Friday Fun: Job data

The BLS put out labor statistics that may raise some eyebrows. Want to find out more about your area? The map below is a screenshot, but to find more info click here.

PJ and BD

Penn Jillette is funny. I watched a few of his

shows and I laughed, but often felt as though he was not honest in his arguments. Maybe, that's too harsh, dishonest, but you could at least say skewed towards his point of view. So today, CNN puts up an article Jillette writes about Obama's economic policies. Here is the thesis:

Obama tells us that we can spend our way out of debt. He tells us that even though the government had control over the banks and did nothing to stop the bad that's going on, if we give them more control over more other bank-like things, then they can make sure bad stuff doesn't happen ever again. He says we can get out of all those big wars President Bush caused by sending more troops into Afghanistan. And I don't know. I really don't know.

Now, that link doesn't go to any statement by Obama to that effect. I don't remember Obama ever saying we can spend our way out of debt. I do know that economists on the right and left agreed that stimulus spending needed to be big. Which is to say, Jillette is bullshitting us. And that is disappointing.

Friday Fun: Budget Hero

The Republicans put out a their "Road to Recovery"
(and kudos to their SEO people, the document is very easy to find!). There aren't many details and this has upset some. On the other hand, writing a budget is hard.


Don't believe me? Well then, try creating one yourself here.

Halfway there...

The chart below from dshort.com should give us all some perspective as to how the current financial crisis aligns with those in the past.

We seem to be following the 1929-32 iteration more closely than 1973-4 or 2000-2. As others have noted, this may get worse before it gets worse.

Trash talking...Senate style

This is going to be everywhere tonight. Just remember you saw it here first.


Click here if the video doesn't work (of course that would mean you saw it there first, I guess).

MeFi repost

Over at MetaFilter, the poster named Mutant asks the following:

The Fed's Public Private Partnership Program, promises to clear down as much as $1T worth of "legacy assets" from banks balance sheets. Globally, equity markets responded positively. But what about assets held off balance sheet?

He continues...

Off balance sheet vehicles originally were designed to mitigate risk, focusing investments into subsidiaries so credit ratings or leverage ratios of parent companies wouldn't be impacted. Many financial firms improperly used such vehicles to hide poorly performing assets, culminating in the well known collapse of Enron in 2002. Last July The Financial Accounting Standards group postponed FAS statement 140 - which would require firms to move assets on to their balance sheets - for one year, an impending deadline that concerns many analysts.

How much is held off balance sheet? As of Q1 2009 off balance sheet assets at the four largest US banks - Wells Fargo, JP Morgan, Citigroup and Bank of America - totaled roughly $5T, or a sum potentially dwarfing Geithner's trillion dollar plan.

Regulators are aware of the problem and already are planning to increase requirements for economic capital, but considering how reluctant the United States was to adopt Basel II [.pdf] , a real fix could take a while.

All of this is to say, it looks like the hole is deeper than we are told.

Cover me, cover you

I'm not exactly sure what Obalesque is arguing here. It seems as though Rep. Schultz is for universal health care.

You down with PPIP?

The Public-Private Investment Program (PPIP), Treasury Secretary Geithner's plan to save the US financial sector from catastrophe, is...uh...complicated. I won't try to describe it (for that, I"d suggest going here). I will say that from what I understand, it is basically asking the private "investors" to price something that will mostly (completely?) be paid for with tax dollars.

I don't know if this is the right approach or not. I do want to note something I don't think other people have mentioned. In reading the Ryan Grimm piece about the nationalization of IndyMac, the following stood out:

Depositors didn't all stick around to see how things worked out. A year ago, the bank was sitting on those $19 billion in deposits. When it was finally sold last Thursday, that number had fallen to $6.4 billion.

From $19 billion to $6.4 billion. That is a drop of about 67%. People weren't made to feel secure enough by the FDIC to not pull their money out. I am left wondering if nationalization of the largest banks wouldn't create the same illiquidities and/or create runs on the banks involved? Is this why we are moving forward with TARP v.2?

Oh Canada

MattY had a post today about the border implications of global warming...namely, that they will have to be re-visited. Meanwhile, it seems that our, more mundane, boprder dispute with the Canadians has been resolved. Another quiet victory for the Bush Administration.