Economy Archives

Will we ever join the rest of the civilized world when it comes to health care? To the excerpt below, I might add, COBRA is very expensive, the premium usually triples.
Economist Scott Adams:
Employers are the major providers of health insurance in the United States. As a result, individuals who lose their jobs may also [...]

Now everything has a “Made in China” label and the quality is quite poor. Cutting corners means cutting quality. I’d rather pay more for quality. The beauty of cultures making what they make best and offering them for sale at a fair price has been lost – but you can still find [...]

From Kiplinger:
When housing prices hit bottom, they will languish near those low levels for years to come. So don’t be in a rush to buy. … if I were in the market for a new home, I would wait. Housing prices typically don’t rebound quickly after a bust; instead, they level out and stay near [...]

I’m not comfortable with the tone of the article; there is no discussion of the dynamics of society leading up to women entering the workforce. And I’d have liked to hear how couples with kids competing for the best rung on the middle class ladder driving up prices adversely affected singles and couples who [...]

Peter Bernstein from Financial Times:
… Relying on the long run for investment decisions is essentially relying on trend lines. But how certain can we be that trends are destiny? Trends bend. Trends break. Today, in fact, we have no idea where any trend lines might begin or end, or even whether any trend lines still [...]

From CBS News:
When employers began turning 401(k)s into retirement plans, the financial community was not shy about promoting them as such. The prospect of trillions of dollars in the hands of unsophisticated investors opened the door for all sorts of potential abuses. What kind of a retirement plan allows millions of people to lose 30 [...]

From Survey USA:
In any healthcare proposal, how important do you feel it is to give people a choice of both a public plan administered by the federal government and a private plan for their health insurance–extremely important, quite important, not that important, or not at all important?
Extremely [...]

From Paul Krugman at the New York Times:
I really don’t even want to think about health care right now. It’s too painful. Have the Obama team learned nothing from the past 16 years? No concession will satisfy Republicans — they’ve said so themselves! Yet the administration keeps signaling weakness.

From Bloomberg:
Almost half of U.S. homeowners with a mortgage are likely to owe more than their properties are worth before the housing recession ends, Deutsche Bank AG said.
The percentage of “underwater” loans may rise to 48 percent, or 25 million homes, as prices drop through the first quarter of 2011, Karen Weaver and Ying Shen, [...]

From John Wasik at Bloomberg:
What you can’t see in the most recent housing numbers is the least-visible driver of home prices today: demographics. The baby-boomer generation, the largest in American history, will be buying fewer single-family homes. The U.S. is experiencing a 40-year generational peak in consumer spending, one that will lead to [...]

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

From Dave Johnson at the Huffington Post via patrick.net:
People still think that what we are going through a temporary “correction” and that real estate prices are going to “go back up,” that houses are “cheap” now, that they should “snap them up” before they are “priced out.” They still think real estate is the path [...]

From Lew Rockwell:
We borrowed and spent ourselves to the brink of bankruptcy, and now we must save and produce ourselves back to prosperity. … Given the size and scope of the remedies that the Obama Administration is cajoling the world to adopt, it is likely that the unease will grow until many countries emerge in [...]

I’m all for nailing the crooked lenders. But the borrowers share the blame. This article by Reuters only tells half of the story:
As a realtor in the Phoenix area, Jullisa Kalish rode high on the property boom. But when the market crumbled over the past three years, she wound up her business, went [...]

From the Washington Post (I have to disagree with the author that Obama is pro-free market – the bailouts are counter to free markets):
…The funny thing is, of course, that socialists know that Barack Obama is not one of us. Not only is he not a socialist, he may in fact not even be a [...]

From ReallyF-edHomeowner (Regretting the American Dream):
Dear Invisible Renters,
The New York Times today published an editorial in which it supports a law winding its way though congress to force banks to cram-down (AKA reduce) the principle balances on home mortgages and we must stop it. This is ridiculous for many reasons stated in a letter [...]

Read about it Patrick.net…

From Time:
… Although it is counterintuitive, the best approach to reversing the falling prices of homes may be to push the housing market to a deep trough as quickly as possible. This would mean that the government would not provide any assistance for current homeowners and give no financial aid to people who might [...]

