Economy Watch

The Big Money

Mon, 17 Dec 2018 20:38:35 -0500

Party Poopers Did Wells Fargo save any money by canceling its lavish event? The Way We Beg Depression Diary, Part 5

Stat header

Tue, 18 Sep 2018 11:53:57 -0500

1.0% Q2 GDP | 4.98% avg. 30-year mortgage | 10.2%Unemployment

New GM still looking a lot like old GM

Tue, 24 Nov 2009 15:06:05 -0500

The plan for the new General Motors -- the plan that became a taxpayer-funded bankruptcy that left you owning 60 percent of GM -- was that the automaker would shed several brands and become a smaller, more nimble automaker going forward, able to focus on only its best and best-selling brands. Well, that hasn't worked out so well thus far. You, the taxpayer, are still dragging around a bunch of auto brands that GM can't seem to unload. The plan was for GM to keep only four of its several brands -- Chevy, Cadillac, GMC and Buick. Chevy is popular, Cadillac is quality, GM makes a profit on every GMC truck sold and Buick is huge in China. GM would say goodbye to the villified Hummer, the odd-fit Opel, the beloved-but-unselling Saturn and the quirky Saab, raising cash and throwing dead weight overboard. That was the plan, anyway. Today, news

American consumer holding back recovery -- and that's a good thing

Tue, 24 Nov 2009 14:30:12 -0500

Today's downward revision of third-quarter GDP from 3.5 percent to 2.8 percent, slightly less than forecasters predicted, was directly caused by consumers refusing to spend. And for now, that's a good thing. Consumer spending accounts for about 70 percent of U.S. GDP. The U.S. officially came out of the Great Recession (which began in December 2007) in the third quarter of this year, when GDP turned positive, hitting a preliminary estimate of 3.5 percent growth. The turnaround was hailed by those who backed the taxpayer-funded stimulus programs as proof that a strong recovery was underway, boosted by government spending, in true Keynesian style. But hold on a second, today's data say. The revision to quarterly GDP -- part of the process each quarter -- provides a more solid estimate of the quarter's GDP. At 2.8 percent instead of the first-reported 3.5 percent, it means consumers spent less during the previous

For spinoff, AOL rebrands itself as Aol.

Mon, 23 Nov 2009 13:40:12 -0500

AOL, which used to be AOL Time Warner, which used to be America Online, is now going to be Aol., as it begins new life on Dec. 9 as a spinoff from Time Warner, the company says. Okay. Where to start on this one? The Internet wags are already way ahead of me, lobbing in jokes, such as, "AOL? Aol.? LOL!" It's pretty easy to be cynical about the changes at AOL, or perhaps Aol. Things have gone downhill for the company pretty steadily since the epic, and epically disastrous, merger with Time Warner in 2000, a $350 billion bet to create a new media giant. It never worked. AOL got its name stripped off the combined company in 2003, because it was such a drag on Time Warner. A succession of chief executives -- Jonathan Miller, Randy Falco and now former Google sales guru Tim Armstrong -- have tried

Oct. existing home sales jump record 10.1 percent

Mon, 23 Nov 2009 10:20:33 -0500

Existing home sales in October jumped a record 10.1 percent, according to data released moments ago, thanks to buyers rushing in to take advantage of the first-time home buyers' credit before it was set to expire. Sales are up 23.5 percent since their lows in October 2008, which also is a record for year-over-year jump, according to the National Association of Realtors. It's not clear the surge represents a bottoming out of the housing market, as the sales are still not happening organically--that is to say, without a government incentive. And now that the home buyers' credit has been extended to April, we won't know if we have an organic, non-subsidized bottom until after then. The median sales price of an existing home in October was $173,100, down 7.1 percent from October 2008. That's the smallest decline in median home price in more than a year. How October existing home

Stocks open week with strong rally

Mon, 23 Nov 2009 09:43:19 -0500

Wall Street zoomed out of the gate Monday morning in a strong rally ahead of the most recent existing home sales report, due out at 10 a.m. In the first 20 minutes of trading, the Dow is up 1.4 percent. The broader S&P 500 is up 1.7 percent, as is the tech-heavy Nasdaq. The markets closed Friday on a three-day losing streak, which they appear to be trying to flip this morning. The key market-moving data this week comes Tuesday, when third-quarter GDP gets revised. Remember: the number that was reported last month (3.5 percent) was only a preliminary number and it always gets revised when the data gets fully cooked. Forecasters are expecting a downward revision to 2.8 percent, so we'll see how that affects the markets. -- Frank Ahrens Sign up to get The Ticker on Twitter

Markets flatten: Have they found their top?

Fri, 20 Nov 2009 14:17:20 -0500

In early afternoon trading, stocks have pared some of their losses, but they are down for the second straight day (and spent most of Wednesday underwater before closing up), so it's worth wondering if this is a blip or the long-advertised "correction" traders have been predicting and awaiting. First, a look at the markets right now. As of about 2:15, the Dow is down three-tenths of 1 percent. The broader S&P 500 is down four-tenths of 1 percent and the tech-heavy Nasdaq is down six-tenths of 1 percent. Now, let's take a look back and see how the markets have been trending in recent months. (These numbers do not include today's moves.) Since the March 9 bottom, the Dow is up about 58 percent, the S&P 500 is up a little bit over 60 percent and the tech-heavy Nasdaq, which has been leading the rally, is up a whopping 70

Leonsis: I was not planning on selling Revolution Money

Thu, 19 Nov 2009 14:44:26 -0500

I had a long talk with Ted Leonsis on Wednesday night about American Express's $300 million purchase of Leonsis's Revolution Money, a PayPal-like online alternative-payment site. I wrote a story in today's paper, which you can read by clicking here. But I wasn't able to squeeze some interesting things he said into the newspaper story, so I wanted to share them with you here today. Let's be clear about this: This sale was probably Leonsis's best play for Revolution Money to continue growing. Trying to go up against the four big payment networks -- Visa, Mastercard, Amex and Discover is like trying to start your own auto company and go up against Toyota and Ford. The barriers to entry are very high and it's hard to overcome the trust hurdle -- complain as people do about their credit cards, they trust a name like Visa or Amex to handle their

Rep. Brady to Geithner: 'Will you step down?'

