The U.S. economy [Archive] - Page 2

geerussell

10-25-2008, 02:22 PM

Consolidation isn't always a product of "hard times". No one was really losing money in the wake of the AT&T breakup, yet they ended up consolidating back to the evil empire (with a few tweaks). Sometimes, consolidation is just a part of complementary business goals, eventually leading down a path to a very few firms comprising "THE business" for awhile.

I agree. I didn't mean to suggest that consolidation was exclusively a product of hard times. In particular, local/regional banks had been getting swallowed up at a good clip for some years now.

The current crisis has really accelerated the trend though as everyone's scrambling to de-lever and acquiring capital in the form of deposit institutions is much more attractive than selling assets.

I wonder what the effect on the economy would have been if we had taken that $700 billion and hired a bunch of out of work people to build bridges, roads and other infrastructure?

In addition to unemployment, you'd have to think that the number of foreclosures would go down, and consumer confidence and spending would increase, right?

Plus we'd get the added benefit of the tangible good being done.

There are a lot of economists and pundits out there endorsing that idea. It still has a good chance of happening as the notion of some kind of further stimulus package has a lot of political traction right now.

Glenn

10-25-2008, 03:02 PM

We could be putting people to work building mass transit systems (light rail, streetcars, etc), too, where feasible, with the side benefit of reducing our oil dependency.

Tahoe

10-25-2008, 03:19 PM

And does the Gov't run all of this? I'm not trying to be a dick on that question but please understand I hate Gov't run programs.

Glenn

10-25-2008, 04:14 PM

Do you hate Medicare?

Social Security?

Tahoe

10-25-2008, 04:20 PM

Social Security? yea, kind of. Great idea but don't like the Gov't being in charge of it. I don't know enough about medicare to make an informed comment.

Let me clarify, I dislike the gov't running most programs.

DrRay11

10-25-2008, 04:55 PM

So do I. But a well-run government can lead to well-run government programs.

Fool

10-25-2008, 04:59 PM

The government farming it out isn't the best option either.

Tahoe

10-25-2008, 07:17 PM

So do I. But a well-run government can lead to well-run government programs.

But imo, there is soooooo much Gov't waste no matter who is in office and how well things are going. A prez doesn't come in and make cuts that make the Gov't lean. Waste has been going on for decades and it will never stop, but I still hope someone will come in and do something about it.

DrRay11

10-25-2008, 07:35 PM

But imo, there is soooooo much Gov't waste no matter who is in office and how well things are going. A prez doesn't come in and make cuts that make the Gov't lean. Waste has been going on for decades and it will never stop, but I still hope someone will come in and do something about it.
I agree with that. It is likely that government programs will always be less efficient than their private counterparts; however, there is a massive amount of room for improvement.

Tahoe

10-25-2008, 07:39 PM

I agree with that. It is likely that government programs will always be less efficient than their private counterparts; however, there is a massive amount of room for improvement.

And then theres the possibility that the CEO's of these private counterparts will be carted away in cuffs too. But I'd still give the nod to someone in the private sector vs the Gov't who has unlimited resources....taxes.

Glenn

10-25-2008, 09:12 PM

One option would be letting the Gov't issue some low interest loans to alternative energy and mass transit firms.

Uncle Mxy

10-25-2008, 10:41 PM

Smart public government can be very efficient. I'll take the government over the private sector for "accounts receivable". How many businesses can have the IRS, NSA, DEA, Congress, and the military crawl up your ass with a phone call? A lot depends on how you define efficient, which has a lot to do with what the objectives and constraints are.

Often, government-tied projects have constraints that are exceedingly odd from a business-as-usual perspective. Some constraints are a function of government-as-usual. IMO, the biggie is continuity. Government is expected to last forever, never engage in strategic mergers and divestitures, and plan year-to-year with short-term easily-bought leadership at the top and a very molestable income stream (barring constitutional amendments, like many of the proposals on the 2006 ballot in Michigan). Few business sorts would run a company that insanely. Other constraints are a function of the missions that governments have. Fairness and equal access aren't words you generally hear or see practiced in "regular" business. You'd rarely expect business to be compelled to do something unprofitable for some perceived public good. Add this all up and you get great potential for stupidity.

Of course, given that Greenspan just discovered that the people who run a business are in it for their perceived interests first and the perpetuation of the business second, now is a bad time to argue business being efficient at much of anything. :)

geerussell

10-26-2008, 01:12 AM

Mass Transit vs Banks (http://www.nytimes.com/2008/10/25/business/25mortgage.html?ref=business): Collateral damage from the AIG bailout

The battle between banks and 31 of the nation's largest transit agencies, including systems in Chicago, Los Angeles, New York and Washington, is an unusual byproduct of the federal government's rescue of insurer American International Group Inc. The Federal Reserve has provided lines of credit topping $122 billion to AIG and has taken control of the giant insurer in an effort to prevent its collapse.

The financial battle stems from leasing agreements that transit agencies have struck with banks. The arrangements, which produced up-front cash for transit operators and tax benefits for financial institutions, were insured by AIG. But once AIG's credit rating fell, provisions in the agreements allowed banks to demand more collateral from transit agencies, or require a new insurer to replace AIG. Banks have been seeking to unwind the agreements since the Internal Revenue Service in 2003 moved to eliminate much of the tax breaks banks can claim.

If the transit agencies can't come up with more cash, or find another guarantor to step in, they face the prospect of losing assets such as rail cars and buses. The financial hit, in turn, could lead transit systems to curtail service, even as more riders have started using public transit to save money on gas. Transit agencies say they have met with the Treasury Department, Federal Reserve and members of Congress in an effort to find a solution, but none has been forthcoming.

xanadu

10-26-2008, 12:18 PM

Government ineffciency tends to be somewhat exaggerated on the one hand and a self-fulfilling prophecy on the other. For example, I don't think anyone believes that the private contractors serving in Iraq are more efficient than the military people that they support. Nonetheless, the contractors are paid much higher salaries, making the entire ordeal extremely inefficient from the taxpayer perspective, but extremely profitable from the private company's perspective.

In addition, W has undermined a lot of govt. agencies via his dingbat appointments. People left the FDA, EPA, FEMA, DOJ and others because bushco is turning those into political propaganda tools. It may take years to regain competence in the federal sector. This philosophy started with Nixon, who appointed people (that he knew would suck) to particular agencies so that those agencies would rot from within and so that future repubs could run against big govt. If you want govt. agencies to fail, it is very easy to ensure that happens.

About 10 years ago, people were talking about privatizing water infrastructure and all the money that could be saved. Well, a few companies gave it a shot and realized that the public sector was already fairly efficient and little to no profit could be made.

Obviously, some government initiatives are inefficient, but I think the key to those fixes tend to be transparency and the availability of private sector consultants to examine the efficiency of government. Corruption in govt. privatization contracts seems to cause much more inefficiency than public sector operation in the first place. Look at the private contracts handed out by FEMA after Katrina.

As far as health care, we have a much less efficient (mostly private) system than any other developed country (with much more publicly-operated systems). For example, the bush medicare prescription drug bill explicitly prevents negotiation with drug companies for drug costs. No country with a public-based system would make such a law. This pseudo-public system leads to incredible inefficiency and we spend the most per capita on health care, but still have mediocre mortality/morbidity rates. Another example of private inefficiency: we would be much better off if medical records were available from central databases to reduce the probability of physician errors. This would save money, but it is not really in the interest of any single insurer.

Essentially, the last 28 years of repub economic policy have led us to strikingly similar macroeconomic indicator data to what we experienced prior to the Depression: huge govt. and consumer debt, huge income disparity between rich and poor, and rapid consolidation of industry. This has been a real triumph of supply side economics.

Uncle Mxy

10-27-2008, 12:07 PM

http://www.lcurve.org

Glenn

10-28-2008, 04:29 PM

-- Dow Jones closes up nearly 900 points, gaining more than 10 percent.

Hells yeah.

Might be a steak/bj night tonight.

Uncle Mxy

10-28-2008, 09:53 PM

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/25/BUJI13NAC9.DTL

geerussell

10-29-2008, 07:07 AM

More on bank consolidation: (http://www.bloomberg.com/apps/news?pid=20601087&sid=amABF5wPNrf0&refer=home)

Oct. 29 (Bloomberg) -- The U.S. government's $160 billion handout to banks from Niagara Falls to Beverly Hills is going mostly to lenders that need it least, putting weaker rivals at risk of being shut down or taken over, analysts say.

"This has the unintended effect of making the strong stronger and the weak weaker,'' said Gray Medlin (http://search.bloomberg.com/search?q=Gray+Medlin&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), founder of Carson Medlin Co., a Raleigh, North Carolina, investment bank focused on banking deals. "Banks that are getting bad exams and are under intense pressure from regulators won't be successful in applying.''

The government buying spree has so far targeted two dozen regional lenders. One, PNC Financial Services Group Inc. (http://www.bloomberg.com/apps/quote?ticker=PNC%3AUS), immediately bought a competitor, National City Corp. (http://www.bloomberg.com/apps/quote?ticker=NCC%3AUS) Another, Saigon National Bank (http://www.bloomberg.com/apps/quote?ticker=SAGN%3AUS), had almost four times the minimum level of capital before selling a $1.2 million stake.

Treasury Secretary Henry Paulson (http://search.bloomberg.com/search?q=Henry+Paulson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) is doling out cash to recapitalize lenders and jump-start takeovers. Besides PNC and Saigon National, regional lenders that have accepted government stakes in exchange for cash include SunTrust Banks Inc. (http://www.bloomberg.com/apps/quote?ticker=STI%3AUS), Capital One Financial Corp. (http://www.bloomberg.com/apps/quote?ticker=COF%3AUS) and KeyCorp. They also include City National Corp., in Beverly Hills, and First Niagara Financial Group Inc., in upstate New York.

geerussell

10-29-2008, 07:30 AM

Oklahoma State University trampled and killed by gift horse. (http://www.faniq.com/blog/T-Boone-Pickens-165-Million-Donation-To-Oklahoma-State-Football-Is-Completely-Gone-School-In-Massive-Debt-Blog-12968) No word as to whether they looked it in the mouth.

a few years ago that T. Boone Pickens, who chairs the hedge fund BP Capital Management, gave Oklahoma State a $165 million donation to be used all for helping the school's athletic program. And the largest portion of it was going to be used to beef up the school's football stadium and football facilities.

Well, there was one problem with Boone's donation. He left the donation in the hedge fund, which initially seemed to be a good idea as oil prices soared in a post Katrina economic climate, swelling the initial gift to over $300 million.

Officials were told that actually, the entire $ 165 million donation, and the earnings, which once inflated the gift to over $300 million, had recently been eliminated by margin calls due to drastically falling oil prices.

As of Monday OSU's gift had flat-lined completely and was declared 'gone.'

the school borrowed almost all funds used in the stadium expansion plans using the $300 million balance in BP Capital as collateral.

