Living room for $250.
Today on Planet Money:
-- Justin Ritchie of Charlotte, North Carolina, bought the living room set pictured above from a Craiglist ad. The seller, he says, was a Bank of America employee who decided now would be a good time to return to India.
-- When Super Bowl 43 is finished, the host city of Tampa can expect to count up a $150 million boost to its economy. But economist Philip Porter of the University of South Florida tells Mike Pesca there's no way that's true.
-- President Barack Obama says that only government can pull America out of a recession this severe. Obama calls his plan for stimulus spending of well more than $800 million a new idea, but Adam Davidson and Alex Blumberg say this kind of public spending relies on an old theory. John Maynard Keynes wrote it up in 1936 -- and this recession marks its first real-world test.
Bonus: Results of our Name the Crisis poll, after the jump.
Continue reading "Hear: Obama Tests Keynes" »
Laura Conaway
3:43 PM ET | 01-30-2009 | permalink
comments () | | e-mail
Steve Chu, the physicist and Nobel laureate who will be running the Department of Energy has some tough economic challenges ahead, finding a way to make renewable energy affordable among them.
I've talked to him a couple times over the years and Chu seems wisely skeptical of miracle cures.
When researches claimed a while back that they had made a laser pulse move faster than the speed of light, I called him up. Chu was quick to testify that this was a silly parlor trick:
"OK, it's surprising for a little while, but after the dust settles, you have to ask, 'Did we learn any new science?' or, 'Is it going to be good for anything?' And I can answer at least the first part. We did not learn any new science."
That story is here. Chu recently told NPR there is no hiding from global warming.
David Kestenbaum
12:25 PM ET | 01-30-2009 | permalink
Aaron writes:
I am on the college recruiting team for a large manufacturing company in the Midwest. Last Tuesday, I staffed my company's booth at Iowa State University's spring engineering career fair.
I met a very charismatic student with an impressive resume: Suma Cum Laude with a 3.98 GPA in engineering.
Continue reading "Indicator: GPA Vs. Job Leads" »
12:03 PM ET | 01-30-2009 | permalink
Today's Planet Money is brought to you by the number 3.8.
That's the annualized percentage rate by which the American economy shrank in the last three months of 2008. Gross domestic product, or GDP, fell by less than expected in the fourth quarter. GDP is the sum of all the goods and services produced in this country -- as Adam Davidson likes to say, every cup of coffee bought and every house sold and every last widget made.
Continue reading "Incredible Shrinking Economy" »
9:03 AM ET | 01-30-2009 | permalink
Click to view
We've been hearing from some of you that you're trying to save more, that you're either tired of what feels like over-consumption or that you want to hunker down in case you lose your jobs.
Others of you tell us that you've decided to spend a little more, here and there, to help a local business or to prop up the economy in general.
That debate plays out in the slideshow above, with ad campaigns from the U.S. and Finland.
What we keep asking ourselves at Planet Money is not just how we're changing our spending/saving habits, but whether those changes will last. Hit the comments, please.
5:34 PM ET | 01-29-2009 | permalink
Planning your next move? Wondering where your state stacks up now that the football season is almost over? The Bureau of Labor Statistics publishes monthly unemployment data. I've made a chart from labor force data, one of two ways unemployment is measured (the other is from payroll data). Click here to see the past three months of data. I was surprised to see places like Oregon and D.C., where there have been no big layoff announcements, near the top of the list. What are you seeing?
Alan Cordova
2:52 PM ET | 01-29-2009 | permalink
Our colleague Andrea Seabrook sends along this excerpt from H. L. Mencken's essay "What Is Going On In the World," published in The American Mercury, March, 1933:
The psychic effect of the depression, it seems to me, is generally a good one.... It has taught people the difference between speculative values and real values. It has hastened the death of sick industries, and proved the vigor of sound ones. It has blown up the old delusion that the amount of money in the world is unlimited, and that every American is entitled to a police captain's share of it. Best of all, it has taught millions that there is really no earthly reason why there should be two cars in every garage, and a chicken in the pot every day.
Continue reading "A Word From H.L. Mencken" »
Caitlin Kenney
1:10 PM ET | 01-29-2009 | permalink
Remember when times were good?
Got this today from NPR alum Dan Pashman:
They say that when your friend loses his job, it's an economic slowdown. When you lose your job, it's a recession. And when an economist loses his job, it's a depression. By that logic, this economic crisis just became my Waterloo.
As someone lucky enough to be gainfully employed, I have watched this great unraveling with anger at those responsible, sympathy for those less fortunate and concern for us all. But it hadn't fully hit home. Until now.
That's because the Super Bowl is this Sunday, and there's a SHORTAGE OF BUFFALO WINGS IN AMERICA. That's like Wimbledon running out of strawberries and cream, or the French Open running out of contempt.
Continue reading "No Buffalo Wings, No Peace" »
11:24 AM ET | 01-29-2009 | permalink
Cormac Eubanks sends one of my favorite indicators to date -- the team names from his local pub trivia game. He writes:
I live in San Francisco and the Bay Area had been considered somewhat insulated from the downturn as Silicon Valley is less dependent on the traditional banking system than it is from small private investors. Recently though the stories of friends being laid off at companies large and small have become more numerous. Here's an interesting indicator of how the trend is beginning to settle in even here. At a pub quiz last night at the Edinburgh Castle, 3 of the 10 team names in the bar were:
- "8,000 Sprint Employees Now Have Free Daytime Minutes"
- "I Was Told There Would Be Cake in the Breakroom and Instead They Laid Us Off"
- "Other People's Pinkslips"
11:08 AM ET | 01-29-2009 | permalink
Via Freakonomics and Bo Cowgill, we have a trend that may or may not shock you: the number of Google searches for "coupon" has exceeded the number of searches for "Britney Spears," a sign, according to Justin Wolfers, that we are most certainly in a recession.
10:50 AM ET | 01-29-2009 | permalink
The libertarians at CATO took out a full page advertisement in the Times, Post and other papers yesterday opposing the stimulus package.
It ran the same day as this story in the Times about declining newspaper ad revenue. Which I suppose makes their point.
Though they're going to have to take out a lot of ads to save the newspaper business. I just got word that where I live, the Baltimore Examiner will be closing, though there's no notice on their website as I post this.
And boy, strange times when a newspaper ad for the general public can begin with a reference to the Keynesian school of economic thought.
10:37 AM ET | 01-29-2009 | permalink
The new job loss numbers are in -- Ian Shepherdson of High Frequency Economics says the weekly figures are shifting, with something like 588,000 new claims for unemployment benefits last week. Shepherdson notes that 4,776,000 people are getting benefits, a new record, as hiring slows and layoffs increase:
The net result of this is soaring unemployment, and we see no chance of this picture changing in the foreseeable future. We expect net job losses of about 3 million through the first half of this year.
Calculated Risk says the U.S. situation is already as bad as it was in the 1990-91 recession.
At the World Economic Forum in Davos, global leaders are blaming the U.S. for the economic crisis. And Democrats in the House of Representatives muscled the economic stimulus bill through, which now goes to the Senate as an $819 billion package.
9:14 AM ET | 01-29-2009 | permalink
A much quieter shop in Hamilton, Virginia.
-- David Specht of Shelburne Falls, Mass., delivers today's Planet Money indicator. It has to do with sawdust and why his family started rationing it.
-- U.S. officials are considering a new plan for saving troubled banks: create one big "bad bank." The idea, explains economist Larry Ausubel, is to launch a single institution charged with mopping up the toxic assets and selling them off. Ausubel has been testing a way of pricing the stuff no one seems to want. Bonus: Simon Johnson's "Bad Banks for Beginners."
-- From his plans for a $10 million bonus to his $1.2 million office renovation, ex-Merrill Lynch CEO John Thain has become a leading villain of the financial crisis. Adam Davidson and Portfolio blogger Felix Salmon. Bonus: David Folkenflik asks "What's John Thain saying?"
Download the podcast; or subscribe. Intro music: Regina Spektor's "Better." Find us: Twitter/ Facebook/ Flickr.
Continue reading "Hear: Bad As They Want To Be" »
4:00 PM ET | 01-28-2009 | permalink
Since we're podcasting today about ex-Merrill Lynch CEO John Thain, NPR's David Folkenflik sends this sneak peek at his regular column:
As we segue from the golden age of Bashing the Media to the golden age of Eulogizing the Media, I'd like to pause for a moment to admire an example of a journalist doing her job. As I lack expertise in certain elements of high finance, I'll be appealing at the end of this to professionals to weigh in -- but the professionals I'm talking about may be different than the ones you'd expect.
On Monday, a humbled Wall Street titan entered the court of public opinion to try to salvage his reputation.
Continue reading "What's John Thain Saying?" »
3:45 PM ET | 01-28-2009 | permalink
Ali Alhalmi talks business in Detroit.
While I was in Detroit this week, I had to stop at my favorite restaurant -- the Lafayette Coney Island. The Detroit landmark is a downtown greasy spoon famous for its Coney dogs -- smothered in chili, mustard and onions -- best accompanied by a can of Labatt's.
Full disclosure: I like the place so damn much my wife and I had our post-wedding photos taken here after our wedding in Detroit. But back to the economy . . .
During the recent auto show in Detroit, much was made of the cutbacks companies in attendance were making. Coincidence or not, Lafayette was asked by an automobile consulting company to shut down for five hours, and host a private party.
Continue reading "'Wait For A Better Day'" »
David Greene
12:59 PM ET | 01-28-2009 | permalink
User unknown = user no longer works here.
There are certain rituals that come with a layoff, like cleaning out your desk, giving back your security badge and that awkward goodbye lunch. Bryan sends another one to add to that list -- the disabling of your e-mail account:
This is a personal indicator that can only happen in these modern times. More and more, when I send emails to friends at their company address, I receive one of these as attached. This is often the first indicator that someone you know has been laid off at a company. Who would have thought that this technical error message would indicate someone's misfortune?
