A week of too many economic headaches
By ROBERT TRIGAUX, Times Business Editor
Published September 23, 2007
If former Fed chief Alan Greenspan's book is so perfectly titled The Age of Turbulence, the past week is living proof.
Consider these Top Ten Headaches of just the past seven days.
1. The Big Cut: The Federal Reserve, still able to differentiate a credit crunch from Cap'n Crunch, cut short-term "fed funds" rates by a half-percentage point. It's the first cut in four years and says the U.S. economy - especially the housing and mortgage markets - needs some serious babysitting for a while.
2. Greenspan pans Bush-onomics: In his 531-page book, Greenspan says the Bush team is a lousy steward of the economy and irresponsible in handling the nation's spending. Responds Bush: I must "respectfully disagree."
3. If our country used a credit card, we'd be maxed out: Come Oct. 1, the federal government says it will hit its debt limit. That happens to be: $8,965,000,000,000, or $8.965-trillion. Why did we hit it? Because we're spending so much more than we take in, we are borrowing big bucks.
4. One U.S. dollar = One Canadian dollar? Call me loony, but I never thought our greenback would equal one loonie as the Canadian dollar is affectionately dubbed. Snowbirds, come on down. We're cheap!
5. Oil prices hit record - four times. Oil prices already over $80 a barrel hit four consecutive records last week. The good news is experts don't expect to see record gasoline prices re-emerge, in part because we're shifting from summer to winter grade gas. The bad news: We're paying for most of this oil with a really weak dollar.
6. Florida's job engine is braking: Yes, Florida still managed to create some jobs in August. But unemployment in the state is still rising. And out of 119,500 jobs created in Florida in the past year, just 15,300 occurred in the Tampa Bay metro area. That's well behind Orlando.
7. A run on a bank in 2007? Customers of Northern Rock, a British bank, lined up outside branches across the country to get their savings out. Runs should never happen any more in developed countries, but it did this time. The root cause: growing international nervousness about investments in shaky housing markets. (See No 8).
8. Foreclosure filings soar across Tampa Bay: They more than doubled in Pinellas, Hillsborough, Pasco and Hernando counties from July to August.
9. New rich storm Forbes 400: The 2007 list of America's richest shows nearly half of the 45 new billionaires to make the 400 are hedge fund managers or leveraged buyout chiefs, folks who make nothing but use financial leverage to generate unheard-of wealth.
10. What about the 'R' word? "Recession" has appeared 59 times in the Wall Street Journal in the past week and 180 times in the past month. We're not real close to a real one, I believe, but if you start using the R-word too often, things have a way of happening.
My head hurts. Alan, pass the ice pack.
Robert Trigaux can be reached at email@example.com or (727) 893-8405.
[Last modified September 21, 2007, 21:35:50]
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