Archive for the ‘economy’ Category.
The Washington Post reported today that commercial banks and investment institutions are shifting their political donations towards Republicans. Apparently Democrats were garnering two-thirds of those donations as recently as the beginning of 2009 and now that is shifting to an even split despite the Democratic majority.
This can sarcastically be placed under “shocking news” of the day category but there is something even more cynical at play in this world of no shame.
Back in March we wrote about the report “Sold Out: How Wall Street and Washington Betrayed America,” published by Essential Information and the Consumer Education Foundation. The report stated that $5 billion in political influence purchasing in Washington over the past decade had led to our current economic collapse.
The report was anything but shocking as the influence of big money on public policy is no secret. Many depression era reforms were struck down in the past decade, which allowed among other things the merger of commercial and investment banking and an increase in the amount of leverage financial institutions could utilize.
There was a rosy picture painted for the U.S. dollar, earnings and the economy at large at Dow Jones Indexes‘ 2010 Global Economic Outlook today. Analysts predicted a rebound in global economic activity. Kevin Logan, an independent global economist, said by the middle of this year, estimates for global GDP growth in 2010 are likely to be double what they were in the middle of 2009. Analysts said that the dollar would start out the year weak, with a recovery sometime in mid-2010.
It’s that time again, when all of the pundits and analysts weigh in with their predictions for the new year, and, as we leave “the aughts” behind, the new decade. The past two weeks have been chockablock with best of/worst of ‘09 lists, events of the year, people of the year, etc. (Time magazine’s choice for Person of the Year for 2009, Fed Chairman Ben Bernanke, actually ties in very nicely with Futures’ January Markets piece, “Interest rate policy: Under pressure.”) The consensus among many pundits is that the coming decade HAS to be better than the one we’re leaving behind. Continue reading ‘Drama ahead in 2010?’ »
Blogger Felix Salmon tossed out the subject of whether a PhD in Financial Journalism should be created, apparently in light of the poor job done by the media in covering the credit crisis. Actually he notes that an ex Lehman Bros. executive is trying to create such an education track and Salmon threw it out for public discussion and it has been bandied about by media based chat rooms.
Continue reading ‘More curiosity, less arrogance is what is needed’ »
Did you hear? Citigroup is paying back its $20 billion in TARP money! But as this New York Times editorial points out, big banks’ motives for paying back the government are (surprise, surprise) less than pure; namely, the banks want to get out from under the pay caps and restraints of the bailout. As the Times says:
“The Treasury Department, which seems to have no qualms about Citigroup’s self-proclaimed strength, plans to sell its $25 billion stake over the next six to 12 months… The Treasury Department’s approval is a grim reminder of the political power of the banks, even as the economy they did so much to damage continues to struggle.” Continue reading ‘Big banks’ fog follies’ »
Goldman Sachs’ holiday partying spirit was once again dimmed this year by a Grinch called the economy. Like last year, Goldman’s holiday party was cancelled, but this year, there’s a new twist. According to the Business Insider, Goldman Sachs employees are not allowed to organize private Christmas parties for the firm’s employees at their own homes, even if no firm money goes to pay for them. This Gawker story says that Goldman employees are basically not allowed to party in groups of 12 or more. Continue reading ‘Ain’t no party like a Goldman party’ »
As I wrap up some loose ends going into the long holiday weekend, I noticed that we have not commented here yet on last week’s partisan jousting over who is to blame for the financial mess we find ourselves in.
Republican Rep. Kevin Brady of Texas blamed Treasury Secretary Timothy Geithner for a major role in creating the problem when he was the president of the New York Federal Reserve Bank. Mr. Geithner shot back, ”What I can’t take responsibility is for the legacy of crises you’ve bequeathed this country.”
It might have been more than a little embarrassing for President Obama that the U.S. dollar was making 15-months lows just as he was visiting China in part to reassure the Chinese that their massive investment in U.S. Treasuries were secure. China is concerned that the massive holdings of dollars will continue to lose value. But threats of disinvestment holds a knife to their own neck as much as it does ours so they will likely continue to buy our debt.
In his speech before the Economic Club of New York yesterday, Fed Chairman Ben Bernanke expressed some conflicting thoughts about dollar policy. He said that the Fed is “attentive to the implications of changes in the value of the dollar.” At the same time, Bernanke reiterated his stance that economic conditions will warrant low levels of the Fed funds rate “for an extended period.” So it appears the Fed will maintain its low interest rate policy, which, in theory, could keep the dollar weak. This seems like a contradiction in terms.
