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Friday, February 27, 2009

US GDP Shrinkage of 6.2%

Items of Interest:

Wall Street Journal:
U.S. GDP Shrank 6.2% in 4th Quarter-- The U.S. recession deepened a lot more in late 2008 than first reported, as fourth-quarter GDP was revised down to a 6.2% contraction from 3.8%...

related:
Calculated Risk / The Money Blogs:
GDP Revision: Q4 GDP Declined at 6.2% — From the WSJ: GDP Shrank 6.2% in 4th Quarter, Deeper Than First Thought The U.S. recession deepened a lot more in late 2008 than first reported, according to government data showing a big revision down because businesses cut supplies to adjust for shriveling demand. ... The sharply lower revision...

Meg Marco / Consumerist
The GDP dropped 6.2% in the fourth quarter, ... — The GDP dropped 6.2% in the fourth quarter, the largest drop since 1982. Reuters says that a month ago the Commerce Department estimated that the economy shrank at a 3.8 percent pace in the October-December quarter. Whoopsies! ...

TIME.com:
A 6.2% Drop in GDP: Is the Worst Yet to Come? — New GDP estimates confirm that a broad and deep economic contraction is under way...

EconLog:
Macroeconomic Identity Politics, by Bryan Caplan — I've already faulted Fama for misuse of the macroeconomic identity GDP=C+I+G+NX. Now TheMoneyIllusion takes the War On Misleading Tautology to a new level: When I discuss the effect of monetary stimulus on aggregate demand with other economists, I notice that they often want an explanation couched in terms of the major components of GDP. I find ...
Catherine Rampell / NY Times:
G.D.P. Revision Suggests a Long, Steep Downfall-- The economy shrank at an annual rate of 6.2 percent last quarter, much more than earlier estimates, in a sign of the recession’s depth...
discussion:
CrossingWallStreet.com: Q4 GDP RevisedDownard

NPR Topics:
Shrinking GDP, Citibank Plan Analyzed — The government said Friday the economy shrank at an annual rate of 6.2 percent. Meanwhile, the Treasury Department announced it is converting some preferred shares it owns in Citigroup to common stock, a move that helps stabilize the bank, but increases risks for taxpayers...
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Citi.com:
Citi to Exchange Preferred Securities for Common, Increasing Tangible Common Equity to as Much as $81 Billion – Citi today announced it will issue common stock in exchange for preferred securities, which will substantially increase its tangible common equity (TCE) without any additional U.S. government investment. The transaction is intended to build Citi's TCE to a level that removes uncertainty and restores investor confidence in the ...
related:
Eric Dash / NY Times:
U.S. Agrees to Raise Its Stake in Citigroup-- The Treasury Department announced on Friday that it would vastly increase its ownership of the struggling company...

USATODAY.com:
Government boosts its stake in Citigroup; dividends ended — Citigroup has struck a deal that allows it to shore up a key financial measure while giving the government a 36% stake in the ...

BBC News:
US increases stake in Citigroup — Citigroup agrees a deal which sees the US government increase its stake in the ailing bank from 8% to 40%.

Shawn Tully / Fortune: Will The Banks Survive?
Rick Newman / Flow Chart: 7 Other Stress Tests We Ought To Run
----
FT.com:
East Europe banks set for €24.5bn loan-- A group of multilateral lenders has pledged to support crisis-hit eastern Europe with up to €24.5bn in equity, loans and guarantees for the region's troubled banking sector...
related:
FT Alphaville:
Eastern Europe gets €24.5bn — Eastern Europe has received its own special bailout after all. Well, not technically a bailout, it comes as "aid" via the World Bank, European Bank for Reconstruction and Development and the European Investment Bank in a bid support the region through its first technical recession since the breakdown of the communist system....

