Category Archive

if socialized medicine is so evil, why didn’t Republicans privatize the V.A. health system when they controlled both the White House and the Congress during 2001-06?
—Uwe Reinhardt in NYT: Economix

Despite these visions, the flashing lasers and latex aliens, “Star Trek” is fundamentally about two men engaged in a continuing conversation about civilizations and their discontents.
—NYT: Manohla Dargis on the new Star Trek movie

We were looking into an abyss a couple of months ago. Some of the worst-case scenarios seem to be much less likely now and there’s some more upside risk.

We’re going to get to the point where recovery is just not soaring and they’re going to do the same again. We’re going to have a very slow recovery from here

We definitely seem to be hitting a plateau but that doesn’t mean we’re going to bounce up in the next couple of years. We’ll be in this long period, maybe two years, of vulnerability.

They hope people think the recession won’t be so deep, so the banks’ losses won’t be so bad, so their equity will be worth something

—Kenneth Rogoff in a Bloomberg interview, May 6, 2009

The desire to bring back the boring, small banking industry of the nineteen-fifties is understandable. Unfortunately, the only way to do that would be to bring back the economy of the fifties, too. Banking was boring then because the economy was boring. The financial sector’s most important job is channelling money from investors to businesses that need capital for worthwhile investment. But in the postwar era there wasn’t much need for this. The economy, while remarkably strong, was dominated by huge companies that faced little competition, and could finance investments out of their profits. And entrepreneurship was restrained: there were many fewer start-ups then than in the period after 1980. So the financial sector didn’t have much to do.

—James Surowiecki

a capitalist economy, while immensely dynamic and productive, is not inherently stable
—Richard Posner

As part of the 30-day planning process, firms will need to review their existing management and board in order to assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment
—Government Source

==============================================
Company ……………………………Capital Requirement
==============================================
Total …………………………………… $65.5 Billion in additional Capital
Bank of America………………………$34b
Wells Fargo……………………………$15b
GMAC……………………………………$11.5b
Citigroup…………………………………$5b
Morgan Stanley………………………..—none—
Goldman………………………………..—none—
MetLife…………………………………..—none—
JPMorgan Chase………………………—none—
Bank of NY Mellon……………………—none—
American Express……………………—none—
==============================================
Company…………………………….Government Capital Injections by Firm
==============================================
Bank of America………Targeted Investment Program $20b, 01/16/09
……………………………Capital Purchase Program $10b, 01/09/09*
……………………………Capital Purchase Program $15b, 10/28/08
———————————————————————————————————————
Wells Fargo……………Capital Purchase Program $25b, 10/28/08
———————————————————————————————————————
GMAC………………….Automotive Industry Financing Program $5b 12/29/08
………………………….GMAC has also received other financial assistance
———————————————————————————————————————
Citigroup………………Targeted Investment Program $20b, 12/31/08
………………………….Asset Guarantee Program $5b, 01/16/09
………………………….Capital Purchase Program $25b, 10/28/08
———————————————————————————————————————
Morgan Stanley………Capital Purchase Program $10b, 10/28/08
———————————————————————————————————————
Goldman Sachs………Capital Purchase Program $10b, 10/28/08
———————————————————————————————————————

==============================================
Company……………….Government Capital Injections by Firm
==============================================
MetLife…………………..None
———————————————————————————————————————
JPMorgan Chase………Capital Purchase Program $25b, 10/28/08
———————————————————————————————————————
Bank of NY Mellon…….Capital Purchase Program $3b, 10/28/08
==============================================
Note: Dollar figures in billions
*This transaction was included in previous Transaction Report with
Merrill Lynch listed as the qualifying institution and a 10/28/2008
transaction date. The purchase of Merrill Lynch by Bank of America
was completed on Jan. 1, 2009 and this transaction under the CPP was
funded on Jan. 9, 2009

We have a hiring freeze on, but even when there’s a hiring freeze, we need to maintain our head count. We have 40,000 people, and you’re going to have some openings.

A challenge we have now is people from other areas are having problems selling their homes. People aren’t quite as mobile nowadays.

—Joe Patrnchak, Cleveland Clinic’s chief human resources officer

You’re facing more competition for every job you apply for, but the reality is there is a lot of hiring going on. You’re never going to find anything unless you apply.

—Andrew M. Sum, director of the Center for Labor Market Studies at Northeastern University

At the moment, those forecasting nearer-term recovery have the recent data on their side. […but…] Wage and salary growth has evaporated, credit is very tight, home prices continue to decline, financial asset values have been decimated and household balance sheets are extremely stressed.
—Joshua Shapiro, chief United States economist with MFR

We’re in the worst recession since World War II. However, the days of this recession are limited.
—Lakshman Achuthan, managing director of the Economic Cycle Research Institute

The system will look more like what preceded the current environment than many people seem to believe. I am far from convinced there was something inherently wrong with the system.
—H. Rodgin Cohen, chairman of law firm Sullivan & Cromwell

Wall Street will be reshaped. People once thought that American brand-name institutions could do no wrong and that if they sold a product, it was a good product, and if they said something was worth a certain value, it was worth a certain value. Now that has changed.
—David Rubenstein, co-Founder, Carlyle Group

Rather than financial or economic fixes, it looks like the Treasury really doesn’t have enough money to address the situation, and therefore is going back to this idea that somehow if we change preferred into common, magically the problem goes away

—Joseph Mason, a banking professor at Louisiana State University in Baton Rouge, former employee at the Treasury’s Office of the Comptroller of the Currency

China’s bulging foreign exchange reserves reflect the lack of private demand for dollars, which was driven by the renminbi’s appreciation. Though this was speculative in nature, it shows the renminbi’s rising credibility and its potential to replace the dollar as the main vehicle of wealth storage for ethnic Chinese.
—Andy Xie: in the FT, former Chief Economist for Asia Pacific at Morgan Stanly