Nouriel Roubini, writing in the New York Daily News , said on Sunday that “unemployed Americans should hunker down for more job losses” given the likelihood of a job less recovery. This was as gloomy a piece as I have seen from Roubini in the past few months. He has clearly become more downbeat about the long-term picture for the U.S. economy.

The article begins:

Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%…

…we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.

This sounds dire. As a result, Roubini goes on to call on the Obama Administration to take direct action on jobs. Extending unemployment benefits is not going to cut it.  Roubini says we need:

a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.

With statistics showing that the rate of long-term joblessness is at the highest since the Great Depression, Roubini joins an increasing number of economists who are calling on the Obama Administration to take the employment situation more seriously.

Paul Krugman has said that we are now in a liquidity trap. Therefore, we need to subsidize jobs and promote work sharing as Germany is doing.

I have made similar arguments about quantitative easing for the past year. Monetary policy is effectively useless – and is merely creating bubbles.

The Obama Administration is moving into deficit hawk mode at the wrong time as this will only worsen the jobs situation and lead to a double dip recession. Instead, I have called for a payroll tax cut or a job subsidy.

Randall Wray, a professor at the University of Missouri-Kansas City, has also offered a unique job solution.

All of this is urgent, as Roubini indicates:

Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.

The weakness in labor markets and the sharp fall in labor income ensure a weak recovery of private consumption and an anemic recovery of the economy, and increases the risk of a double dip recession…

The damage will be extensive and severe unless bold policy action is undertaken now.

The Obama Administration is taking an ‘indirect’ approach. They do so for three reasons. First, they are afraid of being boxed in politically by taking more direct measures. They also see a need to defend their previous policy decisions.  But, Mark Thoma thinks part of the resistance to more direct measures is ideological.  In a post earlier today, he says:

Growth policy is an attempt to make the economy grow faster, and stabilization policy attempts to keep the economy as close as possible to that trend, i.e. to avoid business cycles.

When Republicans had the political microphone, they emphasized growth policy (because it allowed them to argue for what they really wanted, lower taxes, growth policy was simply the vehicle that allowed them to get there), and this was supported by academic work from people such as Robert Lucas who claimed that, from a welfare perspective, stabilization was of second order concern, growth policy was where policymakers should focus their effort if they wanted to enhance welfare. Summers’ remarks reflect this type of thinking.

The Obama Administration’s approach of focusing on deficit reduction without enough direct job measures is sure to keep unemployment elevated. In looking at the politics of economics I said recently:

I see jobs as the first area for Obama to attack. The question is whether he does this directly via some modified private-sector controlled W.P.A.-type program or indirectly via something like a payroll tax cut. After jobs comes foreclosure. Personal income and taxes are the least important area going forward (especially as any tax cuts will either increase deficit spending or have to be made up by tax increases elsewhere).

The Obama Administration is doing the opposite. They seem to have received the ‘deficit reduction comes first takeaway’ from recent state elections in Virginia, New Jersey, and New York instead of the ‘jobs come first takeaway.’ That is bad news for Democrats and it is also bad news for the hopes of a sustained recovery.

Source

The worst is yet to come: Unemployed Americans should hunker down for more job losses – Nouriel Roubini, NY Daily News
Job Losses Mount, Enduring and Deep – Floyd Norris, NY Times (the long-term unemployment image is also from this story)

Related posts:

• Comprehensive unemployment rate is 17.5%
• 467,000 jobs lost in the U.S. in June 2009
• 651,000 jobs lost but unemployment rate at 8.1% in U.S.
• 10.2% unemployment, 190,000 jobs lost
• Unemployment rate to 9.7%, 216,000 jobs lost

Last night I wrote an article reminding you that downside risk remains in the global economy.  While I have been singing a more bullish tune in regards to the prospect of a technical recovery in 2009, I am concerned about a double dip as a likely outcome.

And for the record, I have said I see a recovery happening probably in Q4 2009 or Q1 2010 (see my post “The Fake Recovery”).

