Comments on: Unemployment numbers good news?

By: bth

bth — Fri, 03 Jul 2009 13:29:01 +0000

Debt for equity – that is another of the techniques a workout CEO might use. And, I think it is a part of what FDIC chief Shiela Barr (sp?) is suggesting to the banks. I’m not sure how a government entity would do that with government debt. And, if Obama were to try to pressure the financial industry into such swaps I am certain the Limbaughs, Hannitys and O’Reillys would howl.

A similar deby/equity swap is taking place with GM, Chrysler, AIG, Citi, etc as debt of these corporations is converted into stock. And, you might note the howls about THAT from talk radio.

By: bth

bth — Fri, 03 Jul 2009 13:11:05 +0000

jerry – when I took a lot of Econ as part of my MBA I learned that you can run high deficits for a short period to ‘tide you over’ a downturn. The key is to do the opposite – surpluses – during good times. That is why Clinton’s actions were so important – he balanced the operating budget in his first year and finally balanced the overall budget (including debt service on the inherited debt) by the time he left office.

We are definitely in a bind today. It will take significant deficit spending to try to ‘prime the pump’ and get us through it. Unfortunately a decision was made to NOT save money during the previous 8 years when things were running hot. States and cities did the same thing – chose to NOT build reserves during good times. And many families and businesses did the same – no savings banked while working overtime.

Like the lesson from dream of the 7 fat cows and 7 skinny cows: bank the grain during feast time so you have enough to get you through famine. That same lesson was taught to me in all those Economics and business courses.

The situation today is similar to that faced by a ‘workout’ CEO taking over a bankrupt company. He will likely require bridge loans to get though the restructuring. He should not, however, be judged by the interest he has to pay on debt he inherited.

By: ictBest

ictBest — Fri, 03 Jul 2009 04:04:55 +0000

This DPR is going to hurt for a long time.

By: jerry

jerry — Thu, 02 Jul 2009 18:56:34 +0000

There is nothing good about the latest job numbers. And there is not one iota of evidence showing it will get better.

bth, you are obviously a sharp fellow in numerous fields of study. But economics and post January 20, 2009 history does not appear to be one of them. Care to show the numbers on overspending, deficits and financial practices on the last 5 months versus the previous 80 years, let alone 8?

I thought this link was fascinating, and hopefully will lead to discussion. I am really curious if the debt solution proposed is remotely feasible:

http://www.cnbc.com/id/31706523

By: bth

bth — Thu, 02 Jul 2009 17:18:09 +0000

It’s going to take more than 5 months to undo the damage done to our economy over the past 8 years of overspending, massive deficits, and irresponsible financial practices in our unregulated financial industry. The crash was well under way BEFORE January 20.

By: goodman52

goodman52 — Thu, 02 Jul 2009 16:50:31 +0000

Good news, are you kidding? Just look at the Midday Report. Nothing but bad news regarding our local and the national job situation. And what is his highness Obama doing about it? Trying his best to promote a ridiculous health plan that will cost more jobs and, at the same time, higher taxes. Wow! Did we just fall off the turnip wagon or what?