Free Republic

What Americans want to hear is that everything will be alright, that a quick fix is at hand that will return us to prosperity and growth. The problem is that there is no quick fix and, at best, we are in a serious recession. What we need is a recovery plan that preserves our freedom and protects the only possible engine of prosperity, a free economy. We also need a recovery plan that is visibly fair. It is beyond doubt that our economic troubles stem from government promoted expansion of bad debt. Congress required banks to make bad real estate...

Some people don’t like the concept of blame. They view it as useless because it wastes time in looking for a solution. I will tell you differently. Blame is useful because it identifies offenders, which is the first step in eliminating the problem. The trouble is that few have the stomach to get rid of the offenders. So, as I traveled home from prayer meeting with my children last night, we listened to a radio show discussing the current credit crisis. This was a good discussion, unlike many that I hear. But the discussion (on NPR) eventually focused on “who...

Do cycles exist in the financial markets? Take a look at the black line in the graph below. The U.S. stock market had a gigantic bubble back in 2000. When it burst, stocks came crashing down. Over the next several years, policy makers did all they could to get things going again, focusing mostly on monetary policy and increasing homeownership. This had the unintended consequence of creating too much inflation, which caused central bankers to tighten aggressively. Thus began what will almost certainly be declared a recession. This mimics the US stock market bubble back in 1929...

CBOT Rice Review: Slips As Lack Of Demand Weighs 3 hours ago CHICAGO (Dow Jones)--Chicago Board of Trade rice futures ended sharply lower Wednesday as a lack of demand continues to weigh on the market, an analyst said. November rice ended down 40 cents to $17.30 per hundredweight and January rice ended down 41 1/2 cents to $17.62. Prices have fallen sharply since hitting a high of $20.44 last month, when the market had rallied on concerns about the crop following hurricanes Gustav and Ike. Although the crop remains troubled, with lower yields expected, firstgrain.com analyst Ed Taylor said the...

"Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my...

Is Main Street longer or busier in some locales and nonexistent in others? And if so why? And is it time the American people learn the difference between wants and needs?

The Curve in the Road Necessary but Not Sufficient Why the Government Had to Step In All the King's Horses How Can I Be 59? The "Bailout Plan" was passed. Will it work? The answer depends on what your definition of "work" is. If by work you mean no more government intervention and no further costly programs and a functioning market, then the answer is no. But there are things it will do. This week I try to help you see what might lie ahead around the Curve in the Road. We look at how the rescue plan will function,...

Snopes says: "On 30 September 1999, the New York Times published an article entitled "Fannie Mae Eases Credit to Ease Mortage Lending" by Stephen A. Holmes. The complete text of the article is available online."

The national economy's current woes are less like the Great Depression than the Panic of 1873, according to a new article in the Chronicle of Higher Education. "When commentators invoke 1929, I am dubious," writes Scott Reynolds Nelson, a professor of history at the College of William and Mary. "According to most historians and economists, that depression had more to do with overlarge factory inventories, a stock-market crash, and Germany's inability to pay back war debts, which then led to continuing strain on British gold reserves. None of those factors is really an issue now."Nelson continues: "In fact, the current...

Two old guys in Florida are talking and one asks the other where his money came from. The answer was: “My factory burned down and I’m here on my insurance money. What about you?” The second man answers: “I’m like you, but my business was destroyed by a flood.” The first man pauses, and then asks: “How do you start a flood.”

Originally Posted at http://www.voicesinthewilderness.net The rich, the poor and the middle class made their beds and now we have to lay in it. I understand the consequences of allowing the markets to fail and not passing a bailout but it seems to me that it is necessary to go through this pain in order to ensure that it never happens again. Solomon, the wise king of Israel has said that there is a time for everything in this world, under the sun. There is a time to be happy and a time to be sad, a time to be rich...

