Doug Henwood on Teddy Kennedy

by Dollars and Sense

From Doug Henwood's blog, LBO News.

De mortuis: Teddy Kennedy and deregulation

According to just about everybody, Teddy Kennedy represented the "soul” of the Democratic party, which presumably refers to his long-professed concern the poor and the weak. Now that that soul is safely buried, the Dems can move on to the important stuff, like preserving Wall Street power and escalating the war in Afghanistan.

Let’s inspect that soul a little more closely though. I’ve never been inclined to hold my tongue about the recently departed. Well, yes, in personal life, but certainly not public life—especially in the midst of one of these orchestrated rituals of national morning that have become so damned compuslory since Ronald Reagan went on to his reward.

Sure, Teddy had his virtues, especially in contrast to his older brother John, who could wage imperialist war with the best of them, and who’s revered by supply siders as their political ancestor. (Since we’re talking politics, not personality, let’s bracket that little incident where Teddy drunkenly drove a woman to her death, left the scene of the crime, and then dispatched a family laywer to get to the Kopechne family before the press did. One can only imagine what went on at that meeting.) Let’s just look at Teddy’s role in one of the greatest assaults on working class living standards of the modern neoliberal era, transport deregulation.

Once upon a time, working for an airline or driving a truck was a pretty good way to make a living without an advanced degree: union jobs with high pay and decent benefits. A major reason for that is that both industries were federally regulated, with competition kept to a minimum. Starting in the early 1970s, an odd coalition of right-wingers, mainstream economists, liberals, and consumer advocates (including Ralph Nader) began agitating for the deregulation of these industries. All agreed that competition would bring down prices and improve service.

Among the leading agitators was Teddy Kennedy. The right has been noting this in their memorials for "The Lion,” but not the weepy left.

Why was Kennedy such a passionate deregulator? Greg Tarpinian, former director of the Labor Research Association who went on to work for Baby Jimmy Hoffa, once speculated to me that it was because merchant capital always wants to reduce transport costs—the merchant in question being Teddy’s father, Bootlegger Joe. Maybe.

In any case, Kennedy surrounded himself with aides who worked on drafting the deregulatory legislation. Many of them subsequently went on to work for Frank Lorenzo, the ghoulish executive who busted unions at Continental and Eastern airlines in the early 1980s. (Kennedy’s long-time ad agency also did PR work for Lorenzo.)

And what was the result of all this deregulation? Massive downward mobility for workers. The Bureau of Labor Statistics doesn’t provide earnings data for the airline sector, and its data on trucking only begins in 1990. (Start search for data here.) So for a longer-term view, we have to look at the entire "transportation and warehousing” sector (which is mostly transportation). The graph of that sector’s hourly earnings compared to the entire private sector average is below.

Read the rest of the post.

Labels: deregulation, Doug Henwood, Teddy Kennedy

 

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8/31/2009 03:47:00 PM 1 comments

 

On the Usefulness of Economics In Tough Times

by Dollars and Sense

This Washington Post article speaks for itself. Note that Alan Greenspan apprears to be a devotee. Needless to say, perhaps, I found it on Marginal Revolution, a veritable treasure-trove for those enthralled by the trivial.

Blue Chip, White Cotton: What Underwear Says About the Economy

By Ylan Q. Mui
Washington Post Staff Writer
Monday, August 31, 2009
For one answer to the nation's most pressing economic question -- when will the recession end?--just take a peek inside the American man's underwear drawer.

There may be some new pairs there, judging by recent reports from retailers and analysts, and that could mean better days ahead for everyone.

Here's the theory, briefly: Sales of men's underwear typically are stable because they rank as a necessity. But during times of severe financial strain, men will try to stretch the time between buying new pairs, causing underwear sales to dip.

"It's a prolonged purchase," said Marshal Cohen, senior analyst with the consumer research firm NPD Group. "It's like trying to drive your car an extra 10,000 miles."

The growth in sales of men's underwear began to slow last year as the recession took hold, according to Mintel, another research firm. This year, Mintel expects sales to fall 2.3 percent, the first drop since the company started collecting data in 2003.

But the men's underwear index--or, conveniently, MUI--may also have a silver lining. Mintel predicts that next year, men's underwear sales will fall by 0.5 percent, and as with many economic indicators, a slowing of a decline can be welcomed as a step in the right direction. Retailers are reporting encouraging signs in the men's underwear department. Sears spokeswoman Amy Dimond said stores are beginning to see more sales. At Target, spokeswoman Jana O'Leary said sales of men's underwear have been stronger over the past two months and multi-pair packs are moving.

No less an oracle than former Federal Reserve chairman Alan Greenspan has given this theory credence....

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Labels: Alan Greenspan, economics education, financial crisis, Marginal Revolution

 

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8/31/2009 11:07:00 AM 0 comments

 

On the Profitability of the TARP

by Dollars and Sense

Two views.

First, Daniel Gross.

Then, Yves Smith.

I'm with Smith. Even if *some* pecuniary benefit eventually accrues to the government's balace sheet, huge losses still loom, and the system remains dependent on us bailing out those responsible for the crisis, in effect enabling them to screw us again.

Labels: Daniel Gross, financial crisis bailout, TARP program, Yves Smith

 

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8/31/2009 10:52:00 AM 0 comments

 

One Forgotten Indicator: Restaurant Sales

by Dollars and Sense

Calculated Risk discusses the 23rd consecutive month of depression for restaurant sales. Restaurant sales performed heroically during the bubble, and became a leading source of job-creation during that period. Both capacities have now crashed to earth, and with more and more displaced workers competing for restaurant jobs they would ordinarilly turn their noses up at, both the drag on employment and knock-on effects on consumer spending and revenues for restaurants will continue to have an outsized negative impact on the wider economy, it seems.

Monday, August 31, 2009
Restaurants in July: 23rd Consecutive Month of Declining Traffic
by CalculatedRisk on 8/31/2009 10:03:00 AMNote: Any reading below 100 shows contraction for this index.

From the National Restaurant Association (NRA): Restaurant Industry Outlook Remained Uncertain In June as Restaurant Performance Index Declined for Second Consecutive Month

The outlook for the restaurant industry improved somewhat in July, as the National Restaurant Association's comprehensive index of restaurant activity registered its first gain in three months. The Association's Restaurant Performance Index (RPI)--a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry--stood at 98.1 in July, up 0.3 percent from its June level. However, the RPI still remained below 100 for the 21st consecutive month, which signifies contraction in the index of key industry indicators.

"Although restaurant operators continue to report soft same-store sales and customer traffic levels, they are more optimistic about improving conditions in the months ahead," said Hudson Riehle, senior vice president of Research and Information Services for the Association. "Restaurant operators reported a positive six-month economic outlook, and the proportion expecting higher sales rose to its highest level in three months."

. . .

In addition to sales declines, restaurant operators reported negative customer traffic levels for the 23rd consecutive month in July.
emphasis added

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Labels: Calculated Risk, economic indicators, financial crisis, National Restaurant Association, restaurant sales

 

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8/31/2009 10:38:00 AM 0 comments

 

E-books, Content, Advertising and Hardware

by Dollars and Sense

Emerging relations between, and implications for big media, discussed in this Financial Times article.

E-book advocates highlight content evolution
By Andrew Edgecliffe-Johnson in New York
Financial Times
Published: August 31 2009 03:00 | Last updated: August 31 2009 03:00
Steve Haber, president of Sony's digital reading division, stood in the New York Public Library last week with a picture of a stone tablet, a book and the electronic book reader he was there to unveil .

The evolution from pages to pixels was as profound as that from CDs to MP3s, he argued. Sony's devices, priced as low as $199, heralded "the mass-market expansion of digital reading", he claimed.

Two months earlier, Sony's main rival in the e-book battle had taken a similarly long view. The book "has had a 500-year run", said Jeff Bezos, the Amazon.com chairman who launched the Kindle reader. "It's been an unbelievably successful technology, but it's time to change."

To date, reality has not lived up to the hyperbole on e-books. A recent Credit Suisse report found that wholesale e-book revenues were $1.48bn last year, or 5.5 per cent of the global publishing market. Most were scholarly texts, with consumer e-books selling just $78m.

Current e-readers are suitable only "for the upper class, people over 45, big readers, big travellers, early adopters," said Arnaud Nourry, chief executive of Hachette Livre.

But the technology and pricing of e-readers is changing fast, as devices from Interead, Hearst and Plastic Logic, backed by retailer Barnes & Noble, join Amazon and Sony's brands. Forrester Research expects the US e-reader market to grow from 1m units to 12m by 2012 as new devices offer wireless connections, touch screens and, in time, colour displays.

The book industry sees in e-readers a chance to improve on its challenging business model, where publishers pay advances before reading authors' finished works, guess at what print runs to pay for, bear the costs of storing books and then shoulder the cost if unsold copies are returned.

Newspaper and magazine publishers see a similar chance to save on costs, and are rushing to get on to devices whose consumer appeal offers a better chance of charging for content than they have online.


Read the rest of the article

Labels: ebooks, hardware industry, Information Technology, media, newspapers, publishing industry, software industry

 

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8/31/2009 10:30:00 AM 0 comments

 

Weekly Indicator Outlook/Monday's Indicators

by Dollars and Sense

First, setting the tone for market performance as the week starts is a Shanghai stockmarket loss of no less than 6.7% on Monday, which has led Asian and European (but not British, as of 10.30 am EST--3.30 pm GMT) stocks lower.

