For a time now my editor Rick Stengel has been asking the question: Why won’t unemployment stay at around 10%. That is to say, even after the economy pulls out of the recession how do we know that unemployment won’t remain where it is today. Perhaps 10% is the new 5%, when it comes to unemployment. We have afterall outsourced many of our …
Stocks are rallying today in the wake of very little positive news. So some are clinging to the one piece of news that can be spun. The financial reform bill is good for banks and their profits. Yes, State Street did pre-report good profits. But most banks are projected to have falling profits in the second quarter. The real market …
The economy lost 125,000 jobs in June. But that’s not the worst news contained in the economic report that came out on Friday about who’s working and who’s not. Here’s what we should be really worried about: American workers are losing faith in the economy faster than they have in 15 years.
In fact, the jobs numbers themselves are not …
If you took even a glance at CNBC or yahoo finance or CNNMoney.com or where ever you go to check up on the market, you probably know that today was a bad day for stocks. The S&P 500 hit an 8-month low, and the Dow was down as much as 326 points at one point. It ended down only 268 and change. (Feel better. Behavioral economics at work.) …
Earlier this week, the Federal Reserve had its regularly scheduled meeting and Bernanke & Co. decided to keep short-term interest rates at near zero, as they have been for a while. Low interest rates are supposed to spur growth by encourage borrowing, giving people more money to spend and invest. But interest rates have been really, …
Many people are already commenting on how good or bad a deal financial reform is for Wall Street. Some are saying it will crush profits in the banking sector. Others are saying Wall Street dodged a bullet and it will be business as usual. The answer is we really don’t know. That’s because a key problem with the bill, though why it worked …
Ever since Obama made his poorly received (by pundits at least) Punish BP/Energy Independence White House address last week there has been a lot of talk that a carbon tax, especially a cap-and-trade one, could be dead. Many read the fact that the President didn’t mention it in his speech as a sign that he was caving to Republicans on …
Ever since the Boycott BP movement was launched in early May (actually this guy seems to have been way ahead of his time), it has had an upward battle against this confounding argument: The gas you get at a BP station is not actually from BP. So, the argument goes, when you drive past a BP station you are not actually hurting BP at …
It seemed like more Detroit delusions when General Motors CEO Ed Whitacre predicted in March that the government would eventually make money on its bailout of the beleaguered auto maker. But just three months later, General Motors increasingly looks like it is ready to exit the chop shop. Things have actually been turning around for the …
At a time when most people are saying the path out of the financial crisis and European debt problem is for individuals and governments around the world to cut back, Paul Krugman wants us to spend, spend, spend.
So how much we spend on supporting the economy in 2010 and 2011 is almost irrelevant to the fundamental budget picture. Why,
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How low will BP stock go? Today’s guess: All the way to zero. Already, the oil spill in the gulf has caused BP shares to drop to $30 from $60. That’s a loss in total market value of $90 billion. Earlier on this blog, I sided with the camp that thought BP might be a buy, because its stock had fallen so far and another oil company might be …
Where’s Goldman’s Waldo?
The Financial Crisis Inquiry Commission was out last night with its list of demands from Goldman. And while I certainly think Goldman was wrong, morally, if not legally, when it purposely created worthless bonds so that hedgie John Paulson and indeed its own trading desk could benefit (Goldman denies this), I …
