Washington's go-to man on Wall St. - BlackRock's Larry Fink "has a way of making good money in bad times." More Gov't Support for GMAC - Geithner: "It's likely, again, that GMAC will need to take additional capital ... and we'll be prepared to provide that." A taxonomy of health care systems - What's the difference between "socialized medicine" and "social health insurance"? China wants a new reserve currency - But IMF-issued SDRs won't be it. Madoff's secretary speaks - "Bernie Madoff was a sexist, egomaniacal, short-tempered control freak—yet everybody loved him." --Zubin Jelveh
Despite this morning's big job loss announcement, the market and the pundits are both highlighting the positive from the report: the decline in the pace of job losses. From NYT's David Leonhardt: Job losses have now been slowing for three straight months. Ever since World War II, a trend like that has been a signal that a recession was in its final months. Another encouraging aspect of the report was the decline in the number of workers in a part-time job for economic reasons -- a group whose status isn't captured by the headline unemployment rate.
On Wednesday, I blogged about some research by economists contending that changes in the unemployment rate were better explained by an unwillingness of firms to hire during a downturn, rather than the conventional view that the primary driver of unemployment was job losses. But a reader points us to some good work from three University of Michigan economists that dispute some of this. The strongest claim in one of the earlier papers by University of Chicago's Robert Shimer was that job losses (i.e., flows into unemployment) didn't appear to react much to changes in the business cycle.
Falling real estate prices hitting Manhattan - Over a quarter of listings in many neighborhoods down double-digits in the first quarter. Can Obama cut farm subsidies? CBO on climate change - "past emissions have made a substantial amount of further warming inevitable." More crisis blaming - Marin Wolf, Richard Posner Visions of doom from Taleb - Global downturn will be worse than the 1930's. "10 Reasons not to fear inflation." --Zubin Jelveh
The Center for Public Integrity has a new report out today that asks my favorite question about the current mess: The Roots of the Financial Crisis: Who Is to Blame? Here is an excerpt: The top subprime lenders whose loans are largely blamed for triggering the global economic meltdown were owned or bankrolled by banks now collecting billions of dollars in bailout money — including several that have paid huge fines to settle predatory lending charges.
Don't Stress the Stress Tests - Daniel Gross wonders why we should put faith in their projections. Stress Test Leak Tracker - Who needs how much. How to interpret the results - Late-afternoon release from the Fed and Treasury. "Banks Need Fewer Carrots and More Sticks" - Glenn Hubbard and friends put a new spin on the good-bank/bad-bank solution. It's not only A.I.G. that's losing billions - The U.S. Postal Service posts a $1.9 billion Q1 loss. -- Zubin Jelveh
Steven Greenhouse at the Times does a nice job putting a sunny spin on the job situation: Since November, the nation has lost more than three million jobs. But not everyone knows the brighter side to the equation: deep in the maw of the deepest recession since the Great Depression, millions are still being hired. So, while 4.8 million workers were laid off or chose to leave their jobs in February, employers across the country hired 4.3 million workers that month, according to the Bureau of Labor Statistics.
Bernanke on the Hill - Denies l'affaire Ken Lewis, projects 2% growth for 2010, but issues caution on credit market 'relapse'. "Fact-checking Bernanke" - Are existing home sales really at a bottom? "All back to normal?" - Not-as-bad-as-expected economic news and the market-bottom euphoria. S.E.C. charges Reserve Fund with fraud - For failing to disclose Lehman vulnerability to investors. "Tired and alone" - What it feels like to live in Japan. --Zubin Jelveh
Which would you rather have: a 10 percent return on your investment or a 20 percent return? Okay, maybe that's a no-brainer. But what if, in the first case, inflation was running at a Japan-like one percent per year while in the second it looked more like Iran, above 15 percent? In real terms, the first option now looks much better than the second. This process of adjusting for inflation is common to almost all types of economic and financial analyses. But one area where it’s not used systematically is in calculating income inequality.
Goldman Sach's knows how to pick'em - A 'buy' on Wednesday and a rally on Friday. But it ain't the the bastion of capitalism no more. Praise for Bernanke - Improving debt markets mean no Great Depression II. Fed's losses on AIG and Bear Stearns assets at $10 billion. Meet the CBO's new panel of economic advisers - Simon Johnson is everywhere. --Zubin Jelveh