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Economic News
- Thread starter Spaf
- Start date
CBO Sees $250 Billion Deficit
The deficit for the current budget year will jump to about $250 billion, the Congressional Budget Office estimated Wednesday, citing the weakening economy. And that figure does not reflect at least $100 billion in red ink from an economic stimulus measure in the works. The figure greatly exceeds the $163 billion in red ink registered last year. Adding likely but still unapproved outlays for the wars in Iraq and Afghanistan brings its "baseline" deficit estimate of $219 billion to about $250 billion.
http://biz.yahoo.com/ap/080123/budget_deficit.html
The deficit for the current budget year will jump to about $250 billion, the Congressional Budget Office estimated Wednesday, citing the weakening economy. And that figure does not reflect at least $100 billion in red ink from an economic stimulus measure in the works. The figure greatly exceeds the $163 billion in red ink registered last year. Adding likely but still unapproved outlays for the wars in Iraq and Afghanistan brings its "baseline" deficit estimate of $219 billion to about $250 billion.
http://biz.yahoo.com/ap/080123/budget_deficit.html
Oldcoin
Member
Bullitt
Well-known member
The traders demand more. Apparently the world is not enough. At this point, the Fed is nothing more but a puppet.
http://ftalphaville.ft.com/blog/2008/01/23/10388/the-short-view-when-enough-is-not-enough/
http://ftalphaville.ft.com/blog/2008/01/23/10388/the-short-view-when-enough-is-not-enough/
Show-me
Well-known member
Self stimulation.........................interesting. :blink: :laugh:
Sovereign Bancorp posts $1.6 billion loss
Sovereign Bancorp Inc, the second-largest U.S. savings and loan, posted a $1.6 billion quarterly loss and canceled its dividend following a larger-than-expected write-down for consumer credit losses and a 2006 bank acquisition. Sovereign wrote down $1.58 billion of goodwill, or $3.08 per share, which was $180 million more than it estimated on January 14. It attributed the increase to interest-rate changes that affected its consumer and New York-area operations. Part of the write-down reflected weakness in consumer lending, which has been hurt by deteriorating credit and a decision to halt auto loans in southeast and southwest U.S. states. The rest covered New York operations, which consist largely of the former Independence Community Bank Corp.
Critics had complained when the company's former chief executive, Jay Sidhu, paid $3.6 billion for Independence, and simultaneously sold a 20 percent stake in Sovereign for $2.4 billion to a Spanish bank, Banco Santander SA.
Santander's stake later rose to about 25 percent.
http://news.yahoo.com/s/nm/20080123...esults_dc_2;_ylt=As.LBf2gpjD0EZYObO1I6lcE1vAI
Sovereign Bancorp Inc, the second-largest U.S. savings and loan, posted a $1.6 billion quarterly loss and canceled its dividend following a larger-than-expected write-down for consumer credit losses and a 2006 bank acquisition. Sovereign wrote down $1.58 billion of goodwill, or $3.08 per share, which was $180 million more than it estimated on January 14. It attributed the increase to interest-rate changes that affected its consumer and New York-area operations. Part of the write-down reflected weakness in consumer lending, which has been hurt by deteriorating credit and a decision to halt auto loans in southeast and southwest U.S. states. The rest covered New York operations, which consist largely of the former Independence Community Bank Corp.
Critics had complained when the company's former chief executive, Jay Sidhu, paid $3.6 billion for Independence, and simultaneously sold a 20 percent stake in Sovereign for $2.4 billion to a Spanish bank, Banco Santander SA.
