News What is wrong with the US economy? Part 2

[Jimmy Snyder]

Hopes that the US is in recession were given a hearty boost today as the Commerce Department reported a contraction of 0.3% in the GDP in the last quarter. This is the worst quarter since 2001. Actually, I find that encouraging in the light of predictions by half the people that this would be the worst quarter since the great depression, and the other half predicting it would be the worst quarter since the nation's founding. GDP was forecast to drop 0.5% according to the median of 75 economists surveyed by Bloomberg News. This is inconsistent with my view that economists are completely nuts, but is consistent with the opinion that they are 66% nuts.

We have not had two consecutive quarters of negative growth, so I doubt the NBER will give you what you want this quarter. However, recent events do not point to growth and other indicators have been weak as well, so you should definitely not give up hope for the future.

 

[Astronuc]

Adding to jimmysnyder's great news -

Where Did A.I.G.'s Cash Go?
http://www.nytimes.com/2008/10/30/business/30aig.html

The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October, The New York Times's Mary Williams Walsh writes.

Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.

"You don't just suddenly lose $120 billion overnight," Donn Vickrey of Gradient Analytics, an independent securities research firm in Scottsdale, Ariz., told The Times.

A.I.G. said it could not provide more information ahead of its quarterly report, expected next week, the first under new management.

Edward M. Liddy, the insurance executive brought in by the government to restructure A.I.G., has already said that although he does not want to seek more money from the Fed, he may have to do so.

Certainly there is a lot of skepticism about the book-keeping at AIG. Makes one wonder about the book-keeping elsewhere.

AIG was bailed out because it was considered solvent, i.e. had capital (collateral), besides being too big to fail. Lehman Brothers was allowed to fail since it was insolvent, i.e. no capital, no collateral. Now some are wondering if AIG actually didn't/doesn't have adquate capitalization.

So how come John McCain isn't campaigning on the successes of the republican stewardship of the economy - and the prosperity that has trickled down to everyone?

 

[Astronuc]

Exxon Mobil posts biggest US quarterly profit ever
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/earns_exxon_mobil

HOUSTON – Exxon Mobil Corp., the world's largest publicly traded oil company, reported income Thursday that shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter.

Bolstered by this summer's record crude prices, the Irving, Texas-based company said net income jumped nearly 58 percent to $2.86 a share in the July-September period. That compares with $9.41 billion, or $1.70 a share, a year ago.

The previous record for U.S. corporate profit was set in the last quarter, when Exxon Mobil earned $11.68 billion.

Revenue rose 35 percent to $137.7 billion.

On average, analysts expected the company to earn $2.39 per share in the latest quarter on revenue of $131.4 billion.

Company shares fell 69 cents to $73.96 at the open of trade.

Exxon Mobil's results got a boost of $1.62 billion in the most-recent quarter from the sale of a natural gas transportation business in Germany. It also took a special, after-tax charge of $170 million related to a punitive damages award related to the 1989 Exxon Valdez oil spill.

. . . .

The definitely benefitted from high gas and oil prices, which have fallen preciptiously in the last month or so. I doubt the current quarter will be as good.

 

[Astronuc]

Alabama County On Brink Of Bankruptcy
http://www.npr.org/templates/story/story.php?storyId=96344546

Jefferson County is home to Birmingham, the state's largest city, and if it declares bankruptcy, it would be the largest municipal filing in history. The county owes $90 million as payment on bonds, and it does not have the money. There are efforts to have the state and Federal government step in. With or without bankruptcy, the taxes or public service fees will have to increase - at the time there is an economic downturn.

Meanwhile -

Missouri Farming Couple Worries About The Future
http://www.npr.org/templates/story/story.php?storyId=96323476

All Things Considered, October 30, 2008 · Bryan and Christina Truemper are struggling to make a living off their organic farm in Frohna, Mo. They're thinking hard about their future — and the country's future.

They worry about the economy and their finances running the four-acre Farrar Out Farm, and they hope a change in the presidency will make a difference.

In the week before the election, NPR traveled through Missouri as part of a series of stops along the Mississippi River to take the depth of voters and gauge how the economy is affecting them.
. . . .

 

[Proton Soup]

Alabama County On Brink Of Bankruptcy
http://www.npr.org/templates/story/story.php?storyId=96344546

Jefferson County is home to Birmingham, the state's largest city, and if it declares bankruptcy, it would be the largest municipal filing in history. The county owes $90 million as payment on bonds, and it does not have the money. There are efforts to have the state and Federal government step in. With or without bankruptcy, the taxes or public service fees will have to increase - at the time there is an economic downturn.

heh, i live in this county. i think there's a lot more to it than simply "the economy".

 

[Astronuc]

heh, i live in this county. i think there's a lot more to it than simply "the economy".

They did mention something about 4 former county commissioners have been prosecuted for corruption, including one who accepted gifts from an investment banker who handled the sewer bond deal on which the county may default.


Meanwhile - At Planet Money, a multimedia team of reporters tracks down the economists, investors and regular folks who are trying to make sense of the rapidly changing global economy.
http://www.npr.org/templates/story/story.php?storyId=94427042

 

[Proton Soup]

They did mention something about 4 former county commissioners have been prosecuted for corruption, including one who accepted gifts from an investment banker who handled the sewer bond deal on which the county may default.

yes, that is a big part of it.

 

[jal]

How do capitalist manage to survive in a socialised system?
Please read to whole article and pass me a clean hankie

http://www.bloomberg.com/apps/news?pid=20601109&sid=aX6xQJdexEEo&refer=exclusive
Wall Street Won't Surrender on Bonuses, Veterans Say (Update1)
By Christine Harper
``Wall Street bank executives are set to walk away with billions of bonuses at the end of this year,'' Barack Obama, the Democratic presidential candidate, said in a campaign speech on Oct. 28. ``We call that an outrage.''
Gutfreund, the former Salomon CEO, said Wall Street executives are likely to find ways to pay bonuses and manage the political uproar.
``I'm sure there are creative ways,'' he said. ``There are all kinds of devices to cover yourself in terms of paying people.''
Last Updated: October 30, 2008 09:59 EDT

 

[jal]

Insight: The masters lost our trust
By Aline van Duyn
Published: October 30 2008 17:43 | Last updated: October 30 2008 17:43

The focus now has become the nine US banks which are receiving $125bn of public money. They have spent or reserved $108bn for employee pay and bonuses in the first nine months of 2008, nearly the same as last year. Henry Waxman, chairman of the House of Representatives oversight committee, has rightly asked them to explain this and has questioned the ”appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry’s worst years on record”. This issue is the one that people not working on Wall Street talk about the most – I have had discussions about it at the school gate and in practically every social encounter.
For Wall Street to really restore the confidence, it needs to understand why its pay make others not just bristle, but angry. Getting paid as much as last year looks really bad, it is as simple as that. Indeed, with such a large amount of their expenses eaten up by compensation costs, curbing payouts last year and the year before would have presumably left the banks is a less dire financial condition than they are now.
The story of Sherman McCoy ends in utter disaster, the dire consequence of his initial decision to avoid assuming responsibility for a crime. Behaving as if it’s business as usual when it clearly is not can have devastating effects
Copyright The Financial Times Limited 2008

That bonus money is coming from your grandma's saving, from your pension account, from an IOU that your kids will need to pay for.
jal

 

[Astronuc]

7.5 million homeowners 'underwater'
http://money.cnn.com/2008/10/30/real_estate/underwater_borrowers/index.htm
Nearly a fifth of U.S. borrowers owe more on their mortgages than their homes are currently worth - and that number is growing!

NEW YORK (CNNMoney.com) -- At least 7.5 million Americans owe more on their mortgages than their homes are currently worth, according to a real estate research firm's report released Friday.

In other words: If they sold their homes today, they'd have to bring a check to the closing. Ouch.

Another 2.1 million people stand right on the brink, according to the report by First American CoreLogic. Their homes are worth less than 5% more than the mortgages they're paying on them.

The technical term for this phenomenon is negative equity; more colloquially, these borrowers are often referred to as being "underwater."

"Being underwater leaves homeowners vulnerable to foreclosure," said Mark Fleming, CoreLogic's chief economist.

That's because these borrowers are left with no home equity to tap - via refinancing or a home equity loan - if they run into financial trouble. Negative equity has contributed much to the soaring increase in foreclosures over the past year.

The report on the growing problem of negative equity is a conservative estimate. Some organizations, including Moody's Economy.com, estimate that as many as 12 million borrowers may be underwater.
. . . .

This is an indication of the severity of one of the fundamental weaknesses in the US economy.


Mortgage Plan May Irk Those It Doesn’t Help
http://www.nytimes.com/2008/10/31/business/31bailout.html

As the Treasury Department prepares a $40 billion program to help delinquent homeowners avoid foreclosure, it confronts a difficult challenge: not making the plan too tempting to people like Todd Lawrence.

An airline pilot who lives outside Norwich, Conn., Mr. Lawrence has a traditional 30-year mortgage that he has no trouble paying every month. But, thanks to the plunging real estate market, he owes more on his house than it is worth, like millions of other people.

If the banks, which frequently lent irresponsibly, and many homeowners, who often borrowed irresponsibly, are getting government assistance, Mr. Lawrence says he believes sober souls like himself are also due a break.

“Why am I being punished for having bought a house I could afford?” he asked. “I am beginning to think I would have rocks in my head if I keep paying my mortgage.”

The plan, still under development by Treasury, is part of the economic rescue package passed by Congress earlier this month. It is aimed at aiding up to three million beleaguered homeowners by reducing their monthly payments.

Washington and Wall Street are frantically seeking to stabilize markets by curtailing the onslaught of foreclosures. There are now at least four major plans to aid homeowners. But experts say it is difficult to design these programs in ways that reduce the indebtedness of the distressed without giving everyone else a reason to mail the keys back to their lenders.

“If the lunch truly is free, the demand for free lunches will be large,” said Paul McCulley, a managing director with the investment firm Pimco.

. . . .

 

[jal]

Problem #1
I assume that you did read my previous posts.
Problem #2

Are the market corrections due to rebalancing and reflecting the accumulated transactions costs? (Every 5 – 7 years)

=======
http://en.wikipedia.org/wiki/Zero-sum
Economics
Many economic situations are not zero-sum, since valuable goods and services can be created, destroyed, or badly allocated, and any of these will create a net gain or loss. Assuming the counterparties are acting rationally, any commercial exchange is a non-zero-sum activity, because each party must consider the goods s/he is receiving as being at least fractionally more valuable to him/her than the goods he/she is delivering. Economic exchanges must benefit both parties enough above the zero-sum such that each party can overcome his or her transaction costs.
========

7.5 million homeowners 'underwater'

The report on the growing problem of negative equity is a conservative estimate. Some organizations, including Moody's Economy.com, estimate that as many as 12 million borrowers may be underwater.

“If the lunch truly is free, the demand for free lunches will be large,” said Paul McCulley, a managing director with the investment firm Pimco.

-----
Would you expect to get a bail out if you bought a new car? After all you are 'underwater' as soon as you drive it off the "lot".
jal

insert:
I just got this from another blog. Any comments?

"...I run various websites for people in foreclosure and whatnot. Until just a month ago, it was lender policy not to grant a homeowner a modified loan unless the homeowner met certain criteria...Most loan mods fail. In that the homeowner fails to make the new payment also. So lenders were not eager to modify a loan and go through the expense and time, and have the borrower reneg. Well, as of about 3 weeks ago, this has all changed. Lenders are eager to modify any loan regardless of the probability that the homeowner will meet the new obligation. Most of the old loan mods failed. What chance do the new ones have, in this new "anything goes" climate? The US is dictating lender policy outright..."

 

[mgb_phys]

An airline pilot who lives outside Norwich, Conn., Mr. Lawrence has a traditional 30-year mortgage that he has no trouble paying every month. But, thanks to the plunging real estate market, he owes more on his house than it is worth, like millions of other people.

“Why am I being punished for having bought a house I could afford?”

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?
Or he was gambling that it would go up in value and he would make a profit = tough.

His employer could probably get a better deal on 737s now than when they bought them and they probably wished they hadn't locked into fuel contracts at $100/barrel. Perhaps they deserve a bailout as well.

 

[mheslep]

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?
Or he was gambling that it would go up in value and he would make a profit = tough.

His employer could probably get a better deal on 737s now than when they bought them and they probably wished they hadn't locked into fuel contracts at $100/barrel. Perhaps they deserve a bailout as well.

Great point mgb

 

[Astronuc]

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?
Or he was gambling that it would go up in value and he would make a profit = tough.

His employer could probably get a better deal on 737s now than when they bought them and they probably wished they hadn't locked into fuel contracts at $100/barrel. Perhaps they deserve a bailout as well.

It doesn't say when the house was purchased, but perhaps it was purchased recently. I have a colleague in that town, where a major employer closed down. Another major employer in the region also closed. Both resulted in the loss of high paying jobs, which also supported a lot of lower paying jobs. The region has not fully recovered in 15 years. They do have a casino, but those jobs pay much less than many of the jobs lost.

The president of the company where I used to work told my friend and colleague that he should just sell the house and take a loss. Well - if he did that, he probably would have still owed money on the loan, and he'd be without a downpayment.

I'm not sure what the government is proposing in terms of helping those in foreclosure, but there are many who have acted responsibly, yet they find that there house has devalued along with the rest of the housing market. So in that sense, Mr. Lawrence may feel he is being punished. It's not clear that he gambled on the market appreciation.

 

[edward]

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?

Was it a reasonable deal or the only deal?? The life of a mortgage is a long time for individuals to have pay for failed government policy and lack of oversight.

At the same time he has to pay to bail out the bank that caused his problem.

Sure some people made some poor choices, but that doesn't categorically mean that all people who bought a home in the past three years made a poor choice. Most didn't even have a choice.

 

[Office_Shredder]

As long as he's not planning on selling his house, it'll rise in price again in a couple years and he'll be fine

 

[mheslep]

Was it a reasonable deal or the only deal?? The life of a mortgage is a long time for individuals to have pay for failed government policy and lack of oversight.

At the same time he has to pay to bail out the bank that caused his problem.

It is quite a stretch to say that 'the bank' caused his problem. Mortgages were, and still are, widely available in the US from a wide range of lenders.

 

[Office_Shredder]

Furthermore, the bank isn't the one that decided on the price he'd buy the house for.

 

[edward]

Furthermore, the bank isn't the one that decided on the price he'd buy the house for.

No and neither was the buyer because he had no choice.

The loan writer was willing to loan what the buyer had to pay because an appraiser wanted to please the realtor and the realtor wanted to please the loan writer.

Then the loans were packaged and given a bogus credit rating by companies who wanted to please investment bankers.

As the CEO of Moody"s stated: "We drank the kool aid", and they made millions doing it.

As aresult 40% of the mortgages in the west and southwest are now underwater. People are locked in and can't get out even if they need to move for a job change.

But go ahead and blame it all on the little guy.

 

[Proton Soup]

http://www.tradingmarkets.com/.site/news/Stock%20News/1927757/

Testifying before the U.S. House Oversight and Government Reform Committee, Dinallo faulted provisions of 2000's Commodity Futures Modernization Act that exempted so-called "naked" credit default swaps ? those in which the holder has no direct exposure to the named credit event ? from state gaming laws. Without direct oversight by securities, commodities or insurance regulators, the massive growth of the unregulated CDS market, from $900 billion in 2000 to an estimated $58 trillion today, lay at the heart of the financial crisis now gripping global markets, Dinallo said.

 

[Office_Shredder]

the realtor wanted to please the loan writer.

Maybe the realtor just wants to make more on his commission. I don't think realtors are going around thinking "I got to sell this house for more so bank of america can give a larger mortgage out"

 

[jal]

There goes more of your money/savings
http://online.wsj.com/article/SB122542331644887249.html?mod=googlenews_wsj
• OCTOBER 31, 2008
Banks Owe Billions to Executives
The Wall Street Journal By ELLEN E. SCHULTZ
Financial giants getting injections of federal cash owed their executives more than $40 billion for past years' pay and pensions as of the end of 2007, a Wall Street Journal analysis shows.
The government is seeking to rein in executive pay at banks getting federal money, and a leading congressman and a state official have demanded that some of them make clear how much they intend to pay in bonuses this year.
But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what ..

 

[edward]

Maybe the realtor just wants to make more on his commission. I don't think realtors are going around thinking "I got to sell this house for more so bank of america can give a larger mortgage out"

Time for a reality check Shredder. The higher the price the higher the realtor's commission. There were kick backs, free trips and all kinds of chicanery going on. Inflating the sales price so that the all parties could get a kick back was very common. (Google is your friend)

That doesn't negate the fact that honest buyers have been stuck with upside down mortgages for the foreseeable future.

The scammers walked, the credit rating companies were scolded by the Congress, and the investmewnt bankers are being bailed out. The honest people were left holding the bag.

 

[Office_Shredder]

Time for a reality check Shredder. The higher the price the higher the realtor's commission. There were kick backs, free trips and all kinds of chicanery going on. Inflating the sales price so that the all parties could get a kick back was very common. (Google is your friend)

That doesn't negate the fact that honest buyers have been stuck with upside down mortgages for the foreseeable future.

The scammers walked, the credit rating companies were scolded by the Congress, and the investmewnt bankers are being bailed out. The honest people were left holding the bag.