Japanese Industrial production rose 1.9% in July, raising the string of consecutive rises to 5. But critical export growth is lacking, and the figures, viewed from a year-to-year perspective, remain quite depressed. The fact that production continues to grow robustly, while exports and imports decline, or, at best, level off throughout the region, makes me quite concerned that the much-remarked-upon post-Lehman inventory restocking will be seen to have overshot on the upside in the next few weeks. One can only hope that the fact that the swingeing declines have led to such meager advances, viewed from a yearly perspective, will keep inventory restocking aligned to a much-reduced capacity of consumers to buy, and businesses to invest.

In the US, the Chicago Purchasing Manager's Index, which provides a snapshot of the bosses' propensity to invest, rose to a post-Lehman high in August.

Later in the week, all eyes will be on Friday's US employment reports. The nonfarm payroll figure is expected to be down by *only* 220,000 for August, a slight improvement on July's 240,000 loss, but the unemployment rate is expected to climb a notch, back up to June's 9.5%, as discouraged (and uncounted) workers re-enter (presumably encouraged by July's downward movement in unemployment) still horrific labor markets.

But other gauges of employment are also due out: on Thursday, US weekly new and existing unemployment claims figure comes in, ehile Eurozone unemployment indicators are slated for tomorrow. Unemployment there is forecast to rise .1% to 9.5%, which would, if it--and the US projection--materialize represent another noteworthy development in the crisis, when European and American unemployment rates finally converge after decades of mainly large divergence. It's a fool's errand as to which side will come off looking better....

US revised productivity and unit labor costs are due on Wednesday. Both figures are expected to be trimmed from their spectacular heights (inversely for ULCs), but the story of workers lucky enough to have steady jobs being squeezed implacably by the boss to make up for lack of sales and revenues is expected to stick.

Finally, indications on the health of the all-important US service sector will be released Thursday. This sector has contracted since September of last year, albeit at a slowing rate. Improvement is key for the US outlook, because it has such a large service sector. Regarding housing, US July pending home sales is out tomorrow. US retailers will also report comparable stores-sales on Thursday, providing a look at the increasingly important back-to-school sales in the retaiing calendar, and of the state of the US consumer.

Labels: corporate profits, economic indicators, employment, eurozone, housing market, industrial production, Japan, productivity, retail sales, service industries, stock markets, unemployment, United States

 

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8/31/2009 09:16:00 AM 0 comments

 

4 Years after Hurricane Katrina

by Ben Greenberg

Grand Casino, Biloxi, MS, five months after Hurricane Katrina made landfall in Mississippi.

On August 29, 2005, the eye of Hurricane Katrina made landfall in Waveland, Mississippi, and the western side of the storm grazed New Orleans. Five months after the storm, I visited the Mississippi Gulf Coast.

According to a National Hurricane Center report on Katrina, "in many locations, most of the buildings along the coast were completely destroyed, leaving few structures within which to identify still-water marks." The center's researchers estimate that the hurricane produced a storm surge as high as 27 feet in some locations.

It was dumbfounding to drive along the coast in Biloxi and find the Grand Casino on the north side of Highway 90. Before Katrina, the casino was on a barge, docked off the beach, south of the highway. The storm surge lifted the casino barge out of the water, over the beach and over the highway. If you stand at the western end of the barge and look east, you can see the yellow and blue neon sign, a half mile down the road, where the barge originally sat. The same thing happened to two other casino barges—the President Casino in Biloxi, which landed on top of a Holiday Inn, and the Gulfport Grand Casino....

The national media have covered the near-total destruction of Bay St. Louis and Waveland. Driving along Beach Boulevard in the two towns, I saw a few people who had returned and were living in trailers on their plots of land, but practically everything was deserted. All that remained were the merest remnants of homes and the things that had been inside them....

In each place I visited along the western half of Mississippi's Gulf Coast, the look of the destruction was a little different, but it was consistently total. And surprisingly, the destruction in the coastal areas of Pascagoula, at the eastern end of the state, is comparable. I remembered George W. Bush's promise to rebuild another "fantastic house" for Trent Lott on the Pascagoula beachfront. I did not know that 95% of the city's residential areas went underwater or that 65% of the city's homes remain uninhabitable. Northrop Grumman Ship Systems' facility in Pascagoula, which before Katrina employed 19,800 people, was all but obliterated.

Hurricane Katrina wiped out the entire Gulf Coast of Mississippi. The scale of the destruction is difficult to comprehend. All along the coast—mile after mile—just about anything that was there is now gone.

But this is only part of the story. According to the National Hurricane Center, the surge "penetrated at least six miles inland in many portions of coastal Mississippi and up to 12 miles inland along bays and rivers. The surge crossed Interstate 10 in many locations." Interstate 10 runs east-west, four miles or more north of coastal Highway 90.

Gayle Tart's brother Sam and his son John died in Pass Christian during the hurricane, on John's second birthday. Tart explained that father and son had drowned inside their own home.

"Water never came down there [before Katrina]. That's across the track. [With Katrina] that water came in and that water went out, and the velocity was unbelievable," Tart said. "The first boundary was the beach and the next boundary was the highway. The day after the storm, you saw neither—no beach and no highway."

When I wrote this for Dollars & Sense Magazine in 2006, I focused on the housng crisis faced by Katrina survivors in Mississippi. Today, at the fourth anniversary of the storm, the housing crisis rages on, thanks to government inaction and skewed priorites.

Small rental and workforce housing progress has fallen dramatically short of State predictions, and so Mississippi has asked HUD for additional funds to temporarily subsidize lower-income residents in market rate rentals....

• Mississippi has allocated just over half its funds on housing, and has lowered its commitment to housing by over $800 million in the past 2 years. Louisiana has allocated over 85 percent to housing programs and increased its commitment over the same period.


• Mississippi has spent just under half its funds, while Louisiana has spent almost 68 percent of its funds, widening its lead over Mississippi.


• Mississippi diverted $600 million from its housing program to a port expansion, while Louisiana intends to reinvest $600 million in unused Road Home funds for housing assistance for low-income residents.


• Mississippi took longer to spend less later for low-income residents than for wealthier residents.

But the housing crisis was just one part of the ongoing disaster. Katrina has also been a cultural and ecological disaster of epic proportions.

Framed family photos rest on the foundation slab of a home obliterated by Hurricane Katrina in Bay St. Louis, Mississippi.

I emphasize Mississippi in this blog post because I know that nearly all of the fourth anniversary coverage of the ongoing Katrina aftermath, will focus myopically on New Orleans. The situation in New Orleans is still dire. The housing crisis is dire. But there will not be an adequate recovery until the interconnectedness of regions and issues becomes a fundamental insight that drives policy.

While poor and minority survivors and activists will agree (if anyone asks them) that they face multiple, interconnected disasters in the aftermath of Katrina and Rita, this basic local insight goes largely unrecognized. Government failure is certainly most responsible for a "recovery" that has been arbitrary, resource-driven, and slow rather than holistic, need-driven, or effective. But no one, progressives as a group included, has adequately depicted, let alone offset, that failure. Narrowly focused aid has often segregated otherwise related issues, making one or another worse and masking the lack of an overall plan. Residents of the region feel tremendous gratitude to the tens—if not hundreds—of thousands of volunteers whose countless hours of labor, along with their financial contributions, are primarily responsible for what rebuilding has occurred. However, this individual good will is no substitute for the kind of comprehensive, coordinated, and sustained response that is needed from government at all levels.

Unfortunately, no thoughtful and coordinated response will occur without a compelling grassroots push for community visibility, multi-issue awareness, and broad social justice for Gulf Coast survivors. Our region today remains in a cultural, environmental, economic, and human rights crisis no less severe than its more frequently discussed housing crunch and extending far beyond the parishes of its famed city, New Orleans. The media, policymakers, academicians, and private funding groups repeatedly fail to recognize regional connectivity or to challenge the basic invisibility of the Gulf Coast's multiply wounded communities and ecosystems—together, its very soul. [P]iecemeal analyses and responses ... are moving social justice and equitable recovery nowhere fast.

The Gulf Coast Civic Works Act, still needing co-sponsors in the House, is a step in the right direction:

a hybrid model to partner directly with communities in planning, overseeing and administering recovery projects to assist the survivors of these disasters, provide communities with tools to build resilience against the impact of future disasters and revitalize the region economically. The bill would create a minimum of 100,000 prevailing wage jobs and training opportunities for local and displaced workers on projects reinvesting in infrastructure and restoring the coastal environment utilizing emerging green building techniques and technologies. This program would empower residents to realize their right to return with dignity and create stronger, safer, and more equitable communities.

Ask your Representative to co-sponsor this important legislation.

Carland Baker, Sr. on the site of his former townhouse, Longwood Apartments, 2012 2nd St, Long Beach, MS.

More reading and resources

• Marian Wright Edelman, Katrina's Children---Still Struggling


• Jeffrey Buchanan, Four Years Later, Let's End the Human Rights Crisis in KatrinaRitaVille


• The STEPS Coalition, Hurricane Katrina: Has Mississippi Fallen Further Behind?


• Institute for Southern Studies, SPECIAL REPORT: How is Obama doing on Gulf Coast recovery?


• Institute for Southern Studies, Hurricane Katrina and the Guiding Principles on Internal Displacement


• Children's Defense Fund, What It Takes to Rebuild a Village after a Disaster


• The KatrinaRitaVille Express


• Advocates for Environmental Human Rights
  


• Mississippi Center for Justice


• The Gulf Coast Fund

(Cross-posted on Hungry Blues.)

Labels: bay st. louis, biloxi, grand casino, gulf coast civic works act, gulfport, hud, louisiana, national hurricane center, northrop grumman ship systems, pascagoula, pass christian, road home, waveland

 

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8/31/2009 08:37:00 AM 0 comments

 

US Personal Consumption/GDP NOT 70% GDP

by Dollars and Sense

Or so Michael Mandel insists. From his Economics Unbound/World Economy Blog:

Economics Unbound
Get It Straight: Consumer Spending is *not* 70% of GDP
Posted by: Michael Mandel on August 29

Ok, now I'm getting aggravated. On the front page of the NYT this morning, Peter Goodman wrote

Given that consumer spending has in recent years accounted for 70 percent of the nation's economic activity, a marginal shrinking could significantly depress demand for goods and services, discouraging businesses from hiring more workers.

And Martin Crutsinger of the Associated Press wrote

Especially in the U.S., consumer spending is essential: It drives about 70 percent of economic activity--more than for most European nations and well above the rates in developing countries such as China.

Both of these fine economics writers have fallen into a subtle but very important trap. They look at the category of GDP which the BEA calls 'personal consumption expenditures' and assume that it means what it sounds like: The money that persons, like you and me, spend on consumption.

But in fact, 'personal consumption expenditures' in the U.S. is a grab-bag category which includes all sorts of money--like Medicare spending by the government--which never passes through the hands of households. PCE also includes all the consumer goods imported into the U.S.--cars, computers, clothing, and the like--which create very little economic activity in this country.

In fact, by my very rough calculations, the money that people actually pull out of their paychecks and bank accounts to pay for domestically-produced goods and services drives about 40% of economic activity in this country. That's still large--but the U.S. is nowhere near as dependent on consumer spending as people think.

Okay. Let's look under the hood...


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Labels: economic indicators, GDP, Michael Mandel, Personal consumption

 

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8/30/2009 04:00:00 PM 0 comments

 

Elections in the Other Ueber-Exporter: Germany

by Dollars and Sense

Germany, too holds a general election very soon. The ruling center-right Christian Democrats, under chancellor Angela Merkel, have been expected to win big enough to possibly form a coalition with their right-wing soul mates, the Free Democrats (they rule in a grand coalition with the center-left Social Democrats now). But yesterday's county elections in two laender, Saarland and Thuringia, saw the Christian Democrats lose a lot of support (as well as the hapless Social Democrats): the big winner (which the article neglects to mention: details on this score can be found here if you read German) was the Left Party. During the last general election, Merkel saw a similarly wide lead vanish, and won only by a relative whisker. Now, the fact that the Social Democrats are even more unpopular means that she'll probably win quite easily, but will not necessarily be able to govern with the FDP.

From Reuters

Merkel loses ground to left in German states
Sun Aug 30, 2009 3:16pm ED

By Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel's party suffered losses in German regional elections on Sunday, a setback that could hurt her chances of forming the center-right government she wants after next month's federal vote.

Merkel's conservatives hold a comfortable 12-15 point lead in national polls over their main rivals, the center-left Social Democrats (SPD), and a weekend opinion survey showed 87 percent of Germans expect her to win a second term on September 27.

But her Christian Democrats (CDU) saw their support fall sharply in the final weeks of the 2002 and 2005 campaigns and the regional results on Sunday may increase fears of another pre-election slump.

In the state of Saarland, on the French border, and in Thuringia, in the ex-communist east, CDU leaders who have ruled for a decade saw their support slump by more than 10 points compared to 2004 and both could be unseated by leftist coalitions.

"The Social Democrats now have the aura of a winner, something they will need for the coming weeks," said Karl-Rudolf Korte, a political scientist at Duisburg-Essen University. "It could mean a turning point in the election campaign."

The regional election results from three German states were not all negative for Merkel.

In a third vote in the eastern state of Saxony, her CDU looked poised to retain power, most likely in a coalition with the business-friendly Free Democrats (FDP)-- the same party she hopes to partner with after the federal vote.

Gains for the FDP in all three states were a silver lining for the conservatives and the lack of strong rises in support for the SPD will be a comfort.

But the risks Merkel faces in the final four weeks of the campaign have clearly risen.

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Labels: Angela Merkel, Free Democrats, Germany, Left Party, Social Democratic Pary

 

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8/30/2009 03:47:00 PM 0 comments

 

US Second Quarter Earnings Roundup

by Dollars and Sense

From the New York Times' Site:

U.S. Second-Quarter Earnings Tough to Beat

By REUTERS
Published: August 30, 2009

NEW YORK (Reuters) For corporate America and Wall Street, the second quarter may be a tough act to follow.

Just as investors were closing the book on second-quarter earnings, Dell Inc (DELL.O) drew them back in by accidentally releasing earnings that beat expectations just minutes before Thursday's closing bell.

Despite this minor misstep by Dell, the world's No. 2 personal computer maker, investors reacted to the news the way they did to many other pleasant surprises this quarter--by hungrily snapping up Dell's stock and lifting tech shares.

This was the pattern throughout the latest earnings period, as a bevy of surprises provided the fuel to drive the benchmark Standard & Poor's 500 Index (.SPX) up 11.5 percent since July 1. The rally lifted the S&P 500 to a 10-month high this week.

Intel Corp (INTC.O), which reported quarterly results that surpassed expectations last month, surprised the Street again on Friday morning by raising its revenue outlook.

But the broader market's initial euphoric response to the news soon fizzled. That left participants wondering: In the dearth of earnings, what will push stocks higher from here?

"This market has about as much good news baked into it as it can take," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

"We're at that point now where there is no more good news that could come out that can really juice this market."

For the past week, the S&P 500 rose 0.3 percent, while the blue-chip Dow Jones industrial average (.DJI) gained 0.4 percent. The Nasdaq Composite Index (.IXIC) also finished the week up 0.4 percent.

MORE REALISTIC MOOD

With just a handful of companies left to report, the S&P 500's second-quarter earnings are projected to decline 27.3 percent from a year ago, according to Thomson Reuters data. That compares with a forecast for a 36 percent decline from the year-earlier quarter at the start of the earnings period, and a 35.5 percent drop in the year's first quarter from the same period in 2008.

Some 73 percent of the companies that reported results beat estimates, well above the 61 percent average for a typical quarter, Thomson Reuters data showed.

Wall Street used the abundance of positive surprises as the catalyst to keep the stock market's rally going.

But it remains to be seen whether the broad market's buoyant reaction can be repeated in coming weeks.

Intel shares rose sharply, and boosted semiconductors, but the market itself struggled on Friday.

And even glittering results from jeweler Tiffany & Co , which reported a higher quarterly profit on Friday in tandem with cost cutting, could not get the market excited.

Analysts say expectations are not as dire as they were when headed into the second quarter. Estimates are for third-quarter earnings to decline 20.8 percent from a year ago. The change in expectations may reduce the impact of positive earnings guidance, which will start to trickle out in a few weeks' time.

"I don't think we will get surprises of the magnitude we got in the second quarter," said Hugh Johnson, chief investment officer of Johnson Illington Advisors, in Albany, New York.

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Labels: corporate profits, economic indicators, financial crisis

 

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8/30/2009 03:21:00 PM 0 comments

 

Japanese Election: Ruling LDP Gets Hammered

by Dollars and Sense

From The New York Times:

Japanese Opposition Wins Elections in Landslide

By MARTIN FACKLER
Published: August 30, 2009

TOKYO In a rare display of democratic muscle in this traditionally apolitical nation, Japan's voters cast out the Liberal Democratic Party for only the second time in postwar history, handing a landslide victory to the opposition in hard-fought elections on Sunday

The victor, the main opposition Democratic Party, must now tackle Japan's worsening economic problems. Almost as crucially, it faces questions here about its ability to manage the relationship with Washington.

Voters set aside doubts about the untested Democrats, a broad coalition of former socialists and ruling party defectors who campaigned with promises to ease Japan’s growing social inequalities and change the way the country is governed.

However, the victory is widely seen here as less of an embrace of the opposition than a resounding rejection of the conservative incumbents, whom voters blame for this former economic superpower's stubborn decline and increasingly cloudy future.

Prime Minister Taro Aso told reporters that he would step down to take responsibility for the defeat.

The Democrats won 302 of the 480 seats in the powerful lower house, giving it control of the chamber and far surpassing the 112 seats they held before the vote, according to a count late Sunday night by national broadcaster NHK. The incumbents took just 115, about a third of their previous total. Most of the remaining seats were won by smaller parties.

"This has been a revolutionary election," a triumphant Yukio Hatoyama, the Democratic Party leader, told reporters. "The people have shown the courage to take politics into their own hands."

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Labels: Democratic Party of Japan, Japan, Liberal Democratic Party, Taro Aso, Yukio Hatoyama

 

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8/30/2009 03:13:00 PM 3 comments

 

Getting Health Care Incentives Right

by Polly Cleveland

David Goldhill's father, 83 but still working, walked into a non-profit Manhattan hospital with pneumonia. Five weeks later he was dead from hospital-borne infections. Appalled by the negligence and primitive record-keeping of a top-rated hospital, Goldhill spent two years researching the US health system. The September Atlantic features Goldhill's report on how misdirected incentives seriously distort the system. Goldhill, a business executive, proposes an alternative system to give consumers more choice, and allow competition to improve quality and lower costs. (See "How American Health Care Killed My Father".)

