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2009-01-06 09:21

Frank K
Colorado Springs, CO

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Thread: China, Japan, Germany and the petrodollar states must expand consumer demand and consumption

In her Nation article, Redoing Globalization, Sherle R. Schwenninger points out that "the economic crisis is the result not just of unscrupulous mortgage lenders and unregulated investment bankers on Wall Street but of the globalization of finance and trade that key members of his economic team set in motion when they were in the Clinton administration. The uncomfortable truth is that the current system of global commerce and transnational finance is inherently prone to crisis and is incompatible with Obama's goal of rebuilding the American middle class. Any sustainable recovery on the domestic front, therefore, will depend on his success in getting other countries to agree to fundamental changes in that global system."

"The main focus of the new administration's international economic statecraft must be on the large current-account surplus economies--China, Japan, Germany and the petrodollar states, which are running surpluses of 9.5 percent, 4 percent, 7.3 percent and more than 10 percent, respectively. These economies must lead in spurring world growth not only because, with the United States, they bear responsibility for the crisis but also because they are in the best position to lead, given their large surpluses and foreign currency."

2008-12-14 09:34

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Will consumers get relief with new credit card rules?

Reuters reports (Dec 13, 2008) that credit card reforms being voted on this week may bring some relief to customers who face a variety of ways for being hit with late fees, universal defaults, shorter payment periods and confusing payment allocations for different balances.

Credit card asset-backed securities face increasing stress as more consumers fall behind on payments. Credit card companies have warned that interest rates charged on credit cards will rise for all borrowers and that borrowing limits may be reduce because of the changes.

However, the new rules are expected to prohibit credit card companies from increasing rates at will, with some exceptions such as those that apply to people who fail to pay a bill within 30 days. So-called universal default, which permits changing card terms if the borrower defaults on another bill such as utilities or a gym membership, also is expected to be banned. And double-cycle billing, in which card companies reach back to earlier billing cycles to help calculate interest charged in the current cycle, also is expected to be eliminated.

2008-12-13 10:08

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Government unemployment statistics hide the true unemployment picture

The Bureau of Labor Statistics report of December 5, 2008 shows an increase in the unemployment rate to 6.7 pct in November, an increase from the 6.5 pct the previous month. This is equivalent to a loss of 533,000 jobs in November bringing the total unemployed through November to 10.3 million.

However, excluded from the numbers are persons who worked part time for economic reasons. According to the BLS:

"Over the month, the number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) continued to increase, reaching 7.3 million. The number of such workers rose by 2.8 million over the past 12 months. This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs."

In addition, the BLS excludes “about 1.9 million persons (not seasonally adjusted) that were marginally attached to the labor force in November, 584,000 more than 12 months earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks pre-ceding the survey.”

The number of those no longer looking for work added to those working part time while looking for fulltime work totals about 9.2 million higher. Adding these people to the official unemployed of 10.3 million results in a number of about 19.5 million or an equivalent unemployment rate of 12.6 pct, almost double the official 6.7 pct

2008-12-13 08:56

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Allowing the Big 3 automakers to fail would also cost taxpeyers

One of the frequently heard arguments for not bailing out GM is that they don't make quality cars that consumers want. While that is certainly true for the past, perceptions take a long time to overcome. According to Car and Driver Magazine, the Chevy Malibu is on their Ten Best Car list, right behind the Honda Accord and Nissan Altima, but ahead of the Toyota Camry.

But for every success story like the Malibu, they also have losers like the Hummer that drag the company down.

2008-12-13 08:27

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Detroit auto workers do not make $73/hour.

Further to the wages of UAW union workers, the NY Times of December 9th has said that adding in overtime and vacation pay raises the average union worker's wage to about $40/hour. It would appear then that overtime and vacation pay must be a significant part of the compensation. The fringe benefits of employee health insurance and pensions (including the company costs for Social Security and Medicare payments) adds another $15/hour to the cost, while retiree benefits of pensions and health care add another $15/hour.

Ignoring the fixed retiree benefits, the NYT estimates that UAW salary plus benefits total $55/hour compared to the non-unionized $45/hour at Honda and Toyota. However, they also note that even if the UAW would cut their salaries and benefits to $45/hour, it would save only $800 on the cost of a Big 3 car. But the Big 3 are already selling their cars for an average of $2,500 less than the equivalent cars of Japanese companies.

Is the reason that the Big 3 are hurting the fault of the UAW Union? Or the Big 3 managment? Or the economic downturn which seems to have affected the Big 3 more than the Japanese automakers?

Unfortunately, a rational understanding of the problem is lost to TV viewers when the manistream media like CNN operate in ignorance and certain southern Republicans seek to exploit the crisis to "bust the unions" for politcal gain.

2008-12-13 07:45

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Treasury notes sold at record low rates yielding 0.005 pct while companies pay 10.8 pct on debt

In this December 12th Bloomberg article, "the government sold $27 billion of three-month bills this week at a discount rate of 0.005 percent, the lowest level since the auctions began in 1929."

