This story from the BBC covers largely familiar ground as far as the deterioration of the Chinese economy is concerned, but in contrast to some other articles featured here, stresses the political implications of lower growth. Note that while many in passing observe that lower economic growth could be destabilizing for China, it also appears […]
Read more...One theory I derided earlier was the notion that that there are certain expenditures that do not get cut even when budgets are strained. The subject of my mini-rant last time was the idea that women would not cut back on going to their hair colorist. If people are cutting back on their medications, which […]
Read more...The UK’s Times reports that Swiss bank UBS intends to change its bonus program so that current year bonuses can be largely reversed if performance in subsequent year falls or generates losses. Even more striking, the bank is considering trying recoup bonuses already paid to certain executives. The UBS move is a worthwhile effort towards […]
Read more...Nearly 20 years of stagnant to falling wages, threadbare social safety nets, and no returns on savings has produced a retiree class in Japan struggling to make ends meet. Good reason to worry at the sight of the US cribbing heavily from the Japanese playbook. From Bloomberg (hat tip Ed Harrison): More senior citizens are […]
Read more...As readers may have noticed, we have gotten exercised about how brazenly the Treasury has been in lavishing cash on favored interests. Felix Salmon took up the theme, admittedly with less choler: There does indeed seem to have been a visible change in Treasury policy since the election. Until that point, it cared a little […]
Read more...Note that the headline above was on a Wall Street Journal story about the new taxpayer-raping improved version of the AIG bailout. The current headline is anodyne: “New AIG Rescue Is Bank Blessing.” Just as one wonders why the government backed down on a deal that was appropriately punitive to AIG (at worst, it was […]
Read more...The Wall Street Journal reports, as was rumored on Friday, that AIG appears on the verge of approving a considerably enlarged and sweetened rescue package from the government. We were less than happy with the idea when it first surfaced (see our rant “The Black Hole Gets Bigger: AIG Back for Yet Another Bailout“). Let […]
Read more...From the Daily Mail (hat tip Jesse): Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses – despite asking the U.S. government for an emergency bail-out. The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday. Each of the firm’s 443 partners is […]
Read more...Hauling executives from the private sector before Congress and lambasting them about pay has had zero impact on top level compensation. However, now that the banking industry is a ward of the state and the Democrats might not just win the Presidency but also could get a filibuster-proof majority in the Senate, the banking industry […]
Read more...Barry Ritholtz at The Big Picture has sometimes taken to showing spikes in his website’s traffic around market crises. They are usually dramatic and he has said in the past that they signal short-term market bottoms. Your humble blogger has also witnessed this phenomenon. We had a huge jump in traffic around the Bear crisis, […]
Read more...Now that Greenspan has thrown in the towel, the free market ideologues have lost one of their most loyal advocates. From Bloomberg: Former Federal Reserve Chairman Alan Greenspan called for tighter regulation of financial companies, distancing himself from the free-market culture that he helped to create. Firms that bundle loans into securities for sale should […]
Read more...The blow to many Americans’ net worth via diminished home values and shrunken retirement accounts has lead to a new found insecurity and conservatism. Not only have consumers reined in spending, but they are reported to be suddenly worried about the debt levels and financial buffers. This change in sentiment is aided and abetted by […]
Read more...John Kay, in “Banks got burned by their own ‘innocent fraud’,” argues that banks got themselves and the world at large in a heap of trouble via self delusion. Had the bets embodied in their products been presented in simpler terms, they would have recognized that they were bogus and bound to lose money. But […]
Read more...I have been naive enough to have believed we live in a democracy, although the evidence contradicting that view is more obvious with every passing day. Michigan Republicans plan to challenge the eligibility of voters whose homes have been foreclosed. Talk about adding insult to injury. From Michigan Messenger (hat tip Credit Slips): The chairman […]
Read more...Steve Waldman has a great little post on how the end of the consumer credit bubble is going to expose rifts papered over by the illusion of rising living standards for all. In fact, average real wages have been stagnant since the mid-1970s; the gains in income have accrued entirely to those at the top […]
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