end of another year and the end of Capitalism

well another year is coming to a close and boy what a year 2008 turned out to be.

This year we saw the stock market crash and along with it the economies of many countries are seeing a down turn.

I've notice a number of people looking at this bad news and declaring that this is a sign that capitalism doesn't work as an economic system and if capitalism isn't already dead it is soon to end.

Now I understand where some of these people are coming from but the truth is we are not facing the end of Capitalism.

The thing is that some of the people who are saying we are entering a post-Capitalism era fail to realize is the fact the Capitalism is a big umbrella term for economic trains of thought usually centered around the ideal that people own their capital (which includes their labor)

What I think many people really mean is that this is hopefully the end of certain trains of economic thoughts such as favoring policies that benefit large companies and wealthy people but are economically harmful for the average person or the ideal that the free market will solve all problems, ect.

or maybe they do realize this but also realize that stating that Capitalism is dead or ended draws much more attention then saying something more specific like "class is out on the Chicago school of economic theory" or that "Reaganomics is Dead"

Madoff hedges $50 billion fraud

Bernard Madoff former head of the Nasdaq (and currently on the Nasdaq OMX board)and head of Bernard L. Madoff Investment Securities LLC has been arrested today for basically running a giant ponzi scheme.

scheme was ran through Madoff's hedge found which promised people a return in the range of 7.3% to 9% on their investment. Due to their consistent returns this hedge found looked like a smart place for investors to put their money in. what they didn't know was that Madoff was paying off the old investors with the money that the newer investors put in.

at an estimated $50 billion this is one of the biggest fraud cases in history.

even though Madoff's a crook at least when he was caught he didn't deny what he did and is accepting the blame instead of trying to pin it on others.

but give that he is only getting 20 years in jail and a fine of $5 million I think he is getting of a little easy. the years are ok at his age he more then likely wont live to see the end of his jail term but giving the amount of mony he frauded out of people $5 million seems to be such a small fine.

I think the fine should be raised upped.

Chinese laid off workers riots.

last month the workers and ex-workers of Chinese factor that produces Nerf toys held a riot.

the riots where started when the factor made plans to fire over 200 workers and 80 of the senior workers got upset when they saw their severance package get cut.

it seems that this wasn't the first strike/riot in china dealing with people fighting over their jobs and quotes like

"When times are bad economically, a small incident can rapidly become a big one," said local Communist Party official Guo Chenming,

I think we may see more events like this.

it also makes me wonder why we haven't seen similar things happened in America. Companies have been cutting off workers lift and right and many people have seen their severance cut. maybe we don't have riots because even with the cuts we aren't in a position where we need to take similar actions or maybe we are just complacent.

is it Citigroup or Obama that is saving the stock market today?

after a really bad week of drops the markets started to go up on Friday afternoon, closing the market up about 494 points (during a week where we mostly saw drops)

as I write this the market is up 209 points.

now I am wondering what is causing this good news.

a lot of people are thinking that some of it is do to news recently being made by Obama. the market went up after it was leaked that Obama will pick Timothy Geithner to be his Treasury Secretary.

and over the week Obama released a web video where he talked about his economic plan.

and this after noon he gave a press conference.

are stockbrokers feeling good about the choices Obama is making causing the market to go up? or is there something else.

The market did go up to day but it actually started to dip a little when Obama gave his press conference.

and in fact Obama wasn't the only one making financial news this weekend. there was a G20 meeting over the weekend and the government has announced plans to buy $20 billion in Citigroup preferred stock and back the banks assets by up to $309 billion.

if you look at many financial news site they look at the citigroup news to explain the jump in the market.

But I think it's a bit odd to say that people are buying more stock because of the news of the government pumping more cash into citigroup giving that was hardly the response when they did that before with citi and the other finical intuitions.

now maybe people are just getting us to it in the last few month and are start seeing this as an actually good thing.

or maybe these sites/papers are wrong in saying that is what is causing the bump in the stock market.

now the G 20 meeting have made people feel good enough to invest a little. 20 of the world's countries go together to try and work out away to stop the world market form keeping going into the tank.

I think this may be a real factor in the market up shot.

but at the same time I can see Obama also being a bit of a factor and manly for the same reason. the G 20 and Obama pretty much focused on what we will need to be doing and stating that we wont see the out come sometime in the near future.

big 3 brake 'em down

a few days ago Kenneth Lewis the CEO of Bank of America through his two cents in about he thinks is wrong with the car industry.

He feels that the car industry should consolidate.

Not surprising giving all the merging we are seeing in the bank industry that a head of one of the nations largest banks would have this view. Of course looking at how well the bank industry is doing and the fear that was/is going on about if one of these big banks fail it could bring down the economy (ooops to late :) and one of the big fears about the big 3 going down is that it have bad effect on the economy because of all the jobs that come from the car industry (2 to 3 million) this is poor ideal.

The problem with the American car industry is actually the opposite. the car industry doesn't need to consolidate they need to be broken up into smaller companies.

not only would it cut down on the fact that if a few of these smaller car companies go under it wont be the huge impact on the economy if one (or more) of the big 3 go down.

but we would have more market competitions

and one of the huge reasons the American car industry is in such a bad shape right now was that the heads of the company where to reluctant to make improvements on their cars. making them more fuel efficient, slow to adopt to green tech etc

the big 3 where slow to work on hybrids because they didn't thank they had to and the fact that they thought the market was to small for them.

sure if we broke down the industry into smaller companies odds are lot of those companies would have also flocked to SUV but likely some would have noticed that the market for green cars wasn't really that small and would have tried to services that niche (because really that market wasn't that small) and would have found them selves in a great position when gas prices shoot up.

china stimulates the world's economy

Yesterday China announced that they will spend nearly 600 billion dollars to stimulate their economy.

now they are doing this not by giving the money to banks but building and fixing the nations infrastructure.

the news of this sent many stock markets in Europe and Asia up. The market was also up in America in the morning but by the end of the day the market closed at a lost.

jobless rate at a 14 and a half year high

in October the jobless claim rate has reach 6.5% which is the hightest it has been since 1994.

this year we have had over 1.2 million lost jobs.

