The Real Face of Socialism

The real 'socialists' here.

The George W. Bush administration handed 125 billion dollars to nine of Wall Street's richest banks, but this will do little to help the economy that is crumbling around ordinary U.S. citizens, independent experts and activists say.

"There is no way a modern economy can function without good roads, telecommunication, rail transport and an educated labour force," Allan Mendelowitz, a member and former chairman of the Federal Housing Finance Board, told IPS.

Bush's new Office of Financial Stability, led by Neel Kashkari, sealed a deal Tuesday to provide the billions, plus 125 billion dollars more for small banks, to encourage them to start lending to each other and the world's biggest businesses again.

A freeze in lending, related to the banks' risky trading ventures, has slowed the global economy, rocked stock markets around the world, and tightened lending throughout the U.S. economy.

"We're not proud of all the mistakes that were made by many different people, different parties, failures of our regulatory system, failures of market discipline that got us here," said Treasury Secretary Henry Paulson Thursday in an interview on Fox Business Network.

The Ever Increasing Grocery Bill

I was just talking with a co-worker about this yesterday.

Worries over a global recession have pushed the price of oil to its lowest in over a year. Don't expect the same for a bottle of beer, a tube of toothpaste, or a box of cereal.

You can blame "sticky" prices.


That's what analysts call it when companies slap higher prices on products and keep them there even though the rationale for the price hikes -- such as soaring oil prices -- is gone.

The falling cost of oil could help companies pad their profit margins as they pay less to make and transport goods. But it won't mean a break on the average grocery bill.

The price of consumer goods typically lags behind the price of key inputs like oil and wheat, said Chris Lafakis, an economist with Moody's economy.com.

"Consumer prices don't change near as fast, because they are set by companies," Lafakis said. "Commodity prices are set every day on an open market."

Global Economy in 'Major Downturn'

So says the IMF...

The International Monetary Fund said Wednesday that the global economy was sinking in a maelstrom of financial turmoil, and faces a painful crawl toward recovery in 2009.

"The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s," the IMF said in its biannual World Economic Outlook (WEO) report.

The IMF revised downward its July forecasts for global economic growth to 3.9 percent in 2008 and 3.0 percent in 2009, the slowest pace since 2002. The markdowns shaved off 0.2 percentage point and a hefty 0.9 point, respectively.

"The major advanced economies are already in or close to recession, and, although a recovery is projected to take hold progressively in 2009, the pickup is likely to be unusually gradual, held back by continued financial market deleveraging," the 185-nation institution said.

National Debt Clock Ticks On

The results of 'fiscal conservatism'...

Number of Homeless Rising

This is so sad. To think you still hear the 'We're the richest country in the world' line...

The nation's financial crisis has plunged more Americans into a personal financial crisis that sees the number of homeless individuals and families rising nationwide.

In Massassachussets, a surge in homeless families has swamped shelters and caused state officials to house more than 500 families in hotels, versus the 27 it housed in hotels at this time a year ago, according to reports.

The usual culprits of unemployment and a shortage of affordable housing coupled with rising energy and food costs are driving more people into homelessness. But Massachussets officials have also begun tracking how many people are homeless because of foreclosure.

And it isn't just heavily populated states such as Massachussets that are struggling to cope with growing numbers of homeless families.

In Montana, homeless advocates put on a fundraiser this weekend to raise $30,000 to assist homeless families in getting back on their feet. Some 382 homeless children attended school in the Billings school district during the 2007-2008 school year.

eBay to Cut Workforce By 10%

Going, Going...Gone!


EBay Inc. plans to eliminate 1,600 jobs, or 10 percent of its workforce, to reduce costs as the company tries to revive its slowing growth.

Separately today, eBay revealed its intent to spend $1.34 billion on three acquisitions, the biggest of which is Bill Me Later, an online credit service.

The staff cuts include 1,000 full-time, temporary and part-time workers, plus some open positions that will be left unfilled. They come on top of 125 dismissals earlier this year by the San Jose company, whose core online marketplace is slumping in the face of stiff competition from Amazon.com and users' growing preference for shopping for products at a fixed price rather than by auction.

Dow Finishes Below 10,000

This isn't good.

Wall Street joined in a worldwide cascade of despair Monday over the financial crisis, driving the Dow Jones industrials to their biggest loss ever during a trading day. Even a big afternoon rally failed to keep the Dow from its first close below 10,000 since 2004.

The sell-off came despite the $700 billion U.S. government bailout package, which was signed into law Friday after two weeks in which traders had appeared to count on the rescue as their only hope to avoid a market meltdown.

At its worst point, the Dow was down more than 800 points, an intraday record. The stock market rallied during the final 90 minutes of the trading day, and the Dow finished down about 370 points at 9,955.50.

The Cyberbeggar Times- I'm Back!

Well, I've been away for about nine months now (not by choice) and finally made it back. Unfortunately I was a casualty of this great economy of ours and lost both my old computer and the time to post. There is so much to catch up on and talk about and I look forward to discussing these issues with you. As I have said in the past, I am not an economist nor do I profess to having an extensive knowledge of the fine points of the economy but I do keep up with economic news and understand how it affects me in my daily life.

Thanks for stopping by!

House Prices Keep Falling and Falling...

Another report on the state of housing today.

Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30 percent before the housing crisis is over, a report from Moody's Economy.com said on Thursday.

On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economics.

The report paints a worsening picture of the hard-hit housing sector, which is in the midst of its worst downturn since World War II.

While activity will stabilize in 2009, it will not be until 2010 before a measurable improvement in sales, construction and pricing will emerge, the report said.

House prices are forecast to fall 13 percent from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15 percent, the report said.

Punta Gorda, Florida, and Stockton, California, are the hardest hit markets in the U.S., with price declines from peak-to-trough forecast at 35.3 percent and 31.6 percent, respectively.

"This is the most severe housing recession since the post-World War II period," Zandi told Reuters.

Rubin in at Citigroup

Citigroup names former Treasury Secretary Robert Rubin as chairman...