“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.” (via 60 Minutes)
Well, it looks like the recession is back on. Despite comments over the weekend from Larry Summers who said that “everybody agrees that the recession is over,” there’s still that niggling problem of 10 percent unemployment. And outsized bonuses on Wall Street, which only create a further disparity between the rich and everyone else. Populist rage over the bonuses and Obama’s claim that he gives his record so far a “solid b-plus” are a sign that people are mad, and not ready to call an end to the tough times—because they’re still experiencing them…
* 23% of homeowners’ properties are underwater
* 13% of parents of adults say one or more of their grown children have moved back in
* 34.5% of black males between the ages of 16 and 24 are unemployed: these are Great Depression proportions, folks
* 17.5% of people are unemployed, according to U-6 data, which includes discouraged and part-time workers who are looking
* The Small Business Administration has run out of money to back loans issued to small businesses.
* 33,000 people were laid off from from a single employer, the postal service in Russia
Things aren’t great, and maybe even scary. In an interview with CNBC.com, one economist suggested that, “Unless you create another bubble in which the economy can create jobs, then you’re not going to have growth. That’s the sad truth.” As such, Michael Pento, chief economist at Delta Global Advisors, added that he expects more of an L-shaped recovery—prolonged pain with no sudden rebound…
President Obama has just released plans for regulatory oversight of the creaky financial system. The bulk of it focuses on bringing more of the system under fewer agencies, and on requiring less-regulated or unregulated entities like hedge funds to adhere to new rules and regulations. All are important proposals aimed at creating a more sound financial framework that keeps everyone’s money safe and capital flowing through the economy. But in the short-term, it will mainly be high-level, focused on whupping Wall Street’s excesses into shape. Here’s a little FAQ on a few of the plan’s key points. (We recommend this package at the Wall Street Journal for more in-depth look at the proposal.)
* Abolish the Office of Thrift Supervision. What’s this about? One argument for its abolishment was the oversight for the savings and loan industry, which had troubles since the 1980s. So it transforms, more like, into the National Bank Supervisor. It follows, given all the consolidation in the financial sector in the last two decades.
* Create a Consumer Financial Protection Agency. What the heck is this? This is the stuff that matters. This agency would work with state regulators to better control swindling by mortgage lenders and credit card companies.
* Give the Federal Reserve broader oversight. What does that mean, exactly? Will they be printing personalized money? Almost, but no. The Fed will now oversee parent companies, bank holding companies, as well as economic and monetary policies. But we can safely assume that we’ll all trade in the same currency, for now, and that the faces will remain the great presidents, not BSB (Ben S. Bernanke).
But it’s all just a plan, for now, and some of it over-broad and ambitious. Next up, it will be worked up into legislative language and put before Congress. By then, who knows where the financial system will be. Ah, government.
Here’s Barack Obama talking about the plan on Bloomberg:
In the first two months of Barack Obama’s presidency, the economy shrank 6.1 percent, according to a government report out today.
The drop was greater than the 4.7 percent estimated by Briefing.com but less than the 6.3 percent fall in the fourth quarter of last year.
In that same period, unemployment has also hit record levels, with the national rate now at 9 percent according to the Bureau of Labor Statistics and above 10 percent in 109 cities, according to the government report.
With Obama fast approaching the final day of his first 100 days in office (tomorrow), the world is watching closely.
Obama is the first president since FDR to walk into such a demanding situation. Comparisons are natural to make: both men combine a sense of realism with the energy of hope. Both have shown comfort with empowering teams to work towards solutions and hearing different points of view.
There are key differences, too. When FDR took office, Americans were exhausted and demoralized, so he had to act as Chief Cheerleader to get the country motivated again. In Obama’s case, the crisis occurred swiftly, just before he took office. In a personal conversation on Sunday, Anne Roosevelt, granddaughter of FDR, noted that Obama’s charge is a little different…
What you need to know today to survive and thrive in the recession.
The economy appears to be leveling off, with retail sales slowing their decline, the stock market up, and credit markets loosening. But the recession’s not over yet… (AP)
Slowly but surely, the $787 billion American Recovery and Reinvestment Act—better known as the economic stimulus package—is beginning to percolate nationwide, six weeks after President Obama signed the legislation.(Washington Post)
It’s a renter’s market around the country, which means landlords are getting more creative (and desperate) to hold down vacancies and prevent turnover. (BusinessWeek)
President Barack Obama yesterday touted the economic benefits of refinancing, but he should keep the 30-year mortgage on his Chicago spread, a broker says. (Chicago Tribune)