The Economist: Ex-Communist Economies: The Whiff of Contagion
Jack Ewing / BusinessWeek: How the Crisis Is Hitting Europe
----
ABC News:
Stonewalling in Style: Bank of America Subpoenaed -- On Thursday, Lewis refused to provide a list of bonus payments to the New York Attorney General, after arriving in New York in his $50 million corporate jet. Earlier this week, President Obama said the days of bank executives flying corporate jets "were over." Not for Bank of America.
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Thursday, February 26, 2009

The War On Wealth

Items of Interest:

New York Times:
To Pay for Health Care, Obama Looks to Taxes on Affluent – President Obama will propose further tax increases on the affluent to help pay for his promise to make health care more accessible and affordable, calling for stricter limits on the benefits of itemized deductions taken by the wealthiest households, administration officials said Wednesday...

discussion:
Michelle Caruso-Cabrera / CNBC: Op-Ed: War on Wealthy Will Cost Us All
David Rogers / The Politico: Promises, risks in new spending plan
Ceci Connolly / Washington Post: Obama Proposes $634 Billion Fund For Health Care
Martin Crutsinger / Associated Press: Official: Obama budget sees $1.75 trillion deficit
Hugh Bartling / Cafe Talk Aggregator: More Details Emerging on Obama's Cap-and-Trade Position
Caitlin Taylor / The Note: The Note, 2/26/09: Taxing Tasks …
David Leonhardt / Economix: A Primer on Health Costs
Tas / Comments from Left Field: Carrying GOP water?
Robert Stein / Connecting.the.Dots: Radical Surgery for Health Care
Economist.com l WASHINGTON / Democracy in America: How they'll do health care — THE economic crisis has changed …
Reliapundit / THE ASTUTE BLOGGERS: HE REALLY IS A SOCIALIST, JUST LIKE WE SAID …
Laura Meckler / Wall Street Journal: $318 Billion Tax Hit Proposed
Henry J. Pulizzi / Wall Street Journal:
Budget Deficit to Hit $1.75 Trillion -- President Barack Obama delivered Congress a $3.6 trillion budget blueprint Thursday that hopes to "break from a troubled past" with a sharp shift toward expanded government activism, tax increases on affluent families and businesses, and spending cuts targeted at those he says profited from "an era of profound irresponsibility."

The budget blueprint for fiscal year 2010 is one of the most ambitious policy prescriptions in decades, a reordering of the federal government to provide national health care, shift the energy economy away from oil and gas, and boost the federal commitment to education...
discussion:
Krooney / TIME.com: Breaking Down the Budget
Michael Falcone / The Caucus: The Early Word: Budget Blueprint
Lori Montgomery / Washington Post:
In President's Budget Plan, Broad Agenda and a Few Gaps
discussion:
----
New York Times:
Obama Budget Sees $1.75 Trillion Deficit — President Obama's budget proposal for 2010 projects a stunning deficit of $1.75 trillion for the current fiscal year, which began five months ago, reflecting a shortfall of more than $1 trillion as the fiscal year began, plus the costs of bank bailouts …
----
An NBA Bailout in the Works!

AP / ESPN:
Report: NBA plans to borrow money -- SportsBusiness Journal reports the NBA plans to borrow $175 million to distribute to teams in need of additional cash.

The deal comes at a time when leagues are laying off staffs and cutting ticket prices. It will allow the NBA to distribute up to $11.66 million to 15 teams that responded to a league survey gauging interest in the money, SportsBusiness Journal said.