Gun sells increase due to Obama victory???

It seems that due to fears that Obama and the Democratics controlling 3 branches of the governement there has been a huge increase of people buying guns because they think that it likely that gun control laws will be passed.

in Connecticut gun sells have increased 50%

see Obama winning the election is already getting people to buy more in our economy.

actually giving that their have been threats to Obama's life already and people are buying more guns because he is in office is a bit unnerving.

but in a time when sells are down on most markets it's kinda of good news that this market is getting a boost.

Obama takes on the economy during his first news conference

during a time when unemployment has been the highest that it has been in over a decade Obama has giving a speech saying that on of the first things he is going to do in office is try to solve our economic problem.

one of the things he wants to do...focus on job creation.

that's right focus on job creation.


oh my god where has he been over the last few years.

he also wants to increase unemployment benefits (giving the numbers I think most of the nation will now get an increase paycheck because of that)

and bailout the auto industry. which is a good thing giving that GM has report that they are in series finical trouble this morning.

it looks like another bad day for world economy

Stock markets around the world have dropped, in some cases by nearly as much as 10%. The Dow Jones Indices went into free fall this morning and lost over 400 points.

gold is down to $681 the price it was the beginning of the year.

and good news for us bad for OPEC nations is the fact that oil is done to $63 a barrel.

and the dollar is down

this recession originally looked like it was mainly going mostly just effect the "developed" nations but now investors are pulling their investments form emerging markets due to fears that those markets wouldn't be able to handle being hit hard by a financial crisis. Of course these withdrawals of money can be the very thing that would send these nations into a financial crisis.

I wonder if all this down turn is just due to the already nervousness of the market or was it giving a little push due to Greenspan's talk with the House Committee on Oversight and Government Reform yesterday, where he admitted that he was wrong (at least partly) on some of his views and in his hands off way of managing banks.

In a time when people are already nervous about the state of the economy that news is easily enough to make a lot of people feel unsafe about the market.

Al-Queda hoping for a McCain win

it seems that on a number of Al-Queda blogs and sites people have been posting about their happiness over the fall of the world's stock markets.

and are hoping for a McCain win because they think he will do all the same things Bush that led to this mess and the war in Iraq.

well at least someone is happy :(

Hey you may get yet another check...to stimulate the economy...yeah baby

it seems like Bush, Fed Chairman Ben Bernake and even Nancy Pelosi are backing the ideal of sending yet another check to the American tax payers in hopes that we will go out and stimulate the economy.

If past the check should come sometime after the election but before Christmas.

with the talk that sells are expected to be down for Xmas shopping this year I am sure retailers are happy about this.

the folks at thinkyourwaytowealth.com are right in that this will have to be paid for some how (higher taxes or by causing inflation)

But it will also be spent and since right now people are holding back on their spending. which is making the bad problem of the economy worst it could be a good thing.

of course once again I think the money could be used in a better way.

for example instead of just giving us a check why not spend the money on fixing a bridge or something and paying an out of work construction working.

All Your Banks Are Be Long To U.S

Today President Bush and Treasury Secretary Paulson announce a plan to use $250 billion out of the $700 billion bailout bill to buy stocks in American banks.

or to put it simply the government is taking (part) ownership in the banks.

This move is of course done to help fix the troubled economy and countries around the world have taken similar actions.

As big of a change this is for the way we (America) have ran our banking system to give some since of normalcy a large chunk of the money ($125 billion) will go to the largest banks (Citigroup Inc., Goldman Sachs Group Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Merrill Lynch & Co., Morgan Stanley, State Street Corp. and Bank of New York Mellon Corp.)

This is keeping with who the FEDS bailed out in the past months.


wow, joking aside I'm really trying to take this all in. I know the ideal of America nationalizing its banks will make some people fell uneasy even if it only in part. But then those people will go into a crazy rant about becoming a communist nation.

Which I doubt will happen in America.

besides the government is only planning on buying 15% of the companies and in 3 years they can buy back their shares.

but this is still a very interesting development.

the Treasury department will be placing limits on executive pay and golden parachutes.

holy toledo Obama's plan to save the economy

In Toledo, OH Obama has laid out his plans to save the nation economy.

Obama is still pushing many of the same programs he has been running on since the beginning of this race but has added a few things that I don't remember seeing before.

Obama will offer companies a $3000 tax credit for every new employee they hire in the years 2009 and 2010.

extend a law that was passed earlier this year but expires at the end of the year that raises the amount of money small business can raise to $250,000

0 capital gains tax on money made by investments into small business.

for the years of 2008 and 2009 Obama will end the penalties placed on people taking money out of their IRAs due to hardship.

let Seniors delay taking their money out of their 401k (if they want to) instead of forcing them to take their money out by the time they are 70 1/2

tell the Sectaries of Treasury and HUD to be more active in fixing the terms on mortgages to better suit people.

end a loop-hole that allows judges to fix terms on second homes and vacation homes, but doesn't allow the judge to fix the terms on primary residence.

make sure people facing foreclosure have at least 90 days moratorium

give states $25 billion so they don't face budget crunches

be ready to give more help to the banks

the money for that $850 billion bailout shouldn't just go to mortgage assets but things like student loans, individual mortgages, car loans and other things.

credit for small business and local governments.

eliminate fees on the SBA

and have an emergency lending organization for small business (similar to the one that was in place after 9/11)

and they are blaming it on the Jews agian

it's really a shame that hard times like we are going through with world economy can bring out the worst in people.

yesterday I talked about how it was wrong to blame minorities and poor people for this crisis.

know I just read an article talking about how there has been a boom of people blaming Jewish people for the world economic downturn.


