Thursday Evening News Roundup
- You know, after my being up all night, a short nap does not hit the spot like it used to. It takes some time for cobwebs to clear. So if most of what I wrote below doesn’t make any sense, feel free to write it off to a lack of sleep.
- The stock market fell for the second day in a row. All the major indices were down. Standard & Poor’s changed its outlook for General Electric to “negative”. Exxon Mobil and Chevron lost approximately 5% as the cost of a barrel of oil fell below $36. (NPR has a nice story on the oil glut.) Auto stocks also fell as the White House continued to play around with the auto bailout.
- The Office of Thrift Supervision (yes, that is the name of the actual federal office) has produced a 300-page report which outlines credit card companies “unfair,” “unreasonable” and “deceptive” practices. They banned together with the Federal Reserve and the National Credit Union Administration and new rule changes were proposed. These rule changes should help consumers; however, like everything in the Bush administration era, there is one last poke in the eye for the consumer. These rule changes do not take place until July 1, 2010. 2010? That’s ridiculous. I believe changes should be enacted by January 1, 2009, but that’s just my opinion.
- I’ve mentioned the New York Times series The Reckoning, a series of articles that explores the causes of our financial crisis. After reading all of them, it is clear that not it was not one thing that caused the financial crisis. Instead, multiple and disparate occurrences created an atmosphere in which this crisis became possible. Today’s article looks at compensation on Wall Street. A 30-something trader making $180,000 a year could pull in a bonus of over $5 million back in 2006. Unfortunately, as the article points out, the record earnings of $7.5 billion (in 2006) for Merrill Lynch turned out to be (here we go again) Monopoly money. The earnings weren’t real but the bonuses were. This is an excellent article and is well worth taking the time to read.
- This was the warmest year on record for the Arctic. The average temperature was a full 9°F above normal. This can’t be good.
- Pirates in Somalia are living the good life. Some are making over $1 million a year. Think of these pirates as Wall Street executives. 😉
- The latest out of the White House on the bailout of Detroit is something called an “orderly” bankruptcy. The president spokesperson, Dana Perino, tried to explain what this was. I’m not sure that she quite gets it herself. Basically, as I understand it, some government person would oversee negotiations among investors, executives of General Motors and Chrysler, suppliers and the UAW. In my opinion, this means that everyone should do okay… except that the workers will be asked to sacrifice even more. (By the way, Chrysler announced that it will cease production for the rest of the year.)
- President Bush spoke at the American Enterprise Institute (a conservative think tank) today. As he discussed his eight years in office, he commented on how he has decided to leave free-market economics and move “aggressively” to avoid another Great Depression. It would seem George W. Bush is trying to avoid being the century’s Herbert Hoover. Again, this could be considered part of President Bush’s “victory tour.” President Bush and Dick Cheney have done numerous interviews over the last 10 days which seem to be aimed at rewriting history. Rachel Maddow had an excellent segment on this a couple nights ago (see video clip below).(full video of the President is here.)
Time for a little R&R.