Full Version: Financial Turmoil
Common Ground Common Sense > National & International News > Op-Ed Articles from the Mainstream Media
Pages: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28
Moody's Implied Ratings Show MBIA, Ambac Turn to Junk
Banks' credit crisis solutions have echoes of 1929 Depression
Some Home Sellers Told: Don't Even Bother Trying
First Comes the Swap. Then It’s the Knives.
The Trouble in Housing Trickles Up
US staring at double-dip recession as calls for higher interest rates grow
An ill wind for gas prices
U.S. Michigan Consumer Sentiment Index Falls to 59.8
Incomes and spending both slow in April
Wal-Mart puts the squeeze on food costs
Beware credit crisis sharks that still lurk
Wachovia Ousts Thompson on Writedowns, Share Plunge; Smith Is Interim CEO Wachovia Corp. ousted Kennedy Thompson as chief executive officer of the fourth-largest U.S. bank after the board blamed him for losses that cost the lender more than half its market value in the past year.
U.S. Stock-Index Futures Drop; Boeing, United Technologies, JPMorgan Fall U.S. stock-index futures fell on speculation a report will show manufacturing contracted for a fourth month, while a profit drop at U.K. lender Bradford & Bingley Plc reignited concern credit losses are spreading.
GM, Motorola, New York Times Burn Through Cash Flow With Dividend Payouts Dividends may be in jeopardy at almost three dozen of the biggest U.S. companies where annual payouts exceed cash flow from selling everything from cars to mobile telephones to newspapers.
Auto Sales in U.S. Probably Extended Drop in May as Buyers Shunned Pickups U.S. auto sales probably extended the longest tumble in seven years in May as the economy weakened and record gasoline prices drove consumers from pickups and sport- utility vehicles.
Paulson Says Financial-Market Turmoil Will Last `Months,' Supports Dollar U.S. Treasury Secretary Henry Paulson said it will take ``months'' before financial-market turmoil ends and reiterated his commitment to a ``strong'' dollar.
U.S. Stock-Index Futures Drop; Boeing, United Technologies, JPMorgan Fall U.S. stock-index futures fell on speculation a report will show manufacturing contracted for a fourth month, while a profit drop at U.K. lender Bradford & Bingley Plc reignited concern credit losses are spreading.
GM, Motorola, New York Times Burn Through Cash Flow With Dividend Payouts Dividends may be in jeopardy at almost three dozen of the biggest U.S. companies where annual payouts exceed cash flow from selling everything from cars to mobile telephones to newspapers.
Auto Sales in U.S. Probably Extended Drop in May as Buyers Shunned Pickups U.S. auto sales probably extended the longest tumble in seven years in May as the economy weakened and record gasoline prices drove consumers from pickups and sport- utility vehicles.
Paulson Says Financial-Market Turmoil Will Last `Months,' Supports Dollar U.S. Treasury Secretary Henry Paulson said it will take ``months'' before financial-market turmoil ends and reiterated his commitment to a ``strong'' dollar.
Wall Street Says -2 + -2 = 4 as Liabilities Diminish With Newest Bond Math Leave it to Wall Street to profit from its own distress.
GM, Motorola, New York Times Burn Through Cash Flow With Dividend Payouts Dividends may be in jeopardy at almost three dozen of the biggest U.S. companies where annual payouts exceed cash flow from selling everything from cars to mobile telephones to newspapers.
Foreclosure Bus Tour, Sign of U.S. Housing Bust, Rolls Into New York Area The white bus with the magnetic sign saying ``Long Island Foreclosure Tours'' pulled up to a small home in East Meadow, Long Island, and spilled out its cargo: a dozen homebuyers looking to save $100,000 or more.
GM, Motorola, New York Times Burn Through Cash Flow With Dividend Payouts Dividends may be in jeopardy at almost three dozen of the biggest U.S. companies where annual payouts exceed cash flow from selling everything from cars to mobile telephones to newspapers.
Foreclosure Bus Tour, Sign of U.S. Housing Bust, Rolls Into New York Area The white bus with the magnetic sign saying ``Long Island Foreclosure Tours'' pulled up to a small home in East Meadow, Long Island, and spilled out its cargo: a dozen homebuyers looking to save $100,000 or more.
