Where is the US economy headed?

@talk72000,

But regulations cause them to hone the shenanigans to greater and greater proximity to perfection.

Gold ended with-in $30 of the all time high, the DOW was down another 2.2%. B of A lost 8.34% , so it is getting to be time to worry about what to do with this too big to fail company that we recently let get a lot bigger.

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@hawkeye10,

hawkeye10 wrote:

Gold ended with-in $30 of the all time high, and the down was down another 2.2%. B of A lost 8.34% , so it is getting to be time to worry about what to do with this too big to fail company that we recently let get a lot bigger.

Well, we're going to have to take that company into receivership most likely, as it turns out that they have been breaking the law left and right and are probably going to be liable for more than their current net worth in damages.

Cycloptichorn

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@Cycloptichorn,

Quote:

Well, we're going to have to take that company into receivership most likely, as it turns out that they have been breaking the law left and right and are probably going to be liable for more than their current net worth in damages.

We gave Chrysler to Fiat, so maybe we could sell BAC to the Chinese for $1??

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@hawkeye10,

There's nothing in the economy that shows any strength; that can mean only one thing. The stock market is going to take a beating as well as the banks.

The issue of the lack of jobs have been in the forefront of our economic news for several years now, but there's nothing that can be done when the richest of companies with billions in their bank will not hire or create manufacturing jobs here in this country. All while giving CEO's the greatest portion of their profits and keeping the workers ever further behind their so-called leaders of industry.

Until that changes, our economy is doomed.

I have entertained the idea several months ago that the DOW would end up losing about 30% of its value during this "Great Recession." That may now be a bit conservative.

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@hawkeye10,

hawkeye10 wrote:

Quote:
Well, we're going to have to take that company into receivership most likely, as it turns out that they have been breaking the law left and right and are probably going to be liable for more than their current net worth in damages.
We gave Chrysler to Fiat, so maybe we could sell BAC to the Chinese for $1??

Only if they are willing to incur the liabilities as well!

Cycloptichorn

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@Cycloptichorn,

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Only if they are willing to incur the liabilities as well!

Sure, but the Chinese lately have been much like the Japanese were back when they were flush....they will massively over pay for the stuff they want...If we sold BAC for $1 it us we who would get the better part of the deal.

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@cicerone imposter,

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There's nothing in the economy that shows any strength; that can mean only one thing. The stock market is going to take a beating as well as the banks.

Not only that, we are also trying to wean the markets off of welfare (QE3 was the last round).

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Until that changes, our economy is doomed.

My arguement for a long time is that we are doomed till

1) we reform the global economic system..IE get something that people can believe in

2) come up with a plan for building the American economy, and do it this time for real, not with the fraud and phony baloney numbers that we have used to drive up GDP since Reagan

3) reform the American political system so that we have something that is capable of implementing an economic plan.

We need 3 for 3 to get moving again....

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@hawkeye10,

The LIST

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The complaints were filed against the following institutions: Ally Financial; Bank of America (BAC, Fortune 500); Barclays Bank (BCS); Citigroup (C, Fortune 500); Countrywide Financial; Credit Suisse Holdings (CS); Deutsche Bank (DB); First Horizon National (FHN); General Electric (GE, Fortune 500); Goldman Sachs (GS, Fortune 500); HSBC North America; JPMorgan Chase (JPM, Fortune 500); Merrill Lynch/First Franklin Financial; Morgan Stanley (MS, Fortune 500); Nomura Holding America; Royal Bank of Scotland (RBS); Societe Generale.

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@hawkeye10,

Quote:

1) we reform the global economic system..IE get something that people can believe in

That would be impossible. Even countries on their own devices are unable to arrive at reform to improve their own economic system.

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2) come up with a plan for building the American economy, and do it this time for real, not with the fraud and phony baloney numbers that we have used to drive up GDP since Reagan

"Come up with a plan...." sounds good, but that's also impossible when our two party system of government is always at loggerheads. One wants more tax cuts for the rich, and cut government expenditures, while the other wants to expand social programs.

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3) reform the American political system so that we have something that is capable of implementing an economic plan.

Exactly, how do we go about "reforming our political system?" That's a non-starter.

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@cicerone imposter,

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That would be impossible. Even countries on their own devices are unable to arrive at reform to improve their own economic system.

We did it after WW2, we can do it again.

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Come up with a plan...." sounds good, but that's also impossible when our two party system of government is always at loggerheads. One wants more tax cuts for the rich, and cut government expenditures, while the other wants to expand social programs.