On the other hand, "companies are paying an average 10.8 percent on their debt, up from 6.53 percent in January".

"Right now there’s a tremendous flight to quality that’s going on. A lot of people globally are concerned still about the viability of the financial system.”

The US and the Fed has committed $8.5 trillion to date to rescue the financial system, but so far this amount has not succeeded in unlocking credit markets that seized up with the collapse of the subprime mortgage market.

Bloomberg stated that "The government invested or loaned financial institutions $3.2 trillion to stem the financial crisis and jumpstart lending. The Federal Reserve pledged to buy as much as $2.4 trillion in short term corporate debt, and the Federal Deposit Insurance Corp. will guarantee as much as $1.4 trillion of interbank loans. The Fed will spend as much as $800 billion to purchase debt issued or backed by government-charted mortgage-finance companies and to support consumer and small-business loan markets."

2008-12-13 07:24

Frank K
Colorado Springs, CO

Posts: 12
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Thread: What about the $2 trillion that the Fed has loaned the banks so far?

Congress is bickering about $15 billion in bailouts to the auto industry. Meanwhile, according to Bloomberg, the Fed as of November 6th has loaned out over $2 trillion of taxpayers money to the banks and also refuses to disclose recipients or collateral. Why isn't Congress or the mainstream media hollering about what the Fed is up to?

2008-12-10 17:47

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Allowing the Big 3 automakers to fail would also cost taxpeyers

According to an article in Huffington Post, "Just walking away and letting the struggling Big Three automakers go under would drain government coffers by about as much as the $15 billion bridge loan that lawmakers are preparing, and perhaps much more, according to outside analysts. The costs would come from lower tax collections by the federal, state and local governments and the payment of extra unemployment, pension and other benefits to unemployed or retired auto workers."

The question could be posed quite simply as: "Is it better to pay unemployment and other benefits to laid off workers, or is it better to have them gainfully employed and paying taxes?"

2008-12-10 17:16

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Detroit auto workers do not make $73/hour.

Media Matters has highlighted a major misconception floating around the mainstream media that the Detroit autoworkers make $73/hour. The $73/hour is a an all inclusive cost of labor if you throw in employee vacation and holiday pay, overtime premiums, pension contributions, group life insurance, disability benefits, unemployment compensation, Social Security taxes, and hospital, surgical, prescription drug, dental, and vision care benefits. It also includes the costs of pensions and health care for all of the retired workers and their spouses.

The truth is, base wages for UAW members range from about $14 per hour for newly hired workers to $28 per hour for assemblers.

While the merits of bailing out the auto industry are debated in Congress and the media, it would be nice if they checked their facts first.

2008-12-10 16:51

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Who owns the Federal Reserve?

Most Americans think that the Federal Reserve is a government institution. It is not. Ellen Brown, author of Web of Debt, addresses this question below in this Global Research website.

The Fed is privately owned. Its shareholders are private banks. In fact, 100% of its shareholders are private banks. None of its stock is owned by the government.

The fact that the Fed does not get "appropriations" from Congress basically means that it gets its money from Congress without congressional approval, by engaging in "open market operations."

The Fed generates profits for its shareholders.

Hard to accept? Confusing? Read more at the above website..

2008-12-10 14:20

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Abolish the Federal Reserve

While there has been considerable finger pointing going on regarding the economic crisis, Ron Paul is one of the few that speaks candidly and honestly about the underlying source of the problem -- The Federal Reserve. As Ron Paul points out in his RonPaul.com website:

"People talk about toxic assets, but the real toxicity in our economy comes from the neo-alchemy practiced by the Federal Reserve System. Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today’s bankers are poisoning the economy with accelerated fiat money creation."

Ron Paul proposes that "Congress should reject the central bank as a failure for its manipulations of money that have brought our economy to its knees. I am hoping that in the 111th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money."

2008-10-22 17:42

Frank K
Colorado Springs, CO

Posts: 12
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Thread: Talking with the Trillion Dollar Meltdown author Charles Morris

This website doesn't have categories yet for this topic, but having read Charles Morris's book, The Trillion Dollar Meltdown, I found this interview with him on October 8th to be more compelling than all the TV pundits' and candidates' views and solutions to the economic crisis. It's something to think about for those that think we have already hit bottom and are hoping for a quick fix. Here's a quote from the interview:
"I'm not sure that the market shouldn't fall. People seem to think that the market is undervalued now. I don't think so. The market may be falling to the right level -- and it's probably not even there yet."

And he suggest that we're not over the bubble yet..
"Oh no, not at all. We haven't gotten to leveraged loans yet. The junk bond market -- I'll call it the high-yield bond market -- is going to have terrible troubles all through 2009 and 2010. The home mortgage market still has huge swaths of loans out there that are going to get violently repriced in 2009 and 2010. Credit cards are just now starting to get nasty. Default rates are really starting to spike up."

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