in an effort to take into account the impact of the recently released Obama budget. The verdict? A whopping $1.8 trillion deficit for 2009, approximately four times larger than the all-time record established in 2008 ($455 billion).
The concerns raised by this latest forecast are many:
1) A mere two months ago, the CBO’s estimate for 2009 was “only” $1.2 trillion. They have already grossly underestimated a deficit that will most likely continue to balloon in the coming months.
The U.S. Treasury said on Wednesday some life insurers have met requirements for government capital investments under an existing rescue plan, clarifying that it is not launching a new bailout for the sector.
"There are a number of life insurers that have met requirements for the Capital Purchase Program because of their bank holding company status," said Treasury spokesman Andrew Williams. "These are among the hundreds of financial institutions in the CPP pipeline that will be reviewed and funded as appropriate on a rolling basis."
The statement was made in response to a Wall Street Journal story published late on Tuesday saying the Treasury would extend its $700 billion financial bailout program to certain life insurers and would make an announcement in coming days.
The Fox network is making a reality show out of the troubled economy. An upcoming series titled, "Someone's Gotta Go," lets employees of a small business decide which one of their colleagues will be laid off.
Fox says it has no air date yet for the series, which is being developed by the company behind "Big Brother" and "Deal or No Deal." Each week, a different company lays off an employee.
Now imagine yourself, on national television, at your job and all of the reasons, petty office politics, bad mouthing, discussing your personal flaws for at least 20 minutes and then deciding of all of the people in the company, you are the worse and need to be fired. Remember this is broadcast to the entire country on why you, personally, are to be rejected at your place of employment and you lose your real job, real income as a result.
Over the last six months, Treasury has spent or committed $590.4 billion of the TARP funds. Treasury has also relied heavily on the use of the Federal Reserve’s balance sheet which has expanded by more than $1.5 trillion (not including expected TALF loans) in conjunction with the financial stabilization activities it has undertaken beyond its monetary policy operations. This has allowed Treasury to leverage TARP funds well beyond the funds appropriated by Congress.
Couldn't sleep, been watching the over night markets. Saw an interesting piece on Reuters about everyone's favorite car company. Bankruptcy is looking more and more likely. According to the news report, it appears that that one possibility being talked about is breaking up the company into two parts. One "good" GM consisting of brands that still sell, and one made up of the Bad News Bears brands that the company is having a hard time unloading.
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