“More than a million children regularly go to bed hungry in the US, according to a government report that shows a startling increase in the number of families struggling to put food on the table.” - Chris McGreal in Record numbers go hungry in households in the US | World news | guardian.co.uk
Selected by quotingthecrisis
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Quoting the Crisis
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"More than a million children regularly go to bed hungry in the US, according to a government report..."
20 Nov 2009 | 11:46 am -
"Just two days before the New York Fed paid A.I.G.’s partners 100 cents on the dollar to tear up..."
20 Nov 2009 | 9:46 am“Just two days before the New York Fed paid A.I.G.’s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut — but it never got the chance. UBS, of Switzerland, alone offered to give a break to the New York Fed in the negotiations last November over how to keep A.I.G. from toppling and taking other banks down with it. It would have accepted 98 cents on the dollar. But UBS’s good-faith gesture was quickly drowned out by Goldman Sachs and the top French bank regulator. They argued, with others, that it would be… -
"The United States of America … came into this crisis without anything like the basic tools..."
20 Nov 2009 | 7:46 am“The United States of America … came into this crisis without anything like the basic tools countries need to contain financial panics. Coming into AIG, we had basically duct tape and string.” - Treasury Secretary Tim Geithner, quoted by Sarah O’Connor and Alan Rappeport in FT.com / US / Economy & Fed - Geithner defends record to Congress -
"It may be the world’s richest nation, but the US is no stranger to startling poverty. A new..."
20 Nov 2009 | 5:46 am“It may be the world’s richest nation, but the US is no stranger to startling poverty. A new report from the US Department of Agriculture says that food insecurity is the highest in America since the survey began. Food insecurity - defined by the USDA as when “food intake … was reduced and their eating patterns were disrupted at times during the year because the household lacked money and other resources for food” - afflicted 14.6% of Americans in 2008. Ie, some 50 million people were too poor to guarantee being able to put food on the table.” - Simon Rogers in Hungry America:… -
U.S. House Dems sharpening 'too big to fail' plan | Business News | Reuters
19 Nov 2009 | 2:45 pmU.S. House Dems sharpening 'too big to fail' plan | Business News | Reuters: continuum: WASHINGTON (Reuters) - A key U.S. congressional panel moved toward toughening a plan for dealing with “too big to fail” financial firms on Tuesday, while rejecting a Republican alternative backed by Wall Street.
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naked capitalism
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Stop the madness now!
20 Nov 2009 | 1:08 pmBy Edward Harrison of Credit Writedowns. A reader at Naked Capitalism asked us to respond to a recent article from the Christian Science Monitor asking Does US need a second stimulus to create jobs? Marshall Auerback has already done some heavy lifting – and taken all of the heat in the comments. He says emphatically yes. Now I want to take a crack at this. My short answer is no. But before I go into this, as an aside, I wanted to mention Marshall’s new smiling, happy picture up at the great blog New Deal 2.0 where he now writes. Earlier, when Credit Writedowns was hosted at… -
Dodd: Bernanke Confirmation “Not Necessarily” a Foregone Conclusion
20 Nov 2009 | 10:06 amThis clip is from an interview with blogger Mike Stark. Apologies for the poor sound quality. While Dodd indicates that he is “inclined to be supportive” of Bernanke, he is surprisingly cautious about making a broader statement, a sign of a shift in sentiment. -
Ivy Zelman: “Home prices are going back down”
20 Nov 2009 | 4:59 amBy Edward Harrison of Credit Writedowns. Yves is stuffed again today, so I am going to post at least once or twice. Hopefully, we will also see something from Jesse or George as well. This is a post I wrote overnight about rising delinquencies and shadow housing inventory. I am not convinced house prices in the U.S. are headed higher permanently and this post points out why. The Mortgage Bankers Association is reporting that nearly one in ten households with mortgages are at least one payment behind. That is a record, my friends. And it certainly means we cannot believe house prices… -
Links 11/20/09
19 Nov 2009 | 11:02 pmthe price of water Archein Lions kill rare white tiger at Czech Republic zoo BBC (hat tip reader Steve L) Moira man fights off deer attack Press Republican (hat tip reader John L) Cinema popcorn is nutritional horror show: US study Raw Story (hat tip reader John D) The jobless rate-interest rate conundrum Tim Iacono Canada’s sub-prime mortgage time bomb Rabble Goldman Holders Miffed at Bonuses Wall Street Journal White House Rebuke: Angry Dems Shut Down Vote Huffington Post (hat tip DoctoRx) Easy Loans in Expensive Areas New York Times Leading Economic Indicators Losing Strength… -
“Does US need a second stimulus to create jobs?”