Continue reading "Return To Sender" »
11:33 AM ET | 01-28-2009 | permalink
Number of new banks (click for bigger chart).
People keep asking why someone doesn't just start up a new, squeaky-clean bank that everyone trusts -- one unencumbered by toxic mortgage backed-securities.
There are new banks popping up, though last year saw a drop (see chart). The American Bankers Association says there were 62 newly chartered banks that qualified for FDIC insurance.
Most of these are small community banks, though. Vista Bank in South Carolina has three offices and a pretty bare-bones website. Vision statement: "VistaBank will be recognized as the financial institution of choice." That's it. No way it will be taking the place of Citibank anytime soon.
The challenge in starting up a new bank is the same you would face opening any new business. You need start-up capital, which these days is hard to come by.
11:25 AM ET | 01-28-2009 | permalink
Douglas Coupland, author of Generation X, has an op-ed for everyone who thinks the world the world as we know it is coming to an end. I'm not endorsing it. I just thought you'd want to see it.
Coupland writes:
How much less will we actually consume in 2009? Does the prospect of a 10 percent reduction in personal spending sound scary? Should we be figuring out a number in our heads we can agree on as being both plausible and survivable? Five percent? Eight? When do we say, "O.K., this kind of reminds me of 'The Waltons' and I can feel good about it"?
He gets to that off-the-edge-of-the-horizon thing toward the end.
9:55 AM ET | 01-28-2009 | permalink
The U.S. House of Representatives is expected to vote on its version of the now nearly $900 billion stimulus bill today.
From the Washington Post: Democrats Among Stimulus Skeptics:Some say it fails to reshape American economy.
From the New York Times: Stimulus reshapes American economy: A flood of money for education/ Republicans call it a back-door path to universal health coverage/ Leonhardt looks at merits and misses.
In other news: World's growth worst in 60 years/ Global search for growth turns to U.S./ FDIC may run "bad bank" to purge toxic assets/
9:47 AM ET | 01-28-2009 | permalink
Click to enlarge.
How do you see the financial crisis?
The Alphaville blog of the Financial Times posted a JP Morgan image showing the rapidly shrinking market values of major banks. Commenters immediately pointed out that the graph used diameter, rather than area (the square of half of the diameter, times pi), which made JP Morgan look better than it should. Below the jump, a couple variations on this theme.
Continue reading "Any Way You Show It, It's Bad" »
4:55 PM ET | 01-27-2009 | permalink
IBM let another 1,200 people go today, union organizer Lee Conrad says, bringing the total layoffs at the company in the last week to about 4,000.
IBM has mostly declined to comment on the layoffs, except to acknowledge that they're happening. Several major corporations have announced job cuts this week totaling some 60,000 in the U.S., but IBM has reduced its workforce quietly.
Continue reading "Union: IBM Cuts 1,200 More" »
3:53 PM ET | 01-27-2009 | permalink
Seen in Brevard County, FL.
Last week, we learned that housing starts for December fell to their lowest level ever. Flickr user Sadicarnot sends this picture of a house that got started but never finished. He writes:
This house is on the Indian River Lagoon in Brevard County FL. The houses on this street were going for a minimum of $1m. This house was gutted but no work went on for several months, the assumption was they were waiting for permits.
They began working just before the summer of '08 but work stopped sometime during the summer. They didn't shingle the roof, what they did do will probably just rot away.
12:31 PM ET | 01-27-2009 | permalink
Since we aired Chana Joffe-Walt's report on naming the mess we're in, you folks have thrown out many terrific nominations. I took the liberty of picking the ones I liked best and putting them into an online poll.
Now it's time to vote. The poll's open until Friday, Jan. 30, at 11:30 a.m. Eastern. We'll announce the results on that day's podcast.
Click Here for PollSurvey Software | Website Polls | Email Marketing | Innovation ManagementView MicroPoll
11:41 AM ET | 01-27-2009 | permalink
Big layoffs make big news. American corporations cut jobs on the order of 60,000 yesterday -- one estimate put the global figure at 75,000.
The question now is what those layoffs mean in terms of the overall economy. Yes, those are scary numbers. Yes, economists expect unemployment to rise and keep rising. But the economy creates and sheds jobs all the time. Do this week's mass layoffs wreck the curve?
One place to start understanding what economists call "churn" is with the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey -- aptly shortened as JOLT.
Continue reading "Welcome To Layoff Land" »
9:16 AM ET | 01-27-2009 | permalink
Protesters outside Iceland's Parliament, 01.20.09.
-- Iceland's government became the second to fall as a direct result of the economic crisis. Icelandic National Broadcasting's Bjorn Malmquist reports on what some are calling a revolution.
-- Russians have gotten almost accustomed to an economy that grew rapidly, until this year, that is. Now, as David Kestenbaum reports, people there are struggling with what to call the new economic climate. Andrei Illarianov, former adviser to President Vladimir Putin and now of the Cato Institute, says neither media nor the government wants to call it a crisis.
Download the podcast; or subscribe. Intro music: The Streets' "Everything Is Borrowed." Find us: Twitter/ Facebook/ Flickr.
4:51 PM ET | 01-26-2009 | permalink
Layoffs are continuing at IBM this week, says Lee Conrad, union organizer with Alliance@IBM. The job cuts started quietly on Wednesday, the day after IBM posted a 12 percent quarterly rise in profits and the CEO sent a companywide letter promising bonuses and raises.
Conrad says nearly 3,000 people have been sent packing so far.
Along the way, workers are wending through jungle of corporate jargon. Most of the laid-off workers have been Resource-Actioned. Conrad expects further cuts this year by Management-Initiated Separations (translation: You're fired.). "Believe me, you need a dictionary," Conrad says. After the jump, more IBM-ese.
Continue reading "Jargon Watch: Say What?" »
3:52 PM ET | 01-26-2009 | permalink
We started the day wondering whether John Thain has any sense of this historic moment. The former CEO of Merrill Lynch has become something of a villain in the financial crisis, with his rush to pay bonuses as the investment firm tanked and his $1.2 million office renovation.
Now comes the news that Thain has decided to reimburse Bank of America, which now owns Merrill Lynch, for the cost of revamping his executive suite. Among its contents: A trash can that reportedly cost $1,405. (Which puts a whole new spin on the 62,000 slated to get canned in corporate layoffs announced today.)
3:14 PM ET | 01-26-2009 | permalink
In November, Ryan Stotland of the Astroturf checked in with "A Central Banker's Dilemma." Now he's back, with "Financial Crisis Revisited." Ryan says he originally called it "Financial Crisis 2008 Revisited," but that's so last year -- and the crisis, of course, is so right now.
1:54 PM ET | 01-26-2009 | permalink
U.S. companies today announced 43,000 layoffs in the works today. President Barack Obama used the news to pitch a quick economic stimulus package again.
It's definitely starting to feel like Layoff Land out there, with e-mails from newly canned folks piling up. I'll drop one from an IBM family after the jump. Note: IBM calls its layoffs a "Resource Action."
Continue reading "'Resource Actioned' Lately?" »
1:37 PM ET | 01-26-2009 | permalink
Shane Bailey used to work here.
NPR's David Greene has hit the road for a big "100 Days" project. He's talking about the recession with people around the country. The idea is to travel south on I-75, starting in snowy Sault Ste. Marie, Mich.
Greene sends the photo above, along with this first report:
Continue reading "Out Of Work In Michigan" »
10:42 AM ET | 01-26-2009 | permalink
The news out of Reykjavik is a whopper: Iceland's prime minister says the government has collapsed. Since the economy there tanked, Icelandic protesters have taken to the streets over spikes in unemployment and prices. Hey, the Belgians went first.
Elsewhere, Britain talks recession, economists say things are getting worse, and Washington wonders about nationalizing the banks.
10:00 AM ET | 01-26-2009 | permalink
My dad's an actor. And he taught me that when actors play a villain or a jerk, they have to find a way to sympathetically understand that person. After all, villains and jerks don't think of themselves as villains and jerks. They generally think they are decent people responding to an unfair world, or whatever other justification they have. When an actor doesn't do the work of finding some way to sympathetically embody a bad character, you can tell: they play it as a crude caricature.
So, I've had a lifelong habit of trying to sympathetically understand villains and jerks. This is helpful for a journalist (particularly, for me, when covering the Middle East), though it can make your head hurt sometimes. And John Thain--probably more of a jerk than a villain--is really putting me through my paces.
Where is the soul-searching? Where is the self-doubt? Where is the slightest hint that this guy understands this moment in history?
Continue reading "Thoughts On Thain" »
Adam Davidson
8:02 AM ET | 01-26-2009 | permalink
Keep looking in Texas.
-- The last time we heard from Noel Paterson, the Microsoft worker was driving the backroads of Washington State, picking up cheap electronics he found on Craigslist. Now, he checks in from his new post on the economic frontier. Paterson was one of 1,400 people Microsoft laid off this week.
-- Which would you rather have happen to you -- a layoff, a pay cut or a furlough? As companies look for ways to slash costs without canning workers, more of you are reporting that you're being asked to take short periods off without pay. Listeners Elizabeth Call and Daniel Cross wonder what will happen next, and economist Howard Rosen worries.
Download the podcast; or subscribe. Intro music: Arcade Fire's "Neighborhood #3 (Power Out)." Find us: Twitter/ Facebook/ Flickr.
2:25 PM ET | 01-23-2009 | permalink
Seen in Takoma Park, Maryland
The folks at High Frequency Economics noted this week that the perception of deflation creates deflation. Listener David Melito seconds that, in an e-mail with the subject line "My Mother's Hallway Mirror." He writes:
I was chatting with my mother the other day and she said to me that she had her eye on a hallway mirror at [deleted]. She said "I know that they are about to declare bankruptcy so I am waiting for the clearance sale. You have to wait awhile for them to really cut the prices."
