Article of the Week: 3 May
Congratulations to Sobia Ijaz, winner of Article of the Week (3 May)!
Worries Rise on the Size of U.S. Debt
This article delves into the long term viability of government spending and borrowing. The authors claim that the current government policies are not sustainable because they would drive up interest rates. This would be specifically bad because it continues to increase our national debt. This is especially dangerous because there are fewer countries willing to buy our debt.
posted by Professor Cramton at
8:09 AM
14 Comments:
Economy Shrinks at Worse-Than-Expected Pace - by JEANNINE AVERSA, AP Economics Writer. http://news.yahoo.com/s/ap/20090429/ap_on_bi_go_ec_fi/us_economy
Commerce Department reports GDP is down 6.1% for Q1 09 (economists predicted only 5% annualized rate) . At least consumer spending is up 2.2%.
http://www.msnbc.msn.com/id/29599786/page/2/
I think this article is extremely relevant today about the swine flu. Though the mention of the flu is not there, it talks about how the current economic crisis is making America more susceptible to certain diseases.
According to Lakshman Achuthan, one of America's most reliable economic forecasters says the current recession will end this year, as early as this summer. What I like about the article is how they explain the crunching of various pieces of data and how that creates leading indicators that show where the economy is heading.
http://ac360.blogs.cnn.com/2009/04/30/forecaster-says-recession-is-almost-over/
According to Lakshman Achuthan, one of America's most reliable economic forecasters says the current recession will end this year, as early as this summer. What I like about the article is how they explain the crunching of various pieces of data and how that creates leading indicators that show where the economy is heading.
http://finance.yahoo.com/news/GOP-Obamas-first-100-days-all-apf-15110306.html
Republicans say that President Obama's first 100 days in office can be summed up in three words: spending, taxing borrowing. Republican Lynn Jenkins expressed disapproval with Obama and Democrats in Congress for going through with a $787 billion stimulus package and a $3 trillion federal budget for next year. Jenkins says that this will only waste taxpayers' dollars and burden future generations. All in all, Republicans believe they can create twice as many jobs for people in half of the cost of the current "stimulus" package.
http://www.economist.com/finance/displaystory.cfm?story_id=13579025
Even though the economy is still in the tank and most people are losing money, the Federal Reserve as been investing in more risky assets because of the bailouts and therefore has made some very hefty profits.
Empty Coffers
http://www.economist.com/finance/displaystory.cfm?story_id=13579236
This article discusses the impact of the recession on the returns of bonds and bondholders. In a normal situation, when a company goes bust the bondholders make a claim on the bank’s assets, but as seen from recent bankruptcies bondholders have been left with less than 2 cents. The author gives reason for this type of behavior: the relationship between recovery rates and default, and the types of companies that were borrowing during the boom.
"But we never imagined that they'd do so many stupid things all at once". Arent the government officials supposed to be our leaders of intelligence? Isnt that why they are leaders? Becuase of their specifically good decision making? I really like this Bill Bonner article.
http://www.dailyreckoning.com.au/us-government-doing-so-many-stupid-things-all-at-once/2009/04/27/
I forgot to post the link
http://www.nytimes.com/2009/05/04/us/politics/04stress.html?_r=1&ref=business
This article details what we should expect from the bank stress tests that will be unveiled this week by the Treasury Department. Although some banks will need additional capital, the author of the article suggests we should be optimistic about the future.
http://www.marketwatch.com/news/story/fed-stands-pat-says-worst/story.aspx?guid=%7B0B0756F8%2D7AE9%2D4A67%2D9205%2D82DC00D153A7%7D
This article deals with the Feds believing the worst of their recession is behind us. Though our economy is extremely weak, evidence is showing that the falling economy has slowed down and will eventually have an upturn.
Josh Orell
http://news.yahoo.com/s/ap/20090503/ap_on_bi_ge/us_wall_street_week_ahead;_ylt=AuYsGEnJp6yfNLRkU.IddQWyBhIF
This article is explaining where our economy might be presently, and where it might be going. Though our market is doing better, there is a split whether we will continue to get better, or a fall is coming again.
Josh Orell
"The conventional view of Africa as a genocide inside a failed state inside a dictatorship is, in fact, wrong."
Worries Rise on the Size of U.S. Debt
http://www.nytimes.com/2009/05/04/business/economy/04debt.html?ref=business
This article delves into the long term viability of government spending and borrowing. The authors claim that the current government policies are not sustainable because they would drive up interest rates. This would be specifically bad because it continues to increase our national debt. This is especially dangerous because there are fewer countries willing to buy our debt.
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