I just said the realtor was trying to get a higher commission. I looked on google, and the first couple hits had nothing to do with realtors getting kickbacks from banks for getting them larger mortgages; considering the realtors already had a financial interest in doing this, I'd think it pretty unnecessary for the banks to pay them more also. If you can show me proof that this was common I'm willing to change my mind. Until then, claiming it's the bank's fault that the person needed a higher mortgage is based in pure speculation in my mind

 

[misgfool]

As a non-US citizen I could describe some fundamental problems that I see in US economy with facts provided by local news. I have no doubt that in the short term US will bounce back up (with bold actions of FED & UST) so these are long-term aspects. My interest in US comes from the fact, that my safety (job, civil rights, military, etc.) is directly dependent in the health of US. Also europeans are completely scattered and seem to be mostly focused in fighting with themselves and at least for the foreseeable future are quite useless. Anyway couple of things that came to mind.

1. This idea of shifting from production to service-oriented business structure.

Not only a national security threat, but how can you keep generating more and more services? If you produce a product you can always keep doing them and there are not practical limitations of producing them in the future as you can recycle the previous generations. You also always need products to live, but services are only an extra luxury. However, when you provide a service you can't scrap it after it has been used. Maximum amount of service providers is limited by the population cap. Not to mention the fact that it is a lot easier to outsource a service than production of material. So a service culture can disappear almost overnight.

They have already begun to preach in my company too that, growth is in focusing more in services. What is the end point of this cycle? Everyone serves each other?

2. Government subsidies to existing corporations and the idea of something being too big to allow to collapse.

No it isn't. Maybe with the exception of the entire financial sector. If it's too big then why was it allowed to form in the first place? Only emerging technologies and industries should have access to public funds.

For example American automobile industry was a forerunner in the first half of the twentieth century. These days it's technologically backward compared to just about every auto producing country by almost any standard. Now seeing a Ford on the street is a interesting curiosity. It must be already more than five years, since I last saw any other US brand vehicle with the exception of maybe two humvees. I actually had to look from the web what are the other brands. Why is it that there is so high effort from the government to keep the industry in artificial respiration?

 

[edward]

I just said the realtor was trying to get a higher commission. I looked on google, and the first couple hits had nothing to do with realtors getting kickbacks from banks for getting them larger mortgages; considering the realtors already had a financial interest in doing this, I'd think it pretty unnecessary for the banks to pay them more also. If you can show me proof that this was common I'm willing to change my mind. Until then, claiming it's the bank's fault that the person needed a higher mortgage is based in pure speculation in my mind

You are talking about a direct kick back from a bank to a realtor and that is not what I mentioned. I mentioned the loan writers aka mortgage companies. Countrywide is a good example.

It wasn't just Realtors involved, and I mentioned only loan writers, not banks. Mortgage writers, Realtors, and appraisers plus title companies were all involved. in kickbacks.

The banks involved were the big investment banks that failed.
Once the loans were packaged ratings companies such as, Standard and Poors and Moodys were giving AAA ratings on sub prime mortgages. Like the CEO of Moodys said; "We all drank the kool aid"

First hit on Google realtor kickbacks:

In one case, HUD forced TitleVentures.com, a title insurance agency based in Kingsport, Tenn., to close 36 affiliated title corporations because they existed solely to funnel illegal referral fee payoffs, according to HUD. The government charged that Jerry D. Holmes, Jr., principal owner of TitleVentures.com, "established dozens of sham title insurance companies for the purpose of paying kickbacks to real estate and mortgage brokers in five states." The alleged sham corporations in North Carolina, South Carolina, Tennessee, Georgia and Ohio "had few or no employees, no office space, and did little or no title work" -- all in violation of RESPA’s ban against unearned referral fees, according to HUD.

http://realtytimes.com/rtpages/20030825_respa.htm

More:

http://www.fraudguides.com/mortgage-closing-fees-kickback.asp

http://www.realestatejournal.com/buysell/markettrends/20070528-hagerty.html

http://www.lieffcabraser.com/news_articles/2008/20080809-propertyid.htm

This is getting off on a tangent to the topic.

 

[jal]

Keeping up the IMAGE. The finance is coming from YOUR savings.

http://www.ft.com/cms/s/0/a7f6cf94-a78a-11dd-865e-000077b07658.html
JPMorgan to freeze foreclosures
By Francesco Guerrera and Saskia Scholtes in New York
Published: October 31 2008 20:51 | Last updated: October 31 2008 20:51

…. $70bn of mortgages and freeze foreclosures for up to three months.
The measures are expected to stave off the threat of home repossessions for 400,000 families by cutting their mortgage bills through reductions in interest rates or principal repayments and other loan modifications.
Citigroup revealed it had launched a similar programme of loan modifications last month. Citi said the programme, which did not involve an automatic halt to foreclosures, could eventually be extended to up to 100,000 homeowners owing some $20bn in mortgages.
Bank of America also said last month it would modify mortgages for almost 400,000 borrowers with home loans from Countrywide, the mortgage lender it acquired this year. The decision was part of a deal with several state attorneys-general to resolve claims against Countrywide.