19 Nov 2009 | 10:02 pmReader Doug Smith was not happy with an article in the Christian Science Monitor yesterday, titled, “Does US need a second stimulus to create jobs? His remarks: Could you, Edward or someone consider reading this article and responding to it? My sense is that it perfectly captures ‘conventional wisdom’ and, in that sense, is a bell weather for what our nation is confronting when it comes to just how far conventional wisdom lies from real insight that matters. I am up to my elbows in alligators right now, and Ed Harrison and Marshall Auerback have offered to take this one on,…
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The Big Picture
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From Bear to Bull By Sector
20 Nov 2009 | 11:02 amMost investors know that the S&P 500 hit a record high in October 2007 and a (the?) low in March of this year. But when you break it down by sector, things are a bit more complicated. Otherwise, for those who are wondering whether there is more upside ahead, the fact that four groups — telecom services, financials, energy, and utilities — have not seen new highs this month while the S&P 500 has might be a cause for concern. -
Site of the Day: Innumeracy.com
20 Nov 2009 | 10:30 am> Some good learnin’ here: This web site stems from a personal interest in critical thinking and is a collection of links to articles and sites pertaining to numeracy and critical thinking. Links should be good for at least the date posted. After the posting date, link reliability depends on the policy of the linked sites. Some sites may require registration before allowing access. -
The ‘Greatest Trade’: How to Make $20 Billion
20 Nov 2009 | 7:30 amThe WSJ’s Greg Zuckerman has a new book out titled, The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History. Here is an excerpt from his recent WSJ column on lessons on the subject: 1 Don’t Rely on the Experts Many investors lost big in 2007 and 2008 as housing crumbled and the stock market tumbled. But no one lost more than commercial and investment banks caught with toxic mortgage-related securities. These bankers were the very same ones who created these investments, and Wall Street’s top analysts had vouched… -
Deflationary Trend (Temporarily) Masked by Free Lunches
20 Nov 2009 | 7:30 amThe Quote of the Day comes to us via Bloomberg’s Alice Schroeder: “We’re in the midst of a deflationary trend that is temporarily being masked by inventory restocking and free lunches like Cash for Clunkers. Consumers are done with borrowing. They’ll keep refueling the deflation by going through their attics and garages to find stuff they can sell on Ebay to raise cash.” -Gold Tells You U.S. Bubble Hasn’t Popped Yet -
It’s All About Supply, Not Demand
20 Nov 2009 | 7:00 am> Jim has run Bianco Research out of Chicago since November 1990. He has been producing fixed income commentaries with a circulation of hundreds of portfolio managers and traders. Jim’s commentaries have a special emphasis on: money flow characteristics of primary dealers, mutual funds, hedge funds, futures traders, banks, and institutional investors. It’s All About Supply, Not Demand Barron’s – A Foolish View of America’s Debt America’s dependence on foreign capital to fund its fiscal and external deficits is anything but a joke. And as the dollar has declined steadily —…
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NYT: Paul Krugman
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Interest rates: the phantom menace
20 Nov 2009 | 8:44 amWhat I think lies behind the surprising deficit squeamishness of the Obama administration, and why it's wrong-headed. -
Exterminate! Exterminate!
20 Nov 2009 | 1:59 amDaleks and EU foreign policy. -
Invisible bond vigilantes
19 Nov 2009 | 12:39 pmIt would be a very, very bad thing if the administration is intimidated into passivity -- or, worse, into neo-Hooverism -- by the threat from invisible, probably imaginary enforcers. -
The AIG report
18 Nov 2009 | 1:21 amBy itself, the AIG story would be damaging enough. But it's part of a pattern -- and that pattern has ended up undermining the economy's prospects, big time. -
