Second estimate of third-quarter GDP out; growth rate marked down to 2.8%. This is really quite grim. At this growth rate it's far from clear that we're doing anything to reduce the output gap -- the gap between what the economy could produce and what it's actually producing. Correspondingly, there's no reason now for even a bit of optimism on unemployment.
Second estimate of third-quarter GDP out; growth rate marked down to 2.8%.
This is really quite grim. At this growth rate it's far from clear that we're doing anything to reduce the output gap -- the gap between what the economy could produce and what it's actually producing. Correspondingly, there's no reason now for even a bit of optimism on unemployment.
The U.S. economy expanded at a 2.8 percent annual rate in the third quarter, less than the government reported last month, reflecting a smaller gain in consumer spending and a bigger trade deficit. The increase in gross domestic product from July through September reported today by the Commerce Department in Washington compares with a 3.5 percent gain previously estimated. Corporate profits climbed by the most in five years....Much of the boost last quarter was provided by the administration's auto-incentive program known as "cash for clunkers," which offered buyers payments of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan, which ended in August, boosted sales by about 700,000 vehicles, according to the Transportation Department.
The increase in gross domestic product from July through September reported today by the Commerce Department in Washington compares with a 3.5 percent gain previously estimated. Corporate profits climbed by the most in five years....Much of the boost last quarter was provided by the administration's auto-incentive program known as "cash for clunkers," which offered buyers payments of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan, which ended in August, boosted sales by about 700,000 vehicles, according to the Transportation Department.
I know this is like beating a dead horse, but the fact is they haven't buried the long dead animal and it stinks to high heaven! "Beware of the man who does not talk, and the dog that does not bark." Cheyenne
About the only way money money is actually spent away from USA is buying fuel and supplying bribes.
If they built anything in the US, that wouldn't be US jobs cos they'd pay illegals to build it (cheap labour) and the chinese to supply the kit (cheap goods). keep to the Fen Causeway
Basically, we may be in a technical recovery, but we're not recovering.
A front-page story in today's New York Times details the swelling rivalry between Amazon (AMZN) and Wal-Mart (WMT). This may seem odd because, in reality, the retailers are fundamentally different. Wal-Mart is rooted in its big-box retail stores, and Amazon operates only online. But that hasn't stopped them from engaging a heated competition for overlapping customers. As Wal-Mart is stepping up its online offerings, Amazon has found itself on the defensive. The paper explains, "In what is emerging as one of the main story lines of the 2009 post-recession shopping season, the two heavyweight retailers are waging an online price war that is spreading through product areas like books, movies, toys and electronics."
South Africa's economy has come out of recession, with growth of 0.9 per cent in the third quarter of this year. Results, adjusted for seasonal variations, released on Tuesday showed southern Africa's biggest economy to have ended it's first period of negative growth in 17 years, the country's national statistics board said. "The seasonally adjusted real gross domestic product [GDP] at market prices for the third quarter of 2009 increased by an annualised rate of 0.9 per cent compared with the second quarter of 2009," Statistics South Africa said.
South Africa's economy has come out of recession, with growth of 0.9 per cent in the third quarter of this year.
Results, adjusted for seasonal variations, released on Tuesday showed southern Africa's biggest economy to have ended it's first period of negative growth in 17 years, the country's national statistics board said.
"The seasonally adjusted real gross domestic product [GDP] at market prices for the third quarter of 2009 increased by an annualised rate of 0.9 per cent compared with the second quarter of 2009," Statistics South Africa said.
Until now, the UK's central bank had kept details of the loans secret for fear of creating alarm in the markets. It announced the full scale of the loans to the Government's Treasury Select Committee, telling the hearing the combined borrowings of the banks - which were charged a fee for the facilities - peaked on October 17 last year. Both banks had paid back the cash by January, it said. John McFall, the chairman of the Commons Treasury Select Committee, said there had been an "intake of breath" when he and his colleagues saw the £61.6bn figure.
Until now, the UK's central bank had kept details of the loans secret for fear of creating alarm in the markets.
