Tax cuts...are they worth it?

President Obama's deal with the Republicans include extending the Bush era tax cuts as well as unemployment benefits. The only socialist in the congress Bernie Sanders is threatening a filibuster as he objects to allow tax cuts for the most wealthy 1% of the nation. For Sanders he sees the tax cuts as reckless government spending. Looking at the Bush tax cuts subjectively we know that will see there effects very quickly but they will only be effective as the MPC of people that receive the rebate. In economic times like this people are less likely to spend they did in the 2004, 2005 and 2006 when they first received these checks. Therefore the boost to the economy will have less impact, so Sen. Sanders does have point in this respect. What do you think?

No Jobs? Young Graduates Make Their Own

The traditional path of “Go to college, get good grades and then get a job,” is no longer guaranteed to work, given the current economic crisis. According to the National Association of Colleges and Employers, only 24.4% of the 2010 batch of college graduates who applied for a job was able to get one. A promising solution to this problem is entrepreneurship.
The article features a few success stories about how college graduates started out their business ventures. It also includes a few tips and resources for those who are seriously thinking of boosting the economy by becoming entrepreneurs.

Taxes, benefits and the deficit: Kicking down the can down the road

The article summarized what happen to the tax cut deal between the president and the Republicans. They reach a further compromise: the Bush tax cut will be extended for two more years. In return, Republicans agreed to further extend the unemployment benefit, payroll tax cut and several other benefits for the poor, students and parents.

Several analyses and reports about the impact of the tax cut are also discussed. But as a matter of fact, the compromise will further deepen the deficit for about $ 300 billion next year, pushing the deficit forecast over a trillion dollars.

Quantitative Easing

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Obama to meet with CEOs in Blair House session

In order to better understand what will help job creation, Obama is sitting down with 20 CEOs. He wants to discuss how the next generation will be prepared to be more global. He also wants to build stronger partnerships in the business community. The session will focus on export promotion, investment in green energy, and tackling the deficit.

Are Americans as Poor as they feel?

The cost of living between 1980-2010 shows that nominal income rose more than overall consumer prices. When you look at the price tags on consumer goods, it would seem that costs have skyrocketed over the last 30 years. If you adjust for inflation, however, the relative cost of items such as food, manufactured goods, and energy has fallen since 1980, while prices for other necessities such as housing, education, and health care have increased significantly.

Article that compares prices of expenditures from the 1980s to now:

Computers: -80.8%

Coffee: -55.9%

Coca-Cola: -54.9%

Sugar: -50.4%

Tennis Balls: -43%

Movie theater ticket: +1.1%

Bread: +3.4%

Home Price: 3.4%

Household income: +8%

Man's haircut: +8.5%

Senator Bernie Sanders Speaks Against Tax Cuts for over 8 Hours

This is a video clip from the 8.5-hour speech against tax cuts for the wealthy by Senator Bernie Sanders (I-Vermont) in which he refers to the rich as crybabies, refers to wealth as an addiction, and asks "When is enough, enough?" His argument is that tax cuts for the rich will unnecessarily increase the debt by rewarding greed at a time when the country is suffering, while 1/4 of American children are being raised in poverty.

U.S. Trade Deficit Narrowed in October

The United States trade gap was $38.7 billion in October, the lowest level since early this year, with exports to China hitting a high. Imports declined 0.5 percent, while exports rose 3.2 percent, the highest level in more than a year.
Steven Blitz, a senior economist for ITG Investment Research, said:"Building a recovery around export growth and the capital investment needed to bolster that sector is necessary for the U.S. economy to have a well-balanced and sustainable growth path."
The increase in American exports in October reflected a rise in sales of a variety of goods abroad. And exports swelled to record highs with two important U.S. trading partners -- Mexico and China.
"The United States is always looking to balance the consumer goods that we import from Asia with commodities that we can export to them," Mr. Blitz said.

The Seven-Year Recessionary Itch

This article relates and increase in divorce rates to the struggling economy. Divorce rates tend to increase the most for people who have been married for more than 5 years but less than 10. It is said that a recession will cause financial strain and puts more tension on the relationship, while in times of economic booms marriages do well while neither spouse feels the strain of the economy. For couples who have been married for more than ten years it is believed that money has less to do with their stresses, plus a divorce would be more expensive to them.

Will rising mortgage rates spur home sales?

Historically, low mortgage interest rates have not spurred home buying - it is the increase from the low benchmark that stirs up investing. Consumers notice the mortgage price increase which helps speed up decisions. Naturally, consumers will hold off buying a commodity/good/service if they are eying decreasing prices. They will hold off in hopes that the price will continue to decrease. Once a good bottoms out and starts to increase again, consumers jump in. The average rate for a 30-year fix loan increased to 4.61% in the week ended Thursday from 4.46% the previous week, following a fourth week of increases, According to Freddie Mac. The average 15-year rate rose to 3.96% from 3.81%. These rates are the highest they've been since June. The author also explains how it is ironic that the Fed just issued QE2 and now mortgage rates are increasing. Capital was made cheaper and now mortgage rates respond by increasing. Economic thinking can be a funny thing, and like politics, there is no right answer. There are many left and right theories but we find ourselves in trouble when we start to enact opposing policies.

Madoff son found dead in NYC in apparent suicide

The son of Bernie Madoff apparently committed suicide in his appartment. Bernie Madoff ran one the biggest ponzi scheme's in United States history. He stole billions of dollars from investors over a course of 20 years. Mark Madoff was the one who reported to the authorities about his dads crimes. Mark has never been criminally charged linking him to his father, but indirectly, he did work for his father. Bernie Madoff is serving a 150 year prison sentence in North Caroline, and it is unclear whether he knows about his son's death.

Top 10 States People are Fleeing

The top 10 states people are fleeing are below and the reasons for this occurring are economic issues: depressed job market, high cost of living, states' tax structures, loss of manufacturing jobs, BP oil spill....and on and on.

1. New York

2. Illinois

3. Ohio

4. Nebraska

5. Kansas

Louisiana and Mississippi are also on the list.

