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Latest Articles: Economy
Michael Hudson: The Financial Road to Serfdom – How Bankers are Using the Debt Crisis to Roll Back the Progressive Era
Post Date: 2011-06-13 11:04:36 by lucysmom
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Financial strategists do not intend to let today’s debt crisis go to waste. Foreclosure time has arrived. That means revolution – or more accurately, a counter-revolution to roll back the 20th century’s gains made by social democracy: pensions and social security, public health care and other infrastructure providing essential services at subsidized prices or for free. The basic model follows the former Soviet Union’s post-1991 neoliberal reforms: privatization of public enterprises, a high flat tax on labor but only nominal taxes on real estate and finance, and deregulation of the economy’s prices, working conditions and credit terms. snip From the bankers’ ...
‘Perfect Storm’ May Threaten Global Economy: Roubini
Post Date: 2011-06-13 08:37:55 by Happy Quanzaa
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A “perfect storm” of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, New York University professor Nouriel Roubini said. There’s a one-in-three chance the factors will combine to stunt growth from 2013, Roubini said in a June 11 interview in Singapore. Other possible outcomes are “anemic but OK” global growth or an “optimistic” scenario in which the expansion improves. “There are already elements of fragility,” he said. “Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger ...
Dear Leader calls Obamanomic confidence pow-wow w/ Gov't Electric CEO/Job Czar Immelt's panel of experts
Post Date: 2011-06-13 08:27:16 by Happy Quanzaa
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Obama Meets With Immelt-Led PanelSeeking to Boost Confidence in Economy President Barack Obama meets today with almost two dozen current and former company leaders including General Electric Co. (GE) Chief Executive Officer Jeffrey Immelt to try and convince the business community as well as voters that the slowing economy doesn’t undercut his policies. It’s not an easy sell. Obama is stopping in two states that are critical to his reelection -- North Carolina and Florida -- and where unemployment rates top the national average of 9.1 percent. With the White House and Congress mired in negotiations to cut government spending and raise the $14.3 trillion federal debt ceiling, ...
Brain-Dead Economy
Post Date: 2011-06-13 08:07:06 by Happy Quanzaa
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A few thoughts prompted by "Stocks Swoon, Worry Rises" -- the banner headline in the weekend Wall Street Journal: • Even as stocks swoon and worries mount, our president continues to hold his head high -- a little too high, in fact -- every time he strides to the podium. This makes him the anti-Princess Di. He is always triumphantly chin up, just as she, poor thing, was always tremulously chin down. Given the lousy state of the economy, he might try to be a little self-effacing himself. He should stop acting as if he expects his every word to be greeted with rapturous applause. • Why would anybody pay $2.6 million to have a "power lunch" with Warren ...
PJTV: Obama's Economic Recovery Summer, Part II: The Wrath Of Keynes!
Post Date: 2011-06-13 07:32:26 by Happy Quanzaa
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Trifecta looks at the failed theories of economist John Maynard Keynes, and his economic follower, President Obama. Does more government spending lead to prosperity, or does it result in more debt and a severely damaged economy?
Subprime 1-2-3
Post Date: 2011-06-12 11:11:51 by lucysmom
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Subprime borrower: Has a few overdue credit card bills; goes to a storefront lender owned by major bank; takes out a $100,000 home-equity loan at 11 percent interest Lending bank: Assuming housing prices will only go up, and that investors will want to buy mortgage loan packages, makes as many subprime loans as it can Investment bank: Packages subprime mortgages into bundles called collateralized debt obligations, or cdos, then sells those cdos to eager investors. Goes to insurer to get protection for those investors, thus passing the default risk to the insurer through a "credit default swap." Insurer: Thinking that default risk is low, agrees to cover more money than it can ...