COMMENT
Extending discount
window a threat to markets
Proposals that the US Federal Reserve give securities firms permanent access to Fed loans tied to greater oversight overlook the failure of oversight in the recent banking crisis. The Fed should instead take more seriously its regulatory role and focus on real reforms. - Peter Morici
Extending discount
window a threat to markets
Proposals that the US Federal Reserve give securities firms permanent access to Fed loans tied to greater oversight overlook the failure of oversight in the recent banking crisis. The Fed should instead take more seriously its regulatory role and focus on real reforms. - Peter Morici
A worrisome understatement Monetary policy is so loose worldwide that real interest rates are less than zero. Does anyone actually, really believe that interest rates will always stay below the rate of inflation? They are going to rise - and some people are going to hurt!
NRO FINANCIAL
The Economy & More
MICHAEL BARONE: “Dude, where’s my recession?” “Economic Reality Check” 05/31 12:00 AM
DEROY MURDOCK: Federal mortgage guarantees are only the latest assault on taxpayers “Bailout Bonanza” 06/02 4:00 AM
The Economy & More
MICHAEL BARONE: “Dude, where’s my recession?” “Economic Reality Check” 05/31 12:00 AM
DEROY MURDOCK: Federal mortgage guarantees are only the latest assault on taxpayers “Bailout Bonanza” 06/02 4:00 AM
CLIVE CROOK
The Fed's Year of Living Dangerously ft.com — When a central bank has an uncomplicated recession to deal with, it can cut interest rates. When it faces a clear-cut case of inflation, it can raise them. The worst nightmare of any central banker — especially one with a tradition of political independence to defend — is stagflation, when raising interest rates to curb inflation will provoke a recession or deepen one that has already begun. It is a problem that the U.S. has not had to confront for 30 years. In 2008, an election year, the conditions are falling into place.
The Fed's Year of Living Dangerously ft.com — When a central bank has an uncomplicated recession to deal with, it can cut interest rates. When it faces a clear-cut case of inflation, it can raise them. The worst nightmare of any central banker — especially one with a tradition of political independence to defend — is stagflation, when raising interest rates to curb inflation will provoke a recession or deepen one that has already begun. It is a problem that the U.S. has not had to confront for 30 years. In 2008, an election year, the conditions are falling into place.
Job Numbers Could Dash Recovery Hopes marketwatch.com — Economists say any notion that the economy has turned a corner toward recovery is likely to be dashed in the coming week by weak economic numbers on job growth, household wealth, auto sales, construction spending, and the factory sector.
Bank Downgrades Drive Dow Lower
New York Times
New York Times
US Stocks Drop, Led by Financials; Lehman, Wachovia Retreat
Bloomberg -
S&P slashes bank, broker ratings on loan loss fears MarketWatch
Bank Downgrades Drive Dow Lower New York Times
Bloomberg -
S&P slashes bank, broker ratings on loan loss fears MarketWatch
Bank Downgrades Drive Dow Lower New York Times
U.K. Mortgage Approvals Drop to Lowest in Nine Years, Factory Growth Slows U.K. mortgage approvals dropped in April to the lowest in at least nine years and manufacturing growth ground to a halt, bringing the economy closer to a recession.
Manufacturing in U.S. Shrinks Less Than Forecast, Sign Slump Not Worsening Manufacturing in the U.S. shrank less than forecast in May, further evidence that international demand for American-made goods is keeping factories busy amid the domestic economic slump.
China Central Bank Dismisses Threat of `Hard Landing' From U.S. Slowdown China's central bank dismissed predictions that exports will collapse because of the U.S. economic slump, signaling it may allow further gains in the yuan.
Paulson Says End to Financial-Market Turmoil Will Probably Take `Months' U.S. Treasury Secretary Henry Paulson said it will take ``months'' before financial-market turmoil ends and reiterated his commitment to a ``strong'' dollar.
Manufacturing in U.S. Shrinks Less Than Forecast, Sign Slump Not Worsening Manufacturing in the U.S. shrank less than forecast in May, further evidence that international demand for American-made goods is keeping factories busy amid the domestic economic slump.