I'm sadden to hear this but I guess I shouldn't be to surprised Jewish people have taken the blame for financial troubles since the middle ages.

But still I guess I hoped we got past that short of thing (but then giving that there are so many people wanting to blame this on Blacks and Latinos I shouldn't have know better)

anti-Semitism and racism doesn't have any place in economics go please take that stuff to your Klan rallies and neo-nazi meetings.

dear racist classist it is not the poor or minorities that caused this economic crash

I have noticed a trend on blaming this crash on minorities. The truth is this is not the case.

Newsweek as an article showing why this isn't the case

in short the article notes that the programs people point at to say the crisis is due to bank being forced to give loans to minorities where placed mostly on regulated banks and most of the subprime loans didn't come from those banks.

in fact the article shows that giving loans to poor minorities isn't risky if you give them a fair loan. they brought up an example of microlending and a group called Nehemiah Homes which gives loans to the working poor in the new york area. out of nearly 3,900 loans they have giving out they have only had 10 defaults.


The article ends by pointing out that the problem really seems to come from lending to rich white guys that ran companies like AIG (I already wrote about how fast they sent the billions they got from the fed)

They where the ones that used the money riskly. Not the poor or the minorities.

Zero Dollar bill

on Tuesday artist Laura Gilbert was on wall street passing out 10,000 copies of her latest work of art...the zero dollar bill

the zero dollar bill is the artist's statement on the state of the economy.



The bill is printed on a sheet of paper showing both the the front and back on the front side of the paper. I'm guessing it's done this way so the artist wont be accused of trying to counterfeit or maybe she wanted to make sure no one spent it (but at 0 bucks that seems hard to do)


I wouldn't mind having a copy of her work, it's funny and tragic and the same time.

AIG needs even more money

Just weeks after the feds gave AIG $85 Billion to stay afloat and not to long after reports that the heads of the company spent $442,000 on a week in trip the fed has decided to give the company another $34 billion.


it seems that AIG has already spent a good chunk (about $61 billion) of the money they got from the feed 2 weeks ago.

It seems that maybe reason AIG is in such trouble is because the company isn't managing its money to well. maybe instead of just handing the company more and more money they should only give the money if the company has better management.

the No Bail out plan

Peter DeFazio has done it again. He has came up with an alternative plan to the bail out that is being talked about in DC right now.

He figures his plan would either not cost tax payers money or at the least wont be that big of a cost.

here is his five point plan.

No BAILOUTS Act

Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security

1) Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.

This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examines have traditionally done will immediately correct the capital shortfalls experienced by many institutions.

2) Require the Securities and Exchange Commission to restricting naked short sells permanently

This bill will require SEC to implement a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales, but significant negative effects.

3) Require the Securities and Exchange Commission to restore the up-tick rule permanently.

This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence." This rule prevents market crashes brought on by irrational short term market behavior.

3) Require the Securities and Exchange Commission to restore the up-tick rule permanently.

This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence." This rule prevents market crashes brought on by irrational short term market behavior.

4) "Net Worth Certificate Program"

This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount "borrowed" as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.

Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.

In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75%, required no further assistance beyond the certificate program.

5) Increase the FDIC Insurance limit from $100,000 to $250,000.

The bill will require the FDIC raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks which are destabilizing to the industry.

if you like it feel free to ask your congressperson to support it.

I think on of the big problems with the Paulson bail plan is the way it has been presented as it's this or nothing else and congress should have taken a little more time to look at other ways about it.

at least there are a handful of people like DeFazio that are at least looking at something different.

Goverment takes over a busted up WaMu

Washington Mutual Inc. aka WaMu faced going under today. the US government came in and seized it's assets and sold WaMu's banking to JP Morgan Chase.

WaMu stock has been on shaky ground since last week's market melt down on Monday, but it seems that that news made people nervous and a lot of them took their money out of WaMu bank, $16.7 billion worth of money. WaMu couldn't take that big of a hit...a bank going under because of a run by people to pull their money on the bank, dear god where did I see that before? oh yeah that was one of the key factors that caused the great depression.

of course to top those banks in that went under during the depression, Washington Mutual's going under makes it the biggest banking failure in history.

now to be far WaMu was having problems before last week market meltdown. They where a part of the subprime mortgage loans mess. They took a big hit when a lot of people couldn't pay their mortgage and ended up defaulting. Thought to the companies credit they did start to work with people to work out ways they could pay. But that was after the company already took great losses because of subprime fiasco.

The news of the buyout has had negative reaction around the world. Asian investors are now more nervous about investing in American and the stock market is down as I write this.

also I can't help but wondering if JP Morgan Chase buying WaMu is a good ideal in the long run. Yes, I can see where the selling it to JP Morgan and Chase is better then just letting it go under but in an era when we are facing banks that are said to be to big to go under why are allowing JP Morgan Chase to get bigger and bigger.

JP Morgan Chase is the nation's 2nd largest bank but going by deposits it is the largest.

Peter DeFazio wants a 0.25% tax on stocks

Oregon's congressperson person Peter DeFazio is calling for congress to put a 0.25% tax on all transactions of stocks.

He states why should the average tax payer bail out wall street instead let Wall street pay for their bailout.