It got me to thinking if my mother is buying a hallway mirror from a company that is going out of business. That means she is NOT giving money to a company that is trying to stay in in business. She can't be the only person making these types of decisions.
Where does this end?
1:08 PM ET | 01-23-2009 | permalink
The folks at Baseline Scenario have a nice walk-through of the problems the banks are facing and the possible fixes. They imagine it Lord of the Rings-style with a "Bank of Middle-Earth" stuck with toxic assets.
Option 1: Bank Mitosis : Bank of Middle-Earth splits into a good bank (Bank of Gandalf) and a bad bank (Bank of Sauron)
Option 2: Little Red Riding Hood fix: Create a "Big Bad Bank" for the bad assets.
As they explain, both solutions have problems.
It's worth mentioning that we're not really in new territory here. The International Monetary Fund deals regularly with countries that have to fix up their banks. Sweden managed it just fine.
10:27 AM ET | 01-23-2009 | permalink
Leading today's news: Corporate earnings reports.
The Wall Street Journal says, "Earnings gloom sinks stocks." Economist Nouriel Roubini says slowing demand from China will force stock prices down all over the world.
Layoffs are piling up, with cuts at major outfits like Microsoft, Intel and Digg. Still very little news about what a union official calls nearly 3,000 layoffs at IBM, which posted a 12 percent jump in profits this week. You can peek in on the layoffs in real time on the union website.
Continue reading "Oh, Mercy" »
10:07 AM ET | 01-23-2009 | permalink
The Washington Post ran the numbers on how much Obama's freeze on White House salaries over $100,000 actually adds up to. Answer: $443,000 next year.
Here's a list of some salaries from last year. Josh Bolton (Chief of Staff) was making $172,000. Staff assistants were making $34,000.
The LegiStorm website lists Congressional salaries, though it seems to be having technical problems as I post this.
10:03 AM ET | 01-23-2009 | permalink
Empty office elevators are one symptom of China's real estate problems. NPR's Louisa Lim reports on the deceptively beautiful view from the world's highest observation deck in Shanghai.
"Behind these gleaming glass facades, all is not well. Shanghai's real estate market is slumping."
You can also hear her report on why China is not happy with 6.8% growth last quarter.
9:47 AM ET | 01-23-2009 | permalink
Growing, but more slowly.
Today's Planet Money indicator is 9. That's the percentage rate of growth in the Chinese economy last year, down from 13 percent in 2007. Nine percent may sound like boom times, but you have to remember two things: First, the Chinese population is large and poor and needs every new job it can get. Second, by some estimates, every percentage-point drop in China means 2 million jobs lost.
The real-world indicator of this comes from James Hervold, who works in Beijing. He writes:
I'll note the recession is hitting us here too. My company had moved into a new building shortly after it was built in May -- we were the 2nd office on our floor to move in. After some months, by the end of summer, it became quite frustrating to use the elevators -- we are on the 9th floor and routinely used the stairs to exit the building. By November, enough offices had closed down and moved out that this was/is no longer a problem.
4:26 PM ET | 01-22-2009 | permalink
Wife tells unemployed husband to get job delivering Domino's. The bright side? Minus cable and dinners out, the family members actually sit around reading and talking to each other.
(Thanks, @jsboian.)
4:01 PM ET | 01-22-2009 | permalink
New York City, 1929
In other news from the unemployment line, Microsoft says it will cut 5,000 jobs over the next 18 months (Next Web has Steve Ballmer's letter). One of those 5,000 people happens to be a friend of mine. He just got the news.
I don't know about your e-mail, but my inbox is becoming a nest for messages like his.
Continue reading "A Microsoft Layoff Checks In" »
2:13 PM ET | 01-22-2009 | permalink
As layoffs continue at IBM, a Planet Money listener and IBM worker forwards this letter sent by CEO Sam Palmisano on Tuesday. An IBM spokesperson confirms that it's from Palmisano. Full text after the jump. The letter reads, in part:
I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company's ability to invest in people in these very concrete ways.
Continue reading "IBM CEO: Raises, Bonuses Ahead" »
12:52 PM ET | 01-22-2009 | permalink
Universities around the country are bracing for massive cuts as states rethink their shrinking budgets. In preparation for expected budget cuts, many are asking their staffs to look for any way to save money.
Continue reading "Universities Prep For Cuts " »
12:20 PM ET | 01-22-2009 | permalink
Corporate scandals involving back-dating stock options just keep living on.
Word is two top executives of Research In Motion Ltd., the Canadian maker of the ubiquitous BlackBerry, may pay dearly for their role in a stock option accounting controversy dating back over a decade.
The Ontario Securities Commission is seeking a record penalty -- one that reportedly could be as high as $100-million -- from the top two executives for their role in backdating more than 40 percent of stock options granted to employees since 1996.
Daniel Costello
11:58 AM ET | 01-22-2009 | permalink
Tomorrow, I'll be in Philadelphia at the Wharton Private Equity Conference. I'd like to invite you to post or e-mail questions or issues you would like me to cover while I'm there. If you're wondering what private equity is, click on the jump.
Continue reading "Got A Question For The 'Masters of the Universe'?" »
11:51 AM ET | 01-22-2009 | permalink
Workers at IBM say the technology company launched a round of layoffs Wednesday. The company has so far been mum, but you can find reports on blogs and on a union website.
IBM posted news Tuesday that its fourth-quarter 2008 profits were up 12 percent over the same period in 2007. If you're calculating in shares, analysts say that's $9.20 per.
An IBM worker and listener wrote in to point out that the company stands to gain from President Barack Obama's stimulus package, and that CEO Sam Palmisano advised the Obama transition team.
UPDATE: The Wall Street Journal reports.
11:34 AM ET | 01-22-2009 | permalink
This morning, I'm turning the mic over to Ian Shepherdson, chief U.S. economist at High Frequency Economics. Shepherdson sends two notes today. (Bonus note on deflation after the jump.)
On weekly unemployment numbers, he writes:
Jobless claims jumped by 62K to 589K, well above the consensus 543K and matching the cycle peak recorded in the week of December 20. Last week's claims were revised up by 3K. . .The labor market remains a disaster area.
Continue reading "Welcome To The Disaster Area" »
9:54 AM ET | 01-22-2009 | permalink
Looking for cash, say, to cover a stagflation bet? The Cato Institute's WashingtonWatch.com blog has you covered with a new contest: identify the best or worst use of the money and win $100. Planet Money will also take your opinions on the bill, but all we can offer is gratitude.
5:25 PM ET | 01-21-2009 | permalink
Seen in New York City
-- Treasury Secretary-designate Tim Geithner took questions today on Capitol Hill. Dan Costello boils it down.
-- The U.S. federal government has thrown hundreds of billions of dollars at banks, but the banks say they're still in trouble. What will it take to save them? Simon Johnson, former chief economist of the International Monetary Fund, says about $1.5 trillion, maybe -- whatever it costs for Plan A plus Plan B.
-- Bank lobbyist Scott Talbott says his industry is willing to trade more government oversight for more government help. He's not crazy about nationalization, but he doesn't rule it out, either.
Download the podcast; or subscribe. Intro music: Tegan and Sarah's "Where Does the Good Go." Find us: Twitter/ Facebook/ Flickr.
4:43 PM ET | 01-21-2009 | permalink
The bailout has plunged the federal government into relatively uncharted legal territory and, as a result, it has had to look outside its ranks for help. In particular, the Treasury Department has retained legal and accounting advisers to draw up contracts and monitor the disbursement of funds.
Continue reading "The Treasury-Industrial Complex" »
4:25 PM ET | 01-21-2009 | permalink
Like a lot of news about the global economy of late, this strikes me as just sad.
The British government announced Wednesday that it will spend up to a quarter of its two billion pounds in contingency reserves ($2.7 billion) set aside for the 2012 London Olympics to bail out building projects because they cannot attract private sector funding.
Construction of the Olympic village and the adjoining media center could have been delayed and even stopped because of the credit crunch and officials said the cash was needed to get them built in time for the opening ceremony.
2:36 PM ET | 01-21-2009 | permalink
I just watched the last three hours of Timothy Geithner's confirmation hearing (whew) and it seems pretty clear he's going to sail through. There were some fun highlights, including some tense admonishments of Geithner from Sens. Wyden and Bunning. Here's a story I just wrote for NPR's website. We'll update it if anything else interesting happens as the hearing wraps up.
1:01 PM ET | 01-21-2009 | permalink
Business Week has an article out this morning about age and layoffs. The article suggests that when it comes time to make hard decisions, companies may be thinking about more than "first-in, last-out" union rules:
Jean Jackson, vice-president for workforce planning for Baystate Health, a 10,000-employee health-care system in western Massachusetts, points to seasoned nurses who can mentor younger recruits in the operating room. When Baystate laid off 55 staffers last November, only 20 were 55 or older (and the system has since hired back nearly half of all those it let go, finding new spots for them). Says Jackson: "Our ability to keep seasoned, longtime employees for longer periods of time will be critical for us."
Is it really a "bad time to be young?" Floyd Norris of the New York Times seems to think so.
11:19 AM ET | 01-21-2009 | permalink
The steepest Inauguration Day bounce was FDR's: Click to enlarge.
Anyone expected a stock market bounce from the inaguration of President Barack Obama -- and many apparently did -- instead got the shock of the largest Inauguration Day drop ever. The market fell more than 4 percent yesterday.
But spikes or drops in the market on Inauguration Day are quite rare: only in 1933, when FDR delivered one of the most famous addresses in American history, did the Dow Jones Industrial Average register a significant change.
