All Blog Posts from Econwatch

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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I used to live in Rhode Island, which is why I still take an interest in what's happening there. Little Rhody has gotten crushed in the recession. The last vestiges of its manufacturing base have been vaporized and the contraction in housing have contributed to the state's dismal employment situation.

You'll note from this seal, that "hope" is the motto of RI, as in "I sure do hope the unemployment rate starts to drop soon!" Today, Rhode Islanders poured themselves a little coffee milk to celebrate: according to the Bureau of Labor Statistics Regional and State Unemployment rate report, RI unemployment fell for the first time in nearly three years, dropping by a 0.1% to 12.9% in October.

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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While ambling around the Bureau of Labor Statistics site (a fantastic trove of information), I stumbled upon a Consumer Expenditure Survey that details how Americans spent their 2008 Economic Stimulus Payments, which were actually IRS tax rebates.

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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Special Inspector General for TARP (aka "SIG TARP") Neil Barofsky said something we've all known for a while: the government gave away the farm when AIG failed.

If you recall, AIG's failure meant that the companies on the other side of all of its contracts (counterparties) were going to be left holding the bag. Under normal cases of bankruptcy, the court would impose haircuts to the amount of money due to counterparties, but because AIG didn't actually declare bankruptcy, the counterparties claimed that they were owed 100 cents of every dollar. The only bank that even considered taking a haircut was UBS - the Swiss, for goodness sakes - hard to imagine that a Swiss bank could make US banks look bad, but here's a case in point.

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After seizing control of more than 150 failed banks in the last two years, the U.S. government reluctantly finds itself in the real estate business.

According to a Wall Street Journal report Tuesday, the Federal Deposit Insurance Corp. now owns more than 5,000 foreclosed properties taken from small banks that collapsed as the housing market went into the tank.

The entire catalog of properties, ranging from an $18,700 home in Birmingham, Ala., to a $1.7 million lodge tucked in the mountains of Steamboat Springs, Colo., carries an appraised value of $1.8 billion.

As the Journal's Michael M. Phillips writes: "The financial crisis started with Americans buying homes they couldn't afford. It is ending with the government struggling to sell buildings it never wanted."

Phillips charts the FDIC's efforts to sell troubled Dresden Heights – an unfinished housing development in Atlanta that counts an interstate highway and a pest control company as neighbors.

Among the many challenges facing the FDIC – a decaying constructions site, looters and the fact that potential buyers would technically have to trespass to get to their homes (the original developer took out loans from two different banks to buy the land and then build on it).

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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When is a loss good news? When you're General Motors and the loss could have been worse. Call me a cheerleader or a concerned citizen, but I have been rooting for GM throughout the financial crisis.


This morning, GM announced that it lost $1.2 billion in Q3. Yes, we'd like to see profits, but the news is movement in the right direction. Pessimists might note that it's a lot easier to get back on track when you wipe out a boatload of your outstanding debt and the taxpayer pumps billions of dollars into the endeavor. True enough, but GM had some good news on that front too - the company said that intends to re-pay the $6.7 billion US taxpayer loan by the middle of 2011. Here again, the more cynical will remind you that those loans represent something like 13% of the $52 billion of the government's infusion over the past year, still, I'd prefer to get the money back, wouldn't you?

What's next for GM? During the earnings call, CEO Fritz Henderson said that the company is seeing signs of "stability" in the in the auto sector and that vehicle sales should increase from about 10.7 million vehicles annually today to 11-12 million next year. The company has also seen some success in China and is trying to address problems in Europe, especially after backtracking on the sale of Opel.

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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Here's my interview with Charlie Gasparino, author of "The Sellout."

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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I should have expected the massive stock market rally - after all, at the end of March, I had heard that the guy who I consider one of the great "contra-indicators" (let's call him "Mr. Wrong") was predicting a steep decline to Dow 5000. Before you brush aside that notion as nonsense, remember that at that time, we were still worried about the implosion of the financial system.

But when I heard that Mr. Wrong was predicting massive riots in the streets and falling equity prices, I forced myself to consider the bull case for stocks. I had made the mistake of betting against massive liquidity once before - in 2002-03, I remained underweight in risk assets for too long and paid the price. I'm pretty sure that Mr. Wrong is making the same mistake and here's why: there still remains deep pessimism over the recovery and the stock market.

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Attention Mets fans: Feeling down after watching a Yankees-Phillies World Series? Need a little boost to get through a long offseason? How does owning Bernard Madoff's tattered but shiny plush Mets jacket sound? With "Madoff" sewn on the back, it's sure to be a hit from Wall Street to Citi Field.

The jacket is one of more than 100 seized items once belonging to the famous Ponzi schemer and his wife Ruth Madoff set to be auctioned to the public Saturday in New York. Other items include Madoff's Rolex watch, Mrs. Madoff's jewelry and furs, and a decoy duck.

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This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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"Whereas the legislatures of twenty-seven of our States have already declared November 11 to be a legal holiday: Therefore be it Resolved by the Senate (the House of Representatives concurring), that the President of the United States is requested to issue a proclamation calling upon the officials to display the flag of the United States on all Government buildings on November 11 and inviting the people of the United States to observe the day in schools and churches, or other suitable places, with appropriate ceremonies of friendly relations with all other peoples."

Today is Veteran's Day and while the bond market is closed, the stock market is open. I know it's hard, but to honor our brave soldiers, I'm going to ask you to stop thinking about money, at least for a brief period of time.

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AIG's Chief Executive Officer Robert Benmosche threatened to quit at a board meeting last week, saying it was too difficult to do his job with so much government oversight.

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