Crude Oil Little Changed as Inventories Gain, Equities Retreat
by Mark Shenk and Samantha Zee
Apr 30 (Bloomberg) — Total daily fuel demand in the U.S. averaged 18.4 million barrels in the four weeks ended April 24, down 6.8 percent from a year earlier, the department said. Consumption of gasoline was down 0.5 percent and distillate use was 11 percent lower.
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>
> On Thu, Apr 30, 2009 at 7:01 AM, Joshua wrote:
>
> The 82-83 Reagan rally was good for roughly 70% to the upside from trough to
> peak. I clearly have been too pessimistic.
>
> At this point, are you looking for substantial upside in equities from here in light of
> 7% deficit/GDP? My concern has been that the decimation in non-bank lending
> (roughly 75% of prior total lending) would be more than enough to offset the
> positive effects of deficit.
>
That caused the economy to weaken/inventory liquidation to intensify until the deficit got high enough to reverse that effect. And now proactive deficit spending is kicking in.
>
> Are Bernanke’s programs really reinvigorating securitization markets? Clearly
> something is working for them.
>
It’s mainly the increased deficit spending that’s turning the tide. Yes, the Fed did a few things that helped some, but overlooked what they could have done (and should still do) to ‘normalize banking’.
Also, we can get a V shaped financial market recovery as it was pricing oblivion, while the real economy looks more L shaped.
And we are also always subject to external shocks like swine flu, wars, supply shocks, etc.
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| Survey | n/a |
| Actual | -1.7% |
| Prior | -0.1% |
| Revised | n/a |
| Survey | n/a |
| Actual | -0.7% |
| Prior | -0.4% |
| Revised | n/a |
| Survey | n/a |
| Actual | 0.7% |
| Prior | 0.1% |
| Revised | n/a |
| Survey | n/a |
| Actual | 1.6% |
| Prior | 1.5% |
| Revised | n/a |
| Survey | 142.80 |
| Actual | 143.17 |
| Prior | 146.40 |
| Revised | 146.35 |
| Survey | -18.70% |
| Actual | -18.63% |
| Prior | -18.97% |
| Revised | -19.00% |
| Survey | n/a |
| Actual | 139.14 |
| Prior | 150.00 |
| Revised | n/a |
| Survey | n/a |
| Actual | -18.23% |
| Prior | -16.55% |
| Revised | n/a |
| Survey | 29.7 |
| Actual | 39.2 |
| Prior | 26.0 |
| Revised | 26.9 |
| Survey | -17 |
| Actual | -9 |
| Prior | -20 |
| Revised | n/a |
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Magna Entertainment Corp. announces appointments of Interim Chief Executive Officer and Independent Director
April 7 (Magna Enterntainment Group) — Magna Entertainment Corp. (“MEC” or the “Company”) (NASDAQ: MECA – News; TSX: MEC.A – News) today announced that it has appointed Greg Rayburn as Interim Chief Executive Officer of the Company, subject to the approval of the United States Bankruptcy Court for the District of Delaware. MEC and certain of its subsidiaries are currently subject to bankruptcy proceedings in the United States under Chapter 11 of the United States Bankruptcy Court for the District of Delaware. If approved, Mr. Rayburn will assume the customary responsibilities of the Chief Executive Officer including leading MEC’s Chapter 11 restructuring activities and overseeing the sale of MEC’s assets. He will report directly to MEC’s Board of Directors. The decision to appoint Mr. Rayburn followed an extensive executive search process led by MEC’s lead director, William Menear. Mr. Rayburn is currently a senior managing director and the practice leader of FTI Palladium Partners. He has more than 26 years of experience advising companies and boards of directors in several in-court and out-of-court restructurings and has previously served as CEO or CRO of other troubled companies, including WorldCom, aaiPharma and Muzak Holdings LLC. Frank Stronach, who has resigned his office as Chief Executive Officer of the Company effective immediately, will retain his position as Chairman of the Board of Directors.
In addition, the Board of Directors also appointed Warren Mosler to serve as an independent member of the Board of Directors. Mr. Mosler is the founder and principal of AVM, L.P., a broker/dealer that provides advanced financial services to large institutional accounts. Mr. Mosler is the President and founder of Mosler Automotive which manufactures the MT900 sports car in Riviera Beach, Florida. MEC’s Board of Directors is in the ongoing process of searching for additional, qualified independent directors to strengthen MEC’s Board.
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Right, seems the eurozone is toast until the rest of the world recovers and starts importing from them of their deficits get high enough via recession- the ugly way- without the national governments and banks defaulting.
Trying to keep deficits from rising with tax hikes only means the economy goes down more as it seeks the necessary higher level of deficit spending for recovery.
A tall order but not impossible.
Erin Go Broke
by Paul Krugman
Apr 19 (New York Times) — “What,†asked my interlocutor, “is the worst-case outlook for the world economy?†It wasn’t until the next day that I came up with the right answer: America could turn Irish.
What’s so bad about that? Well, the Irish government now predicts that this year G.D.P. will fall more than 10 percent from its peak, crossing the line that is sometimes used to distinguish between a recession and a depression.
But there’s more to it than that: to satisfy nervous lenders, Ireland is being forced to raise taxes and slash government spending in the face of an economic slump  policies that will further deepen the slump.
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Levy Conference review
by George M. Richvalsky
Apr 19 — Warren presented “Alternative Proposals for a U.S. Nonconvertible Currency Regime†[see “Levy Presentation†on another part of this site] on Friday, April 17, 2009 at a conference organized by the Levy Economics Institute [www.levy.org] of Bard College entitled The State of the U.S. and World Economies: Meeting the Challenges of the Financial Crisis. Ford Foundation provided support. The Levy Institute is a nonprofit, non partisan public policy research organization whose work is premised on the accounting identity Government Surplus/Deficit = Private Deficit/Surplus.
The conference was well attended with many luminous presenters including a Nobel Laureate, Federal Reserve Bank Presidents, famous authors, academics, economists and forecasters [see Levy Program also on this site].
Warren’s presentation came within a block of “in paradigm†speakers, Jamie Galbraith, Robert Parenteau and Randy Wray, all effective and to their point. Warren’s major thrust is that the US is not on a gold standard but rather a nonconvertible currency regime with a broader range of policy options that he proceeded to put forward. His conclusions [see presentation final page]: recession is over, the ugly way – caused by automatic stabilizers, additional proactive fiscal adjustments are only now kicking in with the subsequent recovery restoring the financial sector and housing markets, but high and lingering unemployment will contain real wages and direct real wealth towards rentiers and upper income individuals. I encourage you to review this year’s proceeding when they appear on the Levy website. I noticed that 2008s proceedings are still available.
Mike Norman, a blogger on Warren’s site and an effervescent radio and TV personality, attended Warren’s presentation and reports that he will shortly provide details about his new TV show. Congrats Mike!
Not only did I enjoy the conference’s content and socializing opportunities but I was also impressed by those organizations and personalities that share those views expressed by Warren on this site. Expanding economic policy options to achieve increased world prosperity is necessary NOW but only happens once the politicians and their advisors acknowledge the validity of these views. The question is, How do we get to that tipping point?
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Does this indicate euro institutions are now selling euro for dollars to pay down their net dollar borrowings?
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