I think there are many people that feel like him. Thought giving that yesterday congress as already reach an agreement I wonder if it is to late for DeFazio to try and past this bill.

I think a lot of people would be behind hit and it a really small tax that I don't think most people that invest in the stock market will be heavily hit by it.

why political idealogy and economics don't mix

people are posting blame on what happen to the economy this week on a number of things.

a lot of blame is on deregulation.

and truth is that is a big problem, but it's not the root of the issue.

the problem really is the fact that we have allowed economic policies be dictated by mindless political rhetoric.

In this cause the mindless political rhetoric was that of Reaganomics, small government, deregulation, etc. But it wouldn't really matter if it was something ideal that people would be more willing to label as left-wing or right-wing, when it comes to steering the economy following one ideal regardless of the facts around you can cause you to crash.

we expect our politicians to steer our economy (or at least do what they can) to benefit us. but many politicians don't really have a basic understanding of economics. it easy for people to leech onto something that sounds the nicest (ie get them the most votes) and in some cases may have been good ideal under the conditions of a certain time period. but factors change and at times those ideals need to be tweaked or even dropped completely.

But because politicians don't always really know what they are doing when it comes to the economy it more often that they stick with their old ideals instead of looking at the numbers an fixing them.

In this case the problem was that we over deregulated the finical industry. truth is we would have ran into (different) problems sooner if we over regulated.

I think we are going to need some major regulation to fix many of the problems that caused the crash we had last Monday. But I don't think regulation should become an ideology like we saw with the deregulators.

there was some good news on Monday

after all the bad news yestorday it is easy to over look this little bit of good news, the price of crude oil dropped.

though with the events of Ike I'm not sure if we will see the effects we would have hoped for with a drop in crude.

maniac monday

wow what a day!!!

Lehman brothers filed for bankruptcies

and AIG had to go looking for loans to stay in business

and because of the news the stock market when down around 500 points.

one of the big news stories is the fact that after repeatedly bailing out big companies like these the us government has decided not to bail out AIG or Lehman brothers.

Bush basically released a statement saying he will let nature do its course in the finical market but will try to prevent it form having a bad impact on the rest of the nation.

America jobs still going down the drain

The Labor Department released last months figures for unemployment and it has jumped higher then people expected. people thought unemployment would be around 5% but it is at 6.1%.

This is the 8th straight month of American job lost.

the New York Times pointed out that

So far, 605,000 jobs have disappeared since the start of the year, with employers slashing 84,000 jobs in August alone

The stock market was already down yesterday because of what people new the report was coming and expected bad news. now that the news is a little worst then expect the stock market is staying down.

the job losses are coming even though exports of American made goods go up. why that is I'm not 100 percent sure. could be because the people working are working harder. illegal immigrants are working at the jobs making the products or simply that even thought that market is doing OK doesn't mean it spreads to the rest of the economy.

P. Diddy says gas prices are too high...even for him

yes even if you have money coming out of the anus, you are still effect by high gas prices



producer, record mogul, and rapper Sean "puff daddy, P. Diddy, Diddy, Puffy, I hope he hasn't changed his name again" Combs has release the above video joking about the fact that he has to fly a commerical plane because of high gas prices.


a lot of people are mocking him for this video but hey maybe we will be looky and an OPEC nation will see this and being fans of bad boy records they may lower the price of oil.

or they might hate Puffy and raise it just to spite him.

save the blue collar worker help save the economy

With the economy doing badly for most of the America right now, many states and cities are trying to find ways to bring jobs and business into their area.

Most of the time the focus is on bringing in higher paying/higher skilled jobs.

But looking at the states and cities that where hit the hardest by economic down turn, focusing on things like tech jobs may not be best place to start to focus on. This is not to say there shouldn't be focus on these jobs (there should) but giving that most of the cities that are doing the poorest right now tend to be in the rust belt. And most of the jobs lost in that area where blue collar. Focusing on bringing in jobs that demand skills they don't have will hardly help them.

Because their jobs are gone and nothing similar replaces them the ex-blue collar worker is left either not finding a new job or finding one that doesn't pay as much at their old job.

In either case that means they now have less money to spend in the economy or in taxes that they used to, and the blue collar Joe and Jane make up a big percentage of are work force, so that a large percentage of the American populous not making as much money as they used to.

So it makes sense for local governments to have policy that will make their area more appealing for companies to place blue collar jobs there.

For example tax credits to companies that bring manafraction or other blue collar jobs into their city/state.

it not as sexy as say trying to bring in high tech jobs and Hollywood to your state (like they are trying to do in MI) but you you will lower unemployment, increase your tax base and make sure the average Joe now has a OK job.

in other words it will give part of the base needed to make the states/cities that are looking bad right now, look good.

for example the increase tax base alone, should bring in enough money for those areas to improve their schools. if the local school board is smart they will make sure the kids coming up will learn the skills they need for the high skilled jobs of not only now but the future.

And business will be more willing to come into your area, either because of the educated pool now in the area or just because there are people with more spending money then they use to have.

Beijing Olympic opening ceremony and workers rights

we all enjoyed the Olympic games opening show this year.

it was a thing of beauty and was really aw inspiring.

but it coming out that to put on a show of great wonder that China put on a lot of people had to suffer and human rights of the performers where ignored.

For example 2200 tai-chi masters had to work 16 hours a day for 3 months in an army camp to train for what they would do for the brief time they would preform.

in July a 26 year old dancer feel 10 feet and may no be permanently paralyzed.

The Beijing Olympic ceremony's director had this to say to a local Chinese paper after visiting the dancer in the hospital

Performers in the West by contrast need frequent breaks and cannot withstand criticism, Zhang said, citing his experience working on an opera performance abroad. Though he didn't mention specific productions, Zhang directed an opera at New York's Metropolitan Opera in 2006.