Seen on Option ARMaggedon:
It has become an upside-down world. It seems we are falling all over ourselves to ease the debt load by taking on more debt.
Those who had homes wanted larger homes, or second homes, or goodies that would be paid for by putting their homes into hock a second time.
Having lived during a [...]

From Paul Krugman in the New York Times:

Somehow the movies starring TCM’s Star of the Month Jack Lemmon bring it all back, like Prisoner of Second Avenue (co-starring the fabulous Ann Bancroft):

Bankrate.com has ratings of banks and credit unions…

Seen on Patrick.net, from a UK money blog, he puts it as well as I’ve ever heard it:
“Yes, renting isn?t as nice as owning, but that?s already the case for those who rent. And they?re not getting any extra cash!”
Read the rest of the author’s post at Monevator…

You can’t deny the logic in his argument…

From the New York Times:
This is the people?s money. They?re giving it out with no rules. …The deepening red ink underscores a crucial question about the government?s plan: Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to [...]

Robert Shiller:
“To the extent that an equity culture leads to entrepreneurship and investment and wealth creation, I’m for it. But I was not, for example, in favor of George W. Bush’s plan to privatize Social Security. Can you imagine what would have happened to people retiring today if that plan were in place? I like [...]

I strongly believe government has no business legislating religious beliefs; as Barry Goldwater said, “There is no place in this country for practicing religion in politics.” If McCain is really a “maverick”, then he needs to distinguish himself from George W. Bush and the other religious fundamentalists, who neither represent the majority of Americans [...]

His recent comments on the global financial meltdown:
“I know these are difficult times. I know folks are worried. But I also know that now is not the time for fear or panic. Now is the time for resolve and steady leadership. Because I know we can steer ourselves out of this crisis.”
Mr. Hope and [...]

From Dr. Housing Bubble:
What [the national debt] works out to is $33,550 for every man, woman, and child in this country. If we look at the national personal income, 33% of Americans actually make less than $37,500 a year! Yet the rich get richer and CEOs are still jumping out of wrecked businesses [...]

From Motley Fool:
The votes are in. The ink from the president’s signature has dried. The massive bailout bill is now the law of the land. Congratulations — you’ve just been sold an extremely expensive pig in a poke that you’ll be paying for throughout the rest of your life.
If this ill-conceived, hastily passed, and pork-laden [...]

From Yale University economist and author of “Irrational Exuberance”, Robert Shiller:
…It is true that, for the United States as a whole, real home prices were 66 percent higher in 2004 than in 1890, according to the index my research assistants and I have put together. But all of that increase occurred in two brief periods: [...]

Seen on patrick.net:
VoteNoBailout.org

In a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.
“Why not come and chat with me,” said the Grasshopper, “instead of toiling and moiling in that way?”
“I am [...]

From Yahoo:
That “run” could accelerate as people realize the FDIC fund has about $50 billion to “insure” about $1 trillion in assets at the nation’s financial institutions, says Roubini. “They’re going to run out of money” unless Congress acts soon to recapitalize the FDIC. With the “financial storm of the century” hitting financial institutions, many [...]

From Chris Isidore at CNN:
Experts argue that the steps being taken to rescue firms like AIG could make a recovery in housing and the broader economy more difficult. … because of the depth of the housing problems, it may take a long time before real estate prices head higher again. Here’s why.
Home prices, while sharply [...]

From the New York Times:
…Record earnings for Exxon, the world?s largest publicly traded oil company, have become routine as the surge of oil prices in recent years has filled its coffers. The company?s income for the second quarter rose 14 percent, to $11.68 billion, compared to the same period a year ago. That beat the [...]

In a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.
“Why not come and chat with me,” said the Grasshopper, “instead of toiling and moiling in that way?”
“I am [...]

From Pat Summers:
Dear Mortgage Borrower:
I understand that you have gotten yourself into some trouble. As someone who has made more than a few mistakes, I sympathize with you. I really do.
However, I am more than a little concerned by how eager our government is to intervene on your behalf. They want to bail you out [...]

From Paul Krugman in the New York Times:
Austan Goolsbee, a University of Chicago economist who is one of Barack Obama?s top advisers, warned against a crackdown on subprime lending. ?For be it ever so humble,? he wrote, ?there really is no place like home, even if it does come with a balloon payment mortgage.? ?Owning [...]

