Consumer Spending Falls Most Since 2004 ·
The U.S. Commerce Department reported Friday that personal spending declined 0.3% in September, the steepest decline since June 2004, contributing to the worst quarterly performance in 28 years. (NYT)
October 31, 2008
Economic News
Laeven: The Cost Of Crisis Resolution [OPINION] ·
International Monetary Fund economist Luc Laeven calculates that between 1970 and 2007 the fiscal cost of banking crises in industrialized economies averaged 15% of GDP, three times the U.S.'s $700 billion bailout plan, suggesting costs associated with the current credit crisis could rise appreciably. (VOX)
U.S. Stocks Shake Off GDP Report ·
The Dow Jones Industrial Average added 189 points, or 2.1%, on Thursday after signs of improvement in credit markets tempered an expected decline in economic growth. The S&P 500 index gained about 2.6%. (NYT)
Roubini: Get Ready For ‘Stag-Deflation’ [OPINION] ·
Economist Nouriel Roubini cautions that goods, labor, commodity, financial and bond markets are all sending the same message: deflation or"stag-deflation" looms ahead. (Forbes)
U.S. Economy Shrinks As Consumers Cut Back ·
The U.S. Commerce Department reported Thursday that the economy contracted at a 0.3% annual rate in the third quarter, the sharpest decline since 2001, as personal consumption fell the most in 28 years. (Economix)
Hedge Funds To Ask EU For Porshe-VW Resolution ·
Hedge funds that were short-squeezed by Porsche's surprise disclosure Monday it owns roughly 75% of Volkswagen will petition the European Union to clamp down on a controversial German legal loophole that allowed the automaker to secretly boost its stake. Some of the funds are facing billions of dollars in losses. (The Times)
Japan, Germany Prepare Stimulus Packages ·
Japan, the world's second largest economy, unveiled a $51 billion economic stimulus package Thursday while German lawmakers signaled they will announce $32 billion in new measures sometime next week to boost business amid a looming recession. (Reuters)
Asian, European Stocks Rally On Rate Cuts ·
Global markets rallied Thursday as Asian and European central banks echoed the Federal Reserve's Wednesday rate decision with cuts of their own. In Asia, Japan's Nikkei 225 index rose 10% while Seoul's Kospi index soared 12%. (NYT)
IMF Creates $100B Loan Fund, Argentina Excluded ·
The International Monetary Fund will offer $100 billion in condition-free, three-month loans to countries battered by the financial crisis, but immediately discounted struggling Argentina as a recipient because it has not had a financial review in more than a year. (WSJ)
A Silver Lining For Goldman Sachs [OPINION] ·
Rob Cox and Pierre Briancon of BreakingViews.com contend that although Goldman Sachs restricted partnership offers this year, turbulent times in the securities industry will surely prevent its Wall Street competitors from poaching top talent. (BreakingViews)
U.S. Pension Funds Face $100B Deficit ·
Pension industry analysts estimate that U.S. companies will need to inject more than $100 billion into their employee pension funds over the next year to cover recent market losses. Currently, pension fund losses are estimated at 20% year to date. (FT)
Lucas: “Bean Accounting” For Federal Bailouts [OPINION] ·
Economist Deborah Lucas argues that the U.S. government holds itself to less stringent accounting standards than it imposes on the private sector, cautioning that its methods could distort the value of securities it buys from troubled financial institutions. (Kellogg Insight)
U.S. Stocks Lose Ground On Bleak Fed Outlook ·
The Dow Jones Industrial Average failed to sustain a 300 point rally Wednesday, closing down 74 points after the Federal Reserve tempered a half percentage rate cut with a bleak forecast for exports and consumer spending. (CNN Money)
Human Touch Returns To NYSE Floor ·
The floor of the New York Stock Exchange has roared back into action the past few weeks as investors seek to push trades through brokers and specialists rather than computers amid the unprecedented market volatility. (FT)
Treasury, Markets Brace For Insurance Earnings ·
Analysts expect Hartford Financial, Prudential Financial and MetLife to report steep third-quarter losses late Wednesday, increasing pressure on the U.S. Treasury to expand its $700 billion bailout program to include the insurance sector. (CNNMoney)
