Free Republic

The Fed's chairman talks up the economy IT HAS been a long time since comments on the economy by an official of America’s Federal Reserve comments could be described as cheerful. Yet there was no denying the upbeat tone of Ben Bernanke’s testimony to Congress on Tuesday July 21st. Markets have experienced “notable improvements,” the Fed’s chairman told Congress. The fear of investors has “eased somewhat,” and “many markets are functioning more normally.” As for the economy, consumer spending has been stable, the drop in the housing market has moderated and many “of our trading partners are also seeing signs...

Goldman Sachs's record profits owe more to lack of competition than market recovery TO THE survivors, the spoils. That is the cry going up at Goldman Sachs after it chalked up recession-defying—nay, record-breaking—quarterly profits on Tuesday July 14th. Minting more than $3 billion in as many months, so soon after its own near-death experience in the wake of Lehman Brothers’ demise, will enhance Goldman’s reputation as Wall Street’s overachiever. But it will also strike some as faintly obscene given the scale of public support needed to keep the firm and its peers from buckling last year. The first half of...

People protectionism Rich countries respond to the economic downturn by trying to limit the flow of migrants IN THE boom years, migrants picked fruit in southern California's orange groves, worked on construction sites in Spain and Ireland, designed software in Silicon Valley and toiled in factories all over the rich world. Many will continue to do so, despite the economic downturn. But as unemployment rises in most rich countries, attitudes towards migrants are hardening. Attacks on Romanians in Northern Ireland and on Indian students in Australia are the most visible and disturbing manifestations of growing xenophobia. In response, many governments...

The 1,600 employees of venerable outdoors retailer Joe's learned firsthand this spring the impact of the U.S. credit crisis when an inability to find new financing forced the 57-year-old company out of business. Joe's demise -- the company's last stores close permanently this weekend -- was as unnecessary as it was rapid, some insiders contend. The private equity fund that bought Joe's Sports, Outdoor & More in 2007 badly wanted to save the company and had offered to pour another $10 million into the operation. But Joe's lenders, Wells Fargo and Boston-based Crystal Capital, refused to put up more money,...

A once-glittering business loses its shine CREDIT-CARD borrowers who roll over a portion of their balance each month are known as revolvers. These days lenders are in a spin as they struggle to cope with write-offs, a regulatory crackdown and changes in consumer behaviour. On May 18th American Express, a credit- and charge-card giant, announced a second round of job cuts (bringing the total to 11,000), slashed its marketing and business-development budgets and offered a “very cautious” outlook. A few days earlier Advanta, a provider of cards to small businesses, froze all existing accounts after charge-offs (uncollectable debt) reached a...

Think your apartment is small? Don't try to tell that to Elizabeth Turnbull. While studying for her master's in urban ecology and environmental design, the 24-year-old graduate student at Yale University is living in a truly tiny house. It measures just 8 1/2 feet wide by 18 1/2 feet long, for a cozy total of 144 square feet. The goal? Limiting her impact on the environment. http://www.foxnews.com/story/0,2933,521433,00.html

Oregon's unemployment remains No. 2 in the nation, and economists remain puzzled why. For the second month in a row, Oregon recorded the country's second highest jobless rate -- 12 percent in April, seasonally adjusted -- behind Michigan, at 12.9 percent. Oregon also posted the largest jobless-rate increase of any state from a year earlier, U.S. officials reported Friday, up 6.4 percentage points from April 2008. "We're all scratching our heads and trying to figure out how much of it is bad data and how much of it is the underlying economy," said Bill Conerly, a Lake Oswego economist. "What...

Is this what the first trade war of the global economic crisis looks like? Ordered by Congress to "buy American" when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that...

Oregon exports dropped by a third in the first quarter of this year compared to the same period last year, as the global recession slashed spending abroad. Sales to Oregon's top foreign customers -- China, Canada, Japan, Malaysia and Taiwan -- all fell from last year's fourth quarter, according to U.S. figures released Tuesday. The state sold $3.2 billion worth of goods abroad during the first quarter of 2009, down 32 percent from $4.7 billion during the first quarter last year. Oregon exports peaked at a record $5.2 billion during the third quarter of 2008, then sank as the recession...

SALEM -- The cigarette dangles dangerously from Humphrey Bogart's lips, the curling smoke making him squint. In one swift move of disgust, he drops the butt to the ground and extinguishes it with a twist of his shoe. Fine for Hollywood. But if Bogie tried that in Oregon, he would be fined $90 or made to perform community service, under a bill approved Tuesday by the House. The bill -- one of many anti-smoker bills this session -- goes after what Rep. Carolyn Tomei, D-Milwaukie, considers an environmental travesty in Oregon, the river of cigarette ends that litter parks, beaches,...