... Oklahoma State is now in debt of close to $300 million dollars.
Insert pithy fail picture here.

geerussell

11-01-2008, 04:23 PM

Continuing with the [rul=http://online.wsj.com/article/SB122420679058043423.html]edupocalypse[/url] theme...

All of these wealth generators for the Ivory Tower are facing threats in the current economic turmoil. The cratering stock market has already hit endowments. Falling markets typically take a toll on gifts, many of which are made, for tax reasons, in the form of appreciated stocks and bonds. Analysts and schools are predicting even bigger tuition increases than those seen so far. But this time, families may be in no position to meet the higher bills. Falling house prices have sapped their ability to use home-equity loans for tuition payments, and the credit crunch has forced many lenders to stop making student loans.
Public schools without big endowments that rely on state budgets are screwed...

Molly Corbett Broad, president of the American Council on Education, which represents 1,600 colleges and universities, says public schools face the greatest challenge in a slumping economy because they get as much as three-quarters of their revenue from state taxpayers.

She says students could face double-digit tuition increases next year, up from the typical 4% to 6% level in recent years. Some university presidents privately confided to her that their institutions, which she declined to name, are even considering midyear tuition hikes. Ms. Broad adds that small private colleges without hefty endowments may have to consider merging with bigger rivals.
Private schools that have big endowments are also screwed...

Before the meltdown, richer colleges such as Harvard and Yale had responded to pressure from Washington and started to spend more of their endowments to lessen the tuition burden. Endowments have swelled in recent years, with 785 of the wealthiest holding more than $400 billion in assets as of 2007.

Now, Moody's Investors Service, the bond rater, is projecting endowment returns to be negative for the first time since 2002. In a report Thursday, the ratings agency estimates that college endowment losses averaged 5% to 7% in the year ended June 30. Since then, including spending and stock market losses, Moody's figures colleges experienced another 30% decline in cash and investments.

The crisis has even made colleges wary about where they keep their ready cash. Earlier this month, a fund that invests cash for about 900 colleges suddenly froze withdrawals. Schools, which can now withdraw about 40% of their money, may not be able to get all of it back until 2011.

tl;dr: Wil may have to start doing his own term papers.

geerussell

11-13-2008, 06:13 PM

tl;dr version: The secretary of treasury single-handedly (and probably illegally) re-wrote a section of tax code to give away $140 billion. It's good to be the king.

If/when the public finally notices the barn door was open, the horse, the barn, the farm and the tractor will all be in hock.

A Quiet Windfall For U.S. Banks (http://www.washingtonpost.com/wp-dyn/content/article/2008/11/09/AR2008110902155_pf.html)

The financial world was fixated on Capitol Hill (http://www.washingtonpost.com/ac2/related/topic/Capitol+Hill?tid=informline) as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department (http://www.washingtonpost.com/ac2/related/topic/U.S.+Department+of+the+Treasury?tid=informline) issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill.

When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

The story of the obscure provision underscores what critics in Congress, academia and the legal profession warn are the dangers of the broad authority being exercised by Treasury Secretary Henry M. Paulson (http://www.washingtonpost.com/ac2/related/topic/Henry+M.+Paulson?tid=informline) Jr. in addressing the financial crisis. Lawmakers are now looking at whether the new notice was introduced to benefit specific banks, as well as whether it inappropriately accelerated bank takeovers.

The change to Section 382 of the tax code -- a provision that limited a kind of tax shelter arising in corporate mergers -- came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

Andrew C. DeSouza, a Treasury spokesman, said the administration had the legal authority to issue the notice as part of its power to interpret the tax code and provide legal guidance to companies. He described the Sept. 30 notice, which allows some banks to keep more money by lowering their taxes, as a way to help financial institutions during a time of economic crisis. "This is part of our overall effort to provide relief," he said.
The Treasury itself did not estimate how much the tax change would cost, DeSouza said.

Glenn

11-17-2008, 10:06 AM

Obama Says He Will Do `Whatever It Takes' on Economy

Edwin Chen – 2 hrs 28 mins ago

(Bloomberg) -- President-elect Barack Obama said the U.S. government will do ``whatever it takes'' to revive the economy, and that means ``we shouldn't worry about the deficit next year or even the year after.''

In the short term, ``the most important thing is that we avoid a deepening recession,'' Obama said in an interview broadcast last evening on CBS News's ``60 Minutes.''

Obama, who yesterday resigned his Illinois Senate seat, effective today, said the government needs to provide assistance to the automobile industry. Such aid -- in the form of a ``bridge loan,'' he suggested -- must be provided on condition that management, labor, suppliers and lenders come up with a plan to make the industry ``sustainable,'' he said.

``For the auto industry to completely collapse would be a disaster in this kind of environment -- not just for individual families but the repercussions across the economy would be dire,'' Obama said. If that were to happen now, he said, ``you could see the spigot completely shut off so that it would not potentially permit GM to get back on its feet.''

The hour-long interview with Obama and his wife, Michelle, was taped on Nov. 14 in Chicago, where he is working to build his government team before his Jan. 20 inauguration. The president- elect discussed the economy, the wars in Iraq and Afghanistan, and energy. He and his wife also talked about the changes in their lives after he defeated Republican John McCain in the Nov. 4 presidential election.

National Security
Obama also said he's moving quickly to assemble his national security team. ``I think it's important to get a national security team in place because transition periods are potentially times of vulnerability to a terrorist attack,'' he said.

Obama reiterated his intention to close the U.S. detention center at Guantanamo Bay, Cuba, and ban torture during interrogation of suspected terrorists as part of ``an effort to regain America's moral stature in the world.''

He said that after he takes office, he will begin executing a plan to draw down U.S. troops in Iraq and send some to Afghanistan, ``which has continued to worsen.''

Obama said it is ``a top priority for us to stamp out al- Qaeda once and for all,'' and that a critical aspect will be capturing or killing Osama bin Laden. The terrorist group's leader is ``not just a symbol'' but remains ``the operational leader of an organization that is planning attacks against U.S. targets,'' the president-elect said.

Energy Plan
On energy, Obama said that, with oil prices dropping in recent weeks, ``it may be a little harder politically'' to enact measures to lessen U.S. dependence on foreign energy. ``But it's more important,'' he said, noting that the country has gone through earlier cycles of energy shocks only to return to its heavy reliance on foreign oil.

As a result of such behavior, he said, ``we never make any progress. It's part of the addiction, all right. That has to be broken. Now is the time to break it.''

Obama said his job as president will be to bolster confidence in the economy.

``Part of the way to think about it is things could be worse,'' he said. ``We could have seen a lot more bank failures over the last several months. We could have seen an even more rapid deterioration of the economy -- even a bigger drop in the stock market.''

Obama said he soon will begin to make Cabinet appointments. He already has named about a half-dozen top White House staff. Obama said there would be a Republican in the Cabinet.

`A Great Feeling'
On more personal matters, Obama, 47, said he was enjoying sleeping in his own bed in Chicago, and seeing his two daughters in the mornings, after almost two years of non-stop campaigning. ``It's a great feeling,'' he said.

One adjustment, he said, is the loss of privacy, such as not being able to take a walk in his Chicago neighborhood.

Michelle Obama said she hopes the White House ``will feel open and fun and full of life and energy'' when the family moves in. She said first lady Laura Bush was ``gracious'' and ``excited and enthusiastic'' when giving her a tour last week.

Obama said his family plans to get a dog after settling into the White House. ``I don't think it would be good to get a dog in the midst of transition,'' he said.

In excerpts of the interview released Nov. 15, Obama said Treasury Secretary Henry Paulson may be disappointed with some aspects of the federal government's $700 billion bailout of the banking industry.

``Hank Paulson has worked tirelessly under some very difficult circumstances,'' Obama said. ``I think Hank would be the first one to acknowledge that probably not everything that's been done has worked the way he had hoped it would work.''

Obama also said the government must do more to help distressed homeowners.

``We have not focused on foreclosures and what's happening to homeowners as much as I would like,'' Obama said. He called for setting up ``a negotiation between banks and borrowers so that people can stay in their homes.''

Glenn

11-21-2008, 01:04 PM

Steve & Barry's is going under.

I think Jethro used to work there, IIRC.

Uncle Mxy

11-21-2008, 02:14 PM

Steve & Barry's is going under.

I think Jethro used to work there, IIRC.
I heard a statistic that 25% of retail jobs have gone away in the past year.

Fucking spooky.

Glenn

11-21-2008, 06:09 PM

I'm guessing that after Christmas there is going to be a historical retail bloodletting.

geerussell

11-21-2008, 07:25 PM

The only thing left will be at the extremes. If you're selling yachts or happy meals you'll survive, everything else is getting gutted.

UxKa

11-21-2008, 07:32 PM

The internet isn't helping either (and I'm fine with that). Even 5 years ago, if you were getting a camcorder or something you automatically went to the mall or Best Buy, now I go to Newegg and don't even bother looking around town unless I want to hold it in person before buying online.

Being in the HVAC industry is nice for job security. People will always need their furnaces, and always really really want their AC. If you live far enough South I suppose you can flip that.

DennyMcLain

11-21-2008, 08:26 PM

UxKa

11-21-2008, 08:30 PM

Hence the AC comments...

geerussell

12-01-2008, 05:15 PM

This site is kind of nice if you're into long explanations of arcane financial terms. With more and more such terminology being casually sprinkled into everyday news coverage of the economy, I've found it useful.

http://derivativedribble.wordpress.com/

geerussell

12-07-2008, 03:59 AM

Look for this story (http://www.startribune.com/politics/state/35515404.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD 3aPc:_Yyc:aUnciaec8O7EyUsr) in the very near future with "Minnesota" scratched out and replaced by "Michigan." I hope Granholm is quietly angling to make sure we're near the front of the line when the 50-governor bailout march kicks off in 2009.

Minnesota is headed toward a historic budget deficit that could rock state government -- and the people who depend on it -- down to its core.

State budget officials will release a two-year economic projection today that is expected to show Minnesota facing a deficit of anywhere from $4.5 billion to as much as $6 billion. At the upper end, the red ink would equal nearly 17 percent of the state's total budget.

"This is without question going to be the worst deficit in modern history," said Senate Finance Committee Chairman Dick Cohen, DFL-St. Paul. "We're heading into a terrible storm, and we have nothing left to face it with."

Gov. Tim Pawlenty said that immediate shortfall will be "noteworthy" but will be dwarfed in size and scope by the two-year deficit projection. Budget officials have not publicly stated the amount, but Cohen and others say they are anticipating $5 billion. "I would not be shocked to see $6 billion," Cohen said.

Unlike the federal government, the state is constitutionally required to balance its budget, a constraint that will force elected officials to consider options they've never looked at before.

Minnesota has weathered mega-deficits before, most notably in 2003, when it stared down a $4.2 billion shortfall. The state's budget still bears the scars from that one -- year-to-year actual reductions in K-12 spending, cuts in health-care rolls, a thousand nicks from fee increases, higher property taxes.

The state avoided deeper pain by availing itself of several sizable pots of money, including about $1 billion in endowments from its 1998 settlement with tobacco companies.

