This is what happens when regulatory reform on credit ratings, collateralized debt obligations, derivatives and innovative financial products is put on hold.
Wall Street thinks it's all fine and dandy to do the same damn thing all over again.
In recent months investment banks have been repackaging old mortgage securities and offering to sell them as new products, a plan that's nearly identical to the complicated investment packages at the heart of the market's collapse.
Income Inequality + Financialization + Globalization = Destruction of the Middle Class
This equation is a work in progress for me. I have tried an econometric model but it crashed my computer. Seriously, we are losing sight of the much bigger picture that is playing out across the country. Our policy makers are distracted by this financial crisis or intentionally ignore the plight of the Middle Class in the U.S.
In past global slowdowns, the United States invariably led the way out, followed by Europe and the rest of the world. But for the first time, the catalyst is coming from China and the rest of Asia, where resurgent economies are helping the still-shaky West recover from the deepest recession since World War II.
While Roubini warns on oil price increases breaking any potential recovery, we note China's robust growth is causing oil prices to rise.
Good job Krugman. On George Stephanopoulos' show, Krugman amplified a much needed new term for the state of the economy, purgatory!
We've got a problem with terminology because we usually say either the economy is in recession or the economy is recovering. Either you're in hell or you're in heaven. And the trouble is we're actually in purgatory. We're actually in a situation almost for sure GDP is growing; almost for sure the business cycle leading committee will eventually decide the recession ended this summer. But almost surely also we're still losing jobs. The unemployment rate is going to continue to rise. So we're in that infamous jobless recovery state.
Surfing the Internets I found a most interesting post by Chris Gunn, SBA continues to fabricate contracting data. Oh really? It seems the Small Business administration likes to re-categorize large multinational corporations as Mom & Pop operations in order to award them large amounts of government dough!
This year the SBA awarded $93.3 billion to Small Business in 2008. It appears the SBA also missed it's target in small business contract awards by a good 1.5% (ignoring the awarding of contracts to those not qualified).
The numbers are significantly inflated with some of the largest corporations in the world. In some cases the numbers even appear to be the result of fabrication by high-level government officials at the SBA and other government agencies.
Despite public cynicism, it's pretty clear now that the American Recovery and Reconstruction Act (aka the stimulus bill) is working to boost economic growth and save and/or create jobs. However, it could have been much, much better - even aside from the effect that professional "moderates" had by stripping money for aid to states (to keep teachers employed, for example) from the bill. I think the limitations of the ARRA came from the decision to divide the bill into roughly one-third tax cuts, one-third aid to states, and one third public investments.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Tonight's video is a lecture by Economist and Law Professor William K. Black, an expert on the 1980's S&L crisis. He minces no words, as one can see by the lecture title, on the current financial crisis.
And the grandaddy of the week, Guaranty Bank of Austin, Texas
As of June 30, 2009, Guaranty Bank had total assets of approximately $13 billion and total deposits of approximately $12 billion. ...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3 billion. ... Guaranty Bank is the 81st FDIC-insured institution to fail in the nation this year, and the second in Texas.
Guaranty Bank will cost the FDIC nearly as much as Colonial did last week.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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