Where is the US economy headed?

Its true that short term interest rate will not change until next year, but we are already at zero interest rate,and the feds have played their stupid games to no avail except to injure consumers who do the right thing to save.

NEW YORK (AP) -- The advertising slump at one of the world's best-known newspaper publishers is deepening.

New York Times Co. CEO Janet Robinson says ad revenue during the July to September period is expected to fall by about 8 percent from the same time last year. That would translate into a decline of about $23 million.

The company publishes The New York Times and 17 other daily newspapers. It previously predicted ad revenue would drop by roughly 4 percent -- about the same pace as the second quarter.

Robinson announced the changed outlook Wednesday at an investment conference in New York. She blamed the shortfall on the bleak economy.

Like most other major publishers, the Times Co. has been struggling for years to adapt as more print advertising shifts to the Internet.

What do you think of U.S. proposals to increase the response capacity of the European Financial Stability Fund (EFSF) to avoid the risk of contagion?

My impression is that Europe needs to reform much deeper than the creation of EFSF. This will not suffice. To preserve the euro will require real institutional reform by a year or two. The United States will do everything to the implosion of the euro does not happen before the U.S. election of 2012 and to preserve a form of stability by then. Washington wants to see Germany extend its safety net. I have no doubt that in the end Germany will eventually guarantee a very significant amount of debt in Europe. The problem is that they lack credibility, saying they can not allow Greece to fail. It's ridiculous. They should be in position to prevent bank runs in Spain and Italy. From the time when the credibility of the euro is weakened, and it is now, it becomes much more difficult for banks to attract Italian and Spanish bank deposits or interbank funding. The risk of infection is considerable. And there is no central bank could fly to the rescue of an individual country. Therefore it will take a term institutional reform. But the situation could yet get worse before they can seriously improve. I see a strong parallel with the momentum created by the collapse of Lehman Brothers in the United States.

Do you think that the Director-General of the IMF, Christine Lagarde, was right to stress the urgency of the recapitalization of the European banking sector?

Absolutely. The IMF has been too reverential to date. It is right to insist on this point. Of course, his hand was forced by the fact that she knew in advance the contents of the Global Financial Stability Report. It was difficult not to be considered. All who were involved in the development of "stress tests" must recapitalize banks know that a number of European banks. It's a leap too virtuous to turn back now. The IMF has not really contributed to solving problems by pushing back the deadlines. There is only one year, IMF officials said at the general meeting they considered Greece as an advanced country that would never default. And there are only six months, the IMF said it had even considered that Spain was no longer a peripheral country in the "Financial Times". It's one thing to be wary, it is another to take positions implausible. The IMF has gone too far in that direction. However, Christine Lagarde did not go far as to say that default is inevitable. It is only implicit in his remarks.

Do you in fact a default of Greece is now inevitable?

Of course. There will inevitably be a major restructuring of the Greek debt, regardless of the terms chosen. A profound failure to pay in Greece and Portugal is now inevitable, and probably in Ireland, although the situation is somewhat more complicated in that country because the government has guaranteed the banks. But I think Ireland will also need a major restructuring of its sovereign debt, whether private or public. I'm sure that even Dominique Strauss-Kahn was aware

One would hope that the Fed is not trying to help Obama out, as the Fed is supposed to be independent and non-political, though it sure has not been lately. Kind of makes me wonder if Perry's criticism of the Fed will have legs going forwards.

In so must helping out Obama is also helping out the economic of the US I sure hope they are doing what is best for the US and not acting like the GOP who worst nightmare is that the economic would be allow to improve before the election

Its true that short term interest rate will not change until next year, but we are already at zero interest rate,and the feds have played their stupid games to no avail except to injure consumers who do the right thing to save.

I think interest rates are low because too much money is chasing too few 'safe' investment opportunities.

The President is pursuing the "art of the possible".