Thu, 19 Nov 2009 11:09:38 -0500

Rep. Kevin Brady (R-Tex.) just gave a severe tongue-lashing to Treasury Secretary Tim Geithner moments ago in the Joint Economic committee, concluding with a surprising call for Geithner to resign. For a change, Geithner didn't just sit there and take it. Geithner is ostensibly before the committee to argue for financial reform, but Brady used the opportunity to launch a partisan attack on Geithner reading a laundry list of what Brady termed as economic failures of the current administration. Geithner responded with a spirited defense -- edgier than usual -- and was clearly angered by the attack. Brady noted that the White House said earlier this year that unemployment would peak at 8 percent (true) and that it is now at 10.2 percent. He noted that reports of the number of jobs saved or created by the stimulus has been repeatedly ratcheted back by the White House (true). And he

Current economic situation: A look backward, and ahead

Thu, 19 Nov 2009 10:46:22 -0500

Let's take a look backward and forward at some leading economic indicators as a way of trying to figure out where we are and where we're going. First, let's look backward. Here's a terrific graphic that The Post's Business section did today, comparing unemployment, consumption and industrial production during this recession compared with the four previous recessions. Takeaway: If you had any doubt that this recession was the worst since the Great Depression, this graphic should put that doubt to rest. Now, forward. According to the Conference Board's monthly index of leading economic indicators out this morning, slow growth in the U.S. economy should occur during the first half of 2010. The index ticked upward 0.3 percent in October, following a 0.1 percent gain in September and a 0.4 percent gain in August (fueled by Cash for Clunkers). “The data indicate that economic recovery is finally setting in. We can

Stocks broadly down at opening

Thu, 19 Nov 2009 09:48:10 -0500

Wall Street opened in a broad sell-off this morning, following a downturn in overseas markets and an uptick in the value of the dollar. In the first 15 minutes of trading, the Dow is down 1 percent. The broader S&P 500 is down 1.3 percent and the tech-heavy Nasdaq is down 1.5 percent. The markets are ignoring encouraging news from last week's new jobless claims report out this morning. New jobless claims filed last week were flat compared with the week before, the government said in data released this morning, giving hope to those who believe that unemployment is beginning to crest. New claims filed last week came in at 505,000, the same as the previous week's revised numbers. The four-week moving average fell for the 11th straight week. New claims have to fall into the low 400,000s in order for the economy to actually start adding jobs. Nevertheless, the

How tax cuts would have created more jobs than the stimulus

Wed, 18 Nov 2009 11:31:44 -0500

Writing in an opinion piece in today's Wall Street Journal, Michael Boskin -- then-President George H.W. Bush's top economic adviser -- argues that payroll tax cuts for businesses would have created far more jobs than President Obama's $787 billion stimulus. The White House says the stimulus has saved or created (or, more accurately, will save or create, once it's all paid out) 1 million jobs. This comes at a cost of $787 billion. Cutting payroll taxes 6 percent would have reduced businesses' expenses by about the same amount the decline in employment has, it would have cost less than half of the stimulus and it would have created incentives for businesses to hire, Boskin writes, citing research by Stanford's Pete Klenow and University of Rochester economist Mark Bils. You can read the entire piece by clicking here. At the heart of this crisis has been an ideological war between fiscal

Stocks open mixed following surprise housing-starts slump

Wed, 18 Nov 2009 09:51:52 -0500

Wall Street opened mixed, following data released this morning on consumer inflation and housing starts. In the first 15 minutes of trading, the Dow is down one-tenth of 1 percent. The broader S&P 500 is just barely above water and the tech-heavy Nasdaq is down three-tenths of 1 percent. New homes construction and building permit applications fell unexpectedly in October. Why? Builders were waiting to see whether Congress was going to extend the first-time home buyer credit. Congress did extend it, so presumably November housing starts should tick up a little (but still be dulled by the fact we're moving into winter) but what this tells you is that the new home market is rebounding only because of government help, not because it's rebounding organically. Elsewhere, inflation edged up a little more than expected, but if you take out the volatile energy and food prices, core inflation was modest. This

Post exclusive interview with Cisco's John Chambers: U.S. can't afford a second stimulus, no double-dip likely

Tue, 17 Nov 2009 14:31:14 -0500

Frank Ahrens (left) interviews Cisco CEO John Chambers. I had breakfast with Cisco Systems chief executive John Chambers this morning in his suite at the Four Seasons hotel in Washington, where he is attending the Wall Street Journal’s CEO Council. Cisco makes switches and routers — the plumbing of the Internet. But the company’s future appears to be in video. Earlier this year, Cisco paid $590 million to buy the company that makes Flip video cameras. Right now, Cisco has a $3.4 billion bid on the table for Tandberg, a Norwegian videoconferencing company. Chambers might be more of a big-picture guy than most CEOs. He doesn't like to get down on the “transactional” level. He’s also salesman and a negotiator, and he’s got little tricks that he employs. He’s affable, but he’s got a little Sun Tzu in him. For instance, I once saw him get up during a