On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.
Sometimes though, one cannot say it better but miss those who did.
Must Read Post #1
Matt Taibbi has written another piece, Wall Street's Bail Out Hustle. It contains strong Populist language, has some errors additionally, but the main message, nothing has changed as well as risk is subsidized, profits are privatized is lovely. You'll like it.
Bank Failure Friday is a little late but like clockwork, the latest announcements are not, although last week, we got a reprieve. I guess even the FDIC needs a vacation.
With further ado, this week's failures, with their FDIC estimated costs are:
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!
First up is a very good interview of Stiglitz by trade expert Lori Wallach on the Financial Crisis. Book TV doesn't believe in embedding so just click on the image or click here to watch the interview.
Double, double toil and trouble; Fire burn, and cauldron bubble. – Macbeth, by William Shakespeare
The financialization of the American economy certainly represents a bubbling cauldron, and the cauldron has bubbled over quite recently, and we sadly can look forward to further overflows.
Previously, I had stated the premise of the rise in healthcare costs due to private equity firms' leveraged buyouts of health sector companies together with any and all speculation by healthcare hedge funds.
Here comes even more lovely news. HHS is warning, nationwide individuals trying to keep health insurance are going to be hit with double digit premium increases.
People buying their own insurance in at least six states have been facing pressure from insurers to raise rates by as much 56 percent, the report said. Officials said the problem is likely to be more widespread, but data from individual insurers in different states is difficult to obtain.
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.[Corporate written Health care bill promo propaganda snipped out from the article]
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The delinquency rate for mortgage loans on one-to-four unit residential properties fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter of 2009, down 17 basis points from the third quarter, and up 159 basis points from one year ago.
Don't you believe it. Firstly, 14.05% of all mortgages are delinquent or in foreclosure, not seasonally adjusted, 15%. Then, this from Calculated Risk:
The CPI-U increased 0.2 percent in January, the same increase as in December. The index for all items less food and energy fell 0.1 percent in January after rising 0.1 percent in December.
The increase was due to gas, but see the PPI report for a dramatic increase in gas, coming to a station near you soon!
Today the Federal Reserve made a surprising move to increase the discount window rate by 0.25%. The move is already covered in all respectable financial blogs so I feel necessary to add my 2 cents.
The first thing to keep in mind is that this move is truly symbolic. The outstanding discount window credit is something like $14 bln, virtually nothing. This rate doesn't mean anything really.
So what it is? It's a message, which I want to discuss.
The typical reaction of the average blogger is that Bernanke is crazy anyway and is not aware that the economy is struggling, is living in his dream of 5% GDP growth and is already discussing the exit strategy. Well, if that's true there is not much to discuss, crazy is crazy.
The whole idea of bailing out Wall Street was to get the credit markets working again. For that to happen, banks would have to lend.
This strategy has failed.
David Rosenberg from Gluskin Sheff said lending has fallen by over $100bn (£63.8bn) since January, plummeting at an annual rate of 16pc. "Since the credit crisis began, $740bn of bank credit has evaporated. This is a record 10pc decline," he said.
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The M3 broad money supply – watched by monetarists as a leading indicator of trouble a year ahead – has been contracting at a rate of 5.6pc over the last three months. This signals future deflation. The Fed's "Monetary Multplier" has dropped to a record low of 0.81, evidence that the banking system is still broken.
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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