Sunday, September 26, 2010

Obama Stimulus Made Economic Crisis Worse, `Black Swan' Author Taleb Says

Obama Stimulus Made Economic Crisis Worse, `Black Swan' Author Taleb SaysBy Frederic Tomesco - Sep 25, 2010 10:36 AM ET U.S.

President Barack Obama and his administration weakened the country’s economy by seeking to foster growth instead of paying down the federal debt, said Nassim Nicholas Taleb, author of “The Black Swan.”

“Obama did exactly the opposite of what should have been done,” Taleb said yesterday in Montreal in a speech as part of Canada’s Salon Speakers series. “He surrounded himself with people who exacerbated the problem. You have a person who has cancer and instead of removing the cancer, you give him tranquilizers. When you give tranquilizers to a cancer patient, they feel better but the cancer gets worse.”

Today, Taleb said, “total debt is higher than it was in 2008 and unemployment is worse.”


Saturday, September 25, 2010

Buffett : Taxpayer anger against President Barack Obama and Congress is counterproductive

Buffett : Taxpayer anger against President Barack Obama and Congress is counterproductive

Buffett to taxpayers: Get over your anger

Taxpayer anger against President Barack Obama and Congress is counterproductive because policy makers took measures including deficit spending to stimulate the economy, billionaire investor Warren Buffett told CNBC.

“Sentiment has turned very sour in the last three or four or five months,” the chairman and CEO of Omaha-based Berkshire Hathaway Inc. said in an interview broadcast Thursday.

“I hope we get over it pretty soon, because it’s not productive,’’ Buffett said. “We will come back regardless of how people feel about Washington, but it is not helpful to have people as unhappy as they are about what’s going on in Washington.”

More than three-quarters of U.S. investors view Obama as anti-business and are pessimistic about his policies, a Bloomberg survey this month indicated.

The U.S. unemployment rate is 9.6 percent, even after an $814 billion stimulus measure enacted last year and other government actions.

The Federal Reserve has kept the benchmark overnight lending rate target close to zero and said this week that it was prepared to ease policy further.

“The truth is we’re running a federal deficit that’s 9 percent of gross domestic product,” Buffett said. “That’s stimulative as all get out. It’s more stimulative than any policy we’ve followed since World War II.”

Wednesday, September 08, 2010

Roubini ,"There is no private sector jobs growth"

More than 400 US Banks Will Fail: Roubini
Published: Friday, 3 Sep 2010 | 3:00 AM ET Text Size By: Patrick Allen
CNBC Senior News Editor

Even if the US and European economies manage to avoid a double dip, it will still feel like a recession, while more than half of the 800-plus US banks on the "critical list" are likely to go bust, according to renowned economist Nouriel Roubini of Roubini Global Economics.

The second half of the year will remain weak as tailwinds become headwinds, Roubini told CNBC on the shores of Lake Como, Italy at the Ambrosetti Forum economics conference.

"In the second half, fiscal policy becomes a headwind, no more cash for clunkers," Roubini said. "The positive scenario is that growth will be below par."

Roubini recently said the chance of a double-dip recession in the US was now more than 40 percent.

"The big risk is that there will be a downturn in markets that could impact the bond, the equity and the credit markets," he said.

“Job losses have been higher, the US jobs number will show that. There is no private sector jobs growth," he said. "Consumption is weak, exports are weak and housing is weak."

"If there is no final sales and no final demand, companies will not invest," he added.


Wednesday, September 01, 2010

Dow Logs Worst August in 9 Years

Dow Logs Worst August in 9 Years


Stocks limped to their worst August since 2001, battered by a wave of discouraging data that cast doubt on the faltering economic recovery.

Investors now enter September, a month that has been historically challenging for the stock market, against a backdrop of broad uncertainty, including slow growth and deflation fears.

The Dow Jones Industrial Average battled to a stalemate on Tuesday, rising 4.99 points, or 0.05%, to finish at 10014.72. The blue-chip index's 4.3% drop for the month was the worst since a dismal May, and the measure's first down August in five years. The Dow had rallied 7.1% in July.

September Slump Superstitions August is typically a positive month for stocks, whereas September declines tend to come as companies begin issuing warnings ahead of third-quarter results and mutual-fund managers get back to work after the typically light volume in the summer.

The Standard & Poor's 500-stock index fell 4.7% for August, while the Nasdaq shed 6.2%. Small-capitalization stocks, a leading indicator of the economy, took an even bigger hit. The Russell 2000 index of small-cap stocks posted its worst August in 12 years, falling 7.5%.

Other barometers of economic activity are flashing warning signals, too. Technology stocks were the weakest performers on Tuesday, taking a hit after technology-research firm Gartner cut estimates for computer sales, reinforcing growing concern about the outlook for the sector.

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