China Central Bank Dismisses Threat of `Hard Landing' From U.S. Slowdown China's central bank dismissed predictions that exports will collapse because of the U.S. economic slump, signaling it may allow further gains in the yuan.
Paulson Says End to Financial-Market Turmoil Will Probably Take `Months' U.S. Treasury Secretary Henry Paulson said it will take ``months'' before financial-market turmoil ends and reiterated his commitment to a ``strong'' dollar.
Auto Sales in U.S. Probably Extended Decline in May as Buyers Shun Pickups U.S. auto sales probably extended the longest tumble in seven years in May as the economy weakened and record gasoline prices drove consumers from pickups and sport- utility vehicles.
Lehman, Merrill, Morgan Stanley Debt Ratings Are Cut by S&P; Shares Drop Morgan Stanley, Merrill Lynch & Co. and Lehman Brothers Holdings Inc. plummeted in New York trading after Standard & Poor's lowered credit ratings for the investment banks, saying they may have to book more writedowns on devalued assets.
U.S. Stocks Drop After S&P Cuts Ratings on Merrill, Lehman, Morgan Stanley U.S. stocks fell for the first time in five days after Wachovia Corp. ousted its chief executive officer and Standard & Poor's lowered its debt ratings on three of Wall Street's biggest securities firms.
Wachovia's Ouster of Thompson May Foretell More Losses, Takeover Attempts Wachovia Corp. fell to the lowest since July 1995 after the bank ousted Chief Executive Officer Kennedy Thompson, signaling the company may report a second- quarter loss.
U.S. Stocks Drop After S&P Cuts Ratings on Merrill, Lehman, Morgan Stanley U.S. stocks fell for the first time in five days after Wachovia Corp. ousted its chief executive officer and Standard & Poor's lowered its debt ratings on three of Wall Street's biggest securities firms.
Wachovia's Ouster of Thompson May Foretell More Losses, Takeover Attempts Wachovia Corp. fell to the lowest since July 1995 after the bank ousted Chief Executive Officer Kennedy Thompson, signaling the company may report a second- quarter loss.
Kunstler: "The Remorseless Algebra of a Deflationary Death Spiral"
By Mike Whitney
Look around. The evidence of a withering economy is everywhere. In "good times" consumers shun the canned meat aisle altogether, but no more. Today, Spam sales are soaring; grocery stores can't keep it on the shelves. Everyone is looking for cheaper ways to feed their families. Continue
By Mike Whitney
Look around. The evidence of a withering economy is everywhere. In "good times" consumers shun the canned meat aisle altogether, but no more. Today, Spam sales are soaring; grocery stores can't keep it on the shelves. Everyone is looking for cheaper ways to feed their families. Continue
THE BEAR'S LAIR
Exploding innovations
The creation of a clearing house for the US$62.3 trillion credit derivatives market is overdue, although in a truly deep credit disruption it would go under, along with most market participants. Further solutions are required in policing and allowing financial innovation. - Martin Hutchinson
Exploding innovations
The creation of a clearing house for the US$62.3 trillion credit derivatives market is overdue, although in a truly deep credit disruption it would go under, along with most market participants. Further solutions are required in policing and allowing financial innovation. - Martin Hutchinson
The Fed's unholy legacy
The US Federal Reserve Board was created to safeguard price and financial stability by controlling money supply and credit creation. Betraying its mandate, it is responsible for price instability, a collapse in the US dollar, unemployment and food riots. - Hossein Askari and Noureddine Krichene
The US Federal Reserve Board was created to safeguard price and financial stability by controlling money supply and credit creation. Betraying its mandate, it is responsible for price instability, a collapse in the US dollar, unemployment and food riots. - Hossein Askari and Noureddine Krichene
A paralyzing risein money supply
The US Federal Reserve is pumping out money that will mean general price levels will probably almost double in the next five to six years. Double! That is sheer madness.
