US / World Economy in Trouble

Administrator · Aug 23, 2008

View of economy somber from Fed mountain retreat

Fed officials say that it will take a prolonged period for the harm done to confidence by the collapse in the U.S. housing market to wash through the system. Bernanke acknowledged that there would no quick fix.
"The financial storm that reached gale force some weeks before our last meeting here in Jackson Hole has not yet subsided, and its effects on the broader economy are becoming apparent," Bernanke told the conference on Friday.

Lipsky said the U.S. economy might contract slightly in the second half of the year. Even if it skates the generally accepted rule of thumb for a recession -- two consecutive quarters of contraction -- he warned it will suffer a clear period of sluggish growth, with the IMF forecasting growth of 1.3 percent this year and 0.8 percent in 2009.

Others at the conference had no doubt that the U.S. economy was heading for a nasty knock.

"That's where we are today, in the middle of a financial crisis, with the economy sliding into recession, with monetary policy at maximum easing, and fiscal transfers impotent," said Harvard economist Martin Feldstein, until recently head of the National Bureau of Economic Research.
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Wall Street bailout aid questioned at Fed event

"The Fed listens to Wall Street," said Willem Buiter, professor of European political economy at the London School of Economics and Political Science. "Throughout the 12 months of the crisis, it is difficult to avoid the impression that the Fed is too close to the financial markets and leading financial institutions, and too responsive to their special pleadings, to make the right decisions for the economy as a whole," he wrote in a paper presented to the conference.
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Administrator · Aug 25, 2008

This next article gives a good analysis of the current state of affairs concerning our economy.....it's not looking good either.

Crunch time: Set the crash-alert flags at half-mast

Mike Shedlock of Mish’s Global Economic Trend Analysis gives this technical analysis: “The recent plunge in M3 (ed.--M3 is the broadest measure of money used by economists to estimate the entire supply of money) makes it likely that credit lines have been fully tapped and/or banks have simply turned off the spigot. Liquidity shrinks by the day. Banks scrambling to refinance long-term debt are going to have a very tough go of it. Weekly unemployment claims are soaring. Consumers out of a job are going to have a tough time paying bills. Those looking for a bottom in these conditions are simply barking up the wrong tree.”
The prospects of a deep and protracted downturn are now greater than ever. Financial institutions are either pulling back and preparing for the storm ahead or taking advantage of existing credit lines while they last. The herky-jerky market action suggests that a growing number of CEOs and CFOs can see that the walls are closing in on them. The crash-alert flag is about half-way up the pole.
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Administrator · Aug 30, 2008

Incomes drop sharply in July while spending slows

The report showed that the June and July spending figures were skewed by a huge jump in inflation during the period. An inflation gauge tied to consumer spending rose over the past 12 months by 4.5 percent, the biggest price jump in 17 years, led by higher costs for energy and food. Without the big jump in prices, consumer spending would have actually fallen by 0.4 percent last month after dropping 0.1 percent in June, underscoring just how weak current activity is.
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Administrator · Sep 6, 2008

Yup....no way in Hell the government is going to take over Fannie or Freddie....uh huh........sure.

Government may soon back troubled mortgage giants

WASHINGTON - The government is expected to take over Fannie Mae and Freddie Mac as soon as this weekend in a monumental move designed to protect the mortgage market from the failure of the two companies, which together hold or guarantee half of the nation's mortgage debt, a person briefed on the matter said Friday night.
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Administrator · Sep 6, 2008

Unemployment climbs to 5-year high of 6.1 percent

WASHINGTON - The nation's unemployment rate bolted above the psychologically important 6 percent level last month for the first time in five years — and it's likely to go even higher in the months ahead, possibly throwing the economy into a tailspin as Americans pick a new president.
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Administrator · Sep 6, 2008

Silver State Bank in Nevada is shut

WASHINGTON - Regulators on Friday shut down Silver State Bank, saying the Nevada bank failed because of losses on soured loans, mainly in commercial real estate and land development.
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AverageJoe · Sep 6, 2008

Herbsparky said:

Yup....no way in Hell the government is going to take over Fannie or Freddie....uh huh........sure.

Government may soon back troubled mortgage giants

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Here's a disturbing little snip from that article

This summer, Congress passed a plan to provide unlimited government loans to Fannie and Freddie and to purchase stock in the two companies if needed.
Critics say the open-ended nature of the rescue package could expose taxpayers to billions of dollars of potential losses.
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The Outstanding Public Debt as of 06 Sep 2008 at 04:52:32 PM GMT is:

$9,671,644,543,575.84

The estimated population of the United States is 304,678,866

so each citizen's share of this debt is $31,743.73.

The National Debt has continued to increase an average of

$1.93 billion per day since September 28, 2007!

:sarcasm:

I guess when your that far in debt it pretty much doesn't matter anymore. Fuck it!! Fire up the printing presses!!!

Administrator · Sep 15, 2008

Wall Street awakes to 2 storied firms falling

Another one bites the dust.......

Lehman Brothers, burdened by $60 billion in soured real-estate holdings, filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court after attempts to rescue the 158-year-old firm failed. Bank of America Corp. said it is snapping up Merrill Lynch & Co. Inc. in a $50 billion all-stock transaction.
The demise of the independent Wall Street institutions came as shock waves from the 14-month-old credit crisis roiled the U.S. financial system six months after the collapse of Bear Stearns.
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Administrator · Sep 15, 2008

Many CEOs see more pink slips ahead

WASHINGTON - Nearly one-third of the country's top executives expect to cut payrolls in the coming months as companies cope with a weakened economy dogged by housing, credit and financial problems
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Why not just start cutting the CEO's back? Takes far fewer of them to make up the same cuts gained by eliminating workers. Blows my mind how top heavy companies are these days yet they do nothing about it.

