The Economy! What can I say? It stinks!

Biden said yesterday that the Obama Admin misread the economy.

From ABC's George Stephanopoulos: "Biden acknowledged administration officials were too optimistic earlier this year when they predicted the unemployment rate would peak at 8 percent as part of their effort to sell the stimulus package. The national unemployment rate has ballooned to 9.5 percent in June -- the worst in 26 years.

"The truth is, there was a misreading of just how bad an economy we inherited," said Biden, who is leading the administration's effort to implement it's $787 billion economic stimulus plan.

snip

The vice president argued more time is needed for the stimulus to work.

"We misread how bad the economy was, but we are now only about 120 days into the recovery package," he said. "The truth of the matter was, no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having to distribute the bulk of money."

Biden didn't rule out a second government stimulus package, but downplayed calls from Nobel Prize-winning economist Paul Krugman this week that a second stimulus will be needed.

There are many economists that agree with Krugman. How about Joseph Stiglitz, Robert Reich, Ravi Bahtra. The stimulus wan't enough and the TARP money went to Banks that didn't need the funds. What we should give the banks is a nice package of rules and regulations that would keep their lawyers and bean counters busy for awhile trying to find loop holes and ways around these rules and regs!

And just to throw another wrench on the pile, the New York Times has an article today about the unstable Oil Prices and how it will hurt our economy. But this article also says:

"The instability of oil and gas prices is puzzling government officials and policy analysts, who fear it could jeopardize a global recovery. It is also hobbling businesses and consumers, who are already facing the effects of a stinging recession, as they try in vain to guess where prices will be a year from now — or even next month."

This article goes on to say:

While the movements in the oil markets have been similar to swings in most asset classes, including stocks and other commodities, the recent rise in oil prices is reprising the debate from last year over the role of investors — or speculators — in the commodity markets.

Government officials around the world have become concerned about a possible replay of last year’s surge. Energy officials from the European Union and OPEC, meeting in Vienna last month, said that “the speculation issue had not been resolved yet and that the 2008 bubble could be repeated” without more oversight.

Many factors that pushed oil prices up last year have returned. Supply fears are creeping back into the market, with a new round of violence in Nigeria’s oil-rich Niger Delta crimping production. And there are increasing fears that the political instability in Iran could spill over onto the oil market, potentially hampering the country’s exports.

So in my opinion, the Foxes guarding the economic Hen House from the Obama Admin has to start broadening their outlook and accept the opinions of other economist that our stimulus package wasn't enough. The falling employment shows this with fears of a double digit jobless count on the horizon.

And G W Bush is in Texas, in his recliner, with his feet up, and his wide screen TV watching all the destruction his 8 years in office has created. Doesn't seem right!

Lots of Economic news today!

Stock Market dropped like a brick this AM. Here's why...

From the AP:

Stocks plunge on rising credit anxiety
By TIM PARADIS, AP Business Writer
7 minutes ago

Wall Street plunged in early trading Thursday, yanking the Dow Jones industrials down more than 180 points after a French bank said it was freezing three securities funds that struggled to find liquidity in the U.S. subprime mortgage market.

The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone — institutions, investors, companies, individuals — can't get money when they need it unnerved a stock market that has suffered through weeks of intense volatility triggered by concerns about available credit.

A move by the European Central Bank to provide more cash to money markets intensified Wall Street's angst — although the bank's loan of more than $130 billion in overnight funds to banks at a bargain rate of 4 percent was intended to calm investors, Wall Street saw the step as confirmation of the credit markets' problems.

The Federal Reserve followed suit, adding $12 billion to U.S. markets to help ease liquidity constraints, according to Dow Jones Newswires.

Bonds rose sharply as investors again sought the relative safety of Treasurys, with the yield on the benchmark 10-year note falling to 4.78 percent from 4.89 percent late Wednesday. Bond prices move opposite yields.

Thursday's plunge continued an erratic pattern of triple-digit moves in the Dow for several weeks. There has been more panic and gambling in those moves rather than conviction — even when the Dow has finished up more than 280 points in a session, those gains have evaporated at the first mention of trouble in housing, subprime lending or the credit markets.

In early trading, the Dow fell 185.02, or 1.35 percent, to 13,472.84 after falling more than 200 points.

The Dow on Wednesday finished 2.45 percent below the record close of 14,001.41 reached on July 19. Since passing 14,000, the blue-chip index has been highly volatile — in the 14 trading days since that record close, 10 have seen a triple-digit gain or loss.

Also Thursday, the broader Standard & Poor's 500 index fell 24.25, or 1.62 percent, to 1,473.24, while the Nasdaq composite index lost 28.58, or 1.09 percent, to 2,584.40.

The dollar was mixed against other major currencies, while gold prices fell. Light, sweet crude fell $1.03 to $71.12 per barrel on the New York Mercantile Exchange.

Just heard on CNN: Mutual funds are now affected by the European Bank move.

Stay tuned!

More on the Market from McClatchy

And part of the leadoff of Kevin Hall's McClatchy article:

A steady stream of recent data shows mixed signals about where the U.S. economy is headed. The old sage himself, Alan Greenspan, suggests recession could be looming.

When Greespan speaks, the World listens!

Here's some more of Hall's article:

Fasten your seat belts - some economic chop could be coming.