Soaring Gas Prices Will Have Lasting Effects - I. Stelzer, Wkly. Standard
Review of 'Deception & Abuse at the Fed' - John Tamny, RealClearMarkets
Review of 'Deception & Abuse at the Fed' - John Tamny, RealClearMarkets
Housing Crash Only Going to Get Worse - Larry Lindsey, Weekly Standard
Bernanke Says Rates `Well Positioned' to Allow for Growth, Stable Prices Federal Reserve Chairman Ben S. Bernanke signaled he's done cutting interest rates for now and raised his biggest concerns yet about the inflationary effects of a dollar down 16 percent in the past year against the euro.
GM Will Close Four Truck Factories in Shift to Small Cars, May Drop Hummer General Motors Corp., struggling to return to profit amid record gasoline prices, said it will close four truck plants, make more small cars and consider selling its Hummer brand of large sport-utility vehicles.
Dollar Rebounds After Bernanke Says Fed Keeping Eye on Currency's Weakness The dollar rose to a two-week high against the euro and increased versus the yen after Federal Reserve Chairman Ben S. Bernanke said the central bank is ``attentive'' to the implications of the currency's decline.
Soros Says Oil `Bubble,' Market Fundamentals May Touch Off U.S. Recession Billionaire investor George Soros said an oil price ``bubble'' is working with fundamentals in the market that may lead to a recession in the world's largest economy.
GM Will Close Four Truck Factories in Shift to Small Cars, May Drop Hummer General Motors Corp., struggling to return to profit amid record gasoline prices, said it will close four truck plants, make more small cars and consider selling its Hummer brand of large sport-utility vehicles.
Dollar Rebounds After Bernanke Says Fed Keeping Eye on Currency's Weakness The dollar rose to a two-week high against the euro and increased versus the yen after Federal Reserve Chairman Ben S. Bernanke said the central bank is ``attentive'' to the implications of the currency's decline.
Soros Says Oil `Bubble,' Market Fundamentals May Touch Off U.S. Recession Billionaire investor George Soros said an oil price ``bubble'' is working with fundamentals in the market that may lead to a recession in the world's largest economy.
GM closing 4 truck and SUV plants in North America The Associated Press
THE MOGAMBO GURU 
Howling at
the moon
Mr and Mrs Average Joe would have made a paper gain over the five years from 2002 if they had followed the establishment advice to buy and hold stocks for the long term - but they would have made a real, inflation-adjusted loss of 25% in the period! What a way to get rich! What a way to fund your retirement! A 25% loss in buying power every five years? Ouch!!!!
Howling atthe moon
Mr and Mrs Average Joe would have made a paper gain over the five years from 2002 if they had followed the establishment advice to buy and hold stocks for the long term - but they would have made a real, inflation-adjusted loss of 25% in the period! What a way to get rich! What a way to fund your retirement! A 25% loss in buying power every five years? Ouch!!!!
Stock Market Tanks as US Unemployment Rate Soars to 5.5%
The Market Oracle - London,UK
This is what the major investment banks are saying to their clients in auction rate securities . At least 24 proposed class action suits have been filed ...
See all stories on this topic
The Market Oracle - London,UK
This is what the major investment banks are saying to their clients in auction rate securities . At least 24 proposed class action suits have been filed ...
See all stories on this topic
Time overdue for a world currency
Overly expansionary US monetary policy is bringing the world upheaval-threatening inflation, discouraging savings and driving sober investors to speculative plays. Reform of the international financial system is required, including staying the free hand of national authorities to wage monetary warfare and establishing a full-fledged world central bank. - Hossein Askari and Noureddine Krichene (Jun 5, '08)
Overly expansionary US monetary policy is bringing the world upheaval-threatening inflation, discouraging savings and driving sober investors to speculative plays. Reform of the international financial system is required, including staying the free hand of national authorities to wage monetary warfare and establishing a full-fledged world central bank. - Hossein Askari and Noureddine Krichene (Jun 5, '08)
It's not a dollar crisis, it's a gold crisis
Governments and central banks tell you they are combating inflation, in the hope they can escape the pull of the backwardation of monetary metals. A forlorn hope because that pull is the global manifestation of countless individuals' seeking shelter against deliberate monetary debasement in the ownership of monetary metals. - Antal E Fekete (Jun 6, '08)
Governments and central banks tell you they are combating inflation, in the hope they can escape the pull of the backwardation of monetary metals. A forlorn hope because that pull is the global manifestation of countless individuals' seeking shelter against deliberate monetary debasement in the ownership of monetary metals. - Antal E Fekete (Jun 6, '08)
CHAN AKYA
Cheap talk, pricey banks
US Federal Reserve Board chairman Ben Bernanke's desperate attempts on Tuesday to talk up the US dollar highlight the Fed's increased concerns of further stress in the financial system after investment banks report their quarterly results later this month. A rising US dollar though is murderous for Asian inflation, while investments in US banks are bad for regional wealth. (Jun 4, '08)
Cheap talk, pricey banks
US Federal Reserve Board chairman Ben Bernanke's desperate attempts on Tuesday to talk up the US dollar highlight the Fed's increased concerns of further stress in the financial system after investment banks report their quarterly results later this month. A rising US dollar though is murderous for Asian inflation, while investments in US banks are bad for regional wealth. (Jun 4, '08)
MARKET RAP
Bourses in holding pattern
In a week of generally unremarkable movements, even the standout moments defied explanation beyond technical considerations. In India, where the press attributed share declines to energy prices on slight and unsustainable evidence, and elsewhere, the psychology was one of a holding pattern in the face of diminished exuberance.
