Dow 7000?
Filed under: Fannie Mae, Freddie Mac, Ohio Economy, U.S. Economy, U.S. Financial Crisis
Back on October 6, I predicted - well sort of predicted by writing a headline on some market news aggregation - Dow 8,000. Based on the economic and financial industry news of that day just 2 1/2 months ago (seems longer) the Dow dropping to 8,000 and staying in that vicinity for some period of time seemed reasonable.
At the time we had been through Fannie and Freddie, Lehman was failing, more banks were failing and the federal government and media began explaining things like credit default swaps to America. Things looked bad, but some were still touting the “fundamentals” of the U.S. economy and the publicly traded companies on our major stock exchanges shouldn’t pay too high a price (with dropping share values) for the excesses of the financial services industry. Also at that time, I was reading Kevin Phillps’ book, Bad Money. If you want a better understanding than the average bear - or bull - of the current U.S. financial system Bad Money is a must read. At any rate, under the influence of that book, it was just obvious that as stocks dropped sharply that day there were probably many more shoes to drop, hence the market wasn’t at the bottom yet.
Now I’ll revise my estimate. On top of the crisis in the financial system and all that it entails, from failing banks to a still too tight credit market there are many more economic indicators pointing to the final quarter of 2008 just being the beginning of a difficult economic downturn. Here are a few things that immediately come to mind: Read more
Text: Henry Paulson Testimony before House Financial Services Committee | November 18, 2008
Filed under: Bailout Bill, U.S. Congress, U.S. Economy, U.S. Financial Crisis
(Source: U.S. Treasury Department)
Click this link for PDF of Sec. Paulson’s Testimony
Text: Ben Bernanke Testimony to House Financial Services Committee | November 18, 2008
Filed under: Bailout Bill, Ben Bernanke, U.S. Congress, U.S. Economy, U.S. Financial Crisis
Click this link for PDF of Chairman Bernanke’s testimony.
Big Three Automakers, UAW Go Begging on Capitol Hill
Filed under: U.S. Congress, U.S. Economy, U.S. Financial Crisis
Other Than Lehman, Who’s Not Too Big to Fail?
- Automakers beg for aid as their bailout bill stalls - Associated Press
- Big Three try to jumpstart U.S. bailout - Agence France Presse
- GM’s Wagoner: Bailout needed to save U.S. economy from ‘catastrophic collapse’ - Reuters
- Support unravels for Detroit’s share of $700 BN - Detroit Free Press
- Mulally defends Ford’s decisions - Detroit Free Press
- Automakers ask for federal help - Washington Post
- Automakers make their case to Congress - New York Times
Full Text: President George W. Bush, Speech on the Financial Markets and World Economy, Manhattan Institute, November 13
Filed under: Bailout Bill, Bush Foreign Policy, George W. Bush, U.S. Economy, U.S. Financial Crisis
(Source: White House Press Office)
THE PRESIDENT: Thank you very much. Please be seated. Thank you. Larry, thank you for the introduction. Thank you for giving Laura and me a chance to come to this historic hall to talk about a big issue facing the world. And today I appreciate you giving me a chance to come and for me to outline the steps that America and our partners are taking and are going to take to overcome this financial crisis.
And I thank the Manhattan Institute for all you have done. I appreciate the fact that I am here in a fabulous city to give this speech. (Applause.) People say, are you confident about our future? And the answer is, absolutely. And it’s easy to be confident when you’re a city like New York City. After all, there’s an unbelievable spirit in this city. This is a city whose skyline has offered immigrants their first glimpse of freedom. This is a city where people rallied when that freedom came under attack. This is a city whose capital markets have attracted investments from around the world and financed the dreams of entrepreneurs all across America. This is a city that has been and will always be the financial capital of the world. (Applause.) Read more
Text: George Soros Testimony to U.S. House Committee on Oversight and Government Reform, November 13, 2008
(Source: U.S. Congress, House Committee on Oversight and Government Reform)
Click Here for PDF of Soros’ Prepared Testimony
Treasury Bailing Out AIG Again
Filed under: Bailout Bill, U.S. Congress, U.S. Economy, U.S. Financial Crisis
Will There Be Spa Trips and English Hunting Excursions This Time?
I sure hope the executive pigs at AIG get it this time. After all, the last time our tax money was used to prop up their failing business, they spent hundreds of thousands on a West Coast spa and an English hunting trip.
This morning, the U.S. Dept. of Treasury announced the federal government was upping the AIG bailout ante by $40 billion — bringing the taxpayer funded tab to keep the company solvent to $150 billion. Additionally, AIG is getting a better deal today on the interest it is paying the federal government for loans the public is backing. As this once shining capitalist jewel becomes nationalized, that means the public accounts will reap less from the bad business decisions sown by AIG executives.
