economic stimulus posts
FeedPosted Mar 5th 2011 3:10PM by Joseph Lazzaro (RSS feed)
Filed under: Good news, Economic Data, Federal Reserve, Recession
This past week's data point of significance for investors has to be the February nonfarm payroll report by the U.S. Department of Labor, which indicated that the U.S. economy created 192,000 jobs last month -- roughly in-line with the consensus estimate.
The good news was complemented by the fact that January's job gain was revised up to 63,000 from 36,000 and December's to 152,000 from 121,000. January's low job tally was probably skewed lower by the winter blizzards and storms that hit the Northeast and Midwest; hence, it's safe to say that the economy is creating jobs. What it needs now is sustained demand to drive GDP growth, which will lead to stronger job growth.
Continue reading Ray of Light: U.S. Private Sector Hiring Increases
Posted Nov 20th 2010 10:30AM by Ted Allrich (RSS feed)
Filed under: Comfort Zone Investing, Federal Reserve, Currency
Most good deeds never go unpunished. That's certainly the case for the latest effort from the Federal Reserve (the Fed). It wants to pump $600 billion into the economy to keep interest rates low and spur growth. It's called quantitative easing (QE). Unfortunately, that's not how investors are interpreting its latest move. They're seeing it as yet another failed, inflationary, dollar degrading stunt that won't do anyone any good.
As you may remember, the Fed has already injected quite a bit of money into the system through the QE1 program. That was announced back in November of 2008. The Fed declared it would purchase direct obligations of housing-related government sponsored enterprises (GSEs) -- Fannie Mae, Freddie Mac and the Federal Home Loan Banks -- and mortgage backed securities (MBS) backed by Fannie, Freddie and Ginnie Mae. Purchases of up to $100 billion in GSE direct obligations through the Fed's primary dealers (big Wall Street firms and banks) through competitive auctions. Purchases of up to $500 billion in MBS by asset managers selected by a competitive process. Buying to begin by year-end, 2008, and expected to last for several quarters.
Continue reading Comfort Zone Investing: The QE2 Is Sinking
Posted Dec 28th 2009 3:00PM by Sheldon Liber (RSS feed)
Filed under: International Markets, Bad News, Rants and Raves, Middle East, Scandals, Economic Data, Politics, Serious Money, Recession, Financial Crisis
Best wishes to all and, next to world peace among people, we should hope for the same among world markets.
I have let some time pass before commenting on a recent example of how fragile a world we live in. This past year through a time of greater economic danger, fear and volatility than most of us has experienced in a life time, many people cannot fathom how close we came to the edge of Hades.
Continue reading Serious Money: Dubai Vaporizes $48 Trillion
Posted Oct 7th 2009 11:00AM by Mark Fightmaster (RSS feed)
Filed under: Target Corp. (TGT)
On Tuesday, discount retailer Target (NYSE: TGT) announced that it is going to do its best to stimulate the job market. The company announced that it will open 26 new stores, which will lead to 5,000 new jobs. These stores are set to open on October 11, and a majority of the stores will be of the general merchandise variety, with five of them full-grocery SuperTarget stores.
Target is making this move as the company is facing a tough market. A week ago, UBS cut the stock from "neutral" to "buy," citing a "tarnished image" for the retailer. Target saw quarterly profit fall for an eighth straight quarter after reporting a second-quarter drop. In addition, Target saw same-store sales fall 6.2%.
Continue reading Target opening new stores, creating new jobs
Posted Jul 10th 2009 5:20PM by Tom Johansmeyer (RSS feed)
Filed under: Recession, Financial Crisis
There are two competing positions on consumer sentiment right now. One is that it turned south last week, as people worried about their jobs – always a bad sign for spending. The other is that consumer sentiment didn't crap out in July: it fizzled in May. So, it's not a question of whether consumers aren't confident in the U.S. economic machine, it's just a matter of when the collective mood changed.
