AIG MAY NOT PAY BACK $60 BILLION TO GOVERNMENT AS PROMISED IN BAILOUT PLAN - New York Post

AIG MAY NOT PAY BACK $60B TO GOV'T AS PROMISED IN BAILOUT PLAN - New York Post: “Uncle Sam may not get paid back as promised in its $150 billion bailout of American International Group, the giant insurer conceded.

AIG had agreed as a condition of its recent government lifeline to escape bankruptcy that it would repay at least $60 billion by selling valuable assets.

However, CEO Ed Liddy admitted yesterday that it may not be that easy to raise the cash.”

Google's NYC holiday party has Filet mignon on menu

Perks: Filet mignon on menu at Google's NYC holiday party -- I wish I were there!

World Bank Chief Economist: World Faces "Worst Recession Since The Great Depression"

World Bank Chief Economist: World Faces "Worst Recession Since The Great Depression": “Global oil demand will collapse next year and commodities will not return to the highs they reached this summer in the foreseeable future, two authoritative reports said on Tuesday as they forecast a long and painful worldwide recession.

The stark conclusions came as the World Bank's chief economist predicted that the world faced "the worst recession since the Great Depression".

The US energy department said global oil demand will fall this year and next, marking the first two consecutive years' decline in 30 years.

"The increasing likelihood of a prolonged global economic downturn continues to dominate market perceptions, putting downward pressure on oil prices," it said, forecasting that demand would drop 50,000 barrels a day this year and a hefty 450,000 b/d in 2009. US oil demand will drop next year to the lowest level in 11 years.”

Wall Street extends big rally to 2nd session - Huff Post

Wall Street extends big rally to 2nd session: “NEW YORK — A stock market gaining in confidence shot higher for a second straight session Monday as investors bet that President-elect Barack Obama's plans to increase infrastructure spending will help lift the economy back to health. The major market indexes jumped more than 3 percent, and the Dow Jones industrials' nearly 300 point advance gave the blue chips their highest close in a month.”

Tribune Company Files For Bankruptcy - CNNMoney.com

The CNN Wire: Latest updates on top stories - Blogs from CNN.com: “By David Goldman
CNNMoney.com
NEW YORK (CNNMoney.com) — Media conglomerate Tribune Co., publisher of the Chicago Tribune, announced Monday it is filing for Chapter 11 bankruptcy protection.

The Chicago-based company said the restructuring focuses on the company’s debt, not on its operations. The company said its businesses will remain in operation throughout the restructuring of its debt obligations.”

Super Bowl and The Economy - In a recession, even the Super Bowl takes a hit

FOX Sports on MSN - NFL - In a recession, even the Super Bowl takes a hit

Barack Obama On Meet The Press - The Activist President-Elect

President-Elect Barack Obama appeared on the last "Meet The Press" hosted by Tom Brokaw who filed-in masterfully to take the place of Tim Russert after Russert's untimely death earlier this year. On the telecast, Obama presented a plan which can be summed-up as the "Activist President." The convergence of economic problems and President Bush's horrible performance has paved the way for an economically aggressive agenda by Obama that's the child of necessity. Even the most conservative economists agree that a large degree of spending must be done to lift the American Economy.

Thus, Obama talked to Brokaw about the need for such a program and then gave a statement that while he has been a critic of the American Car Industry, it's basically too large to allow to fail, so some kind of managed assistance program will be created for it.

Then, in discussing what plans he and First Lady Michelle Obama have for the White House, Obama said that it was "The People's House" and they planned to celebrate American arts and culture in all of its diversity, even mentioning poetry readings. I personally took Obama to mean that poetry slams, or at least one, would be part of this program. That's huge news if it's true and I don't see why it would not be. Poetry slams are an American-borne art form and the new expression of American urban culture. Since it was reportedly created in Chicago around the time Obama lived there, it's logical to believe the Obamas would introduce the White House to the sub-culture, and vice-versa.

What's so exciting is we finally have a President who reflects the diversity of America and not a part of it. Americans have come to think of the Presidency as the harvest for the rich, White staid upper-crust society and have done so without critical thinking. Obama has forced America to rethink how it's presented itself; now we see a country truly by all the people and for all the people emerging.