This time, the cupboards are virtually bare and the downturn comes amid a national financial meltdown.

Glenn

12-08-2008, 10:59 AM

http://mtblog.vanityfair.com/online/politics/2008/12/01/federalbailout.html

geerussell

12-08-2008, 01:38 PM

http://mtblog.vanityfair.com/online/politics/2008/12/01/federalbailout.html

I'm so in there.

Uncle Mxy

12-10-2008, 12:15 PM

Glenn

12-11-2008, 01:42 PM

Yahoo! lays off 1,500
http://adage.com/talentworks/article?article_id=133167

DrRay11

12-11-2008, 05:55 PM

Yahoo!

WTFchris

12-11-2008, 06:06 PM

It's because you bitches don't pay attention in our fantasy leagues and they are missing out on page hits.

geerussell

12-12-2008, 05:10 PM

Note that in both the case of Michigan and Minnesota, a disproportionate hunk of revenue comes from the sales taxes rather than property and income taxes. Property and income taxes are deductable at a federal level, while sales taxes aren't, which is one reason we've both been big donor states historically.

I'm irritated at the states that bitch against bailouts who have been getting the moral equivalent of bailouts from federal government for generations.

Minnesota and Michigan are going to have to get in line while California feeds at the trough (http://www.reuters.com/article/businessNews/idUSTRE4B96RC20081210?feedType=RSS&feedName=businessNews&rpc=23&sp=true).

California's budget crisis is growing worse as its shortfall for its current fiscal year has increased to an estimated $14.8 billion from a previously estimated $11.2 billion, Gov. Arnold Schwarzenegger said on Wednesday.

During a press conference broadcast on his office's website, the Republican governor said he would call top lawmakers into a meeting to stress the need for fast action by the Democrat-led legislature on balancing the budget of the government of the most populous U.S. state because it may be out of cash by the end of February.

Glenn

12-12-2008, 05:48 PM

Caleyfornia.

Uncle Mxy

12-15-2008, 12:35 PM

The engine that keeps our big-time movers and shakers moving and shaking is hurting, can't you see?

http://www.lasvegassun.com/news/2008/dec/14/economy-affects-supply-demand-some-special-twists/

geerussell

12-18-2008, 01:30 PM

Although it's only a tangent to the overall economic situation, I'll take a nugget of good news wherever I can get it.

New Limits Imposed on Credit Card Companies (http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121703474.html?hpid=topnews)

The three agencies declined to release the final draft of the regulations. But the version made public in May would, among other things, prevent banks from raising interest rates on existing balances unless a payment was more than 30 days late, charging late fees without giving the borrower a reasonable amount of time to pay and applying payments so that debts with higher interest rates are repaid last. Sources said regulators would give card issuers until mid-2010 to comply with the rules.

Hard to call this anything but pure win for the little guy. The credit card companies are kicking and screaming because the extremely lucrative "screw the consumer with confusion and fees" business model will (until they figure a way around the new rules) have to give way to the less profitable "make money by extending credit to people who can reasonably repay the debt" business model.

Fool

12-18-2008, 02:38 PM

The only issue with it (it seems) is that there really is not reason it can't be applied right now.

Uncle Mxy

12-19-2008, 07:14 PM

Having had credit card companies take well over a week to cash a check, then say "oh, it was late, we gotta charge you...", this is a welcome move.

geerussell

12-23-2008, 12:14 PM

An outbreak of corporate sanity (http://www.guardian.co.uk/business/feedarticle/8164902) is so rare it deserves special attention.

LAS VEGAS, Dec 17 (Reuters) - Wynn Resorts Ltd, which next week is opening the Encore casino on the Las Vegas Strip, will sacrifice high room rates, and profit, in order to boost occupancy at its Vegas resorts, according to Chief Executive Steve Wynn.

"This is the first time I've said 'fill all 4,700 rooms'... I will trade profit on the hotel business for job protection."
Wynn repeated that he has never laid off employees and will do everything he can to make sure that guest satisfaction remains the company's No. 1 priority.
"We can overcome low room rates when the market goes up, but it can take years to rebuild employee morale," he said during the interview

He also bragged about the 3 percent interest rate on the project, which was secured before the current credit crisis dried up funding.
"Imagine that -- we raised the money before we started the project ... the alternative is ridiculous," he said.

The CEO also said that paying down debt "will be all I'll be doing for the next couple of years -- that's our corporate strategy."
Stock buybacks are not on the agenda.

Uncle Mxy

12-24-2008, 08:20 AM

Wynn's in a better financial position than his competitors because he started from a clean slate a few years back, and had been part of the establishment for long enough beforehand to build up relatively quickly. So, he's putting the squeeze on his competition, particularly Sheldon Adelson (traded Comdex for the Venetian, lost 95% of his net worth this year). The other big players in Vegas are really taking it in the ass, AFAICT.

Vinny

12-28-2008, 04:39 PM

I'm sure it doesn't hurt that high occupancy rates in the rooms also equals high occupancy rates at the tables and slots.

Uncle Mxy

12-28-2008, 09:52 PM

I'm sure it doesn't hurt that high occupancy rates in the rooms also equals high occupancy rates at the tables and slots.
It turns out that casino gambling is less susceptible to economic mood swings than conventions and theme parks.

Glenn

12-29-2008, 02:25 PM

73,000 stores to close in the first 6 months of 2009.

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=ajAqMbszJmNY

That's not good.

MikeMyers

01-07-2009, 07:42 PM

I don't think people realize how bad this is going to get by the summer.

DennyMcLain

01-07-2009, 09:42 PM

Tahoe

01-07-2009, 09:47 PM

DennyMcLain

01-07-2009, 10:08 PM

01-07-2009, 10:31 PM

Tahoe

01-07-2009, 10:34 PM

In the retail world, that January inventory report is just about the most important report of the year, in some ways more important than any sales report and by far the most important moment for the purchasing department. Missing out on sales far outweighs ordering any stock and having that show up on the report (even if that means they are completely out of a product for weeks).

I stopped after reading the first sentence. I'm only reading posts that agree with me tonight. But I'll read this tomorrow.

Back to my Cab or is it a merlot?

01-07-2009, 10:40 PM

I stopped after reading the first sentence. I'm only reading posts that agree with me tonight. But I'll read this tomorrow.

Back to my Cab or is it a merlot?

Actually I found a very cheap (but very good) Spanish wine. It isn't from an official region so I don't know the grapes or the type of wine. But with my limited knowledge of wine I've found that you can find some amazing Spanish wines that aren't expensive because they're not from an official region.

And I agree with you actually. It's just that retailers would rather have a shitty January if that means no stock on that report.

Tahoe

01-07-2009, 10:53 PM

DennyMcLain

01-08-2009, 01:52 AM

I used to get this Spanish Syrah that was awesome. I know it might be hard to believe but I actually would eat this cheese and bread with wine. I get into those fuck beer moods. Good shit.

edit...my point was I could buy a case for an excellent price and they said cuz it was from Spain. WHAT, Spain doesn't have sun, air and dirt?

Good form talkin' bout your Spanish Syrah and your cheese, while the Detroit dwelling posters are barely getting by on Natty Light and Velveta.

California>Michigan

Uncle Mxy

01-08-2009, 10:15 AM

I needed a pair of jeans. I went to Macy's. 99.9% of their inventory was 30-30 and 42-30.

I said...Pretty picked over from Christmas? She said...Yes. We decided not to buy anything till we do our inventory since our inventory is so low. I said When is that? She said in about 2 weeks.

So its not really surprising to me if some stores have shitty January's. Stupid fucks.
Inventory is often a liability. For every Tahoe who wants to purchase pants in January but can't, there's analysts who'll downgrade the business because it has last year's depreciating models and sordid dragging debt and so on. Add year end books juggling and the laughs are guaranteed.

That said, I'm surprised that some brick-and-mortar industry hasn't emerged solely for looking at and trying on shit, some sort of consortium of relatively obscure brands or whatever. I don't buy clothing online because I'm afraid it won't fit or look right "in person". I'd love to go to a store that just carries "one of everything". I take the inventory I want to some self-service kiosk, swipe my credit card and, and shit gets sent to my postal address. Nothing ever actually leaves the store so they can RFID the snot out of the thing and save on security. You have librarian sorts handle the merchandise, rather than rely on customers to put it back in the right place (or even to get the stuff from the right place in some cases). I want to take a look at every fucking shoe or t-shirt or jeans ever made in my size, ever, that's under a certain dollar value. I dunno... someone might say that's what malls are for, but I want it simpler than that, damnit.

On an unrelated note, the porn industry needs more blood flow:

http://www.cnbc.com/id/28542109

Fool

01-08-2009, 10:40 AM

Is there any way not to look creepy when you are a porn mogul?

Zip Goshboots

01-08-2009, 10:47 AM

This is an economic cleansing. A lot of retailers are going to shit due to internal mismanagement and poor decision-making, things a vibrant economy can mask and support (i.e., Circuit City, Starbucks). The bright side is, the economy is not going to be like this for long, as history shows.

What's truly unfortunate is that the economy hasn't a fighting chance with the doom-and-gloom media crowing about it's ultimate demise. I know quite a few people with some disposable cash who choose not to spend it, instead holding on to it as a "safeguard" for the coming financial apocalypse.

There is money out there, waiting to be used on this economy. And surely more often than not it's some trash economic story headlining the 6 o'clock news which thwarts the possible purchase. Like the story a couple of months ago about 500,000 lost jobs (or was it 300,000). True, jobs were lost, but what the media failed to note was the creation of nearly twice as many jobs over recent years due to the robust economy. Jobs were lost, but there was a net gain of several hundred thousand.

Wanna feel better about the economy? DON'T WATCH OR READ THE NEWS!!! I'm not joking, either. I'm serious.

McClain, this may be your best post ever (well, that is a bit skewed since it's the first post of your that I've ever read). I haven't watched the news since 1948, and don't get a newspaper unless I want to do the crossword (which, by the way, I do in INK. My record for completing the newspaper crossword is 9 minutes with NO errors).

Now, to your point about the economy: Couldn't agree more. Also, people ARE spending money. They always have and always will. We will always be a huge market for Chinese junk. I mean, relly, what American home is complete without some stupid four-foot vase filled with fake dried grass in the corner? And how about a bowl with a set of wicker-like balls in it?

But all that aside, our economy has gone this way: junk stores, information, service, and bankruptcy and divorce lawyering. In other words, we've found diversification, even in these troubled times. I like the thought that it's gonna get better, especially when you say that the economy has generated another several hundred thousand minimum-wage jobs that offer no benefits or no retirement plans. But seriously, I do agree that this is a sort of "cleansing".

The only problems I see are that we'll have more real-estate agents as many out of work people will now try that career, more ponzi scheme marketeers, more people trying to sell Wu-Yi tea and Juice Plus, and of course, a lot more convenience store robberies.

DennyMcLain

01-09-2009, 06:57 PM

I feel special now.

