Uncomfortable Answers to Questions on the Economy
By PETER S. GOODMAN
Published: July 19, 2008
http://www.nytimes.com/2008/07/19/business/economy/19econ.html?pagewanted=all
Something has clearly gone wrong with the economy. But how bad are things, really? And how bad might they get before better days return? Even to many economists who recently thought the gloom was overblown, the situation looks grim. The economy is in the midst of a very rough patch. The worst is probably still ahead.
Job losses will probably accelerate through this year and into 2009, and the job market will probably stay weak even longer. Home prices will probably keep falling, shrinking household wealth and eroding spending power.
“The open question is whether we’re in for a bad couple of years, or a bad decade,” said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund, now a professor at Harvard.
Saturday, July 26, 2008
Why millions of people may be just 11 days from financial ruin
Why millions of people may be just 11 days from financial ruin
By Becky Barrow
Last updated at 10:57 AM on 25th July 2008
http://www.dailymail.co.uk/news/article-1038445/Why-millions-people-just-11-days-financial-ruin.html
More than a third of adults could survive financially for only 11 days if they were to lose their job or be too ill to work, according to a survey.
The finding gives a worrying insight into the lives of millions who are living on a financial tightrope.
Researchers looked at how much people spend every month and how much they have in savings.
It found a massive gap between the two, which means most would be crippled by a sudden change in their circumstances.
The research involved interviews with more than 2,000 adults about their typical weekly spending and their accessible savings, which excludes pension.
It found the average weekly spend is £333.56 including essentials, such as council tax, luxuries, such as eating out, and debt repayments.
But a shocking 36 per cent of people have less than £500 in savings to use in an emergency.
As a result, they could survive for just 11 days before their finances would implode.
By Becky Barrow
Last updated at 10:57 AM on 25th July 2008
http://www.dailymail.co.uk/news/article-1038445/Why-millions-people-just-11-days-financial-ruin.html
More than a third of adults could survive financially for only 11 days if they were to lose their job or be too ill to work, according to a survey.
The finding gives a worrying insight into the lives of millions who are living on a financial tightrope.
Researchers looked at how much people spend every month and how much they have in savings.
It found a massive gap between the two, which means most would be crippled by a sudden change in their circumstances.
The research involved interviews with more than 2,000 adults about their typical weekly spending and their accessible savings, which excludes pension.
It found the average weekly spend is £333.56 including essentials, such as council tax, luxuries, such as eating out, and debt repayments.
But a shocking 36 per cent of people have less than £500 in savings to use in an emergency.
As a result, they could survive for just 11 days before their finances would implode.
Friday, July 25, 2008
8,500 U.S. banks; many will die soon(updated 3x)
8,500 U.S. banks; many will die soon(updated 3x)
by Stranded Wind http://stranded-wind.dailykos.com/
Sun Jul 20, 2008 at 03:49:28 AM PDT
http://www.dailykos.com/story/2008/7/20/64928/7807/206/554077
Bear Stearns got bailed out ‘cause they were highly visible (read: failure would have exposed aforementioned funny money to the average Joe), Freddie Mac and Fannie Mae are Government Sponsored Entities who now have their sickly balance sheets backstopped by the U.S. Treasury (read you & me), but all the commercial banks have is the Federal Deposit Insurance Corporation.
Great! All accounts are insured to $100,000! We’re saved!
Way wrong. The FDIC is an insurance operation. They make an educated guess as to how many banks will fail and what the total exposure is, then they collect insurance premiums from them. They’ve got $51 billion ... and Indymac alone sucked up 10% of that. If a big one lets go, like Washington Mutual or Wachovia, then the FDIC will look just like FEMA did facing down hurricane Katrina. Don’t go and look at the scoreboard on the Bank Implode-O-Meter unless you’ve got a very strong stomach. Oh, and do note that a good bit of those write downs are investment banks - the FDIC does not cover their activities.
by Stranded Wind http://stranded-wind.dailykos.com/
Sun Jul 20, 2008 at 03:49:28 AM PDT
http://www.dailykos.com/story/2008/7/20/64928/7807/206/554077
Bear Stearns got bailed out ‘cause they were highly visible (read: failure would have exposed aforementioned funny money to the average Joe), Freddie Mac and Fannie Mae are Government Sponsored Entities who now have their sickly balance sheets backstopped by the U.S. Treasury (read you & me), but all the commercial banks have is the Federal Deposit Insurance Corporation.
Great! All accounts are insured to $100,000! We’re saved!
Way wrong. The FDIC is an insurance operation. They make an educated guess as to how many banks will fail and what the total exposure is, then they collect insurance premiums from them. They’ve got $51 billion ... and Indymac alone sucked up 10% of that. If a big one lets go, like Washington Mutual or Wachovia, then the FDIC will look just like FEMA did facing down hurricane Katrina. Don’t go and look at the scoreboard on the Bank Implode-O-Meter unless you’ve got a very strong stomach. Oh, and do note that a good bit of those write downs are investment banks - the FDIC does not cover their activities.
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