Key to Goldhill's reform is to split health care into two components: he would require us to contribute regularly to a health savings account to cover basic care and to purchase catastrophic insurance-with appropriate subsidies for lower income citizens. (Note that requiring subsidized purchase of health insurance, as Obama also proposes, is a political smokescreen to hide the reality that universal health insurance will reduce benefits and raise costs for those relatively well off Americans who have benefited most from the current system.)

I agree with Goldhill on splitting the system between basic and catastrophic, but I don't think his health savings account will provide the best incentives. Here's the problem:

As a society we want all citizens to receive basic health care. That means immunizations, treatment for minor illnesses or injuries, dental care, hearing aids, eyeglasses, pregnancy monitoring, routine counseling for chronic diseases like diabetes, or high blood pressure or heart disease-care that heads off serious conditions and keeps people productive and out of hospitals. Such care should be more than free: it should be accessible to those who can't afford a taxi or much time off from work. (Great Britain not only provides free health care, but reimburses transportation.)

As a society, we also don't want over-treatment, let alone the incompetent treatment that killed Goldhill's father. But as long as doctors are paid by fee-for-service, there will be over-treatment and little incentive to make doctors wash their hands. That's true whether or not a hospital is non-profit. Moreover, fee-for-service encourages doctors to become specialists, who are better paid, instead of primary care practitioners.

The problem with the health savings account part of Goldhill's proposal is that it would not only discourage over-treatment but encourage people to skimp on basic health care. Moreover, people would still lack the information to make good healthcare decisions.

How do we promote basic health care while discouraging over-treatment?

Some thirty years ago, we thought HMOs like Kaiser had come up with the solution: capitation, that is, charging a fixed amount per client. Supposedly, the patients who stayed healthy would balance out those who got sick, and the HMOs would profit by cutting waste. It didn't work that way. HMOs started denying care to sympathetic patients, provoking public outrage. The HMOs backed off--and raised premiums.

What went wrong with capitation? As someone wrote at the time, if you charge a fixed price for a buffet at a cafeteria, watch the quality of the food decline. In other words, capitation gave HMOs an incentive to cut service.

So are we stuck between over-treatment with-fee-for service and under-treatment with capitation? No. In the real world all-you-can-eat buffets thrive without cutting quality--because they face competition. Most HMO patients are there by choice of their employers, not their own. In some states, there is only one HMO. Capitation has failed in HMOs due to lack of competition.

Here's my alternative to Goldhill's health savings accounts. Provide every citizen with a fixed, age-adjusted federal voucher to cover the services of a primary care physician/ medical service advisor. This primary-advisor would provide all basic health care services. And the advisor would offer counseling on serious health problems, recommendations for specialists as needed, and guidance on choices of catastrophic insurance providers.

Why would this primary-advisor approach work where HMO capitation failed? The answer is competition and informed clients. First, the primary-advisors would compete with one another to offer the best service for the voucher. Second, they would enable clients to make well-informed health care choices--creating competition among service providers, such as MRI facilities or catastrophic insurers.

A primary-advisor and catastrophic insurance system would of course require regulatory constraints. For starters, neither primary advisors nor catastrophic insurers could refuse or drop clients. While the system would be de facto single payer with private provision, it could potentially provide better service and more effective cost control than our current full single-payer system: Medicare.

 

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8/29/2009 10:00:00 PM 1 comments

 

The Crisis and US Export/Import Destinations

by Dollars and Sense

Wonder how this reflects on NAFTA (especially from a Mexican perspective--they're getting absolutely killed by this). From Vox EU:

Transmission of the global recession through US trade

Michael J. Ferrantino Aimee Larsen
29 August 2009


International trade has transmitted demand contractions across national boundaries throughout the crisis. This column analyses the transmission of the recession through US trade flows at the sectoral level. US imports of housing construction inputs peaked before many other popular housing indicators.

International trade has played a major role in the global recession especially in transmitting demand contractions across national boundaries (Freund 2009). According to standard trade-linkages reasoning, countries "catch" recessions from their major export partners while transmitting recessions to their major import suppliers.

This simple economic logic directs attention to a set of facts that has heretofore attracted little attention in the global debate.

US exports are disproportionately sold to the EU and Canada (a bilateral trade surplus); US imports are disproportionately sourced from China, Japan, and the rest of Asia (a bilateral trade deficit).
Imports from China dominated the US (real) import decline, while exports to Canada figured disproportionately in US export declines.
US imports peaked in October 2007, with a secondary peak in October 2008, and a trough in February 2009. US exports, by contrast, continued to rise until much later in June 2008.
The timing of US import peaks by sector is markedly different from that of US export peaks by sector. The export peaks cluster around the general peak in mid-2008. The import peaks, by contrast, both came much earlier (end of 2007) and show a great deal of sectoral dispersion.
US imports related to housing construction--especially wood and construction equipment--showed relatively early downturns.
The downturn in US imports of motor vehicles and parts has been particularly deep; it began in March 2007 when oil prices were still rising sharply.

Read the rest of the article

Labels: exports, financial crisis, imports, NAFTA, Trade, vox eu

 

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8/29/2009 12:00:00 PM 0 comments

 

Calculating the Benefit of Our Present Healthcare

by Dollars and Sense

Many people aready know much of this, but these are points that deserve to be hammered into our heads these days. Here's the essential point:

Let's start with value. Most Americans are blissfully unaware that their healthcare system provides appallingly little value for their money. This is because when it comes to costs, they see only the tip of the iceberg. While companies typically pay about three-quarters of an employee's family premium--on average $12,680 a year--individuals ultimately bear the burden. In a free market, companies do not hand over to their workers more than they absolutely have to. Money spent on healthcare is carved out of take-home pay or other benefits.

"We pay for healthcare in considerably lower salaries," Uwe Reinhardt, a Princeton University economics professor, said in a telephone interview. "The system seduces people into thinking care is pretty cheap. We are kidding ourselves if we think that the shareholder pays."

Oh, and lest we forget, "The foundation estimates that without reform, the cost of premiums could double again by 2020--gobbling up still more take home pay."
From Reuters:

13:49 August 26th, 2009
The mirage of U.S. healthcare
Posted by: Christopher Swann

On healthcare, the White House is struggling with a political riptide that threatens to drag it into deep water.

Americans, as they contemplate change, have suffered a weakness of nerve. The main reason is that nearly two thirds of Americans are apparently happy with their healthcare coverage, for all its deficiencies. Repeated reassurances from President Obama that those who like the existing set-up will not be forced to change, have had little effect.

A change of tactics may be in order. The administration must do a better job of underlining the glaring defects of the existing system. The genius of the U.S. healthcare is in providing the illusion of value and security. For their own sake, Americans must be encouraged to set aside jingoistic claims about having the best care system in the world and look more honestly at its short-comings.

Read the rest of the article

Labels: health care, health care reform, insurance industry, wages

 

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8/29/2009 11:52:00 AM 0 comments

 

China's "Bailout" of Taiwan

by Dollars and Sense

From Reuters:

02:25 August 26th, 2009
China's bailout of Taiwan is good for the region
By: Wei Gu

Wei Gu is a Reuters columnist. The opinions expressed are her own

If market performance is anything to go by, Taiwan is the biggest beneficiary of China's economic stimulus.

Because of Taiwan's heavy dependence on exports to Western consumers, it was assumed there was little Beijing 'could do about its downturn. But Beijing has gone out of its way to take care of the recession-hit island. This year, it sent several procurement missions to Taiwan to buy billions of dollars of goods, even though Taiwan's trade surplus with China is already approaching as much as a fifth of its economy.

China might be pursuing its unification agenda. After all, it has vowed to bring the island under its rule, by force if necessary. But money is a lot better than missiles. The whole point of inter-dependency is that there will be less chance of confrontation. Taiwan could use more investment, particularly in properties and infrastructure, while China is looking for new areas in which to invest its excess liquidity.

In the short run, increased purchases from Taiwan may come at Korea and Japan's expense. For example, computer maker Lenovo (0992.HK) is increasing its orders from Taiwan companies, probably also because Taiwanese firms are happy to stay as contract manufacturers.

But in the long run, warmer cross-strait ties not only benefit Taiwan and are a positive for China, but also are a very bullish development for the region, which should lead to lower risk premiums in Asia.

The wall of Chinese money has pushed Taiwan stocks up almost 50 percent this year, making it the second best performing market in the world after China itself and followed a decade of underperformance. Taiwanese stocks are currently valued at 26 times of 2009 earnings--a premium versus the rest of the region.

Read the rest of the article

Labels: bailout, China, economic statistics, financial crisis, supply chains, Taiwan

 

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8/29/2009 11:43:00 AM 0 comments

 

This Is What We Get for All the Bailout Money

by Dollars and Sense

Two related posts here: Simon Johnson of Baseline Scenario looks at the shakeout in the banking system that he says is leading to the creation of a two-tier economy that benefits connected-insiders of virtually Naomi Klein proportions (that's him, not me). And here's also a FT piece from early July that goes into the matter in more detail.

And Yves Smith discusses one way in which this is being done, via the use of forms of leverage that contributed to the blowup last year. Seems like we really saved the banking system only to increase the likelihood that we'll be hit by it again. I hope, if that happens, we don't repeat this mistake again next time.

