Go give your two cents
If you’re free tomorrow at 5 p.m., head over to the other hill for “The Great Financial Crisis: What Caused it? What is Next?” in Call Auditorium in Kennedy Hall.
Robert Kuttner (Co-Editor of The American Prospect; Senior Fellow at Demos), Barry Eichengreen (Professor, University of California, Berkeley), and Eswar Prasad (Professor, Cornell University; Senior Fellow, Brookings Institution) will participate in the debate and address necessary reforms and consequences of the current recession.
For more information, follow this link.
The Wall Street Journal explains why this summer was a bore
The summer of 2009 was the summer when nothing positive happened. The stock market went up but it didn’t help the economy. The classic bear market “sucker rally,” which lifted stocks by 50%, still left the Dow 5,000 points short of its all time high. In other words, those who had lost 53% of their life’s savings had now only lost 38%. Golly! Pass me another Dos Equis! Toxic assets were still on the books, mortgage refinancings slowed to a trickle, no one could get a loan to start a business. Housing starts remained at apocalyptic lows, people kept getting laid off, people kept getting furloughed. The press kept writing stories about people getting laid off and furloughed. Then journalists started getting laid off, and those that had not been laid off started writing stories about how journalists getting laid off—or furloughed—was hurting the economy because now there would be even fewer people to write stories about people who had been laid off. Or furloughed.
Read the rest (not about the economy) here.
Money talks
You don’t have to know with certainty what’s right and what’s wrong, but you can know what’s stupid. … Taxing bonuses at AIG is stupid. Anything that Congress passes in a short period of time is pretty much stupid.
-Adam Davidson, business and economics reporter at NPR
at the Nieman Conference on Narrative Journalism
on writing about business
Everything you ever wanted to know about how you are so not getting a job after graduation
Remember back in October when economists were saying we should prepare for a possible 7.1% unemployment rate by the time May graduation dates roll around? Well, in January the U.S. unemployment rate rose from an already-higher-than-that 7.2% to 7.6%. The highest cuts? The finance industry - not so surprising - Citigroup alone laid off 50,000 workers.
So where are the jobs? Seems like chemicals and pharmaceuticals are the way to go (too bad I almost failed chemistry in 10th grade) and according to sources like Forbes, Businessweek and HRWorld, anyone looking for a quick career-path change should look to technology, healthcare, education and … administrative assistant? Well, if anyone goes for the latter, I could use someone to remind me to blog more often.
Check out WSJ.com for a detailed breakdown of the biggest layoffs by industry sent to me by the last person who reminded me to blog more often. Seriously, go look at it, it’s really cool.
The man, the legend, the interview: Warren Buffett
Magically, a transcription of a PBS Nightly Business Report interview with Warren Buffett ended up in my inbox and I thought it would be a great place to pull a catchy quote for a Money Talks post (which is basically my cop out when I have nothing else to write about). But halfway through the interview I realized it was way to good to pick and choose. Buffett - CEO of Berkshire Hathaway, worth about $60 billion (pre-economic collapse), and widely considered to be one of the smartest investors in the world - is truly an amazing guy.
For someone who’s life you would think revolves largely around money, he is, afterall, an investor by title, he seems so unphased by the economic climate right now.
A PBS reporter interviewed Buffett as a part of the Nightly Business Report’s 30-year anniversary special about his talks with President Obama, his optimism for the economy in the long run, and how he hasn’t altered his investing strategies since 1949, or maybe ‘50 (no, he will NOT give you investing recommendations, even if the reporter begs, which she does)
Here’s a quote to satisfy those of you who don’t like to read, the majority of the interview after the jump for those of you in the middle, and for anyone who wants the whole beast - post a comment and I’ll e-mail you the full interview.
Well the most important thing to fix right now is the economy. We have a business slowdown particularly after October 1st it was sort of on a glide path downward up til roughly October 1st and then it went into a real nosedive. In fact in September I said we were in an economic Pearl Harbor and I’ve never used that phrase before.
- Warren Buffett,
CEO, Berkshire Hathaway,
inventing new phrases.
Finally, something you can’t blame on our generation
It’s not exactly news that the economy is a little sub par right now or how it’s affecting consumers (that’s the name the financially stable policy makers use for the lowly public) - but The New York Times published an article on Saturday about debtors that are even deeper in debt during this recession than previous recessions … there are a whole lot more of them. The downturn economy is affecting people even harder this time around than usual - maybe because it’s hitting on all fronts (housing prices are down, incomes are down, jobs are down, lending is almost nonexistent) but I think it’s also because people in 2008 just live differently than people did during some of the last deep recessions (like in the early 1980s when Congress reacted to failing banks by deregulating them and loosening lending restrictions … good idea, guys).