Continue reading "Chart: Inauguration Days" »
10:32 AM ET | 01-21-2009 | permalink
On the first full day for the new Obama administration, financial institutions are still leading the way down.
From the New York Times: Obama has no quick fix for banks. Key quote after the jump.
Calculated Risk runs the list of banks whose stocks got hammered Tuesday.
From the BBC: UK to expand bank rescue plan/ Germany's shrinking economy/ IBM bucks gloom with rosy outlook
Continue reading "It's All About The Banks" »
9:43 AM ET | 01-21-2009 | permalink
A souvenir from the American Economic Association Conference.
Zach from Minnesota writes:
I've got my own personal Planet Money indicator for today, zero. I work in the market research industry and for months my employer has been talking about promoting me (adding a "senior" in front of my title). Obviously timing has been bad for this sort of promotion. We even lost a few team members last month to layoffs. I haven't gotten the promotion because there simply isn't enough money available to cover the associated bump in pay, unfortunate but totally understandable.
Well, my employer has decided to give me the promotion anyway. I have really been doing the job anyway for some time now and they want to at least give me the title change to acknowledge my contribution to the company. They'll run new business cards for me, but my paycheck wont be changing.
4:00 PM ET | 01-20-2009 | permalink
Twitter listener @joshzele writes:
$650m for Digital-to-Analog converter boxes? That's in the stimulus plan? When did TV become a critical public service?
Continue reading "$650 Million For Digital TV" »
2:28 PM ET | 01-20-2009 | permalink
An Obama voter, @kittydew tweets: "What's happening with the DOW with all this hope and change?"
Continue reading "Why The Sinking Dow?" »
1:26 PM ET | 01-20-2009 | permalink
Bryan in Dallas is looking to make some money. He writes:
My co-worker is offering a $100 bet that in four years, we'll be suffering from "stagflation". Whether I take the bet or not, do you know where we can look today (and also in four years) to find out if stagflation is occurring? Maybe a Government agency or non-profit whose metrics are sound are reputable?
Continue reading "Should I Bet On Stagflation?" »
1:10 PM ET | 01-20-2009 | permalink
One of the areas expected to get as much as $20 billion under the federal government's planned economic stimulus package is electronic medical records.
The current stimulus bill says the funds "will update and computerize our health care system to cut red tape, prevent medical mistakes and help reduce health care costs by billions of dollars each year."
Digitizing the nation's medical records is a great idea. It will save lives and reduce skyrocketing health care costs. It may even get a few doctors swimming in paperwork to reconsider putting down their stethoscopes for good. But if it's not done well, or done too quickly, it can cause more problems than it cures.
Continue reading "An Old Lesson: Modernize Health Care Records With Care" »
1:00 PM ET | 01-20-2009 | permalink
Jan. 20, 2009
President Barack Obama just finished delivering his Inaugural Address. Early on, he said:
"Starting today, we must pick ourselves up, dust ourselves off and begin again the work of remaking America."
Here at Planet Money, we hear so many conflicting opinions, from economists who say government should stay out of the economy and ones who say government hasn't yet waded in far enough. Today I find myself thinking, my goodness, I hope Obama gets this right -- whatever right turns out to be.
12:23 PM ET | 01-20-2009 | permalink
Seen in Seattle, Wash.
Aaron McLin from Bothell, Wash., writes:
I suppose that this is nothing new at this point, but the pace of small-business closures seems to be picking up in the Seattle area. Furniture stores are hard-hit, as they seemed to have developed a reliance on people purchasing new furnishings for new homes that they were moving into, but I've also encountered an ethnic-gifts store and a hobby store that are going (or have gone) belly-up.
Continue reading "Stores Say 'Uncle' " »
11:02 AM ET | 01-20-2009 | permalink
Along with the $825 billion stimulus bill, Congressional sponsors added an "Economic Analysis in Support of Economic Recovery and Reinvestment Act." It includes this note:
"[P]rices for steel rebar plunged 36 percent from August to December. Prices of asphalt have dropped even more in most parts of the country. Falling demand and rising capacity is also putting downward pressure on cement. With so much excess capacity from falling private demand, we should expect a major push on infrastructure to help stabilize prices but not to raise them in general. Nevertheless, out of concern that some capacity bottlenecks could develop, the Committee has been somewhat more restrained in infrastructure investments than some have urged."
In short, lawmakers say they dialed back on building because they're worried about getting enough raw material. Already, folks on the construction side have complained that the stimulus plan won't do enough -- a connection, perhaps? After the jump, the full section on deflation.
Continue reading "Not Enough Stuff?" »
10:11 AM ET | 01-20-2009 | permalink
I read a fascinating essay in the Economist over the weekend about the overuse of antibiotics in some European countries and what that might say about a population's tolerance for uncertainty in these harsh economic times. Here's the leap: the article makes a possible link between the level of antibiotic use in a country and its penchant for trade protections.
In short, consumption of antibiotic drugs varies strikingly across Europe, with Greeks, the heaviest users, taking three times as many as the Dutch, who use the fewest.
While there are many reasons to explain the phenomenon, the article says many experts suggest key drivers of antibiotic demand may be how anxious a culture it is and how tolerant it is of uncertainty. In theory, that's interesting right now as the global economic crisis is leading to growing protectionist fever in many countries.
Continue reading "Protectionism And Pill-popping" »
9:53 AM ET | 01-20-2009 | permalink
Welcome to Inauguration Day, kids. Come help us unpack the stimulus bill, will ya? Here's the press release, the full report, and the economic analysis.
Let's start with a cris de coeur, courtesy of Brandon M:
For energy, there has been talk of using wind power to pump water back into a dam when there is excess power and using the stored water in the dam to provide power when the wind isn't blowing. Much has been said of how much our power grid needs to be upgraded. Our internet standard trails behind foreign countries because we have an oligopoly of data providers (phone, cable, and satellite) where others place the data infrastructure under the government control and allow lots of competitors to offer there services over those lines. We've seen presentations of a shared electric car system, similar to the zip cars, to handle the charging/parking issue. When will we see real change?
9:38 AM ET | 01-20-2009 | permalink
Short circuit in Cleveland, TN.
-- President-elect Barack Obama begins his first 100 days in office on Tuesday. Historian Eric Rauchway guides us through the first 100 days by which all other 100 days are measured -- the start of Franklin Delano Roosevelt's presidency. Rauchway is the author of The Great Depression and The New Deal: A Very Short Introduction.
-- Listener Nathan Fiala says he's found a bright spot in the dismal U.S. economy. It's his hometown, Grand Forks, North Dakota.
Download the podcast; or subscribe. Intro music: Anthony Hamilton's "Do You Feel Me." Find us: Twitter/ Facebook/ Flickr.
1:30 PM ET | 01-19-2009 | permalink
How much highway can you buy for $30 billion? How many homes does $6 billion weatherize? What would $140 billion do to fix our schools?
We're going to unpack a couple parts of the stimulus package the democrats have put forth. Take a look and give us some guidance. Where should we dig?
Here's the press release, the full report, and the economic analysis. All this comes from the House Appropriations Committee.
1:00 AM ET | 01-19-2009 | permalink
Looking in Fort Myers, Fla.
-- The TED spread finally dropped below one this week. John Ewan, director of the British Bankers Association, helps us throw a party -- starting with the LIBOR dance.
-- Ian Bremmer of Eurasia Group and Ken Rogoff of Harvard lead our search for somewhere, anywhere in the world where you won't feel like the economy is crashing around you. How about Liberia?
-- After eight months of looking for a job in computers, Scott Somerfleck of Ft. Myers, Fla., has taken to putting up signs around town. He tells us why.
Download the podcast; or subscribe. Intro music: The Bird and the Bee's "Polite Dance Song." Find us: Twitter/ Facebook/ Flickr.
2:09 PM ET | 01-16-2009 | permalink
It's a tough time to be in the food and drink business. Restaurants are suffering, and shoplifting at grocery stores has become the new entrepreneurship.
However, while various financial indices -- such as the Fed Funds Rate or the price of container shipping -- have gone to zero, we have yet to see eating standards bottom out.
Until now, that is.
Continue reading "Culinary Standards Bottom Out" »
1:41 PM ET | 01-16-2009 | permalink
Adam Blank writes:
Planet money indicator - Sweaters. My child goes to private school in Manhattan. When he first started kindergarten only the mothers were dropping the kids off, or dads in suits. As the semester progressed I have noticed a sharp rise in the casual sweater wearing male. I am guessing that a lot of private schools are going to have a hard time holding on to a portion of their students.
Continue reading "Indicator: Dads At School " »
10:58 AM ET | 01-16-2009 | permalink
Adam Davidson talked to Morning Edition this morning about John Maynard Keynes. It's fairly fabulous.
10:55 AM ET | 01-16-2009 | permalink
Way back in the fall, economist Raghu Rajan warned us that the federal government could spend a ton of money on the bailout and yet still not spend enough to fix the problem. In today's headlines, news that two big recipients of government capital are still on the ropes. From the Wall Street Journal:
Stocks opened higher on Friday as the U.S. government injected $20 billion into Bank of America and guaranteed losses on over $400 billion in assets of both Bank of America and Citigroup.
In October, Uncle Sam invested $45 billion in Citigroup and $25 billion in Bank of America. Meanwhile, the European Central Bank just slashed the benchmark interest rate to its lowest level ever (sound familiar?) and Floyd Norris says the cheaper rate, Stateside, just might be showing signs of working.
9:52 AM ET | 01-16-2009 | permalink
The Port of Singapore
A while back, we blogged about how the plunging Baltic Dry Index (BDI) reflects the dramatic slowdown in international shipping. Today's bleak number is zero -- the cost to ship containers in Asia and Europe. Yes, you're reading this right, you can send your containerized products (such as the BBC's Box) for absolutely nothing on certain key routes.
