Out of Control Policy Blog

Weekly Economic News Digest

Some stories you should be reading that might have slipped through the cracks:

  • Difference of opinion: Bernanke says economy will grow later in 2009, Roubini thinks we're headed for 10% unemployment--or could both happen?
  • Defending secondary markets: firms and individuals that have bought distressed assets are not immoral for getting the best price they can. These are real markets that investors have confidence in before they buy, otherwise, why purchase and asset if you don't think you'll have a market to sell it too later?
  • It's not just American auto firms struggling, the industry is down all around in the wake of an Auto Bubble bursting over the past 18 months, resulting in rippling effects through out the market. This is perhaps another problem with the cheap credit that was available the past few years, more people who did not need to, bought new cars. Toyota down 41.9%, GM down 33.2%, Ford down 31.6% (all year-over-year). And, as a side note Ford has gain market share on Toyota for the first time in two years.
  • Warren Buffet sees the housing market stabilizing, but consumer spending still perilous.
  • There might be another scandal at AIG. Reportedly AIG paid a PR firm to attack its critics with bailout money. While inexcusable if true, this is the kind of thing that happens with bailout money, where politics get involved with nitty gritty business decisions like public relations campaigns to attack rivals and critics. On the other hand, as Noam Scheiber points out in this post, AIG has a right to try and defend its image, and if they have received bailout money it's hard for them to do that without dealing with this kind of criticism.
If you find this information to be interesting/helpful please let us know in the comments or via email.

Anthony Randazzo is Director of Economic Research


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