tagged w/ Financial Crisis
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In a discussion on the global role of the dollar, Zhu told an academic audience that it was inevitable that the dollar would continue to fall in value because Washington continued to issue more Treasuries to finance its deficit spending.
He then addressed where demand for that debt would come from.
"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."In a discussion on the global role of the dollar, Zhu told an academic audience that... more
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As the recession continues to weigh heavily on the livelihoods of millions, the Fox News Channel on Monday suggested lowering the minimum wage, suggesting it could be "better for workers."
"The minimum wage is kind of like a sacred cow in Washington, with many, many lawmakers thinking it's a win-win for low-skilled workers," said Fox anchor Juliet Huddy. "But what if those good intentions backfired?"
"One school of thought says lowering the minimum wage will actually create more jobs," she continued, without mentioning any counterargument.
Laws enacted by Congress following the Democratic takeover in 2007 have increased the federal minimum wage to $7.25 an hour as of this July. Prior to that, the minimum wage hadn't been raised since 1997.As the recession continues to weigh heavily on the livelihoods of millions, the Fox... more
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WASHINGTON — The House on Friday approved a Democratic plan to significantly tighten federal regulation of Wall Street and the financial sector, advancing a far-reaching Congressional response to the financial crisis still reverberating through the economy.
After three days of floor debate, the House voted 223 to 202 to approve the measure. It creates a new agency to oversee consumer lending, establishes new rules for transactions that contributed to the meltdown, and seeks to reduce the threat that one or two huge companies on the verge of collapse could bring down the economy.
“As we have seen over the past year, our financial system is broken and we can no longer afford to maintain the status quo,” said Representative Ed Perlmutter, a Colorado Democrat and member of the Financial Services Committee, which spent months assembling the measure. The Senate has made less headway in drafting a companion bill.
The vote is the most significant legislative act to confront the financial crisis that exploded last year since the vast and costly bailout that was rammed through Congress at the peak of the emergency. It was an effort to address comprehensively what many of the bill’s supporters have called the underlying causes of the collapse — reckless risk-taking unrestrained by regulation.
The bill’s principal provisions establish a process for dismantling large, failing financial institutions; set up a council to identify and regulate firms that are so big, interconnected or risky that they need heightened supervision to keep them from bringing down the whole financial system; create a new consumer financial-protection agency to squelch unfair and abusive practices; and for the first time, regulate over-the-counter derivatives markets. The bill also contains provisions on executive pay, investor protection, credit ratings, hedge funds and insurance.
http://www.nytimes.com/2009/12/12/business/12regulate.html?_r=1&hpWASHINGTON — The House on Friday approved a Democratic plan to significantly... more
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“Ghosts of Shopping Past” is a photo-documentary by Brian Ulrich, a photographer who lives and works in Chicago. His work has been shown in the Museum of Contemporary Art, Chicago; the Museum of Contemporary Art, San Diego; the Art Institute of Chicago; and the Museum of Contemporary Photography. He is a 2009 John Simon Guggenheim Memorial Fellow.
Brian Ulrich’s photographs of closed-down malls and big-box retail stores reveal the potential ghost towns lying inside successful shopping complexes all across America. His photo-documentary is a testament to the devastating impact of the current financial recession, as well as to the failed illusions of a lifestyle based upon unbridled American consumerism.
This piece includes a number of very memorable high-resolution photographs, as well as a remarkable, haunting slide show.
Please visit my website to view these stunning photographs, and the memorable slide show:
http://disembedded.wordpress.com/2009/12/11/ghosts-of-shopping-past-the-failed-illusions-of-american-consumerism/“Ghosts of Shopping Past” is a photo-documentary by Brian Ulrich, a... more
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Count Stephen Colbert among the opponents of calls to audit the Federal Reserve.
Responding to what he calls claims that the Federal Reserve is a "secretive cabal that only benefits the well-connected," Colbert sounded practically Bernanke-ian. The Fed needs its autonomy and its clandestine meetings, Colbert said -- and the "puff of smoke" that "comes out of the Fed chimney announcing whether the economy has seen its shadow."
The Fed's "merely an extra-constitutional star chamber that controls our monetary policy with no oversight."
But some people, like Chris Dodd and Bernie Sanders, keep trying to "pull down the Fed's pantaloons to look at its fiscal naughty parts," added Colbert.
Watch Colbert take on the Fed's critics:
http://www.huffingtonpost.com/2009/12/09/colbert-takes-on-the-fede_n_385603.htmlCount Stephen Colbert among the opponents of calls to audit the Federal Reserve.... more
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The Obama administration, buoyed by a resurgent Wall Street, plans to cut the projected long-term cost of the Troubled Asset Relief Program by more than $200 billion, in a move that could smooth the way for the introduction of a new jobs program.