The real question is how robust a recovery are we going to have and this is directly related to why the jobless claims series has been sending a false signal.  Now, initial claims has been sending a recovery signal since January. Yet, continuing claims continued to rise more quickly until last week.  In the past, one had seen these two series as harbingers of imminent recovery.  But, I am talking Q4 here.  Why? Deleveraging.

In the end, consumers are going to be forced to reduce debt and save more in this more cautious financial environment.  Team Obama does seem intent on re-kindling animal spirits but the personal savings rate has gone up nonetheless.  This will be a drag on GDP growth going forward and means that the economy’s rebound will be more tenuous and slower to develop.  In my view, this means recovery will be delayed and once it gets going it will be weak.  The potential for a double dip is very high.

So, to be clear, first derivatives are starting to turn up and since recession is a first derivative event, we are probably going to see an end to this recession soon enough.  But, with structural problems still remaining, the U.S. economy will be weak for a long time to come.

The major reason I see a double dip as more likely than most is the policy response. The Munchau post I highlighted last night certainly should leave you with the impression that policy makers are not taking continued downside risk very seriously.  But, I tend to see this as very much a predictable outcome.  Back in November I wrote a post called “Beware of deficit hawks” in which I argued that a now-we-can-normalize-policy meme was sure to take hold as soon as the first signs of recovery appeared.

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.

While I agree that deficits will need to be eliminated, this line of thinking risks a repeat of 1937-38 in the U.S. and 1997 in Japan and must be refuted.

This line of argument, entirely predictable, does seem to be exactly what is taking place right now.  Witness Paul Krugman’s remarks in his most recent post Stay the Course.

The debate over economic policy has taken a predictable yet ominous turn: the crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts. For those who know their history, it’s déjà vu all over again — literally.

or this is the third time in history that a major economy has found itself in a liquidity trap, a situation in which interest-rate cuts, the conventional way to perk up the economy, have reached their limit. When this happens, unconventional measures are the only way to fight recession…

The first example of policy in a liquidity trap comes from the 1930s. The U.S. economy grew rapidly from 1933 to 1937, helped along by New Deal policies. America, however, remained well short of full employment.

Yet policy makers stopped worrying about depression and started worrying about inflation. The Federal Reserve tightened monetary policy, while F.D.R. tried to balance the federal budget. Sure enough, the economy slumped again, and full recovery had to wait for World War II.

The second example is Japan in the 1990s. After slumping early in the decade, Japan experienced a partial recovery, with the economy growing almost 3 percent in 1996. Policy makers responded by shifting their focus to the budget deficit, raising taxes and cutting spending. Japan proceeded to slide back into recession.

And here we go again.

You will notice that Krugman is making the exact point I made seven months ago – testimony to how inevitable this all is.  I suggest you read his post in full because his arguments need to be taken seriously if we are to avoid a repeat of 1937 and 1997.  Quite frankly, I am not particularly optimistic that we are going to see policy makers stay the course.  After all, the budget deficits in the U.K., the U.S., and Ireland (to name three of the four original bubble economies – Spain is the other) are exploding.  Willem Buiter has already warned that the U.K. and the U.S. cannot credibly maintain these deficits (see his U.K. post here and U.S. post here).

Pre-Lehman, I was very much in the deficit hawk camp (see my post “Confessions of an Austrian Economist”).  But, those days are over, Lehman’s bankruptcy was the shock that guaranteed a debt deflationary outcome in the U.S. and for the global financial system.  If we are to deleverage, credit is going to contract and that will mean recession.  The only way to avoid this – and a potentially destabilizing deflationary spiral – is for government to temporarily fill in the gap until we reach a sustainable point of recovery.  We are nowhere near that point now.  I warned in November that

…the Obama administration is going to be beset by parties using the immediate deficit reduction line of argument: Can we really balloon the deficit to $1 trillion and expect business as usual in 4 to 5 years given the precedents and given the low savings and high debt?

