Obama says US has Stake in Indonesian Democracy, Prosperity

President Barack Obama said the U.S. has a stake in Indonesia’s continued growth as a market for American goods and as an ally in spreading democracy.

In a speech to an audience of about 6,000 people at the University of Indonesia in Jakarta, Obama said Indonesia’s “extraordinary democratic transformation” and its religious tolerance stand as examples to other emerging economies.

“America has a stake in an Indonesia that is growing, with prosperity that is broadly shared among the Indonesian people,” Obama said, “because a rising middle class here means new markets for our goods, just as America is a market for yours.”

Is this true proof that our economy has recovered that we are now showing higher production and export levels, and are even assisting in the growth of foreign markets?

Racial Predatory Loans Fuel Housing Crisis: Study

"Predatory lending aimed at racially segregated minority neighborhoods led to mass foreclosures that fueled the U.S. housing crisis, according to a new study published in the American Sociological Review.

Predatory lending typically refers to loans that carry unreasonable fees, interest rates and payment requirements.

Poorer minority areas became a focus of these practices in the 1990s with the growth of mortgage-backed securities, which enabled lenders to pool low- and high-risk loans to sell on the secondary market, Professor Douglas Massey of the Woodrow Wilson School of Public and International Affairs at Princeton University and PhD candidate Jacob Rugh, said in their study.

The financial institutions likely to be found in minority areas tended to be predatory -- pawn shops, payday lenders and check cashing services that "charge high fees and usurious rates of interest," they said in the study.

"By definition, segregation creates minority dominant neighborhoods, which, given the legacy of redlining and institutional discrimination, continue to be underserved by mainstream financial institutions," the study says."

Construction Spending Rises and Manufacturing Falls

The pace of growth in the U.S. manufacturing sector slowed in September, an industry report on Friday showed, and employment in the sector also declined.

The Institute for Supply Management said its index of national factory activity slipped to 54.4 last month from 56.3 in August.

The median forecast of 79 economists surveyed by Reuters was for a reading of 54.5. A reading above 50 indicates expansion.

While manufacturing has expanded every month since August 2009, the pace of growth has slowed in recent months amid signs a broader U.S. recovery was running out of steam.

In September, sector employment slipped to 56.5 from 60.4 in August.

Warren Buffett: "No Double Dip Recession"

Speaking today by video to the Montana Economic Development Summit, the AP quotes him as telling those attending: "I am a huge bull on this country. We are not going to have a double-dip recession at all. I see our businesses coming back across the board."

Bloomberg feels the same way, in that all businesses are making a slow comeback and we should not be faced with any deflationary period that the double-dip recession entails. It seems that the general feeling towards the economy through some of our top economic figures in this country have no real concern for our ailing economy and see it getting better in the foreseeable future.

Three Reasons Why We Are Not Going To Become Japan

This short article touches on the notion that the economy of the United States is showing some resemblances to Japan's economy in that the same kind of double-dip recession that Japan went through about 20 years ago. A double-dip recession is a recession followed by a short-term recovery, followed by another recession. In Japan's case, they suffered two bubbles in the real estate and equity markets that put prices at ridiculous levels and completely out of proportion. The Imperial Palace in Tokyo, which is near 5 miles around, was valued the same as the State of California. That one instance, although not your run-of-the-mill home in Japan, shows the magnitude of the spike in prices. The United States had a bubble in prices in 2007, but nowhere near that proportion, and really only effected the commercial real estate market. Japan suffered a heavy deflationary period also because they have an essentially mono-cultural society. A younger, more culturally diverse work force that the United States boasts creates industrial growth, and also huge foreign investments. But, probably the most important reason the US economy won't be plagued with huge deflation like Japan's was is the US monetary policy. Japan's economy really dropped the ball and didn't realize how serious their issues were, and were too slow to cut rates before it was too late. The Fed, starting in 2008, has aggressively been working on cutting rates and getting on smaller, struggling banks to raise some capital before they step in and take it over. This has kept everything relatively "in check" and is going through the necessary steps to repair the US economy.

I feel that the US economy will eventually recover and that the Fed is taking the necessary steps to make sure that we don't go through a huge period of outrageous deflation like Japan did. Things may not happen for some time, but small steps in the right direction are much more favorable than several steps back like Japan had to face.