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Beware of deficit hawks

Beware of deficit hawks

Recently, deficit hawks have been pushing a nefarious line of argument that I need to debunk right here and right now. The line goes as follows: we need to spend government monies now to get the economy back on its feet. In a couple of years, we can signal all clear and then raise taxes on the middle class in order to reduce the deficit again, much as we did in 1993.

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Paulson abandons TARP asset purchase and risky assets plummets

If you are wondering why the stock market has been declining, you only need to flip your TV to C-SPAN and see Hank Paulson explaining why he has abandoned his original plan to save America from depression. Basically, Paulson has done a complete 180 and now refuses to invest a dime of the TARP (Troubled Asset Relief Program) in buying the troubled assets for which the program was named. The result: those assets hav cratered, pulling down many shares with them.

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Chart of the Day: Citigroup

Chart of the Day: Citigroup

Citibank has to be the worst run of the major banks. The result of ridiculous mergers of Citicorp, Travelers, Smith Barney, Salomon Brothers, this unwieldly mess was a disaster that should never have happened. Now, Citigroup has a market cap lower than U.S. Bancorp, a company with only one-eighth the asset base as Citi. Paul Volcker recently said banks of this size pose a threat to the county and should not exist.

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U.S. pre-market trading suggests a major selloff

U.S. pre-market trading suggests a major selloff

Just after the unemployment claims number was released at 830AM ET in the U.S. markets took a sudden jolt down.  U.S. stock futures cratered, European stock markets fell more and Dollar-Yen and U.S. bond markets rose.  In fact, bonds rose so much that the two-year treasury yield fell below 1%. Market indices are collapsing and Bloomberg Radio commentators are wondering […]

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Unemployment claims rise to a massive 542,000

Unemployment claims rise to a massive 542,000

Unemployment claims rose to a monster reading of 542,000 last week. This is easily the highest figure in this business cycle and represents the largest number in 16 years. As with last week, there was absolutely nothing to like about this weekly report – continuing claims breached 4 million and year-over-year comparisons are getting worse. After a few weeks in a holding pattern wondering where we would break, the the employment market has broken toward the downside in a fairly large way these past wo weeks. One should expect 7.0% unemployment at a minimum by January.

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Using WordPress Again — or at least trying to

A few weeks ago we attempted to switch the blog here over to WordPress from the Blogger platform. It didn’t go so well. In the interim, some of the technical issues seem to be sorted out. If you are reading this post, then we are all ready and set to go. By and large, everything is about the same in […]

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Louise Yamada sees stocks below 2002 lows

Yesterday morning, I heard Louise Yamada on Tom Keene’s show on Bloomberg Radio giving her assessment that stocks may break below 2002 lows. I mentioned this in yesterday’s news round-up. But, now I have the audio for you as well. Yamada is a much followed technical analyst so her opinion has weight. Since at least this summer she has been […]

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China is now America’s largest creditor

America is the largest debtor nation in history. And given the economic weakness in the global economy right now, the debt load is likely to get worse. Recently, China surpassed Japan to become America’s largest creditor. The Chinese, who rank a mere 100th in per capita income, save so much money that they are able to buy massive amounts of […]

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Dow breaks below 8000

Dow breaks below 8000

Related articles Dow Plunges 400 to Below 8,000 as S&P 500 Skids to 5-Year Low

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News round-up: 19 Nov 2008

Yesterday’s big news came at the hearings in Washington D.C. where U.S. Treasury Secretary Paulson did his best Donald Rumsfeld imitation, stonewalling Congress despite increasing anger at how the Troubled Asset Relief Program (TARP) is being administered. See my post “Barney Frank rips Hank Paulson’s bait and switch” on this. Caroline Baum from Bloomberg also has a good article on […]

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US consumer prices down 1%, core prices also down

US consumer prices down 1%, core prices also down

Consumer prices came down more than expected with the CPI (Consumer Price Index) falling 1.0% month-to-month. This s a large decline, but is entirely related to fall in the price of oil. Underlying core CPI excluding food and energy, down 0.1 month-to-month, remains steady on a year-to-year basis. Although the 1.0% fall is being touted by media outlets as the […]

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Is Obama really “Change we can believe in?”

The tag line from the Obama campaign was “Change We Can Believe In.” However, an increasing number of people are becoming skeptical as to whether Obama will actually change anything.

I, for one, have always felt his cautious approach meant incremental change as opposed to wholesale change. And that is a good thing. Nevertheless, as the glow of election politics wears off and the job of governing looms, many progressive Obama supporters are seeing signs that he is not the change agent they want him to be.

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