Labels: bailout, Baseline Scenario, financial crisis, Naked Capitalism, Naomi Klein, Simon Johnson, Yves Smith

 

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8/29/2009 11:28:00 AM 0 comments

 

Excellent Radio on Afghanistan

by Dollars and Sense

Doug Henwood's weekly radio program is just about the best there is on politics and economics generally, but the August 20th show, featuring Tariq Ali and the August 15th one, with Christian Parenti, should fill in the innumerable cracks left by the article we posted earlier this week on the Af-Pak situation somewhat. The interview on Nigeria, and on the connection between big oil and third world degradation, is fantastic, too. The link above provides streaming and download links to Doug's archive, so just scroll down a bit and click (and consider a contribution to WBAI, Doug's public radio station, if you're duly impressed).

Labels: Afghanistan war, Christian Parenti, Doug Henwood, Tariq Ali, WBAI

 

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8/29/2009 11:14:00 AM 0 comments

 

Indicators That Fell Through The Cracks...

by Dollars and Sense

...this week (sorry about that!):

UK business investment falls at fastest rate since records began in 1966, despite rock-bottom interest rates (well, not quite at US levels, but...). Once again, super-lavish quantitative easing proceeds are being hoarded by banks.

The number of Americans working part-time for lack of full-time work has, in an astonishing development, almost doubled since the beginning of last year. Thanks to Calculated Risk.

According to Commerzbank economists, the economic crisis has cost the world $10 trillion so far (or, more specifically, will do so by the end of this year). This article, from Die Zeit, is in German (note: in German, like in British English, a billion is a trillion, while a 1,000 million is a billion). The researchers, who assumed that world growth would have been the same as in previous years without the crisis, claim that losses in the US and UK from real-estate amounted to $4.65 trillion, while measures to save the banking system and whatnot have added on another $4.2 billion.

Labels: business investment, Calculated Risk, economic indicators, real unemployment rate, United Kingdom

 

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8/29/2009 10:44:00 AM 0 comments

 

China's Stimulus and Dodgy Statistics

by Dollars and Sense

From The Guardian:

Too early to hail China's stimulus success

China may be on course to hit its annual economic growth target, but the official figures don't tell the full story

Zhang Hong
guardian.co.uk
Friday 28 August 2009 07.00 BST

It seems likely now that China will reach its annual economic growth target of 8%, dwarfing most of the other countries in the world. In the second quarter of 2009, its GDP growth spiked to 7.9%, from 6.1% in the first quarter. If all goes well, the Middle Kingdom will see its economic growth rise to an even higher rate in the remaining two quarters, making it one of the few countries still enjoying a nascent economic growth in spite of the severe impacts of the global financial crisis.

However, looking only at the handsome official figures and rushing to the simple conclusion that China's stimulus economic package has worked successfully would be wrong. In China, official figures don't always tell the true story. Furthermore, the economic growth curve might develop into a "W" shape, rather than the more exciting "V" shape. This means China's economy still faces the danger of nose-diving when the stimulus effects fade away.

Ma Jiantang, director of China's national statistics bureau, admitted recently that some official figures might not reflect the country's real situation. A large number of net users have also questioned the latest official figures on the country's residential average income, released by the bureau, while Ma admitted that the official surveys didn't cover those employed in the private sector. With more than 60% of Chinese residents employed by the private sector, this is a major omission.

Read the rest of the article

Labels: bailout, China, consumption, economic statistics, economic stimulus, financial crisis, Trade

 

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8/28/2009 11:24:00 AM 0 comments

 

More Telecoms Regulation?

by Dollars and Sense

Let's hope the administration's regulators are more aggressive in pursuing this hated quartet than they have been regarding certain financial institutions....From today's Financial Times:

Watchdog to query 'big four' mobile phone set-up
By Paul Taylor in New York
Financial Times
Published: August 28 2009 03:00 | Last updated: August 28 2009 03:00

US regulators launched a broad assault on the US mobile phone industry yesterday, announcing an investigation of competition in a sector dominated by the "big four" wireless network operators--AT&T, Verizon Wireless, Sprint Nextel and Deutsch Telekom's T-Mobile USA unit.

The Federal Communications Commission, now controlled by the Democrats, voted five-to-one to pursue the inquiry. It is being taken as a further indication the Obama administration is to step up its scrutiny of antitrust matters.

Consumer advocates and smaller mobile network operators have complained the wave of consolidation in the US mobile industry during this decade has damaged competition and put too much power in the hands of the big four national operators. Among the issues likely to be considered are whether large companies such as AT&T and Verizon Wireless thwart competition by charging high fees to connect smaller rivals' calls over their networks, and for use of lines that carry data for wireless internet services. The inquiry will look "broadly at all of the elements that affect what we understand to be the mobile marketplace," said Julius Genachowski, FCC chairman. The Democrat was presiding over his second monthly meeting since taking office in June as President Barack Obama's choice to run the agency that regulates television, radio and telephones

Read the rest of the article

Labels: AT and T, FCC, Sprint Nextel, T-Mobile, telecom industry, Verizon

 

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8/28/2009 11:16:00 AM 0 comments

 

Environmental Stuff (Not Pretty)

by Dollars and Sense

Peak Water? Thanks to Naked Capitalism

The "Great Pacific Garbage Patch" pinpointed at last. Thanks again to Yves Smith.

Ever-more bizarre geoengineering proposals. Why can't we just consume sustainably instead?

Finally, speculators and oil markets. Thanks to Economist's View.

Labels: Economist's View, energy, Environment, environmental crisis, geoengineering, Naked Capitalism, natural resources, oceans, pollution, water, Yves Smith

 

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8/28/2009 11:02:00 AM 0 comments

 

Friday's Indicators

by Dollars and Sense

US personal income was .1% lower in July, reflecting continued weakness in the job market, but private sector wages were actually up $6.7 billion after a big decrease of $24.5 billion in June. July consumer spending rose .2%, powered by cash-for-clunkers, and the June figure was revised upwards to an increase of .6%. For the second quarter, spending fell at a 1% annualized rate. Savings fell as incomes were squeezed, to 4.2% from 4.5% in June.

The fact that the private sector is starting to put some money on the table is good news, but one has to wonder how much of it is being confined to top earners. The fact that savings fell so much may be a consequence of such skewed distribution. And if that is the case, the implications for a relatively quick economic recovery must remain in doubt.

On Wall Street, positive statements by Dell (despite a steep drop in 2Q earnings) and Intel (on the basis of a more optimistic sales forecast) have failed to energize the stalled tech sector at the time of writing, at about 11.00 am EST.

The UK, unlike its continental counterparts France and Germany, saw negative second-quarter growth of .7%, according to the Swiss newspaper Neue Zuercher Zeitung (for some reason I couln't find this story in the headlines of the UK dailies). But UK house prices rose in July for the third straight month, and at the highest rate in five years.

In Japan, which will hold a general election on Sunday, unemployment hit a record high of 5.7% in July, while deflation of 2.2% continued to ravage the positive growth figure announced a fortnight ago. This will no doubt contribute to the widely anticipated big defeat for the ruling Liberal Democratic Party. Ambrose Evans-Pritchard noted yesterday that Japanese exports fell yet again in July, with big declines in exports to its major partners China and the US. And the Baltic Dry Index, a key barometer of international trade, has been falling for 11 weeks, as Evans-Pritchard says.

Finally, LIBOR, a key set of interest rates for banks lending to each other, continued a dramatic recovery since the collapse of Lehman Brothers saw them rise to unheard-of levels last September and October. Still, however, smaller banks are finding it difficult to borrow at low rates.

All in all, the data remain disturbingly mixed. Signs of strength are offset by continuing imbalances and unwindings across the board. And there's no way economies can stand on their own feet without historic levels of government support.

Labels: Ambrose Evans-Pritchard, consumption, corporate earnings, Dell, economic indicators, intel, Japan, LIBOR, personal income, Trade, United Kingdom

 

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8/28/2009 09:20:00 AM 0 comments

 

The Afghanistan Quagmire

by Dollars and Sense

Though this Reuters article is hardly one of the best I've read on the topic (for that, I'd refer to The Independent's Patrick Cockburn and Robert Fisk, and The Nation's Christian Parenti, among others), Afghanistan is a subject I think we've neglected on this blog. And with casualties higher in Afghanistan than Iraq for the first time, and the administration increasing the troop presence significantly (not to mention the propect of significantly higher outlays to fight the war in the years ahead--years which will quite possibly see the US deficit hit close to $10 trillion over the next decade), even this short article may remind us of the big financial impact this "little war" may have on all of us for a long time. Needless to say, I, like many of the readers of this blog, don't necessarily feel that the war can, or should be "won." And the article does make some interesting claims, like this one: "foreign assistance coming into Afghanistan was one of the richest sources of funding for the Taliban."

04:15 August 27th, 2009
Obama’s Afghan war - a race against time
By: Bernd Debusmann

Bernd Debusmann is a Reuters columnist. The opinions expressed are his own)

By making the war in Afghanistan his own, declaring it a war of necessity and sending more troops, President Barack Obama has entered a race against time. The outcome is far from certain.

To win it, the new strategy being put into place has to show convincing results before public disenchantment with the war saps Obama’s credibility and throws question marks over his judgment. Already, according to public opinion polls in August, a majority of Americans say the war is not worth fighting. Almost two thirds think the United States will eventually withdraw without winning.

