All Blog Posts from Econwatch

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

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Why aren't banks playing the mortgage modification game? We've been told that lenders prefer to modify and/or restructure loans, rather than enter into the costly and time consuming foreclosure process. At least that was the thought when the government rolled out the Home Affordable Modification Plan ("HAMP").

Despite paying up to $1,500 for each modification, plus $1,000 a year for up to 3 years for each borrower who remains current, the program is stuck. 650,000 homeowners have been given trial modifications, but only a fraction of those have become permanent. What's HAMPering progress on the program?

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

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I heard about Dubai's debt problems before dashing out for Thanksgiving and discounted the news. It seemed likely that Abu Dhabi, which sits atop a $700 billion sovereign wealth fund, would swoop in and come to the rescue. Not so fast - we would have to wait for the Tiger Woods car crash to move the Dubai story below the fold.

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

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In preparation for the eat-a-thon that is Thanksgiving, I do like to give thanks for the big stuff - health, loving mate, wonderful family, great country with wonderful troops who give so much to all of us and an amazing city that despite the high taxes, is still worth it.

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

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In today's "Reality Check" (Click here to view the video) MoneyWatch Editor-in-Chief Eric Schurenberg and I discussed the economic smack-down of the moment: inflation vs. deflation.

Although most economists understand that a recession, especially one highlighted by significant deleveraging, is deflationary, the worry is that the massive government spending spree (trillions of dollars since Lehman's collapse) will lead to higher inflation down the line.

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

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I always get nervous when three or more people who don't study the economy or financial markets say exactly the same thing. This past weekend, it was a teacher, a lawyer and a doctor, all of whom proclaimed: "we're definitely headed for a double-dip recession!"


Every time someone says "double dip" I can't help think of a soft serve ice cream cone plunging into that delicious chocolate coating not once, but twice. That said, are fears of a double dip warranted?

One would have to be brain-dead to not consider the possibility of something bad - really bad, derailing the progress that has occurred since the beginning of this fiasco. Here's a just a few ideas to get you started: a commercial real estate collapse could make the residential market look like a walk in the park; unemployment could get much worse; a large multi-national bank bites the bullet; the Fed blows it; and the weekend favorite, this whole recovery is in your head.

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

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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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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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