Continue reading "Indicator: Free Shipping" »
5:08 PM ET | 01-15-2009 | permalink
How's this for chutzpah?
A division of Countrywide Financial Corp., once the the nation's largest mortgage lender before it was sold to Bank of America at a bargain-basement price last year, faces scores of lawsuits over its subprime lending practices.
Considering that, what Countrywide's lawyers have been saying in a New Hampshire court is pretty interesting.
Continue reading "Don't Believe What We Say" »
3:36 PM ET | 01-15-2009 | permalink
Bud in Virginia wants to know:
The TED spread is (thankfully) heading below [one], but I observe that both LIBOR and 3-month Treasuries are VERY low -- does this dilute the good TED Spread news?
For those of you just joining us, I'll put some definitions at the very end of the post; if the above question makes sense already, forge ahead.
Continue reading "A TED Spread Quandary" »
2:23 PM ET | 01-15-2009 | permalink
I'd like to correct a post I made yesterday on short-selling stocks.
A listener wrote in to ask what a person who loans a stock to short seller has to gain? Short selling can seem a bit counterintuitive but I always thought I understood it. When I answered the question yesterday, this is what I wrote:
Continue reading "Mea Culpa" »
1:25 PM ET | 01-15-2009 | permalink
After the Wednesday podcast, listener TrevorL took exception to economist Anita McGahan's definition of disintermediation. McGahan has written back. Both responses after the jump.
Continue reading "Meet You In The Middle" »
11:48 AM ET | 01-15-2009 | permalink
Jesse Zink of South Africa is paid in U.S. dollars, and the dollar has been rising pretty steeply compared to the South African rand. He wants to know why:
It seems that since the real crisis in the financial markets began last fall, the dollar has only strengthened against the rand and I've had more money to spend. It happened rapidly and was notable, at least 20 percent. I have no complaints about the extra rand in my wallet, but how come the dollar didn't weaken as virtually every other indicator did?
Continue reading "Why Is The Dollar Climbing?" »
11:17 AM ET | 01-15-2009 | permalink
Add to the list of suddenly cheaper products one of the most sought-after luxury items: tickets to the Super Bowl.
Continue reading "Deflation Watch: Super Bowl Tickets" »
9:15 AM ET | 01-15-2009 | permalink
I thought EVERYBODY was getting a piece of the financial stimulus. (even us).
Well, according to Congressional Quarterly, defense contractors are not so lucky.
To be sure, some defense companies had sought to obtain weapons funding in the stimulus bill, particularly after the Obama transition team asked military acquisition offices for information on projects that might create jobs, said lobbyists who requested anonymity.
"In December, defense lobbyists went nuts," one said.
But it became clear that weapons projects were not what the Obama team was looking for, they said. And justifying such spending was difficult after the increases of recent years.
...
the Aerospace Industries Association has spent nearly $2 million on ads to convince decision makers that the defense sector plays an important role in the economy. The group is under no illusions that the rate of growth in defense spending since the Sept. 11, 2001, terrorist attacks can be sustained, but it hopes to limit the cutbacks.
5:30 AM ET | 01-15-2009 | permalink
The lucky ones at this tech firm got pay cuts.
A number of listeners have asked us to look at what's happening inside our own industry -- media. Magazines have been shutting down, newspapers are canceling home delivery and furloughing staff, publications are moving online, radio networks are laying off workers. Which is just the half of it, really.
-- A newspaper carrier says the print edition he delivers is now too light for him to throw it onto porches properly.
-- Economist Anita McGahan, author of How Industries Evolve, studies what's known as punctuated change. She says the line between shifting and dying is not always apparent, at the time. But the first company to figure out what comes next wins.
Continue reading "Hear: The News Today, Oh, Boy" »
3:49 PM ET | 01-14-2009 | permalink
Inspired by the Fail Blog.
Congratulations to our friends over at EconTalk who captured the title of the 2008 Weblog Best Podcast Award. Despite our best efforts, Planet Money came in third behind EconTalk and the much loved Harry Podcast Mugglecast. There's always next year.
3:48 PM ET | 01-14-2009 | permalink
If all this talk over quantitative easing and split-strike conversions has left you with a headache, surf on over to the Bailout Game for minutes of mindless fun. Let the ax fall on your favorite investment banks, automakers and government-sponsored entities and watch the carnage unfold! (Thanks, Clusterstock!)
2:59 PM ET | 01-14-2009 | permalink
You've been hearing a lot about John Maynard Keynes, the British economist of the early 20th century who, 63 years after his death, is suddenly the single-most important thinker if you want to understand President-elect Obama's plan to get us out of this economic whole.
We're going to do a lot on Keynes. I'm on Morning Edition this Friday and This American Life over the weekend talking about the man.
I've been reading the masterful biography by Robert Skidelsky. Just get it. It's fun and fascinating even if Keynes were not, suddenly, basically running our country.
And I will give plenty of time on this blog and the podcast and on the radio to Keynes's important ideas, but I have to get some things off my chest: the things about Keynes that absolutely drive me crazy. That make me furious and frustrated and angry.
Continue reading "Some Problems With Keynes" »
12:51 PM ET | 01-14-2009 | permalink
I've had the benefit of having the past few weeks off. I got a lot of reading done and have been able to catch up on a ton of movies. (The Wrestler is not as good as people say it is, but Frost/Nixon and Milk were much better than I expected. I'm betting it's Frank Langella for Best Actor.)
One other thing I did was rewatch the six-hour PBS documentary "Commanding Heights: The Battle for the World Economy" that aired back in 2002. I remember seeing it then and, while having a few key issues with it, liked it a lot. The series is based on a book by Daniel Yergin - who is best known for writing the terffic The Prize: The Epic Quest for Oil, Money, and Power, that won the Pulitzer Prize for General Non-Fiction in 1992 - and Joseph Stanislaw, first published in 1998. It is available on DVD but also free on PBS's website.
I think the series is fascinating background for anyone trying to put what is happening to today's economy in larger context.
Continue reading "The Commanding Heights" »
11:16 AM ET | 01-14-2009 | permalink
Ed. This item has been substantially corrected.
Our Twitter pal @imajes sent in a question:
"In a short-selling scenario, what does the person loaning the stock have to gain?"
Continue reading "The Other Side Of Short Selling" »
11:10 AM ET | 01-14-2009 | permalink
With the ranks of the unemployed swelling and domestic opportunities sparse, job-seekers may need to look far afield for their next gig. For those willing to venture down under, the Queensland, Australia, government recently began advertising The Best Job In The World -- "taking care" of a tropical island near the Great Barrier Reef.
Continue reading "Where Are The Jobs?" »
10:38 AM ET | 01-14-2009 | permalink
After speaking publicly at the London School of Economics on Tuesday-- his first speech since the Fed's decision to lower rates to 0.25% in December -- Federal Reserve chairman Ben Bernanke held a 20-minute question and answer session that is available online.
Continue reading "Bernanke on You Tube" »
10:35 AM ET | 01-14-2009 | permalink
I finally carved out enough time to read the Washington Post series on the near-death of AIG. It's quite good, has interviews with many central figures. And it's told not in black and white, but shades of grey, the villains unclear.
Though there certainly were those who worried:
Park spelled out his reasoning in meetings and conversations with colleagues over the next several weeks. It was as if he had scratched the needle across an old record album at full volume.
And those who did not:
"It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions," Cassano said.
Amusingly, while I was reading the article this Google-supplied ad popped up at the bottom of the page:
Credit Default Swap Trade US High-Grade And Credit Default Swaps Now. Get More Info! www.MarketAxess.com
7:45 AM ET | 01-14-2009 | permalink
The Planet Money podcast now trails the Harry Podcast Mugglecast by just 60 votes!
Help us out, it takes two clicks.
5:07 PM ET | 01-13-2009 | permalink
Seen in Tennessee.
We have no podcast today, now that we're on our Monday, Wednesday, Friday schedule, but we do have this economic indicator for you. Back in December, Cassi Yost sent us the above photograph of her local mall in Cleveland, Tenn. At the time she wrote:
Our local mall on a Saturday about 6pm ... food kiosks have closed and spaces are for lease. Barely anyone shopping, and virtually no one eating at the single food vendor. This could spell the end of our only shopping mall here in Cleveland, Tenn. -- we may be forced to head to Chattanooga or Knoxville in days to come.
Today Cassi sends this update -- the mall has entered receivership. The local paper has this quote from the receiver, which is operating the mall now:
"Our leasing and management teams are fully engaged in assessing the mall and its needs," said Greg Maloney, president and chief executive of Jones Lang LaSalle Retail. "The mall is open for business, and we welcome the entire community to come and shop."
5:03 PM ET | 01-13-2009 | permalink
(Update here. Tax and housekeeper troubles are separate.)
Looks like we've found some more of those missing U.S. dollars. They're not all with the mayor of Baltimore. From the AP:
Treasury secretary designee Timothy Geithner is meeting with senators to discuss why he failed to pay personal taxes and check the immigration status of a housekeeper.
An official with President-elect Barack Obama's transition office says Geithner answered senators' questions during a meeting he requested Tuesday. The person requested anonymity because the source is not authorized to speak publicly on Geithner's situation.
Obama's transition team was expected to release a statement about the issue later Tuesday.
Obama named the 47-year-old Geithner as his pick for Treasury secretary in November, citing as a top priority tackling the nation's financial crisis.
But who knows, maybe he paid by check.
4:00 PM ET | 01-13-2009 | permalink
The Obama administration says it wants to create or save some 3 million jobs.
They even have a rough plan and a price tag, $775 billion.
But how exactly do you spend $775 billion? The 2009 federal budget is just over a three trillion, so that's a huge increase.
Even among Democrats there is disagreement.