Barack Obama is committed to restoring the healthy American Middle Class of the 60s, but to do that will require not only a massive economic package but a return to a kind of economic nationalism not seen in two generations. It's time has come, because our G8 and G20 partners have formed economic programs around a nationalist perspective and it's wrecked America's economy.

Jojo's French Eatery In Oakland Closes Jan 1st - Hard times hit Bay Area restaurants

Hard times hit Bay Area restaurants: “Jojo, a neighborhood French restaurant in Oakland” is closing. It's at 3859 Piedmont AveOakland, CA 94611 (510) 985-3003

U.S. Loses 533,000 Jobs in Biggest Drop Since 1974 - NYTimes.com

U.S. Loses 533,000 Jobs in Biggest Drop Since 1974 - NYTimes.com: “The nation’s employers cut 533,000 jobs in November, the Bureau of Labor Statistics reported Friday.

Not since December 1974, toward the end of a severe recession, have so many jobs disappeared in a single month — and the current recession, far from ending, appears to be just gathering steam.”

Mortgage Delinquencies, Foreclosures Rise to Record

Bloomberg.com: Worldwide: “Mortgage Delinquencies, Foreclosures Rise to Record ”

NBCU To Cut 500 Jobs, Layoffs Begin at NBC News Bureaus - mediabistro.com: TVNewser

NBCU To Cut 500 Jobs, Layoffs Begin at NBC News Bureaus - mediabistro.com: TVNewser

President-Elect Barack Obama Introduces Economic Team Today - Video

President-Elect Barack Obama introduced his Economic Team today.   I have an earlier post on it, but this one features a two-part video: the presentation and the press conference after it.






Press Conference:


 

Obama Economic Team: Tim Geithner, Christine Rohmer, Lawrence Summers

President-Elect Barack Obama's just annouced his new economic team this morning :  New York Federal Reserve head Tim Geithner as Treasury Secretary, UC Berkeley Professor Christine Rohmer as chair of his Council of Economic Advisers, and former Harvard President Lawrence Summers as head of National Economic Council.


Geithner and Summers have been much-talked about. Summers, even with his mistatements on women, is considered a bright and effective economic policy-maker. Geithner is so well respected on Wall Street that the Dow jumped 200 points after Friday's news leak of his selection as Treasury Secretary.



The surprise is Christine Rohmer, who's well-known in the San Francisco Bay Area as a professor of Economics at Cal-Berkeley. I personally met Professor Rohmer during my second year as a graduate student at UC Berkeley. I found her to be a delightful mix of the personable and the intellectual. A great mix to advance policy points and ideas. On that, Dr. Rohmer was well-regarded and popular with students, and I think if memory serves, won an award for teaching. The point is she can take complex economic matters and explain them in such a way that people can learn them.

Bailout The American Auto Industry - The Blog Report

 

If the American Auto Industry is allowed to collapse, the US will lose 7.8 million jobs, an economic impact of $349 billion and, increase an already high unemployment rate by another six percent. We can't let that happen. In this video I explain why. 

The American Poverty Problem - Blog Action Day 2008

This is my contribution to Blog Action Day. The subject is poverty. My call is for us to spend what we need to solve our economic and poverty problem. I also ask that we stop asking what it costs when we don't do so when spending for war is in quesion.

McCain's Mortgage Hail Mary May Alienate His Base

At last night’s second presidential debate, John McCain made what will surely be regarded as his umpteenth Hail Mary throw. In response to a question from an audience member regarding ways the federal government can bail people out of “economic ruin,” McCain said this:

I would order the Secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes – at the diminished value of those homes and let people be able to make those – be able to make those payments and stay in their homes.

Aside from the fact that McCain’s sudden epiphany is already part of the bailout package, McCain’s attempt, less than four weeks before the election, to transform himself from the champion of laissez faire economics to the great patron saint of government intervention into private markets, may backfire.

Surely this comment was tailor made for battleground states like Michigan and Florida, which have been disproportionately hit by the foreclosure crisis. If voters in those states who are struggling to make their mortgage payments are fooled into believing this was actually McCain’s idea, they may decide to vote for McCain. However, the reverse may also be true of his core constituency. Republicans are generally not in favor of government welfare programs, and this can be easily construed as such a program. Interpreted through the lens of McCain’s base, McCain is effectively saying “sure, I know you were foolish enough to buy a home you couldn’t possibly afford, but rather than allow you to suffer the consequences of your own fiscal stupidity, I’m going to take Joe Six-Pack’s tax money and give it to you, to save you from your own ignorance.”