The report says the league plans to borrow the money Thursday...
----

Tuesday, February 24, 2009

Great Recession Roundup — February 24, 2009

Items of Interest:

Andrew Malcolm / Top of the Ticket:
Full text of Obama's speech to Congress and the nation — Here is the text of President Obama's first address to a joint session of Congress, as released by the White House moments ago: — Madame Speaker, Mr. Vice President, Members of Congress, and the First Lady of the United States:

discussion:
Tom Maguire / JustOneMinute: Post Game Show
Kate Phillips / The Caucus: Live Blog: Obama's Address to Congress
Matt Welch / Reason: Speech Highlights? I've Got Two
Donald Douglas / American Power: Obama's State of the Union
related:
The Politico:
Obama: ‘Day of reckoning has arrived’ — We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth …
discussion: Reason
The Huffington Post:
Obama Speech Tonight: Video, Text — The full text of President Obama's address:
----
Andrew Malcolm / Top of the Ticket:
related:
Ben Smith / Ben Smith's Blogs:
Jindal accuses Obama of pessimism — The early excerpts of Bobby Jindal's response to Obama's State of the Union are largely standard fare, but the conclusion strikes an interesting note — one hinted at recently by Bill Clinton — accusing the president, basically, of pessimism...
----
Calculated Risk:
Case-Shiller: House Prices Decline Sharply in December -- Prices are still falling, and will probably continue to fall for some time...

In Phoenix, house prices have declined more than 45% from the peak. At the other end of the spectrum, prices in Charlotte and Dallas are only off about 9% from the peak.

Prices fell at least 1% in all Case-Shiller cities in December, with Phoenix off 5.1% for the month alone! ...

----
Myglesias / Matthew Yglesias:
On So-Called “Irresponsible” Borrowers – Along with the absurd, Santelli-led revolt of the overclass against efforts to help middle class homeowners, there’s been a larger sense that “reasonable” people can all agree that there’s “plenty of blame to go around” and that on some level “irresponsible borrowers” deserve to take their lumps in all of this. I have my doubts...
discussion:
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Monday, February 23, 2009

Great Recession Roundup — February 23, 2009

Items of Interest:

Forbes:
Wall Street: Party Like It's 1997 -- The major US averages stumbled to their worst finish in more than a decade Monday, as investors considered the Treasury Department's looming bank rescue plan and the bailout of insurance giant American International Group came back into focus...

related:
Bloomberg: US Stocks Fall, Sending Market to Its Lowest Close Since 1997
MarketWatch: US Stocks Sliding; Dow Pushing Into Levels Not Seen In Decade
Barry Ritholtz / Big Picture: Bear Market Comparisons, 1929-2009
Kogut, Santos & Bolton / Forbes: How To Prepare For Financial Meltdowns
----
David Faber / CNBC:
AIG Seeks More US Funds As Firm Faces Record Loss
— American Insurance Group, the insurance giant that is 80-percent owned by the US government, is in discussions with the government to secure additional funds so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history, CNBC has learned...
----
Henry Blodget / Tech Ticker:
Citigroup's Clever Plan to Screw Taxpayers Again — From The Business Insider, Feb. 23, 2009: — So Citigroup (C) has proposed that the US taxpayer and other preferred shareholders convert up to $75 billion of preferred stock into common stock, thus bolstering the company's tangible equity …
related:
Paul Krugman / New York Times: Why Not Just Go Ahead and Nationalize?
Gerald O'Driscoll / Wall Street Journal: The Problem With 'Nationalization'
T. Ferguson & R. Johnson / The Nation: Nationalize Banks? Think Twice
William Cohan / Daily Beast: The Real Reason Bank Stocks Are Tanking
John Hussman, Hussman Funds: Citi and BofA Should Go Way of WaMu
Colin Barr / Fortune: What Exactly Is Bank Nationalization?

Felix Salmon / Portfolio:
----
Michelle Malkin:
Hey, lady, your $800,000 house is NOT my problem — Repeat after me: Property value-preservation is not a civil right. — Craig Meister at the Examiner.com points me to this typical CNN sob story clip of a bus driver named Minta Garcia who is demanding that President Obama halt all foreclosures...
discussion:
----
Lee Fang / Think Progress:
Santelli Claims The White House Is Threatening Him: ‘My Kids Are Nervous To Go To School’ — CNBC's Rick Santelli appeared on at least two radio programs today to promote his “rant” against President Obama's housing program. On G. Gordon Liddy's radio program, Santelli called attention …
discussion:
Phil Rosenthal / Chicago Tribune: Rant raises profile of CNBC on-air personality Rick Santelli
The Daily Reckoning / SeekingAlpha: Why I'll Sit Out Santelli's Tea Party
----