I know, I know, I’ve said this a million times but people just don’t save as much anymore - even the idea of saving has transformed into the idea of investing. I’m not saying I know much about the stock market yet, I don’t have any investments, but I do know that the people who have made out best coming out of the financial crisis are people who have CASH. According to Bankrate.com, in 1985 Americans saved 11.1% of their income, in 2005 that rate slipped to -.5%, the first time since the Great Depression that it dropped below zero, and it’s pretty much stayed down there ever since.
Relief for the Mom & Pops
… and so do I. But specifically, small business. Think about it - how much nicer would the world be if there was a Mom & Pop’s convenience store around every corner instead of a 7-11, at least the coffee would probably be better.
It’s easy to assume small biz are the are the ones getting hurt the most by the economy since 1) consumer spending is down 2) they can’t get the capital they need to survive and 3) life’s hard.
BUT (of course there’s a but), while established business may be having a hard time, it’s not necessarily a bad time to start a new one, seriously. Companies like McDonald’s, Johnson & Johnson and even Microsoft were all started during a recession. There are a number of reasons: customer loyalty is obsolete (so you’re more likely to attract customers/clients), competitors are weakened (leaving the door wide open for you) and capital (like land and labor, not so much the money, you need to actually have that yourself) are more readily available - and for less.
Local banks survive the storm
It seems local banks are holding their own during the (crazy, out of this world, worse than anything we’ve ever seen, economic mess that’s slowly trickling down to every other aspect of our lives of a) financial crisis.
In last week’s Ithaca Business Journal, Laurie Linn did a Q&A with Greg Hartz, president of the Tompkins Trust Company, and Steve Romaine, president of Tompkins Financial Corporation. She asked Romaine if there was a difference between big banks and community banks in the economic crisis and he basically said that local banks are fairing much better because they have a connection to the community and would never get caught up in something so greedy and evil risky as subprime lending.
Tristram Coffin, CEO of Alternatives Federal Credit Union, posted a letter to members on the union’s Web site that basically said they’re the good guys. The money you give them stays local so you know it’s not being sold off in securities - they take pride in the fact that they have relationships with the people they deal with.
You know what, I believe the boys. Back in August when I was just-moved-back-to-school broke, I saw the beauty of the trustworthy local bank. I have an HSBC checking account, I’ve had one for four years now and have never overdrawn it - expect once - back in August. So I overdraw like, $2. And when I realize I did, I go directly to the bank with $2,000 check to deposit (basically all the money I planned to spend for the school year - I move it from my savings to my checking so I’m limited to that amount throughout the year). So far, so good. But, I needed to take back $50 (when I say need I mean my gas tank was on empty, my car was parked at an expired meter and i had no cash whatsoever). They couldn’t let me do it since I had an outstanding overdraft fee! So I had to walk a couple blocks away to Tompkins Trust Company where they cashed my check and then I had to walk back through town with $2,000 cash to deposit $1,950 of it into my HSBC account. Insanity. But thanks Tompkins Trust Company.
There have got to be some other perks out there. Readers, are there any? (perks I mean, not readers. I know you’re there …. somwhere …. silent.)
See an excerpt from the Business Journal article and the Alternatives Web site after the jump.
Consumed by Consuming?
Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole. How’s that for a book title? A little dramatic? Yes. Completely true? I think it might be.
I recently read this book by Benjamin Barber about how our capitalist society has turned citizens solely into consumers and how a society of consumers is empowering the corporate world to actually manufacture our needs. To be fair, most of the students I know who have read this book found serious faults in Barber’s argument and in general, just didn’t enjoy the book. It was hard to get through (there are 91 citations in the first chapter) but I totally bought his point (pun intended, haha).
I’m not necessarily recommending anyone read his whole book because it was a little painful, but check out the excerpts below and follow the link to a video clip and take his message into consideration - YOU DON’T NEED HALF OF THE THINGS YOU ARE BUYING!
While you’re watching/reading, take this into consideration: In his last book, Jihad vs. McWorld, Barber predicted that religious extremists in other parts of the world would soon feel so trapped by the West’s intrusion into their cultures that they would be forced to retaliate violently (read: 9/11). He’s a regular Nostradamus.
Money talks
I don’t know why we’re not holding criminal charges against these people. They’ve done more to hurt the nation than Bin Laden could ever dream of.
- Robert Scheer,
Editor in Chief, Truthdig.com, a political blog,
on Henry Paulson, Secretary of the Treasury, and friends.
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