My answer is no. The U.S. economy cannot possibly work itself out of the greatest financial crisis in some 70-odd years in a mere 4 years and then expect to raise taxes on the middle class without a major recessionary relapse.

So, when you hear policy makers talking about reducing the deficit as soon as possible, what you should think is 1938 and continued depression. While all of this is still a number of years off, we need to nip this talk in the bud now before it becomes orthodoxy.

Buiter’s view of the U.S. and the U.K. as Banana Republics demonstrates that there really aren’t very many policy options available here.  But, that is the outcome of years of bubbles and unbalanced growth.  Think of the United States as Argentina or Latvia writ large. The U.S. does need to demonstrate a longer-term path to fiscal policy normalization to maintain investor confidence.  This is something that is not happening. (see David Leohardt’s piece from last week).

Going forward, in all likelihood, we are going to see a move toward fiscal prudence and policy normalization.  Stimulus will be seen as irresponsible.  This is already the view amongst many politicians in the U.K., the U.S., and Germany (and the Czechs have been making the same noises in Central Europe).  So, when the U.S. and global economy relapse into depression because we did not stay the course, you will know why.

Related posts:

• Weakest employment market since the Great Depression
• Beware of deficit hawks
• Revisiting employment indicators for signs of recovery
• Some tidbits about stimulus, recovery, and the Great Depression
• Is 2009 tracking a 1930 Great Depression scenario?

Below is a clip from the World Affairs Council meeting in Oregon with Paul Krugman as keynote speaker.  I believe this clip is from 29 Jan 2009. It runs a full 1 hour and 34 minutes. However, if you want to hit the main points, Krugman’s piece, which is the centerpiece, starts at about 13 minutes. He runs through his ideas first before they open it up to questions. Well worth a look.

Related posts:

• World Economic Forum: Experts voice their views on the economy
• Three views of the global economy
• Economic Bloggers in the spotlight
• Forstmann on Charlie Rose: easy money caused crisis
• Jim O’Neill on the Global Economy

President-elect Barack Obama has won plaudits for his management skills as he prepares for office in less than two weeks. However, his stimulus bill is coming under fire from both the right and the left. On the left, Paul Krugman is critical about the high proportion of so-called stimulus that Obama’s proposal gets from tax cuts. On the right, Republicans like the fact that Obama is not only living up to his tax cut promises for the middle class but is also delaying a return to pre-Bush tax levels for the wealthy. However, there is pause within Republican ranks about the size of this package and the debt load that will go along with it.

First, let’s look at what Krugman has to say.

This really does look like a plan that falls well short of what advocates of strong stimulus were hoping for — and it seems as if that was done in order to win Republican votes. Yet even if the plan gets the hoped-for 80 votes in the Senate, which seems doubtful, responsibility for the plan’s perceived failure, if it’s spun that way, will be placed on Democrats.

I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”

Let’s hope I’ve got this wrong.

Edward here. The long and short of Krugman’s fuller analysis is that this will NOT be enough stimulus to provide the economy the boost it needs. Moreover, Krugman asserts that the lesson learned if it comes up short is that government spending does not work. Therefore, Obama will be less likely to receive monies if he tries to add stimulus a second go ’round.

I tend to agree with Krugman’s political calculus here. Obama has one shot. From a political standpoint, he should be opting for massive stimulus and look for that to be cut back to a more palatable level in negotiation. However, he seems to be treading a cautious line, looking for bipartisan support that he may not receive.

I see this scenario as very negative for the U.S. economy. First, you have huge government spending that requires additional borrowing by the U.S. government. But, this spending does not give the economy the needed jump start to pull out of the deflationary spiral. In a worst-case scenario, one could see interest rates rising, inflation going negative, meaning real rates are even worse, while the economy stagnates and unemployment rises. This is the stag-deflation scenario of which Nouriel Roubini warns.