US Congress to approve a government bailout of banks on/before 30 Sep 2008 Last Price: 17.6 \/40.4 The US Economy will go into Recession during 2008 Last Price: 13.0 \/ 7.0

STIGLITZ CALLS BUSH BAILOUT PLAN "MONSTROUS" Wednesday, 24 September 2008 (Ed. Note: Everybody has an opinion about the current Wall Street meltdown and how best to deal with it, but perhaps the opinion of a Nobel Prize winner in economics should carry special weight. So it is interesting that recent remarks by Nobel Prize winner Joseph Stiglitz to European reporters did not get much play in the U.S. media. Could it be that the U.S. media, so comfortable with Wall Street’s crony capitalists, is part of the problem, too? This report on Stiglitz’s analysis is reprinted from MercoPress .) Economy...

Millions of Washington Mutual customers woke up Friday morning fearing that their life savings, checking accounts and mortgages were in danger, after federal regulators seized the bank’s assets and sold them in a fire sale Thursday night. Despite assurances by the federal government that it guarantees deposits of up to $100,000, customers descended upon bank branches to yank out their money on Friday, hoping it was still there.

WASHINGTON – Pressing urgently for a massive financial bailout, President Bush says the nation faces a "long and painful recession" if Congress fails to act. He says "our entire economy is in danger."

Given last week's dramatic events — the bankruptcy of Lehman Brothers, the end of Merrill Lynch's independence, and an $85 billion US-government bailout of insurer AIG — most financial institutions are likely to become more sensitive to the state of their net worth. For instance, all it takes for a financial institution that has a net worth of $30 billion and assets of $600 billion to go under is for the value of assets to fall by 5%. In the current financial climate, it can easily happen; hence, most financial institutions are not immune from the potential threat of going...

Remittances from overseas Filipino workers (OFWs) have eased the impact of the U.S. financial crisis on the Philippine economy, local media reported on Sunday. Diwa Guinigundo, deputy governor of the Philippine central bank, said the OFWs' foreign-exchange remittances have buttressed the local economy even as the global financial markets reeled from the effects of the U.S. subprime crisis, the Philippine Star reported. The U.S. downturn has left giant institutions shuddering, including investment banks Lehman Brothers and Merrill Lynch, and insurance giant American International Group. "OFWs are now saving and investing their hard-earned money which helps generate economic activity," Guinigundo said....

I recently chatted with Rep. Ron Paul (R-Texas) about the gigantic financial bailout that the government is preparing to undertake. Some excerpts from the interview: What's your take on this huge financial bailout? "It's more of the same. More debt and more inflation and more pressure on the dollar. Ultimately, although the markets are responding very favorably at the moment, I think it is going to be devastating to the dollar and to our financial situation in this country." But don't we need to get these toxic assets off banks' balance sheets? "Sure, they need to be removed. Somebody needs...

Messing With Markets Again by: Lance Nation, September 11, 2008 Currently the housing market has been of particular interest to politicians and the media. For example, the Bush Administration seized control of the two mortgage giants Fannie May and Freddie Mac. This takeover is an example of government control which hinders a free market society. “Consider the fate of mortgage lenders and homeowners,” writes Llewellyn Rockwell Jr. in Market During Crisis. “The markets became wise to the fact that loose credit led to a fantastic bubble and that trillions in traded mortgages might not be serviceable in an environment of...

Race riots kill man at Spanish holiday town of Roquetas del Mar (EPA/RICARDO GARCIA) Police patrol the streets of Roquetas del Mar in Spain after a man was killed in race riots Thomas Catán in Madrid Riot police were deployed throughout a Spanish seaside town popular with British expatriates today after the second consecutive night of rioting by African immigrants. The fighting in Roquetas del Mar, 12 miles west of Almería, were caused by a dispute between Spanish Gypsies and African immigrants in which a 28 year old Senegalese man was stabbed to death, the Spanish Interior Ministry said. Outraged...

LONDON (AFP) – The euro on Tuesday slid below 1.45 dollars for the first time since February as the market anticipated lower interest rates in the eurozone and stronger growth in the United States, analysts said. In early London trade, the European single currency dropped to 1.4467 dollars, the lowest point since February 12. It rose from this level to trade at 1.4524 dollars in late European trade, compared with 1.4606 dollars late on Monday in London. Elsewhere, the yen fell slightly after Monday's abrupt resignation of Japanese Prime Minister Yasuo Fukuda. The pound meanwhile struck a record low versus...

