Twas the week before Christmas and the news was all barren. Out came Joseph Stiglitz with some views he was wearing. Oh hark oh Angel, may we contract? Does this mean I should take all of my presents back? Oh food stamps, oh foreclosure, how long must ye be bearing? On Geithner, on Summers, BLS, spin some stats! This ain't good news, can I have my taxes back?
The world’s largest economy isn’t likely to expand fast enough to create jobs for new entrants into the labor force or compensate for increases in productivity that will reduce demand for workers, Stiglitz told reporters in Singapore today.
In case anyone assumes home prices have bottomed, this Business Week article overviews a lot of good reasons why that probably isn't true.
One of which is Moody's estimation that residential home prices will drop 7.8%.
What they are calculating is the foreclosure rate, the high unemployment rate and the withdrawal of the Federal Reserve buying mortgage backed securities, in addition to a first time home buy tax credit being modified and expiring.
Thanks to the feds' bounty of tax credits, purchases of mortgage securities, interest-rate cuts, and home loan programs, new and existing home sales are up. The median home price rose, to $177,900. What happens in 2010 depends on whether the market can stand on its own.
It helps to read global newspapers because according to Shanghai Daily:
It is getting harder for governments to buy United States Treasuries because the US's shrinking current-account gap is reducing supply of dollars overseas, a Chinese central bank official said yesterday.
We on the Economic Populist haven't talked much lately on those U.S. taxpayer funded money pits, Fannie Mae and Freddie Mac.
The government took Fannie and Freddie into conservatorship in September 2008.
At that time, each institution was pumped with $100 billion to $200 billion total. Then in February 2009, each received another $200 billion each to bring the bail out tally to $400 billion total.
Realize Freddie and Fannie are not part of TARP, this is a separate bail out.
The MBS (mortgage backed securities) between the two of them is estimated at $5 trillion dollars.
People that bought long-dated treasuries, those betting on deflation, in the first quarter of 2009, lost BIG this year.
Long-term Treasury bonds are on track for their worst year in at least three decades. The Barclays 20-plus-year Treasury index has posted a total return of -20% in 2009.
...
The U.S. household sector bought a net $178 billion of Treasury securities other than savings bonds during the acute phase of the crisis, between last October and this past March, according to Federal Reserve data.
Households and nonprofit organizations were actually net sellers during the fourth quarter of 2008, when Treasury prices were soaring as financial institutions around the globe scooped up safe U.S. government obligations.
Yippie! Horray! Unemployment decreased in 36 States! Oops, but wait! Guess what. That isn't because we had an increase in jobs.....it's looking like we have people being dumped off the rolls and no longer counted. Isn't is so lovely how our government reports unemployment? You're broke, desperate, now living in a box and you're no longer even counted in the tally.
Thirty-six states and the District of Columbia recorded over-the-month unemployment rate decreases, 8 states registered rate increases, and 6 states had no rate change.
Onto actual job creation:
Nonfarm payroll employment increased in 19 states and decreased in 31 states and the District of Columbia.
"With this bill we are putting in place some common sense reforms designed to protect consumers," Obama said at a signing ceremony at the White House.
It was a proud day to be an American. Finally the government was standing up for the little guy.
For example, look at First Premier Bank Credit Cards. They were offering a $250 line of credit with a minimum of $256 in fees per year. But with the new law, fees were capped at 25% of the credit line.
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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