Trade Deficit Falls with Increased Demand for U.S. Goods

With the U.S. dollar failing, demand for American goods is on the rise and exports were at their highest level since August 2008 as of October. Exports rose 3.2 percent to $158.7 billion with purchases of American-made machinery, farm products and cars leading the way and the U.S. trade deficit fell to $38.7 billion, 13.2 percent below the deficit in September ($44.6 billion). The rise in exports is expected to boost economic growth in U.S. export markets and help with the Obama administration’s goal of doubling U.S. exports to combat high unemployment rates. However, the trade deficit with China continues to grow as China keeps the Yuan considerably undervalued against the dollar. This unfair trade practice, as critics call it, is making it cheap to buy Chinese products meanwhile increasing the price of U.S. goods in China. Overall, the U.S. trade deficit is at an annual rate of $504.8 billion up from $374.9 billion dollars in 2009, but economists expected the increase would happen as U.S. economy recovered. It is their hope that with a decline in the dollar, global demand for U.S. goods will make exports competitive and offset some of the increase in imports.

Bill Clinton: Tax deal the best we can reach

Bill Clinton still studies economics an hour a day. With the new Administration proposal pending, Clinton says that the single most influential tax cut in the current economy will be the payroll tax holiday - not the extension of the Bush tax cuts. Clinton believes that the payroll tax holiday will lower create jobs and contribute to lowering the unemployment rate.

Democrats declared Thursday they opposed the package because it would extend the lower Bush-era tax rates for millionaires. But Senate Republicans have refused to accept any difference in tax treatment for the wealthy, demanding that all current rates be extended. I am in favor of extending the bill and, for the first time ever, the Democratic party is not in favor of their President.

Limiting Bonuses

More restrictions have been placed on European banks.

"European regulators have confirmed tough restrictions on the bonuses that banks can pay their staff.

Only 20-30% of bonuses can be paid in upfront cash, according to new guidelines announced by the Committee of European Banking Supervisors (CEBS).

The rules are much tougher than those agreed by the G20 countries, raising fears that bankers may emigrate to more lightly regulated countries."

However...

"Some European banks have warned that the rules create an added incentive for their employees to relocate to Asian cities such as Singapore that have looser bonus rules, as well as lower tax rates and access to Asia's booming economies."

Looks like some loopholes need to filed.

Trade deficits narrows to 9-month low in October

WASHINGTON (AP) -- The U.S. trade deficit fell to its lowest level in nine months, as growing demand for American goods overseas and a falling dollar pushed exports to their highest level in more than two years.

The trade deficit narrowed to $38.7 billion in October, the Commerce Department reported Friday. The figure was 13.2 percent below September's deficit of $44.6 billion...

Remember in class about an open economy? Well, according to the article, the U.S. exports rose roughly 3.2% and the imports dipped .5% in October. This would indicate that we have a lower exchange rate in terms of currency towards other nations, which is why the exports rose more than the imports. Could this be the beginning phase to balance the trade but at the same time, devaluing our dollar?

$860 billion tax-cut deal: Cost breakdown

Well, a compromise has been made for the future tax-cut plan. The price tag is an estimated $860 billion, and things were going smoothly. That is until the bill was brought to the Senate. As Democrats still control the Senate, they have shown resistance to the current version of the bill. It includes multi billion dollar commitments to unemployment insurance, the previous Bush tax cuts, and various tax beaks for social security and businesses. Yet, people are worried about the short term stimulus that is necessary for these plans. I agree that debt reduction should be part of the plan as well.

Home values tumble $1.7 trillion in 2010

It's certainly not a sellers market any longer. Home prices have decreased substantially amounting to $1.7 trillion. Yes, trillion! That is more than a 50% increase over last year. The market is continuing to stabilize itself. The government's efforts to help those homeowner's out have proven effective, but only for a limited amount of time. They offered a tax credit for those people who invested new homes, but the prices still decreased. Analysts have stated that it will not become better in the near future, as foreclosures are at an all time high. New York and Los Angeles homes were the biggest losers as their cumulative prices have decreased by $103.7 billion and $38.6 billion respectively. A passive policy will hopefully cure these ailments.

Oil demand rises on global economic recovery, says IEA

The International Energy Agency increased demand for oil for the next year and raised its projections on consumption to 2015-a sign for growth in the US.
This increased consumption and predicted consumption has raised oil prices. The IEA report said that although the economy seems to be on the downside, the demand for oil is still increasing. This is because of the increase in the world demand for oil.

Furthermore, the OPEC is meant to meet soon to discuss quotas but analysts believe output will remain the same. Next year however the article says that OPEC will be pressured into increasing supply to meet demands.

Where do you think this increased demand is coming from if other articles comment on low consumer confidence and high unemployment rates?

US trade deficit narrows unexpectedly

The US trade deficit has reduced for the month of October however the overall trade deficit for 2010 has been risen. This fall in the deficit has been due to lower imports from lower spending and an increase in exports by 3.5%.
Even though this is the case, the future for the trade deficit looks poor. It is expected to rise to $500bn for the year from $346bn in 2009.

Beware $90 oil

Oil price climbed up to above $90 on Tuesday this week; futures rose by 1.5% to trade as high as $90.76 in New York. The rise could put another damper on consumer spending and add to factors slowing the economic recovery, and hurt the U.S. auto industry significantly.
Moreover, analysts predict that the commodity will hit $100 a barrel sometime next year as demand rises from China and other emerging economies. But various factors might send prices down as well, as the spread of Europe's debt crisis could strengthen the U.S. dollar and send prices for the dollar-denominate commodity downward.

Fed critic to take reins of House oversight panel

Ron Paul, a well known libertarian politician, has been chosen by House Republicans to lead the panel that oversees the actions of the Federal Reserve. As someone who has very strong and opinionated views on the mere existence of the Fed and overall monetary policy, this appointment has far reaching consequences. With many of Ron Paul's personal beliefs involving the dismantling of numerous government institutions, his libertarian outlook may change the ability of the Fed to conduct monetary policy. Ron Paul has previously written a book called "End the Fed" and is also an advocate of the gold standard. Whether or not this is indicative of a trend against the autonomy of financial institutions remains to be seen.

Chase Responds to Lehman Suit

We recently discussed in class how fall of the Lehman Brother's bank was one of the origin for the 2008 crisis. During early summer this year, Lehman had filed a suit against JPMorgran
Chase of "illegally siphoning $8.6 billion in collateral four business days before" Lehman's bankruptcy. But only few days ago, JPMorgan counter-sued Lehman Brothers stating Lehman committed fraud and left JPMorgan in more than $25 billion of unpaid loans which were backed by Lehman's most toxic securities.

According to the JPMorgan's statement, Lehman was provided with more than $70 billion on Sep 18, 2008 on the basis that Lehman will repay it back after it (Lehman) gets bought by Barclays Bank. JPMorgan further states that Barclays did not buy all of Lehman's debt that Lehman had guaranteed. Also, JPMorgan's countersuit includes higher Lehman executives which it accuses of accepting lucrative job offers at Barclays in return for allowing Barclays to "cherry-pick" the securities to be bought. A trial is not expected to start until 2012 and JPMorgan "is seeking unspecified damages".

