Video: Ben Bernanke Interview on 60 Minutes – Depression Averted, Recovery Soon

Bernanke on 60 Minutes Part 1:

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Bernanke on 60 Minutes Part 2:

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Add Condom Sales to Recession-Proof Business List

From the Columbus Dispatch on Saturday:

Nationwide, sales of male contraceptives in food, drug and mass-merchandise stores increased 6.4 percent in the last 13 weeks of 2008 compared with 2007, according to the Nielsen Co., which tracks products.

Nielsen also counts how many condoms are sold, and that number went up 2.4percent in the same period.

The trend continued in January, with sales up 5.3 percent compared with the previous year and per-unit sales up 1.6 percent, Nielsen found.

Condom sales are pretty much recession-proof, said Carol Carrozza, vice president of marketing at Ansell Healthcare in Red Bank, N.J. Ansell is one of the largest manufacturers of condoms in the world.

“In this time of fear, people tend to be coupling more,” Carrozza said. “There’s a nesting effect, and people are staying home.”

Reluctance to have children in uncertain times also adds to the condom boom, she said.

The piece also dealt with Hilliard, Ohio condom entrepreneur Brian Frank.  His business, Undercover Condoms, has had a “rise” in sales even though the economy is “flagging.”

If you want to wrap your rascal, or your mate’s, go visit Undercover Condoms.  Buy Ohio!

The Daily Graphic: Interactive Graphic from NYT – How the Gov Dealt With Past 7 Recessions

You’ll need to experience this on your whole screen.  Click the image below to go to the NYT website.  Each recession or pair of recessions includes and audio clip from an economist explaining more about the particular circumstances of that downturn.

Full Text: Larry Summers Speech, Brookings Institution, The Obama Program and the Current Economic Crisis

(Source: White House Press Office)

I am glad to be here. This morning I want to describe our understanding of the root of our current economic crisis, talk about the rationale for the Administration’s recovery strategy, and connect our longer-term economic strategy to the central objective of sustained and healthy expansion.

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U.S. Household Wealth Still Falling – Fed

From the BBC:

Households saw a 9% drop in wealth from the previous quarter – the largest since the Fed began collecting records more than 50 years ago. …

…The decline in net worth was the sixth consecutive quarterly drop.

The record fall pushed the total net worth of households down to $51.48 trillion.  It has now fallen 20% below its peak of $64.36tn in the third quarter of 2007.

Since then house prices have tumbled and more than a million people have lost their homes.

The World Has 332 Fewer Billionaires This Year

From the BBC:

Just 793 people can now lay claim to a place on the list, but on average they have lost 23% of their wealth.

The stock market collapse helped Microsoft founder Bill Gates regain the top spot, despite his wealth declining $18bn (£13.06bn) to $40bn.

He ousted investor Warren Buffet whose fortune declined by $25bn to $37bn.

Recession: From Wall Street to … Sesame Street?

From the Financial Times:

The recession has spread from Wall Street to Sesame Street. The home of Elmo and Oscar the Grouch announced on Wednesday that it would eliminate a fifth of its 355-strong workforce as market turmoil ate into its income and assets.

Sesame Workshop, the 41-year-old non-profit educational organisation behind the Sesame Street television programmes, toys and community projects, said on Wednesday it was “not immune to the unprecedented challenges of today’s economic environment”.

Unemployment Double Digit in Four States, National number exptected to follow by year’s end

From the Associated Press:

Four states — California, South Carolina, Michigan and Rhode Island — registered unemployment rates above 10 percent in January, and the national rate is expected to hit double digits by year-end.

The Labor Department’s report on state unemployment, released Wednesday, showed the increasing damage inflicted on workers and companies from a recession, now in its second year. Some economists now predict the unemployment rate will hit 10 percent by year-end, and peak at 11 percent or higher by the middle of 2010.

In December, only Michigan had a double-digit jobless rate. One month later, four states did and that did not count Puerto Rico, where the unemployment rate actually dipped to 13 percent in January, from 13.5 percent in December.

Dear Secy Geithner: It’s Not Just Some Silly Bloggers Waiting for Change

I’ve now read in two different places that U.S. Treasury Secretary Timothy Geithner blames some of his bad pub on those rascally bloggers.

Well, it’s not just the bloggers.  How about Paul Krugman in a column on Monday headlined, Behind the Curve:

So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.

O.K., that’s a warning, not a prediction. But economic policy is falling behind the curve, and there’s a real, growing danger that it will never catch up. (emphasis Clips & Comment)

Or, how about Krugman last week in The Big Dither:

Last month, in his big speech to Congress, President Obama argued for bold steps to fix America’s dysfunctional banks. “While the cost of action will be great,” he declared, “I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.”