The July camp is set up around the Reuters/University of Michigan Surveys of Consumers, which makes now the weakest point for consumer sentiment since March. Those who favor May look to domestic demand for foreign goods, which went soft two months ago, bringing the monthly trade deficit to its narrowest since 1999. The U.S. trade gap unexpectedly tightened to $26 billion in May, with exports up 1.6% and imports down 0.6%, according to the U.S. Department of Commerce.
Continue reading Consumer sentiment down, according to everyone
Posted Feb 13th 2009 10:45AM by Peter Cohan (RSS feed)
Filed under: Politics, Recession
You might have thought that the cost of the stimulus package about to be signed into law was $789.5 billion, but it looks like the total bill for taxpayers -- the numbers detailed below exclude all the infrastructure investment -- must be much bigger.
That's because the subset of the total package that goes to consumers adds up to $42.8 billion on top of that total headline number, or $832.3 billion by my calculation. So there is either something wrong with the $789.5 billion figure, which is being highlighted in the media, or the cost estimates for the components are being calculated differently than the top-line number.
Continue reading Your share of $832.3 billion in taxpayer money
Posted Jan 26th 2009 9:45AM by Peter Cohan (RSS feed)
Filed under: Employees, Economic Data, Financial Crisis
If you work in an organization, it looks like you'll be a big fat target for your headcount-cut-hungry bosses this year. That's because the economy is contracting fast -- many expect GDP to have slumped 5.4% in the fourth quarter of 2008. And those economists see GDP shrinking 4% this year. That means job losses not seen since 1982 (as I posted last week, these forces led to 40,000 layoffs on one day earlier this month).
How bad? The National Association for Business Economics (NABE) surveyed 105 corporate economists between December 17 and January 8 and found that 84% of them expect their employers to either cut significantly or make no change in its headcount. Specifically, the surveyed companies had the following to say:
These forecasters are reporting customer demand dropping, capital spending reductions and shrinking profit margins. These reports are symptoms of a deflationary spiral which, as I posted, works as follows:
Continue reading Will you lose your job in 2009?
Posted Jan 19th 2009 4:30PM by Jonathan Berr (RSS feed)
Filed under: Economic Data, Politics, Housing

Like all good marriages, the union of Barack Obama and the American people will start tomorrow with the best of intentions. The problem is that it won't last, particularly when it comes to the economy.
The president-elect already is at odds with House Speaker Nancy Pelosi over whether to repeal the Bush tax cuts before they expire in 2010, according to the
Wall Street Journal. The economic stimulus package is expected to top
$850 billion as part of Obama's pledge to create jobs and reducing taxes. Meanwhile, the housing market continues to stink and the stock market continues to be dreadful.
Improving the economy is going to be a long, painful process. Think turning around a super-tanker and you get the idea. Good news is going to be hard to come by over the next 12 months. Bad news will be plentiful. Here are some predictions of the troubles that lie ahead for the economy no matter despite Obama's best intentions.
- Corporate bankruptcies -- Experts are predicting one of the biggest waves of corporate bankruptcies and restructurings in years. Already, Circuit City Stores Inc. (OTC: CCTYQ) has bitten the dust and the year is just getting started. Loads of retailers who are already operating on the razor's edge of profitability may be pushed over the edge. I doubt that enough credit will be unlocked by government fiat to address this problem.
Continue reading My predictions for Obama's first year
Posted Jan 19th 2009 12:37PM by Jonathan Berr (RSS feed)
Filed under: Scandals, Economic Data, Recession

The honeymoon between President-elect Barack Obama and the American people may end about the time crews finish cleaning up from tomorrow's inauguration festivities. For now, the American people and Congress are willing to cut the charismatic politician some slack, especially when it comes to his troubled nominee for Treasury Secretary.
Priority number one for the first African-American leader of the free world is the U.S. economy. It's more important than the war in Gaza, more important than education and more important than the fight against terrorism. The U.S. economy is in its worst shape since the early 1980s. If the slump, which has already lasted 12 months, lingers for more than 16 months than it will equal the Great Depression,
according to Reuters.
Obama is well aware of the challenges that lie ahead.
