It doesn’t involve ninjas, but the “shadow” banking system is an important part of the US economy, it’s the companies that loan money but aren’t themselves banks. The loans they make aren’t kept on the companies books, they’re securitized and resold as bonds. White whiteboard and magic marker, Marketplace Senior Editor Paddy Hirsch argues this shadow banking system deserves it own bailout.
economy
Dr. Doom Says The Economy Will Improve … Eventually
By 4.20.09
Contrarian economist Nouriel Roubini — nicknamed “Dr. Doom” because he predicted the global economic collapse long before it happened — sat down with the editors of Consumer Reports for a lengthy interview recently, and shared his thoughts about what’s next.
8.5% Unemployment? More Like 15.6%
By 4.15.09
Officially, the unemployment rate is 8.5%, but that’s just part of the picture. It doesn’t count those who have given up looking for work, or those who are working part-time when they’d rather be working full-time. The real unemployment rate may be closer to 15.6%, according to the Bureau of Labor Statistics. Yikes.
If Everyone Is Broke, Is There Still A Class System?
By 4.15.09
Will The Great Recession dissolve our system of symbols and affluence and remake America into a classless society? Nah, not only would that be boring, but it’s impossible. A river with less water is still a river. Speaking of conspicuous consumption and water, here’s what Paul Fussel, snarky author of Class: A Guide Through the American Status System, says about cruise ships:
Consumer Prices Fall For The First Time Since 1955
By 4.15.09
Grab your nearest economist and hold them tight, prices are falling. The Labor Department says that the obsessed-over Consumer Price Index fell 0.4 percent for the year — the first annual drop since 1955.
Never Mind, People Still Aren't Buying Anything
By 4.14.09
Just when we thought we saw a light at the end of the tunnel, retail sales dropped “unexpectedly” in March after a three month period of growth. Why is this bad? Because it makes economists worry about deflation.
Nurse Laid Off In The Middle Of Surgery
By 4.14.09
When Dean Health System in Madison, Wisconsin announced last week that it “planned to ‘immediately’ lay off 90 employees,” it wasn’t kidding around. One of them was a nurse who was pulled out of surgery to be told the news.
Banana Republic Lowers Credit Card Limit From $1000 To $100
By 4.13.09
It’s no surprise that a popular purveyor of work-suitable vestments suck lowered a reader’s friend’s store credit-card limit, but to go from $1000 to $100, that’s cold, Banana Republic. Danielle writes:
Job Seekers Crowd Jamba Juice. Customers? Not So Much.
By 4.9.09
I saw this crowd outside the Jamba Juice on 3rd Ave and 61st today. They’re hiring. The job applicants stretched around the corner and down the block. At peak lunch time, there were only three customer inside. That’s pretty much the economy in a nutshell smoothie right there.
What's This "Public-Private Partnership" Mean?
By 4.7.09
So the latest solution to the problem of these toxic assets on the banks’ books is a “public-private partnership” between the government and the private sector…yawn what is he going on about, I wish I had a pancake…oh wait! Here’s Paddy Hirsch from marketplace drawing stick figures on a whiteboard and explaining it all. Now we’re talking.
Chase and Citi Shut Door On Mortgage Brokers
By 4.6.09
You’re cut off! JPMorgan Chase and Citi announced they’ll no longer accept mortgages submitted by mortgage brokers. The move seems to be a way for the banks to exercise more control over the loans they undertake. At first blush, this sounds like a good thing, for banks to be looking their borrowers in the eye, a throwback to the days when credit was earned instead of splooged out like candy in a parade (days epitomized in this 1950’s short, “The Wise Use of Credit,” posted inside…) On the other hand, it could be more just a way to snag market share and shut out the competition, which can lead to higher interest rates, borrowing costs, fees, and lower service.
What The G-20 Said, And What They Meant
By 4.6.09
WHAT THEY SAID: “We are undertaking an unprecedented and concerted fiscal expansion, which will save or create millions of jobs which would otherwise have been destroyed, and that will, by the end of next year, amount to $5 trillion, raise output by 4 percent and accelerate the transition to a green economy.”
Fannie And Freddie Can Foreclose Again
By 4.3.09
Fannie Mae and Freddie Mac can foreclose on people’s houses again. There was much fanfare when they were banned from doing so back in December, but not a peep on March 31st when the moratorium ended. Funny, that. [The Washington Independent] (Photo: Colin Tobin)
People Haven't Returned Hyundais b/c They Weren't Yet Eligible
By 4.1.09
Rather than some secret barometer of the economy’s resilience, the real reason why no one has returned a car yet under the Hyundai Assurance Program is that you have to make at least two payments before you can return a car. Also, you must first miss three payments, so the earliest you would start to see returns is Mayish. Yeah, that makes a lot more sense than the armchair social economics crap I was coming up with. (Thanks to readers kman and Dennis!) (Photo: popofatticus)
Lose Your Job? Ford Makes Your Payments For A Year
By 3.31.09
Not to be outdone by Hyundai, if you buy a Ford and lose your job, the car-maker announced they’ll make your payments for up to a year, up to $700 per month. President Mark Fields released a video about the “Ford Advantage Plan” on YouTube. Take a shot every time he says “confidence.” GM is supposed to announce their own version this morning, says Kicking Tires. UPDATE: And here it is.
Why AIG Gave Your Money To Other Banks
By 3.30.09
There’s been a big stink about how AIG has given a bunch of taxpayer money to other banks. Why why why, demand the American people. Well, it’s not like they enjoy shoveling money out the door, wait, scratch that, but anyway, the real reason is because of something called “collateral calls.” Marketplace’s Paddy Hirsch explains the situation with the help of his friends Mr. Magic Marker and Mrs. White Board in this video.
Nation's Only State-Owned Bank Earns Record Profits, Wall Street Salivates
By 3.30.09
The Bank of North Dakota is the only state-owned bank in America. It also reaped record profits last year. [Mother Jones] (Photo: afiler)
Recession Boon Time For Online-Dating Sites
By 3.30.09
eHarmony says they’ve noticed their site traffic increases on days when the Dow drops by more than 100 points. I guess add them to auto parts stores as another counter-cyclical investment. [Economist] (Photo: andronicusmax)