In its preliminary 2Q08 GDP estimates, the Commerce Department said on Thursday, the countryÂ’s gross domestic product was revised up at an annual rate of 3.3% for the April-June period, exceeding analystsÂ’ initial estimates of a 1.9% increase as well as economistsÂ’ forecast of a 2.7% gain. Constant dollar GDP is now up 2.2% versus a year ago. The acceleration in real GDP growth in 2Q08 reflects a larger decrease in imports of 7.6% compared with a decrease of 0.8% in the 1Q08, and an acceleration in exports of 13.2% in the second quarter, compared with an increase of 5.1%...

The U.S. economy was much stronger in the spring than first thought because of better exports and less inventory liquidation by businesses, according to a government report that surprised economists. Gross domestic product rose at a seasonally adjusted 3.3% annual rate April through June, the Commerce Department said Thursday in a new, revised estimate of second-quarter GDP. Originally, the government had estimated second-quarter 2008 GDP climbed 1.9%. First-quarter GDP increased 0.9%. snip

Warning: Worldwide wipeout ahead Think US stocks are on a life raft? Look around the globe, where seas are much rougher. This is serious, folks. Brace for a brutal riptide of more economic upheaval. By Jon Markman It barely seems possible that anyone is more pessimistic about corporate earnings prospects than American shareholders right now, with the U.S. stock market down almost 15% for the year and the banking system coming unglued before our eyes. Yet if you take a moment to look around the world, you may be surprised to learn that U.S. stocks are the picture of health...

On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy...

Dollar surge will not stop America feeling the effects of a global crunch By Ambrose Evans-Pritchard Last Updated: 11:07pm BST 17/08/2008 Two alerts landed on my desk this weekend from the elite markets team at Goldman Sachs. One was entitled "The Dollar Has Bottomed!". Those betting on an imminent disintegration of American economic and political power may have to wait another cycle. Rival hegemons are falling like ninepins. The US dollar index hit an all-time low in March. It crept slowly upwards in the early summer before smashing through layers of resistance over the past month. The surge against sterling,...

David Frum: China's brightest day may have just passed Posted: August 09, 2008, 11:57 AM by Kelly McParland David Frum, Full Comment The leaders of China have carefully planned an imposing Olympics. They have bought new stadiums, new airports, new facilities of every kind — in fact, just about everything available to an authoritarian state with a full treasury and low labour costs. They overlooked only one possibility: that the Olympics would arrive at the same time as China’s economy braked to a stop. To understand what is happening in China, compare two statistics. In the 12 months ending December...

On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy...

BRUSSELS) - Europe has swung towards recession, with the eurozone economy shrinking for the first time and inflation hovering at a record high as the sharp global downturn takes hold, new figures showed Thursday. The 15-nation eurozone economy contracted by 0.2 percent in the second quarter, the EU's official Eurostat agency reported. That figure heightened analysts' fears that recession -- two consecutive quarters of contraction -- is on the way, a prospect now pushing down the euro. "Today's releases suggest that this probability has risen, probably to over 50 percent now," said Sunil Kapadia, European Economist for UBS Investment Research....

German, French economies contract By Steve Goldstein, MarketWatch Last update: 3:13 a.m. EDT Aug. 14, 2008LONDON (MarketWatch) -- The German and French economies contracted during the second quarter, figures out Thursday showed, the latest evidence demonstrating how European activity has not been able to decouple from the U.S. slowdown. In Germany, gross domestic product dropped 0.5% compared to the first quarter, the Federal Statistics Office said, the first drop in nearly four years. Weaker consumption, capital investment and construction activity led to the decline.

US dollar rallies as extent of worldwide recession becomes clearer By Ambrose Evans-Pritchard, International Business Editor Last Updated: 10:13pm BST 08/08/2008 The psychology of global markets has shifted hugely over recent days as it becomes clear that Europe, Australasia and parts of Asia are sliding into recession. The US dollar has launched its best rally in half a decade, reflecting a recognition that half the world is in even worse shape than the US. In fact, America is the only G7 country to eke out modest growth this summer. The US dollar index - currencies watched closely by traders -...

