Are financial conglomerates in a position to increase lending? Do they still have too many "toxic assets" on the books plus a lot of their own debt on the books which in turn is causing them to not be able to provide any no loans? Are we (households) in a position to incur more debt? If the trillions of dollars that Federal Reserve and Treasury pumped into the financial system to keep interest rates low is not jump starting new lending, did we just waste trillions of dollars? These are the questions that came to mind after reading this Bloomberg article and the Federal Reserve Bank's April 2009 Senior Loan Officer Opinion Survey.
I’m a sucker for barbeques, especially good ones. Normally I’m not a “family” person, but I am a people person. When it comes to barbeques, though I tend to even go to the ones my family puts out. This year I hosted, unfortunately the weather was not on my side and being someone into risk management I decided to hold an “indoor bbq.” The food, as always, was good, but my other type of appetite was also satisfied, my hunger for news and tid bits.
Dead–cat bounce (n): a brief and insignificant recovery (as of stock prices) after a steep decline, etymology, from the facetious notion that even a dead cat would bounce slightly if dropped from a sufficient height. First used 1985.
Since Chrysler put those chopped dealerships between a rock and a hard place by refusing to buy back their inventory, we now have firesales of autos trying to get some of their money back.
At Engel's dealership, a 2009 Dodge Ram Truck with a retail price of $45,428 is selling for $28,392 -- after rebates, incentives and cash back from the dealer.
Emily and Josh Patterson left a dealership outside Chicago with a new Dodge Caravan they got for nearly $13,000 off the $40,000 sticker price.
"We came in just to look but when we found the deal we really went from there," Emily Patterson said.
I am not sure where I came across this article. If it was on EP, I apologize for not giving credit but it may have been Calculated Risk. This article has some sombering graphs.
The article titled "US Household Deleveraging and Future Consumption Growth", by Reuven Glick and Kevin Lansing, articulates (much better than I can) why future economic growth may be relatively weak or anemic. The article suggests that U.S. households may continue to "deleverage" which may result in less consumption. It concludes that this "deleveraging" will not be painless.
U.S. household leverage, as measured by the ratio
of debt to personal disposable income, increased modestly from 55% in 1960 to 65% by the mid-1980s. Then, over the next two decades, leverage proceeded to more than double, reaching an all-time high of 133% in 2007. That dramatic rise in
In Help Us! Our kids need jobs outlines the story of more and more adult kids, with degrees in many cases, living at home with their parents, unable to find a job. Parents are asking employers to help their kids.
So, do these employers help their kids? Hell no. They give them outplacement services, which is a bunch of advice, but no job!
Other parents are asking their companies’ employee-assistance providers for job-finding help for their kids. ComPsych, Chicago, is fielding a growing number of requests from parents seeking outplacement services for young adult children, a spokeswoman says. While ComPsych doesn’t offer those services in such cases, it does provide financial planning and counseling help.
But what is interesting is the age group 18-34, 34% of all children are living with their parents.
Suggestions to solve the financial crises by basically shutting down most of Wall Street are always shouted down by howls of “How are companies going to raise money?” or “How are people going to invest in companies?”
Well, take a good, long look at this graph, which shows the percentage of capital expenditures by U.S. non-financial companies that was raised in U.S. financial markets from 1952 to 2006.
Having been in the Retail sector for my entire professional career, I am on the front line of the driving force of our (until now) consumer driven economy. This story from the WSJ hit close to home: Recession Turns Malls Into Ghost Towns
If retail sales continue to decline at current rates, the dead-mall roster could exceed 100 properties by the end of this year, according to Green Street. That's up from an estimated 40 failing malls in 2006, before the recession began.
Brought to you by the United States Government - Enabling offshore outsourcing of your job all the while convincing you it's a great idea you pay for it.
Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!
On May 20th, U.S. Treasury Secretary Geithner testified before the Senate Banking Committee on TARP Oversight.
Our Senators, bi-partisan, asked some very good common sense questions.
This hearing was right before Geithner announced they will be using the
Wall Street Plan (read Goldman Sachs, JP Morgan Chase) for OTC derivatives trading, a seemingly contradiction of his earlier May 13th proposal.
Below are excerpts from the committee questioning.
Senator Mark Warner asks why AIG paid out on credit default swaps at 100%, in particular to Goldman Sachs:
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