This, from the president of France: “I will not increase taxes,” he said, “because an increase in taxes would delay the end of the crisis and because by increasing taxes, when we are at our level of taxation, we would not reduce deficits — we would increase them.”
Some doom and gloom from David Wyss of S&P via the NYPost:
David Wyss, S&P’s chief economist said banks should brace for a plastic meltdown as credit-card losses track the unemployment figures almost exactly. “Credit-card losses, on average, are equal to the unemployment rate plus about 5 percent,” he said, noting his estimates that the nationwide jobless rate could rise as high as 12.5 percent by 2011.
I think Mike Darda of MKM Partners nicely encapsualtes the Fed’s thinking:
With the unemployment rate 3-4 percentage points above what is widely deemed to be neutral, the Fed probably believes the economy is running more than $1 trillionbelow potential. In other words, don’t expect the Fed to start laying the groundwork for tighter monetary policy until a sustained turn in both output and employment is underway. Of course, this will risk an eventual inflation problem, but as long as inflation doesn’t escape the mid-single-digit range, it’s a risk the Fed is probably willing to take (as opposed to a relapse in the credit markets, and a third leg down in the economy, if they tighten too soon).
“I need a crash cart, stat!” The political prospects for major U.S. healthcare reform have taken a decided turn for the worse in recent days (at least from the point of view of many Democrats). And you don’t need to be some totally plugged-in Washington insider to understand that.
I think this bit from First Read echoes what I have been saying:
So let’s get this straight: Barack Obama won last year’s presidential election by seven percentage points (53%-46%) campaigning, in part, for some form of universal health care; his party is about to have 60 votes in the Senate; polls show the country is receptive to overhauling health care; and the president’s approval rating is between 56-60%. But Senate Democrats, like Dianne Feinstein, now say that Obama might not have the votes to pass health care? “I think there’s a lot of concern in the Democratic caucus,” she said on Sunday, per the AP.
Moody’s is threatening California with a “multi-notch” downgrade of its credit rating. The state is in a deep fix, but necessity is the mother of policy invention. It will be interesting to see what Arnold and legislature do, assuming no rescue from Uncle Sam. The governor’s call for a flat tax might just be the beginning.
A string of new polls seems to show that America’s belief in the wonder-working power of Obamanomics has begun to fade. A Pew poll found President Obama’s economic approval rating has fallen to 52 percent from 60 percent in April. A Wall Street Journal poll found 53 percent disapprove of his handling of GM and Chrysler vs. 39 who approve. And the New York Times found that 60 percent don’t think Obama has a “clear plan” to deal with the monstrous budget deficit.