Video: Ben Bernanke Interview on 60 Minutes – Depression Averted, Recovery Soon
Filed under: Bailout Bill, Ben Bernanke, Recession, U.S. Economy, U.S. Financial Crisis
Bernanke on 60 Minutes Part 1:
Bernanke on 60 Minutes Part 2:
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!
G20 Finance Ministers Meeting Upshot in Less Than 30 Seconds
U.S. Treasury Secretary Timothy Geithner met with his 19 counterparts today in the U.K. in advance of April’s Group of 20 meeting. The G20 represents the 20 largest industrial nations. Their membership accounts for around 85% of the world’s economic output.
The finance ministers are still split in two camps on economic stimulus. One camp, led by Germany, believes any further economic stimulus measures should wait until the results begin to come in from member countries on what they’ve already done. In the case of the U.S., that would mean having some sort of measure of the efficacy of the recently enacted economic stimulus bill. Other countries, it appears the U.S. is among them, are lobbying for member nations to prime the pump further, now.
There were three things in the communique issued at the end of today’s meeting. The members are pledging to cooperate on:
- Increase financial commitments to the International Monetary Fund for helping developing countries out of the recession;
- Regulation of hedge funds; and,
- Keep the core focus on getting banks around the world lending again.
Go over to the NYT for more.
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.
Click Image to Go to Original Page
The Obama Effect: Dow Having Best Week Since November
O.K. – the above headline is just as stupid as the right wing bloggers’ headlines have been since January. I just thought I’d throw one out there for our team. The truth about the market this week, I fear, is that this merely a bear rally. However, I’m intrigued by profitability in some of the biggest banks (so they say). I’m troubled by China’s premier calling us (U.S.) out today. It’s been a great week, but there’s still one helluva recession to slog through.
Suck It, Right Wing Bloggers and Radio Hosts
Full Text: Larry Summers Speech, Brookings Institution, The Obama Program and the Current Economic Crisis
Filed under: Recession, U.S. Economy, U.S. Financial 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.
Video: Preview – Jon Stewart v. Jim Cramer Tonight on Daily Show
IF YOU WANT FULL INTERVIEW CLICK THIS LINK
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.
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.
Rasmussen: Just Over Half of Americans Say Economic Depression at Least Somewhat Likely
From Rasmussen Reports:
Most Americans (53%) now think the United States is at least somewhat likely to enter a 1930’s-like depression within the next few years.
The latest Rasmussen Reports national telephone survey found that 39% think this outcome is unlikely.
Nineteen percent (19%) say a Depression is Very Likely while 7% say it is not at all likely.
The latest results are more pessimistic than those found in early January, when 44% said a 1930’s-like depression was likely in the next few years, and 46% disagreed.
Dear Secy Geithner: It’s Not Just Some Silly Bloggers Waiting for Change
Filed under: Bailout Bill, Banking, Recession, U.S. Economy, U.S. Financial Crisis
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.
The Daily Graphic: Manufacturers New Orders 2008, 2009
The U.S. Bureau of the Census has a handy economic indicators page where I found this:
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.
Sen. Specter: Nation on ‘brink of depression’
Filed under: Recession, U.S. Economy, U.S. Financial Crisis
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.
Obama turns the racial argument to one of socioeconomics
From the New York Times today, President Barack Obama says he wishes Attorney General Eric Holder would have chosen different language than “nation of cowards” when describing Americans and their ability to deal with race.
I stand by what I wrote earlier, I like what Holder said. I think he’s a smart guy who gave a speech dealing with the issue in a nuanced way. He was thinking and communicating. For the previous eight years we became accustomed to a lot of communication without much thought. During the presidential race there was even a minor debate among political watchers about whether or not the sort of intellect displayed by Barack Obama and other Democrats would play well with a public grown accustomed to having the world described to them in Bushian ‘black and white’ terms.
I wish Obama wouldn’t have “chided” Holder, as the Times puts it.
The president did take a moment to get at a bigger problem that sometimes gets confused with race: socioeconomic status. Obama was asked further about the “cowards” comment:
Mr. Obama was asked whether he agreed with Mr. Holder. He hesitated for five seconds before responding.
“I’m not somebody who believes that constantly talking about race somehow solves racial tensions,” Mr. Obama said. “I think what solves racial tensions is fixing the economy, putting people to work, making sure that people have health care, ensuring that every kid is learning out there. I think if we do that, then we’ll probably have more fruitful conversations.”
