Rick Newman
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Why It's Taking So Long To Fix the Economy
Continue reading… 41 CommentsNobody wants to listen to Ben Bernanke - even though the Federal Reserve Chairman has been a pretty effective soothsayer.
Last fall, he famously predicted catastrophe if the government didn’t step in to help stabilize panicky financial markets. That was on the mark: Even with more than $2 trillion worth of government intervention since then, the economy is in tatters.
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7 Other Stress Tests We Ought To Run
Continue reading… 1 CommentPlanning for a worst-case scenario is hardly a novel idea. But it became so unpopular for awhile that President Obama has now rechristened it a “stress test” and shaken up Wall Street as if they never heard of such a thing.
By forcing banks to simulate how they’d perform under a couple of gloomy scenarios, the government hopes to identify who’s likely to need help over the next six months, and roughly how much. You can quibble with the details, but the idea is such a no-brainer we should apply it to a lot of others besides banks. Here are my nominations:
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How AIG and Citi Will Look In a Year
Continue reading… 40 CommentsAt least one thing is clear about the financial meltdown: We know who the poster children are.
Lehman Brothers and Bear Stearns had their dramatic flameouts, but at this point we’ve survived their demise. Big banks like Wachovia and Washington Mutual wiped out shareholders when they failed, but the financial system managed to absorb the remnants. Dozens of lesser bank failures have seemed minor, by comparison.
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Why Bank Nationalization Is So Scary
Continue reading… 165 CommentsScan the headlines, and you’d think it’s a no-brainer: The government takes over the most troubled banks, whips them back into shape, then returns them to the private sector in a few years. Problem solved.
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10 Ways To Survive Without a Bailout
Continue reading… 33 CommentsIf you haven’t qualified for a bailout by now, your chances are sinking fast. Washington has spent just about all the money it can stomach for awhile and done its best to give something to everybody. If you’re not in a line for a tax cut or housing rebate or mortgage modification or green-energy job, you may have little choice but to wait for the next financial meltdown.
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Could China Buy An American Carmaker?
Continue reading… 9 CommentsWith sales plunging and the auto industry in a tailspin, it’s a great time to get a deal on a car. But think big: For a few extra bucks, you might be able to buy the whole company.
Here’s the list of carmakers on the block:
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A Plea to Give GM Another Chance
Continue reading… 18 CommentsGeneral Motors is reeling. America's biggest automaker is bleeding cash and asking for up to $37 billion in emergency federal loans to avert bankruptcy. Many Americans feel the feds should simply pull the plug. But in Why GM Matters: Inside the Race to Transform an American Icon, financial journalist William Holstein argues that GM deserves the chance to turn itself around. I spoke with him about GM's current condition, the beleaguered U.S. auto industry, and Toyota's vulnerabilities. Excerpts:
You argue that GM is vital to the U.S. economy. Explain why. GM is the backbone of our industrial economy. There are all sorts of linkages into the high-tech sector. It's the largest private sector purchaser of information technology in the country. It's a huge player in logistics. It spends hundreds of millions on advertising and marketing, and part of that supports the sports world. Including its suppliers, GM represents 1 percent of the nation's GDP.
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9 Bailout Surprises From GM and Chrysler
Continue reading… 32 CommentsBack in December, economist Mark Zandi of Moody’s Economy.com told Congress that bailing out the Detroit automakers could ultimately cost $75 billion to $125 billion. So when GM and Chrysler asked for a mere $17.4 billion late last year, it seemed like a bargain.
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How To Tell When The Economy’s Getting Better
Continue reading… 44 Comments
The New York Stock Exchange
(Charlie Archambault for USN&WR)President Obama has finally signed the stimulus bill. He has also promised a tough new bank-rescue plan to boost lending and limit outrageous pay. Troubled homeowners may even get some relief. All told, the government could spend more than $3 trillion to help end the recession.
So now all we have to do is sit back and watch the economy grow like a beanstalk, right?