- R M Cutler runs his eye over the ups and downs in the week's markets. (Jun 6, '08)
Bourses in holding pattern
In a week of generally unremarkable movements, even the standout moments defied explanation beyond technical considerations. In India, where the press attributed share declines to energy prices on slight and unsustainable evidence, and elsewhere, the psychology was one of a holding pattern in the face of diminished exuberance.
- R M Cutler runs his eye over the ups and downs in the week's markets. (Jun 6, '08)
Economic lessons from Pope Columbia University's decision to sign up US Federal Reserve Board member Frederic Mishkin makes you wonder what on earth he is going to teach his students, unless it is the art of creating bubbles or the incestuous arts of oversight. Or perhaps he could branch out into poetics, and wax wisely on the doubtful pleasures of "lucre's sordid charms".
CREDIT BUBBLE BULLETIN
The cost of credit seizure
The US first-quarter economy was remarkably resilient amid extreme trauma in the credit market and a seized-up securitization market. Release of the US Federal Reserve Board's "flow of funds" credit report for the period helps to reveal the sources of credit that took up the slack. Some of the huge costs associated with propping up a bubble economy are now readily apparent.
Doug Noland looks at the previous week's events each Monday.
The cost of credit seizure
The US first-quarter economy was remarkably resilient amid extreme trauma in the credit market and a seized-up securitization market. Release of the US Federal Reserve Board's "flow of funds" credit report for the period helps to reveal the sources of credit that took up the slack. Some of the huge costs associated with propping up a bubble economy are now readily apparent.
Doug Noland looks at the previous week's events each Monday.
Bad times get worse for Ben
Events late last week in the US, from the surge in the oil price to jobs data, are cause for great trepidation. Export demand is now about the only thing keeping the American economy away from the abyss. The credibility of Federal Reserve Board chairman Ben Bernanke is at similar risk as he faces nothing but bad choices. - Julian Delasantellis
Events late last week in the US, from the surge in the oil price to jobs data, are cause for great trepidation. Export demand is now about the only thing keeping the American economy away from the abyss. The credibility of Federal Reserve Board chairman Ben Bernanke is at similar risk as he faces nothing but bad choices. - Julian Delasantellis
US Economy is a National Security Crisis: 'US Needs to Raise $6 Trillion and It is Simple,' China, Russia, India and Saudi Arabia basically own the United States. Our economy is the real target of terrorists and this is our potential downfall," says Wm Glynn. His solution is ... a 10% solution. "If we are to prevent another Great Depression we need to pass one simple law: All pension plans, endowments, 401(k)s etc will be required to allocate 10% to buy back U.S. debt. (I'm not convinced)
Lehman to raise $6bn after first quarterly loss
The investment bank was forced to raise $6bn from investors as it plunged to a second quarter loss of $2.8bn as hedges failed and debt assets fell in value
ReutersGeorge W. Bush speaks to reporters as he leaves for a tour of Europe. The president acknowledged concerns about the economy and said the US was committed to a strong dollar
Lehman losses hit US financial stocks
Surprise rise in pending home sales in April Pending home sales lift US housing hopes
Surprise rise in worst-hit regions Crisis shifts to regional lenders
US home equity loans losses triple CIT secures $3bn financing from Goldman
Has billions of dollars in maturing debt NY Fed chief urges global bank framework
Calls for larger role for US central bank US petrol tops $4 a gallon for first time
Price point seen as key to driving habits
The investment bank was forced to raise $6bn from investors as it plunged to a second quarter loss of $2.8bn as hedges failed and debt assets fell in value
ReutersGeorge W. Bush speaks to reporters as he leaves for a tour of Europe. The president acknowledged concerns about the economy and said the US was committed to a strong dollarLehman losses hit US financial stocks
Surprise rise in pending home sales in April Pending home sales lift US housing hopes