Unemployment still a problem

Although we are through the worst of the recession (hopefully), the unemployment rate is till high and not changing recently. Gains in wages have been slowing down everywhere leaving one to question how to fix it. What can be the possible solutions in order to turn the corner and start making things better? Possible lowering unemployment benefits could give more incentive for people to gain skills to attain jobs.

Germany's Inflated

The German rate of inflation has hit "reasonable" levels after a surge in oil and food prices.

"Germany's inflation rate hit 1.5% in November, the fastest pace in more than two years, thanks to the increased cost of food and energy.

In September and October, the inflation rate had been 1.3%, according to the official figures from Destatis.

Despite the rise in prices, inflation remains below the 2% threshold the statistics agency sees as representing an unhealthy rise in prices."

"With food and energy taken out of the calculation, inflation would have stood at 0.9%, it added.

Germany is currently the growth-engine in Europe, experiencing strong expansion when many of its neighbours' economies are struggling to recover from the downturn."

Hopefully Germany can help Europe out of the economic stagnation.

What's hot for 2011: Mortgage-backed Securities?

Remember those toxic assets that nearly wrecked the U.S. financial system back in 2008? They're back, even though housing isn't

It seems like only yesterday that virtually everyone thought mortgage-backed securities were evil. After all, the securities – backed by mortgages including subprime home loans – helped put the country's largest banks on the brink and the global economy into a dizzying downward spiral after the housing bust started.

In the years leading up to the financial crisis, as credit boomed in tandem with home sales, Wall Street shored up on mortgage-backed securities. At the time, at least, it was almost easy to see the appeal of betting on securities whose values depended on mortgage payments and housing prices. But when things went awry, these securities were akin to the plague – not just for Wall Street who reported big losses, but the folks on Main Street who linked the complex financial instruments with their economic woes.

It's true things are looking better today relative to what they did then, when Lehman Brothers went under and Bank of America (BAC) swept up Merrill Lynch in a panic. But the housing market isn't exactly rebounding, and the rate of foreclosures hasn't improved much. The latest Case Schiller Index reported that home prices nationwide declined 2% during the three months ending in September, after having risen 2.4% during the previous quarter. According to Zillow, home prices have lost $1.7 trillion in value in the past year.

Despite the gloom, a modest bright spot linked to housing is emerging on Wall Street. In its 2011 outlook, UBS (UBS) strategists declared that mortgage-backed securities are poised to be an attractive investment. This doesn't necessarily signal that defaults and foreclosures on home loans will totally recover anytime soon, UBS says. Ironically, some of the factors working against the housing market today are helping make the securities more appealing to investors.

These days, mortgage-backed securities come with relatively less risk, since banks have enforced much stricter lending standards. Fewer people are taking out new home loans, even while mortgage rates have fallen to record lows.

What’s Wrong With Cutting Taxes?

The proposed tax cuts are argued to help stimulate the economy, create jobs and hopefully lead to economic recovery. the author of the article states that cutting taxes for the very rich is a very ineffective way to stimulate the economy. some people believe there are better actions that could be made. three more effective ways to support consumer demand and jobs would be to extend unemployment benefits, don't lay off teachers anywhere and start hiring more people.

Bond Markets Settle Down; U.S. Indexes Mixed

The recent Bond markets have settled down lately due to a couple reasons. one being that there had been an encouraging report on the labor market. another being that there is rising optimism about the american economy as well as the recent extension of the tax-cuts. European bonds and american treasuries have seen a slight increase as well lately. a down side of the situation is that people are fearing the deficit matters may worsen and that created a spike in treasury yields on Wednesday as investors dumped the bonds.

Morgan Stanley Aims to Rein In Executive Pay

Morgan Stanley is doing a lot to keep exaggerated pay in check for top executives.
They have had financial problems - like everyone- but also because they hoped that hiring more people would create revenue growth. However, they hired 2,000 people and have seen little growth in revenue.
This prompted complaints from shareholders about high wage payout costs and led to these cut backs. Instead of laying off the newly hired, Morgan Stanley will cut back the pay and bonuses of top executives.
However, Morgan Stanley promised that the employees that did well will still receive competitive pay yet the workers that have not done so well this year will see a cut in their pay.
The firm hopes these moves will help them in the long run and in the eyes of stockholders.

MasterCard, Visa targeted in apparent cyberattack

The corporate websites of Visa and MasterCard were inaccessible at times Wednesday due to an apparent cyberattack by purported Wikileaks backers.

Banks boost stocks, but gains are modest

Stocks drifted higher Wednesday as a rebound in bank shares offset weakness in commodities and concerns about rising interest rates in the Treasury market.

Opening Bankruptcy Court to the States

Counties, municipalities, and and other subsidiary government entities can file for relief under Chapter 9 should be extended to states.
This is a future possibility and suggestion because states are struggling to cut more expenses and raise any more taxes.

I didn't quite understand the logistics of how this would work and I do not think the article went into enough detail of what would happen after the state filed for bankruptcy. Maybe somebody can read this and understand it better than I.

A Bond Rush as Treasury Prices Fall

The agreement to extend the Bush tax cuts led to a sharp decrease in prices of treasury bonds. Many people started buying and the equity markets rose slightly higher that day.
The reason people began buying the bonds is because the extension on the Bush tax cuts is seen as something that will raise the deficit and raise the price of borrowing.
-Remember, the Fed is selling $600 billion in bonds through June 2011.

AIG's Partially Back

AIG has repaid back some of the loan it received in the bailout.

"American International Group (AIG), the troubled giant US insurer, is to repay one of the emergency rescue loans it received during the financial crisis.

It will repay the remaining $21bn outstanding from a $91bn loan from the Federal Reserve Bank of New York.

The move will pave the way for the US Treasury to sell a fifth of the insurer on the stock exchange early next year."

Looks like a long and steady road of recovery.

Fed Says KC Region Economy Strengthens

The report from the Federal Reserve Bank of Kansas City said the regional economy strengthened this fall as consumers spent more money and production orders picked up. According to the Federal Reserve’s so-called Beige Book that reviews economic conditions in the Fed’s 12 regions, the new survey found that 10 of the Fed’s 12 regions reported economic growth at either a “slight to modest” pace or at a “somewhat stronger” pace. Only two regions, Philadelphia and St. Louis, reported mixed business results in the six-week period that covered October and early November. The survey said the recent gains in consumer spending have “boosted optimism for holiday sales among retailers and auto dealers” and that a “limited number of firms were hiring, primarily for specialized labor or seasonal workers”.