From Liberal to Libertarian: Bush, Obama and the Final Bubble
Post Date: 2011-06-11 14:55:58 by Hondo68
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Introduction: Ideas and Change America’s once vibrant Republic has morphed into an imperial oligarchy. The regime has weaved a new dogma preached faithfully by pundits and politicians of both parties. As that dogma crumbles in the face an impending economic collapse, the vast majority of citizens will be left in an ideological vacuum. Palin or Obama, Fox or CNN, The Drudge Report or The Huffington Post; they simply affirm to their followers and viewers different shades of the same worldview. From within this paradigm it’s impossible to grasp the enormous manipulation and dysfunction that besets the nation. In the past there was sufficient diversity of ideas within the mainstream ...
China ratings house says US defaulting: report
Post Date: 2011-06-11 04:03:45 by Happy Quanzaa
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A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order. "In our opinion, the United States has already been defaulting," Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying. Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies -- eroding the wealth of creditors including China, Guan said. Guan did not immediately respond to AFP requests for comment. The US government will run out of room to ...
Treasury slams big banks' mortgage modifications
Post Date: 2011-06-10 01:30:26 by lucysmom
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The nation's largest mortgage loan servicers have done a poor job in modifying distressed home loans through the government's foreclosure prevention program and need "substantial improvement," the Obama administration said Thursday. Based on a recent audit, Bank of America, Wells Fargo and JPMorgan Chase will lose government financial incentives — which reach at least $1,000 for a permanent loan modification — until they improve, the Treasury Department said. They received $24 million in such incentives last month. snip The audits checked performance areas such as how well servicers dealt with homeowners and evaluated them for modifications, which could ...
Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon
Post Date: 2011-06-09 17:08:25 by CZ82
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The New York Times's Pulitzer Prize-winning columnist reveals how the financial meltdown emerged from the toxic interplay of Washington, Wall Street, and corrupt mortgage lenders In Reckless Endangerment, Gretchen Morgenson, the star business columnist of The New York Times, exposes how the watchdogs who were supposed to protect the country from financial harm were actually complicit in the actions that finally blew up the American economy. Drawing on previously untapped sources and building on original research from coauthor Joshua Rosner—who himself raised early warnings with the public and investors, and kept detailed records—Morgenson connects the dots that led to ...
The Coming Crash of 2013
Post Date: 2011-06-08 12:57:37 by Happy Quanzaa
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On Inauguration Day, 2009, President Obama seemed so politically blessed by the timing of developing economic trends. I expected that based on American economic history, recovery from the recession should have occurred some time during 2009. Even the longest previous recession since the Great Depression would have resulted in a recovery in summer 2009, as the recession began in December 2007. Moreover, prior American history had shown that the deeper the recession the stronger the recovery. So I was expecting President Obama to pass his economic recovery plan, as foolhardy and ineffective as I believed it would be, and then to ride a wave of adulation as the economy roared back later in ...
Chart of the Day: The Death of Small Businesses
Post Date: 2011-06-08 10:48:36 by lucysmom
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Like me, you've probably been hearing for years that small businesses are the engine of job creation in the United States. But that's an outdated view. The number of new startup businesses has declined sharply since the beginning of the recession, while the number of jobs created by startup businesses has been declining for over a decade. As this chart from the BLS shows, the number of jobs created by new businesses peaked in 2000, began declining at the start of the Bush administration, and has been plummeting ever since: The number of new establishments for the year ending in March 2010 was lower than any other year since the series began....The number of jobs created by ...
Obama wants to bailout Greece, says they're why U.S. economy sucks
Post Date: 2011-06-08 08:01:36 by Happy Quanzaa
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Obama Presses Europe, Pledges Help for Greek Crisis President Barack Obama on Tuesday urged European countries and bondholders to prevent a "disastrous" default by Greece and pledged U.S. support to help tackle the country's debt crisis. Obama, whose political prospects have suffered from persistently high unemployment and ballooning U.S. debt, has pinpointed the euro zone crisis as one foreign "headwind" hitting the U.S. economy. After a meeting with German Chancellor Angela Merkel, he stressed the importance of German "leadership" on the issue - a hint that he expects Berlin to help - while expressing sympathy for the political difficulties European ...