The country can come to a consensus and then execute it...there will always be a minority that does not agree, but some time soon we need to poll the majority and do what they want. Pandering to minority rights is a large part of how we got into this hole, and at some point the implementation of pain will snap us out of it. Economic reality will see to it, once people will no longer loan us money we will be stuck living on what we have, we will have to choose what we are willing to pay for, and if we will not pay for it then we shall not have it. Pretty simple really. There will be loads of people who say " I want X!, We must have Y!, Where is my Z!" they will be told "no" and if they still keep whining they will be told "STFU, and do some work to earn what you want!"

EDIT: some conservatives are convinced that this is the election where the debate ends, they expect to win the argument and break the back of Liberalism and the Great society once and for all. We shall see.

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Exactly, how do we go about "reforming our political system?" That's a non-starter.

It has not started, bout time to get cracking Id say...

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@hawkeye10,

WWII is a completely different animal from many different viewpoints - including the fact that we now have a global economy.

"Consensus?" ROFLMAO

Your "time to get cracking" is way ahead of its time. As I've said before, it's also a different kind of time concerning the world economy and political landscape.

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NEW YORK (AP) — The government on Friday sued 17 financial firms, including the largest U.S. banks, for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed.

Among those targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., and Goldman Sachs Group Inc. Large European banks including The Royal Bank of Scotland, Barclays Bank and Credit Suisse were also sued.

The lawsuits were filed by the Federal Housing Finance Agency. It oversees Fannie and Freddie, the two agencies that buy mortgages loans and mortgage securities issued by the lenders.

The total price tag for the mortgage-backed securities sold to Fannie and Freddie by the firms named in the lawsuits: $196 billion.

The government didn't say how much it is seeking in damages. It said it wants to have the securities sales canceled and wants to be compensated for lost principal, interest payments as well as for attorney fees.

The government action is a big blow to the banks, many of which have seen their stock prices fall to levels not seen since the financial crisis in 2008 and 2009. Until now, the stocks have been undermined mostly by unrelated worries about the U.S. and European economies.

It is particularly damaging to Bank of America, which bought Countrywide Financial Corp. in 2008 and Merrill Lynch in 2009. All three are being separately sued by the government for mortgage-backed security sales totaling $57.5 billion.

After Bank of America, JPMorgan Chase was listed in the lawsuits with the second-highest total at $33 billion. Royal Bank of Scotland followed at $30.4 billion.

Bank of America has already paid $12.7 billion this year to settle similar claims. Last month insurer American International Group Inc. sued the bank for more than $10 billion for allegedly selling it faulty mortgage investments.

In a statement Friday, Bank of America rejected the claims in the government's lawsuits.

Fannie and Freddie invested heavily in the mortgage-backed securities even after their regulator said they didn't have the needed risk-management capabilities, the bank said. "Despite this, (Fannie and Freddie) are now seeking to hold other market participants responsible for their losses," it said.

Bank stocks fell sharply on Friday as news of the government's lawsuits emerged. Bank of America tumbled 8.3 percent, JP Morgan Chase fell 4.6 percent, Citigroup lost 5.3 percent, Goldman shed off 4.5 percent and Morgan Stanley's ended down 5.7 percent.

Residential mortgage-backed securities bundled pools of mortgages into complex investments. They collapsed after the real-estate bust and helped fuel the financial crisis in late 2008.

The FHFA said the mortgage-backed securities were sold to Fannie and Freddie based on documents

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@cicerone imposter,

cicerone imposter wrote:

The issue of the lack of jobs have been in the forefront of our economic news for several years now, but there's nothing that can be done when the richest of companies with billions in their bank will not hire or create manufacturing jobs here in this country. All while giving CEO's the greatest portion of their profits and keeping the workers ever further behind their so-called leaders of industry.

Until that changes, our economy is doomed.

In the first place very few CEOs get "the greatest portion of a company's profits" unless they happen to own it. You are grossly exaggerating.

More importantly, what explanation can you offer for the fact that companies that formerly invested huge sums (a lot of it borrowed) in the development of new capabilities and new markets, are now so timidly avoiding any committments? Have their "animal instincts" for future profits suddenly disappeared? Or, as seems far more likely to me, has something in the external situation in this country changed to make them either more fearful of believe that they can no longer count on their ability to accurately forecast their competitive situations?

Since the external situation is largely a function of international financial markets (for very large companies) and the policies of our government (for all of them), do you believe the policies of the scurrent Administration might have anything to do with it.