PPI: Headline Up 0.4 Percent; Core Prices Down 0.6 Percent

In October, the Producer Price Index for finished goods rose 0.4 percent for the third straight month. This was the fourth continuous monthly increase in the index. Recent moves in producer prices have largely been dominated be swings in energy prices. Energy product prices rose 3.7 percent in October.

In contrast, the core index, which does not include energy or food product prices, fell by a large 0.6 percent. This was the largest decline in the index since 2006. Much of the decline was due to an adjustment having to do with the year’s new models of cars and light trucks. A similar decline occurred in October of last year. However, this still illustrates very modest levels of underlying inflation in the system and adds to the Fed’s view of inflation being low relative to employment levels.

“The worries of deflation are once again front and center and could soften criticisms of QE2,” said Jim Chessen, Chief Economist for the American Bankers Association.

From a year prior, the core index was up 1.4 percent. The top line index, including all finished products, was 4.3 percent higher from a year prior.

Industrial Production Flat, but Manufacturing Output Up 0.5 Percent

In October, industrial production was unchanged, following a decline of 0.2 percent in September. As was the case in September, October’s weakness was primarily due to a large drop off in utilities output, which fell 3.4 percent over the month. In contrast, manufacturing output rose 0.5 percent, the strongest rise since July. The gain was led by auto production, which increased by 1.6 percent over the month. However, even without auto production, output rose 0.5 percent. The month’s solid growth in output is encouraging after two months of soft numbers. It suggests that manufacturing sector activity growth is no longer decelerating.

The capacity utilization rate remained flat at 74.8 percent. Though this is off of its lows of the cycle, it is still considerably low. A large amount of excess capacity continues to exist. Until this rate comes up further, significant amount of industrial sector investments will not be required.

Fed Misprints $110 Billion in New $100 notes

It was the "bill of the future". The new American $100 bill had 3D security ribbons and threads. Microprint text and watermark images were disguised across its surface. And the numbers changed color depending on the light and viewing angle. Lauded to the press in April, the bill was so sophisticated that no counterfeiter could hope to reliably print it.

The only problem, though, was that apparently the U.S. government couldn't reliably print it either. During the initial printing run, a flaw in the printing process was encountered, which led to a layer of the paper folding over after inking, revealing an uninked portion.

Approximately 30 percent of the the approximately $366B USD printed, or roughly $110B USD worth of bills, carry the flaw. That's a whopping 1.1 billion botched bills.

This is ironic since it's been the general belief that the US should raise the money supply, to keep inflation at a steady rate...and they misprint $110 billion of it in the process.

Is proposed tax plan a game-changer for the economy?

As the Republicans and Democrats agree on a bi-partisan tax plan, many foresee this compromise as wholly beneficial to the economy. The plan primarily deals with tax cuts, which are now either the same as the Bush tax cuts or have been cut even further across the board. Several small business owners have held back on spending recently in anticipation of tax increases, so the new of a tax cut may help stimulate investment. Some economists see this as something that will most likely improve economic recovery over the next year while others are wary about how much consumers will spend regardless of the tax cuts. This method of fiscal policy works in concert with the recent monetary policy of QE2. In simplest terms, I see this fiscal policy as aiming to stimulate consumption and investment, which would shift the LM curve and is also what the economy truly needs at this point.

House hunters are too scared to buy despite low prices

Most of the economic indicators are showing that the economy is on its way up. Unfortunately, the housing market is still in a decline, which is scary considering it's a pretty big sector of the economy. There are a couple of reasons why people aren't buying housing, even though there have been historical lows on interest rates and prices. The first is people are scared that they won't be able to make payments, which is part of the reason why the economy fell so hard in the first place. The second reason is that people are trying to see if they can get better deals on houses if they wait longer. The reality is that houses won't be that much cheaper, because they are already at historic lows. People need to start buying houses now to help the housing market.

Obama Defiant in Defending Tax-Cut Plan as ‘Good Deal’

Democrats have been expressing criticism over President Obama's recent acceptance of the Bush-Tax cuts. The Bush Tax-cuts have been extended for the next two years for all levels of income and the flow of unemployment benefits will continue. President Obama has done, tried to do or is still trying to do all he had promised in his campaign and retorted so to accusations and critics of his abandoning his principles. The tax-cuts however, only help about 36000 of the wealthiest American families and add about $25 billion to the deficit. Ms Pelosi said “The Democratic provisions will create jobs and help 155 million workers through tax cuts for the middle class, helping working families who are struggling and growing the economy. The Republican demands would provide tax cuts to the millionaires and billionaires, fail to create jobs and increase the deficit.”
Although, on the flip side, the tax-cuts are believed to help create jobs as the wealthiest Americans will be able to invest in firms and pass down that wealth to the working/middle class, there seems to be a larger population who believe these tax-cuts are not about to help the economy but rather deepen its troubles.

A Hint of Good Job Market News

Last Friday the Bureau of Labor Statistics measured the current unemployment rate at 9.8%, which to everyone's dismay, is the highest since April 2010. But a recent data released by Labor Department's Job Openings and Labor Turnover Survey suggests that the October job openings exceeded by 400,000 compared to September numbers. October had 3.4 million job openings compared to 3 million in September. Most of the job openings have been in the service, education, and health service industries. The article also states that ratio of unemployed workers to job openings was the lowest since 2009, indicating that more and more unemployed workers have started looking for jobs more aggressively.

Rich make out in tax deal

This week's tax-cut compromise will trim everyone's taxes. But surprise, surprise, it's an especially rich deal for the rich.

Australia Keeps Rates Steady, RBA Seen Sidelined Into 2011

SYDNEY—Australia's central bank left interest rates unchanged at 4.75% Tuesday and said it expects inflation to remained contained over the "next few quarters," signaling that the bank is likely to sit on the sidelines well into 2011.

The decision left few surprised after data last week showed the economy grew at its slowest quarterly pace in two years in the September quarter and Reserve Bank of Australia Gov. Glenn Stevens said he was content with the level of interest rates.

Still, some economists were forecasting the Reserve Bank would raise rates again relatively soon in 2011. That timeline now looks to have been pushed back substantially. After the statement, financial markets moved the timing of the next rate increase from late 2011 into 2012.

"They are telling us they are comfortable for at least the next few quarters," said Rob Henderson, head of Australian Economics at the National Australia Bank. "There is no rush to hike rates."