Santander's stake later rose to about 25 percent.
http://news.yahoo.com/s/nm/20080123...esults_dc_2;_ylt=As.LBf2gpjD0EZYObO1I6lcE1vAI
EBay warns of weaker 2008 results
EBay Inc warned that 2008 results would fall below Wall Street expectations, sending its stock down more than 5 percent even as it confirmed long-serving Chief Executive Meg Whitman would step aside. The forecast accompanied solid fourth-quarter results, and analysts said it was unclear if the company feared an economic slowdown or whether management was giving itself room to make changes to revitalize the business. Growth in the main auction business has slowed during the past three years.
http://news.yahoo.com/s/nm/20080124/bs_nm/ebay_dc_4;_ylt=AmRb3mtweef.bgsMTMJ3jxEE1vAI
EBay Inc warned that 2008 results would fall below Wall Street expectations, sending its stock down more than 5 percent even as it confirmed long-serving Chief Executive Meg Whitman would step aside. The forecast accompanied solid fourth-quarter results, and analysts said it was unclear if the company feared an economic slowdown or whether management was giving itself room to make changes to revitalize the business. Growth in the main auction business has slowed during the past three years.
http://news.yahoo.com/s/nm/20080124/bs_nm/ebay_dc_4;_ylt=AmRb3mtweef.bgsMTMJ3jxEE1vAI
Economists offer gloomy start to Davos summit (SWISS ALPS)
The global economy is unlikely to remain insulated from what could prove to be a deep U.S. recession, marking a gloomy kickoff to the 2008 meeting of the World Economic Forum. The rest of the world can't decouple from recession in the United States. Addressing a packed panel discussion on the global economic outlook, Nouriel Roubini, chairman of consulting firm Roubini Global Economics, said a potentially "severe" U.S. recession is on tap. He predicted a contraction that's likely to last at least three quarters for the world's largest economy, as subprime credit woes bleed over into credit cards, auto loans and corporate lending. What's more, the U.S. consumer -- long the driver of U.S. economic growth -- is spent out.
http://www.marketwatch.com/news/sto...x?guid={BC70B2DA-EBB0-499C-97F6-C4F0D8226AA7}
The global economy is unlikely to remain insulated from what could prove to be a deep U.S. recession, marking a gloomy kickoff to the 2008 meeting of the World Economic Forum. The rest of the world can't decouple from recession in the United States. Addressing a packed panel discussion on the global economic outlook, Nouriel Roubini, chairman of consulting firm Roubini Global Economics, said a potentially "severe" U.S. recession is on tap. He predicted a contraction that's likely to last at least three quarters for the world's largest economy, as subprime credit woes bleed over into credit cards, auto loans and corporate lending. What's more, the U.S. consumer -- long the driver of U.S. economic growth -- is spent out.
http://www.marketwatch.com/news/sto...x?guid={BC70B2DA-EBB0-499C-97F6-C4F0D8226AA7}
Drought could force nuke-plant shutdowns
Nuclear reactors across the Southeast could be forced to throttle back or temporarily shut down later this year because drought is drying up the rivers and lakes that supply power plants with the awesome amounts of cooling water they need to operate. Utility officials say such shutdowns probably wouldn't result in blackouts. But they could lead to shockingly higher electric bills for millions of Southerners, because the region's utilities may be forced to buy expensive replacement power from other energy companies.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20080123&id=8082204
Nuclear reactors across the Southeast could be forced to throttle back or temporarily shut down later this year because drought is drying up the rivers and lakes that supply power plants with the awesome amounts of cooling water they need to operate. Utility officials say such shutdowns probably wouldn't result in blackouts. But they could lead to shockingly higher electric bills for millions of Southerners, because the region's utilities may be forced to buy expensive replacement power from other energy companies.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20080123&id=8082204
Worries That the Good Times Were Mostly a Mirage
So, how bad could this get? Until a few months ago, it was accepted wisdom that the American economy functioned far more smoothly than in the past. Economic expansions lasted longer, and recessions were both shorter and milder. Inflation had been tamed. The spreading of financial risk, across institutions and around the world, had reduced the odds of a crisis. The recent financial turmoil has many causes, but they are tied to a basic fear that some of the economic successes of the last generation may yet turn out to be a mirage. That helps explain why problems in the American subprime mortgage market could have spread so quickly through the world’s financial system. The great moderation now seems to have depended — in part — on a huge speculative bubble, first in stocks and then real estate, that hid the economy’s rough edges. Everyone from first-time home buyers to Wall Street chief executives made bets they did not fully understand, and then spent money as if those bets couldn’t go bad. For the past 16 years, American consumers have increased their overall spending every single quarter, which is almost twice as long as any previous streak. Now, some worry, comes the payback. But a recession is now more likely than not. It may well have started already. The Philadelphia Fed reported Tuesday that the economy shrank in 23 states last month, including Ohio, Missouri and Arizona, and was stagnant in seven others. California and Florida, with their plunging home values, may soon join the recession list. The bigger question is how severe the recession will be if it does come to pass.
