Nice chart via my fishing buddy, John Silvia, who notes: In its statement, the Federal Open Market Committee suggested that recent policy actions should help over time to improve credit conditions. Financial markets have evidenced some very modest improvement in credit spreads, but the search for that new equilibrium between risk and reward remains in…Read More
David Singer writes: I was going through the Economic Calendar for tomorrow. I went to The Mortgage Bankers Association (MBA) website and began poking around the place. I found the most recent report. Then I went back to November 2004, and checked out that information… Two quick observations I find interesting: 2004 – % of…Read More
Former U.S. Securities and Exchange Commission Chairman Arthur Levitt talks about the importance of credit derivatives to the financial markets and the need for regulation and transparency, and the outlook for executive compensation at financial firms. Levitt is a senior adviser to the Carlyle Group and a board member of Bloomberg LP, the parent company of Bloomberg News.
00:00 Credit derivatives’ importance, transparency
01:26 Growth of derivatives market, new regulation
02:11 “Some moderation” in executive compensation
Running time 03:48
Levitt Says Derivatives Necessary, Should Be Regulated: Video
Bloomberg, Last Updated: October 29, 2008 09:23 EDT
GDP was negative in Q3 — worst quarter since Q3 2001 — and the headline number doesn’t even do the extent of the contraction justice:
“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 0.3 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to advance estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent.
The decrease in real GDP in the third quarter primarily reflected negative contributions from personal consumption expenditures (PCE), residential fixed investment, and equipment and software that were largely offset by positive contributions from federal government spending, exports, private inventory investment, nonresidential structures, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.”
Thank goodness for Federal, State and Local government spending, and for exports:
Real personal consumption expenditures: -3.1%
Durable goods -14.1%
Nondurable goods -6.4%
Services expenditures +0.6%
Bloomberg notes that the 6.4% rate of decline in spending on non-durable
goods, like clothing and food, was the biggest since 1950.
chart via Jake at Econompic
How likely are we to see a zero percent interest policy? Pretty likely: “Federal Reserve Chairman Ben S. Bernanke signaled he’s ready to cut interest rates to the lowest level on record should the central bank’s actions fail to stem the deepening economic slump. Policy makers said yesterday that “downside risks to growth remain” even…Read More