NewsTrust - U.S. Economy - Most Recent Stories

General Motors, Driven to the Brink

Sun, 26 Oct 2008 00:00:00 -0700

New York Times - By Bill Vlasic, Nick Bunkley - Oct. 26 (Investigative Report) - In late May, senior executives at General Motors confronted a decision that few thought they would ever face: whether to continue developing the next generation of one of the most successful products in G.M.’s 100-year history — the full-size sport utility vehicle — or to punt the program entirely. It’s rare for an automaker to pull the plug on high-profile initiatives, much less one involving a $2 billion, top-to-bottom overhaul of a high-volume vehicle that once helped it rake in cash. This was also G.M.’s flagship platform, code-named CXX, which would underpin popular models like the Escalade, Yukon and Suburban, brawny tanks that had defined the auto giant’s image for more than 15 years. The executives killed the CXX project without a single dissenting vote. And with that, the era of the big S.U.V. was as good as dead, done in by soaring gasoline prices and consumers fleeing to smaller, more fuel-efficient cars.

NewsTrust Rating: 4.0 average - 16 Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

Businesses scramble for a piece of the U.S. bailout

Sun, 26 Oct 2008 00:00:00 -0700

Associated Press - Oct. 26 (News Report) - WASHINGTON: The U.S. bailout is now the hottest lobbying game in town. Insurers, automakers and American subsidiaries of foreign banks all want the Treasury Department to cut them a piece of the largest government rescue in U.S. history. The betting is that many with their hands out will be successful, especially with financial markets in a stomach-churning dive and predictions that the U.S. economy is about to tumble into a deep recession. These groups argue that the credit squeeze is so severe and the risks to the economy so dire that their industries need financial support as well. The Treasury is considering requests from a variety of industries, but has not decided whether to expand the program, officials said Saturday. Lobbying efforts are intensifying. The Financial Services Roundtable wrote Treasury officials on Friday requesting that the initiative to buy $250 billion in bank stock grow to cover insurers, auto companies, securities dealers and U.S. subsidiaries of foreign companies, including banks. The Treasury's plan is intended to bolster banks' tattered balance sheets and get them to resume making loans.

NewsTrust Rating: 3.9 average - 5 Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

A case of balance as credit card rules change

Sun, 26 Oct 2008 00:00:00 -0700

San Francisco Chronicle - By Tom Abate - Oct. 26 (News Report) - Over the past 40 years, credit cards have become fixtures in the American wallet. But the worldwide financial crisis and increased regulatory pressure in Washington are starting to reshape the lending system in ways that are making plastic harder to get and more costly to use. The changes will affect American consumers differently, as they carry nearly a trillion dollars of credit card debt, according to Federal Reserve estimates. For the majority of cardholders, who pay off their balances each month, this buy-now, pay-later system will remain a convenience that often comes with discounts and other benefits.

NewsTrust Rating: 3.8 average - 8 Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

It's Official: The Crash of the U.S. Economy has begun

Sun, 26 Oct 2008 00:00:00 -0700

Global Research - By Richard C. Cook - Oct. 26 (Not sure) - “The Takeover Boom, About to Go Bust”

NewsTrust Rating: 3.3 average - 8 Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

Obama, McCain have vastly different approaches on how to resolve financial crisis

Sun, 26 Oct 2008 00:00:00 -0700

San Diego Union Tribune - By Dean Calbreath - Oct. 26 (News Analysis) - In just 86 days, a new president will be sworn into office, facing the greatest economic challenge since Franklin Roosevelt assumed the helm. ohn McCain prefers more indirect methods, such as tax cuts to major corporations, to promote economic growth. First, of course, is the immediate and overwhelming problem of how to fix the broken financial system while ensuring that not too many people lose their jobs or their homes. Then there are the other economic problems that have lingered over the past decade: How to address the challenges of globalism. How to achieve energy independence. How to regulate Wall Street. How to stem the erosion of the middle class. Sixty-five percent of Americans rank the economy as an extremely important issue for the next president, outranking terrorism, in second place at 52 percent, or energy policy, at 50 percent, according to a CNN Opinion Research Poll released last week.