2:09 PM ET | 01-13-2009 | permalink
Paul Kedrosky made this great tag cloud of the papers presented at this year's American Economic Association Conference in San Francisco. Kedrosky notes that the name "Keynes" does not appear in any paper or session at AEA, neither do gold or Federal Reserve.
1:44 PM ET | 01-13-2009 | permalink
Karl from Wisconsin asks:
Why can't the Federal Government lend 30-year fixed mortgages at 0 or 1 percent to US citizens? It lends money at 0 percent to banks.
Continue reading "Can I Get A Free Lunch, Too?" »
1:35 PM ET | 01-13-2009 | permalink
We have a lot of conversations on Planet Money -- on the podcast, over e-mail, by phone, out in the streets and in our studios. And, of course, we yak a lot on Twitter.
People who follow our feed send us links and questions and general good humor. It's a fun crowd, and if you're not already part of it, we'd like you to pedal over. Hey, it's free! (For those of you who are new to Twitter, you might find it helpful to think of it as part cocktail party, part microblog.)
Several Twitter folks have expressed an interest in meeting in each other, which for now means signing up for each other's updates. We invite you to post your Twitter names in the comments and to follow the people you see posting there. If you like, add a sentence or two introducing yourself. Let's see where we can take this.
1:09 PM ET | 01-13-2009 | permalink
Our Twitter pal IMAJES sent in a question: "In a short selling scenario, what does the person loaning the stock have to gain?"
Briefly, short selling stock is a technique used by investors who try to profit from the falling price of a stock.
For example, consider an investor who wants to sell short 100 shares of company ABC, believing it is overpriced and will fall. The short seller typically borrows the shares from his broker, who typically in turn has borrowed the securities from some other investor who is more upbeat about the stock.
Continue reading "Question of the Day" »
12:52 PM ET | 01-13-2009 | permalink
Win Thin/Brown Brothers Harriman
Over the months at Planet Money, we've talked about the role China has played in fueling the consumption boom in the United States. China has been a key investor in the U.S. economy, holding something like $1 trillion in American debt. More recently, economists have worried that China would redirect its considerable financial might inward, choosing to boost its own slowing economy directly rather than help fund President-elect Barack Obama's stimulus plan. That stimulus plan depends on deficit spending, and that borrowed money has to come from somewhere.
This morning Win Thin, a currency analyst at Brown Brothers Harriman, presents a slightly different view. Thin sends the chart above, and writes: "China's purchases of US Treasury bonds may in fact be slowing. However, this is a much different story than recent media stories that suggest China may be shunning dollar instruments altogether. That is simply not true."
I'll drop the full, and somewhat technical, note after the jump.
Continue reading "Another View Of China" »
12:11 PM ET | 01-13-2009 | permalink
A question from a Boston architect:
Will the names recipients of the federal contracts be public information? I and a lot of my friends would like to know so that we will have a better idea of who has work and might be hiring.
Continue reading "Who Gets The Money?" »
11:28 AM ET | 01-13-2009 | permalink
Hiland Hall shares this letter from his hometown newspaper on the coast of Maine. It's an open letter from the CEO of the local hospital in which he lays out their dire financial situation. Hall points to this line, one he says he's been seeing a lot lately: "Part of our problem is in the mirror; our culture has not been one that forced us to run a tight financial ship because we always had our pool of investments in the past to bail us out."
11:16 AM ET | 01-13-2009 | permalink
Twitter listener @saalon starts us off today: The TED spread has fallen below one! This key measure of anxiety among banks crept toward the unholy height of five during the worst of the economic crisis last fall. Now, it has finally re-entered the safer zone of sub-one. It's at .98 -- the widget on our right rail should catch up soon. Meanwhile, open the bubbly, I guess.
More news: Credit crunch over? Best week for debt sales in a year/ Obama shelves jobs-credit proposal/ Trade deficit down sharply
After the jump, Ian Shepherdson's morning note, this time on the drop in trade.
Continue reading "TED Spread Party!" »
8:58 AM ET | 01-13-2009 | permalink
The new fashion in Kansas City, Mo.
-- For Terri Weiss, the first sign of trouble at her job was that the company quit paying for coffee service in the office kitchen. The next was a ping in her inbox. Add another body to Dayton, Ohio's unemployment line.
-- If you can't get a loan from a bank, maybe you can get one from your friends or family. That's the idea, loosely, behind a peer-to-peer lending site like Prosper.com. Clay Shirky, New Media professor at New York University and author of Here Comes Everybody, says it appeared to be working, at least until the SEC shut it down.
Download the podcast; or subscribe. Intro music: Erin McCarley's "Pony (It's OK)." Find us: Twitter/ Facebook/ Flickr.
4:22 PM ET | 01-12-2009 | permalink
... to release the other half of the bailout money. The rule was the Treasury could spend the first $350 billion but would need to approach Congress when it needed the other half.
Lawmakers may attach more strings this time. An oversight panel last week complained that Treasury was giving them the runaround.
"The American people have a right to know how their taxpayer dollars are being used, and so far, they have not gotten the transparency and accountability they deserve," the report said.
One issue that bugged them: "How Is Treasury Deciding Which Institutions Receive the Money?"
Continue reading "Obama Asks Bush To Ask Congress..." »
3:54 PM ET | 01-12-2009 | permalink
From Reuters:
President-elect Barack Obama said on Monday he had requested access to the remaining $350 billion of the financial industry bailout so he would have "ammunition" if the U.S. financial system weakened further.
Speaking to reporters after a meeting with Mexican President Felipe Calderon, Obama said his White House would focus the rescue funds on housing foreclosures and small businesses, representing a fundamental change from President George W. Bush's use of the first half of the money.
2:35 PM ET | 01-12-2009 | permalink
Ed Park, a novelist and former colleague of mine, blogs today in the New York Times about the idea of a personal layoff narrative. Park writes:
You step outside your office building for the last time, and instead of a wayward beam of sun warming your face, you see boarded-up windows all along the block, and the box in which you've packed your major cubicle possessions -- Rolodex, spider plant, reams of something having to do with your 401(k) -- is about to fall apart.
On today's podcast, we'll hear from a worker who barely saw it coming.
1:45 PM ET | 01-12-2009 | permalink
Seen in Kenosha, Wisc.
Flickr user pknaack1 posted this photo to our Planet Money Flickr group. Pknaack1 writes:
This is a brand new business in Kenosha, Wisconsin, just opened today, Jan. 11, 2009. I like that it advertises that you can get up to $20,000 today.
According to its website, the Cash Store offers cash advances, installment loans and title loans with no credit report required. The number of businesses offering these so-called payday loans has ballooned in recent years. Just last week I noticed a new cash advance store in our neighborhood, on 43rd St. between 5th and 6th Avenue, right in the heart of Midtown Manhattan.
11:23 AM ET | 01-12-2009 | permalink
Craig, of KXPR land, writes:
I find that the most important thing I have learned while listening to your podcasts, is that no-one really understands our economy. The economists you have interviewed are happy to portray their pet theories as fact, but if we have learned anything over the past year, it is that they are all just theories, and unlike in real scientific endeavors, we don't seem to be getting closer to a generally agreed upon understanding of the economy works.
Continue reading "Listener: More Skepticism, Please" »
11:09 AM ET | 01-12-2009 | permalink
Last week we looked at how no one can say for sure where all the U.S. currency is. At the same time, this 12-count indictment came out, accusing Baltimore Mayor Sheila Dixon of perjury and theft.
On page six, the indictment describes how a prominent city developer cashed a check for $15,000, and how a week later someone deposited $6,000 in cash at an ATM to the mayor's checking account.
Dixon denies any wrongdoing. But she and the developer certainly use a lot more cash than most folks.
You can see the mayor in boxing gloves and read the Baltimore Sun's coverage, some of it by my wife, here.
10:46 AM ET | 01-12-2009 | permalink
Calculated Risk starts the day with a look at America's "lost economic decade." At least the news still comes with free refills -- links below:
Economy made few gains in Bush years/ World markets fall after U.S. unemployment rises/ Russia 'to resume gas supplies'/ Economy tops Seoul summit agenda
9:50 AM ET | 01-12-2009 | permalink
Not playing in Elizabeth, New Jersey.
The unemployment numbers we've waiting for all week have come in, and my goodness. We're talking 7.2 percent, the highest since January 1993.
In other news, Adam Davidson wants to win the 2008 Weblog Award for Best Podcast. If you like us, please vote for us.
-- Tradition Asiel Securities trader Will Aston-Reese gives the view from his desk. (It's a little better!)
-- On Thursday, we presented a puzzler: Where is all the U.S. currency? Today economists Richard Porter and Ken Rogoff fire up an amazing answer.
-- Listener Sophia Suhu got laid off the night before she dialed in for an Economist House Call. Now she has a puzzler of her own: What's a person gotta do to get a low-wage job anymore?
Download the podcast; or subscribe. Intro music: Hole "Credit in the Straight World." Find us: Twitter/ Facebook/ Flickr.
5:19 PM ET | 01- 9-2009 | permalink
In today's podcast we try to answer the question: Where is all the U.S. currency?
In it we mention that the U.S. government profits from the fact that people all over the world love our green pieces of paper.
How does the government actually profit? Through something called seigniorage, which is as hard to explain as it is to spell.
Continue reading "What Is Seigniorage?" »
5:08 PM ET | 01- 9-2009 | permalink
A Twitter friend of mine sends this news clip. It's about her former employer in Ohio, which sent the workers an e-mail over New Year's saying that it was closing and everyone was out of a job. The reporter in this story questions whether the company, a publisher, gave employees the legally required notice.
After the jump, a series of messages she sent over Twitter.
Continue reading "First, They Stop The Coffee" »
3:58 PM ET | 01- 9-2009 | permalink
Calculated Risk has a terrific look at America's rising number of part-time workers -- more than 8 million of them, according to the latest reports. The blog calls the increase "stunning." An accompanying chart makes clear why.