"In one week, we could only work four and a half days, we had to have coffee breaks twice a day, couldn't go into overtime and just a little discomfort was not allowed because of human rights," he said of the unidentified opera production.

"You could not criticize them either. They all belong to some organizations ... they have all kind of institutions, unions. We do not have that. We can work very hard, can withstand lots of bitterness. We can achieve in one week what they can achieve in one month."

I think this shows us a lot in not only how working conditions are in China but for people that are anti-union this should give them something to look at to see how horrid things can be for the average American worker if the US does a way with unions and laxes to much on workers rights.

to show they will be good for the American economy Obama and McCain's VP should be a...

There has been much talk about who McCain and Obama will pick for their Vice President.

people of course throw out their picks, mainly because they think these are people that can help them win a state or two or because they cover a weakness on an issue that head of the ticket might have.

or people that have strong good will in believing that this person will be strong on an issue that most people think the nation is having a problem with.

one of the top of the list this election year (and pretty every election year I've been around) is the economy.

Now most of the time the people picked are politicians but giving that both Obama and McCain are running as outsiders or at least people who buck the system I think it would be a good ideal not to go that route and do something a little different.

Instead of picking another politician it might be wish ideal to pick an economist for the VP slot.

with the economy being such an issue it will give the person who does this more clout on the issue that they will do a good job on economy, since they will have someone high in the staff that knows more about they are talking about then the standard politician.

or at the very least we can feel a little better that the Prez will just let the VP handle the economic issues.


The only thing that might be a problem is the fact that there aren't many economist who's are household names. But if you can't find an economist known to the general public I am sure you can find someone that worked somewhere or one something that people will know.

Like pick a noble prize winning economist. Sure most people wouldn't be able to pick out say Robert Lucas Jr, Edmund Phelps or Roger Myerson. But just saying they have a noble prize will get the average Joe to think that they will be a wise choice when it comes to picking some one who can properly handle America's economic issues.

should they still be to big to fail

I'm sure you have seen the news about big financial services companies like Fannie May and Freddy Mac being bold out by the government.

our about JP Morgan buying out Bear Stearns.

on of the common reason giving for helping (or buying) out these business is the fact that they are two big to fail.

and the truth is if they did fall they would have had a big effect on the economy.

but is this a sign that we should look at these companies and ask our selves should we allow a few companies have this much effect on our economy. should we break up these financial institutions to make sure no one is so large that if they fail they have the chance of taking down our whole economy with them.

maybe it would be a good ideal to make sure a financial company can only have so much of the american market.

stop whinning, the bad economy is all in the mind...short of

I am sure by now you have heard about Phil Gramm interview with the Washington times where he said we Americans are a bunch of whiners and that ideal that the economy is in bad shape is all in our minds.

and you know what he is right...short of.

and you know what else is a state of the mind...the ideal that the economy is doing the greatest it has in 30 years, like Gramm says.

How can he say the economy is doing gangbusters while everyone else feels like the economic troubles are ganging up on them?

simple it what one choices to look at that makes us think the economy is doing good or bad.

for example for those who think the economy is doing bad might be looking at the fact that the value of the American dollar is down (close to 50% when compared to the euro) while some one who thinks the economy is doing good well look at the fact that our volume of exports we sell has skyrocketed upward.

one may think the American economy is doing bad because of the number of jobs going over seas where labor is cheaper, but on the other hand someone who thinks the economy is doing good will point out the great deals we are getting from these goods made on the cheap and how much profit the companies are now making.

people think the economy is bad because they see a lot of foreclosed homes, where as other people think the economy is good because they can now get great deals on homes.

the people who are think the economy is good may look at the fact that the economy is growing. the people who think the economy is doing bad while point out that this growth is a lot lower then has normally been.

so on and so on.

IMF checking over our books

The IMF is going to do something it has never done before in its 64 year history.

The International Monetary Fund want to run a Financial Sector Assessment Program on the US.

I'm a bit shocked at both that the fact that this is happening and the fact that this is the first time.

it's sad that our economy has came to this point, and I have to admit I am a bit nervous that will find out somethings that could make things worst for our economy (at least in the short run)

but the truth is I also think the American economy really needs this. If we are to truly get better, we need to know what is really wrong with our economy and have every thing out in the open.

it the end of an era where no one questioned America or it's economy. of course even though that era is over it doesn't mean that it's going to be bad for the economy. sure we are going to be judge like everyone else and can no longer coast but we can still be champions on a level playing field.

It seems like even rappers are facing economic times

Recently this taped phone conversation between rappers 50 cent and Young Buck has been release on the net:







This conversation was taped by 50 cent, Young Buck was the guy nearly in tears because he was in financial trouble. Yes it runs against hip-hop’s image of being hardcore thugs but having money problems is stressful for anyone.

Now unlike many Americans right now a big part of Young Buck problems is that he was living a life style he couldn’t afford…actually that might actually be a lot of American’s problem right now (or at least it was one of the factors)

And going by this taped phone conversation Young Buck’s problem are similar to many other peoples.

Young Buck was not working enough and his expenses that he need to pay off where still coming in.



A lot of people are having hard times finding work or those lucky enough to have job are still not able to get enough hours to fully pay off their bills.

Young Buck seems to borrowed a loan from 50 that he can’t pay back right now (or when ever this phone call happen)

Many people are in debt because they either borrowed money out of their homes or due to over use of their credit cards.

Luckily for most of use we are not friends with 50 cent so we don’t have to worry about him posting us talking to him, when we are at are lowest because we facing these money problems, for the world to hear.