GOP's Fuzzy Math Misstates CBO Revenue Projections
Post Date: 2011-06-07 09:56:19 by lucysmom
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snip Since 2001, the national debt has increased $11.8 trillion. This resulted from a $6.2 trillion decline in revenues and a $5.7 trillion increase in spending. Of the revenue decline, $2.8 trillion resulted from legislated tax cuts and $3.4 trillion from economic and technical factors. On the spending side, almost all of the increase was legislated, with $2.4 trillion of it coming between 2001 and 2008. Despite the significant contribution of tax cuts to the national debt, Republicans argue that higher revenues are off the table in the debt limit negotiations. In a May 16 floor speech, Sen. Jon Kyl (R-AZ), the assistant Senate minority leader, made this fact clear in no uncertain terms. ...
Daily economic briefings disappear from Dear Leader's White House schedule
Post Date: 2011-06-07 03:55:53 by Happy Quanzaa
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At some point during the first two years of his administration, President Obama stopped receiving the daily economic briefing that he requested when he took office. Former White House press secretary Robert Gibbs announced at his own first daily briefing reporters that Obama asked for the daily economic briefing, described then as comparable to the daily intelligence briefing the president gets every morning. “The president asked that this be added every day to his schedule,” Gibbs said at the time. Gibbs added that Obama believed it is “important that each day he receive the most up to date information as it relates to the economy.” But at some point, the daily ...
Chronic unemployment worse than Great Depression (O more depressing than FDR)
Post Date: 2011-06-06 13:22:21 by Hondo68
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There is an unfortunate adage for the unemployed: The longer folks are out of a job, the longer it takes them to find a new one.CBS News correspondent Ben Tracy reports that the chronically unemployed face the hardest road back to recovery, and that while the jobs picture may be improving statistically on a national level, it is not for them. Tinong Nwachan, for example, has far too much time on his hands. When CBS News met the former truck driver he had been out of work for two years. "I don't really tell too many people this but I'm not ashamed or nothing, I'm homeless," Nwachan said.Summer job bummer: Teen unemployment 24 percentNearly 14 million Americans are ...
Economy Points Down, Takes Market With It
Post Date: 2011-06-05 20:50:12 by Happy Quanzaa
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With summer around the bend, investors are fretting about the return of something much more unpleasant: the bear market. Suddenly, there are reasons for worry that stocks could be entering a difficulty period, including suddenly poor economic data, troubling signs from housing and a rush of companies selling shares. The Dow Jones Industrial Average fell 2.3% last week, its fifth down week in a row. The Dow is now down 5.2% from its post-crash high, set in May. Other stock indexes also are suffering. The Nasdaq Composite fell 2.3% and is now down 46% from its high. The Standard & Poor's 500-stock index was also off 2.3% for the week. Highlighting the ugly week: The Dow tumbled ...
Obama tunes out, and business goes on hiring strike
Post Date: 2011-06-05 17:43:00 by Happy Quanzaa
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Last week I noted that various forms of the word "unexpected" almost inevitably appeared in news stories about unfavorable economic developments. You can find them again in stories about Friday's shocking news, that only 54,000 net new jobs were created in the month of May and that unemployment rose to 9.1 percent. But with news that bad, maybe bad economic numbers will no longer be "unexpected." You can only expect a robust economic recovery for so long before you figure out, as Herbert Hoover eventually did, that it is not around the corner. Exogenous factors explain some part of the current economic stagnation. The earthquake and tsunami in Japan caused a ...
The U.S. corporate tax haven [Full Thread]
Post Date: 2011-06-04 09:41:06 by lucysmom
44 Comments
When we think of corporate tax havens, we often think of offshore accounts. Well, think again: the United States has become a giant tax haven for corporations. That’s what’s so crazy about the current call to lower corporate tax rates in the United Stats: they’re already (as graph below shows) paying a historically low percentage of federal tax revenues. snip The fact is, we’re being held hostage—by corporations and mainstream economists alike—to the idea that one tiny group in society has the right to appropriate most of the surplus and to decide when and where most jobs will be created. And, if it doesn’t get its way, it’ll deploy its capital ...