3:07 PM ET | 01- 9-2009 | permalink
(NOTE: THIS POST HAS AN UPDATE, AFTER THE JUMP.)
Mike Pesca sends this:
Home Depot has withdrawn as a U.S. Olympic sponsor, and as part of a program that employed Olympic hopefuls with full-time benefits and wages for part-time work. So you'll no longer see commercials like the one above.
Over the years, Home Depot has employed hundreds of athletes who have collectively won many medals. Just how many? Well, Home Depot has never been known for its exacting accounting standards, and and no one can seem to agree as to the scope of the program:
Continue reading "Home Depot Takes Ball, Goes Home. But What's The Score?" »
12:58 PM ET | 01- 9-2009 | permalink
Our own network has joined with other public broadcasting outfits in asking President-elect Barack Obama to include nonprofit public-service media in the stimulus package, Current reports.
NPR and its fellow broadcasters reportedly seek $550 million. Their ideas for using the money include staffing for new Native American stations and building crisis-response teams around the nation.
UPDATE: NPR spokesperson Anna Christopher says the request is now in the form of a general proposal letter. It doesn't get into the nitty-gritty, she says, so it doesn't mention Planet Money specifically. We'll try to keep you posted.
11:39 AM ET | 01- 9-2009 | permalink
Sean K. sent us a story from a Grand Rapids, Michigan, paper about the terrible lines in the unemployment office. The story is great, but what really struck me was the picture.
(Anybody out there dealing with long lines? We'd love to hear from you.)
10:58 AM ET | 01- 9-2009 | permalink
A new report on unemployment tops the news today. The jobless rate has hit 7.2 percent, the highest since January 1993. Looking for a bright spot? Better squint.
"[T]he only possible glimmer of light is that the maximum rate of fall of payrolls is hopefully not far off," writes Ian Shepherdson of High Frequency Economics.
First person to see the bottom, holler out, OK? Meanwhile, Treasury Secretary nominee Timothy F. Geithner is planning an overhaul of the $700 billion bailout. (Bonus: Obama Cites Grim Economy at Start, as Predecessors Have.)
9:06 AM ET | 01- 9-2009 | permalink
Graffiti near Canal Street.
-- Economist Russ Roberts doesn't support president-elect Barack Obama's fiscal stimulus package. He talks about what it was like having the president-elect pitch the plan on his home turf, George Mason University.
-- Stanford professor John Taylor of the Taylor Rule thinks the government made some major mistakes in dealing with the current financial crisis. And he isn't shy about talking about them.
Bonus: Read Professor Taylor's analysis of what the government got wrong.
Download the podcast; or subscribe. Intro music: Young Jeezy's "Put On." Find us: Twitter/ Facebook/ Flickr.
6:27 PM ET | 01- 8-2009 | permalink
We wanted to lay out a strange puzzle for you on today's podcast, then answer it tomorrow. But we forgot to mention it. So here it is:
Where is all the U.S. currency?
According to the Federal Reserve the total amount of U.S. currency out there is about $900 billion. We're talking real currency, dollar bills, $100's, $20's etc.
That works out to about $3,000 per person. Ok now open your wallet, how much do you have? Not a lot, right? So where is all the cash?
Don't look it up on the internet, that's no fun. Just think about it. We'll have the answer on Morning Edition and a longer extended-dance-remix on the podcast for Friday.
5:25 PM ET | 01- 8-2009 | permalink
I talked with All Things Considered's Melissa Block today about how hard it is to figure out how many people are employed or unemployed in the US.
This week --as happens every month-- we get a confusing stream of data.
Yesterday, the payroll company ADP gave its Employment Report, based on the actual paychecks going out for 400,000 of their clients. They recently revised their statistical methods, after years of folks mocking them for generally being pretty lousy at predicting what the overall national numbers would show. Let's hope so. This week, they're report said that nearly 700,000 people lost jobs last month.
Continue reading "Who Has A Job? Who Doesn't?" »
4:39 PM ET | 01- 8-2009 | permalink
According to prosecutors alleged ponzi schemer Bernard Madoff mailed jewelry and other expensive items to family members as Chanukah gifts, violating the terms of his bail agreement. As New York Times writer Alex Berenson describes it:
Sixteen watches, including diamond-encrusted timepieces from Tiffany and Cartier. Four diamond brooches. Two sets of cuff links. An emerald ring. These are a few of Bernard L. Madoff's favorite things.
It sounds like a bold move. But Madoff's lawyer argued that a lot of the items were no more than $25 cuff links and $200 mittens.
$200 mittens? Really?
Continue reading "In Search of $200 Mittens" »
4:09 PM ET | 01- 8-2009 | permalink
A new retail strategy.
Economist Simon Johnson of Baseline Scenario passed along this ad, noting the title, "Deflation Special."
1:57 PM ET | 01- 8-2009 | permalink
Sean writes from Edinburgh:
I had €1.57 left over from trip to visit a mate of mine who was studying in Brescia, Northern Italy.
Had I changed it back as soon as I returned to Edinburgh I'd have £1.16, however I was too lazy. This has proven to be a fiscally prudent move, typical of my thrifty Scottish upbringing. Due to the falling pound it is now worth £1.73, meaning I'm nearly 50% up. Cause for celebration I'm sure you'll agree.
Coupled with falling house prices across the UK, this has led me to believe that by the end of 2009, my €1.57 should buy me a nice flat in the center of Edinburgh, and maybe some nice curtains.
12:09 PM ET | 01- 8-2009 | permalink
Adam is going to be talking on All Things Considered tonight about how hard it is to measure something as seemingly simple as the unemployment rate.
You get a sense for things when you look at one of the surveys the labor department uses. Here's one of many questions it asks:
Continue reading "The Dog Ate My Job" »
11:59 AM ET | 01- 8-2009 | permalink
Joe sends this story about China cutting back on buying U.S. debt.
Thomas Beckett suggests 3 as an economic indicator, as in the number of U.S. states that suffered a crash in their electronic unemployment claims systems.
And Brent passes along this list from the Twitter feed The Media is Dying -- it's the top 10 messiest layoffs of 2008.
10:33 AM ET | 01- 8-2009 | permalink
Lighting up in southern Algeria.
If you're an American and your gas stove won't light, you start by calling a repair company or checking to make sure you paid the bill. If you're a European, you might start by blaming Russia.
Russia's state-owned Gazprom appears to have cut the supply of gas to neighbors from Romania to Austria. It's the second time in recent years that Russia has turned off the spigots. Meanwhile, in Africa, Nigeria is burning off 20 billion cubic meters of natural gas a year -- because it has no way to ship the stuff to market.
As Eurasia Group analyst Geoff Porter tells it, some in Europe would like to build a pipeline from Nigeria through Niger and Algeria, then across the Mediterranean to France. It's a bit of a pipe dream, but one player has shown some interest in the region -- Russia's Gazprom.
After the jump, more photos from Porter, plus a map from Eurasia Group.
Download the podcast; or subscribe. Intro music: Mates of States "Get Better." Find us: Twitter/ Facebook/ Flickr.
Continue reading "Hear: Russia, Russia Everywhere" »
4:57 PM ET | 01- 7-2009 | permalink
Partly it is, or it may be. We talked about this a bit on the radio, but the basic idea is that when we're worried about the future we tend to spend less, which can backfire.
Say you don't buy that new car, then maybe the auto manufacturers have to lay someone off, and that someone then can't go hiring your company to do whatever it does. And on and on...
The idea is called the Paradox of Thrift. Paul Krugman, the Nobel Laureate and New York Times columnist, talks about it here.
Some free-market types disagree, arguing "Consumers Don't Cause Recessions." From that link: "My friend Bill Anderson actually derives sustenance from his hatred of Paul Krugman; at lunch one time, Bill skipped a sandwich and instead just bought a New York Times."
1:38 PM ET | 01- 7-2009 | permalink
The payroll company ADP made headlines today with its new report on unemployment. ADP says the private sector lost 693,000 jobs last month (Read the report in full).
It's worth nothing that this is one report by one player. After the jump, one take by one economist, Ian Shepherdson of High Frequency Economics, who says he's waiting for official numbers but meanwhile uses words like "shockingly awful."
Bonus: Jobless claims swamp computer systems.
Continue reading "'Shockingly Awful' Job Numbers" »
12:19 PM ET | 01- 7-2009 | permalink
Seen in Torino, Italy.
Peter and Jill write from Torino, Italy:
During holiday dinner conversations the crisis of the economy was of course a topic, and while one friend (who works for FIAT) told us about the problems in his sector of the economy, another friend told us the opposite.
The man is working for a famous chocolate maker . . . and he told us that since the crisis started sales are up 5-6%. Apparently it's a well known fact in the chocolate industry, that when times are bad, people tend to comfort their souls with affordable treats.
I know the feeling. I've got a bowl of candy sitting on my desk right now.
11:48 AM ET | 01- 7-2009 | permalink
BJ writes:
I work in the field of water and wastewater infrastructure construction, repair, and maintenance in Minnesota.
Concrete products (pipe, precast manholes, etc) here are 50% of their 2007 costs. HALF PRICE. Other material (plastic and ductile iron pipe, for example) costs are falling too. This is due to lack of demand and the manufacturers are trying to cover their overhead. There is the potential for a bargain if water and sewer is part of the next bailo- er, stimulus package.
11:44 AM ET | 01- 7-2009 | permalink
Lots of news today, lots to think about.
European countries say Russia's Gazprom turned off gas supply.
ADP says U.S. companies cut 693,000 jobs in December.
Obama pushes states to cover more unemployed.
Hill aide: Congressional Budget Office to project $1.2 trillion deficit in 2009.
Asia stocks rise after Obama indicates stimulus spending to last for years.
