Capital Commerce


April 2009


Biden, Swine Flu and the Economy

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Let's says the Biden Scenario is acccurate. Let's say we should be avoiding public places because of the swine flu. What is the economic impact of a pandemic that requires such measures? IHS Global Insight has run the numbers on Captain Trips:

Scenario One. "In an epidemic (roughly 75 million ...

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Fun Housing Factoid of the Day

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This from First Trust Advisers:

However, the stage is now set for a major turnaround in home building that will begin late this year and contribute substantially to the economy in 2010-11. Once the excess inventory is worked off completely, population growth and knock-downs will require ...

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Geithner and More Money for the Banks

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Even though most Americans may not have attended a Tax Day tea party yesterday, most of them are probably none too pleased about the bank bailout.That displeasure is reflected in the current unwillingness of Congress, even plenty of Democrats, to send any more dough their way. Yet the White House ...

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Bernanke: Blame China, Not Greenspan

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While not letting U.S. mortgage markets off the hook for the credit crisis, Federal Reserve Chairman Ben today Bernanke highlighted the role of excess savings from emerging Asia flowing:

In the past 10 to 15 years, the United States and some other industrial countries have been the ...

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Spencer Bachus and the '17 Socialists' in Congress

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OK, so Rep. Spencer Bachus, an Alabama Republican, told a Birmingham paper that there were 17 socialists in Congress. Of course, Newsweek has proclaimed "We're All Socialists Now." And a new Rasmussen poll found that just 53 percent of Americans thought "capitalism" was better than "socialism." I ...

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Unemployment, Democrats and the 2010 Election

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The WSJ just caught up to something I have been writing about for months:

Just 12% of the economists expect the unemployment rate to fall some time this year. More than a third of respondents expect the jobless rate to peak in the first half of 2010, while about half don't see unemployment ...

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America's Uninsured

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Former Bush White House economist Keith Hennesey walks his blog's readers through those "46 million American without health insurance."

1) There were 45.7 million uninsured people in the U.S. in 2007.
Of that amount, 6.4 million are the Medicaid undercount. These are people who are on ...

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Why China Should Buy Citigroup

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Should the Chinese buy beleaguered Citigroup? The perspicacious David Goldman of the Inner Workings blog notes that Citi owns a bit less than 4 percent of Shanghai Pudong Development Bank. It has a market cap of $18 billion. Citi has a market cap of $17 billion. How about a reverse takeover by ...

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Would China Dump the Dollar?

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I found this to be the most interesting bit from the Pentagon-sponsored war game that simulated a global economic conflict. According to Politico, Yale business professor and war game attendee Paul Bracken said the event "left him questioning one prevailing assumption about economic warfare, that ...

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Federal Reserve: Terrible Economic Pain To Come

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Here is what staff economists at the Federal Reserve think about where the economy is heading (via today's release of the FOMC minutes from March):

The staff's projections for real GDP in the second half of 2009 and in 2010 were revised down, with real GDP expected to flatten out gradually ...

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Roubini vs. Cramer: Who's Right?

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So CNBC's Jim Cramer criticized Nouriel "Dr. Doom" Roubini in his blog for being too persistently gloomy in light of the stock market's recent rebound and some bits of positive economic news. Roubini responded by attacking Cramer as a "buffoon." Roubini also thinks the worst is not yet over for the ...

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Stop Apologizing, Obama

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Does the president know a) that leverage at European banks was far higher than at American banks, b) that Europe also had a property bubble, c) that Europe has terrible long-run financial problems related to its demographics, 4) that Europe has been able to build a massive (though now ...

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Why Liberals Hate Larry Summers

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Larry Summers, Team Obama's economic guru, made a ton money working at hedge fund D.E. Shaw. Now this is going to worry some liberals who were already concerned that the Obama economic team looks too much like the old Clinton economic team in its ties to Wall Street. These are same folks who have ...

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Polls, Obamanomics and Taxes

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The NYTimes buried this interesting little facoid from their poll on people's current economic attitudes: "Mr. Obama’s push to increase income taxes on people making over $250,000 a year was supported by 74 percent of respondents. When presented with the possibility that taxing those in the higher ...

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What's Behind Geithner's Threat

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Read this new analysis of the banking situation by Goldman Sachs. It mentions that banks will need some encouragement to sell the so-called toxic assets. I think Geithner is giving them some with his threat to replace executives:

First, it’s unclear whether Treasury and the FDIC will ...

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Michael Mayo: Banks Still Stink

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Guess what, bearish banking analysis Michael Mayo is still pretty bearish. Pretty much everyting that isn't a "sell" is an "underperform," according to a research note today. He expects further loan losses in credit cards, construction, commercial real estate and industrial. Clearly, he isn't ...

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Is America Really a Third-World Country?

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In the WaPo, Simon Johnson and James Kwak make just that case:

In a normal advanced economy, creating hundreds of billions of dollars in new money would not foster runaway inflation. As long as the economy is underperforming -- for example, with high unemployment -- stimulating the economy will only ...

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FASB, Mark-to-Market, and the Geithner Plan

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I had a great chat yesterday with banking expert Ellen Marshall of the law firm Manatt, Phelps & Phillips. She made several points which, to me, mean the loosening of mark-to-market accounting rules will actually make it more likely that banks will be more willing to part with some of their 

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Obama's Cap-and-Trade Plan Goes Cold

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Obama's cap-and-trade plan may become for Democrats what Social Security reform is for Republicans: a handy policy cudgel for the other side even if it never happens. Even though cap-and-trade is supposed to be a more politically viable method for dealing with carbon emissions than a straight ...

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FASB Loosens Mark-to-Market Rules. Finally

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Market-to-market, the accounting rule that ate Wall Street, has finally been relaxed. The changes from FASB, applicable to first quarter earnings, allow companies to use “significant” judgment when valuing assets. That will reduce writedowns on certain investments, including mortgage-backed ...

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'I'm back'

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The headline says it all, gang. But let me quickly squash a few Internet rumors regarding my blogging absence:

1) I was not arrested protesting at the G20. Nor was I holding that "Make Love, Not Leverage" sign.  (Though I would love to own it.)

2) I was not in negotiations with the Obama ...

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