Krugman's Rightful Victory Lap - Mone Too... [Full Thread]
Post Date: 2011-06-03 12:10:35 by war
159 Comments
Earlier this week, the Federal Reserve Bank of New York published a blog post about the “mistake of 1937,” the premature fiscal and monetary pullback that aborted an ongoing economic recovery and prolonged the Great Depression. As Gauti Eggertsson, the post’s author (with whom I have done research) points out, economic conditions today — with output growing, some prices rising, but unemployment still very high — bear a strong resemblance to those in 1936-37. So are modern policy makers going to make the same mistake? Mr. Eggertsson says no, that economists now know better. But I disagree. In fact, in important ways we have already repeated the mistake of 1937. Call ...
Sharks who made a killing out of 'care': How City predators destroyed firm caring for 31,000 old people
Post Date: 2011-06-03 11:13:45 by lucysmom
19 Comments
* Care-home bailout could cost £600m * Second biggest care company also in trouble Shark: Stephen Schwarzman's U.S. private equity firm Blackstone bought out Southern Cross Healthcare in 2004 before selling them three years later Taxpayers face having to rescue more than 31,000 vulnerable people amid financial meltdown at the UK’s biggest care-home company. The bill could run into hundreds of millions of pounds after ruthless City speculators left Southern Cross Healthcare in dire straits. There is anger and outrage that so many lives have been thrown into turmoil through the actions of City venture capitalists. The U.S. private equity firm Blackstone, led by Stephen ...
US Sheds More Government Jobs In May
Post Date: 2011-06-03 08:36:48 by war
13 Comments
June 3 (Bloomberg) -- U.S. employers in May added the fewest number of workers in eight months and unemployment unexpectedly rose to 9.1 percent, underscoring Federal Reserve concerns the expansion is failing to boost the labor market. Payrolls increased by a less-than-projected 54,000 last month, after a revised 232,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000. The jobless rate climbed to the highest level this year from 9 percent a month earlier. The report may fan concern growth is faltering amid a pullback in consumer spending, which ...
Obama Admin Admits: Gov’t Will Lose $14 billion on Auto Bailout
Post Date: 2011-06-02 18:04:00 by CZ82
9 Comments
Obama Admin Admits: Gov’t Will Lose $14 billion on Auto Bailout Posted on June 1, 2011 at 12:31pm by Jonathon M. Seidl WASHINGTON (AP) — The Obama administration said Wednesday that the government will lose about $14 billion in taxpayer funds from the bailout of the U.S. auto industry. In a report from the president’s National Economic Council, officials said that figure is down from the 60 percent the Treasury Department originally estimated the government would lose following its $80 billion bailout of Chrysler and General Motors in 2009. The report‘s release coincides with the administration’s efforts to tout the bailout’s role in the revitalization of ...
Stocks skid as banks slash jobs outlook
Post Date: 2011-06-01 12:34:49 by Happy Quanzaa
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NEW YORK (Reuters) - Stocks skidded on Wednesday, with the Nasdaq off 1 percent as more weak economic data cemented fears of a slowdown and prompted big Wall Street players to slash their forecasts ahead of the closely watched payrolls report on Friday. The Dow Jones industrial average (DJI:^DJI - News) dropped 174.00 points, or 1.38 percent, to 12,395.79. The Standard & Poor's 500 Index (^SPX - News) fell 17.71 points, or 1.32 percent, to 1,327.49. The Nasdaq Composite Index (Nasdaq:^IXIC - News) took off 32.67 points, or 1.15 percent, to 2,802.63.
VOICE Demands Immelt, GE, Bank of America, JP Morgan Address Foreclosure Crisis
Post Date: 2011-06-01 11:16:41 by lucysmom
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Daniel Pennell, a systems expert who has testified before the Virginia House of Representatives on MERS, sent this video compilation from VOICE, a large interfaith group here in the state of Virginia that works for the betterment of local communities. He asks: Although these stories are from Manassas, they could be from any of hundreds or thousands of communities across the United States. ...
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