The madness of the inflation hawks
16 Nov 2009 | 8:59 amMonetary tightening shouldn't be on the agenda for a long, long time.
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Calculated Risk
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Moody's: CRE Prices Off 43% from Peak
20 Nov 2009 | 11:47 amFrom Globe St.: Values Off 43% From 2007 Peak Prices nationwide have fallen 42.9% from their October 2007 peak, according to the latest Moody’s/REAL Commercial Property Price Index report issued Thursday, while Real Capital Analytics says total transaction volume for 2009 will be the lowest of the decade. The November Moody’s/REAL report ... covers transactions through Sept. 30 ... September’s index represented a 3.9% value decline compared to August...."Further price declines are almost certain over the short term," says Nick Levidy, Moody’s managing director, in a statement. -
National Survey: Data on Home Buying Financing
20 Nov 2009 | 10:43 amHere is some national data on home buyer financing in October. This is from a survey by Campbell Communications (excerpted with permission) released today.Source: October Trends in Existing Home Sales, a presentation from Campbell/Inside Mortgage Finance Monthly Survey on Real Estate Market Conditions.Thomas Popik, Campbell Surveys Research Director, highlighted several key trends from the survey in October: Investor Purchases of REO Are Declining First-Time Homebuyers Largely Support the Market First-Time Homebuyers Dependent on FHA Financing If FHA Guidelines Get Tougher, Look for Large… -
Krugman on AIG
20 Nov 2009 | 9:30 amFrom Paul Krugman writing in the NY Times: The Big Squander During the bubble years, many financial companies created the illusion of financial soundness by buying credit-default swaps from A.I.G. — basically, insurance policies in which A.I.G. promised to make up the difference if borrowers defaulted on their debts. It was an illusion because the insurer didn’t have remotely enough money to make good on its promises if things went bad. ... by the time A.I.G.’s hollowness became apparent, the world financial system was on the edge of collapse and officials judged — probably correctly… -
Unemployment Rate Increases in 29 States in October
20 Nov 2009 | 7:00 amFrom the BLS: Regional and State Employment and Unemployment Summary Twenty-nine states and the District of Columbia recorded over-the-month unemployment rate increases, 13 states registered rate decreases, and 8 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia....Michigan again recorded the highest unemployment rate among the states, 15.1 percent, in October. The states with the next highest rates were Nevada, 13.0 percent; Rhode Island, 12.9 percent; California, 12.5 percent;… -
A Few House Price Forecasts
20 Nov 2009 | 5:55 amFrom housing consultant Ivy Zelman commenting on the MBA Delinquency report in the NY Times U.S. Mortgage Delinquencies Reach a Record High"I’ve been pretty bearish on this big ugly pig stuck in the python and this cements my view that home prices are going back down."From Bloomberg: Housing Recovery in U.S. Set Back to 2010 as Market Wanes “I don’t think the housing crisis is over,” Mark Zandi, chief economist with Moody’s Economy.com, said in a telephone interview. “I think we’re going to see another leg down.” From Goldman Sachs chief economist Jan Hatzius in a note to…
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Vox (EU)
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Forecasting macroeconomic developments
19 Nov 2009 | 4:00 pmAlex Cukierman, 20 November 2009Ideology, institutions, political, and accepted economic wisdom shape economic policy choices. This column explores how political ideologies and academic conclusions shaped US policymakers’ responses to the global financial crisis. It says that forecasting macroeconomic developments necessarily involves forecasting the role of such beliefs.Full Article: Forecasting macroeconomic developments -
How credit conditions will shape the economic recovery
18 Nov 2009 | 4:00 pmPrakash Kannan, 19 November 2009Will the economic recovery be U-, V-, W-, or L-shaped? This column warns that recoveries from recessions caused by financial crises are slower than others, due to stressed credit conditions that persist even after output begins to recover. It thus recommends policies aimed at recapitalising financial institutions, resolving distressed financial assets, ensuring adequate provision of liquidity, and expediting bankruptcy proceedings. Full Article: How credit conditions will shape the economic recovery -
Top-down versus bottom-up macroeconomics
18 Nov 2009 | 4:00 pmPaul De Grauwe, 19 November 2009The extraordinary assumptions of macroeconomic models have left the outside world perplexed about what economists have been doing during the last few decades. This column contrasts the incongruous rational expectations top-down model with a bottom-up model where no individual is capable of understanding the full complexity of a market system. The bottom-up model creates correlations in beliefs that generate waves of optimism and pessimism. The latter produce endogenous business cycles akin to the Keynesian “animal spirits”.Full Article: Top-down versus… -
Uncertainty and the tale of two depressions