Many analysts agree. But among people I talk to there’s a growing sense of frustration, even panic, over Mr. Obama’s failure to match his words with deeds. The reality is that when it comes to dealing with the banks, the Obama administration is dithering. Policy is stuck in a holding pattern.

Notice something?  Geithner is mentioned in the Big Dither, but the bullseye for this mess with the banks and AIG is falling squarely on the president in both columns.

Here’s from an op-ed from David Smick in Tuesday’s Washington Post, Tim Geithner’s Black Hole:

Pity Barack Obama’s economic advisers. The blogs are now demanding their scalps, and Treasury Secretary Tim Geithner and his colleagues face a nasty dilemma: There are no solutions to the banking crisis without extraordinary political and financial risks. Thus, they have adopted a three-pronged approach, delay, delay, delay, in the hope that somebody comes up with a breakthrough. …

… The Obama team needs to remember that we got into this mess because of a lack of financial transparency. It’s time to tell the American people what the stock market already knows: that the path to recovery will probably be expensive and politically unpopular, perhaps explosively so. …

… In the end, at least one thing is certain: Our present position is unsustainable. The longer we delay fixing the banks, the faster the economy deleverages, the more credit dries up, the further the stock market falls, the higher the ultimate bank bailout price tag for the American taxpayer, and the more we risk falling into a financial black hole from which escape could take decades.

Here’s the problem with voters, taxpayers.  Or, should I say here’s the problem with at least this voter and taxpayer.  I voted for change.  I was incensed, not so much by the $700 billion Paulson bailout, but by the rabbit hole the money seemed to disappear down.  We were told at the time that there was a national emergency and the government needed to dole out this money and fast.  We were told it would be used to corral some of those toxic assets and allow the banks to get back on track.  Here’s a couple of stock quotes from today’s close:

• Citigroup – $1.05
• Bank of America – $3.75

The Bush Administration either lied to buy time or no one knows what the hell they’re doing.  Don’t forget, Tim Geithner was one of the architects of TARP 1 as head of the New York Fed.

I want one of two things.  First, justice.  That means the pigs who brought this down upon us should experience the ultimate downside of that pure capitalism they love so much – failure.  Or, second, someone in the federal government to take whatever time is needed and explain to the American people as simply as possible why any of these foolish companies are too big to fail and what it will take to make things right.

When Tim Geithner whines about blogs, he’s whining about Americans who are frustrated with a system that is rigged for only the wealthy and privileged among us.  He’s whining about people who do their part, play their role in this economy whose lives are being changed or put on hold because of high tech, high finance gambling on Wall Street.  While the Treasury Secretary ‘dithers’ and prepares to throw more of our money into the maw of AIG or CitiGroup with little transparency or meaningful explanation, he’s blowing his boss’ political capital as well as our tax dollars.

I guess you could sum this up as follows: If we’re in what’s akin to a wartime situation, lay it out for us, don’t talk down to us.  And, since this isn’t war, shed the light of day on where the hundreds of billions of money from the executive branch has gone – every penny – and explain what $4 trillion in “guarantees” from the Federal Reserve means.

Must Read – Understanding the Problem with Banks and the Government

You should read the David M. Smick’s entire column, Tim Geithner’s Black Hole, over at the Washington Post.  Here’s an excerpt:

… The logical alternative — talk show hosts’ solution du jour — is to temporarily restructure or nationalize the banks and leave taxpayers alone. Remove the toxic assets, replace management and cut the too-big-to-fail financial dinosaurs into smaller, nimbler entities. Then reprivatize these smaller banks and let the recovery begin.

Oh, if it were that simple. I suspect Obama’s advisers would like nothing more than to dismantle an irresponsible firm such as Citigroup. They are afraid to do so, for one reason: All the big banks are connected to a potentially lethal web of paper insurance instruments called credit default swaps. These paper derivatives have become our financial system’s new master.

The theory holds that dismantling a big bank could unravel this paper market, with catastrophic global financial consequences. Or not. Nobody knows, because the market for these unregulated financial derivatives, amounting potentially to over $40 trillion (by comparison, global gross domestic product is now not much more than $60 trillion), is the financial equivalent of uncharted waters. …

Bloomberg: Cleveland, Detroit Canaries in the Coal Mine for Coming Commercial Real Estate Problems

From Bloomberg on Monday:

March 9 (Bloomberg) — If you want to know what’s going to happen to commercial real estate across the U.S., look no further than Cleveland and Detroit.

Those two metropolitan areas lead the U.S. in mortgage delinquencies for owners of office buildings, apartments, malls and warehouses, a sign that cities hurt by the housing crisis will see their commercial markets dragged down next.