From 2000:

EXPANDING ECONOMIC OPPORTUNITY FOR ALL

Unemployment Down to 4.1%: The unemployment rate in Pennsylvania
has declined from 7.3% to 4.1% since 1993.
503,600 New Jobs: 503,600 new jobs have been created
in Pennsylvania since 1993 ? an average of 71,096 jobs per year. [...]

What’s wrong with this picture? From My Budget 360:
One of the unintended consequences of this housing market is the punishment conservative savers are taking. Last month we had the rather astonishing release of data from the Bureau of Labor and Statistics telling us for the month, that inflation was at 0 percent. As disconnected [...]

Former New York Governor Elliot Spitzer’s editorial exposing the Bush administration just weeks before the FBI’s investigation of his sex life was leaked to the press (more on this after the editorial). From the Washington Post:
For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important [...]

From Paul Krugman in the New York Times:
If Mrs. Clinton gets the Democratic nomination, there is some chance ? nobody knows how big ? that we?ll get universal health care in the next administration. If Mr. Obama gets the nomination, it just won?t happen. The principal policy division between Hillary Clinton and Barack Obama involves [...]

From John Dean:
… Harvard Kennedy School Professor Jeffrey Frankel, an MIT-trained economist, has examined and documented the ironic but now conspicuous change in the economic philosophies of presidents of the contemporary Democratic and Republican Parties. Comparing the records of Presidents Carter and Clinton with that of Reagan, Bush I, and Bush II provides the evidence [...]

From Michael Moore:
Friends,
I just wanted to drop you a note to let you know (if you didn’t already) the good news that “Sicko” has been nominated for this year’s Academy Award for Best Documentary. It was a pleasant surprise when we got the news on Tuesday.
Of course, every reporter who’s called me in the past [...]

YouTube

In a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.
“Why not come and chat with me,” said the Grasshopper, “instead of toiling and moiling in that way?”
“I am [...]

From ABC News:
Buffett says he pays 18 percent of his salary to the IRS while the rest of his staff pays nearly twice that – 33 percent. “Frankly, an economy where my receptionist pays a lot higher tax rate than, than I do does not strike me as a just economy,” he told [...]

From Alan Abelson at Barrons:
Carpers and cynics who never met a payroll and, indeed, likely never did an honest day’s work (you know the types as well as we do: politicians, journalists, that sort of lowlife) may snarl all they like about crony capitalism and worse. But decent, compassionate folk can only cheer the speed [...]

From Joel On Software:
Many of my friends, especially the ones whose talents were very significant but didn’t show up on the traditional scales, tended to get lousy performance reviews. Negative reviews, obviously, have a devastating effect on morale. In fact, giving somebody a review that is positive, but not as positive as that person expected, [...]

From Julie Pierce, wife of the father whose death was heartbreakingly featured in Michael Moore’s SiCKO:
… I just read your Wall Street Journal article written on Sept. 13, 2007, titled “Sick Sob Stories.” You begin by talking about Tracy’s role in ‘SiCKO,’ and claim the bone marrow transplant denied by our insurer would not have [...]

From Dean Baker in The Nation:
…The housing enthusiasts, led by Alan Greenspan, insist that the run-up is not a bubble, but rather reflects fundamental factors in the demand for housing. They cite several factors that could explain the price surge: a limited supply of urban land, immigration increasing the demand for housing, environmental restrictions on [...]

From Bloomberg:
The U.S. subprime-market rout that wiped out $2.1 trillion from global share values last week has “got a long way to go,” said Jim Rogers, a New York-based fund manager who predicted the start of the commodities rally in 1999.
This week’s rebound in equity markets hasn’t persuaded Rogers, 64, to pull out of bets [...]

If you haven’t seen Michael Moore’s Sicko yet, see it this weekend! From the AP:
The Senate passed legislation Thursday to add 3 million lower-income children to a popular health insurance program in bipartisan defiance of President Bush’s threatened veto.
The 68-31 vote, one day after the House passed a more ambitious and expensive version over [...]

From MSNBC:
Wall Street extended its steep decline Friday, propelling the Dow Jones industrials down more than 500 points over two days after investors gave in to mounting concerns that borrowing costs would climb for both companies and homeowners. It was the Dow’s worst week in nearly five years.
Investors cast aside a stronger-than-expected read on the [...]