The White House and leaders in Congress are debating whether to use any of the remaining TARP funds for other domestic efforts, such as a jobs bill. Congress authorized $700 billion for the program during the height of the financial crisis.
The Treasury now estimates that over the next 10 years TARP will cost $141 billion at most, down from the $341 billion the White House projected in August. The reduction stems in large part from faster-than-expected repayments by some of the nation's largest banks, as well as less spending on programs to help shore up the financial sector.
The government's efforts appear to have helped stabilize the financial sector, and banks have already repaid the Treasury about $70 billion. Bank of America Corp. has said it will return its $45 billion investment as early as this week, and the government now expects total repayments to reach as much as $175 billion by the end of next year. Altogether, it invested $204 billion in 690 firms. The Treasury has also collected more than $10 billion in interest and dividend payments from firms in which it has invested.
The lower-than-expected TARP losses could help the White House tap remaining funds for a jobs program because the revised estimates will help bring down the projected federal budget deficit since the White House will be able to assume less spending associated with the program.The Obama administration, buoyed by a resurgent Wall Street, plans to cut the... more
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Investors are becoming increasingly worried over how Dubai is ever going to pay its enormous debts.
Amid rising fury among bondholders at losing lots of money, the cost of insuring the debt against restructuring or default rose on the London stock market on Friday.
And banking analysts say the trust of investors has been unforgiveably shattered.Investors are becoming increasingly worried over how Dubai is ever going to pay its... more
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The number of US jobs lost narrowed to 11,000 in November, with the unemployment rate easing to 10.0 percent, official data showed Friday in a dramatic improvmement in the critical labor market.The number of US jobs lost narrowed to 11,000 in November, with the unemployment rate... more
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Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?
Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.
Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out. In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.
The crisis facing the middle class started more than a generation ago. Even as productivity rose, the wages of the average fully-employed male have been flat since the 1970s.
http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.htmlCan you imagine an America without a strong middle class? If you can, would it still... more
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Before the desert sands close over its luxury follies, lessons should be learned – number one, don't believe the hype.
Was anywhere heading for a fall so obviously as Dubai? Yet why did no one ever scream? Why did everyone just marvel?
When I first visited the place three years ago, it was already the most dangerous speculative bubble on earth. Breakneck building – using reputedly a quarter of the world's cranes – was sustained on hysterical public relations and $80bn of debt.
By last March the signs of impending doom were everywhere. Property and stock market prices were falling and only the PR firms were still sustaining morale, witness a cringing ITV documentary by Piers Morgan and grovelling coverage of Sol Kerzner's "world's biggest" hotel launch. Building projects worth a reported $300bn were stopping work overnight.
Yet anyone who wrote a word of the impending doom was excoriated. The Guardian was subjected to a campaign of abusive emails when I reflected on the clear parallel with Shelley's Ozymandias and his trunkless legs of stone: "Look on my works, ye mighty, and despair." What had I against Dubai, they complained. Why could I not recognise the future in Dubai's glorious confidence and its open welcome to the world? The enclave's dictator, Sheikh Mohammed bin Rashid al-Maktoum, told critics simply: "Shut up."
(click on the link for the whole article and the in-text links)
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The wages of arrogance and greed...
"Dubai World" is also the third or fourth largest port operator - it owns or leases some of the world's most important ports. I believe this was the company which wished to buy one of the US' most important ports (I can't remember which one in particular), but there was quite a hue and cry about this at the time that the sale was canceled, a few years ago.Before the desert sands close over its luxury follies, lessons should be learned... more
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In Elizabeth Warren's world, credit card contracts would be so simple a teenager could read and understand them in four minutes. Loans would be as easy to compare as toasters, and online credit scores would be free.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a.DEiDrOr.ms&pos=10In Elizabeth Warren's world, credit card contracts would be so simple a teenager... more
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Unemployment has hit migrant communities in the United States so hard that a startling new phenomenon has been detected: instead of receiving remittances from relatives in the richest country on earth, some down-and-out Mexican families are scraping together what they can to support their unemployed loved ones in the United States.Unemployment has hit migrant communities in the United States so hard that a startling... more
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Despite being blamed for billions in lost investments, the big three credit rating companies continue to dodge accountability.
http://www.youtube.com/watch?v=KPNcrCtcBVYDespite being blamed for billions in lost investments, the big three credit rating... more
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lagan
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added this
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2 years ago
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Derivatives Just "A Sophisticated Form Of Gambling," U.S. Senators Say; Propose Bill Allowing State Gambling Laws To Apply
Three U.S. Senators described the complex and little-understood world of derivatives trading as "a sophisticated form of gambling," proposing legislation that would enable state gambling regulators and attorneys general to examine the practice.
