My Comment: From my previous posts on this blog, it’s clear I’m critical of the stimulus program. This article and many others articles on the subject point out the obvious, the expectations for job creation due to stimulus aren’t being met. This is a nice article from the AP.
By BRETT J. BLACKLEDGE and MATT APUZZO – 2 hours ago
WASHINGTON — An early progress report on President Barack Obama’s economic recovery plan overstates by thousands the number of jobs created or saved through the stimulus program, a mistake that White House officials promise will be corrected in future reports. Continue reading
My Comment: I’m sick of hearing about bank stress tests. It’s a joke and the Government has mismanaged this from the beginning. First the Government couldn’t decide if they were going to publish the results. Now, they say they will publish the results and that no bank will fail the test. So is this a case of participation alone gets you a gold star? The public and investors are supposed to feel good about a transparent “stress test” that no bank fails.
In my opinion, the results should not be published. The Government will have the ability to pick and choose which banks win and lose from the stress test, by publishing which banks are healthy than the others. Another potential problem is how much data is the Government going to release; just the score or a detailed report. If the release is skinny on details, I suspect investors will view this as a bad sign, because the government is trying to hide just how bad the results are.
Bank bailout plan’s ‘stress tests’ already causing stress
By Jennifer Ablan and Daniel Burns
NEW YORK (Reuters) – The U.S. economy is in for a “lasting slowdown” and could face a Japanese-style period of relatively low growth with the added problem of high inflation, billionaire investor George Soros said on Monday.
By Nassim Nicholas Taleb
1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.
2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.
My Comment: TARP budget analysts raised their estimates (net) of the cost to taxpayers to $356 from $167. We are just getting started, the number will continue to go up. TARP may need another round of funding.