Uncle Mxy

01-09-2009, 11:24 PM

It pays to Discover.

http://www.lvrj.com/news/37325529.html

Fuel prices have come down but the economy still stinks. So what's a far-flung Nevada brothel to do?

At the Shady Lady Ranch, owner Bobbi Davis has swapped gas cards for credit cards.

Throughout the month of January, the Nye County bordello about 150 miles northwest of Las Vegas will hand out prepaid Discover gift cards worth $50 to anyone who purchases at least 300 bucks in services.

"Basically we're just trying to give a little something back," Davis said. "This is something they can spend on anything."

The Shady Lady made headlines in June when Davis announced plans to "stimulate the economy" by giving out $50 gasoline gift cards to paying customers.

The promotion worked like a charm. "We gave out over 2,000 (gas) cards in one month. It really helped us a lot," Davis said.

That's a handout worth more than $100,000. All told, Davis said, the gas cards attracted about 500 extra customers on top of the thousand or so the brothel normally services in July.

Those numbers, which translate to about six customers a day every day for each of the five women who work at the brothel when it is fully staffed, could not be verified.

At least one person familiar with Davis' operation dismissed the sales figures as bogus.

"That's a whole truckload of misinformation," said George Flint, who owns a Reno wedding chapel and lobbies on the behalf of the state's legal bordellos. "I know every brothel in the state intimately. If she sees even 100 tricks in a month, she's got to be jumping for joy."

Glenn

01-16-2009, 11:43 AM

Goodbye CC

Circuit City says it will liquidate assets (http://news.yahoo.com/s/nm/20090116/bs_nm/us_circuitcity;_ylt=Aunhlbqgrs3zEiP5rKusOkGx_KF4)

Glenn

01-16-2009, 03:33 PM

Circuit City, R.I.P.
Fri Jan 16, 2009 12:13PM EST

The troubled 60-year-old electronics chain tried its best to survive bankruptcy, but to no avail; now, it will liquidate its merchandise and close all 567 remaining stores.

Bloomberg reports that Circuit City Stores Inc. has hired a quartet of liquidators to sell off its existing merchandise, pending a green light from the courts. If everything goes according to plan, the fire sale will start Saturday and continue through the end of March, according to CNNMoney.com.

And unfortunately for Circuit City's 30,000+ employees, unemployment awaits.

The biggest consumer tech chain in the U.S. besides Best Buy, Circuit City filed for bankruptcy protection back in November. As Bloomberg notes, the struggling company had been looking for a buyer as late as Thursday, but failed to find any takers.

Of course, news of the Circuit City liquidation sale will draw plenty of bargain hunters, but (as I've blogged before), buyer beware.

Typically, closeout sales are final: no refunds or exchanges, so think twice before snapping up a big-ticket item like an HDTV. Also, keep in mind that closeout prices often aren't as rock-bottom low as you'd think; make sure to comparison shop online, and don't be fooled by big "75% OFF!" signs on items that have been marked up.

Finally ... a deep bow to Circuit City in general, where I've spent countless hours of browsing (and drooling)—and if nothing else, when it comes to tech retailers, less competition is never a good thing.

Fuck, 30K?

DennyMcLain

01-16-2009, 07:36 PM

Sucks ass, but they had it coming (Circuit City, not the 30k employees). Horrible management and poor direction. Best Buy simply owned them in store positioning, layout, advertising, and keeping up with the times.

Tahoe

01-16-2009, 07:45 PM

BB always had some cool something-or-other to buy. CC not so. Also, it seemed CC had commissioned salespeeps. Not sure about that though. Pressurin MFers.

Not sure if GGs is still around or not.

MikeMyers

01-16-2009, 09:05 PM

They used to but they switched to hourly in like 2001.

Glenn

01-29-2009, 08:55 AM

2009 Retail Industry Stores Closing, Including Chains Going Out of Business:

567 Circuit City

300 Starbucks on top of 2008 closings

461 KB Toys

287 Goody's

175 Van Heusen

117 Ann Taylor (by 2010)

150 Lane Bryant, Fashion Bug, Catherine’s

85 GAP

140 Footlocker

98 Disney

All Linens and Things

133 Sprint/Nextel

12 Ethan Allen

All Wilson Leather stores

All Sharper Image stores

All Talbot’s

All Levitz Furniture

All Piercing Pagoda

112 Office Depot

98 Club Libby Lu (Saks)

60 American Greetings

50 Supervalu

50 New York & Co. (over the next five years)

40 Ruby Tuesday

35 Famous Footwear

33 Pep Boys

28 Yankee Candle

26 Cost Plus

24 Blue Tulip Gift Shops

22 Sears

20 Oneida Ltd.

12 Kira Plastinina

11 Macy's

11 Filene's

8 Dillard's

8 Dominos

7 Sweetbay Supermarkets

4 Applebees

4 Harry W. Schwartz Bookshops

3 Good's Furniture & Flooring

3 P&C Food Markets

3 Pier One

1 Virgin Records

Retail Store Opening Scheduled for 2009 in the U.S.:
200 Family Dollar
75 Aldi Supermarkets
70 Darden
35 EZ Money
25 Apple
25 Taco Maker
19 Kohl's
15 Whole Foods Market
14 American Apparel
14 Nordstrom
3 Publix
1 CarMax

MoTown

01-29-2009, 09:05 AM

WTF ARE WE GOING TO DO WITHOUT PIERCING PAGODA?!?!?!?

geerussell

01-29-2009, 09:05 AM

This is what it looks like when the bubble finally pops.

Glenn

01-29-2009, 09:07 AM

This is what it looks like when the bubble finally pops.

And it's only January.

Tahoe

01-29-2009, 06:06 PM

Or this is what it looks like when shitty stores go under or the companies opened too many stores. It might be a good thing. Theres consolidation out here in Construction thats for sure.

That ^ might be a lil harsh but I won't miss any of those stores. Granted, I don't work at them either.

Glenn

01-30-2009, 11:37 AM

Exxon Mobil breaks its own record with $45.2 billion profit (http://www.yahoo.com/s/1023209)

A parting gift from GWB.

I'm ready, Tahoe.

Tahoe

01-30-2009, 12:19 PM

Hey, GDub rolls like that. He's a giving person.
I'm not ready today

Uncle Mxy

02-02-2009, 10:55 AM

slam dunk

http://www.theonion.com/content/news/cheney_dunk_tank_raises_800?utm_source=onion_rss_d aily

geerussell

02-18-2009, 08:44 PM

It's NBA news but it definitely fits in this thread...

Chad Ford: What to expect as trade deadline nears (http://proxy.espn.go.com/nba/columns/story?columnist=ford_chad&page=TradeTalk-090217)

As commissioner David Stern warned at All-Star Weekend, the NBA is bracing to have the salary cap (and luxury-tax threshold) go down this summer for the first time ever. The picture might be even gloomier in 2010.
With season-ticket renewals expected to plunge because of the weakness of the economy, some league executives expect the cap to fall significantly, which could have serious ramifications for a number of teams. Some teams might find themselves paying the luxury tax, and some might not have the cap space needed to sign players in the already-celebrated summer of 2010.

The silver lining here is even though the Pistons are circling the drain of mediocrity right now, they're in great shape to ride out the financial storm.

Uncle Mxy

02-19-2009, 07:19 PM

It's not just our economy:

http://www.theonion.com/content/news/asian_markets_fall_like_cherry?utm_source=onion_rs s_daily

Uncle Mxy

02-28-2009, 10:10 PM

http://www.theonion.com/content/news/struggling_americans_forced_to?utm_source=onion_rs s_daily

Fool

02-28-2009, 10:46 PM

Mxy's only real weakness is his over-affinity for that website.

Zip Goshboots

03-01-2009, 12:05 AM

As opposed to Fool, who thinks that Detroit is just a ball-bearing factory away from total prosperity.

Fool

03-01-2009, 08:12 AM

Never said that but it does sound like your typical misunderstanding of any situation that doesn't revolve around drinking moonshine and sitting in your double wide with all sixteen of your cousin Jeds reminiscing about the time the neighbor's goat wandered into the town's general store.

Uncle Mxy

03-01-2009, 08:20 AM

Mxy's only real weakness is his over-affinity for that website.
I've been a fan of the Onion long before it went online, owing to some friends of mine who were from Wisconsin. But you're right, I've been clinging to it lately, along with some other silly web sites. I think it has to do with the depressing economic times.

Uncle Mxy

03-03-2009, 12:05 PM

http://img24.imageshack.us/img24/3568/slowincomegrowthfigure1.png

Vinny

03-03-2009, 12:54 PM

That's fucking crazy.

Fool

03-03-2009, 01:04 PM

Ledezma disagrees.

WTFchris

03-03-2009, 02:11 PM

http://img24.imageshack.us/img24/3568/slowincomegrowthfigure1.png

Notice the dip in family income in the early 2000's while the GDP increased. Thanks W!

The other dips correspond to the GDP (even though they are much lower in general)

Fool

03-03-2009, 02:16 PM

That's a really good point, although that is not the only time it occurs on that graph.

Vinny

03-03-2009, 02:23 PM

It's a zero sum game for the most part, so basically the rich got richer while we stayed the same.

WTFchris

03-03-2009, 02:57 PM

That's a really good point, although that is not the only time it occurs on that graph.

When else did it? They certainly didn't increase/decrease at the same rate, but they pretty much followed the same trend (up or down) until then.

Wilfredo Ledezma

03-03-2009, 03:01 PM

Vinny

03-03-2009, 03:04 PM

Notice the median & GDP lines first start to seperate during the Jimmy Carter era.

That would suggest that something happened during that time (a piece of legislation, maybe) that led to a problem that has only gotten worse as time progressed.

Many of the economical problems we have today can be traced back to Jimmy Carter. The mortgage crisis for sure.

Lol. Let's just ignore the Reagan era, right?

WTFchris

03-03-2009, 03:07 PM

Here are the trends broken out (with brown paintbrush!):

http://img150.imageshack.us/img150/3497/economygraph.png

Lets take each period one at a time. The first one you have both trending down. the second period both trend up. the third period both trend back down. the 4th period (looks to be early 90's) the GDP grew and the income did not. That would be Bush Sr in the White House. Both rose again in the 5th period (Clinton), both dipping slightly at the end of his terms. Then you have the major discrepancy in the 6th period under Bush Jr.

WTFchris

03-03-2009, 03:08 PM

WTFchris

03-03-2009, 03:12 PM

Was it the 1979 energy crisis (http://en.wikipedia.org/wiki/1979_energy_crisis)?

Wilfredo Ledezma

03-03-2009, 03:13 PM

yes, that is when they split off. Was that something Ford passed at the end of his term or something Carter did? I'm asking because I don't know.

I'm betting Carter since Ford didn't really do anything.

Jimmy Carter's Community Reinvestment Act which forced the govt to back bad loans.

Glenn

03-03-2009, 03:16 PM

We need an official "Blame Carter" thread.

Tahoe

03-03-2009, 03:45 PM

It did suck back then, not that it doesn't now.