It announced the full scale of the loans to the Government's Treasury Select Committee, telling the hearing the combined borrowings of the banks - which were charged a fee for the facilities - peaked on October 17 last year.
Both banks had paid back the cash by January, it said.
John McFall, the chairman of the Commons Treasury Select Committee, said there had been an "intake of breath" when he and his colleagues saw the £61.6bn figure.
And that's even before tax policies are discussed. In the long run, we're all dead. John Maynard Keynes
A German bank employee who secretly transferred money from rich to poor clients has been given a 22-month suspended prison term.The 62-year-old woman, dubbed the 'Robin Hood Banker', moved more than $11m (£7m) in 117 transfers. The court in Bonn was told that the employee, who has not been named, took no money for herself. The bank made a loss of more than $1.5m (£1m) when poor customers were unable to pay back unauthorised overdrafts.
A German bank employee who secretly transferred money from rich to poor clients has been given a 22-month suspended prison term.
The 62-year-old woman, dubbed the 'Robin Hood Banker', moved more than $11m (£7m) in 117 transfers.
The court in Bonn was told that the employee, who has not been named, took no money for herself.
The bank made a loss of more than $1.5m (£1m) when poor customers were unable to pay back unauthorised overdrafts.
Borders has stopped taking orders for new books on its website while the retailer "is in discussion with potential buyers".The firm said that existing customer orders are also being delayed but will be fulfilled. The Borders Entertainment part of the site - which sells DVDs, CDs and electrical items - continues to operate as normal. Some publishers are also reported to have severed links with the retailer. When customers try to order a book on the website they receive a message saying: "Sorry, title cannot be purchased." Potential buyersReports have suggested that Borders, which has 45 stores in the UK, does not have enough cash to last until Christmas. It is thought it could go into administration if no buyer is found.
Borders has stopped taking orders for new books on its website while the retailer "is in discussion with potential buyers".
The firm said that existing customer orders are also being delayed but will be fulfilled.
The Borders Entertainment part of the site - which sells DVDs, CDs and electrical items - continues to operate as normal.
Some publishers are also reported to have severed links with the retailer.
When customers try to order a book on the website they receive a message saying: "Sorry, title cannot be purchased."
Potential buyers
Reports have suggested that Borders, which has 45 stores in the UK, does not have enough cash to last until Christmas. It is thought it could go into administration if no buyer is found.
EUOBSERVER / BRUSSELS - The European Commission launched a public consultation period on Tuesday (24 November) on a new 10-year economic plan for the European Union. Still grappling with the fallout from the global financial crisis, the EU hopes the plan will help tackle pressing issues such as rising unemployment and return the bloc to solid economic growth in the longer term. NGOs say the consultation period should be extended The final date for submissions is 15 January 2010, after which the commission will then finalise a detailed proposal to be submitted to EU leaders at the European summit next March. "Europe reduced unemployment from 12 percent to 7 percent in the decade to 2008. We now need new sources of growth to replace the jobs lost in the crisis," said commission president Jose Manuel Barroso in a statement.
EUOBSERVER / BRUSSELS - The European Commission launched a public consultation period on Tuesday (24 November) on a new 10-year economic plan for the European Union.
Still grappling with the fallout from the global financial crisis, the EU hopes the plan will help tackle pressing issues such as rising unemployment and return the bloc to solid economic growth in the longer term.
NGOs say the consultation period should be extended
The final date for submissions is 15 January 2010, after which the commission will then finalise a detailed proposal to be submitted to EU leaders at the European summit next March.
"Europe reduced unemployment from 12 percent to 7 percent in the decade to 2008. We now need new sources of growth to replace the jobs lost in the crisis," said commission president Jose Manuel Barroso in a statement.
What are the consequences of allowing multi-billion-dollar systemically important multinational corporations to report their assets using proprietary mark-to-model tools involving discredited Monte Carlo simulations? I think we all know the answer to that one. But unbelievably, after such shenanigans contributed enormously to the greatest financial meltdown in living memory, the SEC is now set to allow more or less exactly the same thing in the oil industry. Otto points to a stunning report by oil consultant Alan von Altendorf which spells it all out. Up until now, oil companies needed to actually prove they had reserves before they reported proven oil reserves. Now, however, the SEC is allowing them to use internal, proprietary computer models to essentially pull their "proven reserve" numbers out of thin air (or the nearest friendly Monte Carlo simulation).