Surprise rise in worst-hit regions Crisis shifts to regional lenders
US home equity loans losses triple CIT secures $3bn financing from Goldman
Has billions of dollars in maturing debt NY Fed chief urges global bank framework
Calls for larger role for US central bank US petrol tops $4 a gallon for first time
Price point seen as key to driving habits
The Financial Tsunami has not reached its Climax - by F. William Engdahl - 2008-06-05 A chain reaction of failures in the CDS market could trigger the next global financial crisis
The Global Crisis: Food, Water and Fuel. Three Fundamental Necessities of Life in Jeopardy - by Michel Chossudovsky - 2008-06-05 The provision of food, water and fuel is a precondition of civilized society: they are necessary factors for the survival of the human species
Potential Future Hyperinflation- by Stephen Lendman - 2008-06-09
Fighting the Financial Sector Funk with a Drink of Waterby Doug FabianOne of the great parts of having money to invest is that each of us can pick and choose where to put it. I have noticed that exchange-traded funds (ETFs) have been rolled out that cater to investors who want to deploy their resources to help fund companies that offer socially responsible products and services. If you dislike supporting gambling, tobacco use, alcohol consumption and other good things, oh, I mean other vices; you can do so and still enjoy the benefits of ETFs...
The Return of Inflationby Nicholas A. VardyAfter a deceptively benign couple of decades, inflation is back in the headlines. JP Morgan estimates that the U.S. consumer price index (CPI) will hit 5.1% in August, its highest rate since 1991. Consumer prices in the 15 countries that use the euro rose 3.6% from a year earlier -- well above the European Central Bank's target of 2%.
The Financial Sector Roadblockby Doug FabianSo, what caused the sharp retreat in equities last week? As I've pointed out so many times during the past year, the culprit that keeps plaguing the overall market is the pernicious slide in financials. To see just how uncomfortable the slide in financials has been, take a peek at the chart below of the Financials Select Sector SPDR (XLF)...
The Return of Inflationby Nicholas A. VardyAfter a deceptively benign couple of decades, inflation is back in the headlines. JP Morgan estimates that the U.S. consumer price index (CPI) will hit 5.1% in August, its highest rate since 1991. Consumer prices in the 15 countries that use the euro rose 3.6% from a year earlier -- well above the European Central Bank's target of 2%.
The Financial Sector Roadblockby Doug FabianSo, what caused the sharp retreat in equities last week? As I've pointed out so many times during the past year, the culprit that keeps plaguing the overall market is the pernicious slide in financials. To see just how uncomfortable the slide in financials has been, take a peek at the chart below of the Financials Select Sector SPDR (XLF)...
ECONOMY -- POLLING SHOWS AMERICANS' BLEAK ECONOMIC OUTLOOK: Two new polls indicate that Americans are increasingly feeling the pinch of the nation's economic downturn. According to a CNN/Opinion Research Corporation survey released today, 78 percent rated economic conditions as poor. "That's up from 75 percent in March. Only 22 percent rate the economic conditions in the country as good," CNN notes. A USA Today poll today found that 54 percent "of those surveyed say their standard of living is no better today than five years ago," while a recent Pew Research Center report concluded that "[f]ewer Americans now than at any time in the last half-century believe they're moving forward in life." At the same time, Mark Zandi, chief economist for Moody's Economy.com, said the government's new jobs report that saw the nation's unemployment rate jump 0.5 percent "has recession written all over it." The unemployment rate was the "biggest monthly rise since 1986." In fact, "[f]or five consecutive months, there has been a steady loss of jobs, mostly in construction and manufacturing. Now, the job losses are spreading to restaurants, retailers, airlines, and even professions such as accounting. Teens are having an especially tough time finding work this summer." The Christian Science Monitor has thus concluded that the U.S. "is now in a jobs recession."
