New reports, meanwhile, showed weaker-than-expected retail sales in June, even as inflation pushed up wholesale prices at a faster than expected rate. ...the dollar fell to a record low of $1.60 against the Euro
The low dollar is a good thing. If you're a USian exporter. If you are from a place that exports to the US, not so good. Likewise ungood for oil users (all of us) in the US...
Via How The world Works (an econoblog everyone should read)
you simply cannot dismiss the threat posed by a possible Fannie Mae/Freddie Mac bankruptcy. The total gross domestic product of the world is about $50 trillion. Together Fannie Mae and Freddie Mac are responsible for about $5 trillion worth of U.S. home mortgage debt.From the Federal Reserve Bank, some lending rules. Including a Rule that will
...This ain't just a U.S. problem, it's the whole world's problem.
...one of the most astounding legacies of the George W. Bush presidency, which becomes more profound and historic with the passing of every single day, is how absurd and laughable has become the idea that unregulated markets are a sensible way to run an economy. ... as a public relations exercise for free market fundamentalism, the Bush years have been an unmitigated disaster.
Prohibit a lender from making a loan without regard to borrowers' ability to repay the loan from income and assets other than the home's value.As HTWW says:
Ponder that sentence for a moment.
The Federal Reserve has decided it must order lenders not to make loans that they should not make.
Make no mistake: The government is stepping in to prevent a bank failure (several, really), to keep the housing market from locking up, and thus to prevent, it hopes, a complete economic meltdown.
GM to Cut Salaried Workers, Production, Dividend
Struggling auto giant General Motors announced a number of sweeping measures this morning designed to raise cash and trim expenses. ...
-- Reducing the number of trucks manufactured, cutting marketing and sales budgets and freezing engineering budgets.
-- Continued workforce reduction, killing raises for this year and next and suspending executive bonuses this year. Wagoner would not specify how many workers could lose their jobs through attrition, voluntary buyouts or layoffs, but said, "We suspect the vast majority of reductions will be from initiatives that do not require involuntary actions." GM also did not specify which manufacturing plants would be affected.
-- The sale of unspecified vehicle lines, likely starting with Hummer.
-- Cutting heath-care benefits to retirees 65 and older, when they are eligible for Medicare, and increasing pension payments to partially cover the increased expenses.
-- Delaying development of its next-generation truck and SUV lines.
Rising inflation. Major bank failures (Bear Sterns, IndyMac, and the 2FMs (effectively, banks). Large companies struggling mightily.
As Lileks said:
I’m worried most about a recession, inflation AND a jolly round of trade wars, coupled with fragile banks, overcapacity, diminished consumer confidence and aggressive messianic collectivism. Something about that smells familiar. I love studying the thirties and forties, but not first hand.
Meanwhile, lm is in town. Time to call him up and figure out what we're doing for lunch. Update [2008-7-15 13:4:6 by wiredog]:
Met with lm and, umm, Mrs. lm for lunch at Oriental East, a nice Chinese place here in Silver Spring. Spent an hour or so just eating and talking about whatever. Really pleasant people to hang out and eat lunch with.
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