The Dow Jones industrial index fell more than 416 points, or 3.29 percent, in trading Tuesday. The tech-heavy Nasdaq composite was off by 3.86 percent, and the S&P 500 was off by 3.47 percent. It was the largest one-day drop for markets since Sept. 17, 2001, the first day trading resumed after the Sept. 11 terror attacks


Tuesday's drops mirrored a global decline in stock markets as the investor mood turned bearish. Investors, who have been murmuring about a coming "correction" for weeks, are concerned that the U.S. and Chinese economies may be entering a period of cooling.


The drop underscores how connected the U.S. economy is now with the broader global economy. U.S. exchanges sank following a nearly 9 percent drop Tuesday on China's Shanghai Composite Index. It was the Shanghai's biggest one-day drop in a decade, and investors worried that interest rates may soon rise to douse China's sizzling economic growth.


Higher lending rates in China matter to average Americans. Most large American corporations either manufacture there or purchase from Chinese contract manufacturers. Higher lending rates in China would slow economic activity there and raise the cost of doing business. The costs could be passed back to Americans as pricier imported goods.


Adding to the economic uncertainty, oil prices are climbing again, due in part to the Bush administration's escalating war of words with Iran. Just weeks ago, some analysts projected a return to $40-a-barrel oil, but it now trades around $60 a barrel. AAA reports that unleaded gasoline averaged $2.37 a gallon nationwide on Tuesday, compared with $2.14 a month ago.

My question is: when you cut out the middle class, won't this hurt the economy of the US as well as the world?

One Day after Greenspan said Possible Recession!

Greespan spooked the Chinese market and it affected ours! He said there would be a possibility of a recession later in this year. Here's the closing figures for our Stock Market for today:

Dow 12216.24 -416.02 (-3.29%)
Nasdaq 2407.87 -96.65 (-3.86%)
S&P 500 1399.05 -50.32 (-3.47%)
10-Yr Bond 0.451% -0.12

That's quite a scare! 416 points in one day.

Here's more form the AP:

World markets fall after plunge in China
Chinese stocks plunged nearly 9 percent Tuesday, their biggest drop in a decade, rattling markets from Hong Kong to Singapore and as far away as New York amid fears of a slowdown in China's economy.

Investors were also spooked by comments Monday from former Federal Reserve Chairman Alan Greenspan, who said a recession in the U.S. was "possible" later this year.

One day after sending Shanghai's benchmark index to a record, investors dumped stocks to lock in profits amid speculation about a fresh round of austerity measures from Beijing to slow the nation's sizzling economy. The Shanghai Composite Index tumbled 8.8 percent to close at 2.771.79, its largest decline since it fell 8.9 percent on Feb. 18, 1997, at the time of the death of Communist Party elder Deng Xiaoping.

Meanwhile, the price of oil fell on speculation that a slowing Chinese economy would slice into demand for fuel. A barrel of light, sweet crude was down 56 cents $60.83 in premarket trading on the New York Mercantile Exchange.

"The (rumors) that China is going to impose a capital gains tax resulted in regional markets falling," said S. Sharath, an analyst with MIDF-Amanah Investment Bank in Kuala Lumpur, Malaysia, where the benchmark index tumbled 2.8 percent.

But Greenspan's comments also took a heavy toll on Asian markets.

"Our economy is also dependent on the U.S. economy, if there is adverse news, exports from our country is going to drop," Sharath said.

In Hong Kong, the benchmark Hang Seng Index tumbled 1.8 percent, while Singapore's Straits Times index sank 2.3 percent. Markets in Japan and Taiwan, however, registered only modest declines.

The plunge spilled over to New York, where the Dow Jones industrials were down 210 points, or 1.66 percent. In London, the FTSE-100 dropped 2.31 percent, France's CAC 40 dropped 3.02 percent and Germany's DAX lost 2.96 percent.

Major Latin American markets were sharply lower around midday. In Brazil, Sao Paulo's Bovespa index was off 4.1 percent, Mexico City's IPC index shed 3.4 percent, the IPSA index in Santiago, Chile was down 3.8 percent, while in Buenos Aires, Argentina, the Merval dropped 5 percent.

Funny that Bernanke is in charge now but Greenspan seems to be the last word

Iran Threat Affects our Economy

The Stock Market was down today in spite of some good news about another buyout of an energy company. One of the main reasons...the political situation with Iran.

Here's a report from the AFP:

Dollar sags ahead of US economic data
Mon Feb 26, 5:19 PM ET

The dollar traded mainly lower Monday as the market braced for fresh data expected to show a slowdown in the US economy, and monitored tensions over Iran's nuclear ambitions, dealers said.

The euro rose to 1.3185 dollars at 2200 GMT from 1.3170 dollars late in New York on Friday, after earlier reaching a high of 1.3199 dollars, its highest level since January 3.

The dollar fell to 120.59 yen, from 120.98 yen on Friday.

Jordan Eburne at PNC Bank said the dollar was under pressure "ahead of this week's slew of consumer data that is expected to show a slowdown in the US economy."

The market awaited data on consumer confidence and durable goods orders Tuesday, and several reports this week on the housing market.

On Wednesday, US growth for the fourth quarter is expected to be downgraded to 2.3 percent from the 3.5 percent first estimate, analysts predicted.

The market was also affected by concerns about geopolitics, specifically Iran.

"The dollar is facing moderate pressure as players are cautious about holding long positions on the dollar as the Iran situation has become shaky again," said Ryohei Muramatsu with Commerz Bank.

The dollar was hit by renewed concern about Iran as six key world powers grappling to contain the country's nuclear ambitions held talks Monday in London on how to increase pressure on Tehran.

Do you still think Bush won't bomb Iran?