Jay Leno interviews Ron Paul

Citi planning severe job cuts

Saying it is reorganizing for efficiency, Citigroup is planning major job cuts over the next few months.

Greenspan: No regrets on housing mes “The housing bubble is a not a reflection of what we did, as it is a global phenomenon,” said the former Fed chief.

CONSUMER BLUES

Now more on why I was write to be skeptical about all the hoopla about “Black Friday” and its economic impact.

WHY CONSUMERS ARE WORRIED ABOUT THE RECESSION
From A New Study by Dr Robert Manning of RIT

Fall 2007 Survey of U.S. CONSUMER SENTIMENT:
Rising Financial Anxiety and Expected Decline in Consumer Spending

OVERVIEW

Consumer confidence in the U.S. economy as well as their personal finances have continued to falter since mid-October following the earlier rebound in the U.S. stock market. From early October to early November of 2007, the RBC Cash Index showed consumer confidence fell sharply—from 80.6 to 64.0–reflecting growing concern over rising oil prices, tightening consumer credit, and escalating residential home foreclosures. Furthermore, the overall U.S. economy grew at a solid 3.9 percent rate in the July-September quarter of 2007 but many economic forecasters expect a much lower 1.5 percent growth rate in the current quarter, and even less in the first quarter of 2008. The key question is when will declining consumer confidence result in a contraction in household consumption.

Unlike typical business-cycle driven economic slowdowns, the current data suggest that consumer purchasing sentiment is less likely shaped by personal income constraints arising from higher levels of un- and underemployment. Rather, the self- reported delays and expected reduction in U.S. household consumption appears to reflect a perception of deteriorating personal and general economic conditions driven by a negative “wealth effect” following declining housing prices and the escalating cost of energy supplies. Furthermore, American households’ sense of financial well-being is now being influenced by the falling U.S. stock market as financial losses by major banks and investment houses begin to spill-over into personal investment and retirement portfolios. The concern is that a sharp contraction in US household consumption over the next six months will precipitate a recession by increasing unemployment levels which will reinforce negative consumer confidence and reduce effective purchasing demand as consumers are already encumbered with record levels of home mortgage and consumer debts.

CONCLUSION

Many households’ holiday spending decisions are shaped by personal and social pressures to purchase gifts for family and friends. The expectation is that many households will temper their holiday expenditures but not necessarily reduce them sharply due to a variety of social factors and access to “easy” credit during the crucial retail season. As a result, the key issue over whether the U.S. will experience an economic slowdown that is propelled by reduced household consumption—especially discretionary purchases. This of particular concern since so many families supplemented their household income with home equity, mortgage refinancings, and increase in consumer debt (revolving and installment). There are already indications that households have begun postponing major purchases in anticipation of more difficult macro-economic conditions and increasing household debt burdens.

The signs of “belt-tightening” are clearly evidenced by the data…. Together with the less than expected level of holiday expenditures by the wealthiest households, the data suggests a generalized sentiment of consumer financial anxiety across all income and wealth groups at the end of 2007. This portends a moderate decline in winter holiday expenditures as the strained but persistent purchasing expectations of the lower income households are balanced by the more restrained purchasing plans of the highest income households. Clearly, the winter holiday shopping season will need a much more enthusiastic response from higher income households if it is to exceed the modest forecasts of many retailing analysts.

Investment News: The credit crisis has hurt bank-loan funds, a sector that until recently has remained fairly stable

REUTERS: HSBC Backs SIVs With $35 Billion to Prevent Fire Sale

LONDON ( Reuters) - HSBC Holdings Plc, Europe’s biggest bank, has stepped in to support its two structured investment vehicles — Cullinan and Asscher — with funding of up to $35 billion to prevent forced sales of assets.

HSBC , one of the biggest players in the structured investment vehicle (SIV) market, will consolidate $45 billion of assets and related funding from Cullinan and Asscher onto its $2.1 trillion balance sheet and set up new debt-issuing vehicles, it said on Monday.

The move is the first concrete proposal by a bank to overhaul SIVs — structures that have been slammed in the credit turmoil by a lack of access to funding and a sharp decline in the value of the assets they hold which are mostly highly rated structured finance securities.

Their woes have led to fears of fire sales of many billions of dollars worth of securities, further hitting prices and sentiment.

From Carolyn Baker:

WE FACE WORLDWIDE DROUGHT WITH NO CONTINGENCY PLAN

SUBPRIME MESS TO GET MUCH UGLIER

6000 APPLY FOR 300 WALMART JOBS