A decision by major banks to sharply raise their mortgage lending rates in November, citing rising funding costs, also played a role in keeping the central bank's powder dry in December. The high Australian dollar has further tightened monetary conditions.

"Following the board's decision last month to lift the cash rate, and the subsequent increases by financial institutions, lending rates in the economy are now a little above average. The board views this setting of monetary policy as appropriate for the economic outlook," Mr. Stevens said in a statement.

Recent data on the economy have also showed shopkeepers are heading into a disappointing end-year sales period, adding to concerns about growth as government economic stimulus is withdrawn. Australian consumers have been cautious for some time, depressing retail sales.

Data earlier Tuesday showed a slump in construction stretching into a sixth consecutive month. The Australian Industry Group's Performance of Construction Index fell 1.8 points to 42.2 in November from October. An index reading below 50 points indicates contracting activity.

"[The RBA] are still very much focusing on medium-term outlook, but I think they believe they have done enough for a time and can sit on their hands," said Josh Williamson, senior economist at Citigroup.

Still, the Reserve Bank has retained a tightening bias, albeit one it looks unlikely to use for a while, economists said.

Wage pressures are growing but forward indicators of the job market suggest some slowdown in hiring is likely, Mr. Stevens said. Over the next few quarters, inflation is expected to be little changed, though it is likely to increase somewhat over the medium term if the economy grows as expected, he added.

Inflation in Australia remains within the Reserve Bank's 2% to 3% target band.

The Reserve Bank has led other central banks in tightening monetary policy, raising the cash rate target seven times since October 2009.

Despite recent soft data, the Australian economy is expected to grow strongly in 2011 as mining investment gathers traction and consumers throw off recent caution that has seen household savings rates soar.

The resources boom now engulfing the economy is the biggest in more than 100 years, with demand for exports of coal and iron ore surging on the back of strong demand from China, and elsewhere in Asia.

The Australian dollar was slightly weaker after the statement. At 4:30 GMT, it was trading at 99.02 U.S. cents, down from 99.10 U.S. cents just prior.

Asia's Inflation Worries Damp Holiday Shopping Cheer

By ALEX FRANGOS

HONG KONG—A cheerful holiday shopping season in the U.S. and Europe could be too much of a good thing for fast-growing Asia's exporters, complicating the region's efforts to fight inflation.

Early indications are that Americans are digging deeper into their pockets than expected to buy televisions, tablet computers and toys, most of which come from Asia. Export figures from Asia have been stronger than expected, confirming a possible bounce in activity. Air freighters from Hong Kong to the U.S. and Europe have been running full loads.

What sounds like good news for a region that derives much of its economic growth from exports could end up being a challenge. Central bankers have kept interest rates low on expectations that consumer demand in the West would stay sluggish. But a boost in growth could be enough to turn a small inflation problem into a bigger one.

"If exports to the U.S. hold up, then Asia is running out of any spare capacity and will quickly find itself with escalating price pressures," says Frederic Neumann, Asia economist for HSBC in Hong Kong. "To keep a lid on prices, Asia needs the West to languish a little while longer."

Unlike in the West, which is fighting deflationary pressures, prices in Asia are on the rise. Food prices and rents are increasing. Factories are running close to or above capacity, and unemployment is low, driving wages higher.

As inflationary expectations in Asia creep up, some are concerned that central banks have been too slow to raise interest rates. China raised benchmark interest rates in October and recently modified its monetary policy stance from "moderately loose" to "prudent," leading to expectations that further rate increases are imminent.

The Asian Development Bank on Tuesday raised its current-year forecast for growth in Asia, saying the recovery "appears to be even stronger than envisaged" in September, when it last published growth forecasts. It predicted the region, excluding Japan, will grow 8.6%, rather than 8.2%. The Manila-based bank credited strong private spending and exports holding up better than expected.

Much will depend on how Asian exports perform in the coming months. Early signs are hopeful from places that specialize in high-tech gadgets that the U.S. and Europe love to buy. Taiwan's exports rose 21.8% in November from a year earlier, to $24.37 billion, driven by strong demand for the island's electronic products, its Ministry of Finance said Tuesday.

South Korea last week also reported strong November export growth. Both Taiwan and South Korea are the first Asian economies to report trade figures each month and are seen as leading indicators for global trade. Their high-tech components are used to assemble telephones and televisions in mainland Chinese factories, and later sold to consumers in the U.S. and Europe.

Stocks of technology companies, such as Taiwan computer maker Acer Inc. and China's Lenovo Group Ltd. have risen on the heightened expectations. Japanese videogame maker Nintendo Co. said it sold 1.5 million consoles and hand-held gaming systems in the last week of November, more than analysts expected.

A consumer rebound in the U.S. is far from a sure thing. Unemployment is stubbornly high at 9.8%. Inventories of goods on store shelves are rising, usually an indicator that retailers will begin to scale back their purchases, fearful of holding too much stock.

Central banks in the region aren't counting on a big burst of economic activity in the U.S., and are keeping interest rates low partially as a buffer against a sluggish 2011. They figure the restocking of U.S. and European warehouses after the financial crisis is over, and now the debt-laden, underemployed consumer sectors will be cautious. Reflecting that view, the Asian Development Bank forecasts growth will slow in developing Asia next year to 7.3%.

Some Asian companies that rely on demand in the U.S. and Europe, having been fooled in the past by good starts to holiday shopping that eventually peter out, aren't convinced yet that the U.S. is really on the rebound.

"It's too soon to say" whether a new wave of buying will come in 2011, according to Stanley Lau, managing director for Renley Watch Manufacturing Co. His company, with factories in Hong Kong, China and Switzerland, produces 1.5 million watches a year for high-end Western brands that sell in the U.S. and Europe. "The next one month will be crucial for our exporters to see the performance of the Christmas sales," he said.

The more optimistic view is that the holiday shopping season will draw down those inventories and new orders will appear in the new year.

Economic-activity signs in the U.S. have been surprisingly healthy, despite the disappointing November jobs report released last week. Major retailers in the U.S. reported a 6.5% increase in sales in November from a year earlier, according to Thomson Reuters. Consumer confidence is at its highest level since May.

There is also good news out of Europe, which is a bigger market than the U.S. for some Asian exporters, including China. Despite fears of Greek and Irish debt woes, German unemployment is at an 18-year low and Nordic countries, such as Norway and Sweden are enjoying solid growth.