17 Nov 2009 | 4:00 pmCarlo Favero, 18 November 2009Today’s global crisis has been compared to the Great Depression in terms of world output, trade, and stock market value. To extend the comparison, this column proposes a new, historically comparable measure of economic uncertainty. The evolution of uncertainty in this crisis has been much less dramatic than in the 1930s.Full Article: Uncertainty and the tale of two depressions -
The effectiveness of fiscal and monetary stimulus in depressions
17 Nov 2009 | 4:00 pmMiguel Almunia, Agustín S. Bénétrix, Barry Eichengreen, Kevin H. O’Rourke, Gisela Rua, 18 November 2009There is one important source of information on the effectiveness of monetary and fiscal stimulus in an environment of near-zero interest rates, dysfunctional banking systems and heightened risk aversion that has not been fully exploited: the 1930s. This column gathers data on growth, budgets and central bank policy rates for 27 countries covering the period 1925-39 and shows that where fiscal policy was tried, it was effective. Full Article: The effectiveness of fiscal and monetary…
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The Baseline Scenario
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Government Debt Hysteria
20 Nov 2009 | 10:00 amI don’t spend a lot of time trying to police the economic news media — Dean Baker and Brad DeLong are much better on that — but I found myself reading a two-week-old Newsweek column by Robert Samuelson that enraged me enough to type this out. (I read it on old-fashioned paper, but here’s the WaPo version.) The title of the WaPo version is “Could America Go Broke?” and here’s the last paragraph: “Deprived of international or domestic credit, defaulting countries in the past have suffered deep economic downturns, hyperinflation, or both. The odds… -
The AIG-Maiden Lane III Controversy
20 Nov 2009 | 7:51 amAs everyone knows by now, Neil Barofsky, special inspector general for TARP, has a new report out on the decision by the Federal Reserve Bank of New York last Fall to make various AIG counterparties (primarily some very big banks with names you know) whole on the the CDS protection they had bought from AIG to cover their risk on some CDOs. The potentially juicy bit has to do with the Maiden Lane III transaction (New York Fed summary here). There are a couple of details I can’t quite reconcile (for example, the Fed balance sheet shows initial funding of $29.3 billion, but everyone says… -
CRA Bashing, Nth Generation
19 Nov 2009 | 9:00 amThe Community Reinvestment Act is a law originally passed in 1977 that directed federal regulatory agencies to ensure that the banks they supervised were not discriminating against particular communities in making credit available.The onset of the subprime mortgage crisis triggered a flood of sloppy, lazy attacks on the CRA claiming that since the crisis was created by excess lending to the poor, and the CRA was intended to increase lending to the poor, the CRA must have caused the crisis. These arguments suffered from a mistaken premise (subprime lending had a modest negative correlation… -
Written Testimony Submitted To The Congressional Oversight Panel
19 Nov 2009 | 6:30 amTestimony submitted to the Congressional Oversight Panel, hearing on “The overall impact of the Troubled Asset Relief Program (TARP) on the health of the financial system and the general U.S. economy,” Thursday, November 19, 2009. (pdf version) Submitted by Simon Johnson, Ronald Kurtz Professor of Entrepreneurship, MIT Sloan School of Management; Senior Fellow, Peterson Institute for International Economics; and co-founder of http://BaselineScenario.com. Summary 1) In the immediate policy response to any major financial crisis – involving a generalized loss of confidence in… -
Auto Race to the Bottom
19 Nov 2009 | 6:12 amThis guest post was contributed by Raj Date, head of the Cambridge Winter Center for Financial Institutions Policy and a former McKinsey consultant, bank senior executive, and Wall Street managing director. For further information on the auto dealer exemption, see the recent study by the Cambridge Winter Center. Over the past several months, Congress has debated ways to strengthen and rationalize consumer protection in financial services. Central to that debate is the proposed creation of a new agency focused exclusively on this issue, the Consumer Financial Protection Agency (the…
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NYT > Business
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Your Money: Financial Advice From the Divorce Trenches
20 Nov 2009 | 1:41 pmSome advice from those with firsthand experience of divorce may help you avoid the financial pitfalls of a split. -
In Survey, Hard Times Before Slump
20 Nov 2009 | 1:36 pmOne in five Americans needed help paying for basic needs, according to a 2005 census survey. -
Shortcuts: When ‘Customer Service’ Seems Anything But
20 Nov 2009 | 1:36 pmSometimes it is hard to remember that the person on the other end of the phone line is not the enemy, but staying calm can help. -
Ohio Sues Credit Rating Agencies
20 Nov 2009 | 1:29 pmIn the suit, the state’s attorney general asserted that Standard & Poor’s, Moody’s and Fitch Ratings provided misleading ratings that led to hundreds of millions of losses for state funds. -
Stocks Finish Lower on Economic Concerns
20 Nov 2009 | 1:18 pmInvestors are increasingly wondering about the speed of the economy recovery and they are questioning the fast-paced rise of technology stocks.
