{"id":193115,"date":"2009-01-19T18:21:00","date_gmt":"2009-01-19T23:21:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/01\/19\/economics-update-300\/"},"modified":"2009-01-19T18:21:00","modified_gmt":"2009-01-19T23:21:00","slug":"economics-update-300","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/01\/19\/economics-update-300\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

It really is beginning to look like the UK is going to be hit worse by this than the US, with Gordon Brown unveiling a new bank bailout<\/a>, one which, shocker, requires the banks to lend the money out again, imagine that.<\/p>\n

I would imagine that the catalyst for this action was that Royal Bank of Scotland posted a \u00a3 28 billion loss for 2008<\/a>.<\/p>\n

Even more than the US, the UK seems to have banked on (pun not intended) finance being the future of their economy, and they are suffering as a result.<\/p>\n

Spain, which created a boom on real estate, is doing worse with S&P cutting the rating on its debt from AAA to AA+<\/a>.<\/p>\n

The downgrades to countries like Spain, Portugal, Italy, Greece, and Ireland are throwing a monkey wrench into the vision of the Euro Zone as a unitary institution<\/a>:<\/p>\n

Diverging bond yields hurt [Euro Central Bank President] Trichet\u2019s argument that the ECB\u2019s inflation-fighting mandate ushered in an era of stability for nations that once suffered rampant price growth. They also make it tougher for the ECB, which cut its key rate to a record yesterday, to set one benchmark for all 16 euro nations. That may delay recovery as governments try to fund stimulus plans.<\/p><\/blockquote>\n

Autos are not great either, with France talking about a partial takeover its car makers in order to bail them out<\/a>, and GM at risk of defaulting on its recent government loan<\/a>, because it cannot find enough debtors to swap debt for equity.<\/p>\n

Likely, the sticking point here is PIMCO, the worlds largest bond fund, which has just been hired to manage a Federal Reserve facility, so they are extorting GM, while at the same time, they are being paid to manage the Fed’s attempt to fix the problem of frozen credit.<\/p>\n

It’s nice when you can generate demand for your services without having to deal with the market, I guess.<\/p>\n

Meanwhile, in currency, the dollar was stronger today<\/a>, largely on the UK bank rescue, and the Ruble continues its slide<\/a>.<\/p>\n

In energy, oil is down<\/a>, largely on the end of Gaza fighting and the Russian-Ukranian gas deal, and retail gasoline is up again today<\/a>.<\/p>\n

I don’t expect it to go above $4\/gal soon, but I think that sub $2\/gal gasoline will be gone shortly.<\/p>\n","protected":false},"excerpt":{"rendered":"

It really is beginning to look like the UK is going to be hit worse by this than the US, with Gordon Brown unveiling a new bank bailout, one which, shocker, requires the banks to lend the money out again, imagine that. I would imagine that the catalyst for this action was that Royal Bank …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1080,973,1004,985],"tags":[],"class_list":["post-193115","post","type-post","status-publish","format-standard","hentry","category-currency","category-economy","category-finance","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193115"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=193115"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193115\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=193115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=193115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=193115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}