Edward Lau, managing director for TNT Express in Hong Kong, says use of the air-shippers' planes between China and Europe over the final weeks of the holiday rush have been "very healthy." TNT recently added service between Chinese interior city Chongqing and Europe, and augmented service from Hong Kong and Shanghai.

Read more: http://online.wsj.com/article/SB10001424052748704250704576005002708945750.html#ixzz17SdIPIAp

U.S. Mortgage Delinquency Rate Could Fall to 5% in '11

The percentage of U.S. consumers who are delinquent on their mortgages could fall to about 5% by the end of 2011, from an expected 6.2% at the end of this year, according to a leading credit bureau.

Even so, the proportion of consumers who are 60 or more days overdue on their mortgages would still be sharply higher than the historical range of 1.5% to 2%, according to TransUnion LLC, which analyzed about 27 million randomly selected consumer records from its database. The Chicago credit bureau first started tracking these statistics in 1992.

In data released Tuesday, TransUnion forecasts that mortgage delinquencies will fall to 4.98% in the fourth quarter of 2011 from 6.21% at the end of this year. According to TransUnion, this delinquency rate peaked at 6.89% in fourth quarter of 2009, as lenders tightened underwriting standards.

A decrease in mortgage delinquencies, traditionally a precursor to foreclosure, could boost the faltering recovery in the U.S. economy and the residential real-estate market.

"We think that the mortgage industry isn't out of the woods yet, but it's starting to move in a better direction," said Steve Chaouki, a group vice president in TransUnion's financial-services unit.

Protracted and high unemployment and depressed home values are contributing to the elevated delinquency rate.

TransUnion also forecast that credit-card delinquencies, an important gauge of future losses for lenders, will continue to fall, though not nearly as sharply. By the end of this year, the ratio of credit-card borrowers who are 90 days or more delinquent on one or more of their credit cards is expected to reach 0.75%—below the levels at the beginning of 2007, at the peak of the credit boom, according to TransUnion.

As credit quality improves, this delinquency rate is expected to fall to 0.67% by the end of 2011. Credit-card delinquencies are lower than mortgage delinquencies in part because credit-card lenders have more ways to control the potential losses, such as reducing customers' credit lines.

IMF Chief Criticizes Euro Crisis Response

ATHENS—The head of the International Monetary Fund on Tuesday urged European countries to find a comprehensive solution to the region's debt crisis, faulting their approach to date as ad hoc and too slow.

Dominique Strauss-Kahn spoke as European finance ministers met in Brussels to debate enlarging the temporary fund for euro-zone members in need of emergency loans, as well as how to set up a permanent funding vehicle.

But those talks so far have been marred by sharp disagreements among various euro-zone governments over the details of future bailouts.

As European nations grapple with debt issues, the Federal Reserve is buying bonds. Video courtesy Fox News.

"My view is very simple—the euro zone must find a comprehensive solution to this problem," the IMF managing director said. "It is not a good approach that for every country we find a separate solution."

European leaders set up the €750 billion ($998.55 billion) European Financial Stability Facility in May, soon after they had put together a €110 billion financial rescue package to help Greece cope with its debt crisis, and have since extended a further €85 billion loan to Ireland.

The stability facility was created as a temporary measure to try to stem worries about the rising indebtedness of other euro-zone countries. Combined, the euro-zone countries have provided €440 billion to the total, the IMF has contributed €250 billion, with the remaining €60 billion coming from European Union contingency funds.

However, there have been disagreements over whether the size of the temporary fund should be expanded, while there are also disputes over how its successor facility should be financed and structured.

In his remarks, Mr. Strauss-Kahn likened Europe's expanding debt crisis to the financial turmoil that rocked the U.S. two years earlier. But he criticized Europe for its slow response and said the lessons learned from the American crisis called for a speedy and comprehensive solution.

"The institutional organs of the European system likely need some improvement so as to react more quickly," he said. "They were not created to deal with crisis, they were created for more peaceful times."

In the U.S., the effects of a widening crisis were first transmitted from bank to bank by a collapse of confidence in the interbank market.

In the past three months in Europe, investor fears that the EU and IMF may soon have to help Portugal and Spain have pressured the sovereign bonds of indebted euro-zone states and raised the cost of borrowing for those countries, further aggravating existing debt problems.

"Clearly the euro zone has a problem of high debt among some of its members. It is not a tremendous problem for the euro zone—I don't agree with the view with those who say that the future of the euro zone is at risk—but it is a problem and it must be addressed," Mr. Strauss-Kahn said. "And for it to be addressed effectively it must be addressed in a complete and comprehensive manner."

Mr. Strauss-Kahn was in Athens to discuss with Greek Prime Minister George Papandreou the country's continuing reform efforts as well as negotiate an extension to the period in which Greece must pay off its EU and IMF loans.

At a joint press conference, he said he was "impressed" with Greece's efforts to narrow its budget deficit, but said Greeks still faced a long road of difficult, structural reforms ahead.

Since May, Greece has narrowed its budget deficit from a record 15.4% of gross domestic product in 2009, to a projected 9.4% of GDP this year. For next year, it aims to reduce the deficit to 7.5% of GDP.

However, Greece still faces high borrowing costs on international markets, in part because of investor jitters over the country's ability to service a €70 billion-a-year in loan repayments in 2014 and 2015.

To ease some of those concerns, Mr. Strauss-Kahn publicly floated the idea of extending Greece's loan repayment schedule in October. And last month European finance ministers decided to consider extending the repayment period until 2024 from 2018, to bring it in line with Ireland's emergency loan.

"It is not an urgent issue, but we shouldn't wait too long about it," Mr. Strauss-Kahn said. "From our side, we are ready to do it. We'll see with our European partners how that should happen."

Late Tuesday, Greek public sector umbrella union ADEDY and the Communist-backed PAME union held protest rallies outside parliament to coincide with the IMF chief's visit.

South Korea and U.S. Reach Deal on Trade

The US and South Korea reached a free trade agreement which will eliminate most tariffs for US exports and help solidify the relationship between the two countries. This is the largest free trade agreement that the US has established since NAFTA. This deal is expected to usher in 10 billion dollars worth of revenue to the US and create "tens of thousands" of jobs. US negotiators had failed to reach this deal just three weeks earlier but after the recent friction with North korea, South Korea seemed eager to close the deal. This deal was lauded by both the republicans and democrats and even the US chamber of commerce which hailed it as a great victory for US exports. Even earlier dissenters such as the Ford motor Company have thrown their support behind the agreement. This agreement is going to positively affect the struggling auto industry as Korea is a large importer of US autos.

