Nov 17 When the Government Issues New Treasury Debt and Puts it into the Banking System, Does That Mean More Dollars in the World, and Thus Inflation? Paul Solman: Several weeks ago, former Fed Chairman and economic boom cheerleader Alan Greenspan said this before Congress: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state… Continue reading
Oct 30 Watch Consumers Trim Spending in New Sign of Economic Downturn New data show that consumer spending fell 3.1 percent in the third quarter, its sharpest drop in 28 years. New York Times columnist David Leonhardt examines the latest numbers. Continue watching
Oct 29 Is it correct to assume that the credit crisis is mostly psychological? Question/Comment: Is it correct to assume that the credit crisis is mostly psychological? Banks hold bad paper which needs to be exposed and somehow that debt needs to be paid or securitized again, so that banks regain confidence in other… Continue reading
Oct 27 The government hopes the $700 billion bailout will get banks to lend again. Why not require them to do so? Question/Comment: So the government hopes the $700 billion bailout will get banks to lend again. Why not require them to do so? According to the Wall Street Journal some of the banks are using the money for possible acquisitions, for… Continue reading
Oct 27 Now that governments have to inject billions into world banks, do you think monetary policy should be adjusted to better maintain a balance between currency in circulation and bank funds? Question/Comment: The ratio between commercial bank money and currency in circulation has been widening for decades. While the Federal Reserve’s monetary policy has protected our economy from runaway inflation, it may have been starving the market for currency. Now that… Continue reading
Oct 27 World Markets Slide as Yen Skyrockets By PBS News Hour A worldwide slide in markets continued Monday on fears that governments' efforts to stabilize the volatile global economy will not be able enough to prevent a global recession. Continue reading
Oct 15 European Leaders Call for Summit to Overal Global Financial System By Admin, PBS News Hour As the world's industrialized nations continued to roll out more plans to bolster flagging economies, European leaders called for a review of the global financial system. Continue reading
Oct 14 U.S. Treasury to Inject $250 Billion into Banks By Admin, PBS News Hour In a new effort to shore up confidence in the economy and inject life into frozen credit markets, the U.S. Treasury will inject $250 billion into several large banks. Continue reading
Oct 09 How could a U.S. domestic problem become a global liquidity crisis? Question/Comment: How could a U.S. domestic problem (the housing bubble) become a global liquidity crisis between banks putting all banks and consequently the economies worldwide in trouble? What needs to be done to prevent a global economic meltdown? Paul Solman:… Continue reading
Oct 09 If banks do not have money to lend, how can they buy up finance firms and other failing banks? Question/Comment: If banks do not have money to lend, how can Citicorp, Wells Fargo, etc. come up with billions to purchase failing banks and finance firms? Paul Solman: They aren’t forking over any cash. “Purchase” means subsume. Wachovia becomes part… Continue reading