Blog

Daily Digest - Dec 28

Sunday, December 28, 2008, 1:54 PM
  • By Saying Yes, WaMu Built Empire on Shaky Loans
  • A Marshall plan for the united states?
  • Economy sheds light on old habits
  • We're All Socialist Now...
  • Autoworkers Union Keeps $6 Million Golf Course for Members at $33 Million Lakeside Retreat
  • A Wish List for Commercial Real Estate
  • Downturn Ends Building Boom in New York 
  • How Did We Get to the Moon? (Video on how humans make financial decisions)

Economy 

By Saying Yes, WaMu Built Empire on Shaky Loans 

While Mr. Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said. 

A Marshall plan for the united states? 

Japan should write-off its holdings of Treasuries because the U.S. government will struggle to finance increasing debt levels needed to dig the economy out of recession, said Akio Mikuni, president of credit ratings agency Mikuni & Co. 

The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes "drastic measures" to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.

"It's difficult for the U.S. to borrow its way out of this problem," Mikuni, 69, said in an interview with Bloomberg Television broadcast today. "Japan can help by extending debt cancellations." ...

Japan should also invest in U.S. roads and bridges to support [American] personal spending and secure demand for its goods as a global recession crimps trade, Mikuni said. ... Combining debt waivers with infrastructure spending would be similar to the Marshall Plan that helped Europe rebuild after the destruction of World War II, Mikuni said.

Economy sheds light on old habits 

Over the river and through the woods to grandmother's house. You remember. And perhaps you also remember the house. 

Plastic slipcovers on the furniture. Mothballs in the closet. And in the cupboard: a little ball of string, scrap tinfoil or balled-up rubber bands.

Grandmother's habits were formed during the Great Depression, where thrift was paramount. Furniture, clothes, food - whatever it was, it had to last as long as possible.

And you smiled as she balled up each bit of string, thinking how tough it must have been to grow up in an era before credit cards, throwaway products and throwaway income.

Well, somewhere up in heaven, Granny is laughing her head off.

The current economic crisis is sparking the return of habits - even institutions - long thought dead and gone. The layaway plan - that antique form of consumerism where you actually pay for the goods before you take them home - has made a smash comeback, with stores like Kmart, T.J. Maxx and Burlington Coat Factory offering step payment plans this holiday shopping season. 

We're All Socialist Now... 

Get ready for a spike. How large will it be? Well, according to the UPI: 

With government spending accelerating with financial bailout funds and a possible economic stimulus package on the way, government's share of the economy is projected to exceed 25 percent of the nation's $14.4 trillion economy in 2009, USA Today reported Thursday.

The previous record in the post-World War II era was 23.5 percent, set in 1983. In 1943 and 1944, government spending hit 44 percent of the total economy. 

Autoworkers Union Keeps $6 Million Golf Course for Members at $33 Million Lakeside Retreat  

The United Auto Workers may be out of the hole now that President Bush has approved a $17 billion bailout of the U.S. auto industry, but the union isn't out of the bunker just yet. 

Even as the industry struggles with massive losses, the UAW brass continue to own and operate a $33 million lakeside retreat in Michigan, complete with a $6.4 million designer golf course. And it's costing them millions each year. 

A Wish List for Commercial Real Estate 

BEFORE Christmas this year, as the government scrambled to fix a recalcitrant economy, some businesses received early holiday gifts. There was $100 billion for the American International Group, the insurance giant; $250 billion for banks; and at least $13 billion for automakers. 

President-elect Barack Obama has also signaled that he would spend more than $700 billion on infrastructure projects to help create jobs, while the Treasury Department has an additional $350 billion available from the rescue funds authorized by Congress in September.

Across corporate America, executives are drawing up their wish lists, and the commercial real estate industry is no exception. 

Downturn Ends Building Boom in New York  

Nearly $5 billion in development projects in New York City have been delayed or canceled because of the economic crisis, an extraordinary body blow to an industry that last year provided 130,000 unionized jobs, according to numbers tracked by a local trade group. 

The setbacks for development - perhaps the single greatest economic force in the city over the last two decades - are likely to mean, in the words of one researcher, that the landscape of New York will be virtually unchanged for two years.

"There's no way to finance a project," said the researcher, Stephen R. Blank of the Urban Land Institute, a nonprofit group.

How Did We Get to the Moon? (Video on how humans make financial decisions)

Endorsed Financial Adviser Endorsed Financial Adviser

Looking for a financial adviser who sees the world through a similar lens as we do? Free consultation available.

Learn More »
Read Our New Book "Prosper!"Read Our New Book

Prosper! is a "how to" guide for living well no matter what the future brings.

Learn More »

 

Related content

5 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Dec 28

Wall Street Welfare cartoons image illustration picture

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - Dec 28

“Japan can help by extending debt cancellations.”

So my outrageous ideas are catching on......! 

joemanc's picture
joemanc
Status: Martenson Brigade Member (Offline)
Joined: Aug 16 2008
Posts: 834
Re: Daily Digest - Dec 28

Venezuela to start seizing gold concessions...

http://www.cnbc.com/id/28401097/for/cnbc/ 

After seeing Argentina seize the private pension system, I can
honestly say that this is a sign of things to come here in the US. It's envy. Those who are smart and invest in the right things will get punished.

kemosavvy's picture
kemosavvy
Status: Martenson Brigade Member (Offline)
Joined: Oct 13 2008
Posts: 254
Re: Daily Digest - Dec 28

here is an intersting article from businessweek i read from the most recent issue...

http://www.businessweek.com/magazine/content/08_52/b4114000208822.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

interesting not because the fed is non-transparent and spending $2 trillion to prop up banks, but interesting because mainstream "bull" media is finally getting the picture. the fed is taking one of the largest gambles in history, ever.

Gadfly's picture
Gadfly
Status: Silver Member (Offline)
Joined: Dec 6 2008
Posts: 127
Re: Daily Digest - Dec 28

I wonder which is more sad: that the UAW brass is keeping the golf course or the fact that none of us are surprised?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments