The long-feared capitulation of American consumers has arrived. According to Thursday’s G.D.P. report, real consumer spending fell at an annual rate of 3.1 percent in the third quarter; real spending on durable goods (stuff like cars and TVs) fell at an annual rate of 14 percent. To appreciate the significance of these numbers, you need to know that American consumers almost never cut spending. Consumer demand kept rising right through the 2001 recession; the last time it fell even for a single quarter was in 1991, and there hasn’t been a decline this steep since 1980, when the economy was suffering from a severe recession combined with double-digit inflation. Also, these numbers are from the third quarter - the months of July, August, and September. So these data are basically telling us what happened before confidence collapsed after the fall of Lehman Brothers in mid-September, not to mention before the Dow plunged below 10,000. Nor do the data show the full effects of the sharp cutback in the availability of consumer credit, which is still under way. So this looks like the beginning of a very big change in consumer behavior. And it couldn’t have come at […]
More than three years before the current financial crisis, in a series Greenspan, the Wizard of Bubbleland that began on September 14, 2005, I warned: Through mortgage-backed securitization, banks now are mere loan intermediaries that assume no long-term risk on the risky loans they make, which are sold as securitized debt of unbundled levels of risk to institutional investors with varying risk appetite commensurate with their varying need for higher returns. But who are institutional investors? They are mostly pension funds that manage the money the US working public depends on for retirement. In other words, the aggregate retirement assets of the working public are exposed to the risk of the same working public defaulting on their house mortgages. When a homeowner loses his or her home through default of its mortgage, the homeowner will also lose his or her retirement nest egg invested in the securitized mortgage pool, while the banks stay technically solvent. That is the hidden network of linked financial landmines in a housing bubble financed by mortgage-backed securitization to which no one is paying attention. The bursting of the housing […]
New research by the University of East Anglia (UEA) has demonstrated for the first time that human activity is responsible for significant warming in both polar regions. The findings by a team of scientists led by UEA’s Climatic Research Unit will be published online by the Nature Geoscience this week. Previous studies have observed rises in both Arctic and Antarctic temperatures over recent decades but have not formally attributed the changes to human influence due to poor observation data and large natural variability. Moreover, the International Panel on Climate Change (IPCC) had concluded that Antarctica was the only continent where human-induced temperature changes had yet to be detected. Now, a newly updated data-set of land surface temperatures and simulations from four new climate models show that temperature rises in both polar regions are not consistent with natural climate variability alone and are directly attributable to human influence. The results demonstrate that human activity has already caused significant warming, with impacts on polar biology, indigenous communities, ice-sheet mass balance and global sea level. ‘This is an important work indeed,’ said Dr Alexey Karpechko of UEA’s Climatic Research Unit. ‘Arctic warming has previously been emphasized in […]
SAMARRA, Iraq | In a blunt assessment, the commander of U.S. forces in Iraq, Army Gen. Raymond Odierno, said Thursday that there is a 20 percent to 30 percent chance that the United States and Iraq won’t reach a deal to allow U.S. troops to operate in Iraq past Dec. 31. On a scale of one to 10, ‘I’m probably a seven or eight that something is going to be worked out,’ Gen. Odierno told The Washington Times during a visit to the 101st Airborne Division in Samarra, about 120 miles north of Baghdad. ‘I think it’s important for the government of Iraq. I think it’s important for security and stability here.’ Massoud Barzani, the president of the Kurdish Regional Government, told The Times on Wednesday evening that he would be happy to host U.S. troops if the central government in Baghdad refuses to do so. ‘The people of Kurdistan highly appreciate the sacrifices American forces have made for our freedom,’ Mr. Barzani said at a reception in Washington after meetings with President Bush and Secretary of State Condoleezza Rice. RELATED STORIES: ¢ CLAUDE SALHANI: Covert forces trumpet successes in war on terror ¢ […]
College students and their parents should brace for sharp tuition increases as the widening economic downturn begins to hit campuses across the country, an organization of higher education officials said yesterday. The warning came in response to an annual national survey of tuition and fees that showed that college costs rose only modestly for the current academic year. But that report, released yesterday by the College Board, was based on data collected before June and did not reflect many of the economic trials embroiling the country. The financial landscape has become far more grim, according to the American Council on Education, a coalition of more than 1,600 college and university presidents. ‘I am afraid this year’s report may prove only to be a snapshot of a time in history that we might soon be referring to as ‘the good old days,’ ‘ said ACE President Molly Corbett Broad. At least 17 states, struggling to balance budgets at a time of plummeting tax revenue, are beginning to slash appropriations for their public colleges. Private schools are also being squeezed as their endowments wither in the stock market and donors grow more cautious. ‘I am concerned that we […]
Remote Viewing the Year 2060