If that weren’t enough, Obama faces push back on the right despite the olive branch of disproportionate stimulus from tax cuts he has thrown into the package. Deficit hawks do not like the spending and are going to fight this from the word go as evidenced by Eric Cantor (R-VA) during a recent appearance on CNBC. Take a look at what Cantor has to say and judge for yourself.

In the end, I am left feeling that Obama needs to go bigger if he goes at all and therefore, this package is dead on arrival.

Update 07 Mar 2009: I am re-posting this in light of increasing evidence that Obama’s stimulus bill was in fact too small. Paul Krugman has a good post today called “One-sided debate,” which reminds us he made that argument but was essentially ignored.

Sources
Stimulus arithmetic (wonkish but important) – The Conscience of a Liberal, Paul Krugman , NY Times
Obama’s Hard Sell – CNBC

Related posts:

• Jamie Galbraith: Stimulus not enough
• Does the US need a second stimulus package?
• Obama takes middle road on stimulus and taxes that leads nowhere
• Galbraith and Buffett think a second stimulus is necessary
• Congress ready with second stimulus package

On a recent Bloomberg Radio with Tom Keene broadcast, Harvey Pitt and Arthur Levitt, two former SEC Chairman were guests. Levitt made the suggestion that hedge funds had once been given the choice of “regulation-light” or “regulation-heavy.” Now, in the wake of the Madoff scandal, “regulation-heavy” is all but assured. But, isn’t this just?

Listen to what Nobel-winning economist Paul Krugman makes of this:

How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?

The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.

Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.

But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.

Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.

O.K., maybe my example wasn’t hypothetical after all.

So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.

What Mr. Krugman just described is what Kevin Phillips calls the “financialization” of America. The financial services industry is a behemoth unlike the military-industrial complex, which has taken on an ever larger share of U.S. jobs, U.S. GDP, and until recently what we thought was U.S. profits. However, witness the extreme levels of debt used to achieve these phantom profits in the chart below.

The fact is that two decades of deregulation has created a financial services monster, which is both an important lobbying group in Washington and of disproportionate size to the real economy. This allowed fund of fund hedge funds to pyramid fees on top of Madoff’s own fees without doing the necessary due diligence regarding the primary funds. No investor would ever have suspected a thing as they received their statements from the fund of funds and not from Madoff directly.

Moreover, the Madoff scandal reveals the laxity in SEC regulation as multiple warnings had been given about Madoff as far back as 1999. Pitt assured the listeners that Madoff could have happened even in a more regulated environment because this was not systemic regulatory failure but human regulatory failure.

Really? I would label this whole episode systemic regulatory capture. And it all leads back to the lack of regulation. This is a systemic problem that needs a systemic fix. Deregulation is the problem here, not the solution.

Source
If it’s broke, fix it – but how? – Willem Buiter’s Mavercon
The Madoff Economy – Paul Krugman, NY Times

Related posts:

• The FSA signals a need for regulation-heavy
• S.E.C. complicit in Madoff fraud, whistleblower says
• Video: Geithner calls for single agency to oversee systemic risks
• Guest post: Regulation in Defense of Capitalism
• A brief note on the fake reform agenda

Now that policy makers worldwide have finally stepped in to stop the bleeding, we have had a relief rally of monumental proportions. Most global indices were deep into oversold territory, meaning that there was lots of pent-up demand for a turn to the upside. A big rally to the upside was baked into the cards. However, these are purely technical factors and they have no relationship to the underlying fundamentals of the economy.

The coordinated actions this past week mark the end of the ‘acute’ phase of the credit crisis. This is now over. But, we will be left with the ‘chronic’ problems of slowing growth that include global rebalancing, increasing savings, purging excess debt and leverage and running out the clock on this recession. In this chronic phase, the question is how deep and how long the recession will be. And, I believe these questions will start to take center stage before long.

I was reading a blurb in the NY Times that reminded me of the so-called real economy that I anticipate will move center stage shortly. The article was about the home retailer Linens-n-Things, a company I see as a poster child for the deadweight loss we wish to avoid in this downturn.

