Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’

Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’
By Cordell Eddings and Betty Liu - Nov 22, 2011 12:20 PM ET

Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian said U.S. economic conditions are “terrifying” as the nation struggles to recover from recession.

The odds of the U.S. returning to recession are as high as 50 percent, El-Erian said during an interview on Bloomberg Television’s “In the Loop” with Betty Liu. U.S. economic growth was worse than expected and congressional policy makers are gridlocked over what to do about the economy and the deficit, which risk exacerbating an already weak recovery, he said.

“We have less economic momentum than we thought we had and we have no policy momentum,” said El-Erian, who also serves as co-chief investment officer with Pimco founder Bill Gross at the world’s largest manager of bond funds.

http://www.bloomberg.com/news/2011-11-22/pimco-s-el-erian-says-u-s-economic-situation-terrifying-as-growth-slows.html

Jim Cramer: In 31 Years I've Never Seen Markets This Crazy

Jim Cramer: In 31 Years I've Never Seen Markets This Crazy

Jim Cramer has come to only one conclusion about markets today: "No one knows what the heck he or she is doing." Not hedge funders, not bankers... no one.
Things sure have changed over the years.
In the past week, he's noted 6 weird happenings that show the market is totally out of whack

Read more: http://tinyurl.com/7da5kx9

US becoming a less friendly business environment than China

US becoming a less friendly business environment than China
By Alan Rappeport in New York

Coca-Cola now sees the US becoming a less friendly business environment than China, its chief executive has revealed, citing political gridlock and an antiquated tax structure as reasons its home market has become less competitive.

Muhtar Kent, Coke’s chief executive, said “in many respects” it was easier doing business in China, which he likened to a well-managed company. “You have a one-stop shop in terms of the Chinese foreign investment agency and local governments are fighting for investment with each other,” he told the Financial Times.

http://www.ft.com/intl/cms/s/0/071f902c-e636-11e0-960c-00144feabdc0.html#axzz1Z9sXNRz1

JPMorgan chief says bank rules ‘anti-US’

JPMorgan chief says bank rules ‘anti-US’
By Tom Braithwaite in New York and Patrick Jenkins in London
Published: September 12 2011 00:01

New international bank capital rules are “anti-American” and the US should consider pulling out of the Basel group of global regulators, Jamie Dimon, chief executive of JPMorgan Chase, has said.

In an interview with the Financial Times, Mr Dimon said he was supportive of forcing banks to have more capital but argued that moves to impose an additional charge on the largest global banks went too far, particularly for American banks.

http://www.ft.com/intl/cms/s/0/905aeb88-dc50-11e0-8654-00144feabdc0.html#axzz1Xhbiq27s

Who cares in the Middle East what Obama says?

Who cares in the Middle East what Obama says?

President Obama has shown himself to be weak in his dealings with the Middle East, says Robert Fisk, and the Arab world is turning its back with contempt. Its future will be shaped without American influence

This month, in the Middle East, has seen the unmaking of the President of the United States. More than that, it has witnessed the lowest prestige of America in the region since Roosevelt met King Abdul Aziz on the USS Quincy in the Great Bitter Lake in 1945.

While Barack Obama and Benjamin Netanyahu played out their farce in Washington – Obama grovelling as usual – the Arabs got on with the serious business of changing their world, demonstrating and fighting and dying for freedoms they have never possessed. Obama waffled on about change in the Middle East – and about America's new role in the region. It was pathetic. "What is this 'role' thing?" an Egyptian friend asked me at the weekend. "Do they still believe we care about what they think?"

And it is true. Obama's failure to support the Arab revolutions until they were all but over lost the US most of its surviving credit in the region. Obama was silent on the overthrow of Ben Ali, only joined in the chorus of contempt for Mubarak two days before his flight, condemned the Syrian regime – which has killed more of its people than any other dynasty in this Arab "spring", save for the frightful Gaddafi – but makes it clear that he would be happy to see Assad survive, waves his puny fist at puny Bahrain's cruelty and remains absolutely, stunningly silent over Saudi Arabia. And he goes on his knees before Israel. Is it any wonder, then, that Arabs are turning their backs on America, not out of fury or anger, nor with threats or violence, but with contempt? It is the Arabs and their fellow Muslims of the Middle East who are themselves now making the decisions.

http://www.independent.co.uk/opinion/commentators/fisk/who-cares-in-the-middle-east-what-obama-says-2290761.html

Stuck on Stupid : US deficit up 15.7% in first half of fiscal 2011

Stuck on Stupid : US deficit up 15.7% in first half of fiscal 2011

US deficit up 15.7% in first half of fiscal 2011
(AFP) – 1 hour ago

WASHINGTON — The US budget deficit shot up 15.7 percent in the first six months of fiscal 2011, the Treasury Department said Wednesday as political knives were being sharpened for a new budget battle.

The Treasury reported a deficit of $829 billion for the October-March period, compared with $717 billion a year earlier, as revenue rose a sluggish 6.9 percent as the economic recovery slowly gained pace.

The Treasury argued that the pace of increase in the deficit was deceptive because of large one-off reductions in expenditures made during the first half of fiscal 2010, compared with previous and subsequent periods.

Those included a $115 billion reduction in funds spent on the Troubled Asset Relief Program (TARP) -- the financial institution bailout program -- in March 2010.

But 2011 so far has also seen significant increases in spending on defense, Social Security, health and debt service, while receipts have not grown as fast.

http://www.google.com/hostednews/afp/article/ALeqM5il-7COiRQUJ9kbLkZ3gg4nrlac5Q?docId=CNG.dcd81b51497966fd4c6461748e63e3ee.921

Stuck on Stupid : US lacks credibility on debt, says IMF

US lacks credibility on debt, says IMF

By Chris Giles and James Politi in Washington
Published: April 12 2011 19:15 | Last updated: April 12 2011 19:15

The US lacks a “credible strategy” to stabilise its mounting public debt posing a small but significant risk of a new global economic crisis, says the International Monetary Fund.

In an unusually stern rebuke to its largest shareholder, the IMF said the US was the only advanced economy to be increasing its underlying budget deficit in 2011 at a time when its economy was growing fast enough to reduce borrowing.

http://www.ft.com/cms/s/0/dc1aadea-652e-11e0-b150-00144feab49a.html#ixzz1JLXw8WWX

The Empire State Manufacturing Survey index fell below "zero" first time since July 2009

The Empire State Manufacturing Survey index fell below "zero" first time since July 2009

New York state manufacturing unexpectedly plunged in November, the first contraction since July 2009 when the US economy exited recession, official data showed Monday.

The Federal Reserve Bank of New York reported its manufacturing activity index dropped to minus 11.1 points in November, from a positive 15.7 points in the previous month.

The Empire State Manufacturing Survey index is considered a bellwether of the manufacturing sector which has been a key strength in the economic recovery.

It was the first time the index fell below zero since July 2009, the month after the worst recession in decades was officially declared over.

more:
http://sg.finance.yahoo.com/news/New-York-state-manufacturing-afpsg-2922799344.html?x=0

Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Former CEO of Nation's 10th Largest Bank

Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Former CEO of Nation's 10th Largest Bank

Thursday, November 04, 2010
By Terence P. Jeffrey

http://www.cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathematica


(CNSNews.com) - John Allison, who for two decades served as chairman and CEO of BB&T, the nation's 10th largest bank, told CNSNews.com it is a “mathematical certainty” that the United States government will go bankrupt unless it dramatically changes its fiscal direction.

Allison likened what he sees as the predictable future bankruptcy of the United States to the problems at Fannie Mae and Freddie Mac, whose insolvency he also said was foreseeable to those who studied their business practices and financial situation.

“I think the first thing we have to realize is where we’re going and to face it objectively,” Allison told CNSNews.com, when asked about the trillion-dollar-plus deficits the federal government has run for three straight years, the more than $13 trillion in federal debt, and the $61.9 trillion long-term shortfall the government faces (according to the analysis of the Peter G. Peterson Foundation) if the government is to pay all the benefits it has promised through entitlement programs.

