EconomicCrisis.US

General Motors Co on Wednesday posted a net loss of $4.3 billion from July to December in its first profit report since exiting bankruptcy in the US government’s grasp.

Nearly all of the loss came in North America, where the car market struggled through much of 2009. The losses included a one-time $2.6- billion pay-out to a health fund for retired union workers.

GM reported global revenue of 57.5 billion dollars over the July-December period. For the fourth quarter of 2009, GM posted a loss of $3.4 billion on revenues of $32.3 billion.
Read the rest of this entry »

If you want to understand the economic crisis, there are several hundred 250-page books for you to read. If, on the other hand, you want a one-page explanation, this is it.

Beginning in the 1990’s, the U.S. became infatuated with homes as investments. The government encouraged home ownership. Private entities — Fannie Mae and Freddie Mac — were pushed to provide liquidity to the residential mortgage market. In return, the government provided an implicit backing (now $400 billion explicit) for Fannie and Freddie’s borrowings. All the smart journalists and financial writers advised Americans to drop everything they were doing and buy a house.
Read the rest of this entry »

Once upon a time, California was the state that everyone wanted to move to. The endless sunshine, the gorgeous weather, the beaches, the lure of Hollywood and a booming economy made it extremely attractive to millions of Americans who wanted to fulfill their “California dreams”. But those days are long gone. Now, the state of California has become an economic nightmare. In fact, many would argue that California has now become the epicenter of the economic collapse of the United States. Everything that once made California great is now being swamped by a tidal wave of unemployment, foreclosures, crime, budget cuts, traffic, taxes and natural disasters. There is a reason why every year now many more people leave the state of California than move into it. The state of California is suffering a slow economic death, and if something is not done it could end up being one of the biggest financial disasters in history.
Read the rest of this entry »

The U.S. government must take action now to prevent a rising public debt from sparking the next economic crisis, Federal Reserve Bank of Kansas City President Thomas Hoenig said Tuesday.

In a prepared speech entitled “Knocking On The Central Bank’s Door,” Hoenig warned that the U.S. central bank may come under political pressure to finance the rising debt, a move that could bring higher inflation.

“Fiscal policy is on an unsustainable course. The U.S. government must make adjustments in its spending and tax programs. It is that simple,” Hoenig said.
Read the rest of this entry »