Some Economic Notes

Has everyone noticed....companies everywhere are cutting back but governments just see a need to tax more, to make up the difference! This will be a huge factor in keeping this economy from getting back on its feet.

I thought we had stabilized the banks! Even this mainstream news source is noting that its not adding up.

Bernanke Urges ‘Strong Measures’ to Stabilize Banks (Update7)

By Craig Torres
Jan. 13 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke warned that a fiscal stimulus won’t be enough to spur an economic recovery and that the government may need to buy or guarantee banks’ tainted assets to revive growth.

“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke said in a speech today at the London School of Economics. “More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.”

Bernanke’s remarks indicate he may be seeking to influence deliberations among lawmakers and President-elect Barack Obama’s economic aides on how to deploy the next $350 billion of the financial-rescue fund approved in October. While some Democrats have focused on offering aid to troubled homeowners, the Fed chief’s comments show he’s more concerned about a continued choking off of credit to companies and households.

Bernanke “is waking up to the reality that it is worse than he thought,” said Janet Tavakoli, president and founder of Tavakoli Structured Finance in Chicago. “We don’t have any investment banks that are doing just fine. The whole situation is very tenuous.”...

As trouble breaks out no one has the money anymore to plug the dam with. Even Saudi Arabia will have a deficit this year. So who will buy our debt to allow Obama Nation to continue the spending spree?

Capitalism Freezes in Worldwide Winter of Discontent (Update2)
By James G. Neuger

Jan. 12 (Bloomberg) -- As capitalism staggers through its first globalized economic crisis, the costs won’t be measured only in dollars and cents.
From newly rich Russia to eternally impoverished sub- Saharan Africa, social strains are threatening the established political order, putting some countries’ very survival at risk.

In the past month, Nigerian rebels threatened renewed warfare against foreign oil producers, Russia sent riot police from Moscow to quell an anti-tax protest in Siberia and China’s communist leadership warned of social agitation as the 20th anniversary of the Tiananmen Square massacre looms.

The disillusionment and spillover effects of the global recession “are not only likely to spark existing conflicts in the world and fuel terrorism, but also jeopardize global security in general,” says Louis Michel, 61, the European Union’s development aid commissioner in Brussels....