“If you run the numbers, on all those numbers that you just talked about, which I think are accurate, very accurate, in 20 or 25 years, the United States goes bankrupt,” said Allison. “It’s a mathematical certainty.

“It reminds me very much of that story I told you about Freddie Mac and Fannie Mae,” said Allison. “We were running the numbers, and Freddie Mac and Fannie Mae went bankrupt, and we got there. In 20 or 25 years, the United States goes bankrupt.

http://www.cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathematica

Roubini : A presidency heading for a fiscal train wreck

Roubini : A presidency heading for a fiscal train wreck

By Nouriel Roubini

Published: October 28 2010 20:48
Last updated: October 28 2010 20:48

http://www.ft.com/cms/s/0/dd140d16-e2c2-11df-8a58-00144feabdc0.html

What has been the fiscal performance of President Barack Obama? He inherited the worst economic crisis since the Great Depression, as well as a budget deficit that – after much needed bail-outs and a series of reckless tax cuts – was already close to $1,000bn. His stimulus package, together with a backstop of the financial system, low rates and quantitative easing from the Federal Reserve, prevented another depression. Mr Obama also deserves credit that the US, alone among advanced economies, currently supports a “growth now”, rather than an “austerity now” path.

But this is but one half of the picture; we must also judge his first two years on his ability to anticipate what the economy will need tomorrow. Here the picture is much less positive. Given the likely path of fiscal policy after next Tuesday’s election – with the expiration of existing stimulus and transfer payments, and even with most of the 2001-03 tax cuts being kept – the US economy will soon experience serious fiscal drag just when it needs a further boost. Problematically, the administration’s failures leave it relying on the Fed, which is bent on further QE, likely to be announced next Wednesday. But studies show this will have little effect on US growth in 2011, so fiscal policy should be doing some of the lifting to prevent a double dip recession.

 In an ideal world Mr Obama would also have been able to move towards reforming and reducing entitlement spending, with commitments to measures that could be phased in over the next few years, therefore avoiding short-term fiscal pain. He would also have committed to increase, gradually over the next few years, less distortionary taxes such as a VAT and a carbon tax. This would have reduced the fiscal deficit, and created a climate in which no investor would worry about additional stimulus.

http://www.ft.com/cms/s/0/dd140d16-e2c2-11df-8a58-00144feabdc0.html

Nancy Pelosi says that food stamps and unemployment insurance will grow the US economy

Nancy Pelosi says food stamps and unemployment insurance will grow US economy

Nancy Pelosi says that food stamps and unemployment insurance will grow the US economy and lift it from the recession that Barack Obama has helped to worsen. Pelosi, that genius and all-around brilliant analyst of the US economy and everything financial, spoke Wednesday in an overly defensive response to Newt Gingrich’s right-on-the-mark salvo against Pelosi and her Democrat Party. In recent comments, Gingrich correctly advised Republicans to make a contrast between Democrats who promote food stamps as their economic policy, and Republicans who actually promote the useful concept called paychecks to grow the prosperity of Americans. Confusingly, Pelosi reacted to Gingrich’s assertion by actually admitting that, yes, Democrats are indeed the party of food stamps (okay, and unemployment for everyone, too)!

http://www.examiner.com/american-politics-in-vancouver/nancy-pelosi-says-food-stamps-and-unemployment-insurance-will-grow-us-economy

Pat Buchanan: Food Stamp Nation

Pat Buchanan: Food Stamp Nation

Posted: October 07, 2010
8:50 pm Eastern © 2010

http://www.wnd.com/index.php?fa=PAGE.view&pageId=212741

"The lessons of history ... show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit."

These searing words about Depression-era welfare are from Franklin Roosevelt's 1935 State of the Union Address. FDR feared this self-reliant people might come to depend permanently upon government for the necessities of their daily lives. Like narcotics, such a dependency would destroy the fiber and spirit of the nation.