Senators Maria Cantwell (D-WA), Ron Wyden (D-Ore.) and Bernie Sanders (I-VT) sent out a press release on Tuesday, describing the need for more oversight of the market in derivatives, which are contracts that can act as insurance against a future event, or as just a simple bet.
"The derivatives market has done so much damage to our economy and is nothing more than a very high-stakes casino - except that casinos have to abide by regulations," wrote Cantwell. "Even in Las Vegas at the Blackjack tables, both the House and the player have to have capital behind their bets. But we allow Wall Street to continue to operate in the dark..."
http://www.huffingtonpost.com/2009/11/10/derivatives-just-a-sophis_n_352994.htmlDerivatives Just "A Sophisticated Form Of Gambling," U.S. Senators Say;... more
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The conventional wisdom in Washington and in most of the rest of the world is that the roaring Chinese economy is going to pull the global economy out of recession and back into growth. It’s China’s turn, the theory goes, as American consumers — who propelled the last global boom with their borrowing and spending ways — have begun to tighten their belts and increase savings rates.
The Chinese, with their unbridled capitalistic expansion propelled by a system they still refer to as “socialism with Chinese characteristics,” are still thriving, though, with annual gross domestic product growth of 8.9 percent in the third quarter and a domestic consumer market just starting to flex its enormous muscles.
That’s prompted some cheerleading from U.S. officials, who want to see those Chinese consumers begin to pick up the slack in the global economy — a theme President Barack Obama and his delegation are certain to bring up during next week’s visit to China.
“Purchases of U.S. consumers cannot be as dominant a driver of growth as they have been in the past,” Treasury Secretary Timothy Geithner said during a trip to Beijing this spring. “In China, ... growth that is sustainable will require a very substantial shift from external to domestic demand, from an investment and export-intensive growth to growth led by consumption.”
That’s one vision of the future.
But there’s a growing group of market professionals who see a different picture altogether. These self-styled China bears take the less popular view: that the much-vaunted Chinese economic miracle is nothing but a paper dragon. In fact, they argue that the Chinese have dangerously overheated their economy, building malls, luxury stores and infrastructure for which there is almost no demand, and that the entire system is teetering toward collapse.
A Chinese collapse, of course, would have profound effects on the United States, limiting China’s ability to buy U.S. debt and provoking unknown political changes inside the Chinese regime.
more at link...
http://www.politico.com/news/stories/1109/29330.htmlThe conventional wisdom in Washington and in most of the rest of the world is that the... more
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Goldman's reputation is suddenly as toxic as the credit default swaps and other inexplicably exotic financial instruments it used to buy with glee. That's bad for the one thing it values more than anything else: business. Being the prime target for popular and political outrage could put Goldman first in line for draconian new regulation. So it has, reluctantly, decided that the time has come to speak out, to fight its corner. That's how, on one of those bright autumnal New York mornings when anything seems possible -- even an invitation to break bread with the masters of the universe -- I find myself walking past the security guard who held up Michael Moore and into the building with no name.
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.eceGoldman's reputation is suddenly as toxic as the credit default swaps and other... more
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Before the financial crisis hit, John Paulson was just your run-of-the-mill hedge fund operator, worth millions of dollars. But when the market crashed, Paulson made billions. How he did it lies at the heart of a new book called The Greatest Trade Ever. The book's author, Gregory R. Zuckerman, offers his insight.
http://www.npr.org/templates/story/story.php?storyId=120183535Before the financial crisis hit, John Paulson was just your run-of-the-mill hedge fund... more
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Commissions are often created to defer tough decisions; to forge a consensus around a hard solution to a genuine problem; and, rarely, actually to delve into underlying facts. The Angelides commission (http://www.nytimes.com/2009/07/16/business/16inquiry.html?_r=1), officially chartered by Congress this summer as the Financial Crisis Inquiry Commission, has the chance to be that third kind of commission, gathering the missing empirical data on fundamental questions that can guide future decision-making.
We already know an awful lot more about what happened last year than we did in 1932, when the legendary Pecora commission(http://en.wikipedia.org/wiki/Pecora_Commission) was created to investigate the Wall Street crash. We know the fundamental violations of sound banking practice and regulatory failures that brought us to the precipice. Yet there are still critical areas that would benefit from the commission's detailed analysis: four structural issues that have not yet received adequate attention and one particular transaction that is still highly ambiguous.Commissions are often created to defer tough decisions; to forge a consensus around a... more
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