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Let's Hope These 4 Things Don't Happen
Tweet Share on Facebook January 13, 2010 Comment (137)In the cast of corporate characters, Fannie Mae and Freddie Mac are A-list villains, thanks to the central role they played in the 2008 financial meltdown. The two mortgage-finance firms failed as spectacularly as AIG, the poster child for finance-gone-wrong, with the combined Fannie-Freddie rescue totaling about $111 billion so far—the biggest bailout of all. Both firms are effectively nationalized, and the government would probably wind them down except for one thing: They underwrite about three quarters of all the mortgages issued in the United States.
[See how the government is swallowing the economy.]
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An Unseen Economic Albatross: Labor-Force Dropouts
Tweet Share on Facebook January 8, 2010 Comment (22)The unemployment rate is probably the most closely watched economic indicator, but the U.S. economy has become so peculiar that you have to dig a lot deeper to figure out whether the job market is starting to heal.
The December unemployment rate was unchanged at 10 percent, and a tick lower than the October peak of 10.1 percent. As the press has dutifully reported, the big disappointment was the loss of 85,000 jobs in December, when analysts had been expecting a much smaller decline or perhaps even a net gain.
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Retail Winners and Losers
Tweet Share on Facebook January 7, 2010 Comment (19)Shoppers revived at the end of 2009, opening their wallets a bit more than expected and sparing many retailers a second consecutive year of holiday gloom. An early survey by MasterCard suggests that sales in December rose by about 3.6 percent, after a ghastly decline in 2008. ThomsonReuters reports that same-store sales at 30 big retailers grew by 2.9 percent in December, beating a consensus forecast of 2 percent. More numbers coming out over the next couple weeks will refine the picture, but overall the retail numbers suggest that consumers are slowly regaining confidence, even if the economic recovery is tepid.
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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