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Claire's: Comfortable With Its Financial Condition
Continue reading… 50 CommentsIn response to my recent story, "15 Companies That Might Not Survive 2009," Claire's Stores had this to say:
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4 Myths About the Obama-Geithner Bailout Plan
Continue reading… 99 CommentsSo far, it's an epic disappointment. Treasury Secretary Tim Geithner has pledged to harness the "full force of the U.S. government" to stabilize the financial system and set the stage for an economic recovery. The ultimate cost could be $2.5 trillion, a number so big that many Americans couldn't tell you how many zeroes it entails.
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Why Geithner’s Graveyard Touch Might Be Healthy
Continue reading… 12 CommentsIs the Grim Reaper masquerading as Tim Geithner?
That’s the emerging storyline. After President Obama’s Treasury Secretary unveiled a new bank bailout plan that sounded more like a plan to make a plan, the stock market went into an immediate funk. Stocks started to plunge while he was still speaking. The Dow Jones Industrial Average ended the day of Geithner’s debut down 4.6 percent, the worst showing of Obama’s nascent presidency. And the press pilloried the performance:
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Realogy Insists It Will Survive 2009
Continue reading… 46 CommentsIn response to my recent story, 15 Firms That Might Not Survive 2009, Realogy had this to say:
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What 8 Bailout CEOs Need to Explain
Continue reading… 19 CommentsFinally.
After handing out more than $350 billion to wayward companies, Congress has finally rediscovered its oversight role and summoned some of the Bailout CEOs to Washington. Let’s hope that these poobahs of finance explain why they deserve money from the “Troubled Assets Relief Program,” and how they’ll spend it in a way that benefits the American public.
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What Sully Sullenberger Can Teach CEOs
Continue reading… 26 CommentsThe story of US Airways Flight 1549 – the “Miracle on the Hudson” – keeps getting better. And it’s a story we really need right now.
Elsewhere, of course, the news is revolting. Wall Street moneygrubbers just rewarded themselves with $18 billion in bonuses for nearly wrecking the nation’s financial system. Many of the banks they run – which are supposed to be the lifeblood of the economy – are in a state of ruin. The politicians who claim they can fix the mess keep stumbling over their own greed and egomania.
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One CEO Who Gets It
Continue reading… 29 CommentsThe jury’s still out on whether there’s a modest CEO in the land. But there’s at least one very clever CEO: Reed Hastings of Netflix.
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Stop Hyperventilating Over Unemployment
Continue reading… 67 CommentsPeople: What’s the big surprise?
Yeah, the job numbers are terrible. Companies cut nearly 600,000 jobs in January. The unemployment rate jumped to 7.6 percent. The numbers are the worst since…. (Aren’t you getting tired by now of hearing that the latest economic indicator is the worst since before you were born, or since Noah filled the ark? Okay then, I’ll spare you on this one.)
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15 Companies That Might Not Survive 2009
Continue reading… 1092 CommentsWho’s next?
With consumers shutting their wallets and corporate revenues plunging, the business landscape may start to resemble a graveyard in 2009. Household names like Circuit City and Linens ‘n Things have already perished. And chances are, those bankruptcies were just an early warning sign of a much broader epidemic.
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How To Skirt Taxes and Still Land a Plum Job
Continue reading… 208 CommentsWhat a bunch of old-timers. Daschle, Killefer, Geithner, and any other Obamanauts who end up getting outmaneuvered by the tax code….. they’re a generation out of date. Their complicated lives and corresponding tax woes date to an era when what went up stayed up, and there was always a specialist who could ease you out of any jam. Nowadays, what goes down stays down, and those expensive specialists can no longer be billed to the corporate account.
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Update: Bird Strikes Aren't Always Explosions
Continue reading… 21 CommentsAfter I posted a video of a test on a Rolls Royce Trent 900 jet engine, Jon Ostrower of the respected trade journal Flight International wrote to point out the difference between a bird-strike test and a "blade-out" test.
