"The total potential federal government support could reach up to $23.7
trillion," says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a report released today on the government's efforts to fix the financial system. Yes, $23.7 trillion.
"The potential financial commitment the American taxpayers could be
responsible for is of a size and scope that isn't even imaginable,"
said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight
and Government Reform Committee.
"If you spent a million dollars a day going back to the birth
of Christ, that wouldn't even come close to just $1 trillion -- $23.7
trillion is a staggering figure." To be sure, we aren't there yet.
The government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis.
The U.S. Commerce Department said Wednesday that orders for durable goods fell 2.5 percent last month, much larger than the 0.6 percent decline that economists had expected. It was the biggest setback since a 7.8 percent decline in January.
With 38% of S&P 500 companies reporting Q2 2009 numbers, on a real basis, earnings have declined over 98%. This is the largest decline on record going back to 1936.
The Bloomberg administration, which has struggled with a seemingly
intractable problem of homelessness for years, has paid for more than
550 families to leave the city since 2007, as a way of keeping them out
of the expensive shelter system, which costs $36,000 a year per family.
All it takes is for a relative elsewhere to agree to take the family in.
Citigroup (C) is considering paying a $100 million bonus -- to one guy.
This
is the same Citigroup that received $45 billion in bailout money. The
same Citigroup that will soon be 34% owned by the U.S. government. The
same Citigroup that has lost 95% of its share value since 2007.
Citigroup
is in no position to be awarding bonuses of $10 million -- let alone
adding another zero to that amount. So why is it mulling such a
colossally dumb move? Because the guy demanding it is probably the
bank's most valuable employee.
Enter Andrew Hall. He's a rock
star, a legend among banking circles. He makes a boatload of money for
Citigroup as head of Phibro, the bank's energy-trading unit. The Wall Street Journal calls Phibro
a secretive operation, housed in a former Connecticut dairy farm, that
"occasionally accounts for a disproportionate chunk of Citigroup
income."
Phibro made so much money for Citigroup last year that
Hall got a $10
“When the government tries to make people more equal, it
makes them more unequal.” James Cook
“The first lesson which we meet again and again in history,
is that once the dole or similar relief program are introduced, they seem
almost inevitably – unless surrounded by rigid restrictions – to get out of
hand. The second lesson is that one this
happens the poor become more numerous and worse off then they were before, not only
because the have lost self reliance, but because the sources of wealth and
production on which they depend for either their doles or jobs are diminished
or destroyed.” Henry Hazlitt
A top Chinese official said on Tuesday the United States should be
careful about flooding global markets with dollars while the world
struggles to restore economic stability and get growth back on track.
The arithmetic of this recession still looks pretty dismal, and why the politics and psychology of it are starting to become disconnected from reality in a scary way. Scary because we seem ready again to declare that everything is hunky-dory
The New York Times recently reported that the latest scheme -- or scam -- on Wall Street is something called High Frequency Trading. Very sophisticated financial firms, such as Goldman Sachs, are tipped off by the New York Stock Exchange's own computers
There is nothing that I find more annoying that the refrain that ‘markets do not work’ that arises whenever we have a crisis or even when someone dislikes an economic outcome. Markets as an abstraction can be always shown to be functioning quite nicely. The difficulty arises when the market is deliberately or accidently distorted to misplaced advantage. We have in fact a barbarian horde attacking our economy at all times with battalions of lawyers and paid flacks.
Before someone wishes to tell me that I am wrong, I want someone to explain when was the last time they received a fee for lending stock to anyone. And believe me if you have stock lodged it generally can be lent, especially if you have a margin account. Even a trivial debt is enough to supply a whole portfolio.
Naked short selling avoids all the niceties. The trader sells short and forgets about it. If the price rises it then can get dicey, but he is packing several positions to play around with.
The recession is over, Newsweek screams from the cover of its most recent issue, which is out today, and which you can read by clicking here.
Three things you need to know:
a) No, it isn't.
b) Magazines depend on rack sales for revenue.
c) Rack sales are driven by purposefully hyperbolic headlines, everything from "ELVIS LIVES!" to "The Recession Is Over!"
Once you read the story inside, you will see that Newsweek economics columnist Dan Gross hasn't exactly, definitively, proclaimed the end of the recession, now in its 19th month.
"The Great Recession," Gross writes, "is most likely over."
He admits this is a technicality. Recessions end when gross domestic
product stops shrinking. And that may actually happen later this year.
But he goes on to correctly state that unemployment will continue to
rise, just as it has after the end of previous recessions, and it will
still fee
Ben S. Bernanke, the chairman of the Federal Reserve,
is on a publicity campaign with a message: the central bank is here to
help, and it is not as mysterious or menacing as people might think.
In a profound departure from the central bank’s tradition as an
aloof and secretive temple of economic policy, Mr. Bernanke has plunged
into the public spotlight to an extent that none of his predecessors
would have contemplated.
He has given a television interview to “60 Minutes” on CBS,
including a tour of his hometown, Dillon, S.C.; held what amounted to a
televised news conference; and written newspaper commentaries to
explain the Fed’s efforts to fight the financial crisis.
On
Sunday, Mr. Bernanke reached another milestone in his evolution from
Fed chairman to Fed showman, participating in a one-hour town
hall-style forum here organized and moderated by Jim Lehrer of “The NewsHour” on PBS.
Like
a political candidate on the campaign trail — inde
"The solid truth is that the United States in it's own way has reached the point where the Soviet Union was just prior to it's collapse. That is exactly where the United States is, the systemic collapse has occurred"...
The stimulus came to an end. But borders still had to be protected. And Roman mobs, made up of displaced small landowners and out-of-work laborers, needed bread and circuses which drained the Treasury.
“They’ve done the math on their account and they’re very angry,” said Corey Calabrese, a Fordham Law student who is an administrator of the school’s walk-in clinic for debtors at Manhattan Civil Court.
It makes some homeowners in foreclosure liable for the difference between their mortgage and what their lender can recoup from reselling the house. In the current housing market, the difference is generally more than $100,000...
"As the hotel economy worsened, we have seen it impact all property types.The properties range from the luxurious St. Regis Monarch Beach Resort in Dana Point to the more economical Extended Stay and Red Roof Inn chains.
Carloads originated on U.S. railroads in June 2009 were down 19.5% (252,078 carloads) from June 2008 to 1,037,928 carloads. June 2009 was the eighth straight double-digit monthly carload decline...
The stock market is pricing in not just a "recovery" but 5-7% GDP growth over the next year! That is simply insane: there is zero support for such a belief anywhere in the macro economic view...
Russia and China have put forth "proposals" which have been highlighted as possible alternatives to the dollar. China has proposed the formation of a new global currency based on a reform of SDR system:
"It is a feasible plan to reform the present SDR and make it into a real settlement currency, a universally accepted 'currency basket' that would replace the dollar at the heart of the monetary system," (Li Ruogu, chairman of the Export-Import Bank of China, Reuters, 6 July 2009)
Naked swaps, where the investor doesn't own the debt on which the contracts are based, have proliferated in the market and may be prohibited under legislation being drafted by House Financial Services Committee Chairman Barney Frank. (Sounds fishy to me)
The chart shows Residential real estate in blue and Commercial in red. Residential real estate peaked 21-24 months before Commercial, but note how much faster commercial is falling now. Can you say banking disaster?
