Filed under: Economic data, Housing, Federal Reserve, Recession, Financial Crisis

What if the economic bailout package is not enough to free the locked-up credit markets? Huge banks may sell bad assets to The Treasury Department, but will they loan that money to the man in the street or small businesses?

If the Paulson plan isn’t effective, the number of arrows in the federal government’s quiver drops substantially.

The Fed has tried to save the economy with a number of rate cuts. Many analysts have thought the bureau wouldn’t cut again before the election, but those many analysts could be wrong.

According to The Wall Street Journal, “Federal Reserve officials are weighing further interest-rate cuts, even if Congress passes a $700 billion rescue plan, in the face of a deteriorating economic outlook and severely strained financial conditions.”

The Fed had superior hurry along. On Wednesday, reported car sales figures were down over 30% for September for many auto companies. The major excuse for the problem wasn’t gas prices, it was the inability of people to get automobile loans. There is completely no evidence that the housing or mortgage markets are getting better. Default rates on credit cards are rising. Retail sales this holiday season are prone to be pathetic.

The economy is at the stage when it is time to pull out all the stops. The window to save the consumer might close in the next week or so. That may mix metaphors a bit, but that makes it no less true.

Douglas A. McIntyre is an editor at 247wallst.com.

Read

Share This

Share This

White Yeti writes with news of the reentry breakup of the ESA’s Automated Transfer Car. All went as planned, and the ESA blog has preliminary photos. An international team of observers, in two aircraft south of Tahiti, saw a series of explosions and over a hundred small pieces of debris. Observations were mostly made using optical cameras and spectrographs. The two images on the ESA site are low-res samples, so we should get more spectacular images soon.

Read more of this story at Slashdot.

Share This

Share This

Filed under: Products and services, Netflix, Inc. (NFLX)

Netflix (NASDAQ: NFLX) will now be offering about 2,500 movies from the Starz movie channel as streaming video from its website. As Netflix continues to dabble heavily into internet-delivered content to complement its DVD rental business, the company really has taken the lead on ensuring it builds its brand to deliver content through whatever means. Once the DVD becomes obsolete (and it will), Netflix’s positioning will put it in front once again to give its customer base content through whatever means.

Netflix’s “Watch Now” selection of immediate content has grown in recent months, but regular customer complaints about lack of selection have streamed in at the same time. This partnership with Starz should change that a bit. Right off the bat, Starz’s “Starz Play” lineup will contain hits like No Country for Old Men, Superbad and other current hits. Can Netflix convince studios to release movies at the start of or during theatrical release? That would be a major coup — but that’s quite a paradigm shift for the motion picture studio industry as well.

All the new Starz content will be available at no cost to current Netflix subscribers as well — which is a major selling point if I’ve ever seen one. The more partnerships Netflix can forge with device manufacturers, gaming console leaders and content providers, the superior. And, it may just keep giving Blockbuster executives fits as well, while Netflix CEO Reed Hastings sighs in relief.

Read

Share This

Share This

Pickens writes “Human-rights activists have discovered a large surveillance system in China that monitors and archives World wide web text conversations sent by customers of Tom-Skype, a joint venture between a Chinese wireless operator and eBay. Researchers say the system monitors a list of politically charged words that includes words related to the religious group Falun Gong, Taiwan independence, the Chinese Communist Party and also words like democracy, earthquake and milk powder. The encrypted list of words inside the Tom-Skype software blocks the transmission of these words and records personal information about the customers who send the messages. Researchers state their discovery contradicts a public statement made by Skype executives in 2006 that ‘full end-to-end security is preserved and there’s no compromise of people’s privacy.’ The Chinese government isn’t alone in its Internet surveillance efforts. In 2005, The New York Times reported that the National Security Agency was monitoring large volumes of telephone and World wide web communications flowing into and out of the United States as part of an eavesdropping program that President Bush approved after the Sept. 11 attacks. ‘This is the worst nightmares of the conspiracy theorists around surveillance coming true,’ says Ronald J. Deibert, an associate professor of political science at the University of Toronto. ‘It’s “X-Files” without the aliens.’”

Read more of this story at Slashdot.

Share This

Share This

Filed under: International markets, Politics, Housing, Recession, Financial Crisis

With the U.S. Senate expected to debate and vote on a revised bailout/rescue bill in the next day or so (famous last words), two revisions the world’s greatest deliberative body should incorporate are bank recapitalization options and funding to refinance mortgages, economists say.

BloggingStocks’ Peter Cohan has written extensively on the need to recapitalize banks, and economist Richard Felson concurs. However, Felson argued that the revised rescue bill should give banks and other institutions the option of either offering their distressed/bad debts to the U.S. Treasury in its reverse auction or accepting a mutually agreeable investment by the U.S. Treasury into the institution.

Creating options for stressed banks

“This will give banks more options, and in my view more incentives to participate in the rescue plan. If the plan just contains asset purchase provisions some banks might balk at the prospect of selling some assets at a fire-sale price of 10 cents or 15 cents on the dollar, and that might prevent some distressed assets from being removed from the system, delaying the financial system’s recovery,” Felson stated. “Offering to buy a stake in the bank offers another recapitalization option.”

Continue reading Rescue bill’s revision seen as chance to recapitalize banks, refinance mortgages

Permalink

Share This

Share This

rrohbeck writes “The Independent reports brand-new results of high concentrations of methane — 100x normal — above the sea surface over the Siberian continental shelf. A large number of methane plumes have been discovered bubbling up from the sea floor. This is probably due to methane clathrate, buried under the sea floor before the last ice age, breaking up as higher water temperatures melt the permafrost that had contained it.”

Read more of this story at Slashdot.

Share This

Share This

Filed under: Bad news, Products and services, Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Economic data, Recession, Financial Crisis

September proved to be yet another tough month for American auto maker Ford Motor Company (NYSE: F) as the company saw its U.S. sales drop by a massive 34% during the month.

The company noted that we are in the middle of an “atmosphere of caution” as the troubled economic environment, and tightening credit conditions are still taking their tolls on the automotive industry.

We will hear more troubling news later today as more auto makers release their September numbers, and analysts are expecting to hear more of the same from the other major names in the industry. Fellow Detroit auto maker General Motors Corporation (NYSE: GM) is expected to announce sales dropping around 27%, while Japanese maker Toyota Motor Corporation (NYSE: TM) is expected to show a sales decline of around 17%.

Today’s news from the major names should really come as no surprise, since we have been hearing much of the same through most of the year. Through August, nationwide sales of cars was down 11.2%.

As consumers continue to express their concerns over the overall economy it is going to continue to be tough for automobile dealers to get shoppers into their showrooms. Larger incentives should help a tiny, but until consumers begin to turn more positive on the overall economy, it is going to be tougher and tougher to sell them new vehicles.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer.

Permalink

Share This

Share This