Rabbits devastate island wildlife BBC
Gaming The Brain The Escapist
Spineless in Washington: Obama and Guantánamo Bay Willem Buiter
Honest Brokers Mark Thoma. Keeping tabs on a wee firefight provoked by Greg Makiw’s comments on some stimulus-related analysis by the new CEA head Christina Romer.
Christie’s Cuts Costs as Art Market Slows New York Times
Fox Business sues Fed for information on bailouts Reuters
Auto bailout has already helped GMAC and GM sales Economic Populist. So much for the theory that it was the job outlook, and not access to financing sales, that was impeding sales (I agree that subsidies of this order do not make for a great business model, but it at least says the auto companies won’t be complete basket cases in the interim). Also dashes a bit of cold water on my worry that no one would buy a car from a company in bankruptcy, although we have not crossed that Rubicon yet.
Serious Instances of Inflation Since World War II Jesse’s Cafe Americain
Credit Crunch Over? Best Week for Debt Sales in a Year Raises Hopes WSJ Deal Journal
CEO Firings On the Rise As Downturn Gains Steam Wall Street Journal
The ECB’s secret weakening? FT Alphaville
Antidote du jour:
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http://thereformedbroker.com/2009/01/13/the-quesadilla-that-changed-my-mind-about-the-bailout/
quesadilla changed my mind about the bailout
I totally agree with the WSJ article that the credit crunch is over. We now have not had a bank fail in over a month and the fed data shows all health signs… see the fed charts
here:
We had a big chill back in October, but things feel much warmer now…
Yves: Is this some sort of subliminal ad ?
I see the picture and my brain unfortunately conjures up the sounds of an english accented voice yammering about insurance.
And, in streaming consciousness, the english insurance peddler reminds me of Michael Douglas’s “Wall Steet” character singing the praises of greed.
Re Auto sales.
Addition of previously removed financing should boost sales. It was never as bad some said, cars people wouldnt buy. Pure rhetiric, people were buying them.
BUT….nobody should be fooled that this doesnt mean ther arent problems with cost structure, product offerings, overall pricing and the purchase and ownership experience. Much remains to be done.
However, that was the one justfication for a bailout or assistance, that the lack of a critical component that is normally available (credit to consumers and or suppliers) could be supplied on a temporary basis by the government till the private sector returned to its “normal” place.
Ideally he government backs out over time, the timing of green vehicles should be let to the marketplace. If government wishes to tax gasoline below a certain price level to encourage transition because it is considered “strategic” then thats how politics works.
By the way, the justification for the auo bailout was the same as the one for the financial bailout, extreme conditions that are not normally seen and lack of the normal repair mechanisms. The callenge will be gettign the government ot leave the field when conditions return, but doing so in a way that “the field” is n better and more robust shape than before. ie better regulation.
There still needs to be some kind of sould searching over compensation in the financial industry that drove some of this. Correction of the “timing problem” where you can boost profits in years 1-3, and obtain significant rewards, but lose it all in year 4, and suffer nothing worse than losing your job but keeping your 7, 8 or 9 figure bonus money.
It is an old problem whos answer I dont really know. I do know the answer starts at the compensation in the C Suite, they will take care of the rest.
Thoma’s post is outstanding. Thank you for linking it here.
Mankiw has a lot to answer for. Time for some good old fashioned, Puritan shunning of the economists who cheerled the bubble, and now refuse to get on their knees and beg forgiveness.
One wonders how many birds of prey will die off after the rabbit,s mice, and rats are eradicated.
Yves, great photo of the lizard or Gekko or whatever it is.
I live in Fl and always leave the windows in my vehicle partially open to let the heat out. A creature similar to the one in the photo got into my vehicle (not unusual) and it has displayed remarkable intelligence. After the lizard had made a home of my vehicle for months it definitely recognized me and would stay near me (possibly for protection?) and avoid getting near passengers in my vehicle that it did not know. The lizard and I also play a game of ‘hide and seek’, where I put my finger withing a quarter inch of it’s nose and it remains absolutely still, then it moves away slowly and continues the game with it’s snout protruding from a piece of dash trim. This lizard now displays absolutely no fear of me. This might be common behavior among lizards but I have not noticed it before. Maybe the lizard needs professional help?
The Thoma commenters seem to suggest, though not in so many words, that Mankiw is a Republican Krugman. That seems very cruel. Though, as one commenter implies, it might be very hard to understand the animosities if one doesn’t know who slept with whom, who plagiarised whose results, who knifed whom in committee, and so on. Still, none of us assumes (I conjecture) that economists are a particularly truthful crew.
Auto sales show how outdated marketing and sales dept has become. Forget the millions spent on advertising,consumer choice color options and other wasteful new age marketing gimicks all we really need is cheap credit to anyone that can fog a mirror, hey it works in the real estate market why not auto?
Citibank just announced their restructuring.
D
If Christie’s is scaling back it must mean that even the rich are freaked out. Seems like “all that money sitting on the sidelines” could come out and buy some cheap art!
What crap: Is there no end to the reach around (expropriation) into our pocketbooks? Like a dog on a pant leg, the Fed just won’t let go of the mantra to sink more good money into bad banks. They have no policy objective but those loaded with rotten, mistaken goals. The Fed chair is devoid of vision, blinded by this single-minded purpose that serves no good end for the taxpayer.
Jan. 13 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke warned that a fiscal stimulus won’t be enough and that the government may need to buy or guarantee banks’ tainted assets to revive growth.
“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke said in a speech today at the London School of Economics. “More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.”
GNE – I don’t think so. Over at Credit Writedowns “Seattle Home Loan Bank short of capital.” “Seattle Federal Home Loan Bank (FHLB) has admitted that it is on the verge of collapse and may need to avail itself of conservatorship, much as Fannie Mae and Freddie Mac did previously.” Credit crunch over or are we in the eye of the storm?