Economy
Posted at 8:35pm on Jul. 11, 2008 Freddie Mac and Fannie Mae hit skid row on Wall Street
By RollingThunder
The MSM has already reported on the decline of Freddie Mac and Fannie Mae and its effects on Wall Street. Restating what has previously been reported is not my purpose here. My thoughts on this subject turn to the bigger picture.
The picture which I see when I read and hear of Freddie and Fannie is how big government has failed one more time. Those of you who read my work with any regularity know that I have a strong Federalist, Conservative belief system. Quoting the third President of the United States: "The government that governs least is the government that governs best."
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Posted at 11:50am on Jul. 11, 2008 Sky is falling
By Alberta
Thunder and lighting, insane happenings...
Dow falling below 11k
Fannie and Freddie going (gone?) bye bye
$150 oil, maybe $200 soon
We left the car keys to Bernanke?
Markets look to the future. What they see aignt good. Could they be seeing an Obama presidency? Lets not kid ourselves either, they could be seeing a McCain presidency. Throwing Phil Gramm under the bus wasnt very polite, or smart.
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Posted at 7:52am on Jul. 11, 2008 Rethinking the Goals of a National Mortgage Bailout
An already-ugly problem gets worse
By blackhedd
Front and center this week have been the ill fortunes of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that together own trillions of dollars’ worth of US home mortgages.
At this point in time, there really is no reason to own the stock of either company. The Administration is said to be looking carefully at whether and how to do a government takeover of one or both. The grand 35-plus year experiment in semi-public support for US housing may be coming to an end.
But that’s far from the only problem in the mortgage/housing sector. In fact, it may be the easy problem. The hard problem is what to do about all the homeowners that are falling behind on their payments.
This is a time bomb that continues to tick away, and Congress has been working hard to pass a huge bailout bill (the Dodd-Frank Act). President Bush has vowed to veto it, but he’ll break that promise.
But what are the objectives (both political and economic) of this enormously costly legislation? Can it actually meet those objectives? And are they the right objectives in the first place?
Keep reading.
Posted in Dodd-Frank Act | Economy | housing | Mortgage Bailout — Comments (45)/ Email this page » / Read More »
Posted at 9:37pm on Jul. 10, 2008 Phil Gramm was right
By David Adams in Kentucky
Today's political roadkill is Sen. Phil Gramm, an economic adviser to Sen. John McCain.
McCain's opponent Sen. Barack Obama is having a field day stomping on Gramm for things he didn't say and extrapolating his misquotings beyond all reason, a commonly used political tactic.
Here is Obama:
Posted in Economy — Comments (17) / Email this page » / Read More »
Posted at 9:49am on Jul. 10, 2008 Airline Industry CEOs Hoping You’re As Ignorant About Economics As Everyone Thinks You Are
Um, Guys? Speculators Aren’t Your Problem
By blackhedd
I’m going to avoid linking to this because you can find it yourself, and because I don’t know who the original authoritative source is. But you’ve certainly heard that a dozen CEOs of major US airlines, including all the big names, have put out a letter urging you, their customer, to agitate for more regulation of the commodities-futures markets.
Unfortunately time is too short to fully consider the issues raised in this carefully-written letter. The basic idea is something you’ve heard me discuss several times now: speculation in crude-oil futures and derivatives is raising the price.
That’s true enough, as I’ve said before. It’s also true that the airline industry is under as much pressure from high oil prices as anyone else (more on that in a moment).
What’s not true is that speculative pressure (or more precisely, buying pressure originating ultimately from institutional investors) is a permanent support for the price of oil. Thus, the conclusions reached by the airline CEOs are wrong, but they’re wrong in ways you wouldn’t expect from experienced business people.
Read on…
Posted in Airlines | CEOs | Economy | Oil Prices | regulation | speculation — Comments (19)/ Email this page » / Read More »
Posted at 9:14am on Jul. 10, 2008 L.A. Outlaws Non-Union Truckers
By Warner Todd Huston
Pretending they are interested in "clean air," the kindly union bought folks in the Mayor's office in Los Angeles signed a new law that makes independent trucking basically illegal in the ports of L.A. Mayor Antonio Villaraigosa signed the law on the 26th that requires independent truckers to join trucking companies, and, therefore, the unions.
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Posted at 10:57pm on Jul. 8, 2008 "Reality-Based" Budgeting
By Pejman Yousefzadeh
The Los Angeles Times has taken a look at the Obama fiscal plan and finds it wanting:
"I don't think it all adds up," Isabel Sawhill, an official in President Clinton's Office of Management and Budget, said of Obama's spending plans.
"There will definitely need to be a recalibration of these proposals once someone is in office," said Sawhill, now a senior fellow at the Brookings Institution. "The fiscal situation just isn't going to permit doing what Sen. Obama or anyone else would like."
[. . .]
Obama's staff thinks that ending the Iraq war would free up money -- at least $90 billion a year -- that could be redirected to the new government programs. But it is unclear when that would occur. Obama has not given a clear date by which the Iraq war might end. On Thursday, he said he remained committed to withdrawing combat troops in 16 months. At a debate in September, he would not commit to pulling all U.S. troops out of Iraq by 2013.
Some budget experts say even a speedy end to the war would not give Obama much money for new programs.