There are similar feelings in Britain, which fields the second-largest contingent of combat troops in Afghanistan after the United States. A poll published in London this week showed that 69 percent of those questioned thought British troops should not be fighting in Afghanistan.

In the United States, almost inevitably in a country that never forgot the trauma of the only war it ever lost, 36 years ago, pundits are conjuring up the ghost of Vietnam. A lengthy analysis in the New York Times wondered whether Obama was fated to be another Lyndon B. Johnson, the president who kept escalating the Vietnam war.

The war in Afghanistan is drawing into its ninth year and chances are it will still be going when Obama is gearing up for his campaign for re-election in 2012. According to a study by the RAND institute, a think tank working for the military, counter-insurgency campaigns won by the government have averaged 14 years.

Read the rest of the article

Labels: Afghanistan war, Barack Obama, iraq war

 

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8/27/2009 03:13:00 PM 1 comments

 

Obama's Neoliberal and Elitist Educational Policy

by Dollars and Sense

From Danny Weil, who's writing a book on elite-led educational reform, at Counterpunch. Not to disrespect the dead, but it must be remembered that No Child Left Behind was endorsed by the late Senator Kennedy...
Neoliberalism, Charter Schools and the Chicago ModelObama and Duncan's Education Policy:
Like Bush's, Only Worse
By DANNY WEIL

In his first major speech on education since his election and swearing in as President, a speech made to an unscheduled meeting of the Council of Chief State School officers, held on March 10, 2009 in Washington D.C., Barrack Obama repeated the claims heard from many quarters that the United States must drastically improve student achievement to regain lost international standing in the world. He called for tying teachers' pay to student performance (merit pay) and for expanding charter schools throughout the nation. In calling for merit pay for teachers, Obama argued:

"Too many supporters of my party have resisted the idea of rewarding excellence in teaching with extra pay, even though we know it can make a difference in the classroom."

The president of the 3.2 million-member National Education Association (NEA), Dennis Van Roekel, weakly insisted that Obama's call for teacher performance pay did not necessarily signify raises or bonuses would be tied to student test scores under No Child Left behind, as merit pay proponents have consistently called for. According to the NEA president, it could mean more pay for board-certified teachers or for those who work in high-poverty, hard-to-staff schools. However, much to the chagrin of the NEA president, administration officials later clarified the issue, saying that among other things, they most certainly do mean to tie higher teacher pay to student achievement on standardized tests. This clearly seems to signal that the No Child Left Behind standardized testing regime will continue unabated and the 'average yearly progress' will continue to serve as the metaphorical educational Dow Jones of 'measureable outcomes', not only for teachers and students, but as we discussed in previous chapters, eventually as benchmarks for the 'charter school providers' or EMOs themselves.

Read the rest of the article

Labels: Arne Duncan, Barack Obama, charter schools, Counterpunch, Danny Weil, education, NEA, no child left behind act

 

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8/27/2009 01:47:00 PM 0 comments

 

On Shrinking the City

by Dollars and Sense

Two FT pieces today on regulating international finance. The first covers some rather remarkable statements by the head of Britain's Financial Services Authority (the regulator of financial services in the UK) on the place of the City of London in the UK's economy. Lord Turner, the head of the FSA, says nothing less than that the FSA should "be very, very wary of seeing the competitiveness of London as a major aim", and that the city's financial sector has become a destabilising factor in the British economy. It also says that the FSA is looking at a Tobin Tax to curb the excesses of global finance.

In the second piece, columnist Gillian Tett continues her thoughts from last week on regulating global finance by assessing the cogency of the Tobin tax.

Labels: Adair Turner, banking system, City of London, financial regulation, FSA, Gillian Tett, James Tobin, Tobin tax

 

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8/27/2009 01:32:00 PM 0 comments

 

FDIC Bled by Bank Losses, Sets P.E. Rules

by Dollars and Sense

First, the NYT on the scary FDIC banking report. As the article notes, the warnings about large numbers of banks should be contrasted with the financial sector's surge on Wall Street.

And then there's Reuters' Rolfe Winkler on new FDIC capital-adequacy rules for private equity firms. Interesting commentary concerning the FDIC's slipping and sliding regarding definitions of Tier-one capital in promulgating the new rule. Winkler thinks these may serve to deter private equity investors from issuing lower-quality equity in the future. So while the new rules allow for a lowering of capital-adequacy ratios for P.E. firms looking to buy distressed banks, they may serve to tighten standards in a part of the market that really needs it.

Labels: bad loans, banking system, FDIC, FDIC fund, financial crisis bailout, private equity, Rolfe Winkler, Sheila Bair, US Treasury

 

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8/27/2009 01:03:00 PM 0 comments

 

Thursday's Indicators

by Dollars and Sense

Weekly new jobless claims in the US fell 15,000 to 565,000, and continuing claims dropped by 80,000 to finish the week ending 15 August at 6.133 million. How many unemployed workers exhausting benefits, thereby contributing to the fall in existing claims, must be considered here, however.

US 2Q GDP was revised upwards to minus one percent. In the longest recession since 1947, real GDP has fallen for four straight quarters. Corporate profits, though, rose 2.9 percent in 2Q, following a return to positive territory in 1Q of 1.3 per cent. Inventories were cut by more than anticipated during the quarter, but this was offset somewhat by stronger consumer spending (a part of that as a result of higher gas prices and the now-expired cash-for-clunkers--After posting this I remembered that the program didn't go into effect until July, so this had no impact on second-quarter purchases; sorry for the mistake). Tomorrow's personal income number will no doubt add definitively to the picture of the consumer's health.

Wall Street opened by shrugging off these data, which seem to confirm long-awaited indications that consumer spending has at least some legs to stand on. Some may be puzzled by this--it wasn't too long ago that negative readings were routinely ignored by the Street. And there are some mighty strange things happening on the markets. Today's FT noted that AIG, Fannie Mae and Freddie Mac put in the most improved performance on the New York Stock Exchange since early August. All three have vaulted more than 150%, with the terrible government-sponsored entity twins posting gains of 250%. And there's more at work here than positive news on the homebuilding front: it seems short sellers have been betting against the trio, and have been caughtm, well, short: so some of the buying was of the panic sort, to buy back shares of the three that speculators had shorted which gained in price.

Also, readers may recall a post from last week in which Arindrajit Dube showed how the shares of big insurers reacted to the demise of the public option in July. I don't follow individual stocks or sectors that much, so I'm guessing here, but I imagine that insurers are still racking up gains. To see so such upward activity suppported by such movements, which can only be regarded as neutral or harmful in an economic sense, would mitigate against the simple recovery story. And retail investors remain close to the sidelines.

The FT also had a longer piece on the very weird upward movement of stocks, bonds and commodities recently (usually bonds move opposite to stocks, and commodities, especially oil, are used as a hedge against inflation--and hence, often-times, stock performance). Add in currencies, in which a movement away from the dollar as a safe haven has been proposed (and the dollar usually moves counter to commodity prices), and you have a very confusing situation, indeed.

Labels: bond market, commodity prices, corporate profits, dollar, economic indicators, GDP, stock market, weekly initial claims

 

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8/27/2009 08:37:00 AM 0 comments

 

German Consumption: Can't Win for Losing

by Dollars and Sense

Germany has long been castigated for its relatively restrained consumer spending habits (though it's definitely a thoroughly consumerist place), and the emphasis of its policymakers, still shellshocked by the Weimar years, on monetary ueber-prudence. But, as this FT article documents, German consumption, spurred on by cash-for-clunkers as well as a governmnet-financed job-saving scheme and generous welfare benefits, actually grew impressively during the country's worst recession since World War 2 (at least during the last two quarters), at rates unseen since the end of the boom year 2006. So did this spending do anything to balance Germany's much-castigated current account surplus? Alas, no: imports lagged exports yet again. This should be a lesson for those hoping surplus export economies can shift, relatively quuickly and painlessly, to a model more dependent on domestic consumption.

Car scrap scheme boosts German spending
By Ralph Atkins in Frankfurt
Financial Times
Published: August 25 2009 09:08 | Last updated: August 25 2009 09:08

German consumers, long berated internationally for not playing their part in supporting a global economic recovery, have increased spending at the fastest rate for more than two years, boosted by the government's car scrappage scheme.

Details of Germany's second-quarter growth figures showed consumer spending in Europe's largest economy rose by 0.7 per cent, extending a 0.6 per cent rise in the first quarter. That was the fastest quarterly rise since the last three months of 2006.

The data helped explain why Germany, along with France, escaped recession ahead of the US and UK. Overall gross domestic product in Germany's export-led economy was up by 0.3 per cent in the second quarter, the federal statistics office confirmed.

They also highlighted the success of the incentives Berlin has pioneered to encourage consumers to trade in old cars for new models.

When the global economic crisis intensified late last year, Germany's government faced widespread criticism from abroad for not doing enough to stimulate its economy. Instead Berlin preached fiscal prudence and Peer Steinbrueck, Germany's finance minister, complained about the "crass Keynesianism" pursued by Gordon Brown, the British prime minister.


In fact, the boost to the economy provided by Berlin's emergency packages was comparable with those of other countries taking into account automatic increases in state spending caused, for instance, by higher unemployment. German consumer spending may also have been boosted by historically low inflation rates.

"Consumers have been prepared to step into the breach more than many, including myself, expected--a welcome, if not huge, boost to global demand," said Colin Ellis European economist at Daiwa Securities SMBC Europe. "But from a macro perspective Germany will 'live up to its international responsibilities' when the trade, or current account, surplus closes, and it actually got bigger in the second quarter."

