Category: Economics & Business

P.S. This CNBC teaser. It’s from March 1999.

Consumerist has the photo.

The Consumerist has this report from ABC News:

In an Aug. 14 letter sent to Winkelmann’s St. Louis-area home, Jordan LaVine, a lawyer for The North Face, wrote that the companies’ logos are similar enough to possibly cause “consumer confusion as to the source, sponsorship or affiliation of particular problems and services that could dilute or tarnish the distinctive quality of the famous and distinctive TNFAC marks.”

Winkelmann is an 18-year-old who sells parody T-shirts and stuff.

Click here to see if you think consumer confusion might be an issue.

“CJ responded to his daylong Comcast outage with an Executive Email Carpet Bomb that hit its target with vigor. He says within 20 minutes his phone was bombarded with calls from company reps around the country, who managed to restore his service within four hours.”

Consumerist has the email that did the trick — and the addresses.

… the news media hypes the increase in retail sales over the previous month.

And once again Calculated Risk provides the perspective the mainstream news media somehow seems incapable of presenting.

Click, you can just look at the charts.

Or, as the Census Bureau puts it:

“[A]n increase of 2.7 percent (±0.5%) from the previous month, but 5.3 percent (±0.7%) below August 2008. Total sales for the June through August 2009 period were down 7.6 percent (±0.3%) from the same period a year ago.”

The increase in August over July was mostly subsidized car sales (cash for clunkers) and an increase in gasoline prices.

Three banks were closed by the FDIC today, numbers 90, 91 and 92 this year.

The big one today was Corus Bank, National Association. It cost the Deposit Insurance Fund $1.7 billion.

424 more banks are on the Problem Bank List. Three are in New Mexico.

“[W]e should still expect millions of foreclosures…”

Assistant Secretary for Financial Institutions Michael S. Barr in Written Testimony on Stabilizing the Housing Market before the House Financial Services Committee, Subcommittee on Housing and Community Opportunity as reported at Calculated Risk.

My good friend Donna was undone by Comcast this evening as the evil ones stood her up for an appointment, put her through eons on telephone hold, only to have a supervisor be dismissive to the point of rudeness.

And, of course, the appointment was to fix their internet service which has been, they admit, inadequate for several days now.

In case you’ve lost track, as of yesterday (with five more), we’re up to 89 banks closed this year.

Banks 73, 74, 75, 76 and 77 of 2009 were closed by the FDIC today.

Community Bank of Nevada
Community Bank of Arizona
Union Bank, National Association (Arizona) — first banks closed in Arizona since 2002
Colonial Bank (Alabama) — first failure in Alabama since 1992
Dwelling House Savings and Loan Association (Pennsylvania)

25 banks were closed last year. 10 were closed 2003-2007.

There will probably be two bottoms for Residential Real Estate.

The first will be for new home sales, housing starts and residential investment. The second bottom will be for prices. Sometimes these bottoms can happen years apart. I think it is likely that we’ve seen the bottom for new home sales and single family starts, but not for prices.

It is way too early to try to call the bottom in prices. House prices will probably fall for another year or more. My original prediction (a few years ago) was that real house prices would fall for 5 to 7 years (after 2005), and we could start looking for a bottom in the 2010 to 2012 time frame for the bubble areas. That still seems reasonable to me.

Calculated Risk

He’s been right so far.

Seven more went down yesterday.

But it should be.

Since the Seattle Times broke some serious news here, maybe it will take a day or two for the national dailies to weigh in, but it’s a big story. Yes, I’m an airplane nut, but this is supposed to be the plane of the future and Boeing single-handedly keeps our foreign trade imbalance from going all the way through the stratosphere. So this is just big news on eight different levels. This is still easily the most exciting jetliner in a generation, but if Boeing blows this and has to go back to the drawing board, it’s a catastrophic loss. If they get it together and the thing flies, so to speak, airlines and passengers around the world will be happily flying this new plane with the bigger windows, cleaner air, greater roominess, quieter engines, etc., etc., for years to come. It’s either a world-beater or an epic loss for U.S. industry. National dailies need to capture that, even if blogs don’t care.