Royal Bank of Scotland expects big economic crashes

the Roy Bank of Scotland has been telling it's clients to expect some bad economic news in the near future.


They expect the American Stock market to go down by 300 points by September.

and the credit market isn't going to do better as corp. bonds rise.

add the raising prices of food and oil, with the increase of joblosses and we maybe in a perfect storm.

RBS says the smart thing to do is keep cashm (euros?) in hand and don't quit your day job

Its the economy stupid

As I am sure you all know it another election year in the America and yet again one of the biggest issues on everyone minds is the economy.



This year the person who enters the Whitehouse could have a big effect on the economy. Not only am I talking about the fact that they can try an push whatever their policies are but because 4 or the 7 seats on the Federal Reserve board are open.



And so right away the next president of America could appoint people into positions to make changes.



And on their second term the prez can change the head of the fed.



So the question us voters need to ask are selves is will McCain be big enough maverick to go against the status quo of economic legacy passed down from Bush and will Obama give us the economic changes we need right now?

Cuba changes is wage policy

Cuba's Ministry of Labor and Social Security has recently stated a change in the policy that guides how people are paid in Cuba.

before everyone was paid the same wage as long as they meet a production goal, but now Cuba has introduced an incentive program.

but now if you meet or surpass the stated goal you will now earn bonus pay.

if you just meet the goal you will only get a 5% bonus. but If you surpass the goal you may earn as much as a 30% pay increase.




The reason for the change is that Cuba wants to increase productivity and production quality.

I notice more then a few people in the news or on the blogs stating that Cuba is moving to capitalism. thought this might end up being a step toward that I don't think it means that Cuba will become a fully capitalist country.

which is OK, I'm not one of those people that think every country should fallow the same economic system that we are using.

I do think what this does is take one of the good (well sometimes good) effects capitalism IE using money to motivate people to do work.

economy still in the tank!!!

I would like to report good economic news some day but this isn't the day

the labor department has released it's may report and it has some really bad news...so bad that there isn't a way from to try to put spin on it.

One of the most shocking things that is in the report is....

The number of unemployed people grew by 861,000 — to 8.5 million.

my god how did unemployment jump so high!!!

but that's not all

dow johns drop 400 points

324,000 have been lost this year

the slightly good news of the fact that average wage is up (but only by .03%) is over shadow by the fact that due to raising food and gas prices people are in fact facing wage cuts if they want to spend the same amount on food and gas as they did in the past.

can you imagine losing over a million dollars in less then 2 hours?

I don't think many people can but amazon's site was down for about an hour and a half and that is the expected amount of money they lost in business transactios during that period and the fall of there stock price.


I can understand the lose of sells but every site has goes down form time to time, and I think it's a little sad (and funny) that so many stock investors ran around like their heads cut off in a panic of amazon not doing well.

horror after $200 oil

Macleans has an article (horror story?) up talking about what will happen if we reach $200 for a barrel of oil.

in a scary world that maybe coming to us soon the rise in oil prices will effect modern society to its core.

a few of the horrors they predict that might happen...

the gas of fuel cause the airline industry to shrink to nearly a 10th of its current size.

sky rocketing prices on ALL goods.

people spending more then half their weekly pay just to feel up there tank.

basically will just cost to much for people to go to far away from there cities and towns.

in some ways it might almost like going back into a time before cars and planes. But instead of not going to far form home because of time restraints, we live in our little worlds because it would cost to much to say go across the country on vacation.

and some areas of course will feel this worst then others. the future you are away from farms the higher the cost of food.

But one also have to look at the fact that the suburbs are dependent on cities for things like jobs. And in a world where it cost more to get to work then what you make, the burbs are going to have to become more self sufficient or turn into ghettos.

economy growing faster then expected!!!

yippy yeah

the first quater resoluts are in and guess what. The economy has grown more then expected.

that's right the economy was only expect ot grow .6% but it instead it grew a whopping .9% at this rate we will soon be have single digit growth. :)






hey with the way things are going we need to be happy at ever little thing we can get.

Hey come up and visit us, eh?

there have been recent reports stating that Canada's tourism is down right now.

in fact they have hit a record low.

mainly it is down because the travels of Americans going to Canada has dropped 15%.

a lot of focus is on the fact that the Canadan dollar is high compared to the US dollar. And it is true that plays a big a role in this dent on Canada's travel industry. a lot of people whent over to canada because they could get good deals on things.

another focus is the fact that we have to get passports to go between the countries now when we used to be able to travel back and forth without one. Which I think is a really big reason why tourism is down in Canada right now. A lot of people don't have passports but they used to be able to go up to Canada for a day/weekend.

For example it was common for Americans that turned 18 to go over to Canada because they could legaly drink alcahol. Now the kid that doesn't have a passport isn't able to do so and money this little drunkered would have spent in Canadian bars has been cut off.

having to get a passport is also a bigger hassle. Before the only problem with going to Canada might have been getting stuck in traffic while trying to cross the border.

But of course one of the biggest reasons (that also ties into the first reason) is the fact that the American economy is down right now and so people don't have as much money to spend on traveling.

are we out of the recession yet?

The AP has released an article today talking about what economist are looking at to tell if we are out of this economic recession.

what they state is pretty common sense. they say that economist are looking at stabilization in the housing market and gas prices as well improvement in the labor market.

so basically economist are looking at what everyone else is looking at.

what I did find intrusting in the article is that compared to are last few recessions it is people that are feeling the effects and not business.

the reason...debt or at least how we have to pay back are debt. More people are having to use there money to pay of debt while business can get away with paying off less (they currently pay off on average 10% a year on debt where as in 90's they where paying around 30% on average)


hmmm maybe the way to turn around this economy is that everyone becomes a company so we can all cut our debt payments down.

male economic recession

Business week has an article talking about the fact the economic slump we are in is hitting men harder then women.


