Last Friday’s unemployment numbers, on the surface at least, appeared to reflect a growing, albeit slowly, economy. The number of new unemployment claims for the week ending January 14th dropped to 352,000, down from 402,000 the previous week, and down from 415,000 a year ago. The four-week moving average also dropped, from 382,500 to 379,000.
After 131 years, it appears that Eastman Kodak will be declaring Chapter 11 bankruptcy before the end of the month, according to the Wall Street Journal. It is currently seeking to sell off some of its 10,000 patents in order to stave off the inevitable, but the company is burning through its remaining cash reserves and credit lines rapidly. The last time Kodak was profitable was 2007 when its stock traded at $30 a share. On Friday, its last trade was at $0.37 a share. It’s in the process of being de-listed from the New York Stock Exchange, and Moody’s has downgraded the company’s credit to junk status.
The Washington Post’s editorial celebrating the ending of ethanol subsidies iterated the same free-market positions taken by Rep. Ron Paul (R-Texas) and other Austrian school economists about those subsidies. Calling the 45-cent-per-gallon tax credit supporting U.S. corn-based ethanol production and the 54-cent-per-gallon tariff on imported ethanol “two of the most wasteful subsidies ever to clutter the Internal Revenue Code,” the Post estimated that ending those subsidies will save the U.S. taxpayer approximately $6 billion this year.
With the latest announcement of its sale of 16 newspapers, the New York Times continues to sell off assets to stay alive. The sale of its papers in Florida, South Carolina, and California is expected to generate a much-needed capital insertion of about $150 million, less than was expected. Those newspapers’ revenues had been steadily declining, falling another 7 percent for the first nine months of the year.
As central banks around the world unleashed a coordinated deluge of new money to deal with the economic crisis swamping Europe, critics expressed outrage that the Federal Reserve System — and all holders of U.S. dollars by extension — would be bailing out profligate European governments and the troubled euro currency. And furious American lawmakers are again demanding congressional oversight of the Fed and a restoration of sound money.
The Federal Reserve Bank and five other central banks across the world cut the "temporary U.S. dollar liquidity swap arrangements" rate for central bank borrowing nearly in half, from just over 1.00 percent to a bit more than 0.50 percent, according to a November 30 Federal Reserve Bank press release. Stock and commodities markets rallied all day with the news, with the Dow Jones Industrial Index gaining 490 points on the day.
It remains unclear exactly why or how the Gadhafi regime went from “a model” and an “important ally” to the next target for regime change in a period of just a few years. But after claims of “genocide” as the justification for NATO intervention were disputed by experts, several other theories have been floated.
When Bank of America announced that it was moving its derivatives-laden portfolio at its subsidiary Merrill Lynch over to its bank holding company, it said it was merely responding to pressure from some of its partners to take advantage of the holding company’s higher credit rating. It would also reduce the need for the bank to post an additional $3.3 billion in collateral because of the recent downgrade it suffered at the hands of Moody’s last month.
The U.S. economy added 103,000 new jobs in September with the unemployment rate holding steady at 9.1 percent, the U.S. Bureau of Labor Statistics (BLS) reported October 7. Most U.S. stock indexes rallied on the news in the early morning hours of the announcement, as the job growth was better than expected and stronger than the average of the past three months.
Federal Reserve Open Market Committee Chairman Ben Bernanke's told the congressional Joint Economic Committee of Congress October 4 that he has the remedy for the ailing economic recovery he admits is "close to faltering": More of the same deficit spending, monetary stimulus, and work to re-inflate the housing bubble.
Americans have invested in homes in many ways for a long time. During the frontier days of the West, families would homestead property and so through grit and endless work transform a patch of prairie into a home, a barn, a farm, and an investment. Federal policies have gutted much of that wealth. Environmental regulations have interfered with the sensible activities of farmers (as if Big Government had a greater long term interest in the preservation of the land than those who lived and worked on it). Farm subsidies, beginning with the disastrous New Deal, contorted rational economic decision-making by farmers and induced them instead to enter the Never-Never Land of government subsidies, so that in Iowa — a politically potent state because of its early role in the primaries — the wasteful use of corn to produce ethanol is still sacrosanct. Federal estate taxes, too, have forced families to sell farms which their grandfathers intended to remain in the family forever.