G.E. and JPMorgan Got Lots of Fed Help in ’08

New records show that during the financial crisis of 2008, GE and JPMorgan Chase, recieved huge amounts of aid from the Fed even as their CEO's served on the nine member board of the Federal Reserve Bank Of New York. Now even though the CEO's of both these companies were not involved in the creation of the emergency loans program,which was approved in Washington, this information shows that they got really cheap loans. This conflict of interests has come under scrutiny recently. A government acoountability office is looking into this potential conflict of interests at the Fed.

Poland’s Currency Lifts Economy

Foreign investment is pouring into Poland and investment opportunities are all over - all while many other European countries are struggling.
Without the euro, Poland is prospering.
"One of the big lessons of the European debt crisis, Polish leaders say, is that countries should not adopt the euro until their economies and labor markets are flexible enough to compensate for the loss of control over exchange rates."
The Polish zloty has fallen 18% against the Euro but has therefore helped Polish goods and isolated them from the European crisis.

Tax Deal Suggests New Path for Obama

To go along with the article I posted yesterday ---
Monday Obama announced a tentative deal with the republicans in congress over the Bush tax cuts. Obama and the democrats will agree to extend the tax cuts to all income levels (although they wanted to only extend them for the middle class bracket).
Therefore, the republicans agree to raise the aid to the long term unemployed and to cut payroll taxes for all workers for a year.
The debate between the parties over the Bush tax cuts has been the first standoff since the midterm elections. Although the newly elected republicans are not overriding the democrats, Obama appears to be struggling with his own party as he pushes to get things done and maintains his very liberal mindset.
This package will cost about $900 million over the next two years.

Interesting for us - this will continue a college tuition tax credit for some families.

We Lost 8 Million Jobs. Only 1 Million Came Back

In late December of 2009, 8 million jobs bit the dust. Not even 4 years earlier the economy employed over 138 million jobs. Over the last year the economy has slowly been recovering despite its miserable high unemployment rate of nearing 10%. Fortunately, over the last year there has been a growth of 1 million jobs. Many of these jobs can be attributed to a great demand in geriatric health care.
At last we can see some recovery in terms of job availability. Unfortunately, the job openings aren't enough but at least we are seeing some progress toward a healthier economy.

Debt, deficits and delays

The National Commission on Fiscal Responsibility and Reform has developed a plan for reducing the national debt and federal budget deficit. Only 11 of the 18 panelists, however, supported the plan, leaving the vote short of passing by 3.

The plan proposed a cut in projected spending by $2.2 trillion between 2012 and 2020 while raising revenue by almost $1 trillion. The failure to pass the policy is not shocking and shows how challenging it will be to develop a plan that has the support of both parties.

It may be a good thing the plan was rejected since November’s unemployment numbers continued to rise. The unemployment report suggests that passing this plan now may put the brakes on the economy before we are really start moving forward again.

US Treasury sets final sale of Citi common shares

The US Treasury is selling the remaining common stocks of Citigroup. The bank was rescued in a taxpayer-funded bailout during the 2008 financial crisis.

2.4 billion shares of stock will be put on the market.

45 billion dollars were invested in Citigroup to stabilize the financial system after the Lehman Brothers bankruptcy in 2008.

The Treasury sold 5.3 billion of the 7.7 billion and received 25 billion dollars in Citibank stock.

Bush Tax-Cut Deal With Jobless Aid Said to Be Near

A day after the Senate rejected Obama's preferred tax plan the Republicans are closing in on a deal to temporarily extend the Bush tax cuts for all income levels. The Democrats preferred plan would have only extended tax cuts for those who are categorized as middle class.
Now a compromise must be reached. The republicans are willing to give long term cuts for the unemployed if the Democrats agree to keep tax cuts for high earners for at least two more years.
Congress is trying to seal a deal soon so they can move on to another long list of priorities to finish before new members come in - such as "don't ask don't tell" and the New Start arms treaty with Russia.

Unemployment rate rised to 9.8%

The United States added a total of just 39,000 jobs last month, down from an upwardly revised gain of 172,000 in October, the Labor Department reported on Friday. With local governments shedding jobs, the additions in the private sector were too small to reduce the ranks of the unemployed or even to keep pace with people entering the work force.

The unemployment rate, which is based on a separate survey of households, rose to 9.8 percent in November. It was the highest jobless rate since April and up from 9.6 percent in October. Part of the surprise in the November report was that layoffs, which had subsided earlier this year, picked up again. The number of people who were unemployed because they had been laid off or had concluded a temporary assignment increased by 390,000. The median length of time the unemployed had been out of work also rose to 21.6 weeks, the third consecutive monthly increase. For those who have been searching for work for more than six months, this is a particularly discouraging prospect.

US Dollar rises: Thanks a bunch Europe!

In November, the U.S. Dollar Index, which tracks the greenback against six major U.S. trading partners including the euro, yen and pound, rose 5.09%. This was driven partly by rising bond yields and signs of economic recovery that raised the appeal of U.S. assets. But the most recent gains also had to do with economic uncertainty in Europe. The region's debt crisis unfolded earlier this year with a bailout in May to prevent Greece from defaulting. Now it looks as if the dominoes might continue to fall as observers watch Portugal, Spain and others closely following the $113 billion bailout package European officials presented to Ireland on Sunday.
Earlier this week, the dollar soared against the euro and other major currencies when a rescue deal for debt-troubled Ireland failed to calm investors worried that the debt crisis might spread. At one point on Monday, a day after European officials announced Ireland's bailout package,the euro fell below $1.31 for the first time since September 21. The British pound fell to $1.5565 from $1.5602 and the dollar rose to 84.24 Japanese yen from 84.07 yen.
However, the dollar's rise in the backdrop of Europe's demise might likely be temporary. After all, the U.S., though probably not to the scale of Ireland and other European countries, has its own debt problems that officials are trying to solve. And some central bankers and even the United Nations have said the greenback's value has been too volatile to be the world's primary reserve currency.

Yes, the economy is making steady gains but...

Factories are busier. Incomes are rising. Autos are rising. The holiday season is the best in four years and stock prices are also rising.

The downfall: Job creation is still missing. The economy is looking up but employers are not hiring very freely. The economy added 39,000 jobs in November. That is not enough to stabilize the unemployment rate and it will stay up at 9% because of the real estate industry. Job creation is the biggest factor that drives the economy...yet it is still weak.

In Tax Cuts, the Options Run Short

Democrats have left themselves in a tough spot on the Bush tax cuts. After delaying the issue until after the election and then being trounced in that election, they find themselves with little leverage.