Fool

03-03-2009, 03:47 PM

When else did it? They certainly didn't increase/decrease at the same rate, but they pretty much followed the same trend (up or down) until then.

Both lines trend upwards but there are more than one instances in which GDP rises while household income falls.

Vinny

03-03-2009, 06:58 PM

Here's an interesting tidbit from the new Harper's:

Profit that the federal government made in 1983 on stock obtained in its 1979 bailout of Chrysler: $311,000,000

Wilfredo Ledezma

03-03-2009, 09:47 PM

That doesn't mean anything.

The UAW didn't have as much power back then.

Vinny

03-04-2009, 01:20 AM

Really? REALLY?

Wilfredo Ledezma

03-04-2009, 08:17 AM

Really? REALLY?

Also, there wasn't all the emission standards back then that there are now.

Environmentalists and junk science have played minor roles in the fall of the auto industry.

Hermy

03-04-2009, 08:27 AM

That doesn't mean anything.

The UAW didn't have as much power back then.

This is the opposite of true. So it is false. Unions held great power then. That is why Americans made a good deal of money. Globalization was used to crush them, now companies tell people what they will make while paying shareholders and execs. (not that this is morally wrong, it is what it is).

Uncle Mxy

03-04-2009, 10:54 AM

The Big Three have become more fragile over the decades, as just-in-time manufacturing has led to vulnerable supply chains. Unions, suppliers, random weather, etc. can gum up the works in ways that they never could before. A lot of folks fixate on management vs. labor without understanding suppliers, and especially how the supplier dynamic here differs from foreign automakers. :/

Uncle Mxy

03-16-2009, 10:28 AM

http://i173.photobucket.com/albums/w50/alix2304/charts/usdebtholders.gif

Vinny

03-16-2009, 01:26 PM

Is it just me or is the US just basically carrying out one giant Madoff style Ponzi scheme on the rest of the world?

03-16-2009, 01:41 PM

Absolutely. In just a year we'll owe Belize double what we owe China just to pay off the China debt.

Tahoe

03-16-2009, 01:45 PM

Is it just me or is the US just basically carrying out one giant Madoff style Ponzi scheme on the rest of the world?

Which is why we should stop these Trillion dollar spending packages.

Glenn

03-16-2009, 01:55 PM

ANybody watch the Bernanke interview on 60 minutes? He seems like a decent guy (and, of course, intelligent as hell).

Glenn

03-16-2009, 02:53 PM

Wall Street rallies for a fifth straight session (http://www.yahoo.com/s/1044143)

FUCK!

Uncle Mxy

03-24-2009, 09:37 PM

"Woman accused of beating down door to offer sex for $10"
http://www.gastongazette.com/sections/article/gallery/?pic=1&id=31917

Uncle Mxy

04-08-2009, 06:23 AM

http://seacoastonline.com/articles/20090407-NEWS-904070381

HAMPTON FALLS — A Florida man accused of robbing the Citizens Bank in December allegedly told another he did it because he didn't want his girlfriend to "have sex for money anymore."

Uncle Mxy

04-08-2009, 05:20 PM

http://farm4.static.flickr.com/3557/3421567581_bd7881ed09_o.png

geerussell

04-10-2009, 10:53 PM

This was presented as a time travel cheat sheet (http://www.topatoco.com/graphics/qw-cheatsheet-print-zoom.jpg) but really it could come in just as handy in a post-econopalypse scenario.

geerussell

05-05-2009, 11:00 PM

qmvgm4bbh0s

Uncle Mxy

05-15-2009, 10:33 PM

http://www.nytimes.com/2009/01/04/magazine/04risk-t.html

geerussell

05-19-2009, 01:53 PM

Trade Wars Brewing In Economic Malaise (http://www.washingtonpost.com/wp-dyn/content/article/2009/05/14/AR2009051404241.html?sub=AR)

Is this what the first trade war of the global economic crisis looks like?

Ordered by Congress to "buy American" when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.

This week, the Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts -- the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.

Rather than merely raising taxes on imported goods -- acts that are subject to international treaties -- nations including the United States are finding creative ways to engage in protectionism through domestic policy decisions that are largely not governed by international law. Unlike a classic trade war, there is little chance of containment through, for example, arbitration at the World Trade Organization in Geneva. Additionally, such moves are more likely to have unintended consequences or even backfire on the stated desire to create domestic jobs.

The Government Accountability Office estimates that state or local officials will administer about $280 billion in stimulus spending, including about $50 billion for transportation projects. But federal authorities have determined that construction projects even partially funded with stimulus dollars must also buy American, dramatically increasing the universe of affected contracts.

As a result, John Hayward, president of Hayward Gordon, a Canadian manufacturer of pumps used in water works projects, says U.S. towns, including Peru, Ind., have told him that they can no longer buy his Canadian-made products.

"We're not China. We're not even Mexico. We have the same relative cost of labor as you do," he said. "If we have a better price, you should buy from us. That's what competition is supposed to be about."

DennyMcLain

05-19-2009, 02:05 PM

Apparently, South Park was way ahead of it's time.

Glenn

05-26-2009, 12:33 PM

US consumer confidence soars in May (http://www.mlive.com/business/index.ssf/2009/05/us_consumer_confidence_soars_i.html)

Let's see how Mr. Transparency spins this one!

Wait, does that even make sense?

Tahoe

05-26-2009, 12:34 PM

YEA OBAMA! I told you he'd fix everything.

geerussell

05-27-2009, 12:29 AM

geerussell

06-18-2009, 09:17 AM

Large numbers.

http://craphound.com/images/bailoutnationchart-912x1024.jpg

geerussell

07-10-2009, 10:28 AM

Brown manure, not green shoots (http://www.forbes.com/2009/07/08/jobs-report-mortgages-unemployment-recession-opinions-columnists-nouriel-roubini.html)

geerussell

09-04-2009, 01:33 PM

Cash for oinkers... (http://online.wsj.com/article/SB125201646178684709.html?mod=googlenews_wsj)

WASHINGTON -- The Agriculture Department, in a bid to help the ailing pork industry, said Thursday it will buy another $30 million of pork in an effort to boost prices.

The USDA already has pledged to purchase $121 million of pork this year for government food-assistance programs, but producers continue to struggle.

"This action will help mitigate further downward prices, stabilize market conditions, stimulate the economy, and provide high-quality, nutritious food to recipients of USDA's nutrition programs," USDA Secretary Tom Vilsack said.

The National Pork Producers Council has been lobbying the USDA hard this year to buy more pork, but the group was turned away repeatedly.

Mr. Vilsack told lawmakers during a May hearing that the group was asking for an additional $50 million purchase, but the USDA didn't have the money in its budget. The council upped the pressure in August, though, holding a media event to publicize its plea to the Obama administration for "immediate financial assistance."

Falling U.S. consumer demand coupled with strong production over the past two years has resulted in $4.6 billion in losses for producers, according to the group.

Weak pork prices and rising production costs have hurt producers deeply, NPPC spokesman Dave Warner said in a recent interview, "but the real problem is there's just too much pork out there."

About 115 million pigs were slaughtered in the U.S. last year, a continuous increase from 2007 and 2006, Warner said.

Glenn

09-04-2009, 01:35 PM

Falling U.S. consumer demand coupled with strong production over the past two years has resulted in $4.6 billion in losses for producers, according to the group.

Weak pork prices and rising production costs have hurt producers deeply, NPPC spokesman Dave Warner said in a recent interview, "but the real problem is there's just too much pork out there."

This is going to sound stupid, but I wonder how much "swine flu" has to do with falling sales of pork? Perception is reality.

I have some really nice boneless pork tenderloin chops that I'm throwing on the grill tonight.

geerussell

09-10-2009, 04:15 AM

From Businessweek, Where have you gone Bell Labs? (http://www.businessweek.com/magazine/content/09_36/b4145036681619_page_5.htm)

my own tl;dr version: Basic research from the 40s through the 80s planted the seeds for the industrial and technological innovations that fueled growth and created new high paying jobs to replace old ones destroyed or outsourced by progress.

From the 80s to present, ever increasing focus on short term profits hollowed out private sector R&D to the point where, having eaten all our seed corn, the vanishing high tech jobs are being replaced with exciting career opportunities in greeting customers at walmart or doing nails.

This comes back to the question I keep flogging of where will the jobs (excluding government) come from when the recovery arrives. The linked article is a good read and ends on a hopeful note of how R&D can be reinvigorated in time to save us all from serfdom. I think that moment of clarity is unlikely.

geerussell

09-12-2009, 03:24 PM

This is what happens (http://www.businessinsider.com/the-rebirth-of-financial-engineering-2009-8) when you don't let bad banks die...

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.

"There is a little bit of deja vu in this," said Arizona State University economics professor Herbert Kaufman.

But Kaufman said the strategy could help solve one of the lingering problems of the financial meltdown: What to do about hundreds of billions of dollars in mortgages that are still choking the system and making bankers reluctant to make new loans.

The strategy of drinking half a fifth of vodka at 7 am would painlessly solve the lingering problem of a hangover from last night's drinking binge. True story.

What could go wrong?

The risk is, if the housing market slips even more, even the AAA-rated investments may not prove safe. The deal also relies on the rating agencies, which misread the risk at the heart of the subprime mortgage crisis, to get it right.

And then there's the uncertainty about the value of the underlying investments, which FBR Capital Markets analyst Gabe Poggi called "totally combustible." Poggi likes the deals because they appear to have breathed some life into the market, but he said it only works if everyone knows exactly what they're buying.

At least we have a new administration in washington. Hope and Change will save us, right?

The Obama administration is also working on a plan to get banks buying and selling risky bonds. But the public-private partnership announced this spring is still in the works and has yet to help investors figure out what those bonds are worth. By creating Re-Remics, banks can help start the process themselves.

I'm officially throwing in the towel on any hope that the escalating borrow-bubble-bust-repeat economics of the last 25 years will be any different under Obama. The sense of entitlement that makes us refuse to accept any economic pain or consequences will just continue until our liver fails--which in this case will be when our creditors finally say "no more" one or two bubbles down the road.

geerussell

09-16-2009, 10:53 AM

More green shoots: (http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession-anchored-just-east-Singapore.html)

Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers - all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen.

They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia's rural Johor state, 50 miles east of Singapore harbour.

Do not tell these men and women about green shoots of recovery. As Briton Tim Huxley, one of Asia's leading ship brokers, says, if the world is really pulling itself out of recession, then all these idle ships should be back on the move.

'This is the time of year when everyone is doing all the Christmas stuff,' he points out.

'A couple of years ago those ships would have been steaming back and forth, going at full speed. But now you've got something like 12 per cent of the world's container ships doing nothing.'

Some experts believe the ratio of container ships sitting idle could rise to 25 per cent within two years in an extraordinary downturn that shipping giant Maersk has called a 'crisis of historic dimensions'. Last month the company reported its first half-year loss in its 105-year history.