The monetary-policy maze Apr 23rd 2009 | WASHINGTON, DC From The Economist print edition The simple rules by which central banks lived have crumbled. A messier, more political future awaits IN THE world that existed before the financial crisis, central bankers were triumphant. They had defeated inflation and tamed the business cycle. And they had developed a powerful intellectual consensus on how to do their job, summarised recently by David Blanchflower, a member of the Bank of England’s monetary policy committee, as “one tool, one target”. The tool was the short-term interest rate, the target was price stability. This minimalist...

In the Market for a Better Banking Plan By the Editors After spending more than a month paying attention to everything but the financial crisis, the Obama administration has moved with surprising speed since Monday to flesh out its plan for saving the banks. Maybe it was the weak Dow, or maybe it was the lynch mob on Capitol Hill that threatened to sweep away any hopes of working with Wall Street. Whatever the impetus, we’re happy to see the administration finally attempting to deal with the country’s most urgent crisis. As for its proposed solutions, we like some better...

Falling world trade Mar 24th 2009 From Economist.com A dramatic fall in world trade could be made much worse by protectionism WORLD trade, the engine of growth, is sinking at a pace not seen since the second world war. In projections released on Monday March 23rd, the WTO predicts that the volume of global trade, which grew by 6% in 2007 and 2% last year, will fall by a dramatic 9% this year. The drop will be worst for rich countries, whose exports will contract by 10%, but even emerging and developing ones, whose exports grew by an average of...

At least 17 of the 20 major nations that vowed at a November summit to avoid protectionist steps that could spark a global trade war have violated that promise, with countries from Russia to the United States to China enacting measures aimed at limiting the flow of imported goods, according to a World Bank report unveiled yesterday. The report underscores a "worrying" trend toward protectionism as countries rush to shield their ailing domestic industries during the global economic crisis. It comes one day after Mexico vowed to slap new restrictions on 90 U.S. products. That action is being taken in...

Lord Turner, chairman of the Financial Services Authority, is to publish a report which should change the face of the banking industry forever. The boss of the City watchdog has been awaiting his chance to unveil his radical reformation of the banking industry for months. In January in a lecture for The Economist, he hinted at some of the specific areas of focus for his report. And similarly before the Treasury Select Committee in February, he suggested his document would make everything clear. So, the 18th is the big day - what's in store? Well, for starters he dare not...

Goldman Offers Loans to Stretched Employees Goldman Sachs got its bailout. Now some of its bankers, those aristocrats of Wall Street, apparently need a bit of a bailout too. Goldman, which accepted billions of taxpayer dollars last fall and, as learned Sunday, was also a big beneficiary of the rescue of the American International Group, is offering to lend money to more than 1,000 employees who have been squeezed by the financial crisis. The loans, offered via e-mail last week, could range from a few thousand dollars to hundreds of thousands. Working at Goldman has long been regarded as a...

The fall of Bear Stearns Bearing all Mar 5th 2009 From The Economist print edition A new book analyses how the near-collapse of Bear Stearns, exactly a year ago, marked the moment when Wall Street was knocked to its senses THE bankruptcy of Lehman Brothers in September 2008 will probably go down as the single most spectacular event in the humbling of Wall Street. But it was the near-collapse of Bear Stearns, six months earlier, that first exposed the fragility of America’s seemingly mighty investment banks, perched atop mountains of debt and dangerously reliant on short-term funding. And it was...

OTTAWA -- Central bankers from the major industrialized countries have moved in lockstep to flood financial markets with cash in their battle against a decaying global economy, but they do so with little experience to draw upon, heightening the risk that this grand effort could fail. “Independent measures being taken in a contemporaneous fashion implies co-ordination,” says Michael Woolfolk, New York-based senior currency strategist at Bank of New York Mellon. “There is nothing perverse or desperate about it. It is just that they are running out of monetary policy room to stimulate the economy.” Mr. Woolfolk’s analysis emerges after Mark...

Higher corporate taxes proposed SALEM -- Two bills unveiled Wednesday in the House Revenue Committee would raise Oregon's $10 corporate minimum tax. House Bill 2119 would set a sliding scale of $25 to $5,000 on the minimum tax paid by corporations that do business in Oregon. It would be based on gross sales -- not profit -- and is projected to raise at least $37 million a year. House Bill 2070 would base the minimum tax on a corporation's "value," such as wages and salaries, interest and dividends paid. It is projected to raise $34 million a year. Raising the...

<p>Is it time to nationalise Citigroup and Bank of America?</p> <p>AMERICA has been dithering about how to sort out its banking crisis. The market has forced its hand. On the morning of Monday February 23rd a joint statement by banking regulators said that they stood “firmly behind” the banking system and would initiate promised stress tests of banks’ capital positions on Wednesday. The fine print remains critical and, so far, unclear, but the statement should at least halt the scary market moves that took place last week.</p>