If they cannot come up with a plan that can win 60 votes in the Senate, which means at least two Republican votes, Republicans can filibuster any bill. All of the tax cuts would then expire on Dec. 31. When the new Republican House majority arrives in January, it will be able to make its first order of business a retroactive tax cut — forcing President Obama and Senate Democrats to choose between a purely Republican plan and an across-the-board tax increase.

Pressure Rises to Bolster European Bailout Fund

Several European economies have been struggling during the economic recession. Many of the countries have come before the European Union to ask to be bailed out. Originally, the bail out fund was tabbed to be 750 million, however with recent troubles arising from Spain and Portugal the Belgian finance director has been leading a push to increase the fund to 1 trillion dollars. One major road block to this plan is the fact that the largest economies would be asked to contribute more to the fund. Many of these countries are a bit reluctant to committ to floating the bill for some of the struggling countries.

Cash Flow to Terrorists Evades U.S. Efforts

WASHINGTON — Nine years after the United States vowed to shut down the money pipeline that finances terrorism, senior Obama administration officials say they believe that many millions of dollars are flowing largely unimpeded to extremist groups worldwide, and they have grown frustrated by frequent resistance from allies in the Middle East, according to secret diplomatic dispatches.

The government cables, sent by Secretary of State Hillary Rodham Clinton and senior State Department officials, catalog a list of methods that American officials suspect terrorist financiers are using, including a brazen bank robbery in Yemen last year, kidnappings for ransom, the harvesting of drug proceeds in Afghanistan and fund-raising at religious pilgrimages to Mecca, where millions of riyals or other forms of currency change hands.

Tax Fear May Move Bonuses Earlier

Congress is debating tax rates, and that has Wall Street nervously eyeing the calendar.

Worried that lawmakers will allow taxes to rise for the wealthiest Americans beginning next year, financial firms are discussing whether to move up their bonus payouts from next year to this month.

At stake is a portion of the hefty annual payouts that are a familiar part of the compensation culture on Wall Street, as well as a juicy target of popular anger. If Congress does not extend the Bush-era tax cuts for the highest income levels, a typical worker who earns a $1 million bonus would pay $40,000 to $50,000 more in taxes next year than this year, depending on base salary.

Bush Tax-Cut Deal With Jobless Aid Said to Be Near

WASHINGTON — White House officials and Congressional Republicans said Sunday they were closing in on a deal to temporarily continue the Bush-era tax cuts at all income levels, while bitterly frustrated Democratic Congressional leaders began exploring whether they would have the votes for such a package.

A day after the Senate rejected President Obama's preferred tax plan, officials said the broad contours of a compromise were in focus.

Rather than extending the tax rates only on income described by Democrats as middle class — up to $250,000 a year for couples and $200,000 for individuals — the deal would also keep the rates for higher earners, probably for two years. In return, Republicans said they would probably agree to extend jobless aid for the long-term unemployed.

In '60 Minutes' Interview, Bernanke Favors Revised Tax Code

An interview conducted on 60 Minutes, the Fed's Chairman spoke on the necessity of the current tax code revisions being discussed. By tightening personal and corporate tax codes it could increase incentives for investment in the economy. Bernanke spoke on several other issues in the same issue. An important point Bernanke made was that the Fed is not actively printing money, but holding the money supply constant. This was a response to individuals that had recently criticized the Fed.

Stock Investors Waiting on Bush Tax Cuts

Although the economic recovery has been weak, much more attention has been drawn in the direction of the policies that Washington is confronting at the end of the year. At the end of the year, the current tax structure will expire and many are concerned about the decisions that are going to be made in regard to extending the current tax rates and the effect that these decisions will have on the economy. The stock market has been doing very well and if the tax rates are extended, then there are expectations U.S. stocks will continue to see growth.

Bernanke on 60 Minutes: Grim picture for jobs ahead

Bernanke made a rare TV appearance on 60 minutes to explain to the public the incentives being QE2: to buy back bonds in order to encourage consumption, which will hopefully lead to the creation of job. Also, unlike printing money, interest rates will stay low to encourage investment. Although Bernanke doesn't address all the criticisms associated with QE2, he has very sound explanations for the one's he does address. For example, many people say the interest rate is too low, which will cause inflation. Bernanke explains that these fears are overstated. I think that most likely, the people complaining of possible inflation are referring to nominal interest rates and not real interest rates, which adjust over time. Also, Bernanke states that the Fed can increase the interest rate very quickly (by adjusting the Federal Funds rate).

U.S. Sets Sweeping New Deal on Trade

President Barack Obama on Saturday praised a newly sealed trade deal with South Korea as a landmark agreement that promises to boost the domestic auto industry and support tens of thousands of American jobs.

"This agreement shows the U.S. is willing to lead and compete in the global economy," the president told reporters at the White House, according to the Associated Press, calling it a triumph for American workers in fields from farming to aerospace.

Inflation Risk Is Low, Fed Says

Federal Reserve Chairman Ben Bernanke took his message into American homes Sunday evening, defending the central bank's bond-buying program and pledging his "100%" confidence he could prevent runaway inflation.

So That’s Where the Money Went

The Fed recently released an accounting of exactly who received emergency bailout funds which totaled $3.3 trillion in 2008. The Fed initially didn't have the intention to disclose who received funds however, a recently passed proposition, The Dodd-Frank Law, forced The Fed to come up with a full accounting.
The Fed data showed that the biggest recipient of taxpayer assistance was, naturally, Citigroup. It was followed closely by Morgan Stanley, Merrill Lynch, Bank of America and Goldman Sachs. All of these recipients received gradual payouts whereas Goldman Sachs only received aid during the worst times of 2008.

Pressure Rises to Bolster European Bailout Fund

The rescue fund for the euro is already at 750 billion euros but the European finance ministers are facing pressure to increase the fund.
The fund will become permanent in 2013. Finance ministers suggest that waiting until then to increase the fund would not be smart.
They suggested that the European Central Bank should increase its bond buying program.

Why Employers Won't Hire

Things are not looking good for the labor force according to the employment report for November. In response to the recession, firms began to cut back unnecessary work and figure out how to increase production per worker so that they could hire less people. What this means for the current economy, which has regained over 80% of the output initially lost but has only regained 11% of the labor force that was cut, is that firms don't really need to rehire the millions laid off because of the recession because they have found how to run their businesses effectively with less workers. There is a limit however to how much productivity can keep increasing without workers fighting back or without things like customer satisfaction becoming an issue. Hiring will likely not drastically increase until these issues become more prevalent.