What brings his words to mind is news that 41.8 million Americans are on food stamps, and the White House estimates 43 million will soon be getting food stamps every month.

A seventh of the nation cannot even feed itself.

full story: http://www.wnd.com/index.php?fa=PAGE.view&pageId=212741

Goldman Sachs Says U.S. Economy May Be `Fairly Bad'

Goldman Sachs Says U.S. Economy May Be `Fairly Bad'

Goldman Sachs Group Inc. said the U.S. economy is likely to be “fairly bad” or “very bad” over the next six to nine months.


“We see two main scenarios,” analysts led by Jan Hatzius, the New York-based chief U.S. economist at the company, wrote in an e-mail to clients. “A fairly bad one in which the economy grows at a 1 1/2 percent to 2 percent rate through the middle of next year and the unemployment rate rises moderately to 10 percent, and a very bad one in which the economy returns to an outright recession.”

http://www.bloomberg.com/news/2010-10-06/oldman-sachs-says-u-s-economy-to-be-fairly-bad-recession-is-possible.html

Food Stamp Recipients at Record 41.8 Million Americans in July, U.S. Says

Food Stamp Recipients at Record 41.8 Million Americans in July, U.S. Says

The number of Americans receiving food stamps rose to a record 41.8 million in July as the jobless rate hovered near a 27-year high, the government said.

http://www.bloomberg.com/news/2010-10-05/food-stamp-recipients-at-record-41-8-million-americans-in-july-u-s-says.html

Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 18 percent from a year earlier and increased 1.4 percent from June, the U.S. Department of Agriculture said today in a statement on its website. Participation has set records for 20 straight months.

Unemployment in September may have reached 9.7 percent, according to a Bloomberg News survey of analysts in advance of the release of last month’s rate on Oct. 8. Unemployment was 9.6 percent in July, near levels last seen in 1983.

http://www.bloomberg.com/news/2010-10-05/food-stamp-recipients-at-record-41-8-million-americans-in-july-u-s-says.html

New York state residents first full-year decline in income in more than 70 years

New York state residents first full-year decline in income in more than 70 years

The recession put a 3.1 percent dent in the personal incomes of New York state residents, who endured their first full-year decline in more than 70 years, according to a report released Tuesday.

http://www.cnbc.com/id/39531849/

Paychecks or net earnings tumbled 5.4 percent, while dividends, interest and rent slid 8.4 percent, to a grand total of nearly $908 billion, the state comptroller's report said.

Not only did New Yorkers' personal incomes fall "almost twice" as much as they did in the nation as a whole, but they have yet to recover to pre-recession levels, Comptroller Thomas DiNapoli said.

The drop occurred even though the job-destroying recession was milder in New York than in the rest of the country.

http://www.cnbc.com/id/39531849/

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.”

more:
http://www.bloomberg.com/news/2010-09-25/-black-swan-author-taleb-says-obama-s-stimulus-made-economic-crisis-worse.html

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.

http://www.omaha.com/article/20100924/MONEY/709249917

“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.”

http://www.omaha.com/article/20100924/MONEY/709249917

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

http://www.cnbc.com/id/38986777

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.

more:
http://www.cnbc.com/id/38986777

Dow Logs Worst August in 9 Years

Dow Logs Worst August in 9 Years

By JONATHAN CHENG And KRISTINA PETERSON

http://online.wsj.com/article/SB10001424052748703467004575463152437588596.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

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.

read more:
http://online.wsj.com/article/SB10001424052748703467004575463152437588596.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

Economy Caught in Depression, Not Recession

Economy Caught in Depression, Not Recession

Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.

http://www.cnbc.com/id/38831550

Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response."

"Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he said.

The 1929-33 recession saw six quarterly bounces in GDP with an average gain of 8 percent, sending the stock market to a 50 percent rally in early 1930 as investors thought the worst had passed.

"False premise," Rosenberg said. "And guess what? We may well be reliving history here. If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3%."

more:
http://www.cnbc.com/id/38831550