Commercial properties with mortgage payments 60 days late or more rose to 3.93 percent as of March in the Cleveland area and to 3.75 percent in the Detroit area, according to data compiled by Bloomberg. The North American commercial property delinquency rate is 1.1 percent, according to Standard & Poor’s. …

… Cleveland’s office vacancy rate was 14.8 percent in 2008 and is forecast to rise to 20.4 percent in 2010, according to CBRE Econometric Advisors, part of CB Richard Ellis Group Inc., the largest U.S. commercial real estate broker. A rate above 20 percent would be the highest since 1991, according to Jon Southard, principal at CBRE Econometric.

Cleveland’s unemployment rate was 7.1 percent in December. Ohio’s unemployment rate was 8.8 percent in January as the state lost 214,600 non-farm jobs, including 90,600 in manufacturing and 12,000 in financial services.

Anyone Else Sick of Lame Commentary on Why Stocks Are Down?

Okay, here’s the headline of the number one story on Bloomberg’s front page:

U.S. Stocks Decline on Buffett’s Remarks, World Bank Warnings About Economy

I’m not sure why they even posted the reporter’s story, they said it all right there in the headline.  Today after the stem cell press conference by President Obama, I took a gander at Google Finance’s front page.  Although the Dow showed down, you could tell there had been a spike up around 1 p.m. or so.  One of the stories in the feed was headed: “Shares Rocket on Stem Cell Announcement.”

This is getting stupid.  Or, how about the partisans who like to point out that the market is down since Obama took office.  Bubba Please!

I’m not an economist, I lost $8k one summer trying to “roll stocks,” and I suck at math.  But, I do get up every morning and pay attention to what’s going on in the world.  I read a lot.  I can tell you this – stocks are down because we’re in a helluva recession and they’re going down some more.  I said 7K for the Dow last fall and we’ve blown that.  At the time I based it on one thing and one thing only: Big Bad News.  I knew there would be more — and there’s more to come.

All of the official economic indicators seem to be still in freefall.  The latest interesting thing I’ve heard about large institutional investors and hedge funds is that they’re buying gold – not a lot, but some.  It doesn’t matter what Warren Buffett or Rush Limbaugh or Dalai Llama says on any given day.  We’re in this for awhile.

Final thought: One thing we don’t need is the media going all drama on us.  I personally would like to hear the Warren Buffetts and Timothy Geithners of the world talk us through this thing.  I also know these guys are going to clam up if every move they make is laid out over a chart of the DJIA.  We’re not hearing enough from financial wizards in or out of government.  I hope the media doesn’t turn them completely reticent.

Sen. Specter: Nation on ‘brink of depression’

From the Associated Press:

HARRISBURG, Pa. — The nation is on the “brink of a depression,” but there’s a “reasonable chance” that the $787 billion economic stimulus package will help ease the situation, Sen. Arlen Specter said Monday.

Specter, R-Pa., said the nation’s economic situation is more dire than the public has been told, but did not elaborate.

“Our economic problems are enormously serious _ more serious than is publicly disclosed. And I think we’re on the brink of a depression,” he told reporters at the state Capitol.

If there’s one thing I’m sick of – from Ds and Rs – it’s not playing straight with voters and taxpayers about where all the money to banks and AIG is going.  That gets right at the heart of how “dire” the economic situation is today.  Specter gets a FAIL for not elaborating.

Buffet Says ‘Patriotic Americans’ Will Get Behind Obama

The Bloomberg lowdown on Warren Buffett’s time on CNBC today:

“We are doing things now that are potentially very inflationary,” he said. Buffett called on Congress to unite behind President Barack Obama, comparing the economic crisis to a military conflict that needs a commander-in-chief. “Patriotic Americans will realize this is a war,” he said.

More Inane Commentary from Columbus Tea Party Organizer

Meet Justin Higgins, a 19 year-old Ohio State University college Republican who’s got things all figured out.  I mean if it weren’t for Constitutional provisions against one so young holding the nation’s highest office, we could put young Justin there in the White House, hold him in high esteem like a young Dalai Llama and he could point us all along the path to political and economic enlightenment.

For now, though, we’ll have to settle for Saturday, March 14 at the Statehouse in Columbus where Higgins will be the master of ceremonies for The Columbus Tea Party.  The party begins at 11 a.m. and is sponsored by College Republicans and Americans for Prosperity.  (Do you know any Americans who are not for prosperity?)

Higgins and others are wigging out over the enactment of the American Recovery and Reinvestment Act, aka the Stimulus Bill.  The notion that the need for this bill rests in part on the unregulated economic behavior of most of the world’s major banks, investment houses and insurers is completely lost on them.  While Justin no doubt luxuriates in his college boy lifestyle subsidized by Mom and Dad, he’s got the time for contemplation to say stupid things like this on 610-WTVN radio today:

We’re going to protest and basically tell Governor Strickland that we don’t want him taking this stimulus money because the last thing we need is more unfunded mandates and more ridiculous spending on the state level.

When these funds run out, we have to pay for it.

Allow me to get right to the point with young master Higgins:  What the hell are you talking about?

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