Depression Economics - What It Means and Why We're Doing It
Sunday November 16, 2008
Paul Krugman (Credit: Jeff Zelevansky /Getty Images)
Last week, Nobel Prize winner and New York Times economics columnist Paul Krugman advocated Depression Economics. This, even though he admitted we aren't in a Depression and probably won't even come close.
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Obama Urges Congess to Stimulate Economy
Saturday November 15, 2008
Barack Obama (Credit: Ethan Miller/Getty Images)
President-elect
Barack Obama has urged the lame-duck Congress to push an economic stimulus package when they meet next week. Specifically, he has asked for many of the same measures as are in his
Economic Stimulus Proposal.
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Paulson and Bernanke to Revive Credit Card Lending
Wednesday November 12, 2008
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke (Credit: Chip Somodevilla /Getty Images
Treasury Secretary
Henry Paulson has shifted the focus of the
TARP program from purchasing toxic
mortgage-backed securities, which will take too long, to faster ways of infusing capital into the financial system. The
Capital Repurchase Program put $115 billion into the eight largest banks, which hold nearly half of the nation's financial assets. This has loosened credit markets, and lowered the
LIBOR rate.
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American Credit Card Debt Grows a Mere 1.2%
Tuesday November 11, 2008
Credit: Scott Barbour /Getty Images
In September, consumers somewhat resumed their reliance on credit card debt, which increased a mere 1.2%. Although up from August's rise of only .4%, it still represesnts a significant decline from the 7% increase in 2007. Consumers owe $971 billion, which is $3,184 of credit card debt per person, or $8,299 per household. (Source: Federal Reserve,
G.19 Release, November 7, 2008)
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AIG Bailout Revised to $150 Billion
Sunday November 9, 2008
Federal Reserve Chairman Ben Bernanke (Credit: Chip Somodevilla /Getty Images
The
Federal Reserve's $85 billion bail-out of insurance giant
AIG has been revised. The Treasury Department will purchase $40 billion in
preferred shares as part of its
Capital Repurchase Plan. The Federal Reserve will purchase $52.5 billion in
mortgage-backed securities. The funds will allow AIG to retire many
credit default swaps, freeing it up to lend more.
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Economy Has 1.5 Million Fewer Jobs than Last Year
Friday November 7, 2008
(Credit: John Moore /Getty Images
In October, the economy lost 240,000 jobs, according to the
Employment Report released by the Bureau of Labor Statistics (
BLS). Generally, about 150,000 new jobs are needed each month to keep the economy stable.
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Obama and the Economy - The Next 90 Days
Thursday November 6, 2008
Credit: John Moore/Getty Images
President-elect Barack Obama has outlined an aggressive
economic stimulus package to address the mortgage crisis and lessen impact of a
recession. As President-elect, Obama can work with the lame-duck Congress when it meets in mid-November to pass many of his measures before he takes office. Obama will also be attending an economic summit of the world's leaders on November 15. Although he has no official standing, his popularity around the world and his detailed economic plan could give him the leadership ability to move many of this agenda items forward.
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How Does an Obama Win Affect the Economy?
Tuesday November 4, 2008
Barack Obama (Credit: Ethan Miller/Getty Images)
The election of
Barack Obama as President has removed uncertainty, which will have a positive effect on the stock market, since investors are looking for a new direction and leadership. An improvement in the stock market gives the economy a boost, by helping to recapitalize banks.
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Decline in Q3 GDP Growth Confirms Recession
Thursday October 30, 2008
Bill Pugliano /Getty Images
The BEA advance report for the U.S. GDP growth rate for Q3 2008 was a negative .3%, down substantially from the 2.8% growth in the second quarter. The decrease was due to a 3.1% decline in consumer spending, the first decline since 1991 and the biggest drop since 1980. This was driven by a 6.4% decline in purchases of clothing and food, the biggest since 1950. (Source: GDP News Release, Bloomberg, GDP Shrinks at Fastest Pace Since 2001, October 30, 2009)
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Fed Drops Rate to Lowest Level in Five Years
Wednesday October 29, 2008
Federal Reserve Chairman Ben Bernanke (Credit:Chip Somodevilla /Getty Images)
The
FOMC dramatically lowered the
Fed Funds rate a half point to 1%, the lowest rate since the 2003 recession. This was just three weeks after the Federal Reserve joined other Central Banks around the world in a
coordinated rate cut of 1/2 point. At the same time, the FOMC lowered the
discount rate to 1.25%.
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