The Journal’s Simon Constable corralled NYU’s Nouriel Roubini ahead of Davos and the two discussed the state of American workers, the prospects for China’s economy, fiscal austerity, and the need for G20 nations to work together rather than just talk about working together.
Banks, Economy, Federal Reserve, Financials, Markets, Unemployment / Comments Off
- Like clunkers, caulkers only drags demand forward, Mish says. “By the way, not the incentive that consumers and businesses have to not do anything until government hands out more free money to act.”
- Rising housing starts represents a mixed bag for the economy.
- Former IMF chief economist Simon Johnson says don’t worry about Greece’s budget deficit.
- Skepticism still running rampant amid this rally.
- Move to reinstate Glass-Steagall picking up steam.
- Why isn’t there an urgency to fix Fannie/Freddie’s problems? “There seems to be plenty of time for topics like creating jobs…and yet not for figuring out how to deal with the $111 billion albatross hanging around taxpayers’ necks,” Barbara Kiviat says.
- Market breadth is rising, but a pullback may not be imminent.
- Citi to payback TARP. So what’s up with its declining stock price?
- Suspicions of a gold bubble are mounting, says Dr. Doom Nouriel Roubini.
- Time magazine names Ben Bernanke Person of the Year, but will the cover curse haunt him?
- Speaking of Bernanke, Tim Ianco says he’s immersed in the “Bizarro World.”
- Cutting wages won’t help spur recovery. “In a severe recession, a cut in the wage rate may not generate any new employment, instead it simply lowers income and demand, and that makes things even worse,” University of Oregon economics professor Mark Thoma says.
Banks, Economic Indicators, Economy, Markets, Uncategorized, Unemployment / 3 Comments
Fed chairman Ben Bernanke can talk all he wants about the strengthening US economy, but nothing can hide the fact that unemployment remains in a dire situation without much hope for a turnaround in the near future.
The notoriously bearish Nouriel Roubini penned a NY Daily News op-ed yesterday cautioning the worst is yet to come on the unemployment front. He expects job losses will continue until the end of 2010 at the earliest, unemployment will peak near 11% and will remain elevated for at least two years.
In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.
He says government should pass another round of stimulus that will put people back to work sooner rather than later.
There’s really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.
Roubini isn’t the only doomsayer who’s predicting the jobs market to get even worse than it already is. Gluskin Sheff chief economist David Rosenberg predicted last week that the unemployment rate could hit as high as 12%-13%. Goldman Sachs chief economist Jan Hatzius has also said the jobless rate could reach 11%.
Dow Jones Industrials, Economy, Markets, S&P 500 / Comments Off
US stocks close basically flat, after an early burst flickers out, and while it was a pretty quiet news day, at least as far as big headlines go, there’s a lot of cross-currents out there you need to keep in mind.
DJIA adds 3 to 9509 after rising as much as 82 in the morning; S&P 500 eases 1 to 1026, Nasdaq Comp slips 3 to 2018. Volume is surprisingly strong, with composite volume on the NYSE hitting 6.3B shares (above the daily average this year and especially curious given it’s the last week of August,), and picked up steam early in the afternoon, right as stocks started to tank.
Financials strong early, but finish down; there’s a lot of chatter floating around about banks’ strength, and how many will ultimately fail. But energy stocks rise as crude inches closer to $75/barrel. Of course, that’s not good for consumers, which may explain why consumer stocks fell.
The first of the government’s high profile stimulus programs, the so-called cash-for-clunkers program, expires tonight. But there’s a handful of others that are set to expire over the next four or five months, and we’ll start finding out just how strong the economy is as they go away. Madeleine and I discuss it here.
Dow Jones Industrials, Economic Indicators, Economy, Markets, S&P 500 / 2 Comments
Recovery, what recovery?
US stocks plunge at the open as investors worry about the sustainability of a potential economic rebound. Stock prices, which have soared nearly 50% off the early March lows, may have gotten ahead of themselves as disappointing reports last week on retail sales and consumer confidence seem to have unnerved investors.
Lots of bearish commentary and analysis floating around the blogosphere this morning, led by “Dr. Doom,” NYU’s Nouriel Roubini.
Growth in advanced economies is likely to remain “anemic” for at least a few years as households still need to deleverage and save more, which will hurt consumption, he writes at RGE Monitor. The financial system also remains “severely damaged” as a lack of credit growth will hurt consumption and investment spending.
Dow Jones Industrials, Markets, Recession, S&P 500 / 1 Comment
US stocks rally in the afternoon, after reports that Nouriel Roubini upgraded his economic views sparks a buying spree, although his people said the comments were misconstrued. Meanwhile, CIT Group teeters amid fears of bankruptcy.
DJIA jumps 96 (1.1%) to 8712, S&P 500 rises 8 (0.9%) to 941, Nasdaq Comp gains 22 (1.2%) to 1885. You want volatility? The Dow is up 6.9% – in four sessions.
Weekly jobless claims plunge, but Labor Department says seasonal adjustments are exaggerating the numbers. JPMorgan posts sharply higher earnings, on a huge quarter for investment banking. But the consumer side of the business is still suffering. Video recap here.
Now, are the bears going soft? First it was Meredith Whitney on Monday, going bullish on Goldman. Today it was, apparently, Roubini. But what’s so frustrating about the Roubini story – and what illustrates just how jumpy the market is – is that ultimately Roubini didn’t say anything new.
Crude oil sets another year high, passing $73 a barrel, causing doubts about a potential economic recovery.
As WSJ notes, retail gas prices rose about 19% in May alone after being flat in April. For the year, gas has gone up about $1 a gallon to $2.67.
Drivers consume roughly $140 billion gallons of gas a year, according to University of California, San Diego, economist James Hamilton, so a lasting $1 price increase could divert some $140 billion in consumer spending power away from “discretionary” purchases like dresses and dinners out.