Friday, February 20, 2009

Great Recession Roundup — February 20, 2009

Items of Interest:

CNNMoney.com:
What is nationalization? -- The administration says it doesn't want to run banks, but investors still fear a replay of the Fannie-Freddie takeover. Investors are fretting over how Tim Geithner will handle the banking crisis...

related:
Forbes: Banks Panic Over Nationalization Fears
Bizjournals.com: Banks say nationalization isn’t necessary
Big Picture: A List of Those For and Against Bank Nationalization
----
David Brooks / New York Times:
Money for Idiots — Our moral and economic system is based on individual responsibility. It's based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible ...
discussion:
Jennifer Rubin / Commentary: The Fallacy of Government Stabilization
James Joyner / Outside The Beltway: Money for Idiots (Chicks for Morons?)
Allison Kilkenny / The Huffington Post: David Brooks: Protecting Us From Poor People
Jill / Brilliant at Breakfast: David Brooks, Socialist
The Barrister / Maggie's Farm: David Brooks explains it for you
----
Josh Gerstein / The Politico:
WH lashes out at CNBC's Santelli — The White House is lashing out publicly and personally at a CNBC reporter whose attack on President Obama's anti-foreclosure plan caught fire on the Internet Thursday. — White House Press Secretary Robert Gibbs jumped at the chance to go after the CNBC journalist …
related:
Mark Silva / The Swamp:
White House: Stock market not our fault
David Sirota / Open Left:
Market Populism vs. Grassroots Populism - Which Side Are You On? – In two separate television clips yesterday, we saw the two most powerful political forces in America in their most pure form...

CNBC, where the network's correspondent, Rick Santelli, is literally on the floor of the Chicago Mercantile Exchange surrounded by multimillionaire traders railing on the Obama administration for trying to help struggling homeowners, and berating people who are getting foreclosed on as "losers." Santelli is praised as a supposed "revolutionary" and the mob of financial elites around him is whooping and hollering, pretending to be a populist mob of regular Joes...
----
International Herald Tribune:
Latvia's government collapses -- Latvia's center-right coalition government collapsed Friday, a victim of the country's growing economic and political turmoil and the second European government, after Iceland, to disintegrate because of the international financial crisis.

The government in Riga, faced with forecasts of a severe drop in the economy this year, was the first in Eastern Europe to succumb to turmoil caused by the crisis. Its collapse rounded out a week that saw worries about feeble investment, banks and output in Central and Eastern Europe coursing through international markets....
----
Eamon Javers / The Politico:
The Obama Cabinet is a CEO black hole — In President Barack Obama's Cabinet, there is a Nobel Prize winner, a former mayor, and a veteran CIA agent. Surrounding him in the White House West Wing are a former four-star general, one of the nation's most eminent economists and a handful of this generation’s most talented political operatives. This constellation of talent, however, has something of a black hole. There is virtually no one on Obama’s team with outsized achievements or a high-profile reputation earned in the world of business.

There are no former CEOs in the Obama Cabinet. And among the people who make up his daily inner circle, there is only a dollop or two of top-level private sector experience. …
discussion:
Conor Clarke / The Atlantic Business Channel: Affirmative action for corporate CEOs
Steve Benen / Washington Monthly: AN OBAMA CEO SNUB?.... The Politico's Eamon Javers has a 1,200 …
----
Phil Gramm / Wall Street Journal:
Deregulation and the Financial Panic – Loose money and politicized mortgages are the real villains.

The debate about the cause of the current crisis in our financial markets is important because the reforms implemented by Congress will be profoundly affected by what people believe caused the crisis...
discussion:
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