Inflationary pressures were subdued, the data showed, with real hourly compensation falling -- a hopeful sign for the fight against inflation, but troubling for economic growth. Productivity in the nonfarm business sector rose a 2.2% annualized rate in the second quarter, a bit slower than the 2.7% rate that economists surveyed by MarketWatch had been looking for. See Economic Calendar. Unit labor costs -- a key gauge of inflationary pressures from labor markets -- rose 1.3% compared with the 1.6% rate expected by economists. Output rose an annualized 1.7% in the quarter, while hours worked dipped 0.5% and real hourly...

An African-American real estate magnate sees an opening to profit from the spiraling U.S. housing market.There is no shortage of gloom in the Southern California housing market, as one key indicator recently saw home values in Los Angeles fall 24.5 percent from a year ago. But those spiraling fortunes are helping Barrington Malcolm build a dynasty. Malcolm, 42, runs Dynasty Dynamics, Inc., a multimillion dollar, privately owned property company that keeps a low profile, but has been a major player in the high-stakes California real estate market for more than 20 years. Dynasty owns a major portfolio of properties, including...

Recessions don't usually look like this, at least when it comes to productivity. In the six U.S. recessions since 1970, worker productivity, or output per hour, grew a sluggish 0.8%, on average. But since the end of last year, even amid economic weakness, productivity is estimated to have grown an average 2.5% at an annual rate. That defies productivity's usual behavior of going "up in good times and down in bad times," says Georgia State University forecaster Rajeev Dhawan. Productivity's path isn't just an academic debate. That productivity is staying strong even in bad times has big implications for economic...

Looking for new and innovative ways to spread the doom-and-gloom news associated with the economic downturn, BusinessWeek magazine launched a recession blog on its Web site back in May to give a personalized glimpse into "recession" hardships. "This blog is one of the places we'll tell these stories," BusinessWeek.com reporter Tim Catts wrote on the blog's first post on May 2. "Here, we'll jump into the conversation about where the economy is and where it's going. Yes, sometimes we'll look at the latest data. Sometimes we'll share observations from the road. The goal is to give readers real stories about...

WASHINGTON (Reuters) - Expansion accelerated modestly in the second quarter as government stimulus payments helped consumers add more buying punch to the economy, a Commerce Department report on Thursday showed. Gross Domestic Product or GDP grew at a 1.9 percent annual rate, up from a revised 0.9 percent rate in the first quarter that previously was reported as 1 percent. Economists surveyed by Reuters had expected a 2.0 percent rise in GDP in the second quarter.

New York economy officially in recession, state budget director saysThe Business Review (Albany) - by Adam Sichko Wednesday, July 30, 2008 - 2:58 PM Gov. David Paterson and his budget director said today the state faces "the specter of stagflation" as it tries to cut more than $1 billion in spending. Budget Director Laura Anglin has concluded the state's economy is officially in a recession. Paterson has called state legislators back for an "emergency economic session" on Aug. 19. He wants them to cut about $600 million in state spending in the current budget, on top of measures he announced...

As of Tuesday, July 15, crowds outside branches of the failed California bank IndyMac were getting ugly. On the second business day after federal agents seized control of bank assets and promised orderly restitution of FDIC-insured funds to IndyMac customers, large numbers of shocked depositors still had not been reimbursed. Those who had more than the FDIC-guaranteed $100,000 in IndyMac accounts were still awaiting word as to what portion of their life savings they could expect to see again. While bank failures are not particularly unusual even in the best of times, the IndyMac implosion has raised eyebrows worldwide for...

What if I told you that a prominent global political figure in recent months has proposed: abrogating key features of his government's contracts with energy companies; unilaterally renegotiating his country's international economic treaties; dramatically raising marginal tax rates on the "rich" to levels not seen in his country in three decades (which would make them among the highest in the world); and changing his country's social insurance system into explicit welfare by severing the link between taxes and benefits? The first name that came to mind would probably not be Barack Obama, possibly our nation's next president. Yet despite his...

Things wouldn't be so bad now if we had listened to Frank Field By Simon Heffer Last Updated: 12:01am BST 23/07/2008 Have your say Read comments When one talks to older politicians they often observe that their lives consist of cyclical re-runs of the same old film. After 15 years of boom, the cycles have become somewhat extended. Now, the impending bust brings back to our screens a rather scary old favourite: unemployment. Barely a day passes that some analyst doesn't pitch in with a projection for the additional numbers that will go on the dole in the next year...