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@georgeob1,

You must've missed this important report of a few days ago.

Quote:

MARKET PULSE Archives
Aug. 31, 2011, 1:30 p.m. EDT
Some CEOs paid more than company tax bill: study

CHICAGO (MarketWatch) -- There are 25 major U.S. corporations that paid their chief executives more last year than they contributed in federal income taxes, according to a report released Wednesday. For its "Executive Excess" study, the Institute for Policy Studies looked at the 100 U.S. firms that paid their bosses the most and at a quarter of them, "the bill for chief executive compensation actually ran higher than the company's entire federal corporate income tax bill." Among those were General Electric GE -0.25% , Boeing BA -3.06% Ebay EBAY +0.03% and Verizon . At the same time, the group noted that major corporate CEOs took home 325 times the pay of the average American worker: "Among the S&P 500, CEO pay last year averaged $10,762,304, up 27.8% [while] average worker pay...finished up at $33,121, up just 3.3%."

BTW, these are not CEO founded companies.

Why do I need to offer any excuse for companies avoiding commitments? It's obvious those CEO's are enriching themselves at the expense of all their workers, and the country's economic benefit.

No, it has absolutely nothing to do with this administration. The biggest boondoggle created this year was from the tea party who refused to approve the debt ceiling. That was not the administration; it was congress.

As I have repeated often enough on these boards, the only way to get out of this recession is for our government to spend money on our infrastructure and our children's education. They are of paramount importance - to give our economy a kick-start, and to make sure our infrastructure and children are prepared to compete in the world marketplace in the future.

The longer we wait, the harder the handicap will be to overcome. Both are necessary for any economy to remain competitive.

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@cicerone imposter,

In the first place these reports only address cases in which CEO pay exceeded corporate income taxes paid. Your allegation, which this data fails to support was that CEOs tood "the greater portion" of the company's total earnings - that means either the majority of theose earnings or at least the largest single share. In fact, in almost every case cited. the largest single share of the earmnings went to the corporation itself as retained earnings and the second largest share in many cases went to shareholders in the bform of dividends.

Secondly the Institute for Policy Analysis is a well known far left wing organization that is certainly not a reliable source for sdispassionate, objective reporting. The bit you quoted asserts the average pay for employees of S&P 500 companies was $33,121. I find that very suspect. Does the data include ONLY employees resident in this country ? (not likely) . There are many ways of calculating average - is this data a mean, median or mode? Does the data include part time workers? (likely it does).

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@spendius,

The regulations I refer to are registration as required by all other professionals and to pass a Code of Ethics. CEOs and financial professionals do not seem to have any such requirement. The lack of a Code of Ethics seems to be the case as they should have been barred from those unethical activities.

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Next week, after Labor Day, will be all about jobs. Obama will talk about it Thursday night and several of the Republican candidates have promised to lay out their ideas ahead of the debate on Wednesday. Congress, badly bruised by their behavior on the debt ceiling issue, promises to be less partisan. Few believe that any spirit of bipartisan will last long.
It seems to me that the Republicans will continue to argue for reducing government spending, eliminating government regulations, not increasing any taxes unless they are revenue neutral and passing a balanced budget amendment to the Constitution.
Obama will propose renewing the tax cut that reduces the employee's contribution to SSAE for another year, extending unemployment benefits for the long-term unemployed and offering a tax credit to employers who add new jobs. There is also an evolving public works program that seems to get larger and larger. Added recently to the list of ideas is a program modeled after a scheme called "Georgia Work$." I boned up on that last night and I have some notes here somewhere. I'll get back to that later; perhaps someone else would like to go over the details.

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@realjohnboy,

I doubt very much any tax credit scheme will help with jobs. Our economy needs to increase demand; that means adding jobs through public works projects and funding of our education - to save teacher's jobs and help students with loans to attend college.

Tax increases for the wealthy is only logical; they are the ones gaining huge increases in pay and benefits while the middle class barely got 3.3% increase last year. Year before last, the CEOs gained some 34% increase in their pay and benefits. The GOP is out of touch with reality, because they want more tax cuts for the wealthy. Their goal only transfers the increasing current debt to our children; they believe that's fair?

Obama doesn't know how to lead this country, because he'll bend with the demands of the GOP. He's useless; our economy needs a strong leader, not a whimp.

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@cicerone imposter,

CI, check the wealth of most of the legislators both Repb. and Dem. and you will find why they dont want to raise taxes on themselves.

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Where is the US economy headed?

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