Some voters, both republican and democrat, dislike the idea that the government is going to reward the foolhardy financial decisions of people who bought a house they should have known they couldn’t afford, effectively shifting the burden from those people to the responsible Americans who budget properly. After all, don’t Republican pundits label this as socialism – taking money from responsible taxpayers and “redistributing it” to people who make unwise financial decisions? By attempting to claim this idea as his own, McCain risks being inexorably linked to it, making his base view him as the one trying to play the part of Robin Hood. Thus, even if McCain’s latest Hail Mary (probably more accurately described as an interception attempt) wins him some votes from distressed homeowners in battleground states, those votes could come at the expense not only of support from his Party, but also of other potential votes both in those states and in Republican strongholds. In short, with this Hail Mary, McCain risks alienating his base at a time he can ill afford to do so.

Rob J
Cross-posted to Opinion Streams.

Obama - McCain - Obama Will Win; The Economic Problem Is Why

This video was created just before the debate, but my prediction seems to have held and for the reasons I state here.


This American Economy is in trouble. It's in bad straights for three basic reasons:


1) According to the Bureau of Labor Statistics, the Civilian Labor Force Participation Rate topped out 10 years ago and then decreased and continued to do so through to present day. What that means is that more and more people basically stopped looking for jobs and working at jobs than ever before for the first time.


2) The total rate of job growth started to increase at a rapidly smaller rate in the late 1990s and that continues today. You can see the BLS data I collected right on the video. We added about 20 million jobs each decade from the 60s to the 90s, but again in 1999, the job growth party stopped cold. We added just barely 5 million jobs in ten years, that's a drop of 75 percent over what we've produced in the past.


3) During the period of the job losses and labor force participation problems consumer credit shot to rapid rates of annual increase starting just before the turn of the 21st Century. What that means is as we were losing our capacity to produce jobs, we were relying on the credit system to essentially make up for the lack of job growth we experienced in the past.


That's why we're in trouble now. Job losses due to the increased number of competitive market economies -- not the sub-prime mortgage issue -- is the real problem and its been years in the making. 


We have to fundamentally alter our economy and the current proposals and the Bailout Bill are only a start of getting at the problem -- but they don't impact this combination of forces that basically creates constant job loss and part of that is the overall International Division of Labor, where cheap workers overseas do jobs that were once located here.


There's an answer, and it's in something I call Zennie's Plan. Stay tuned.


On CNN IReport -- click here. 

U.S. Economy Headed For Depression? Record Consumer Debt Level Points The Way

I've said this for years: the United States Credit System is the shock-absorber to economic fluxuations and when healthy guarantees constant growth in the economy and guards against a long-term recession or worse, a Depression.

But that party's coming to an end, rapidly. Take a look at these indicators presented by MarketOracle.uk: US Recession in 2007 - Third Leg of the Bear Market Likely

In 2004 I told Gary Hart, who was considering a presidential run, about this. All he could talk about was changing the tax system. Geez!

Marriage Becoming An Act Of America's Wealthy and Educated - Blame The Economy

That news comes from the Washington Post , which states...

"Punctuating a fundamental change in American family life, married couples with children now occupy fewer than one in every four households -- a share that has been slashed in half since 1960 and is the lowest ever recorded by the census.

As marriage with children becomes an exception rather than the norm, social scientists say it is also becoming the self-selected province of the college-educated and the affluent. The working class and the poor, meanwhile, increasingly steer away from marriage, while living together and bearing children out of wedlock."

The article also points to the decline in economic prosperty since World War II. But the basic problem is the overall decline in manufacturing jobs, which have fallen from just over 20 million in 1979 to about 14 million in 2004. That's a loss of 6 million jobs. And many of those jobs were taken by people who didn't have masters degrees or college degrees for that matter, but they were good, well-paying gigs. It used to be that one person could make enough money to feed a family, but that's no longer true. It takes two. It's hard to have time to raise a family and work at the same time. Something's got to give.

Marriage, sadly.