NewsTrust Rating: 3.1 average - 11 Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

You don't always know when the sky will fall

Sun, 26 Oct 2008 00:00:00 -0700

International Herald Tribune - By Ben Stein - Oct. 26 (Opinion) - Now, as the great Phil Rizzuto used to say, for "some high hops and short stops" — only not in sports, but in finance and life. First, I get a certain amount of mail asking why I was unable to spot the stock market crash in advance, sell short and become rich. And why was I unable to foretell the future, so my readers could avoid losses and make money? Well, I am just a person. I don't have any magical powers to foresee the future. In this case, I did not foresee the catastrophic mistake, as I view it, by Treasury Secretary Henry Paulson Jr. to allow Lehman Brothers to fail. That failure left a gaping hole in the financial services industry, and blew away confidence that the Feds knew what they were doing. Months ago, one of the greatest of American economists, Anna Jacobson Schwartz, who was co-author with the late Milton Friedman of "A Monetary History of the United States," accurately said that American banks did not face a liquidity crisis, but that they might soon urgently face a solvency crisis. In other words, banks would have ample reserves to lend but might lack assurances that they could meet all their financial obligations if those loans went bad. She was right. In fact, bankers have had so many losses and faced so much uncertainty that they dared not lend, for fear of killing their banks with bad loans — so we have actually had a solvency crisis. (By the way, it's a disgrace that Schwartz, a mainstay of economic insight since before World War II — as well as my late mother's college roommate at Barnard — has not been a Nobel laureate. That hints at a dismal sexism in the dismal science.)

NewsTrust Rating: Not rated yet - See Info » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

Leading in Job Losses, Rhode Island Struggles On

Sun, 26 Oct 2008 00:00:00 -0700

New York Times - By Pam Belluck - Oct. 26 (Special Report) - The family resemblance shared by John Hallam, his brother Arthur, and their cousin Dennis goes far beyond their ruddy features these days. All three were laid off this year from jobs they had held for more than a decade, with John losing two jobs in just the last nine months. Dennis’s 29-year-old daughter, Mary, a single mother of two, is out of work too, having lost her job at a restaurant when summer ended. “What the hell’s going to happen to us?” asked John, 58, who drove a truck for a lumber company. “There are no good jobs here anymore.”

NewsTrust Rating: 4.0 average (not enough reviews) - See Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

Greenspan’s Glitch, Palin’s Duds

Sun, 26 Oct 2008 00:00:00 -0700

TruthDig - By Tony Blankley, Robert Scheer, Arianna Huffington, Matt Miller - Oct. 26 (Opinion) - So, Alan Greenspan isn’t clairvoyant, as it turns out. Whoops! Neither, apparently, are Sarah Palin’s handlers, or else they might have done some bargain shopping instead of landing their leading lady in a heap of trouble over her pricey threads. This week’s “Left, Right & Center” lineup (everyone but Ms. Huffington) take on these topics from the recent past and look to the future of the Grand Old Party on KCRW’s popular political radio show.

NewsTrust Rating: 2.9 average (not enough reviews) - See Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

But have we learned enough?

Sun, 26 Oct 2008 00:00:00 -0700

International Herald Tribune - By Gregory Mankiw - Oct. 26 (Opinion) - Like most economists, those at the International Monetary Fund are lowering their growth forecasts. The financial turmoil gripping Wall Street will probably spill over onto every other street in America. Most likely, current job losses are only the tip of an ugly iceberg. But when Olivier Blanchard, the IMF's chief economist, was asked about the possibility of the world sinking into another Great Depression, he reassuringly replied that the chance was "nearly nil." He added, "We've learned a few things in 80 years." Yes, we have. But have we learned what caused the Depression of the 1930s? Most important, have we learned enough to avoid doing the same thing again? The Depression began, to a large extent, as a garden-variety downturn. The 1920s were a boom decade, and as it came to a close the Federal Reserve tried to rein in what might have been called the irrational exuberance of the era. In 1928, the Fed maneuvered to drive up interest rates. So interest-sensitive sectors like construction slowed.

