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Why It's Taking So Long To Fix the Economy
Tweet Share on Facebook February 27, 2009 Comment (41)Nobody wants to listen to Ben Bernanke - even though the Federal Reserve Chairman has been a pretty effective soothsayer.
Last fall, he famously predicted catastrophe if the government didn’t step in to help stabilize panicky financial markets. That was on the mark: Even with more than $2 trillion worth of government intervention since then, the economy is in tatters.
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7 Other Stress Tests We Ought To Run
Tweet Share on Facebook February 26, 2009 Comment (1)Planning for a worst-case scenario is hardly a novel idea. But it became so unpopular for awhile that President Obama has now rechristened it a “stress test” and shaken up Wall Street as if they never heard of such a thing.
By forcing banks to simulate how they’d perform under a couple of gloomy scenarios, the government hopes to identify who’s likely to need help over the next six months, and roughly how much. You can quibble with the details, but the idea is such a no-brainer we should apply it to a lot of others besides banks. Here are my nominations:
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How AIG and Citi Will Look In a Year
Tweet Share on Facebook February 26, 2009 Comment (16)At least one thing is clear about the financial meltdown: We know who the poster children are.
Lehman Brothers and Bear Stearns had their dramatic flameouts, but at this point we’ve survived their demise. Big banks like Wachovia and Washington Mutual wiped out shareholders when they failed, but the financial system managed to absorb the remnants. Dozens of lesser bank failures have seemed minor, by comparison.
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Why Bank Nationalization Is So Scary
Tweet Share on Facebook February 22, 2009 Comment (174)Scan the headlines, and you’d think it’s a no-brainer: The government takes over the most troubled banks, whips them back into shape, then returns them to the private sector in a few years. Problem solved.
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10 Ways To Survive Without a Bailout
Tweet Share on Facebook February 21, 2009 Comment (39)If you haven’t qualified for a bailout by now, your chances are sinking fast. Washington has spent just about all the money it can stomach for awhile and done its best to give something to everybody. If you’re not in a line for a tax cut or housing rebate or mortgage modification or green-energy job, you may have little choice but to wait for the next financial meltdown.
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Could China Buy An American Carmaker?
Tweet Share on Facebook February 20, 2009 Comment (11)With sales plunging and the auto industry in a tailspin, it’s a great time to get a deal on a car. But think big: For a few extra bucks, you might be able to buy the whole company.
Here’s the list of carmakers on the block:
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A Plea to Give GM Another Chance
Tweet Share on Facebook February 20, 2009 Comment (18)General Motors is reeling. America's biggest automaker is bleeding cash and asking for up to $37 billion in emergency federal loans to avert bankruptcy. Many Americans feel the feds should simply pull the plug. But in Why GM Matters: Inside the Race to Transform an American Icon, financial journalist William Holstein argues that GM deserves the chance to turn itself around. I spoke with him about GM's current condition, the beleaguered U.S. auto industry, and Toyota's vulnerabilities. Excerpts:
You argue that GM is vital to the U.S. economy. Explain why. GM is the backbone of our industrial economy. There are all sorts of linkages into the high-tech sector. It's the largest private sector purchaser of information technology in the country. It's a huge player in logistics. It spends hundreds of millions on advertising and marketing, and part of that supports the sports world. Including its suppliers, GM represents 1 percent of the nation's GDP.
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9 Bailout Surprises From GM and Chrysler
Tweet Share on Facebook February 18, 2009 Comment (32)Back in December, economist Mark Zandi of Moody’s Economy.com told Congress that bailing out the Detroit automakers could ultimately cost $75 billion to $125 billion. So when GM and Chrysler asked for a mere $17.4 billion late last year, it seemed like a bargain.
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How To Tell When The Economy’s Getting Better
Tweet Share on Facebook February 12, 2009 Comment (56)
The New York Stock Exchange
(Charlie Archambault for USN&WR)President Obama has finally signed the stimulus bill. He has also promised a tough new bank-rescue plan to boost lending and limit outrageous pay. Troubled homeowners may even get some relief. All told, the government could spend more than $3 trillion to help end the recession.
So now all we have to do is sit back and watch the economy grow like a beanstalk, right?
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Claire's: Comfortable With Its Financial Condition
Tweet Share on Facebook February 12, 2009 Comment (52)In response to my recent story, "15 Companies That Might Not Survive 2009," Claire's Stores had this to say:
Rick Newman
The global economy is mysterious, even scary. Chief Business Correspondent Rick Newman connects the dots. In addition to his writing for U.S. News, Rick is the co-author of two books: Firefight: Inside the Battle to Save the Pentagon on 9/11, and Bury Us Upside Down: The Misty Pilots and the Secret Battle for the Ho Chi Minh Trail.
Read Rick's latest blog entries here.
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