This is because industries that usually have a higher percentage of men working in such as construction and manufacturing have lost a lot of jobs.

on the flip side industries that statistically have more women working in it, such as education and health care, are still growning.

But while men are losing jobs things really aren't rosey for women. They still face lower pay then men and many of the jobs open to them aren't really that good. Woman are stressed out more then ever since they now have more to do and their husbands can't help out as much (at least not economically) and the one has to wonder when/if the bad economy will start hitting the so called women jobs.



*note the ideal of breaking jobs by gender was business weeks ideal not mind.

Don't think like an economic?

Stephen A Marglin at the Communities dominate brands blog has raised an interesting theory today.

He thinks that thinking like an economist has destroyed the ideal of community.

The ideal is basically the ideal is thinking like an economist usually means thinking "what can I get out of it" which undermines the ideal of a we in community.

I can see where he gets the ideal, though I disagree with the ideal that an economist mind set means someone has to think in a "what can I get out of it" mindset

the buck doesn't stop here

Bush is currently blaming the state on the economy on the Democrats.

Of course the democrats blame him and the Republicans.



personly I think they both are to blame since everyone is going for party lines instead of coming together to push polices that may boost the nation's economy

race and foreclosure

Last night I was watching nightline which ran a story about a housing counselor who is helping people in the Baltimore neigbhorhood he works in to fight off foreclosure.


in the news story it was stated that african americans are 4 times as likely as white americans to be facing foreclosure and the mayor of Baltimore thinks one of the reason is because Wells Fargo is more likely to give African Americans a crappy deal.

the thing is what she says might not really be that shocking. But the numbers might be on Mayor Dixon's side, giving that african american and latinos are more likely to get subprime loans then whites.


it sad but industries in the housing market have had a history of doing things like that in the past. for example there where a few cases in 2006 where home retailers where sued because they directed people to certian neighborhoods based on the persons race.

or the redlining that went on during the 30's to the 60's

so tanking our economy was really part of Bush's war on drugs

because of the falling dollar drug traffickers have decrease the amount of business they do here and instead are going to europe to sell their coke.

congress says helping out home owners wont help economy?

U.S. lawmakers' plans to aid troubled homeowners would likely help prevent many foreclosures but wouldn't stop the freefall in home prices or stabilize the economy, a congressional report said on Friday.

I really want to know how congress figured this out. It might not solve everything but I would think this is a step in the right direction.


Helping these people can really help the economy in a number of ways.

for example between this and gas prices a lot of people have cut down their spending...if you help this people out they can spend there money on other goods.

also the reason why home prices have fallen so much is because of the flood of foreclosed homes on the market.

by stopping more and more of these homes going into the market it should at least start to stablized things, of course prices in houses wont raise for some time because we had/have so many home on the market due to foreclosers. But once we those are off the market price should start raising. of course this wont happen if we keep getting more and more foreclosed homes going up for sale.

"Such actions could help reduce the number of foreclosures... (but) would significantly shift the risk involved in mortgage losses from the current lenders and investors to taxpayers," said a report from the Congressional Budget Office, which gives nonpartisan research advise to lawmakers.

yes it will be are tax dollars going to help these people out but I am not sure i would count this as a risk...at least not the same type as risk lenders and investors faced.

but on the other we could be facing a greater risk if we allow this to go on.

more foreclosers will bring down the value of are homes more and more (if you live in a high forecloser area) and it will keep are economy headed down the drain.

sigh

who the heck came up with these findings, anyways?

hooverville 08

Food Fight

because of the raise in the price of food (up 65 percent since 2002) and demand (increased world population plus fromer poor countries like India and China have increase there food consumption) many of the poorest people in the worlds poorest nations have been hit hard.

so hard infact that there have been riots popping up around the world due to people trying to get food in places suffering from food shortages.

Amsterdam says "we don't want your dollars"

small currency exchange in Amsterdam are turning away american dollars because they fear the value of the dollar will drop before they get to exchange them and make a profit.

Foreclosures up 10x in 10 years but the last 2 where a doozey!!!

Last Sunday in my local paper there was front page article about the fact that local foreclosures has raised nearly 11 times the amount it was in 1998. As you can see from the graph below there was a big jump in the year 2005.







Yes as you can tell the numbers of foreclosures has always been on the raise during that the last 10 years but the fact that it has made such a steep curve in 05 has to show that something abnormal happened to lead to this.

The basic ideal of the economy stimulus plan explained in a comic book?

Printed below are some page from Black Panther issue 18 vol. 2 written by Priest. Which is basically a break down on how the economy works as told by the villain Killmonger to the hero’s kidnapped ex-girlfriend. As a bit of an economics geek I think this was a great moment in comics which





That’s right I think George W. Bush most have read this comic when he came up with is economic stimulus plain. Giving that it was printed in 2000 I say it is most likely.

But any way I think the next issue (19) of Black Panther has one of the best ways a hero defeated his villain that has been printed in comics. Look for these issues at a comic stores back issue bin or see if you find it online.

Time for a change

Well it looks like the economic stimulus plan will be done through giving us taxpayers a rebate. Even though I personally like the ideal of the government handing me some money and hope that people that owe me money will now pay me back (ok not that likely) I think we should all look at something and that is the fact that we did this all 6 years ago.



Since we are once again in the same but I think maybe people should look at the fact that more then likely will only be a short term fix and we need to look at the under lining problems in the American economy right now.