Read the rest of the article

Labels: balance of trade, consumerism, consumption, Germany

 

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8/26/2009 12:39:00 PM 0 comments

 

Quantitative Easing Fails To Get Banks To Lend

by Dollars and Sense

Analysis from FT Alphaville. Here are the main ideas:

The Deputy Governor's remarks on 'quantitative easing' (QE) suggest the Bank of England has abandoned any hopes it might have had that its asset purchases would lead to a revival in bank lending.

If QE is purely and explicitly aimed at flattening yields, it also raises certain questions for central bankers beyond those of the moral hazard of monetising debt. For instance, if yields (10-year gilt shown below) stop responding to government-bond buybacks, and rates start rising, what then?

The world's central bankers, Charlie Bean included, will surely at that stage have to try some extra yield manipulation, or what FT Alphaville has dubbed Ueber-QE.

Today's FT also notes that the Bank of England is considering a move already taken by Sweden's Riksbank, of introducing negative interest rates on balanced banks hold with the central bank, to induce banks to finally lay out cash to borrowers (which has been liberally financed by the taxpayer, of course...)

Labels: Bank of England, bond market, financial crisis bailout, Monetary Policy, Quantitative easing, The Riksbank, yield curve

 

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8/26/2009 11:34:00 AM 0 comments

 

Israel/Palestine: "Breakthrough" Imminent?

by Dollars and Sense

Two UK broadsheet dailies seem to be saying so:

From The Guardian

From The Independent

Labels: Barack Obama, Israel, Palestine, The Guardian, The Independent

 

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8/26/2009 11:06:00 AM 0 comments

 

Wednesday's Recommended Reading

by Dollars and Sense

On China's stimulus, by a (sort-of) insider. Interesting how the author faces up to some serious problems, but disconcerting insamuch as no mention is given to the likely environmental impact of the massive infrastructure-building program, especially in its more extravagantly wasteful aspects (dirty airports to nowhere, etc).

The FT's Krishna Guha on the future of central banking. Substitute class analysis at a couple of major points and you could be getting somewhere...

Ambrose Evans-Pritchard on Bernanke's re-appointment. He makes several of the points other commentators, like Stephen Roach have, but with a wider perspective, and more style:

His reflex is to see any fall in demand as an outside shock to be corrected by extra stimulus. What he does not accept is that the adrenal glands of the economic system have been depleted by perpetual credit stimulus, giving the world a form of Addison's Disease.

Labels: Ambrose Evans-Pritchard, Ben Bernanke, Bureau of Labor Statistics, central banking, Federal Reserve, Krishna Guha, Yu Yongding

 

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8/26/2009 10:43:00 AM 0 comments

 

Labor Leader To Head New York Fed

by Dollars and Sense

Yves Smith thinks it's a gimmick, but one that may have some unexpected consequences.

Tuesday, August 25, 2009
Naked Capitalism
Labor Leader Chosen to Head of New York Fed Board of Directors

Joseph Stiglitz has said that labor should have a voice in the setting of interest rate policy. Is this change at the New York Fed, teh appointment of the AFL-CIO's Denis Hughes as the replacement to ex Goldman co-chairman Steve Friedman as chairman of the New York Fed, a step in that direction?

If it proves to be, it will only be by dint of miscalculation. This is clearly an image-burnishing move by the Fed, throwing a bone to critics, But letting labor into the tent may have unexpected consequences, simply by allowing someone who has not drunk the financial services industry Kool-Aid more influence (Hughes was on the board, but as vice chairman). This appointment is only until year-end, but if the Fed continues to be under political pressure, it isn't hard to imagine this appointment being extended.

The Journal's Deal Journal voices the opposite possibility, that labor is being co-opted. The branding of labor as monolithic and radical is a bit of a canard. In the 1930s, the old AFL, which was a craft union, was comparatively conservative and regarded more favorably than upstart and aggressive CIO, for instance.

From the Wall Street Journal (hat tip reader LeeAnne):

Denis Hughes, president of the New York state branch of the AFL-CIO, had been serving as acting chairman of the New York Fed board since May, when Stephen Friedman stepped down from the position.

Mr. Friedman, a former Goldman Sachs Group Inc. chairman and adviser to President George W. Bush, had faced questions about his purchases of Goldman stock while serving on the New York Fed's board.

The Fed decision formalizes Mr. Hughes's role as chairman through the end of 2009. The Fed board in Washington will announce in November or December who will serve as chairman in 2010. Columbia University President Lee Bollinger was named deputy chairman, a position that Mr. Hughes previously held. Mr. Bollinger has been a New York Fed director since January 2007.

The New York Fed chairmanship typically has gone to prominent Wall Street executives or academics. The ascension of a labor leader is a new twist for the New York Fed and a sign of the public pressure the Fed has been under to loosen its close ties to Wall Street.

Labels: AFL-CIO, Bureau of Labor Statistics, Denis Hughes, Federal Reserve, Monetary Policy, Naked Capitalism, Yves Smith

 

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8/26/2009 10:37:00 AM 0 comments

 

Today's Indicators

by Dollars and Sense

US new home sales increased almost 10% more than forecasted in July, and, perhaps more important, unsold inventories dropped to 7.5 months worth of supply, the lowest that number has registered since April. 2007. There was a huge 32% increase over June in the Northeast. Too bad most of the troubled properties are in the West. Still, even the South registered a 16% monthly rise (don't know how benighted Florida performed v. other states in the region).

This big number, taken in tandem with yesterday's Consumer Confidence figure, provides a much-needed boost to the notion that the US consumer sector is finally starting to respond to the electroshock therapy provided by the monetary and fiscal dollops thrown at it (very indirectly regarding monetary policy: banks still aren't lending). Friday's personal income reading will be decisive in gauging whether or not this view is really robustly supported. Pesonal incomes have been on life support all year, with gains coming only from government transfers, which are now thinning out.

Interestingly, builders are beginning to buy land again, after a three-year hiatus. Housebuilder stocks are boooming on Wall Street these days.

US durable goods orders also surged in July, led by purchases of aircraft. Capital goods orders increased by a quite-respectable 9.5%, consituting the best performance in this area since December, 2007. This is important, because business investment, like consumer spending, really needs a vigorous push if this recovery is to become at all sustaining. But even here, caution is in order:

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, slipped 0.3 percent in July, the Commerce Department said.

Analysts polled by Reuters had expected core capital goods to increase 1 percent. The prior month was revised to show a 3.6 percent rise, previously reported as a 2.6 percent increase.

Durable goods orders are a leading indicator of activity in manufacturing, which in turn provides a good barometer for overall business health.

Durable goods inventories fell 0.8 percent in July, after declining 1.5 percent the prior month..

Germany, with its big capital goods exporters, also saw a bigger rise in business sentiment in July than forecast.

In addition, as cannot be emphasized enough, the process of deleveraging the vastly bloated debt of the US consumer and corporate sectors has scarcely begun. It is very difficult, indeed, to see how sustainble upticks in either is possible given this constraint, especially with prospects for employment, wages, corporate defaults, less government largesse and the possibility of higher taxes all added into the mix.

Finally, the death of Senator Kennedy may resuscitate the public option in some sort of form. God knows what that means for the bond vigilantes and exit-strategists....

Labels: business confidence, deficit, durable goods, economic indicators, Edward Kennedy, Germany, health care reform, new home sales

 

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8/26/2009 09:23:00 AM 0 comments

 

Fed Ordered To Disclose Emergency Loan Details

by Dollars and Sense

From Bloomberg (the plaintiff, no less):

Court Orders Federal Reserve to Disclose Emergency Loan Details

By Mark Pittman

Aug. 25 (Bloomberg) The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.

Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren't covered by the law because their disclosure would harm borrowers' competitive positions.

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.

"The Federal Reserve has to be accountable for the decisions that it makes," said Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee, after Preska’s ruling. "It's one thing to say that the Federal Reserve is an independent institution. It's another thing to say that it can keep us all in the dark."

The judge said the central bank "improperly withheld agency records" by "conducting an inadequate search" after Bloomberg News reporters filed a request under the information act. She gave the Fed five days to turn over documents it told the reporters it located, including 231 pages of reports, and said it must look for more at the Federal Reserve Bank of New York, which runs most of the loan programs.

Read the rest of the article

Labels: Bloomberg, Federal Reserve, financial crisis bailout

 

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8/25/2009 12:27:00 PM 0 comments

 

Changed Relation between Intellectuals and Poor

by Dollars and Sense

Interesting Guardian piece by David Edgar, formerly of Marxism Today:

In the new revolution, progressives fight against, not with, the poor
The old, transformative alliance between the intelligentsia and the poor has been broken by the intelligentsia itself
David Edgar
guardian.co.uk
Monday 24 August 2009 20.30 BST

The year 2009 is not only the anniversary of many great events but also the anniversary of the many misjudgments that were made about them. So, not just the 1979Iranian revolution and Margaret Thatcher but the delusion that the first was an aberration and the second a blip. Not just the 1984 miners' strike but also the conviction that the National Union of Mineworkers (NUM) would win, as it had so decisively in 1972 and 1974. And in 1989, not just a series of uprisings in an obscure corner of Europe but also the failure to notice the new political fault lines they drew throughout Europe and beyond.