“We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline," Phil Gramm told the Washington Times in an interview last week. "You've heard of mental depression; this is a mental recession." And then he walked away from the microphone. You know what else could be said? We also have a bunch of leaders who thrive on image and political correctness to guide their words and decision making. Since when is it not alright to say what you think or tell the truth? Since now! What was...

WASHINGTON (Reuters) - Home building projects started in June surprisingly rose 9.1 percent due chiefly to a change in New York City building codes that, if it were ignored, would have seen starts decrease by 4.0 percent, a government report said on Thursday. The Commerce Department said housing starts set an annual pace of 1.066 million units in June, the highest since February. Economists polled ahead of the report were expecting a 960,000 unit rate. New York City enacted a new set of construction codes effective July 1, that largely explained an 11.6 percent increase in building permits and the...

Where will you be in five years? Many claim the American dream has died. Earnings have supposedly stagnated, even while corporate profits boom and health coverage disappears. Most Americans believe the economy is in a recession. Pick up any newspaper, and it seems the days when most Americans could work hard and expect to get ahead are over. But look more closely at the polls. They show most Americans think it's harder for other Americans to get ahead, but that they personally will be better off in the future. How can most Americans believe opportunities are vanishing for others but...

<p>SAN DIEGO—Barack Obama said Saturday there is "little doubt we've moved into recession," underscoring the country's need for a second economic stimulus package, swift steps to shore up the housing market and a long-term energy policy to reduce reliance on foreign oil imports.</p>

The Psychology of Ben Bernanke: The Great Depression was caused by the Federal Reserve. Was he Talking About the current Great Depression that is Sprouting Under his Watch? Lessons From the Great Depression: Part XIII. The Federal Reserve. Federal Reserve Chairman Ben Bernanke this week once again mentioned that the Federal Reserve was “strongly committed” to financial stability and is considering options like keeping the lending facilities open to primary dealers. In short, they are going to continue to bailout banks and Wall Street firms while Americans get the shaft. This is an important statement and the futures markets are...

Gramm was right about the recession and stood by his recession comments on Thursday. A recession is two consecutive quarters in which the economy shrinks, and last quarter it grew. But no matter. Voters feel they are in a recession, and so they are, at least according to Campaign Econ.

So the Footsie has tumbled again. Forgive me for asking, but where are the economists? As the nation approaches recession, an entire profession seems to have vanished over the horizon, like conmen stuffed with cash, and thousands left destitute behind. They said recessions were over. They told politicians to leave things to them and all would be fine. Yet they failed to spot the sub-prime housing crash, and now look at the mess. When I studied economics we were told we would be masters of the universe. Ours was not a dismal but a noble science. It had harnessed the...

Housing Bubble Correction Update: Fasten your seat belts, here comes the jobs crash The housing market has fallen hard but it's not time to buy, no matter what you hear. Depending on where you live it's time to decide if you can afford not to sell before prices go lower, or grin and bear it. The choice depends on your likely future employment prospects and where you live. In our first major update in our series of housing bubble forecasts since 2006 that began with our August 2002 Yes, it's a housing bubble analysis, we delve into the next phase...

Britain is on the verge of a recession and the number of permanent job vacancies is falling, two reports warn today. The British Chambers of Commerce describes the outlook as 'grim' and warns that a recession could start within months. It says it has uncovered evidence of a 'menacing deterioration' in the economic outlook. Another report, from the accountants KPMG, shows that the number of permanent job vacancies fell in June for the first time in five years.

Upset homeowner shoots real estate agent in Mich. By JAMES PRICHARD ROOSEVELT PARK, Mich. A man upset about a property transaction fatally shot a real estate agent in the head during a meeting Tuesday morning in the victim's office, authorities said. Troy VanderStelt, 34, was pronounced dead at 12:45 p.m. Tague said Johnson plotted to kill VanderStelt, took a .22-caliber semiautomatic handgun to the real estate agent's office, got him preoccupied with some paperwork in a conference room, stood next to him, pulled out the gun and shot him once in the temple. "We believe this was a planned-out execution-style...