The retailer, which initially struggled amid a housing slowdown and a decline in consumer discretionary spending, was finally taken down by a credit crisis that prevented possible buyers from getting the credit to fund a purchase.

“If capital markets weren’t so tight, I think this chain might possibly have survived,” Mr. Schaye told Reuters. “There’s just no financing to do these deals at all.”

The company had filed for bankruptcy protection in May and has already closed more than 100 stores. It had been under pressure from its creditors to rush closing its remaining 371 stores, according to court documents.

As of Dec. 31, the company was one of the largest purchasers of home furnishings in the United States, employed some 17,500 people and had a vendor base of about 1,000 suppliers, according to court documents. At that time, the company was operating 589 stores in 47 states and seven Canadian provinces.

But the sharp decline in the housing market and a slump in consumer discretionary spending undermined the company’s ability to pay its suppliers.

And though some investors were interested in buying the company, they were hindered by the lack of ability to borrow money, Mr. Schaye told Reuters.

“I actually thought there were going to be a couple of people who would (submit an offer) at the 11th hour, but they just didn’t get there,” he said.
-NY Times

You will notice that this is a company that could have and should have continued as going concern, even in a garden variety recession. However, excessive leverage and a credit crisis caused it to be liquidated, and now 17,500 people will be unemployed.

This scenario will be repeated in numerous places in North America, Europe, Japan, and ANZ — and will serve as notice that it is the real economy where we work and live that sustains the economy.

Undoubtedly, the United States is in recession. The likes of Paul Krugman and Paul Volcker have said so. But, I like to think of recession not as a state, but a change in state (and certainly not a state of mind as U.S. politician and McCain advisor Phil Gramm has offered).

Recession is like decelerating in your car from 100 to 40. But, it could easily be like going from 70 to 20. It is the change in economic growth that makes recession, not the absolute level of growth. When an economy slows from 7% growth to 2% growth, that is recession as much as slowing from 4% to -1%. In fact, when we talk about fast-growing emerging economies like China, we are talking about slowing down from 10% breakneck growth to a 5% amazing-for-us-but-not-for-China kind of growth. Five percent growth is a recession in China.

So, that begs the question, what clues should we be looking for to know how we’re doing going forward then? It’s the four horsemen of the economy:

1. How much we spend: retail sales
2. How much we earn: real earnings growth
3. How much we make: industrial production
4. How much we work: employment

Right now, the data for the U.S. and much of Central and Western Europe as well as for New Zealand, Singapore and Japan point to recession. However, that could always change. My analysis says that this global recession will last until at least late 2009 and this will be the deepest recession in post World War II history. Nevertheless, its depth and duration are still somewhat dependent on policy responses globally. Purging debt, increasing savings and bringing the shadow banking system to heal would all be positive developments in making this recession as quick as possible.

Now that the acute phase of the credit crisis is coming to an end, expect to see a lot of data here in the coming days and weeks on the four horsemen of the economy. The data should help us understand where things are headed.

Related posts:

• Fix the real economy first: lessons from James Montier
• Marc Faber says rate cuts won’t work
• Roubini: How to avoid the horrors of ‘stag-deflation’
• Three views of the global economy
• JPMorgan Chase: Large exposure to real economy downturn

This morning I woke up and was listening to Bloomberg Radio in bed when I heard Robert Shiller and John Ryding talking about about Paul Krugman. I quickly realized he was the Nobel Laureate in Economics for this year. Krugman, the Princeton Professor, is much better known for his leftist politics today than for his academic work. But, he had a long history of academic study behind him before he became the sometimes-controversial NY Times columnist we know today.

Congratulations to him.

Princeton University professor and New York Times columnist Paul Krugman won the Nobel Prize in economics for his work on trade theory.

Krugman, 55, received the prize “for his analysis of trade patterns and location of economic activity,” said the Royal Swedish Academy of Sciences, which selects the winners. His work explained how economies of scale influence trade and urbanization.