In 1989, I was one of two non-communist members of the editorial board of the magazine Marxism Today (the iconoclasm of whose politics led to it being described by some on the left as the most inaptly titled periodical in Britain). Under its editor, Martin Jacques, the magazine had been right to see Thatcherism as representing a fundamental political sea change: this year also marks the 30th anniversary of Stuart Hall's coining of the term. However, in the autumn of 1989, as the dominoes fell across eastern Europe, our cover subjects were the Greens, the end of Thatcherism, the soaraway Sun and Shere Hite.

We weren't alone. Many people underestimated or misread the significance of what was happening in eastern Europe in 1989. For all the American triumphalism, the revolutions gave the lie to the neocon theory – used to justify American support for brutal military dictatorships in Latin America and elsewhere--that rightwing "authoritarian" regimes would peaceably morph into democracies while leftwing "totalitarian" systems couldn't. Optimistic leftwingers thought eastern Europe had risen up for social democracy, not realising that the enticing Swedish (and West German) model was also in deep trouble. Reading backwards off the last east European insurgency (against Ceausescu in Romania), cynics argued that the whole thing was a fake, cooked up by Gorbachev's KGB. Others thought it wasn't so much a revolution as a restoration of the Austro-Hungarian Empire.

What most people missed--because it wasn't immediately clear – was that the 1989 revolutions presaged a new kind of political movement.

For all its religious fervour, Iran in 1979 was a recognisable, 20th- century, third-world revolution, in which the progressive middle class allied with the rural masses to overthrow a hated, foreign-backed autocracy. It's easy to see 1989, too, as a variation on that theme. Its seeds lay in the 1980 workers' occupation of the Gdansk shipyard in Poland. Its political mechanisms were borrowed from the 1960s anti-war movement.

But in retrospect, rather than being the last of the 20th-century revolutions, 1989 looks more like an anticipation of the colour/flower-coded revolutions of the 21st: from Georgia's 2003 rose revolution via Ukraine's 2004-05 orange revolution to Kyrgyzstan's initially pink or lemon but finally tulip revolution against another crooked post-communist government, later the same year.

Despite considerable, covert American backing for the insurgencies and the highly dubious character and record of the successor governments, the rose, orange and tulip revolutionaries had right on their side. But their side was much narrower than that of the 1979 Iranian revolution, narrower even than most of the anti-communist uprisings 10 years later.

Most clearly in Thailand--where the airport-occupying yellow-shirted People's Alliance for Democracy actually wants to limit democracy, and openly expresses scorn for its "uneducated", red-clad opponents – there is a new divide running through world politics.

The 21st-century revolution pits the educated, western-oriented, socially liberal, economically neoliberal urban middle class against the economically egalitarian, socially traditionalist rural poor. The green armbanded protesters--again, on the right side--against Ahmadinejad's election "victory" in Iran were urban and liberal, the president's supporters rural and conservative. As the BBC's John Simpson noted in the streets of Tehran, the two big differences between the 1979 and 2009 uprisings were the presence of women and the absence of beards

Read the rest of the piece

Labels: David Edgar, revolutionary praxis, social transformation

 

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8/25/2009 10:37:00 AM 0 comments

 

Yves Smith: Banks Sitting on Bad Mortgages

by Dollars and Sense

More reason to view Case-Shiller data with caution: increased buying activity is only one side of the problem.

Naked Capitalism
Tuesday, August 25, 2009
Banks Sitting on Bad Mortgages, And They Aren't Getting Any Better

Fitch released an analysis that shows that mortgage cure rates, meaning the proportion of borrowers who manage to get current once they fall behind, have tanked. From the Wall Street Journal:

The report from Fitch Ratings Ltd., a credit-rating firm, focuses on a plunge in the "cure rate" for mortgages that were packaged into securities. The study excludes loans guaranteed by government-backed agencies as well as those that weren't bundled into securities. The cure rate is the portion of delinquent loans that return to current payment status each month.

Fitch found that the cure rate for prime loans dropped to 6.6% as of July from an average of 45% for the years 2000 through 2006. For so-called Alt-A loans -- a category between prime and subprime that typically involves borrowers who don't fully document their income or assets -- the cure rate has fallen to 4.3% from 30.2. In the subprime category, the rate has declined to 5.3% from 19.4%.

"The cure rates have really collapsed," said Roelof Slump, a managing director at Fitch.

Because borrowers are less willing or able to catch up on payments, foreclosures are likely to remain a big problem. Barclays Capital projects the number of foreclosed homes for sale will peak at 1.15 million in mid-2010, up from an estimated 688,000 as of July 1.

Ouch.

On top of that, Greg Weston looked at the underlying New York Fed data for Fitch's comment, and found another sobering factiod, namely that banks are not foreclosing. The reason most often given is that the bank doesn't want to write the mortgage down even further (we've heard it bandied about for loss severities is 60% and Weston had a chart that shows it is worse for subprime, at 70%with Alt-As not as bad at 50%), so 60% is a representative level) but another reason is that if the bank does not take possession, the taxes are still the owner's responsibility.

Read the rest of the post

Labels: financial crisis, foreclosures, housing market, mortgage cure rates, Naked Capitalism, Yves Smith

 

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8/25/2009 10:31:00 AM 0 comments

 

Senate Republicans To Block Health Co-ops

by Dollars and Sense

According to this Financial Times report. Co-ops are a totally insufficient substitution for the less-than sufficient public option anyway, but this confirms suspicions that the Republicans were never serious about playing a constructive role in passing health care legislation (at least from the beginning of the summer on). The article rightly points out that a co-op scheme will require considerable funds for start-up costs if they are to hope to compete with their bloated competitors, something many Republicans are dead-set against (I wonder why), anyway. And what's to prevent them from demutualizing when/if things become more "normal" again?

US health co-op plan in doubt
By Saskia Scholtes in New York and Edward Luce in Washington
Financial Times
Published: August 24 2009 20:58 | Last updated: August 24 2009 20:58

A plan to establish more insurance co-operatives could need start-up capital of tens of billions of dollars, analysts say, presenting a potential stumbling block for the US healthcare reform proposal.

The scheme has been championed by some moderate Democrats as an alternative to proposals for a public option.

It would aim to increase competition among healthcare insurers and help reduce the country's spiralling healthcare costs through government support for not-for-profit insurance co-operatives, which would be owned by and managed for the benefit of their members.

However, analysts at Smart, a consulting firm, have said the co-ops would require tens of billions of dollars in start-up capital to pay for recruiting members, striking deals with medical providers and setting up administrative systems.

Current co-op proposals include start-up funds of about $6bn, 4.2bn euros, 3.7bn pounds).

Read the rest of the article

Labels: health care reform, healthcare co-ops, insurance industry

 

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8/25/2009 09:56:00 AM 1 comments

 

More on Craziness of China's Stimulus

by Dollars and Sense

From The Financial Times. Here's a taste:

This was thanks largely to the government's Rmb4,000bn ($585bn, 409bn euro, 355 bn pound) fiscal stimulus and the Rmb7,370bn of new bank loans extended in the first half of the year, triple the amount lent in the same period a year earlier. Economists at BNP Paribas estimate that the loan expansion was equivalent to 45 per cent of half-year GDP and say they know of no other economy that has created credit on such a scale since the second world war.

This lending boom, carried out by the country's state-controlled banks on the orders of the central government, has raised concerns that much of the money has gone to borrowers who will not be able to pay it back. "I worry what’s happening now is similar to what happened in the US in 2001--the government is flooding the economy with cash that just ends up papering over the problems," says a Chinese corporate executive who used to live in the US.



Rule of the iron rooster
By Jamil Anderlini
Financial Times
Published: August 24 2009 20:19 | Last updated: August 24 2009 20:19
Under the leadership of the Communist Party, the people in China brace up to cope with the financial crisis and have scored marked successes to the worldwide attention. High-level figures from the western political and economic spheres...envy China's superb performance...as well as "China's spirit"--the kind of solid, unbreakable "Great Wall" at heart to ward off the financial crisis.


English-language editorial in the People's Daily, official mouthpiece of the Communist party of China, July 30


China's rulers can be excused a modicum of less-than-grammatical gloating after the economic rebound the country has achieved in recent months. With its quick and overwhelming response to the crisis, Beijing appears to have engineered a powerful V-shaped recovery and by most estimates is on track to exceed the 8 per cent growth target it set at the start of the year.

Official readings of industrial production, fixed investment, power consumption and gross domestic product all show a strong revival, while equity and property prices have soared in recent months. There have even been signs of a recovery in exports, although these are still about one-quarter below the levels of a year ago.

But a growing number of economists and officials say the positive growth data hide worrying structural imbalances and the government’s response to the crisis may only have postponed an inevitable reckoning. With the world looking to China as a beacon to lead the way out of economic gloom, a second downturn would have a big impact on global confidence, not to mention commodity prices.

"There is such a thing as good 5 per cent growth and bad 8 per cent growth," according to one senior adviser to the government. "We worry that what we're seeing falls more into the latter category."

On an annual basis, China's economy grew 7.9 per cent in the second quarter, well up from 6.1 per cent in the first quarter. If measured sequentially the rebound was even more obvious, economists estimate, with seasonally adjusted quarter-on-quarter growth at zero in the fourth quarter of 2008 but picking up to 3 per cent in the first three months of this year and as much as 16-17 per cent in the second quarter.

Read the rest of the article

Labels: bailout, bank lending, China, financial crisis, speculation

 

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8/25/2009 09:44:00 AM 0 comments