Great speech by President Obama today. See how he addressed the core crises facing America today …
That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet. These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America’s decline is inevitable, and that the next generation must lower its sights. Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.
Aside from politics, there is plenty of interesting news …
General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker. According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to “complete the renovation of the line of products up to 2012.”
Story #2 — Chrysler is selling a third of itself for NO MONEY. I guess that means we should be able to go buy new Chrysler cars for a bag of chips and the coins I can find under my sofa cushions. “Fiat Nearing a Deal for Chrysler Stake”
The deal could give Fiat control of 35 percent of Chrysler by later this year and possibly raise its stake in the American company to as much as 55 percent.
Story #3 — Failing Upwards. Check out the executive compensation of notorious Wall Street CEOs in a piece from EconBrowser called “Executive Compensation” …
- Bear Stearns: $34 million for CEO James Cayne. The acknowledged direct cost to the taxpayers from Bear’s demise so far is $2.7 billion; ten times that number may be a more reasonable assessment of the actual cost.
- Lehman Brothers: $27 million for CEO Richard Fuld. The financial freeze that followed the collapse of Lehman is seen by many as the key event that turned the recession of 2007-08 into the frightening freefall currently under way.
- Citigroup: $25 million for CEO Charles Prince. Citi’s stock price has since fallen from $50 a share to $3.50.
- Countrywide Financial: $43 million for CEO Angelo Mozilo. According to Ashcraft and Schuermann, Countrywide was at that time the nation’s leading issuer of subprime mortgage-backed securities and the third biggest originator of subprime mortgages.
Other News I’m Reading …
Putin Orders New Budget with $41 Oil The Finance Ministry must base the budget on the price of $41 per barrel, or less than half of the $95-per-barrel estimate that is a cornerstone of the existing budget…A Finance Ministry spokesman said the prices were for Russia’s main Urals blend.
The Standard & Poor’s 500 Index is off to its second-worst start, shattering the biggest rally since World War II, as analysts cut earnings estimates by a record 83 percentage points and companies signal worse to come. The benchmark index for U.S. equities fell 5.9 percent in the first 11 trading days of 2009, second only to last year’s 6.5 percent drop, according to data compiled by Bloomberg going back to 1928. The decline erased about half of a 24 percent rally since Nov. 20 as optimism that government spending would revive the economy evaporated.
Roubini Predicts Bank Losses May Reach $3.6 Trillion as System ‘Insolvent’ U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.
Pemex’s Crude Oil Production Declines at Fastest Rate Since World War II Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.
China Faces Worst Unemployment in Decades as Economy Cools, Exports Slump China’s official urban unemployment rate jumped for the first time since 2003 and may climb to an almost 30-year high as exports slump and a slowdown deepens in the world’s third-biggest economy.