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When the International Monetary Fund lowered its forecast for U.S. growth this year and 2011, it pointed to “sluggish personal consumption” as the main drag on the economy. Since consumer spending accounts for 70 percent of the U.S. economy, the question of why spending remains so low is central to any inquiry into the future of our economy.
How Houses Became ATMS
The usual reasons given for the slump in consumer spending don’t go far enough. Sure household wealth deteriorated thanks to housing prices. Tight credit has made it harder to get credit cards or buy big ticket items. High unemploymentmeans many Americans just lack income to spend. Fear of unemployment drives even employed Americans to put a little more away for the proverbial rainy day.
But there is a deeper reason Americans aren’t spending as much. Typically it goes under the rubric of a “desire to save more”—although that is more of a description than an explanation. If Americans suddenly desire to save more, it’s worth trying to find out why.
Next FOMC meeting a “tough call” says Fed’s Bullard. Double dip risk down; (CNBC.com)Fed may wait and see on QE. Still, economy has slowed.
Goldbugs should strap in because the market is starting to rock.
Like the song goes, Georgia comes in and out of our geopolitical minds. In 2008, it was in during their war with Russia. In 2009, it was out while they rebuilt. And, now in 2010, it's so in.
The Black Sea state expects 5-6% GDP growth this year, followed by another 4.5% growth in 2011 — all of which to say that Georgia is committed to distancing itself from Russia.
“We had a quite difficult year in 2009; however, we’re on our way to recovery,” Georgia’s Prime Minister Nikoloz Gilauri told me in an exclusive interview on CNBC’s “Worldwide Exchange.”
Gilauri said that the first six months of 2010 were especially impressive, as the country saw GDP growth of 6.5%. Tourism, banking and exports, mainly of agricultural goods, have been the main drivers of growth so far.
Anthony Scaramucci tends to talk in lists: Here’s what’s working, here’s what’s not, here’s what a good hedge fund manager needs to do — all enunciated in clear, bullet-point conversational format.
It’s a technique that has served the budding financial media star well as he enjoys a higher profile since his notorious questioning of President Obama at last month’s town hall organized by CNBC.
Scaramucci asked Obama why he was treating Wall Street like a “piñata.” The question set up a lively dialogue between the SkyBridge Capital founder and a president who is perceived to regard financial types as three levels below the gunk you scrape off your shoe when walking through a toxic waste dump.
Earlier this week, economist Arthur Laffer wrote an Op-Ed piece in the Wall Street Journal condemning a proposal to implement a new 5% state income tax in the state of Washington. (Washington State currently has no state income tax.)
The creation of the tax is supported by Bill Gates Sr., father of the billionaire software entrepreneur, and a prominent retired attorney in his own right. Laffer’s response to Gates senior: If you want to help the state of Washington with its financial woes, you and your son should write them a check — but don’t impose a tax on everyone else.
While on its face Laffer’s remark may seem like just a witty retort, his piece is extraordinarily data driven: He maps out the case for how states with high income taxes lag, on a relative basis, states with lower or no income tax.
If I had a dollar for every time someone said the word "deficit" I would be a rich woman.
The “root” of our economic ills have been debated, rehashed and tweaked with nuisances to describe what phase of the “recovery” we are in. I think “New Normal” is the “it” phrase right now, but let’s face it—it’s still the same mess. The best way I would describe this economy is a tortoise with two broken legs carrying an enormous load on its back. The load I’m talking about is the deficit and the housing market.
The United States Congress continues to try and spend our way back to prosperity. The disparity between revenues coming into Uncle Sam’s wallet and what’s being spent is great. The level of government dysfunction has never been more apparent. Voters are so disgusted with both sides of the aisle that they have almost created a third party, the Tea Party.
To get a C-suite perspective on all of this, I decided to sit down with Martin Gruss, Senior Principal of the private investment firm Gruss & Company, which has $2.5 billion under management. We started our conversation on the latest economic team changes in the Obama Administration.
If you were watching "Squawk Box" this morning, youprobably heard Rick Santelli askMohamed El-Erianabout a mysteriousinterstate notary bill that might bail out banks such asGMAC,JP Morgan ChaseandBank of Americafrom their foreclosure gatetroubles.
At stake was the ability of homeowners to challengeforeclosure attempts by banks.Recently,several large banks have had to halt foreclosureproceedings in many states when it emerged thattheir loan officers had taken short-cuts to speedforeclosures.
Ordinarily, banks are able to get a quickie foreclosurethrough the courts by having officers swear out statementsclaiming they have personal knowledge of the details of theloans and the delinquencies of borrowers. But it has nowemerged that loan officers at some banks were just signingthe statements kicked out by a computer without havingreviewed the loan materials.
Basically, the banks gave liar loans and now they aretrying to push through liar foreclosures.
John Carney is a senior editor for CNBC.com, covering Wall Street and finance and running the NetNet blog.
Jeff Cox is finance editor for CNBC.com.
Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.
Stephanie Landsman is one of the producers of CNBC's 5pm ET show "Fast Money."
The unofficial odds are rising that the Fed will announce taper plans at its December meeting.
Three Wall Street trade groups sued the Commodities Futures Trading Commission to stop tough overseas trading guidelines they fear.
Paid in the form of assistance programs, the funds are in effect a subsidy to the banking industry, The Washington Post reported.