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Reuters: Business and Finance News
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Rio's Cloud Peak down in debut, others fare better
20 Nov 2009 | 12:52 pmNEW YORK (Reuters) - Investors bet on growth opportunity in the IPOs of a Chinese hotel chain and an online education company on Friday, but saw murkier prospects for a spin-off of mining giant Rio Tinto, sending its shares lower. -
Black Friday deals may not signal retail comeback
20 Nov 2009 | 12:18 pmCHICAGO (Reuters) - When the U.S. holiday shopping season kicks off on the day after Thanksgiving, retailers can expect to see millions of less frightened but even more bargain hungry customers cross their thresholds. -
Stocks dip as investors weigh recovery bets
20 Nov 2009 | 12:17 pmNEW YORK (Reuters) - U.S. stocks fell for third straight day on Friday as investors took weaker-than-expected results from computer maker Dell and homebuilder D.R. Horton as a further sign that the recovery would be anemic. -
U.S. Q3 seen revised down on widening trade deficit
20 Nov 2009 | 11:55 amWASHINGTON (Reuters) - The U.S. economy's return to growth in the third quarter was less brisk than previously thought as the trade deficit worsened and companies still aggressively cut inventories, a Reuters survey predicted. -
Ex-Vivendi CEO Messier testifies: Losses not fraud
20 Nov 2009 | 11:41 amNEW YORK (Reuters) - Former Vivendi CEO Jean-Marie Messier told a U.S. jury he "never, never, never" committed fraud as he took the stand on Friday in a civil trial pitting international shareholders against the French conglomerate and former top executives.
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TIME.com Top Business Stories
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A New Indian Travel Fad: "Divorce Tourism"
20 Nov 2009 | 9:10 amA few Indian tour operators are cashing in on Indian's rising divorce rate with a new offer: The perfect holiday -- just you, your spouse, and a relationship counselor -
That Viral Thing: I Love Local Commercials
20 Nov 2009 | 1:15 amTwo filmmakers with an appreciation for the unintentionally amusing are accepting nominations for businesses in need of a quirky TV campaign -
Pop-Up Shops: Why Retailing with a Time Limit Is Hot
20 Nov 2009 | 1:15 amIn this economy, retailers are reluctant to invest in new locations. But with rents cheap, they're opening short-term stores for the holidays. Inside a retail phenomenon -
Cadbury Rejects Kraft's Hostile Bid: What Happens Next?
20 Nov 2009 | 1:15 amWeeks after turning down Kraft's first offer for its business, Cadbury angrily cast off a second proposal, which it deemed insulting. Absent a sweetener, Kraft may be in for a stiff fight -
Electric-Vehicle Surge: Where Will Cars Plug In?
20 Nov 2009 | 1:15 amElectric cars will soon swarm onto America's roads, but the charging infrastructure for those vehicles is still on the drawing boards
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IMF Survey Magazine
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Comparing Recessions in Germany, Spain, and United Kingdom
18 Nov 2009 | 6:49 amWhile the global financial crisis and recession have hit all of Europe’s economies, the impact has varied considerably across countries. Output and employment, for instance, have moved quite differently in Germany, Spain, and the United Kingdom, three of the larger European countries, according to IMF research. -
IMF Backs Continued Chinese Stimulus, Economic Rebalancing
17 Nov 2009 | 3:00 pmThe head of the IMF welcomes China’s pledge to continue with its stimulus package in 2010 and says the Chinese would gain from a reorienting of their economy away from exports to domestic consumption -
Experts Warn Financial System Risks Still High
10 Nov 2009 | 9:26 amGovernments need to rethink how the financial sector intersects with the broader economy if future crises are to be avoided, economists agreed at a panel discussion at the International Monetary Fund’s recently held Economic Forum. -
‘Too Complex to Fail’ the Real Issue, Says IMF
10 Nov 2009 | 6:16 amGovernments should consider the potential of financial institutions to severely damage global financial and economic stability in assessing when firms are "too complex to fail," the IMF said, launching a paper to help determine which firms and markets are systemically important. -
IMF to Assess G-20 Progress on Recovery, Mulls Financial Levy
7 Nov 2009 | 4:16 pmG-20 finance officials pledge to maintain economic stimulus measures until recovery from the global crisis is assured and ask the IMF to assess whether countries are on track to avoid future problems. IMF looks into levy on financial sector