Otto points to a stunning report by oil consultant Alan von Altendorf which spells it all out. Up until now, oil companies needed to actually prove they had reserves before they reported proven oil reserves. Now, however, the SEC is allowing them to use internal, proprietary computer models to essentially pull their "proven reserve" numbers out of thin air (or the nearest friendly Monte Carlo simulation).
The latest sign that underneath the surface weakness remains at large financial institutions comes courtesy of Standard & Poors. According to the Telegraph's Ambrose Evans-Pritchard, S&P believes many are horribly short of capital.Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P's list of 45 global lenders fails the 8pc safety level under the agency's risk-adjusted capital (RAC) ratio. Most fall woefully short. The most vulnerable are Mizuho Financial (2.0), Citigroup (2.1), UBS (2.2), Sumitomo Mitsui (3.5), Mitsubishi (4.9), Allied Irish (5.0), DZ Deutsche Zentral (5.3), Danske Bank (5.4), BBVA (5.4), Bank of Ireland (6.2), Bank of America (5.8), Deutsche Bank (6.1), Caja de Ahorros Barcelona (6.2), and UniCredit (6.3). While some banks may look healthy under normal Tier 1 and leverage targets, critics claim these measures can be highly misleading since they fail to discriminate between high-risk and low-risk uses of leverage. The system failed to pick up the danger signals before the financial crisis. The supposedly moderate leverage of US banks in 2007 proved to be a spectacularly useless indicator.
Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P's list of 45 global lenders fails the 8pc safety level under the agency's risk-adjusted capital (RAC) ratio. Most fall woefully short. The most vulnerable are Mizuho Financial (2.0), Citigroup (2.1), UBS (2.2), Sumitomo Mitsui (3.5), Mitsubishi (4.9), Allied Irish (5.0), DZ Deutsche Zentral (5.3), Danske Bank (5.4), BBVA (5.4), Bank of Ireland (6.2), Bank of America (5.8), Deutsche Bank (6.1), Caja de Ahorros Barcelona (6.2), and UniCredit (6.3). While some banks may look healthy under normal Tier 1 and leverage targets, critics claim these measures can be highly misleading since they fail to discriminate between high-risk and low-risk uses of leverage. The system failed to pick up the danger signals before the financial crisis. The supposedly moderate leverage of US banks in 2007 proved to be a spectacularly useless indicator.
The most vulnerable are Mizuho Financial (2.0), Citigroup (2.1), UBS (2.2), Sumitomo Mitsui (3.5), Mitsubishi (4.9), Allied Irish (5.0), DZ Deutsche Zentral (5.3), Danske Bank (5.4), BBVA (5.4), Bank of Ireland (6.2), Bank of America (5.8), Deutsche Bank (6.1), Caja de Ahorros Barcelona (6.2), and UniCredit (6.3).
While some banks may look healthy under normal Tier 1 and leverage targets, critics claim these measures can be highly misleading since they fail to discriminate between high-risk and low-risk uses of leverage. The system failed to pick up the danger signals before the financial crisis. The supposedly moderate leverage of US banks in 2007 proved to be a spectacularly useless indicator.
Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgage than their homes are worth.Data Highlights Nearly 10.7 million, or 23 percent, of all residential properties with mortgages were in negative equity as of September, 2009. An additional 2.3 million mortgages were approaching negative equity, meaning they had less than five percent equity. Together negative equity and near negative equity mortgages account for nearly 28 percent of all residential properties with a mortgage nationwide. The distribution of negative equity is heavily concentrated in five states: Nevada (65 percent), which had the highest percentage negative equity, followed by Arizona (48 percent), Florida (45 percent), Michigan (37 percent) and California (35 percent). Among the top five states, the average negative equity share was 40 percent, compared to 14 percent for the remaining states. In numerical terms, California (2.4 million) and Florida (2.0 million) had the largest number of negative equity mortgages accounting for 4.4 million or 42 percent of all negative equity loans
Windfall taxes are a ghastly idea. They are a sop to prejudice, a burden on risk-taking and a form of arbitrary confiscation. No sensible person should support them. So why do I now find the idea of a windfall tax on banks so appealing? Well, this time, it really does look different.First, all the institutions making exceptional profits do so because they are beneficiaries of unlimited state insurance for themselves and their counterparties. As Andrew Haldane of the Bank of England argues, the state has "become the last resort financier of the banks".* In the UK, total support amounted to a staggering 74 per cent of gross domestic product. These must be the largest business subsidies ever.Second, the profits being made today are in large part the fruit of the free money provided by the central bank, an arm of the state. The state is giving the surviving banks a licence to print money.
First, all the institutions making exceptional profits do so because they are beneficiaries of unlimited state insurance for themselves and their counterparties. As Andrew Haldane of the Bank of England argues, the state has "become the last resort financier of the banks".* In the UK, total support amounted to a staggering 74 per cent of gross domestic product. These must be the largest business subsidies ever.
Second, the profits being made today are in large part the fruit of the free money provided by the central bank, an arm of the state. The state is giving the surviving banks a licence to print money.
The Banks have always had a licence to "print money".
the state has "become the last resort financier of the banks"
This has been going on since the Great Depression. Since the 1960's there has been a financial crisis every few years (usually no more than five) and in each case the Central Bank cleans up the balance sheet of banks by acting as lender of last resort, and the government subsidizes business to make up for reduced private investment so as to put a floor on employment and output.
But, yeah, it is unseemly that the banks should be returning to the big bonuses. However, the better way to address this is adding more tax brackets and higher, punitive marginal rates. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
$1,200 here we come. Bernanke just got punk'd. Again. From the Financial Chronicle of India: India is open to buying more gold from the International Monetary Fund (IMF). It bought 200 tonnes for $6.7 billion on November 3. The Reserve Bank of India (RBI) may well buy IMF's remaining hoard of 201.3 tonnes on acceptable terms, which are now under negotiation. A government official said that the additional purchase would depend on the "successful pitching by RBI". "RBI is an independent body, and the government does not interfere in its affairs. It will get the gold if its bid is successful and at the price it has offered," said the official. RBI did not respond to Financial Chronicle questions if it was bidding for the remaining IMF gold. The purchase of the first lot of 200 tonnes, RBI had said at the time, was a part of its foreign exchange reserves management operations. Responding to query from FC, an IMF spokesperson said the gold sale process was still under way and "there is no fixed timetable for completing the sale". Its spokesperson further said that "the fund does not wish to comment on discussions with individual members." RBI has good reasons to further enrich its gold reserves. In just three weeks it has been able to benefit by as much as $800 million on the investment of $6.7 billion it made in buying 200 tonnes from IMF.
From the Financial Chronicle of India:
India is open to buying more gold from the International Monetary Fund (IMF). It bought 200 tonnes for $6.7 billion on November 3. The Reserve Bank of India (RBI) may well buy IMF's remaining hoard of 201.3 tonnes on acceptable terms, which are now under negotiation. A government official said that the additional purchase would depend on the "successful pitching by RBI". "RBI is an independent body, and the government does not interfere in its affairs. It will get the gold if its bid is successful and at the price it has offered," said the official. RBI did not respond to Financial Chronicle questions if it was bidding for the remaining IMF gold. The purchase of the first lot of 200 tonnes, RBI had said at the time, was a part of its foreign exchange reserves management operations. Responding to query from FC, an IMF spokesperson said the gold sale process was still under way and "there is no fixed timetable for completing the sale". Its spokesperson further said that "the fund does not wish to comment on discussions with individual members." RBI has good reasons to further enrich its gold reserves. In just three weeks it has been able to benefit by as much as $800 million on the investment of $6.7 billion it made in buying 200 tonnes from IMF.
A government official said that the additional purchase would depend on the "successful pitching by RBI". "RBI is an independent body, and the government does not interfere in its affairs. It will get the gold if its bid is successful and at the price it has offered," said the official.
