Daily Archives: January 25, 2009

If A Better TARP Will Not Do, Build A Bigger One

Empire_2The second and last $350 billion of TARP funding is not in the hands or the new Treasury Secretary and the $825 billion stimulus package may not leave the hands of Congress for three weeks. No matter. Both Congress and the Administration have begun the process of resetting expectations.

The amounts of money likely to be needed to revive that economy are already growing well beyond what has been earmarked.

Both Nancy Pelosi, the Speaker of the House, and Lawrence Summers, head of the National Economic Council, have essentially said that restarting the economy will take more money than had been planned..

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Posted on: January 25, 2009 – 3:52 pm in Politics

Buy Land, They Ain’t Making Any More Of It

Water_liliesMark Twain and Will Rogers shared a sentiment. As Twain said, “Buy land, they’re not making it anymore”.

It would have been interesting to ask each man what he thought about the value of the toxic assets on bank balance sheets.Unlike land, toxic assets can multiply. And, unlike land, the value of toxic asset may never rebound although analysts differ on that subject.

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Posted on: January 25, 2009 – 12:55 pm in Economy

GDP Will Drop By More Than 7% In The Second Half

Winter_2Bloomberg’s poll of economists shows that the experts think US GDP contracted 5.5% in the fourth quarter. A drop of that magnitude would be the greatest since 1982, a year when the recession took joblessness to 10%.

Analysts are now trying to forecast what will happen as the economy moves into the first quarter and first half of this year.

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Posted on: January 25, 2009 – 11:55 am in Economy

California Dreaming

SunsetArnold Schwarzenegger may believe that he would be sitting in Barak Obama’s chair in the Oval Office if only he had been born a US citizen. Instead he runs California, which may be the nation’s largest state while being at the same time the one closest to economic ruin.

As of December, California had an unemployment rate of 9.1%. That news is days old now so it has very little value on its own.

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Posted on: January 25, 2009 – 9:57 am in Economy

The Picture Of China’s Economy Almost Certainly Wrong

WinterWhen China’s Lazarus, Deng Xiaoping, finally became the absolute leader of the world’s most populated nation in 1978, the country began its evolution from being an evil empire to becoming America’s most prolific trading partner. When he died in 1997, China was well on its way to becoming the fastest growing large economy in the world.

For at least ten years China’s GDP has grown at more than 10% and it is now the third largest economy in the world. Many projections show it passing the US the world preeminent economy before the middle of the century.

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Posted on: January 25, 2009 – 9:29 am in China

US Car Companies Get Arrogant

Old_carBarely a month after begging for money in Washington, the US auto companies are talking about what a fine job they are doing preparing for a profitable future.

Their predictions are flawed because they speak to the industry’s ability to control costs, and, in some cases, use government funds to tide them over. The forecasts neglect a full analysis of what happens if the recession gets much deeper.

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Posted on: January 25, 2009 – 7:18 am in Autos,