Keeping customers in their homes and receiving monthly payments – albeit at a reduced rate – would benefit both the company’s image and its finances, they said.

 

[OmCheeto]

As a non-US citizen I could describe some fundamental problems that I see in US economy with facts provided by local news.

Do your local news agencies have internet feeds? Aside from NPR, our news agencies suck.

1. This idea of shifting from production to service-oriented business structure.

What is the end point of this cycle? Everyone serves each other?

I agree. Where would we get our flat screens?

2. Government subsidies to existing corporations and the idea of something being too big to allow to collapse.

No it isn't. Maybe with the exception of the entire financial sector. If it's too big then why was it allowed to form in the first place? Only emerging technologies and industries should have access to public funds.

For example American automobile industry was a forerunner in the first half of the twentieth century. These days it's technologically backward compared to just about every auto producing country by almost any standard. Now seeing a Ford on the street is a interesting curiosity. It must be already more than five years, since I last saw any other US brand vehicle with the exception of maybe two humvees. I actually had to look from the web what are the other brands. Why is it that there is so high effort from the government to keep the industry in artificial respiration?

Again, I agree. I used to preach about "the economies of scale". But working for a large company, I can see breakdowns in communication between the top and the bottom. Things can become so disconnected that the head will cut off it's feet because it thinks they are an unnecessary expense.

I cannot even imagine how our auto industries function. They remind me of freight trains. Once you get them going, it takes them forever to stop.

http://www.hoovers.com/free/
Ford: 246,000 employees
GM: 266,000 employees
Chrysler: 72,000 employees

Tesla Motors Inc: 250+ employees​

And like our current financial community, I can only seeing it get worse. Eventually, we will end up with only one bank, one auto company, one of everything. Much like the Microsoft juggernaut. And I'm surprised they won't let Murdoch own every news media in the world. Wait a minute, maybe that's why they all suck. He does own them all.

Although I don't like to quote Wikipaedia as a source, I thought the "See also" section under the Sherman Antitrust Act said a lot about what is going wrong:

http://en.wikipedia.org/wiki/Sherman_Antitrust_Act
See also

* Alcoa
* American Bar Association
* American Tobacco Company
* AT&T
* Microsoft
* Northern Securities Company
* Ticketmaster
* Standard Oil
* Standard Oil Co. of New Jersey v. United States
* Tying (commerce)
* Antitrust
* Cartel
* Clayton Antitrust Act of 1914
* DRAM price fixing
* Monopoly
* Price fixing
* Resale price maintenance
* National Linseed Oil Trust
* laissez faire

 

[misgfool]

Do your local news agencies have internet feeds? Aside from NPR, our news agencies suck.

Our agency may have feeds, but as the original news are translated the original content seems to be quite distorted. Especially ones that concern US. The style is to typically predict some economical, civil or external disaster or otherwise bash US. It appears like the only good thing coming out of US is a road to somewhere else. However, practice has shown that US seems to be on the map even on the next day. So one just has to do some filtering when reading news. The problem is that a constant flow of bad news starts to grow roots in people.

And like our current financial community, I can only seeing it get worse. Eventually, we will end up with only one bank, one auto company, one of everything. Much like the Microsoft juggernaut.

That's the problem in Europe too. But I guess the national pride of politicians has so far prevented formation of massive conglomerates.

And I'm surprised they won't let Murdoch own every news media in the world. Wait a minute, maybe that's why they all suck. He does own them all.

I don't understand. I mean why don't you just call MacGyver to handle him?

 

[jal]

There are some smarter people than me saying the same thing that I have been saying.
http://www.bloomberg.com/apps/news?pid=20601069&sid=azH.b7NrSh3k&refer=fedwatch
Nobel Winner Aumann Says Bernanke, Paulson Steps `Not Smart'
Nov. 2 (Bloomberg)
The crisis in the financial markets was caused by the incentives provided to managers of banks and other financial institutions that caused them to act to their own benefit and not the banks', he said. Bonuses were given on the basis of loan sales, without considering who the borrowers were, he said.