http://www.nytimes.com/2008/01/23/b...em&ex=1201237200&en=9f7ec2c4c66a7084&ei=5087
So, how bad could this get? Until a few months ago, it was accepted wisdom that the American economy functioned far more smoothly than in the past. Economic expansions lasted longer, and recessions were both shorter and milder. Inflation had been tamed. The spreading of financial risk, across institutions and around the world, had reduced the odds of a crisis. The recent financial turmoil has many causes, but they are tied to a basic fear that some of the economic successes of the last generation may yet turn out to be a mirage. That helps explain why problems in the American subprime mortgage market could have spread so quickly through the world’s financial system. The great moderation now seems to have depended — in part — on a huge speculative bubble, first in stocks and then real estate, that hid the economy’s rough edges. Everyone from first-time home buyers to Wall Street chief executives made bets they did not fully understand, and then spent money as if those bets couldn’t go bad. For the past 16 years, American consumers have increased their overall spending every single quarter, which is almost twice as long as any previous streak. Now, some worry, comes the payback. But a recession is now more likely than not. It may well have started already. The Philadelphia Fed reported Tuesday that the economy shrank in 23 states last month, including Ohio, Missouri and Arizona, and was stagnant in seven others. California and Florida, with their plunging home values, may soon join the recession list. The bigger question is how severe the recession will be if it does come to pass.
http://www.nytimes.com/2008/01/23/b...em&ex=1201237200&en=9f7ec2c4c66a7084&ei=5087
Chavez: Pull reserves from US
Venezuelan President Hugo Chavez urged his Latin American allies on Saturday to begin withdrawing billions of dollars in international reserves from U.S. banks, warning of a looming U.S. economic crisis. Chavez made the suggestion as he hosted a summit aimed at boosting Latin American integration and rolling back U.S. influence. "We should start to bring our reserves here," Chavez said. "Why does that money have to be in the north? ... You can't put all your eggs in one basket." To help pool resources within the region, Chavez and other leaders launched a new development bank at the summit of the Bolivarian Alternative for the Nations of Our America, or ALBA.
http://news.yahoo.com/s/ap/20080126...alba_summit;_ylt=Auewp0M4OzeJlLdDu8yiZsub.HQA
Venezuelan President Hugo Chavez urged his Latin American allies on Saturday to begin withdrawing billions of dollars in international reserves from U.S. banks, warning of a looming U.S. economic crisis. Chavez made the suggestion as he hosted a summit aimed at boosting Latin American integration and rolling back U.S. influence. "We should start to bring our reserves here," Chavez said. "Why does that money have to be in the north? ... You can't put all your eggs in one basket." To help pool resources within the region, Chavez and other leaders launched a new development bank at the summit of the Bolivarian Alternative for the Nations of Our America, or ALBA.
http://news.yahoo.com/s/ap/20080126...alba_summit;_ylt=Auewp0M4OzeJlLdDu8yiZsub.HQA
Rebates could be in your hands by May
Most taxpayers could expect a rebate of up to $600 starting in mid-May under the economic aid plan set to go through Congress within weeks. Couples could get twice as much, with even more for most families with children. All that, however, depends on smooth sailing at the Internal Revenue Service, and the agency already is up to its eyeballs in filings and refunds.
http://news.yahoo.com/s/ap/20080126/ap_on_go_co/stimulus_rebate;_ylt=ArISP5zLjTq4aRWjPehAzG2b.HQA
Most taxpayers could expect a rebate of up to $600 starting in mid-May under the economic aid plan set to go through Congress within weeks. Couples could get twice as much, with even more for most families with children. All that, however, depends on smooth sailing at the Internal Revenue Service, and the agency already is up to its eyeballs in filings and refunds.