One must also remember that just weeks ago, New York Attorney General Andrew Cuomo told the insurance company that he was able and willing to ‘help’ them do away with golden parachutes, executive pleasure outings and huge bonuses. Then, U.S. Rep. Henry Waxman found that former AIG exec Joseph Cassano, who ran the company’s financial products section into the ground and left AIG in February was being paid $1 million a month - for nothing - even as the company slurped up taxpayers’ money. Read more
Bank Failures Surging in 2008
Filed under: Bailout Bill, George W. Bush, U.S. Economy, U.S. Financial Crisis
The last couple of times I’ve noticed that banks are failing it’s always on Saturday, as the FDIC quietly swoops in and takes over on a Friday afternoon. It seems like it’s happening more and more often so I took a look at the FDIC’s website. There is a spike this year, we’ve had 19 FDIC insured banks fail this year. The record I found only went back to 2000, there is a chart below. 41% of the bank failures in the last eight years have occurred this year. 33% of U.S. bank failures since 2000 have happened since July of this year.
Security Pacific Bank of Los Angeles and Franklin Bank of Houston, Texas became casulties on Friday. I’m looking at these numbers, the jobless rate, the housing bubble, Ford’s and GM’s woes - the list goes on - and I’m thinking that all Barney Frank, George Bush and Henry Paulson have done is throw $700 billion at Wall Street.
Video: Paul Krugman on Economy and Obama’s Economic Plan | November 7
Transcript: President-Elect Barack Obama First Press Conference, Chicago, IL
Filed under: Barack Obama, Iran, Obama Transition, U.S. Economy, U.S. Financial Crisis
(Source: CNN)
CHICAGO, Illinois (CNN) — Sen. Barack Obama spoke at a his first news conference as president-elect Friday afternoon. The following is a transcript of the conference:
Obama: Thank you very much, everybody. Thank you very much.
This morning, we woke up to more sobering news about the state of our economy. The 240,000 jobs lost in October marks the 10th consecutive month that our economy has shed jobs. In total, we’ve lost nearly 1.2 million jobs this year, and more than 10 million Americans are now unemployed. Read more
Text: Prof. Nouriel Roubini’s Congressional Testimony, October 30 | Dr. Doom Speaks
Prof. Nouriel Roubini testified today before the U.S. Congress Joint Economic Committee.
U.S. and World Markets Poised for Another Rocky Week
Hong Market Plunges Most Since 1989 Tiananmen Crackdown
– Bloomberg
Global markets continue slide, U.S. futures off 4%
- New York Times
‘Dr. Doom’ doesn’t see things getting better yet – Times of London
Grim GDP figures shows U.K. on verge of recession
– Times of London
Forecasters race to call the bottom
– New York Times
Last night, CBS News’ 60 Minutes ran another great, explanatory piece on how the investment class nearly ruined our economy. Check it out below:
Watch CBS Videos Online
For an explanation of credit default swaps go here.
Text: Alan Greenspan Testimony | Congress | October 23
Filed under: U.S. Congress, U.S. Economy, U.S. Financial Crisis
The following link is Alan Greenspan’s testimony before the House of Representatives Committee on Oversight and Government Reform in Washington today.
Click Here for Greenspan Testimony
The U.S. Government Lie: $700 Billion Bailout
Filed under: Bailout Bill, Journalism, U.S. Congress, U.S. Economy, U.S. Financial Crisis
When the U.S. government begins renaming terrible things like killing civilians with misplaced bombs “collateral damage,” we should all know we’re in trouble. When the media doesn’t challenge this government gobbledy-gook but rather adopts it, we’re in bigger trouble. The de-sensitizing has begun. Read more
Cat bounces Monday – Dies again today – What’s in store for tomorrow?
Filed under: Bailout Bill, U.S. Economy, U.S. Financial Crisis
DOWn over 700
- Dow loses 8% over recession fears – CNBC
- U.S. stocks plunge most since 1987 – Bloomberg
- Dow declines 733; S&P 9% - Wall Street Journal
- Plunge in stocks Highlights ailing economy – New York Times
- Most of Monday’s gain is erased – New York Times
- Wall Street plummets – Reuters
One Year DJIA Chart
Bernanke, Other News & Analysis
- Economic activity weak across U.S.: Beige Book – Reuters
- Bernanke says U.S. economy faces big threat – Reuters
- Fed considers more cuts – Wall Street Journal
- Bernanke says bailout will need time to work – New York Times
- Video Link: Bernanke’s Address Courtesy of CNBC
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