Bill Moyers interviews Gretchen Morgenson of the New York Times – a fascinating discussion about the housing crisis. How it came about and who is left holding the bag – you guessed it, the little guy. She says no good will come of a federal government bail out – it will only reward [...]

From The Nation:
About forty minutes into Sicko, Michael Moore’s excellent, frustrating new documentary about the American healthcare industry, Ronald Reagan makes his first and only appearance. It’s surprising, if only because, unlike in his previous film Fahrenheit 9/11, Moore focuses relatively little attention on the villains in his story, choosing instead simply to allow their [...]

Check out this clip from You Tube about the housing market, where one smart guy, Peter Schiff, is shouted down by four fools. I suspect, though, they are paid well to be that foolish (except maybe the dumb blonde guy who seems genuinely to be unable to manage stringing two coherent words together).
You Tube [...]

From Money Magazine:
Robert Shiller is worried about your home’s value, and that’s not good. A finance and economics professor at Yale, Shiller proved he could see a crash coming with his book “Irrational Exuberance,” which forecast the end of the 1990s stock bubble and hit bookstores in March 2000 – almost to the day the [...]

From Andrew O’Hehir in Salon:
“I know the storm awaits me back in the United States,” Michael Moore told a wall-to-wall throng of reporters here after the Saturday morning press premiere of his new film, “Sicko.” Then he heaved a deep breath and added, “But this is just so pleasant.”
It was indeed another gorgeous, summery morning [...]

From the Baltimore Sun:
Have inflated appraisals helped fuel the current surge in foreclosures by credit-strapped borrowers? Are they at the core of many mortgage fraud schemes?
The four largest trade groups representing appraisers say yes – and they are asking federal financial regulators to crack down on lenders and loan officers who pressure appraisers to raise [...]

From Rex Nutting at Marketwatch:
There are two universal truths at the National Association of Realtors: 1) It’s always a good time to buy or sell a home; and 2) We’ve seen the worst of the housing market correction.
The second truth was in the script used throughout 2006 by David Lereah, chief economist for the NAR, [...]

From Eric Margolis:
Chaos in US-occupied Iraq, and the collapse of its banking system and Ba?ath Party-run social programs, forced Washington to rush 363 tons of US $100 dollar bills to Baghdad. This money, which belonged to Iraq, came from the UN-run ?Oil for Food? program. Bremer?s people dished out $12 billion by the truckloads and [...]

From Barron’s:
…Costco is among a handful of retailers that has flourished despite Wal-Mart Stores’ onslaught; Wal-Mart’s more downscale Sam’s Club chain runs second to Costco. With its strong labor relations, low employee turnover and liberal benefits, Costco has been called the “anti-Wal-Mart.” Its approach has paid dividends because Costco, based in Issaquah, Wash., hasn’t encountered [...]

From the Washington Post:
The federal government keeps getting bigger.
The Republican Party’s oft-stated affinity for smaller government has not applied during the Bush administration. According to a recent study, not only is the number of federal civil servants on the rise, but so are the numbers of employees working for government-funded contractors and for organizations [...]

In other words, if so many people hadn’t been using their houses as ATM machines, what would GDP look like in recent years? Check out the story and graph at Calculated Risk…
And some findings from Demos:

Households cashed out $715 billion worth of home equity between 2001 and 2005. In the three years between 2003 [...]

From Market Watch:
The fate of the housing market is no longer in the Federal Reserve’s hands, since psychology has now become the driving force behind the decline in home prices.
This means that last week’s reported plunge in housing starts and building permits is likely to be followed by more of the same for the foreseeable [...]

From Thom Hartmann at Common Dreams:
The Dubai Ports World deal is waking Americans up to a painful reality: So-called “conservatives” and “flat world” globalists have bankrupted our nation for their own bag of silver, and in the process are selling off America.
Everything today is driven by profits for multinationals, supported by the lawmaking power [...]

From Information Clearing House:
By Linda Bilmes
linda_bilmes@harvard.edu
and Joseph E. Stiglitz
jes322@columbia.edu
11/03/06 “Milken Institute Review” — – In January, we estimated that the true cost of the Iraq war could reach $2 trillion, a figure that seemed shockingly high. But since that time, the cost of the war ? in both blood and money ? has risen even [...]

