Consumer spending increases in February, 5th straight months of gains – Consumers kept their wallets open for the fifth month in a row in February even though their incomes remained unchanged, according to government data released Monday. Spending on nondurable goods, such as clothing, jumped 0.9 percent last month, while spending on services rose 0.3 percent. Those increases were partially offset by a 0.2 percent decline in purchases of durable goods such as autos. Total consumer spending increased 0.3 percent.
Payback Time – States’ Debt Woes Grow Too Big to Camouflage…– California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink — budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay. Some economists fear the states have a potentially bigger problem than their recession-induced budget woes. If investors become reluctant to buy the states’ debt, the result could be a credit squeeze, not entirely different from the financial strains in Europe, where markets were reluctant to refinance billions in Greek debt. “If we ran into a situation where one state got into trouble, they’d be bailed out six ways from Tuesday,” said Kenneth S. Rogoff, an economics professor at Harvard and a former research director of the International Monetary Fund. “But if we have a situation where there’s slow growth, and a bunch of cities and states are on the edge, like in Europe, we will have trouble.”
Did the Federal Government Make Money Bailing Out Citigroup? » The Washington Post is anxious to tell its readers that the government made a profit on its bailout of Citigroup. This claim gives a whole new meaning to the notion of "profit." The government gave enormous amounts of money to Citigroup through various direct and indirect channels. It is only getting a portion of this money back in its "profits," the rest is going to Citigroup’s shareholders (e.g. Robert Rubin) and its millionaire executives who are highly skilled at getting the government to hand them money.
The World is Choking on Government Debt – Unprecedented relationships are beginning to form in the global bond markets. For as long as anyone can remember, the US government has enjoyed the lowest cost of borrowing whatever the maturity of the bond, because the US has been deemed the safest credit anywhere in the world. The prospect of default of the United States has been considered so low that academics describe the US Treasury bond as the risk-free bond., from which all other credit instruments are priced. This relationship seems to be breaking down, for the first time in living history. This past week Berkshire Hathaway was able to raise funds at an interest rate lower than that of the US Treasury. The bonds of DuPont and other stalwart corporate names also yielded less than equivalent maturity Treasuries.
Humans ‘too stupid’ to save climate – Humans are too stupid to prevent climate change from radically impacting on our lives over the coming decades. This is the stark conclusion of James Lovelock, the globally respected environmental thinker and independent scientist who developed the Gaia theory. It follows a tumultuous few months in which public opinion on efforts to tackle climate change has been undermined by events such as the climate scientists’ emails leaked from the University of East Anglia (UEA) and the failure of the Copenhagen climate summit. "I don’t think we’re yet evolved to the point where we’re clever enough to handle a complex a situation as climate change," said Lovelock in his first in-depth interview since the theft of the UEA emails last November. "The inertia of humans is so huge that you can’t really do anything meaningful."
Globalization Critic Noreena Hertz: ‘Even War Is Good for Economic Growth’ – SPIEGEL ONLINE: Dr. Hertz, one is constantly reading about how much a country’s economy has grown or shrunk. Why is gross domestic product (GDP) taken so seriously? Noreena Hertz: It’s easy to measure and shows how one nation performs in comparison to another. Every country, therefore, measures its economic success by its GDP. Only Bhutan is an exception. SPIEGEL ONLINE: According to the constitution of Bhutan, the people should not become richer every year, but happier. The little Asian kingdom wants to achieve this with a socially equitable society and better protection of the environment. Is this a better approach?