For example many people point to a big reason for this “economic slow down” is due to the mortgage crisis but it really goes deeper then that. A large number of people who fell victim to predatory lenders where themselves already not doing so well finically. There where a lot of people that took out mortgages to get the money to pay of bills or couldn’t make a payment when the mortgage bill went up because they either lost a job or had a job that didn’t pay to much.



The average American hasn’t really been facing an economic boon. The job creation rate has fallen below the number of people entering the job market and many of the job created don’t really pay that well.



And even for those that do have a good paying job may still be broke because of credit cards.



Until we fix those underlining issues in 5 or 6 years are just going to have to do this all over again. But since this is an election year one can hope that the new president will create policy that will foster a better economy.

Recession fix

Well Bush and Congress are going to pass something to help boost the American economy to make sure we don’t fall into a recession.



There has been much talk about what will be the best way to do this. Some think it is best to give money directly to people in the middle class. Others think giving tax cuts to business should do this. While others fill the best way to boost the economy is giving money to the poor (in things like an increase in food stamps or unemployment benefits).



I even heard some say that the money should be used to fund public work projects.



More then likely it well be done in the form of a rebate check some where around $300 to $800 giving to people in the middle class. And even though I like the ideal of getting some extra money directly into my pockets I think we will get more bang for our buck if the money was used for a public work program or giving to the poor.



Giving the money to the poor makes a lot of sense since statistically poor people will be less likely to save money then people of middle and upper classes and we want this money spent and placed into economy as fast as possible.



The public work project one can be a twofer, not only do you give jobs to people (which would take people who are un(or under)employed and give them pay checks that they will spend) but you fix our aging infrastructure (by doing things like fixing roads and bridges etc) and also create new infrastructure for a number of different things that we as a society (and the American economy) will benefit from now and in the future.

jerk who wanted $100 oil

the bbc has a report about a futures trader who is credit for why the price of oil is over $100 per barrel. The reason why he bought the oil at that price...so he can tell is grandkids that he was the first person in the world to pay $100.

those kids should have at least one of two responces.

1)That was stupid
2)your a real a'hole granddad.

to bad the bcc didn't print this guys name, but if they did I guess everyone who has to pay more at the pump will try to hunt this guy down.

They made their beds why shouldn’t we let them sleep in it?

We all know about the trouble housing marketing going on right now. The busting of the homing market has effected many people in this country. From the single mother of lower middle class income trying to figure out how she can pay the bills and keep from having her house fall under foreclosure to the CEO of large bank trying to figure out how to turn his company around since it is clear they can’t dump their subprime loans on someone else.



It’s clear that all of this trouble is effecting everyone, even if we aren’t people with these loans or part of the companies that deal with them and many economic forecast say that it’s more likely to get worst before it even begins to look like it’s well get better.



Sir the people in Washington will do (and are doing) what they think they should to make sure the impact isn’t too bad. One of the steps to done to try and advert an economic crisis is to that there has been some bailing out. Which leads to the question…



WHY THE HECK SHOULD WE BAIL THESE PEOPLE OUT? THEY KNEW THE RISK BEFORE THEY GOT INTO THIS?



At least that is something I have heard more then a few times and to be honest I am not sure if this is the best thing to do or not.



But to be honest it depends on who we are helping out, because some people I am more open to throwing a life boat then others.



I’m not sure I how much help really should go to the people/companies that sold these loans to people. Honestly the only reason I see to help them is the fear that if nothing is done this might take out some of the big players in the American Banking industry and of course crash our economy. But I’m hardest on these companies because the people working at them should have know better. They should have looked at the people who they where giving subprime loans to or more importantly when they did they should have stopped since many of those people really couldn’t (or I should say would be able in the future to be able to) afford to pay those loans at the terms set.



In fact I am even hard on our banks because they are a big reason why we are dealing with this crap right now. Example Washington Mutual pushed hard to get laws changed to make it hard for people to go into bankruptcy because of credit card debt. Now it seems that one of the reason for so money foreclosures is that people who might have gone in to bankruptcy couldn’t and so they to user their income to pay off their credit card bills instead of their mortgage.



But that is only one example there has been a lot of deregulation in the banking industry done on behest of the banking industry.





It might be because I’m a little to nice but I the people who should be helped first and foremost are those who going to lose there homes because these subprime loans. From the looks of it President Bush is going to do something to help some people who may face troubles in the future. But the bill is so narrow, that it leaves out a lot of people (like those who may have missed a payment or not really have good credit) whom maybe the people who will need the most help. Also the bill he past won’t do anything for people who already faced foreclosures because of bad loans.



Another big reason I would help them over the banks is that unlike the lenders a lot of people where not fully informed on how these loans worked and the lenders made big pushes to lure people in to taking out loans. There many things like ads aimed at poorer income people telling them that “Hey, you not think you could afford a home but we can help” or “Need money let use refinance and get you the cash you need.” It was shameful and you can still see these types of ads on air/print.



And to end this off I don’t think any help should be giving to speculators. They tried to game the system I can’t cry because they where the ones that ended up getting played. What’s worst about the speculators is the fact that the average person who is faced to the fact that they might lose their home gets mixed up with them when people talk about not wanting to help anyone who got a subprime loan.



Whatever is done to help people that are in trouble now I think it is a good ideal to regulate the banking industry so we can be sure we wont face this problem again in the future. Make it so the banks have to make sure people have the income to pay off their mortgage before they lend to them. Maybe make it so the banks should make sure that the person taking out the loan knows the terms of the loans 100%.



Honestly, because of this I clear must say we should treat the banking industry like little children. Even though there will be times that they whine about wanting something we have to be firm and tell them no from time to time because the bankers don’t really know what is good for them and this subprime loan/housing crisis is just proof of that.



And if you want more just look at credit cards.