http://news.yahoo.com/s/ap/20080126/ap_on_go_co/stimulus_rebate;_ylt=ArISP5zLjTq4aRWjPehAzG2b.HQA
Stimulus plan relies on consumers' open wallets
The success of the federal $150 billion emergency economic stimulus plan will hinge on whether American consumers do what they do best — spend, spend, spend. President Bush and leaders in Congress hope people will spend those rebates — a flat-screen television, maybe, or a trip to Disneyland — to help revive an economy sagging from bad mortgage lending and a lack of confidence in the stock market.
http://www.usatoday.com/money/economy/2008-01-25-stimulus-package-consumers_N.htm
That a boy George! Buy 'em a flat screen... or perhaps a trip to D-Land! That's a sure fire way to head off this recession.
The success of the federal $150 billion emergency economic stimulus plan will hinge on whether American consumers do what they do best — spend, spend, spend. President Bush and leaders in Congress hope people will spend those rebates — a flat-screen television, maybe, or a trip to Disneyland — to help revive an economy sagging from bad mortgage lending and a lack of confidence in the stock market.
http://www.usatoday.com/money/economy/2008-01-25-stimulus-package-consumers_N.htm
That a boy George! Buy 'em a flat screen... or perhaps a trip to D-Land! That's a sure fire way to head off this recession.
Oldcoin
Member
From The Sunday Times
January 27, 2008
Former Fed chief says no slump yet
Irwin Stelzer
THE former Federal Reserve chairman Alan Greenspan believes there is little “hard evidence” of an American recession, but a better than even chance of a severe downturn.
In an exclusive interview with The Sunday Times, Greenspan rejects suggestions that his 18-year reign as Fed chief caused the current markets chaos, and argues central bankers now have little power to influence long-term economic trends.
Greenspan said there had not been the sudden sharp dip in economic indicators normally associated with recession. He highlighted an unexpected drop in initial claims for unemployment benefit in the US last week.
“The actual hard evidence [for a recession] at this stage is still not there . . . I don’t recall an instance when a recession has not carried with it a significant rise in unemployment,” he said.
http://business.timesonline.co.uk/tol/business/markets/united_states/article3256250.ece
January 27, 2008
Former Fed chief says no slump yet
Irwin Stelzer
THE former Federal Reserve chairman Alan Greenspan believes there is little “hard evidence” of an American recession, but a better than even chance of a severe downturn.
In an exclusive interview with The Sunday Times, Greenspan rejects suggestions that his 18-year reign as Fed chief caused the current markets chaos, and argues central bankers now have little power to influence long-term economic trends.
Greenspan said there had not been the sudden sharp dip in economic indicators normally associated with recession. He highlighted an unexpected drop in initial claims for unemployment benefit in the US last week.
“The actual hard evidence [for a recession] at this stage is still not there . . . I don’t recall an instance when a recession has not carried with it a significant rise in unemployment,” he said.
http://business.timesonline.co.uk/tol/business/markets/united_states/article3256250.ece
Rod
Well-known member
This should instill some confidence.
Silverbird
Well-known member
IMF cuts global growth forecast on U.S. weakness
"...The IMF said today in its World Economic Outlook report that it expects the U.S. economy will grow a modest 1.5 percent this year, compared with an estimated 2.2 percent in 2007 and 2.9 percent in 2006. The U.S. slowdown is seen dragging global economic growth down to 4.1 percent in 2008 compared with an estimated 4.9 percent for 2007..."
http://www.my-esm.com/showArticle.jhtml?articleID=205921185
"...The IMF said today in its World Economic Outlook report that it expects the U.S. economy will grow a modest 1.5 percent this year, compared with an estimated 2.2 percent in 2007 and 2.9 percent in 2006. The U.S. slowdown is seen dragging global economic growth down to 4.1 percent in 2008 compared with an estimated 4.9 percent for 2007..."
http://www.my-esm.com/showArticle.jhtml?articleID=205921185
Silverbird
Well-known member
The Fed's stagflation fear
The economy grew at weaker pace than expected in the fourth quarter but inflation was higher too.