9:44 AM ET | 01- 7-2009 | permalink
Seen at a Brooklyn hot dog shop.
-- Pam Olson in Centerville, Ohio, checks in with a Planet Money indicator.
-- Roger Lowenstein's While America Aged sees doom in the pension system. Mike Pesca reads it for you.
-- Economist House Call! Renee Edlund, 26 and living in Houston, takes a hard look at the job market with help from economist Simon Johnson of Baseline Scenario.
Download the podcast; or subscribe. Intro music: Alphabeat's "Fantastic Six." Find us: Twitter/ Facebook/ Flickr.
3:32 PM ET | 01- 6-2009 | permalink
A big headline this morning : U.S. Auto Sales Fell 36% last month. I think headlines like that are a little unfair. It's a 36% drop when compared to last December. That's a smart comparison in steadier times. But auto sales were just as bad last month, down 36.7% compared to a year before. So are we going to keep writing headlines for the next ten months saying "Auto Sales Down 30%"?
And here's an economic indicator for you; there's less mail flowing through the U.S. Postal system.
Meanwhile, the auto repair business in Branson, Missouri is thriving.
The Planet Money minds are gathering here in DC today so we won't be tending the blog, but check back this evening -- we have a good podcast for you that includes our first ever Planet Money book review, which I'm sure will not be the usual affair since Mike Pesca did it.
9:38 AM ET | 01- 6-2009 | permalink
The folks combing through Bernard Madoff's books to see how much money is left have reportedly found about $830 million. And they're looking for more.
Letters went out to over 8,000 people who might have been customers. Most of them will of course be trying to recover some part of their investment.
But the form also has a section for investors who might owe money to the guy who allegedly took everyone else's money.
"c. If you wish to repay the Debit Balance, please insert the amount you wish to repay and attach a check payable to "Irving H. Picard, Esq., Trustee for Bernard L. Madoff Investment Securities LLC." If you wish to make a payment, it must be enclosed with this claim form. $__________________"
Wonder if they'll get any checks.
9:02 AM ET | 01- 6-2009 | permalink
Freezing in Allston, Mass.
With the incoming Obama administration planning a $700 billion economic stimulus, the question now is whether a wave of government spending will revive the economy.
For answers, we turn to the example of President Franklin Delano Roosevelt. If you're like me, you first encountered FDR in history class as the hero of the Great Depression. Lately, though, some people have renewed debate over whether FDR and the New Deal saved America or made matters worse.
We'll start with historian Eric Rauchway, who considers a world in which FDR had done nothing.
Bonus: Rauchway's got a blog and a new book, The Great Depression and the New Deal: A Very Short Introduction.
Download the podcast; or subscribe. Intro music: Paramore's "I Caught Myself." Find us: Twitter/ Facebook/ Flickr.
4:48 PM ET | 01- 5-2009 | permalink
Click for bigger image.
Ben Hatke, an illustrator, sent this over today. He first posted it back in October, with the idea that fashion might become a silver lining. Me, I'm holding out for a Great Recession t-shirt.
3:52 PM ET | 01- 5-2009 | permalink
Economist Russell Roberts battled his way through our Friday podcast, arguing against a federal stimulus package to revive the economy. Now Roberts is back, on his own blog, where he tees off on President-elect Barack Obama's proposed tax cuts.
Roberts writes:
"[A]n increase in spending coupled with lower tax collections is an INCREASE in taxes. AN INCREASE in taxes. NOT A TAX CUT. If I spend more money and collect less, the government is promising to collect more taxes in the future. It is not a tax cut. Not a tax cut. Not a tax cut. And when you don't cut rates but rather give people a lump sum of $500, there are no incentive effects other than to increase the probability that the US Treasury will be unable to honor its obligations in the future."
3:34 PM ET | 01- 5-2009 | permalink
The smart folks at Calculated Risk take a look this week at the connection between unemployment and sales of new homes.
Typically, new home sales bottom out during a recession and then start growing at least three months before the worst is over. Unemployment, on the other hand, can peak as late as a year after the recession ends. That makes sense, because companies start hiring once they feel confident that business will keep growing.
So far, so good, right? Calculated Risk says this is not your typical recession. Right now, we've still got falling home sales and rising unemployment. What we'll have next, they write, could be anyone's guess.
3:08 PM ET | 01- 5-2009 | permalink
I've got the recession on my mind today -- and so, apparently, do any number of you.
Twitter pal @olevia sends this bit about the ways in which recessions tend to make us healthier.
Meanwhile, Claire in Northern California reports that her husband's talking about a possible pay cut. She says the same thing we always say at my house -- break out the rice and beans.
1:59 PM ET | 01- 5-2009 | permalink
Pam Olson sends this "3 Suits for the Price of 1!" ad from Centerville, Ohio. Pam says:
Look what came in the mail last weekend! Thought you might want to add this to your list of indicators. If you had a job, a job where you needed to wear a suit, these deflationary times have got you covered!
(See the ad after the jump.)
Continue reading "Recession Attire " »
11:25 AM ET | 01- 5-2009 | permalink
With economists expecting really, really bad numbers on job losses this week, Hyundai's offering a deal: Buy or lease a car, and if you lose your income, the dealership will take the car back.
Among the asterisks: The offer's good for up to $7,500 of what you owe.
(Thanks, Shannon and Aimee.)
11:19 AM ET | 01- 5-2009 | permalink
Michael Lewis and David Einhorn have fired up a major op-ed in the New York Times: "The End of the Financial World as We Know It." It's long. Pour yourself a cup of coffee and dig in -- I want to know what you think of it. Here's the opening:
Americans enter the New Year in a strange new role: financial lunatics. We've been viewed by the wider world with mistrust and suspicion on other matters, but on the subject of money even our harshest critics have been inclined to believe that we knew what we were doing. They watched our investment bankers and emulated them: for a long time now half the planet's college graduates seemed to want nothing more out of life than a job on Wall Street.
This is one reason the collapse of our financial system has inspired not merely a national but a global crisis of confidence. Good God, the world seems to be saying, if they don't know what they are doing with money, who does?
9:25 AM ET | 01- 5-2009 | permalink
Slim pickings.
Planet Money listeners have sometimes hopped all over us for using too many free-market economists. Now, David Kestenbaum sets one free-market thinker against an ideological opposite. These two forces have had only one proper fight -- the Great Depression. Both claimed victory.
Now, in one corner, it's Russell Roberts, an economist at George Mason University, who believes the economy works best when government stays out of it. He likes the Austrian School of economic thought.
In the other corner, it's Steven Fazzari, an economist at Washington University in St. Louis. He believes the government plays a key role in the economy, especially when it comes to recovering from recessions. He describes himself as a Keynesian.
Which of these mighty warriors is right? Your future could depend on it.
Download the podcast; or subscribe. Intro music: Survivor's "Eye of the Tiger." Find us: Twitter/ Facebook/ Flickr.
4:33 PM ET | 01- 2-2009 | permalink
I've had this question the last few weeks: will this crisis give birth to some new way of thinking about economics?
The Great Depression begat Keynesianism, the crisis of the 1970s/1980s gave broader support to Friedmanism. So, will this crisis give birth to some new theory? Or are we just going to keep refining the big ideas we already have.
I had a great talk with Daron Acemoglu, a big-shot young economist about this. He says that yes, certainly, there will likely be radical new ideas.
Continue reading "New Economic Theory? " »
4:11 PM ET | 01- 2-2009 | permalink
A Funny Thing Happened The Day After I Got Laid Off from Anthony Ferraro on Vimeo.
Self-described producer, director and editor Anthony Ferraro finds the silver lining inside a layoff. (Thanks to listener Ron Deutsch for the link.)
1:29 PM ET | 01- 2-2009 | permalink
We all have resolutions for the New Year, but here at Planet Money we want your predictions.
Pick any "economic indicator" -- the price of milk, GDP, unemployment, the stock market, the store that closed on the corner, whatever -- and give us your forecast where it will stand one year from now.
We'll follow up as 2010 dawns and build a podcast or radio story around it.
Stick 'em in the comments section below.
1:23 PM ET | 01- 2-2009 | permalink
Twitter pal @triciamckinney sends two signs of the recession, maybe: City dwellers are raising chickens, and rapper 50 Cent cut the price of a mansion he's selling by 21 percent.
Meanwhile, @sunfire2109 sends word of strapped homeowners abandoning horses.
12:58 PM ET | 01- 2-2009 | permalink
Lifeguards on duty at the Madoff home.
It appears someone is trying to teach Bernie Madoff a lesson.
The Palm Beach Post is reporting that thieves who took a $10,000 statue from Madoff's home have dropped off the item along with a note at the Palm Beach Country Club where Madoff was a member.
The note attached to the statue of two lifeguards reads:
Bernie the Swindler, Lesson: Return Stolen Property to rightful owners. Signed by - The Educators.
The Palm Beach Post notes that in the Edukators, a 2004 German film, activists protest capitalism by breaking into the rich people's homes, moving around the furniture and leaving notes that warn, "The days of plenty are over."
11:14 AM ET | 01- 2-2009 | permalink
Next in the line to seek government intervention: America's steel industry. The nation's steel mills stand to benefit from the incoming Obama administration's stimulus package, especially if that package includes the promised infrastructure upgrades. Industry leaders told the New York Times they want a "buy America" clause in "every provision."
In the more locally minded Wheeling, W.V., Intelligencer, the industry's request sounds more starkly protectionist. What they want is "American-made only," one United Steelworkers union official said. John Saunders told the paper that the fate of Wheeling businesses is at stake.
"We can't put a stimulus package in that will create opportunity for imports," he said. "If we could get this language, it could be the biggest shot in the arm we've had in years for Wheeling Nisshin and Wheeling Corrugating."
9:06 AM ET | 01- 2-2009 | permalink
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