“It’s a total surprise,” Krugman said in a telephone interview.

Krugman gained his reputation in economics by contributing to strategic trade theory, contending that countries could steal a march on other nations by subsidizing strategic industries. He has found broader fame with his newspaper columns that regularly criticize President George W. Bush’s policies.

In an interview with Bloomberg Television on Oct. 10, Krugman said the current financial turmoil had similarities with the Great Depression. “The parallels are stronger than I thought they would be,” he said. “We developed a financial system that is out of control. The only things people want to buy are T-bills and water.”

The Nobel laureate said today he saw little danger of a move toward protectionism in the U.S., no matter which party wins in next month’s elections.

Protectionism

“There may be a standstill, or slowdown at least, on new trade agreements, but I find reversal on trade agreements implausible,” he said in remarks via telephone to a group of reporters in Stockholm. “Full-scale protectionism I don’t see.”

He has argued the benefits of subsidies are generally marginal. He has also been praised for his work on the development of industrial clusters and his equations on the impact of economic shocks on the current account, exchange rates and capital flows.

In 1991, he was awarded the John Bates Clark Medal by the American Economic Association, which is awarded to the best economist under the age of 40.

Krugman was born in Long Island and studied economics at Yale University. He obtained a Ph.D. from the Massachusetts Institute of Technology in 1977 before joining Princeton University. From 1982 to 1983 he served on the White House Council of Economic Advisers, during the presidency of Ronald Reagan. He has published a series of books and his ability to turn complicated economic theory into understandable prose led to him write an opinion column for the New York Times for the past eight years.

Previous Winners

Alfred Nobel, the Swede who invented dynamite, in his will in 1896 established awards for achievements in physics, chemistry, medicine, peace and literature. The economics prize was set up by Sweden’s central bank in 1968. Former winners include Milton Friedman, Amartya Sen and Friedrich August von Hayek.

The award’s official name is “The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.” The prize consists of 10 million Swedish kronor ($1.41 million), a gold medal and a diploma.
-Bloomberg News

Related posts:

• Links: 2009-02-03
• Paul Davidson: Reforming the world’s international money
• Paul Krugman on the global economy
• Krugman: Geithner Plan “won’t work”
• News round-up: 14 Oct 2008

The complete and utter failure of owners’ equivalent rent – Tim Iacono

Inflation Versus Deflation: The Debate Continues – naked capitalism

Dark Star – Bank Implode-O-Meter

July Jump in CPI Suggests Third Quarter Growth Could be Negative – Dean Baker

The impact of the 2008 rebate – Vox

Central Bank Spam – Big Picture

Prospect online this week – First Drafts

Auction-rate deals top $48bn – FT Alphaville

City idiots need not apply – FT Alphaville

Japan’s GDP drops an annualized 2.4% in the second quarter – Japan Economy & News Blog

The Great Illusion – Paul Krugman

When Societies Watch Too Much Television – Charles Hugh Smith

Who’s Buying Financials? – Market Movers

Down 97%: Tax Trouble Coming For States & Cities – Big Picture

Forget the inflation report, we still need higher rates. – UK Bubble

O Que Aconteceu? – Russ Winter

How to Fix Yahoo – Market Beat

World-Wide Recoupling Is Bad News All Around – Real Time Economics

Related posts:

• News round-up: 25 Oct 2008 – blog edition
• News Round-Up: 17 Jul 2008 – the blogs entry
• News round-up: 16 Oct 2008 – Blog edition
• News round-up: 30 Aug 2008 – blog version
• News round-up: 31 Oct 2008 – blog edition

Lehman may raise billions in fresh capital: WSJ

Report sparks selling in the U.S. dollar and weighs on Asian stock

Related posts:

• News Round-Up: 02 June 2008
• News round-up: 15 Aug 2008 – blog edition
• Spain: Week’s News Round-Up
• Soros calls credit crisis the worst since ‘29
• Soros says commodity bubble echoes ‘87 climate