The ghost fleet:
http://i.dailymail.co.uk/i/pix/2009/09/08/article-1212013-06435781000005DC-710_634x403.jpg

Uncle Mxy

09-16-2009, 11:12 AM

Health insurance premiums are up an average of 131% over the past decade.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/15/MNO819NGQN.DTL

mercury

09-16-2009, 11:44 AM

So the economy still sucks?

Tahoe

09-16-2009, 01:07 PM

Health insurance premiums are up an average of 131% over the past decade.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/15/MNO819NGQN.DTL

Mine isn't. Went up about 150 over the last decade? or so, i think.

Tahoe

09-16-2009, 01:08 PM

This is what happens (http://www.businessinsider.com/the-rebirth-of-financial-engineering-2009-8) when you don't let bad banks die...

The strategy of drinking half a fifth of vodka at 7 am would painlessly solve the lingering problem of a hangover from last night's drinking binge. True story.

What could go wrong?

At least we have a new administration in washington. Hope and Change will save us, right?

I'm officially throwing in the towel on any hope that the escalating borrow-bubble-bust-repeat economics of the last 25 years will be any different under Obama. The sense of entitlement that makes us refuse to accept any economic pain or consequences will just continue until our liver fails--which in this case will be when our creditors finally say "no more" one or two bubbles down the road.

Refreshing for a dem to FINALLY say something other than slurp, slurp, slurp.

Hermy

09-16-2009, 01:14 PM

He's criticizing him for being a Republican.

Tahoe

09-16-2009, 01:16 PM

^ lol...well at least he's disagreeing with something he's doing.

BTW...if Max's bill is as good as his presentation, it's dead on arrival.

Fool

09-16-2009, 01:19 PM

I move for Hermy to interpret all posts to help Tahoe understand WTF in the future.

Tahoe

09-16-2009, 01:21 PM

25 years folks. Read a lil bit.

geerussell

09-18-2009, 12:14 PM

Paul Volcker is already the odd man out on Obama's economic "team of rivals" with no real voice in policy decisions. If he keeps talking like this (http://www.bloomberg.com/apps/news?pid=20601110&sid=aEJ2RERn3xFM) it won't be long before he gets sent down to the D-league.

Volcker, 82, is best known for raising the Fed’s key interest rates as high as 20 percent as central bank chief from 1979 to 1987.
Turning off the firehose of cheap money would be unthinkable now.

In his speech, Volcker renewed his call for a limit on the activities of banks that are considered “too big to fail,” going beyond what other officials in the Obama administration have advocated.

“I do not think it reasonable that public money -- taxpayer money -- be indirectly available to support risk-prone capital market activities simply because they are housed within a commercial banking organization,” Volcker said.

geerussell

09-19-2009, 02:31 AM

When I read stuff like this, I think about the red flags being raised today about the handling of the financial crisis... and wonder if we'll look back and find them just as ignored. Believe it or not, the long, rambling post that follows is the heavily abridged version.

Today:
"Option" mortgages to explode, officials warn (http://www.reuters.com/article/ousivMolt/idUSTRE58G5U320090917?pageNumber=1&virtualBrandChannel=0)

"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams.

"That's the next round of potential foreclosures in our country," he said.

Option-ARMs are now considered among the riskiest offered during the recent housing boom and have left many borrowers owing more than their homes are worth. These "underwater" mortgages have been a driving force behind rising defaults and mounting foreclosures.

In Arizona, 128,000 of those mortgages will reset over the the next year and many have started to adjust this month, the state's attorney general, Terry Goddard, told Reuters after the meeting.

"It's the other shoe," he said. "I can't say it's waiting to drop. It's dropping now."

The mortgages differ from other ARMs by offering an option to pay only the interest each month or a low minimum payment that leads to a rising balance in the loan's principal.

Oh my, a shitstorm? How could this have happened? Certainly no reasonable person inside the government could have foreseen this outcome when there was still time to nip it in the bud, right?

December 1, 2005: (http://www.occ.treas.gov/ftp/release/2005-117a.pdf)

The fundamental problem with payment option ARMs, other than the growing principal balance due to negative amortization, is payment shock. A traditional 30-year fixed-rate mortgage requires the borrower to amortize the principal balance through equal payments over the 30-year life of the loan. In contrast, a typical payment-option ARM is a 30-year mortgage that permits five years of negative amortization by allowing a borrower to make very low minimum monthly payments during that period.

To the extent that they are planning for such contingencies, many payment-option-ARM borrowers calculate that they will be able to sell their property or refinance the mortgage by year six. But if real estate prices decline – and there already is evidence of softening in some markets – these borrowers could face the bleak prospect of loan balances that exceed the value of the underlying properties. In that case, selling the property or refinancing the loan would not be a viable escape valve for avoiding huge payment shocks.

I am mindful of the history of neg am products in credit cards, and I recognize that the nationwide mass marketing of neg am mortgages is in its infancy. As a result, I firmly believe that the guidance should draw clear lines about appropriate standards for qualifying borrowers for payment option ARMs that explicitly take into account potential payment shock. Put another way, lenders should not encourage or accept applications from borrowers who clearly cannot afford the dramatically increased payments that are likely to result at the end of the five-year, low minimum payment period. Disclosures should also be clear, timely, and meaningful. And lenders should have very substantial controls in place to manage the potential risk of such loans.
So, given the utter failure of his efforts in 2005 I figured by now this guy is probably living in van, down by the potomac, leaving only occasionally to wander aimlessly up and down pennsylvania ave. carrying a tattered "End is nigh" sign. Surprisingly, a google search of his name showed he's still in the same job peddling the same message (http://www.occ.treas.gov/ftp/release/2009-24b.pdf) to congress about systemic risk, mortgage regulation, consumer protections... yada yada yada. Some people never learn.

An anecdote, to add some context as to what exactly lenders were doing back in 2005, when the boom hadn't yet crested and the most creatively destructive loan products were still in their infancy:

Bank Faces Questions Over Bay Area Home Lending (http://cbs5.com/local/mortgage.world.savings.2.728889.html)

CBS 5 Investigates obtained internal World Savings training videos produced during the height of the mortgage boom. They are videos instructing World Savings employees how to sell loans to people like Willie Bryant.
...skipping past obligatory hapless consumer details, suffice it to say that Willie is in over his head...

But what were World Savings employees instructed to tell these customers? The training videos obtained by CBS 5 investigates provide some clues.

For instance, in a segment called the "Blue Collar Borrower" scenario, where a supposed world loan officer describes the advantages of the Pick-a-Pay loan.
Aim the riskiest loan products in existence at joe the plumber. Genius.

But what concerns Brown even more was the way World Savings employees were instructed to answer questions about the minimum payment on those option ARM's.

"So if I'm paying that minimum payment, I'm not actually putting a dent in my principal though right? My principal and interest they're just going to keep climbing up right?" the borrower asks in the video tape. "It's optional," the broker in the video replied.

"What kind of answer is that?" said Brown after watching the video. "The answer would really be 'Yes.' That's the right answer, that to me would be the true clear straightforward truthful simple answer."

And in still another scenario, the video instructs brokers to explain those loans. "Why would I offer a loan that has a negative amortization?" the broker asked. The World Savings representative replied: "Most brokers refer to them as negative amortization, but we try to use the words a little more user friendly, 'deferred interest.'"

But Brown said, "I don't think that to call this deferred interest really tells the consumer what is going on. They don't realize that their loan principal is ballooning, bit by bit, every month."

"The one thing that this shows it that they're not really focused on making people understand the negative consequences, the potential negative consequences, of these loans," Stein said.

Lastly, the devil really is in the details when it comes to option ARM loans. Most reporters, consumers and even a lot of loan officers don't have a complete handle on the particulars and the terminology involved. More than you ever wanted to know about them can be found here: Negative Amortization for UberNerds (http://www.calculatedriskblog.com/2007/03/tanta-negative-amortization-for.html)

Uncle Mxy

09-20-2009, 07:34 AM

Fortunately, our economic problems are solved.
http://www.theonion.com/content/news/u_s_government_finds_20_trillion

Tahoe

09-22-2009, 02:38 PM

Top 30% will pay benefits of bottom 70%. So these peeps are dependant on the Gov't and the taxpayers. Not good.

geerussell

09-22-2009, 03:29 PM

Top 30% will pay benefits of bottom 70%. So these peeps are dependant on the Gov't and the taxpayers. Not good.

It's like that post was randomly generated with right wing refrigerator magnet poetry. What benefits? To who? What are those numbers based on? Where are they sourced from? Do you even know or care?

Tahoe

09-22-2009, 03:44 PM

http://www.taxfoundation.org/news/show/25195.html

I'm sure there are things in this article/charts that everyone can make an argument for.

Fool

09-22-2009, 03:48 PM

Astounding that people with no money receive more than they pay out. This will revolutionize the debate! Good job T!

Tahoe

09-22-2009, 04:27 PM

^ LOL... 70% of the country makes no money. LMAO

Fool

09-22-2009, 06:01 PM

Your bitching about more than just the bottom 10%?

geerussell

09-22-2009, 06:30 PM

http://www.taxfoundation.org/news/show/25195.html

Top 30% will pay benefits of bottom 70%. So these peeps are dependant on the Gov't and the taxpayers. Not good.

What the ratio of benefits received to tax dollars paid--which is what that 70/30 split you talk about is made along--reflects is the concentration of wealth at the top.

Take a simplified example where every person in the country receives $10k in universal spending benefits (roads, fire, police, etc) and everyone pays a flat 20% in taxes. Nobody getting a larger share of the government spending pie than anyone else. Everyone paying the "same" amount in taxes.

There'd be a break-even point around $50,000 in income where you got 1 for 1 in tax dollars spent for benefits received.

As you go down from the break even mark, you're getting a better and better ratio until finally you find people paying nothing and getting a fantastic $10k free ride.

As you go up from the break even mark, your ratio gets ever worse as your 10% in taxes becomes greater and greater in absolute terms while your benefits remain fairly constant. There's no end to how "bad" this ratio can become as you get ever richer.

What happens when you distribute the population so that 70% of them are below the break-even point and 30% are above with 1% being a multiple of thousands higher? You get 30% "paying for" the other 70% because that's where the wealth is. As you concentrate more and more wealth in ever fewer hands, this becomes more lopsided.

Tahoe, I have to say it's very liberal, even progressive of you to be so concerned about this situation. Welcome. We've been waiting for you.

Tahoe

09-22-2009, 06:36 PM

Redistribution of wealth. Steal from the rich to give to the too lazy to go get a fucking job. But hey, the Dems feel we can turn the lazy asses into a voting block...and they succeeded.

Some peeps need help, but this is ridiculous.

Uncle Mxy

09-22-2009, 06:50 PM

^ LOL... 70% of the country makes no money. LMAO
Relative to the top 1%, that's a mostly-true statement. The top 1% are wealthier than the bottom 95%. The top .1% blow the rest of the 1% into oblivion, never mind the 99% beneath. The bottom 80% own <4% of stock. The L-curve has only accelerated in the rich's favor, too.