Administrator · Sep 18, 2008

I thought the meltdown was gonna come in August.....I missed it by THAT much! :icon_confused:

Another nightmare on Wall Street: Dow down 450

NEW YORK - The stock market took another nosedive Wednesday as the American banking system appeared even shakier and investors worried that the financial crisis is spinning so far out of control that even government rescues can't stop it.
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AverageJoe · Sep 18, 2008

The U.S. National Debt as of

Wednesday, September 17, 2008 at 5:45:41 PM is:

$9,641,784,583,088.46

Since I posted the debt clock 11 days ago, it has gone up $29,859,960,487.38 Almost 30 billion in 11 days. :icon_confused:

Mermaid · Sep 19, 2008

Interesting read.....

This was interesting as well.....

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

Looks like Obama recieved 120,349.00 from Freddie and Fannie in donations the past year.

Among Obama's campaign contributors are many Lehman Brothers Executives, such as CEO Richard Fuld ($2,300), President Joseph Gregory ($4,600) and dozens of other top Lehman Executives. On June 19th, Lehman shareholders filed suit against Fuld and Gregory for the company’s exposure in the subprime market. In addition to dozens of Lehman executives are Obama's bundlers from Lehman Borthers who have raised top dollar for the campaign. Direct contributions from Lehman Brothers have exceeded $395,000 for Senator Obama.

John Rhea - (over $500,000) Co-Head of Lehman Bros. Global Investment Banking

Mark Gilbert - (over $500,000) Lehman Brothers Senior Executive

Christine Forester - (over $500,000) Lehman Brothers Senior Executive

Theodore Janulis – Bundler (over $100,000) & Lehman Brothers Head of Global Mortgages

Nadja Fidelia – Bundler (over $50,000) & Managing Director of Lehman Brothers

Hmmmm but he claims to stop these special interest groups and not take bribes or what I like to call dirty money.

A man of change?? OR a man just like the rest of the good ole boys in congress??

BUT we the taxpayers will pay for this and that is what pisses me off!!! I would have let them go belly up for if you or I had a business do you think we would have gotten help?? Nope.....not one dime! But then we do not pay and pad their pockets at the white house.

Administrator · Sep 19, 2008

That's been well known for a while now...McCain also has 'friends in wealthy places' on Wall Street. Two sides of the same coin...remember?

Mermaid.....This thread is not an Obama bashing thread......thanks.

Administrator · Sep 19, 2008

More good reading.....

Reckless? You’re in Luck

If an activity is important enough to justify a government nationalization to prevent a default, it is important enough to be regulated. The regulators need to know what risks are being taken, and by which institutions, in time to act before a crisis develops.
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Bush says he's working hard on economic turmoil

WASHINGTON - Eager to show that he feels people's pain, President Bush told the country Thursday his administration is working feverishly to calm turmoil in the financial markets. With reports swirling of possibly imminent new government action, the president met with his treasury secretary and the head of the Federal Reserve.
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He feels our pain? Ya....ok.

What happened to "our economy is sound and the fundamentals are in place"?

Mermaid · Sep 19, 2008

Herbsparky said:

That's been well known for a while now...McCain also has 'friends in wealthy places' on Wall Street. Two sides of the same coin...remember?
Mermaid.....This thread is not an Obama bashing thread......thanks.
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NP....your webby and respect that.

Administrator · Sep 19, 2008

Mermaid said:

NP....your webby and respect that.
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I'm not Webby, but thanks for respecting the thread just the same.

Here's another very good article that's a must read.

Steve Fraser, The End of a Gilded Age

What is Washington to do as the financial system collapses? Clearly, stark differences in approach as well as in public policy have already emerged. Bail-out Bear Stearns and pump up the brokerage and investment business with new lines of credit. Nationalize Fannie Mae and Freddie Mac on the backs of the taxpayer -- but let Lehman drown. Tell the financial community to save itself, after which Bank of America salutes and buys Merrill Lynch. Then, the Fed gets cold feet and decides it can't let an institution the size of the insurance giant AIG go under as well. Washington is left staring into the abyss. The old rules no longer apply.
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EvilSkuzzi · Sep 19, 2008

I have to vouch that herb aint webby, but i cant say that webby isnt in herbs collection

Administrator · Sep 20, 2008

EvilSkuzzi said:

I have to vouch that herb aint webby, but i cant say that webby isnt in herbs collection
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Webby actually has a picture of the two of us when we met in person once....I'll have to see if he can get that emailed to me.

Administrator · Sep 24, 2008

Here's a must read for everyone. Get ready...it's getting messy now. :icon_confused:

Mushroom cloud over Wall Street

These are dark times. While you were sleeping the cockroaches were busy about their work, rummaging through the US Constitution, and putting the finishing touches on a scheme to assert absolute power over the nation’s financial markets and the country’s economic future.
Industry representative Henry Paulson has submitted legislation to Congress that will finally end the pretense that Bush controls anything more than reading the lines from a 4-foot by 6-foot teleprompter situated just inches from his lifeless pupils. Paulson is in charge now, and the coronation is set for sometime early next week. He rose to power in a stealthily executed Banksters’ Coup in which he, and his coterie of dodgy friends, declared martial law on the US economy while elevating himself to supreme leader.

“All Hail Caesar!” The days of the republic are over.
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TheFomorian · Sep 24, 2008

So if this bail-out thing goes through, does that mean that the gov. also gains ownership of all of the properties that the banks have liens on?

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