Before I delve into the meat of this edition, I'd like to ask you to take a moment to go recommend the latest Ike Liveblog Mothership. Your contribution in keeping it on the rec list is much appreciated.
Now for a couple of housekeeping items: this is a new series and I'd like some feedback about how I'm doing. Is the format ok? What can I do to draw in more participation and readership? I've started asking some of the authors of the diaries to use an "economic diary" tag to make these diaries more findable out of the masses of DailyKos diaries. If you see a diary you like I encourage you to do the same.
And now, without further ado, here are my personal picks of the economic diaries from the last few days. Please feel free to point out others in the comments.
- tristan57: Seniors' Retirement Plan, Obama's Silver Bullet
An old campaign maxim holds that "People vote their wallets." It might prove true if we can keep the economy front and center and make that mental link of responsibility between Bush and McCain stick with the electorate. It's been a successful strategy in the past but what about something more tactile? Something that doesn't require programs and plans to take hold for improvement sometime in the future...maybe a couple of years from now if we get on it immediately after the election.
Well, I think I found that Silver Bullet if we'd only exploit it. This tidbit is buried in the last paragraph on this AARP website: http://bulletin.aarp.org/...
To help others, Obama has offered a series of tax breaks, including eliminating the income tax for senior citizens who make less than $50,000 a year...
- FWIW: Freddie Mac and Fannie Mae "Golden Parachutes"
Yesterday the Washington Post published an article titled Ousted Fannie, Freddie CEOs Could Still See Big Paydays, detailing how "The ousted chief executives of Fannie Mae and Freddie Mac have the potential to exit with golden parachutes." The article says "The severance packages could be worth as much as $14.9 million for Richard F. Syron, the former Freddie Mac chairman and chief executive, and as much as $9.8 million for Daniel H. Mudd, the former Fannie Mae chief executive." The estimates include multimillion-dollar bonuses. I have to ask: A bonus for what?
- Lasgalen Lothir: Sign of the Times: "Foreclosure Sale"
Every Sunday, my partner and I drive up the hill to the south of us to go to our favorite Thai/Asian fusion restaurant. Every week for the past six months or so, I've noticed more and more "Foreclosure Sale" signs posted along the route. Lately, I've even begun to see "Open House: Foreclosure" signs in those same neighborhoods.
I live in a fairly well-off neighborhood in the Inland Empire in southern California. In the past two or three years, two new subdivisions sprung up within four blocks of my apartment...
...only to find no buyers whatsoever once the homes in those subdivisions were completed.
- gjohnsit: America's addiction
Do our leaders and economists seriously believe that China couldn't find uses for their own money and products? That they couldn't learn to spend their savings on themselves rather than lend it to us so we can waste it on useless wars, McMansions, and Hummers? To make such an assumption reveals a level of arrogance similar to racism and chauvinism.
On the flip side, all of that easy money has corrupted America's values. We have less outrage for wasting trillions on useless wars than we do about a one percent sales tax for health care. We have no problem taking on debt in each election for bond issues for our local schools, but would never consider taxing ourselves to do the same work (and saving a lot of money in the long run by doing so).
We are a nation of monthly payments because credit has always been available. We are also a nation of financial ignorance, because debt for consumption is the road to ruin. We seem to have no concept of what compounding interest is and what it can do.
- Stranded Wind: 9/11/2008: Manhattan's Death Blow
Unlike the 8,500 FDIC insured banks Lehman Brothers is an investment bank. No one has a checking or savings account there and there is no explicit government guarantee of their operations. However they probably qualify for the "too big to fail" appellation; Bear Stearns was the fifth largest and they got a U.S. Treasury facilitated bail out, and Lehman Brothers is the fourth largest. This is done because what is going on is a systemic problem – as we saw above with Fannie and Freddie the devaluation of their preferred stock is going to knock down a lot of small to medium sized banks. When Lehman Brothers lets go it may trigger a falling dominoes scenario, as credit default swaps start going off all over the place; lacking the FDIC the investment banks started self insuring on a case by case basis and these things became another type of synthetic security.
- Bloke: A Perfect Storm:- Meltdown
While we were all looking at McCain making a fool of him self on The View American International Group (AIG) lost over 30 percent of its value today! For those of you who don’t know who AIG is, they are the largest property casualty insurance carrier in the world, $800 Billion in assets (that must now be only $500 billion). The reason for AIG crashing is simple, the sub prime mess. The same thing that has been dragging down Fannie and Freddie.
- Wings Like Eagles:The Central Bankers knew...
The retired Governor of the Bank of Canada, David Dodge, says that the world's central bankers knew that the U.S. Banking system was headed for trouble as early as 2003! They warned U.S. Banking officials and nothing was done. According to Dodge, even Alan Greenspan was concerned about it.