RBI did not respond to Financial Chronicle questions if it was bidding for the remaining IMF gold. The purchase of the first lot of 200 tonnes, RBI had said at the time, was a part of its foreign exchange reserves management operations.
Responding to query from FC, an IMF spokesperson said the gold sale process was still under way and "there is no fixed timetable for completing the sale". Its spokesperson further said that "the fund does not wish to comment on discussions with individual members."
RBI has good reasons to further enrich its gold reserves. In just three weeks it has been able to benefit by as much as $800 million on the investment of $6.7 billion it made in buying 200 tonnes from IMF.
Brazil is seen as an economic success story and its people revere President Luiz Inácio Lula da Silva like a star. He is on a mission to turn the country into one of the world's five biggest economies through reforms, giant infrastructure projects and by tapping vast oil reserves. But he faces hurdles. Elizete Piauí has been waiting patiently for hours in the shade of a mango tree. She is wearing plastic sandals and baggy shorts over her thin legs. At 40 degrees Celsius (104 degrees Fahrenheit), the air is shimmering on this unusually hot day in Barra, a small city in the Sertão, the heart of northeastern Brazil. But Piauí isn't complaining, because today is her big day, the day she meets the president, who is working to provide her hut with running water. The rattle of a helicopter signals his arrival. The white aircraft circles once over the crowd before landing. A motorcycle escort accompanies the Brazilian president to the ceremony. Lula gets out of the limousine wearing a white linen shirt and a green military hat. Ignoring the local dignitaries in their dark suits, Lula heads straight for the crowd behind a security barrier. "Lula, Papai! (Papa Lula!)" Elizete calls out. He pulls her to his chest and shakes the hands of others in the crowd, allowing them to touch, stroke and embrace him. Beads of sweat are running down his flushed face, and people are tugging at his shirt, but Lula soaks in the attention. He feels at home here, in one of Brazil's poorest regions.
Brazil is seen as an economic success story and its people revere President Luiz Inácio Lula da Silva like a star. He is on a mission to turn the country into one of the world's five biggest economies through reforms, giant infrastructure projects and by tapping vast oil reserves. But he faces hurdles.
Elizete Piauí has been waiting patiently for hours in the shade of a mango tree. She is wearing plastic sandals and baggy shorts over her thin legs. At 40 degrees Celsius (104 degrees Fahrenheit), the air is shimmering on this unusually hot day in Barra, a small city in the Sertão, the heart of northeastern Brazil. But Piauí isn't complaining, because today is her big day, the day she meets the president, who is working to provide her hut with running water.
The rattle of a helicopter signals his arrival. The white aircraft circles once over the crowd before landing. A motorcycle escort accompanies the Brazilian president to the ceremony.
Lula gets out of the limousine wearing a white linen shirt and a green military hat. Ignoring the local dignitaries in their dark suits, Lula heads straight for the crowd behind a security barrier. "Lula, Papai! (Papa Lula!)" Elizete calls out. He pulls her to his chest and shakes the hands of others in the crowd, allowing them to touch, stroke and embrace him. Beads of sweat are running down his flushed face, and people are tugging at his shirt, but Lula soaks in the attention. He feels at home here, in one of Brazil's poorest regions.
According to a special report in Money Morning, heavy government intervention in the banking sector combined with low interest rates and ongoing stimulus has made 2009 a profitable year for many banks. In fact, according to a special report in Money Morning, so-called "bad" banks including Goldman Sachs, Citigroup Inc., and Bank of America have turned out to be a better investment than good banks. .... The length and the level of U.S. unemployment have economists wading through unchartered waters. If unemployment rises above its current 10.5% level and tests a postwar period high of 10.8% set back in 1982, it could signal huge losses as the U.S. consumer-credit system is not "stress-tested" for such high unemployment rates over a prolonged period of time. And if the losses start piling up, the Fed might very well intercede again with a second bailout. This would be yet another strike against bank stocks since politicians would try to penalize investors for needing taxpayer money twice in two years. All of this, plus the recent news of record bonuses at Goldman Sachs is creating momentum for punitive legislation against the banks that goes beyond the premiums banks pay to the Federal Deposit Insurance Corp. (FDIC). One idea being considered is a "Tobin tax". Originally proposed by economist James Tobin after the Nixon administration effectively ended the Bretton-Woods system of tying the U.S. dollar to the gold standard. The idea behind such legislation, which would fall most heavily on very big conventional banks and trading-oriented investment banks, would be to tax transactions in bonds, stock commodity and foreign exchange markets.