Graphing income (like the Tax Foundation people did) at the higher end can be misleading because of the diverse non-income vehicles that rich people have to deliver money in their coffers. Warren Buffett's wealth grew by $10 billion while having a taxable income of $40 million, and that income was taxed at a rate less than his secretary.

geerussell

09-22-2009, 07:04 PM

Relative to the top 1%, that's a mostly-true statement. The top 1% are wealthier than the bottom 95%. The top .1% blow the rest of the 1% into oblivion, never mind the 99% beneath. The bottom 80% own <4% of stock. The L-curve has only accelerated in the rich's favor, too.

Graphing income (like the Tax Foundation people did) at the higher end can be misleading because of the diverse non-income vehicles that rich people have to deliver money in their coffers. Warren Buffett's wealth grew by $10 billion while having a taxable income of $40 million, and that income was taxed at a rate less than his secretary.

Warren Buffett's secretary is too fucking lazy to join the .1% and stop stealing from her boss.

Tahoe

09-22-2009, 07:41 PM

Relative to the top 1%, that's a mostly-true statement. The top 1% are wealthier than the bottom 95%. The top .1% blow the rest of the 1% into oblivion, never mind the 99% beneath. The bottom 80% own <4% of stock. The L-curve has only accelerated in the rich's favor, too.

Graphing income (like the Tax Foundation people did) at the higher end can be misleading because of the diverse non-income vehicles that rich people have to deliver money in their coffers. Warren Buffett's wealth grew by $10 billion while having a taxable income of $40 million, and that income was taxed at a rate less than his secretary.

And keep feeding them the candy and it'll be 80%. Why work?

Big Swami

09-23-2009, 09:15 AM

Jeez, Tahoe. It's like you think unemployment and AFDC goes on forever and pays every bit as much as a good job does.

EDIT: And also that the money spent on those programs represents any significant portion of our tax dollars.

Tahoe

09-23-2009, 01:31 PM

Big Swami

09-23-2009, 01:40 PM

Well, here's (http://briansullivan.blogs.foxbusiness.com/2009/04/14/where-your-tax-dollars-go/) a chart from Fox Business about Federal taxes, which I'm sure you'll like.

I can't find one about Michigan, but we're not really talking about State taxes here, so it's kind of OT.

Glenn

10-14-2009, 01:30 PM

Dow tops 10,000 for first time since October 7, 2008

And not to go all bukdow on you guys, but I got my 401K statement in the mail yesterday, and holy rebound!

Tahoe

10-14-2009, 01:53 PM

Holy rebound indeed. I noticed that too.

geerussell

10-14-2009, 02:05 PM

There's no earnings, no fundamentals behind that mirage. The only thing buoying stock prices right now is the firehose of cheap money coming out of the fed--all that money has to flow somewhere and it's mostly bidding up the price of stock certificates. Sucker's rally.

Tahoe

10-15-2009, 08:18 PM

Mine went up about 15%, but I've moved most of it out of stocks again. It seems towards the end of the year peeps sell off.

UxKa

10-15-2009, 09:07 PM

My 401k never went down more than about 1.5%, but it's up about 10% now. Don't dump it all in stocks ;)

geerussell

10-16-2009, 02:59 PM

Fox named as chief of henhouse security. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a6ItnK32Cl6Y) Nothing to see here.

The U.S. Securities and Exchange Commission named Adam Storch, a 29-year-old from Goldman Sachs Group Inc.’s business intelligence unit, as the enforcement division’s first chief operating officer.

Storch, who joined the SEC Oct. 13, was named to the newly created post of managing executive in the enforcement unit, charged with making the division more efficient, the SEC said today in a statement. At New York-based Goldman Sachs, he had worked since 2004 in a unit at that reviewed contracts and transactions for signs of fraud.

“Adam’s skill in technology systems, workflow process, and project management will greatly benefit the division,” SEC enforcement chief Robert Khuzami said in the statement. “He will help to make us more efficient and nimble and permit us to put more of our investigators on the front lines.”

If it's socialism when the government owns GM, what is it when GS owns the government? Oligarchy?

Uncle Mxy

10-16-2009, 03:20 PM

http://www.businessinsider.com/check-out-sec-coo-adam-storchs-website-2009-10

Oh, and more of the same old same ol'... 79.9% APR offered by credit card companies:

http://www.nbcsandiego.com/around-town/shopping/No-Youre-Reading-That-Right-64173667.html

geerussell

10-18-2009, 02:21 AM

MSM Reporting as Propaganda (http://www.nakedcapitalism.com/2009/10/msm-reporting-as-propaganda-no-one-minds-our-new-financial-lords-and-masters-edition.html) or as I'd call it: Why aren't people out in the streets with torches and pitchforks right now?

geerussell

10-20-2009, 08:11 PM

A little taste of the new normal: (http://online.wsj.com/article/SB125590984649093245.html?mod=WSJ_hpp_MIDDLENextto WhatsNewsForth)

Slump Prods Firms to Seek New Compact With Workers

The deep recession appears to be drawing to a close, but not its effect on the workplace.

Since the downturn began, thousands of employers have cut pay, increased workers' share of health-care costs or reduced the employer contribution to retirement plans.

Two-thirds of big companies that cut health-care benefits don't plan to restore them to pre-recession levels, they recently told consulting firm Watson Wyatt. When the firm asked companies that have trimmed retirement benefits when they expect to restore them, fewer than half said they would do so within a year, and 8% said they didn't expect to ever.

"I think we've entered into a fundamentally new era," says David Lewin, of the Anderson School of Management at the University of California, Los Angeles. He describes employers as "leery of long-term commitments," including both benefits and pay increases.

Going further, 16% of big companies have taken the previously rare step of reducing pay, for at least some, according to the Watson Wyatt survey; 61% have frozen pay.

More than half of 638 chief financial officers surveyed by a Duke University professor, John Graham, said they expected their companies to employ fewer people in 2012 than in 2007.

In some cases, employers keep workers, but not on the payroll. Last December, staffing company Spherion Corp. laid off Roberta Marcantonio, a 14-year veteran who sold franchises to local operators. It brought her back as a contractor paid by commission. "We didn't need the fixed costs, because of the recession," says Spherion's chief executive, Roy Krause. "But we needed the skills when she was able to sell something."

"The overall trend is 'travel light' by companies, because the new normal is constant change," says Edward Lawler III, a professor at the University of Southern California's Marshall School of Business.

While you read this, keep in mind the wizards in charge of financial policy fear nothing more than deflation and act accordingly. As a result, our smaller paychecks of devalued dollars will buy less and less. It's going to be a brave new world coming out of the recession.

ps- If you want the full text of an article behind the paywall at wsj.com you can email the article to yourself and you'll get a link to the full article.

Fool

10-21-2009, 12:17 PM

Readers find new ways to circumvent pay for content material on WSJ.com (http://www.wtfdetroit.com/forums/showpost.php?p=350836&postcount=441)

The collapse of the print news market has turned more and more newspaper websites to pay for content models. The Wall Street Journal moved to that model, more than two years ago, hosting their editorial collumns behind a login that required a paid membership to access. They have continued that trend hosting more and more of their content behind these money walls. Savvy users however have found way around these embargoes sometimes using a website's own features against itself. WTFDetroit.com member G-to-the-e-to-the-double-ll invites his friends to email full articles that are normally only accessible to paid members to themselves using the Wall Street Journal's email feature, which allows troglodyte rubes to send articles they found interesting to their friends. The Wall Street Journal uses this email feature in a sadly transparent attempt to compile a emailing spam list to hound the unsuspecting, but G-dizzle flips the scrip and uses it to legally poach WSJ content. Internet sensation Motown, the most famous member of WTFDetroit.com, responded to G's tactics by calling him a douchebag and saying that giant internationa corporations are really struggling during this time of recession and need every last cent they can scrape away from the common public. Noted extreme liberal and ACLU leader Tahoe harshly chastised Motown for hurting the "poor wittle feewings" of "a brother member" and asked that Motown issue G an apology. Forum leader Gla could not be reached for comment and we assume he's fallen into another Flamming Hot Cheeto enduced coma.

Glenn

10-21-2009, 01:30 PM

^that was a bit weird

geerussell

10-21-2009, 05:21 PM

A bit.

Uncle Mxy

10-26-2009, 09:11 PM

http://capitalgainsandgames.com/blog/bruce-bartlett/1200/why-economy-needs-spending-not-tax-cuts

According to the Congressional Budget Office's January 2009 estimate for fiscal year 2009, outlays were projected to be $3,543 billion and revenues were projected to be $2,357 billion, leaving a deficit of $1,186 billion. Keep in mind that these estimates were made before Obama took office, based on existing law and policy, and did not take into account any actions that Obama might implement.

Therefore, unless one thinks that McCain would have somehow or other raised taxes and cut spending (with a Democratic Congress), rather than enacting a stimulus of his own, then a deficit of $1.2 trillion was baked in the cake the day Obama took office. Any suggestion that McCain would have brought in a lower deficit is simply fanciful.

Now let's fast forward to the end of fiscal year 2009, which ended on September 30. According to CBO, it ended with spending at $3,515 billion and revenues of $2,106 billion for a deficit of $1,409 billion.

To recap, the deficit came in $223 billion higher than projected, but spending was $28 billion and revenues were $251 billion less than expected. Thus we can conclude that more than 100 percent of the increase in the deficit since January is accounted for by lower revenues. Not one penny is due to higher spending.

It should be further noted that revenues are lower to a large extent because of tax cuts included in the February stimulus. According to the Joint Committee on Taxation, these tax cuts reduced revenues in FY2009 by $98 billion over what would otherwise have been the case. This is important because the Republican position has consistently been that tax cuts and only tax cuts are an appropriate response to the economic crisis.

Glenn

10-29-2009, 09:11 AM

-- Economy grows for first time in a year, with GDP rising 3.5 percent in third quarter.

Great news!!

Tahoe

10-29-2009, 07:11 PM

It is great news. Now if we can get the Gov't to stop putting road blocks into the inevitable recovery we'll really be doing great.

geerussell

12-06-2009, 10:58 PM

http://www.financialsense.com/fsu/editorials/dollardaze/2007/images/0626.h6.jpg

Near-Zero Rates Are Hurting the Economy (http://online.wsj.com/article/SB10001424052748704007804574573774057713530.html)

The Federal Reserve implemented an emergency monetary policy after the 2008 Lehman bankruptcy to salvage the world financial system. In his testimony yesterday before the Senate Banking Committee, Fed Chairman Ben Bernanke said, "We must be prepared to withdraw the extraordinary policy support in a smooth and timely way as markets and the economy recover."

This leaves all-out emergency monetary stimulus in place, but with a different, much weaker justification. With the system stabilized, the Fed hopes that artificially low interest rates and its purchases of mortgage-backed securities will spur growth. Instead they are pushing dollars abroad and wasting precious growth capital in asset and commodity bubbles.