NEW YORK (CNNMoney.com) -- Uh-oh. The Federal Reserve's decision at 2:15 p.m. just got a little tougher.
Fourth-quarter growth in gross domestic product was lower than expected, rising only 0.6%, compared to forecasts of 1.2% growth and way below the 4.9% growth in the third quarter.
That certainly lends credence to the arguments that the economy is nearing - if not already in - a recession and that the Fed should slash interest rates again this afternoon.
Another number in the GDP report should give the central bank pause, however.
The core personal consumption expenditure (PCE) deflator, an admittedly wonky sounding piece of econojargon that is actually a very important indicator of inflation, rose 2.7% on an annualized basis. That's up from 2% in the third quarter and was higher than the 2.5% that economists were expecting...
http://money.cnn.com/2008/01/30/markets/morningbuzz/index.htm?postversion=2008013010
The economy grew at weaker pace than expected in the fourth quarter but inflation was higher too.
NEW YORK (CNNMoney.com) -- Uh-oh. The Federal Reserve's decision at 2:15 p.m. just got a little tougher.
Fourth-quarter growth in gross domestic product was lower than expected, rising only 0.6%, compared to forecasts of 1.2% growth and way below the 4.9% growth in the third quarter.
That certainly lends credence to the arguments that the economy is nearing - if not already in - a recession and that the Fed should slash interest rates again this afternoon.
Another number in the GDP report should give the central bank pause, however.
The core personal consumption expenditure (PCE) deflator, an admittedly wonky sounding piece of econojargon that is actually a very important indicator of inflation, rose 2.7% on an annualized basis. That's up from 2% in the third quarter and was higher than the 2.5% that economists were expecting...
http://money.cnn.com/2008/01/30/markets/morningbuzz/index.htm?postversion=2008013010
Bullitt
Well-known member
1/30/08: The FOMC will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks.
http://federalreserve.gov/newsevents/press/monetary/20080130a.htm
http://federalreserve.gov/newsevents/press/monetary/20080130a.htm
GMAC posts $724 mln loss, cut by Moody's
Finance company GMAC posted a $724 million fourth-quarter loss and was downgraded by Moody's Investors Service on Tuesday, after more customers fell behind on payments for their houses, cars and trucks. The loss compared with a year-earlier $1.02 billion profit, but improved from a $1.6 billion loss in the third quarter. Results included a $921 million loss at Residential Capital LLC, the mortgage unit's fifth straight quarterly loss. GMAC said it may still sell all or part of ResCap, after reducing riskier lending and announcing 5,000 job cuts.
http://www.reuters.com/article/hotStocksNews/idUSWNAS932120080205
Finance company GMAC posted a $724 million fourth-quarter loss and was downgraded by Moody's Investors Service on Tuesday, after more customers fell behind on payments for their houses, cars and trucks. The loss compared with a year-earlier $1.02 billion profit, but improved from a $1.6 billion loss in the third quarter. Results included a $921 million loss at Residential Capital LLC, the mortgage unit's fifth straight quarterly loss. GMAC said it may still sell all or part of ResCap, after reducing riskier lending and announcing 5,000 job cuts.
http://www.reuters.com/article/hotStocksNews/idUSWNAS932120080205
Fed official sees chance of recession, more cuts
The struggling economy may need more interest rate cuts to avoid a recession, Richmond Federal Reserve Bank President Jeffrey Lacker said on Tuesday. "The prominence of downside risks means that further easing ultimately may be warranted."
http://www.reuters.com/article/ousiv/idUSN0518065020080205
The struggling economy may need more interest rate cuts to avoid a recession, Richmond Federal Reserve Bank President Jeffrey Lacker said on Tuesday. "The prominence of downside risks means that further easing ultimately may be warranted."
http://www.reuters.com/article/ousiv/idUSN0518065020080205
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