"You cannot justify a longer-term commitment to a program based on a one-time saving on the war in Iraq," said Stuart Butler, who studies domestic policy at the Heritage Foundation, a conservative-leaning think tank.
In addition, replenishing the military and rebuilding Iraq and Afghanistan are certain to become expensive priorities once the fighting stops, said Alice Rivlin, who directed the Office of Management and Budget for several years under Clinton.
"Savings from the Iraq war will not be all that great," she said.
Other new sources of revenue in Obama's plan include about $80 billion a year from closing tax loopholes and $100 billion from a variety of cuts in spending and revised government procurement rules.
The nonpartisan Tax Policy Center examined Obama's plans to eliminate tax loopholes and said it could not confirm the projected savings.
"If you look at official revenue estimates, the numbers come out to be less than half of what they say they're going to raise," said Len Burman, director of the center and a former Treasury official in the Clinton administration, referring to Obama's campaign staff.
It's good and reassuring to see that there exists critical coverage of the Obama fiscal plan, but that coverage needs to expand to more media outlets and the Obama campaign needs to respond to critics who point out that the numbers for Obama's fiscal plan simply do not add up. Thus far, they have done a poor job of defending their intellectual product, even if there has been relatively little in the news concerning the many deficiencies in the Obama fiscal plan.
Posted in Barack Obama | Economy | Fiscal Policy — Comments (1)/ Email this page » / Read More »
Posted at 10:07pm on Jul. 8, 2008 Grassley Votes Again to Reward Irresponsible Behavior
By grforbes
The Senate took action on the stalled housing bill today which should allow the bill to move forward to a full vote. Senator Grassley again supported this bill by voting for cloture with the Democrat majority. This should be no surprise as Grassley has loaded this bill with extras not directly related to the current mortgage situation such as a property tax deduction on federal returns and a provision that allows the Internal Revenue Service to examine data on consumer purchases made over the internet and to tax internet vendors. This bill now appears to have sufficient votes to not only pass, but to override a presidential veto. It is not too late for the Senator to stand up for conservative principals and vote against this bill.
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Posted at 3:14pm on Jul. 8, 2008 How to apply downward pressure on the oil market.
By paulseale
Lower economic numbers from European nations put significant downward pressure on the market as oil prices continued to dip today.
Why is this relevent?
To understand how to bring down oil prices we need to understand what is driving the market and how to attack such durrest which pushes oil prices higher.
Posted in Economy — Comments (1) / Email this page » / Read More »
Posted at 9:52pm on Jul. 7, 2008 In Defense Of Oil Speculators
By Pejman Yousefzadeh
The rundown of links can be found at Greg Mankiw's place.
Posted at 6:44pm on Jul. 7, 2008 To Fix the U. S. Education System
By Dr. John Bredfeldt
Education is vital to the U. S. Economy, to each individual American, and to the U. S. culture. An undeducated population of the United States makes it impossible for us to compete favorably with other countries in the world market place, and it impoverishes our population financially and culturally. I suggest the following to fix the U. S. Education System. By the way, here I focus on grades K-12.
Posted in Economy — Comments (7) / Email this page » / Read More »
Posted at 1:52pm on Jul. 7, 2008 Commodity Prices Are Falling Sharply
Unusual Market Action
By blackhedd
Remember a few days ago, I suggested here and here that: A) commodity prices worldwide are in a bubble; B) bubbles always burst; and C) when this one does it’ll be bad news because so many global investors have piled on?
As I write at about 1:45pm EDT, every major commodity that is traded on world markets is down sharply. It’s been a long time since I’ve seen anything like this.
Keep reading...
Posted in Bond market | commodity prices | Economy | inflation | Stock Market — Comments (29)/ Email this page » / Read More »
Posted at 6:34pm on Jul. 5, 2008 Hypocritical Politicians, Thy Country Of Origin Is Norway
By Pejman Yousefzadeh
Posted at 11:52am on Jul. 3, 2008 Ah, bias
By Neil Stevens
The AP today starts a report today beating the drums of doom:
Employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses, underscoring the economy's fragile state. The unemployment rate held steady at 5.5 percent.
Do you think that under a Democrat, the reporting would have been the other way around, perhaps going like so?
The unemployment rate held steady in June, remaining at 5.5 percent, underscoring the economy's resilience against reports that employers cut payrolls by 62,000, marking the sixth straight month of recorded losses.
Maybe.
Posted at 8:02am on Jul. 3, 2008 Have You Been Wondering Why High Commodity Prices Haven’t Created a Wage-Price Spiral?
Dow Chemical: A Canary in the Coal Mine?
By blackhedd
I’ve been writing here about high inflation for nearly a year and a half. I think the Federal Reserve has been running an extremely accommodative monetary policy for quite a long time, much longer than the mainstream press has been screaming about high food and oil prices.
But why we aren’t seeing the classic sign of hyper-inflation, a wage-price spiral? Wage increases are the channel through which inflationary pressure metastasizes to the point that it can destroy an economy.
That isn’t happening this time, for a lot of reasons, all of which are interesting. But there is one in particular that is worth calling out because it illuminates a key aspect of tax policy.
In short, businesses are unable to pass increased factor costs on to consumers.
Keep reading…
Posted in Dow Chemical | Economy | federal reserve | inflation | wage-price spiral — Comments (14)/ Email this page » / Read More »
