Angst regarding 2009 foreclosures from The Financial Ninja, Foreclosures Triple: Housing Recovery is Just Crazy:Everybody has heard of the people who stopped paying months ago but haven’t been evicted because the bank just can’t get around to them. So imagine how long it will take fore the massive job losses in October and November of 2008 to translate first into stopped mortgage payments and then second into actual foreclosures?
RW: It certainly feels like it will be years before anybody has anything good to say about the economy!
And Irrational Doomsday on oil, Oil recovery?: In any case, although cheap gas directly benefits me, it's too bad in my judgment that low oil prices and lack of finance are causing so many renewable energy projects to be suspended now.
RW: I agree. Investment in renewable energy is the wave of the future – innovation in this area would be quite advantageous in terms of growth and jobs in the future (although a rather far future, I expect).
Uh-oh, from Naked Capitalism, Krugman Runs Stimulus Numbers and Finds Obama Plan Wanting, Paul Krugman has analyzed the stimulus plan as it now stands, using accepted techniques (various multipliers for various types of spending) and finds it falls well short of its objectives. Given the determination of the Obama crowd to jolt the economy into some semblance of life, this strongly suggests that towards the end of the year, more stimulus measures will be on the table, with large dollar figures attached to them.
RW: Honestly, this is Congress’ biggest problem, and my biggest problem with how TARP played out. If you’re gonna do it, then just do it! If you don’t do it right (being big enough), then you end up paying more in the end – via the real economy AND government debt.
Somebody’s a little behind. From Carpe Diem, The Credit Crunch That Isn't: The Federal Reserve's own data shows this to be another big government lie. Throughout 2008 bank loans have been increasing compared to a year earlier, both in absolute dollar terms and as a percentage increase over a year ago.
RW: I am still having a problem getting my head around the shadow banking system. But since the banks are no longer selling off their loans to the securitized industries, the flows may actually look bigger (which is exactly what the chart shows).
A bit of skepticism from HSH blog, Funds Expire for TV Converter Coupons: The Federal agency in charge of distributing coupons for the digital TV converter program, announced yesterday their funds have run out. The National Telecommunications and Information Administration (NTIA) disclosed in a press release that as of Sunday January 4, the $1.34 billion allocated to provide consumers with a $40 coupon to offset the price of a digital converter box had expired. Consumers who now request coupons will be put on a waiting list.
Congress and consumer group alike are upset with the NTIA for not properly notifying lawmakers that additional funds were needed to carry out the program.
RW: Funny, $1.34 billion used to mean something; now its pittance compared to what the government is spending. I am totally not surprised – the government doesn’t tell us anything. We appropriated $300 billion in non-accessed funding of Hope for Homeowners, what happened there? I am still reading about stimulus checks going out, and worse yet, stimulus checks that were deposited to the wrong accounts. It’s mayhem out there – better be careful.
And the WSJ Real Time Economics comes through, as always, Don’t Start Thinking About Tomorrow:But a recent NBER paper looks at why we and other developed countries stopped saving in the first place. The finding: “growing intergenerational selfishness” is partly to blame, authors Loretti Dobrescu, Laurence Kotlikoff and Alberto Motta wrote.
“Developed societies are placing increasing weight on the welfare of those currently alive, particularly contemporaneous older generations,” they wrote.
RW: Really cool paper. I was always skeptical about the infinite-horizon intertemporal models, like the life-cycle model. Mostly because they characterize individual decision-making as spanning infinite time – people actually care about consumption beyond their lifetime (infinitely future) generations. Do they really?
And now it’s official. From Calculated Risk (via the FOMC Minutes), Fed Fears Long Recession: The Fed projects GDP to decline in 2009 "as a whole", and unemployment to "rise significantly into 2010". The Fed also expects disinflationary pressures to continue into 2010.
And from Burning Our Money, Spend Spend Spend The original New Deal only cost $500bn (in today's money).
RW: I really like this blog. The population was much (MUCH) smaller in 1933, so the per-capita expenditure is much (MUCH) bigger.
And I almost forgot FOX! Sleeping North Dakota Woman Mistakenly Fires Shotgun in Bed
RW: You really don’t have to read on, but she lives and could faces charges.
And from Kerry Hawkins Photography (she has had some really good ones, lately) – this is a truly fantastic photo!