The length and the level of U.S. unemployment have economists wading through unchartered waters. If unemployment rises above its current 10.5% level and tests a postwar period high of 10.8% set back in 1982, it could signal huge losses as the U.S. consumer-credit system is not "stress-tested" for such high unemployment rates over a prolonged period of time.
And if the losses start piling up, the Fed might very well intercede again with a second bailout. This would be yet another strike against bank stocks since politicians would try to penalize investors for needing taxpayer money twice in two years. All of this, plus the recent news of record bonuses at Goldman Sachs is creating momentum for punitive legislation against the banks that goes beyond the premiums banks pay to the Federal Deposit Insurance Corp. (FDIC).
One idea being considered is a "Tobin tax". Originally proposed by economist James Tobin after the Nixon administration effectively ended the Bretton-Woods system of tying the U.S. dollar to the gold standard. The idea behind such legislation, which would fall most heavily on very big conventional banks and trading-oriented investment banks, would be to tax transactions in bonds, stock commodity and foreign exchange markets.
Federal Reserve officials have expressed concerns that near-zero interest rates could fuel "excessive risk-taking in financial markets" but believe the possibility of such an outcome is "relatively low", minutes from its November meeting show.Both China and Germany warned this month that the weak dollar and the Fed's policy to keep US interest rates "exceptionally low" for an "extended period" could be laying the groundwork for a new speculative bubble.The central bank's Federal Open Market Committee already had discussed this risk, according to the minutes released on Tuesday. In their meeting on November 3-4, the officials "noted the possibility that some negative side-effects might result from the maintenance of very low short-term interest rates for an extended period".
Both China and Germany warned this month that the weak dollar and the Fed's policy to keep US interest rates "exceptionally low" for an "extended period" could be laying the groundwork for a new speculative bubble.
The central bank's Federal Open Market Committee already had discussed this risk, according to the minutes released on Tuesday. In their meeting on November 3-4, the officials "noted the possibility that some negative side-effects might result from the maintenance of very low short-term interest rates for an extended period".
Research by myself and my colleagues found that moderately elevated levels of this hormone increased the profits of high-frequency traders - although at higher levels it can cause overconfidence and risky behaviour, morphing traders into Masters of the Universe.What we could not say, however, was whether testosterone was having its beneficial effects by increasing the trader's skill or merely by increasing his appetite for risk.In a study published on Wednesday in PLoS ONE we found that testosterone had little to do with trading skill. Traders with higher testosterone did indeed do better at this type of trading, because they took more risk. But there was no link between the hormone and their trading skills, as measured by the Sharpe ratio (of which more later). Testosterone alone was not enough.Showing this requires an understanding of how to judge whether a trader's profits are due to skill or luck - a vital question for banks and hedge funds when allocating capital and paying bonuses.
Research by myself and my colleagues found that moderately elevated levels of this hormone increased the profits of high-frequency traders - although at higher levels it can cause overconfidence and risky behaviour, morphing traders into Masters of the Universe.
What we could not say, however, was whether testosterone was having its beneficial effects by increasing the trader's skill or merely by increasing his appetite for risk.
In a study published on Wednesday in PLoS ONE we found that testosterone had little to do with trading skill. Traders with higher testosterone did indeed do better at this type of trading, because they took more risk. But there was no link between the hormone and their trading skills, as measured by the Sharpe ratio (of which more later). Testosterone alone was not enough.
Showing this requires an understanding of how to judge whether a trader's profits are due to skill or luck - a vital question for banks and hedge funds when allocating capital and paying bonuses.
