» It’s becoming more and more apparent that we might be heading for a double-dip recession here. The Dow fell for eight days straight, only ending the losing streak yesterday — but it could fall steeply today. The new jobless numbers are mostly to blame for the weak market. There were 400,000 new unemployment claims in the week that ended July 30. That, in addition to a spreading debt crisis in Europe, has been enough to convince investors that the U.S. economy isn’t in a great spot right now, and it’s hurting our stock market bad.
» We’ve been really worried about the whole debt-ceiling mess for the past few days, but it really says something about the economy when the tooth fairy isn’t even giving as much for kids’ pearly whites. Perhaps, like Glenn Beck, she’s chosen to invest in gold instead of teeth. We hear gold’s doing pretty well nowadays.
boehner’s bill falls short: After a chaotic day of vote-whipping, vote-delaying, and vote-switching, John Boehner has decided to postpone the vote on his debt ceiling bill. Despite multiple assurances that it would be brought to a vote before tomorrow, at the end of the day, Boehner didn’t have enough votes to ensure the bill’s passage (and he wasn’t going to embarrass himself by introducing a bill that was sure to fail). In an unusual alignment, conservative Tea Partiers and House Democrats all pledged to vote against the bill, albiet for different reasons. While the legislation has virtually no chance of passing the Democratic-controlled Senate, Boehner’s ability to shepherd it through the House is seen by many as the first real test of his leadership abilities. If he doesn’t eventually pass it, there’s a good chance he’ll (eventually) be deposed as Speaker. But it’s not over yet—sources say Republicans plan to tweak the bill a bit, and re-introduce it tomorrow. source
» We were generally supportive of the 2009 stimulus package, but aspects of it are starting to seem a bit questionable, to say the least. Case in point: 2,200 students and staff in the town of Owensboro, Kentucky will soon be enjoying a free Macbook Air, courtesy of the Recovery and Reinvestment Act. While we’re all for providing students with the technical competency needed to compete in the 21st-century global economy, you don’t really need to give everyone a Macbook Air to do that. The cheapest Air is $999; if we assume, for the sake of argument, that Apple gave Owensboro a 50% bulk discount, that’s still over a million dollars of federal money being spent so kids can have free laptops. Opponents of “wasteful government spending,” your Exhibit A is right here.
» That is a stark difference. In their latest study, Pew compared the net wealth of families in various racial groups and found that blacks and Latinos in particular did very poorly compared to whites. (Asians, on the other hand, were somewhat within shouting distance. EDIT: Please see explanation.) This is a historic trend which has lasted decades, but has become all the more apparent with the Great Recession. “The bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites,” Pew writes in its study. While net wealth among whites fell roughly 16 percent, blacks families lost about 53 percent, and Latino families lost the most — losing 66 percent of their wealth on average.
» This is both the largest consumer protection fine ever levied by the Fed and the first time the institution has punished a bank for nudging customers into subprime loans. There’s more to come, too; in addition to the fine, the order also “requires that Wells Fargo compensate affected borrowers,” although it’s unclear how this will work. It’s better than nothing, but $85 million just seems a bit low; as a point of comparison, the bank made $2.5 billion in the first three months of 2010 alone.
Almost nobody’s talking about one of the central points that everyone who has analyzed this situation makes – including the bipartisan Simpson-Bowles commission – which [is] you shouldn’t do any of this until the economy is clearly recovering.Bill Clinton • Discussing the deficit-reduction fight going on in Washington, with dealing over the debt limit functioning as a negotiating tool for the GOP to push for spending cuts. This is an angle that’s been taken by many mainstream economists (though obviously, the world of economics can be as contentious as anywhere else), namely that the ability to put off paying down the deficit for a while, though it may not jive with the popular notion of fiscal responsibility, is a valuable tactic to avoid straining the economic recovery. To use an overly simplistic metaphor, if we were to gain thirty pounds over the course of a year, working out twelve hours every day wouldn’t be a healthful way to slim back down. It takes a while to gain the weight, so it’s only natural and measured that it’ll take a while to safely cast it off again. source (via • follow)
He was doing it because he lost his job and I was sick. … He did it. He did all of this.Melinda Brady • Explaining what she says may have led her husband, David Laffer, to kill four people in a Long Island pharmacy on Father’s Day. During the shooting, the suspect reportedly tried to steal prescription drugs from the pharmacy he could not afford, in what sounds like an awful recession story in the making. Brady and Laffer, who proposed to his wife at a New York Islanders game a few years ago, were arrested Wednesday after local police received hundreds of tips on the case. source (via • follow)
» That’s the highest level ever. While the poll question (from a CNN/Opinion Research Corporation poll) had a slight majority — 51 percent — saying we probably won’t have one, a possible double-dip recession has many folks a little concerned. Obama promises that’s not going to happen. He better hope he’s right — 51 percent of people also said that the economy is extremely important in determining who they’ll vote for.
» A leaked memo from the CEO is to blame: The memo by Leo Apotheker caused the company’s stocks to fall. He cited the Japanese earthquake and weak PC sales as reasons to reduce hiring and prepare for another rough quarter. Even though their stocks are up from last year, they aren’t meeting market predictions, causing people to sell their shares in the company. Apparently, it’s causing the stock market to slow down overall. Yikes.