Browsing the archives for the Economics category.

Education, and the Economic Stimulus Package

Advocacy, Economics, Education, Technology

President Obama has signed into law the Economic Stimulus package. And there’s money there for education. This is the good thing. On the other side of the coin, money for education in the bill was scaled back, and now is no larger than the educational funding of the past few years. So while it looks like this is a new source of funding for educational improvements, in many ways, it’s just putting back what’s been cut over the past few years.

The stimulus package’s educational spending is earmarked for technology and infrastructure. This is a necessary area for educational spending, and for the past few years, has been trimmed far too much. But in addition to infrastructure, the money needs to go to better tools.

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Blog Action Day: Poverty

Blogging, Economics, Ethics, Society

Today is Blog Action Day, a day when bloggers take time out from whatever their normal subjects are, to focus a spotlight on attention on issues that matter.  This years subject of Poverty is entirely appropriate, considering the fact that the US economy, and the World economy, seem to be spinning out of control.

But, before we consider our shaky financial situation to be impoverished, think about all those people in the world, who don’t even have a roof over their heads.   The teeming crowds of Calcutta’s street people, who’s only “valued possession” is their meter and a half of sidewalk, at a specific location on the street, where they and their family have been sleeping for the past 3 generations.  We don’t have it bad, by half, yet.

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The Sky is Falling …. Why Markets Continue to Fall, after Bailout Passes

Economics, The Economic Beat

Well, the news isn’t getting any better, is it?   We hear that the Asian markets have lost 7%, that the German market is off 10%, and around the globe, it seems as if the news isn’t any better.

The problem is, in a word, “Chicken Little”.  Before the bailout received all the publicity, before the news media started screaming that the sky (or in this case, the Stock Market) was falling, there was some semblance of sanity in the market.  Companies that were being beat down went down, because they were being beat down. Now, we’ve got media talking heads telling people to “Get Out Before It’s Too Late!”, which of course, is causing the panic.  

Now, the markets are falling on every piece of news, because it’s all about the emotions, all about the media stirring up sensationalism.

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Who Owns America?

Economics, Politics, Society, The Economic Beat

It might surprise you to know the answer to that question.  The common understanding is that We, the People do, but that’s not anything like the truth.

America’s assets are owned by foreigners.  Lots of Foreigners.  The Chinese have $1.4 trillion (that’s $1,400,000,000,000) in foreign assets, and nearly 70% of that is held in U.S. Dollar denominated assets.  Whether it’s in conservative, low-yield instruments like Treasury notes and federal-agency bonds, or showy, high risk stock equity deals with American companies, China has a very large stake in our economy.  

How has this come about?

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Monday’s Bailout Vote was Political Theatre…

Business, Economics, Politics, The Economic Beat

During a conversation Tuesday, I mentioned in passing that I thought Monday’s bailout vote, and resultant 777 point fall in the Dow was purely political theatre. The person I was speaking with asked me what I meant by that.

I explained, “It’s simple.  1) They vote down a horribly crafted bailout plan, 2) the markets stumble, 3) everyone panics, and agrees to support the next bailout (even if it’s obviously worse than the Monday plan).” 

Well, we’ve seen exactly this scenario play out. The senate took the same basic bailout plan, added some perks to make it “more acceptable” to the Republican leadership, and changed it from a $700 Billion plan, to an $800 Billion plan.

Our senators, here in Tennessee both voted for this new package, and this morning, the new package was rolled out in front of House of Representatives once again. The house passed the newer, bigger, bill 263 to 171.  The thing to understand is that both of these bail out bills are several hundred pages long, and that they were brought up for a vote sooner than anyone could have possibly read the entire thing.

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Derivative Media

Best Of, Business, Economics, Intellectual Property Rights, Music, Technology

Hollywood and the Music Industry have both stepped away from their true calling.

They used to take a “new idea” and do something wonderful with it.

Take Citizen Kane.

Not like anything before it. Compelling, immersive, because the story drags you along.

Now compare the movie Transformers. A remake of a kids cartoon show, from our childhood.

Basically, any of us who grew up with the cartoon, already new the basic story, the only real hook was the mind-blowing Computer Generated Imaging (CGI). And yes, it was mind blowing.

But derivative.

Nothing new.

Retelling old stories is why people don’t go to the movie theatre and plunk down $10 a seat. When there are new, good ideas, they come from places where the organization is new.

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Bailout Fails to Pass Congress

Economics, Politics

The vote ran 228 against the $700 billion bailout plan , to 205 for.

And here’s how the Tennessee congress critters voted:
1st Congressional District, David Davis, (R) - NO
2nd Congressional District, John Duncan, (R) - NO
3rd Congressional District, Zach Wamp, (R) - NO
4th Congressional District, Lincoln Davis, (D) - NO
5th Congressional District, Jim Cooper, (D) - YES
6th Congressional District, Bart Gordon, (D) - YES
7th Congressional District, Marsha Blackburn (R) - NO
8th Congressional District, John S. Tanner (D) - YES
9th Congressional District, Steve Cohen (D) - YES

So much for this being a vote to support Bush robbing the country.

A White House spokesman said that President Bush was “very disappointed.”

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WaMu Banker’s Pen Stampede Causes Collapse, JP Morgan to Buy the Remains



WaMu Bankers Pen before the stampede

WaMu Banker's Pen before the stampede

Shareholders and bondholders are likely to be wiped out.   

The FDIC seized and simultaneously brokered a sale of virtually all of Washington Mutual to JPMorgan Chase & Co. for $1.9 billion.

FDIC Chairman Sheila Bair on a conference call said WaMu “was under severe liquidity pressure”. WaMu stock had fallen to $1.69 at the close Thursday, after a 52 week high of $36.47.  Standard & Poor’s downgraded the bank’s rating Wednesday, which was seen as a sign of imminent collapse.

WaMu was the largest savings and loan in the United States with $307 billion in assets.  The customers of the Seattle based bank are unlikely to be affected, as the account holders are guaranteed by the FDIC up to $100,000.   JPMorgan is absorbing at least $31 billion in losses on troubled mortgages and credit loans.

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