CNN reports that he is planning to meet with his top aides Wednesday "to map out how to step up his personal lobbying efforts to get Congress to pass his stimulus plan, which has a price tag of $825 billion."
Continue reading Should Congress let Obama's Treasury pick slide on taxes?
Posted Nov 22nd 2008 11:10AM by Peter Cohan (RSS feed)
Filed under: Employees, Economic Data, Politics
President-elect Obama wants his economic team to develop a plan to create 2.5 million jobs by January 2011. Such a plan has the virtue of providing a specific goal -- and with 1.2 million jobs lost so far this year and more on the way, such a goal would more than offset the lost jobs.
But setting the goal and achieving it are two different things. In the next two months, Obama's economic team -- which will reportedly be announced on Monday -- will need to flesh out the details of a strategy to achieve this goal. And these details will involve using government money to rebuild roads and bridges, upgrade schools and build wind farms and alternative energy technologies.
If Obama is to achieve his goal, he will need to get legislation passed soon after he takes the oath of office. And the legislation will need to provide concrete answers to many questions: Which projects will the government invest in? How many jobs will the projects produce? How much money will be required to finance these projects? Where will the money come from? What profits will these projects generate? How soon will the government get its investment paid back? How much economic growth will these projects create?
I think Obama is certainly focusing on an important priority here. And I look forward to seeing his administration's answers to these questions over the next few months.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
Posted Sep 10th 2008 12:45PM by Jonathan Berr (RSS feed)
Filed under: Economic Data, Politics, Federal Reserve, Recession

Democratic presidential candidate Barack Obama, who has made the economy a focal point in his campaign, is
slipping in the polls as the popularity of opponent John McCain surged after his selection of the Alaska Gov. Sarah Palin as his running-mate.
Now Obama and his supporters are hoping that their support for a
second economic stimulus -- worth about $50 billion -- will grab the attention of voters fascinated by Palin, the moose-hunting hockey mom conservative firebrand. That's going to be a challenge.
Voters now are focused on Palin. They are gobbling up every detail about her life -- The Bridge to Nowhere (which she actually supported for a while), her baby with Down's Syndrome, her pregnant teenage daughter, whether she wanted to ban books from the local library. The list is endless. The McCain campaign is fueling interest in "Sarah Barracuda" by keeping her away from the media. This week, Palin is supposed to sit down with Charlie Gibson of
ABC News. More interviews will follow though apparently
not with Oprah Winfrey.
Democrats, including this one, are betting that once Palin is no longer the flavor of the week voters will move onto more pressing issues such as the economy (and, of course, "American Idol"). The economy is in terrible shape. The federal budget deficit is soaring and unemployment is at record levels. Former Treasury Secretary Larry Summers endorsed the second stimulus plan today in testimony before Congress.
Continue reading Will a second economic stimulus revive Obama's campaign?
Posted Aug 1st 2008 12:10PM by Jonathan Berr (RSS feed)
Filed under: Other Issues, Conventions and Conferences, Politics, Recession
Congressional Democrats, including Sen. Robert Byrd, D-W.Va, are
pushing for the enactment of a second economic stimulus bill worth $24 billion, including a $6 billion lifeline for the beleaguered auto industry. Odds of it passing in a presidential election year are slim to none.
Democrats, though, are giving the people what they want. Regardless of whether it's a good idea or not, it's fantastic politics. Democrats can prove to voters, who are fed up with the lousy economy, that they "feel their pain," leaving aside the debate of whether it's needed.
That explains why House Speaker Nancy Pelosi, D-Calif., says that the second stimulus bill will need to have bipartisan support -- as the first one got -- because it is vital for the economy. Like the first economic stimulus plan, Byrd's bill will be temporary, targeted and provide disaster relief, according to
CQ Politics.com.
"The Speaker earlier had vowed to enact a second measure, totaling at least $50 billion, before Congress leaves this year," the website says. "But the president and congressional Republicans have been less enthusiastic about the idea, repeatedly arguing that lawmakers should wait to assess the impact of the tax rebates and other incentives enacted in February."
Continue reading Do we need a second economic stimulus bill?
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