“As global markets plunged, President Bush on Monday said 'it's going to take awhile' for the government's $700 billion financial rescue plan to bolster the troubled U.S. economy”
RW: Wait a minute. I thought that this plan was designed to raise market confidence, rather than bolster a troubled economy. Man, did we just pass $700 billion with the wrong intentions?
Oil tumbles to 8-month low below $88
“Oil prices tumbled below $88 a barrel Monday, an 8-month low, as banking turmoil in Europe exacerbated fears that a global economic slowdown will crimp demand for oil and gas.”
RW: Just 3 months ago, this would have been heavenly news. Now, the markets write it off as unwanted. In these economic times (strong emerging market growth), you can’t have it both ways- make up your mind already.
MGM Mirage Gets Some Vegas Funding
“Fighting for financing in the midst of tight credit markets, MGM Mirage said it received a $1.8 billion credit facility from a group of banks for its massive CityCenter project of hotels, condos, retail stores and restaurants in Las Vegas.”
RW: And who said that credit was dead?
Bored with the bailout
“Bailout? That was SO last week. The economy? Can’t we just declare a moratorium on the issue, like one of the candidates has suggested?”
Global Carnage In Pictures
The Short Life of the Short-Selling Ban
“So, here's the [SEC’s short-selling ban] list. Remember that the SEC did not vet the list much, but instead allowed firms to self-identify as financial firms. First of all, Autozone isn't on the list. Autonation is. I can believe that Autonation's financing arm is a large enough part of its balance sheet as to make the firm as much of a credit company as the other car company on the list (General Motors and Ford Motor Company are also on the list.) CVS Caremark is on the list, but I'm not sure that this firm is merely a pharmacy. The company also seems to have clinics and offer prescription management services, so extensions of credit may also be part of its business plan. I'm sure this is also probably true about IBM."
Poll: 60% say depression 'likely'
"The CNN/Opinion Research Corp. poll, which surveyed more than 1,000 Americans over the weekend, cited common measures of the economic pain of the 1930s:
* 25% unemployment rate;
* widespread bank failures; and
* millions of Americans homeless and unable to feed their families.
In response, 21% of those polled say that a depression is very likely and another 38% say it is somewhat likely."
RW: Obviously they didn’t take macro 101: the Fed is injecting liquidity like it is a renewable resource (wait, it is), the government is also jumpstarting fiscal expansionary measures, and there has been no move to raise tariffs. I think that we are safe for now.
Mubarak pardons health-row editor
“Egyptian President Hosni Mubarak has pardoned a newspaper editor sentenced to jail for publishing an article questioning his state of health.”
RW: And you thought that we (the developed world) had it bad.
Ford's MyKey System Puts Invisible Road Nanny With Teen Drivers
“Ford is clearly trying to appeal to today’s car buyers, not tomorrow’s, by rolling out a feature ion 2010 models that can limit teen drivers to 80 mph, using a computer chip in the key.”
RW: Just what a struggling sector should offer: another stupid gimmick.
And finally: Cliff notes for Krugman's latest model:
Mark Thoma's summary of Krugman: The International Finance Multiplier
"First, it suggests that the core problem is capital, not liquidity – or at least that you can explain much of what’s going on without appealing to a breakdown of buying and selling per se. To the extent that this is true, rescue plans centered on making troubled assets liquid, like the Paulson plan passed last week, won’t do the trick. Instead, what’s needed is an injection of capital, which can’t reverse the original shock, but can undo the financial multiplier effect of that shock.
Second, the international implications: to the extent that we regard falling asset prices and their consequences as a bad thing, which we obviously do right now, this analysis suggests that there are large cross-border externalities in financial rescues. Macroeconomic policy coordination never got much traction, largely because economists never could make the case that it was terribly important. Financial policy coordination, however, looks on the face of it much more important. Capital injections by U.S. fiscal authorities would help alleviate the European financial crisis, capital injections by European fiscal authorities help alleviate the U.S. financial crisis. Multilateral Man, come home – we need you! ..."