Tricky Dick and the dollar

This is an interesting article about how the United States wants to put pressure on China to increase the value of their currency. Obviously, this has been a hot topic for awhile now and through our discussions in class, we can see how this would affect the world economy.

U.S. Corporate Profits Kept Climbing at End of 2009

The government said profits grew for corporate earnings in the fourth quarter as the economy bounded from a deep recession.

The Commerce Department stated on Friday that the pretax profits rose 8% to a seasonally adjusted $1.5 trillion annual rate in the fourth quarter from the third quarter.

GDP grew at a 5.6% inflation-adjusted annual rate. The change in inflation was due to the construction spending decrease. Economists are expecting more modest growth for the first quarter, with most estimates around 2.8%.

While conditions continue to improve for companies, consumers are still not yet confident in the recovery. An index of consumer sentiment remained flat at 73.6 in March from the prior month.

Steven WOod, an Insight Economics LLC analyst reflected these thoughts about the consumer confidence level, ""It is unlikely that sentiment will improve to truly optimistic levels until robust job creation returns and home prices stabilize."

Thailand Improves

Thailand is slowly recovering from the global downturn after experiencing its first recession in 11 years. Thailand's export market was hit hard as the demand for its goods in major markets (like the U.S., Europe and Japan) decreased. Thailand's GDP increased 3.6% in the fourth quarter from the third, which is on pace for the fastest on-quarter in 10 years.

CLSA expects Thailand's GDP to exceed 6% this year as consumption demand has recovered and private investment is increasing. Exports have also rebounded strongly, while government spending is helping push growth.

Another Advantage for the Biggest Banks

This article is comparing the interest rates paid on deposits for different size banks as measured by amount in assets. Customer deposits are regarded as the cheapest and most stable source of funds for banks especially since the FDIC insures accounts up to 250,000. Average interest paid on deposits was 0.77 percent for banks holding $100 billion or more in assets; this is substantially less than the 1.73 percent, which is the average amount that banks holding less than 10 billion in assets must pay.

The 10 largest banks hold about $3.2 trillion of America’s $7.7 trillion of domestic deposits. Apply the differential in deposit interest rates, and those 10 appear be saving nearly $30 billion a year thanks to their size.

President Obama proposed that big banks pay a “crisis responsibility fee” that would cost them $9 billion a year for 10 years. According to this article he may have undershot the value of being too big to fail.

Obama to order fresh help for struggling homeowners

President Barack Obama's administration has set out to provide further assistance to the struggling homeowners currently being affected by unemployment and slumping house prices. As the economy continues to try and rebound from the recent recession, the recovery continues to be dragged down by weak housing and labor markets. Obama will order mortgage firms to help hard-hit homeowners to restructure their mortgage payments. This is particularly interesting considering some of the failures of the economy were attributed to the sub-prime mortgage crisis and it will be interesting to see how the President and his administration will handle this.

Slow Economic Growth Ahead

This article talks about how some economists believe that the economy will grow by 3 percent in the first quarter of 2010 and no higher than 3.3 percent through 2011.

Also the GDP remained at around 5.6 percent which is the best since 2003. This was the second straight quarter of growth which reflects the belief that the recession started in December in 2007 and ended in the middle of last year.

For the full year GDP fell 2.4 percent which is the biggest decline since 1946.

State jobless situation little changed

A total of 27 states reported rising unemployment rates in February, while rates decreased in seven states and the District of Columbia, according to a government report released Friday.

The White House announced new steps on Friday to help the unemployed and those who are "underwater" with a bigger mortgage than their home is worth. For some unemployed borrowers, the effort would require servicers to reduce or suspend monthly mortgage payments for up to six months.

Income Changes

The fact that personal income fell across much of the country in 2009 comes as no surprise. With lower incomes, people obviously cannot consume at the levels they once were. Lower consumption and consumer confidence have contributed to the poor retail sales experienced by many businesses. The article does mention that in the fourth quarter, as government aid kicked in and the economy attempted to recover, personal income increased in every state. It will be interesting to see what 2010 brings.

Germany Should Aid Greece With ‘Win-Win’ Wage Boost, Posen Says

this article talks about how Germany is expected to aid Greece but there are also being blamed for some of the problems that the euro area is experiencing. Since Germany is operating with a huge trade surplus and all the other countries have such large trade imbalances that are causing problems for the area. one reason they give for Germany's surplus is the fact that they have very low labor costs.

Is health law already hurting business? Maybe, maybe not.

This article is talking about how the republicans feel about the new healthcare system that Obama has just signed. It reports that the new bill will cause businesses to spend more money and let go of their benefits for their retirees. Many companies such as Verizon has had to send letters to retired and current workers saying that the new health-care will most likely affect this benefits since they will have to be spending more on taxes. This new law will also affect the efforts to a recovering economy. With the businesses spending more on taxes, they will likely have to let go of more workers which will hurt the rate of unemployment. All in all, the conservatives are not happy about the movement towards a new health-care system.