NewsTrust Rating: Not rated yet - See Info » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

What does it all mean

Sun, 26 Oct 2008 00:00:00 -0700

Crooked Timber - By John Quiggin - Oct. 26 (Opinion) - There’s been a bit of discussion about what Alan Greenspan really conceded in his recent testimony. Although Greenspan was less opaque than usual, I won’t try to second-guess him any further, and will instead ask again what the crisis means for the way we think about economics and the economy. There are two big economic ideas that look substantially less appealing in the light of the current crisis. The first is the macroeconomic hypothesis, often called the Great Moderation which combines the empirical observation that the frequency and severity of recessions declined greatly from 1990 to the recent past with the explanation that “the deregulation of financial markets over the Anglo-Saxon world in the 1980s had a damping effect on the fluctuations of the business cycle”.

NewsTrust Rating: 4.0 average (not enough reviews) - See Reviews » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

New president will face hard choices

Sun, 26 Oct 2008 00:00:00 -0700

Bloomberg - By Albert R. Hunt - Oct. 26 (Opinion) - On election night in the United States, there will be an emotional celebration, the likes of which contemporary America has rarely seen, especially if Barack Obama wins. Echoes of the Founding Fathers, and the promise and imperfections of the nation, will reverberate. Even if John McCain pulls an upset on Nov. 4, he is a man of such character that he will try to address some of the wrongs perpetrated in his name, while being immortalized as the most resilient Phoenix-like figure in U.S. political history. This is a big election; in very different ways, these are two big men. Yet soon thereafter a sobering reality will hit: This new president inherits the most troubled country, in terms of domestic and foreign policy, of any new American leader since Franklin D. Roosevelt. As fascinating as 2008 has been, neither of these men has educated voters much on the challenges ahead. The tone and substance of the campaign are really no different than they were six weeks ago, while the world has changed.

NewsTrust Rating: Not rated yet - See Info » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

A matter of life and debt

Sun, 26 Oct 2008 00:00:00 -0700

Houston Chronicle - By Margaret Atwood - Oct. 26 (Opinion) - Last week, credit began to loosen, stock markets have been encouraged enough to reclaim lost ground (at least for now) and there is a collective sigh of hope that lenders will begin to trust in the financial system again. But we're deluding ourselves if we assume that we can recover from the crisis of 2008 so quickly and easily simply by watching the Dow creep upward. The wounds go deeper than that. To heal them, we must repair the broken moral balance that let this chaos loose. Debt — who owes what to whom, or to what, and how that debt gets paid — is a subject much larger than money. It has to do with our basic sense of fairness, a sense that is embedded in all of our exchanges with our fellow human beings. But at some point we stopped seeing debt as a simple personal relationship. The human factor became diminished. Maybe it had something to do with the sheer volume of transactions that computers have enabled. But what we seem to have forgotten is that the debtor is only one twin in a joined-at-the-hip pair, the other twin being the creditor. The whole edifice rests on a few fundamental principles that are inherent in us. We are social creatures who must interact for mutual benefit, and — the negative version — who harbor grudges when we feel we've been treated unfairly. Without a sense of fairness and one bad turn — no one would ever lend anything, as there would be no expectation of being paid back. And people would lie, cheat and steal with abandon, as there would be no punishments for such behavior. Children begin saying, "That's not fair!" long before they start figuring out money; they exchange favors, toys and punches early in life, setting their own exchange rates. Almost every human interaction involves debts incurred — debts that are either paid, in which case balance is restored, or else not, in which case people feel angry. A simple example: You're in your car, and you let someone else go ahead of you, and the driver doesn't nod, wave or honk. How do you feel? Once you start looking at life through these spectacles, debtor-creditor relationships play out in fascinating ways. In many religions, for instance. The version of the Lord's Prayer I memorized as a child included the line, "Forgive us our debts as we forgive our debtors." In Aramaic, the language that Jesus himself spoke, the word for "debt" and the word for "sin" are the same.

NewsTrust Rating: Not rated yet - See Info » - Review It Visit NewsTrust | About | Sign Up | Disclaimer

EU says new measures needed for financial meltdown