Sam Howe Verhovek at Slate Magazine reporting from Seattle. Here’s Timothy Egan on the same story:

[A] Seattle Times story that the 787 Dreamliner may not fly this year and could have serious troubles down the road. The implication is that it may not fly at all. … But it’s a big deal. Why? With the auto industry in bankruptcy, people oft say: We don’t make anything in this country anymore. In fact, we do. We make airlines for the world, at some of the best wages in the world. If the Dreamliner, Boeing’s next edition, doesn’t fly, it’s a huge blow to American industrial might, or what’s left of it. And it shows, perhaps, that you can’t build a plane by outsourcing all its parts to factories and engineers around the world, as Boeing has tried to do.

Here’s The Seattle Times story — Boeing 787 may not fly this year.

Note that the Verhovek-Egan exchange is part of a larger look by Slate at news on the web vs. in the newspapers.

Bank failures 54 through 57 of 2009 happened yesterday:

First Piedmont Bank, Winder, GA
BankFirst, Sioux Falls, SD
Vineyard Bank, Rancho Cucamonga, CA
Temecula Valley Bank, Temecula, CA

Did you read Matt Taibbi’s article about Goldman Sachs yet?

The Great American Bubble Machine

As a supplement to Matt Taibbi’s article — described and linked to in the previous post — I thought this paragraph from George Packer in a February article in The New Yorker about Florida’s foreclosure disaster — “The Ponzi State” — was particularly apropos.

Dan knew that his plight was the result of rising unemployment in a bad economy that was shedding the few remaining manufacturing jobs. In Hillsborough County, forty-eight thousand people had no work. And yet, in pondering the cause of his trouble, Dan couldn’t avoid the feeling that the world had singled him out for some terrible payback, that it must have been his fault, that the failure was his alone and he had no right to anyone else’s help. It occurred to me that this was an attitude that no senior figure on Wall Street had adopted.

Matt Taibbi’s controversial report on Goldman Sachs, The Great American Bubble Machine, came online in full today, coincidentally the day Goldman announced second-quarter profits of $3.44 billion. I haven’t read the article yet — I am about to — but I know it’s important reading to understand the economic world in which we live. As Taibbi writes, “It is a history exactly five bubbles long….” [It’s funny, informative, important and deserves your time.]

Here’s the second paragraph to possibly whet your interest.

By now, most of us know the major players. As George Bush’s last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton’s former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup — which in turn got a $300 billion taxpayer bailout from Paulson. There’s John Thain, the asshole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibilliondollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain’s sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in goldenparachute payments as his bank was selfdestructing. There’s Joshua Bolten, Bush’s chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailedout insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman — not to mention …

Taibbi’s description later of Robert Rubin is laugh-out-loud funny.

So says Robert Reich.

The Dow Jones Industrial Average had an intra-day low of 40.56 on this date in 1932, its Great Depression bottom. It closed that day at 41.22.

34 months earlier it had been at 381.17; the drop was 89.3%.

(For comparison, we’re 21 months into the current bear market, down 43.7% since October 2007.)

The Dow did not reach the September 1929 level again in inflation-adjusted value until 1954.

Seven banks were taken over by the FDIC today, that’s as many as in 2004-2007 combined.

52 so far in 2009.

Four Five banks taken over by the FDIC today. That’s 44 45 failed banks in 25 weeks so far this year.

Not surprisingly, all the various chains of superdiscount stores are thriving in the recession. At Dollar Tree Inc. (3,667 stores), earnings were up nearly 38 percent in the most recent quarter. In its most recent quarter, Family Dollar Stores (6,654 locations) said same-store sales were up 6.2 percent. Both companies’ stocks are higher than they were when the market peaked in October 2007. And Dollar General (8,400 stores, $10.5 billion in 2008 sales) is performing even better.

Daniel Gross — Slate Magazine

Tiffany sales in NYC meanwhile are off 42%.