Job Losses, Oil Surge Shock Economy nytimes.com — The unemployment rate surged to 5.5 percent in May from 5 percent — the sharpest monthly spike in 22 years — as the economy lost 49,000 jobs, registering a fifth consecutive month of decline, the Labor Department reported. The weak jobs report, coupled with a staggering rise in the price of oil — up a record $10.75 a barrel to more than $138 — unleashed a feverish sell-off on Wall Street, sending the Dow Jones industrial average down nearly 400 points. The dollar plunged against several major currencies. Investors' recent hopes that the United States might yet skirt a recession sank swiftly in the face of gloomy indications that the economy is gripped by a slowdown and pressured by record fuel prices.
THE BEAR'S LAIR
A less-free world dawns
The future is grim for free-market believers, with the statist policies of the main US presidential candidates accurately reflecting voters' current views. That means more state handouts, an increased government share in national output and more protectionism. The world will endure an unhappy downward economic spiral until the emergence of a new Ronald Reagan or Margaret Thatcher. - Martin Hutchinson
COMMENT
Bernanke Fed getting it right
Criticism in the United States and Europe of US Federal Reserve Board chairman Ben Bernanke's handling of the subprime crisis varies, but unites in pointing to the inflationary risks raised by his sharp cuts to interest rates. Such attacks are unjustified. After a slow response last year, the Fed's policy stance seems right. - Thomas I Palley
A less-free world dawns
The future is grim for free-market believers, with the statist policies of the main US presidential candidates accurately reflecting voters' current views. That means more state handouts, an increased government share in national output and more protectionism. The world will endure an unhappy downward economic spiral until the emergence of a new Ronald Reagan or Margaret Thatcher. - Martin Hutchinson
COMMENT
Bernanke Fed getting it right
Criticism in the United States and Europe of US Federal Reserve Board chairman Ben Bernanke's handling of the subprime crisis varies, but unites in pointing to the inflationary risks raised by his sharp cuts to interest rates. Such attacks are unjustified. After a slow response last year, the Fed's policy stance seems right. - Thomas I Palley
THE MOGAMBO GURU
The declining quality of menus
McDonald's risible comment that it would not tamper with its "highly successful" menu, implying it would sacrifice profit by not raising prices to offset higher costs, could make a sensitive reader throw up. Yet those costs are soaring amid some of the best growing weather the US has had in millennia. So keep what you have in your stomach - you'll need it!!
CREDIT BUBBLE BULLETIN
The cost of credit seizure
The US first-quarter economy was remarkably resilient amid extreme trauma in the credit market and a seized-up securitization market. Release of the US Federal Reserve Board's "flow of funds" credit report for the period helps to reveal the sources of credit that took up the slack. Some of the huge costs associated with propping up a bubble economy are now readily apparent.
Doug Noland looks at the previous week's events each Monday. (Jun 9, '08)
THE WEEK AHEAD
The declining quality of menus McDonald's risible comment that it would not tamper with its "highly successful" menu, implying it would sacrifice profit by not raising prices to offset higher costs, could make a sensitive reader throw up. Yet those costs are soaring amid some of the best growing weather the US has had in millennia. So keep what you have in your stomach - you'll need it!!
CREDIT BUBBLE BULLETIN
The cost of credit seizure
The US first-quarter economy was remarkably resilient amid extreme trauma in the credit market and a seized-up securitization market. Release of the US Federal Reserve Board's "flow of funds" credit report for the period helps to reveal the sources of credit that took up the slack. Some of the huge costs associated with propping up a bubble economy are now readily apparent.