From Bloomberg:
An unexpected increase in auto production last quarter was a statistical fluke that will be reversed, making current U.S. economic growth even weaker, according to a former Commerce Department economist.
Last quarter’s annualized 26 percent increase in auto production shocked Joe Carson, now director of economic research at AllianceBernstein LP in New York. Without the [...]

From Arianna Huffington:
In this LA Times article about Red state Democrats trying to win over conservative voters, the debate falls into the tired old storyline of Republicans pushing “Christian values” (ie opposing abortion and gay marriage) vs. Democrats pushing economic issues (ie raising the minimum wage and offering college tuition tax credits).
How 2004.
Someone needs to [...]

From CNN:
CAFFERTY: The question this hour, is now the time to set aside $20 million to celebrate victory in Iraq? This is part of the military spending bill that was recently passed in Washington. And this party money, the $20 million, was the brain child of Republican Mitch McConnell down there in Kentucky. Nice work.
Bryan [...]

POV special airs on PBS this week:
“In making ‘Waging a Living,’ I wanted viewers to understand what it’s like to work hard, play by the rule and still not be able to support a family,” says producer/director Roger Weisberg. “It’s easy to take for granted the janitors and security guards in the offices where we [...]

From Bill Bonner:
Investors and speculators drove up prices so much that the average house now sells for more than the average buyer can afford. …Twenty-five years ago, who would lend long term at less than 15%? People judged it too risky. They knew their government was in the hands of mountebanks, and their currency managed [...]

From the AP:
Consumer confidence slid to a three-month low as people fretted about the direction of the economy and their own balance sheets in the months ahead.
The RBC CASH Index, based on results from the international polling firm Ipsos, showed confidence ebbed to 74.8 in early August. That marked a sharp drop from July’s showing [...]

From Dean Baker:
All the economists who missed the stock bubble – this is almost all economists – are just about to be embarrassed again. Several reports released this week provide the strongest evidence yet that the housing bubble may finally be deflating.
Sales of new and existing homes are both down more than 10 percent from [...]

Check out the National City report for yourself here: pdf. Appendix C is interesting, it analyzes past overvaluations and corrections and summarizes findings here:
Price corrections are defined as declines of at least 10 percent over a period of at least 8 quarters [2 years].
Sixty-six price corrections are observed over the past 20-year period and [...]

From George Soros:
I believe we are currently in the midst of a gigantic real estate bubble. It was caused by the determination of the Federal Reserve Bank not to allow a stock market decline in 2001 to turn into a self-reinforcing rout. The federal funds rate was lowered to 1 percent. Mortgage institutions encouraged mortgage [...]

From Robert Reich at the American Prospect:
Despite what look like rosy employment numbers, a smaller proportion of the American labor force is employed today than it was in 2000. Millions of people don?t show up on the unemployment rolls because they?re too discouraged even to look for work. Each generation responds to its own traumatic [...]

USA Today Chart…

From the St. Petersburg Times:
Rates on federal education loans will increase dramatically July 1, adding thousands of dollars to the cost of college for many student and parent borrowers.
Lenders said Tuesday that the interest rate on existing variable rate Stafford and PLUS loans will jump nearly two full percentage points. That translates to an increase [...]

From Bill Maher:
New Rule: If you want to live the American dream, move to Europe. According to a new study, climbing up the economic ladder in this country is much harder than in just about every other wealthy nation. If you’re born poor here, you pretty much stay that way. And fat-cat catering Republicans get [...]

From Mike Whitney in the Palestine Chronicle:
It is physically impossible for him to act in the interests of the American people. He won’t be deterred by the falling dollar, the deflating housing market, or the skyrocketing energy prices. He’ll make his budget-busting tax cuts permanent and plunge the country into a sea of red ink. [...]

Unfortunate reference to Microsoft. Everyone knows the true axis of evil is Bush/Cheney ~ Yankees ~ Microsoft. From Peter Rost in the Huffington Post:
Average worker pay has remained flat since 1990 at around $27,000, after adjusting for inflation, while CEO compensation has quadrupled, from $2.82 million to $11.8 million. Our CEO’s are in [...]

Most Americans rate the economy as fair or poor in polls. Unemployment is part of that picture…
A report from NewsHour:
“Add them all up, and today’s 6.4 percent official unemployment rate approaches 1982’s 10.8 percent record, at least for men. There’s one last way to confirm this. Back in 1982, the percent of total working [...]