Nevertheless, more than a year after the heart of the panic, the Fed is still promising near-zero interest rates for an extended period and buying over $3 billion per day of expensive mortgage securities as part of a $1.25 trillion purchase plan. Capital is being rationed not on price but on availability and connections. The government gets the most, foreigners second, Wall Street and big companies third, with not much left over.

The irony of the zero-rate policy, coupled with Washington's preference for a weak dollar, is a glut of American capital in Asia (as corporations and investors shun the weakening U.S. currency) and a shortage at home. For gold and oil, the low-rate policy works, weakening the dollar so commodity prices go up and providing traders with ample funds to buy into the expanding bubble. Those markets are almost daring the Fed to try to break out of its zero-rate box.

But for small businesses and new workers, capital rationing is devastating, spelling business failures and painful layoffs. Thousands of start-ups won't launch due to credit shortages, in part because the government and corporations took more credit than they needed (because it was so cheap).

geerussell

12-07-2009, 01:50 AM

Sen. Jim Bunning (R-Kentucky) is officially my new favorite republican. Of course I could easily end up regretting that statement since I only know two things about him. The first is he pitch for the Tigers (1955-63) and the second is this video:

AVwr-Nf0slQ

MoTown

12-07-2009, 09:44 AM

^that was a bit weird
I just read this. And sometimes the truth is weird.

Uncle Mxy

12-07-2009, 10:39 AM

geerussell

12-08-2009, 12:05 AM

geerussell, when Bunning objected to Bernanke back in 2005, it was because Bunning wanted interest rates to stay at 0% forever rather than have even so much as mild rate increases. Had Bunning gotten his way back then, we'd be in worse shape.

So basically Bunning was full of shit in the video. Figures, I knew I'd regret taking it at face value.

geerussell

02-24-2010, 08:39 AM

What the economy and the spurs have in common (http://www.slate.com/id/2245328/).

Glenn

02-24-2010, 10:11 AM

I appreciate the pun, if not the accuracy of that.

geerussell

02-24-2010, 10:19 AM

Look at the bright side, things aren't so bad that I had to go with a Barbaro reference.

Uncle Mxy

03-06-2010, 09:51 PM

http://www.wwj.com/pages/6461805.php?

Now here's something that seems completely anachronistic! Bloomfield Hills-based Taubman Centers reported Thursday that a quirky yet historically accurate tool -- the length of women's skirts -- is predicting middling economic growth ahead.

The survey commissioned by Taubman Centers suggests that skirt lengths will hover just below and above the knee this spring, accompanied by a cautious dose of optimism.

In an internet survey conducted by Market Strategies International, people across the country were asked the question: They say that hemlines go up when the economy improves; if that's true, where do you think skirt lengths will be this spring? Forty-four percent answered "just below the knee" meaning "cautious optimism," while 38 percent answered "above the knee" which translates to "light at the end of the tunnel." Only 14 percent chose "ankle duster," indicating economic uncertainty. An even smaller 4 percent chose "cheesecake," foreseeing good news ahead.

The internet survey was fielded Jan. 21 through Feb. 12. The 1,038 responses were from participants that chose a specific Taubman shopping center as their primary shopping center.

This "hemline survey" is the third that Taubman has conducted. In the first study conducted in 2003, the majority surveyed (30 percent) predicted skirts would rise above the knee or "light at the end of the tunnel." By 2004, 51 percent of those surveyed predicted skirts would rise above the knee- a more optimistic outlook than this year's "just below the knee" or "cautious optimism" (44 percent) result.

Uncle Mxy

03-27-2010, 09:01 AM

People seem to keep bringing up Bush... I wonder why...

http://www.cbpp.org/images/cms//12-16-09bud-rev2-17-10-f1.jpg

Tahoe

03-27-2010, 04:13 PM

Uncle Mxy

03-27-2010, 11:08 PM

Wars in Iraq and Af Dems voted for too.

Obama voted for every one of Bush spending bills.

Economic downturn was pretty much world wide.

Dems didn't let Bush reform fannie and freddie. Called them racists.

Tax cuts kept us from a bigger downturn.
Bush led the initiative to go to war... some spineless Dems went along for the ride

Obama never voted for the war, and the Senate doesn't lead on appropriations bills.

The economic downturn started in the U.S. and spread like a plague.

Reps didn't reform Fannie/Freddie in 2005, but it's not like they owned the derivatives market

Most economists agree that tax cuts don't create nearly as much GDP as infrastructure spending. Of course, we managed to cut taxes hugely while increasing spending even more hugely.

<yawn> Lemme know when you get bored. I'm pretty sure I've said everything here at some point before.

Tahoe

03-27-2010, 11:12 PM

Bush led the initiative to go to war... some spineless Dems went along for the ride

Obama never voted for the war, and the Senate doesn't lead on appropriations bills.

The economic downturn started in the U.S. and spread like a plague.

Reps didn't reform Fannie/Freddie in 2005, but it's not like they owned the derivatives market

Most economists agree that tax cuts don't create nearly as much GDP as infrastructure spending. Of course, we managed to cut taxes hugely while increasing spending even more hugely.

<yawn> Lemme know when you get bored. I'm pretty sure I've said everything here at some point before.

I'm just sayin the graph is crap. :)

geerussell

03-27-2010, 11:36 PM

Definitely time to drain the swamp.

Uncle Mxy

01-16-2011, 11:34 AM

It's not easy... being green.

http://www.nytimes.com/2011/01/15/business/energy-environment/15solar.html

geerussell

01-16-2011, 12:36 PM

If it bleeds, we can kill it. (http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/01/14/a_new_act_in_foreclosure_circus/)

Tahoe

01-16-2011, 03:20 PM

Obviously, we want to be correct with the foreclosures, but the market also needs to rid itself of the bad paper.

Uncle Mxy

01-24-2011, 08:53 PM

Gap Between Rich And Poor Named 8th Wonder Of The World
http://www.theonion.com/articles/gap-between-rich-and-poor-named-8th-wonder-of-the,18914/

geerussell

01-28-2011, 12:13 PM

Not that our one-state depression is actually news to anyone that lives in michigan, but still...

According to Case-Shiller, a Metro Detroit home worth $100,000 in 1994 would be worth, on average, the same today. But a home that fetched $100,000 in 1994 would have to bring $147,136 today just to keep pace with inflation. So instead of breaking even, the buyer of a $100,000 Detroit home in 1994 has lost more than $32,000.

http://detnews.com/article/20110126/BIZ/101260373/-1/ARCHIVE/Metro-home-prices-fall-to-’94-levels

geerussell

01-28-2011, 12:56 PM

A follow up on trade surpluses and importing inflation (http://finance.yahoo.com/news/China-ups-minimum-wages-as-apf-2498137446.html) from the other thread. (http://www.wtfdetroit.com/forums/showthread.php?13100-LOL-MSNBC&p=369725&viewfull=1#post369725)

SHANGHAI (AP) -- Many Chinese cities are raising minimum wages for workers, fanning inflationary pressures while also seeking to soothe frustrations over price hikes.

The double-digit increases in major manufacturing centers like Guangdong, and the cities of Shanghai, Tianjin and Beijing follow wage hikes last year that have further raised labor costs, accelerating a shift by makers of inexpensive goods to lower cost places like Vietnam and Indonesia.

Shortages of workers in some areas and strikes and other protests by disgruntled young workers have also prompted authorities to push minimum wages higher, with most localities expected to follow suit.

geerussell

02-02-2011, 07:36 PM

Random thought for the day. (http://www.fundmymutualfund.com/2011/01/always-amazing-how-it-does-not-matter.html)

As an aside, as rich as America is, if we did not have our modern soup lines (food stamps) which now suppress 1 in 7 Americans you'd be seeing Tunisia and Egypt in our streets, I truly believe that. Nothing pushes people to desperation like a hungry family. For those who believe otherwise, you are watching the John Galt "free market" at work overseas... having 40M+ desperate people is not what you'd want in this country.

Tahoe

02-02-2011, 07:48 PM

America isn't rich anymore.

geerussell

02-02-2011, 08:01 PM

America is very rich, even if the wealth is concentrated in fewer hands than ever.

Tahoe

02-02-2011, 08:10 PM

America is not rich. We are deeply in debt. We run yearly budget deficits. We give away services for free. We are not in a good position at all.

If liberal policies continue, we will be like CA and NY.

geerussell

02-02-2011, 08:19 PM

When talking about whether a country is rich, it's usually a matter of GDP and aggregate wealth, not debt and deficits.

Tahoe

02-02-2011, 08:22 PM

Thats true. But we can't afford to pay for the services the Gov't gives away right now. We have a trillion dollar deficit this year alone.

Tahoe

02-02-2011, 08:29 PM

I hope, though, that we can get out from underneath this debt, whack some agencies, cut taxes a lil and then help some more peeps out.

geerussell

02-02-2011, 09:18 PM

Tahoe

02-03-2011, 10:45 AM

So we're a rich country, with questionable fiscal policy and large deficits and debt.

How rich a country is does matter when placing debt in perspective.

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

We're 36th at 59% debt to gdp. Compared to say, Japan at number two with debt almost double the size of its economy. My takeaway from that is that no matter how bad you might believe the debt problem is now, there is ample room to kick the can before reality forces a crisis and resolution to it.

Who knows, we may have 2 or 3 ever bigger boom/bust cycles before we find ourselves with debt six times the size of our economy, looking back on today's debt as small and quaint. This is truly uncharted territory, here there be dragons, etc...

Our path is not sustainable, Gee. With the amount of peeps going on SS in the next 10 years, alone will increase our deficit and national debt to a point where we get swallowed by it. You know, the baby boomers. Then those same peeps go on Medicare too. Medicare is right there with Defense and SS as far as spending goes.

Then our deficit spending increases creditors can and will raise rates if we can't prove we're making any progress.

Tahoe

02-03-2011, 11:41 AM

We should cut corporate tax rates though, thats for sure. That will increase revenue.

geerussell

02-03-2011, 02:12 PM

Our path is not sustainable, Gee.

No, it's not--but that's the only thing that's known. When the house of cards comes down and precisely what will trigger it... nobody knows.

Then our deficit spending increases creditors can and will raise rates if we can't prove we're making any progress.

Not exactly. Government borrowing works differently. The treasury can issue debt by having a bond offering. There's no "creditor" to raise the rate. If faith in the government's ability to make good on the bonds drops enough, the government has to offer a higher rate to move those bonds, making borrowing more expensive.

However, the Fed can buy treasuries too--and has repeatedly of the last couple years (http://www.bloomberg.com/news/2010-11-06/treasury-yields-tumble-to-records-on-fed-s-plan-to-purchase-600-billion.html).

This is the benefit of having a sovereign fiat currency and your own central bank. You can have as much money as you want. You can print it, you can loan it to yourself, there is no limit to the shenanigans you can pull. As long as everyone else continues to play the game, buy your bonds, accept your currency and believe in "the full faith and credit of the united states" it goes on forever. Can. Kicked.

Combined with being the biggest economy in the world and being the world's reserve currency... there is no frame of reference you can look at and say ok, here's where things fall down and go boom. Hooray(?) for american exceptionalism.