Doug Noland looks at the previous week's events each Monday. (Jun 9, '08)
THE WEEK AHEAD
How to Deal with Knee-Jerk Market Reactions - 8th June 08 Election 2008: Obama or McCain– US May Suffer Either Way - 8th June 08 
Bernanke Cries "It's all China's Fault!" - 8th June 08 Stock Market Boom or Bust? - 8th June 08 Signs of the End for Fed US Interest Rate Cuts Are Everywhere - 8th June 08
Trade Gap in U.S. Increases as Record Oil Imports Overshadow Export Gains The U.S. trade deficit widened in April as the surging cost of oil boosted imports to a record, overshadowing the biggest gain in exports in four years.
Bernanke Warns of Inflation Expectations, Plays Down Jump in Jobless Rate Federal Reserve Chairman Ben S. Bernanke said policy makers will ``strongly resist'' any surge in inflation expectations, delivering his clearest message yet the central bank is done lowering interest rates.
Global Growth to Slow in 2008 on Higher Oil, Food Prices, World Bank Says Global economic growth will probably slow to 2.7 percent this year from 3.7 percent in 2007, checked by spiraling food and energy prices and the subprime credit crisis, the World Bank said.
Bernanke Warns of Inflation Expectations, Plays Down Jump in Jobless Rate Federal Reserve Chairman Ben S. Bernanke said policy makers will ``strongly resist'' any surge in inflation expectations, delivering his clearest message yet the central bank is done lowering interest rates.
Global Growth to Slow in 2008 on Higher Oil, Food Prices, World Bank Says Global economic growth will probably slow to 2.7 percent this year from 3.7 percent in 2007, checked by spiraling food and energy prices and the subprime credit crisis, the World Bank said.
Bernanke Will `Strongly Resist' Any Surge in U.S. Inflation Expectations Federal Reserve Chairman Ben S. Bernanke said policy makers will ``strongly resist'' any surge in inflation expectations, delivering his clearest message yet the central bank is done lowering interest rates.
Fed, Banks Agree on Credit-Swap Changes to Reduce Risk of Market Collapse Regulators and banks agreed to changes aimed at easing the risk of a collapse in the $62 trillion market for credit-default swaps.
Fed's Fisher Says Higher Interest Rates May Be Necessary to Curb Inflation Richard Fisher, president of the Federal Reserve Bank of Dallas, said he agrees with another central bank official's assessment today that higher interest rates may be needed to offset global inflation.
Fed, Banks Agree on Credit-Swap Changes to Reduce Risk of Market Collapse Regulators and banks agreed to changes aimed at easing the risk of a collapse in the $62 trillion market for credit-default swaps.
Fed's Fisher Says Higher Interest Rates May Be Necessary to Curb Inflation Richard Fisher, president of the Federal Reserve Bank of Dallas, said he agrees with another central bank official's assessment today that higher interest rates may be needed to offset global inflation.
U.S. Stock-Index Futures Fall, Following Europe, China; Citigroup Retreats U.S. stock-index futures declined, following markets in Europe and Asia lower, after analysts said Lehman Brothers Holdings Inc. must unload more mortgage loans and speculation mounted that interest rates will rise.
Fighting the Financial Sector Funk with a Drink of Waterby Doug FabianOne of the great parts of having money to invest is that each of us can pick and choose where to put it. I have noticed that exchange-traded funds (ETFs) have been rolled out that cater to investors who want to deploy their resources to help fund companies that offer socially responsible products and services. If you dislike supporting gambling, tobacco use, alcohol consumption and other good things, oh, I mean other vices; you can do so and still enjoy the benefits of ETFs...The Return of Inflationby Nicholas A. VardyAfter a deceptively benign couple of decades, inflation is back in the headlines. JP Morgan estimates that the U.S. consumer price index (CPI) will hit 5.1% in August, its highest rate since 1991. Consumer prices in the 15 countries that use the euro rose 3.6% from a year earlier -- well above the European Central Bank's target of 2%. The Financial Sector Roadblockby Doug FabianSo, what caused the sharp retreat in equities last week? As I've pointed out so many times during the past year, the culprit that keeps plaguing the overall market is the pernicious slide in financials. To see just how uncomfortable the slide in financials has been, take a peek at the chart below of the Financials Select Sector SPDR (XLF)...
This is a "lo-fi" version of our main content. To view the full version with more information, formatting and images, please click here.