There was a story on PBS last week about the near lack of serious business news reporting on the financial mess as it was developing. One of the commentators was a University professor who has been studying financial news reporting, and he basically said that the financial press is still not doing an acceptable job of reporting, and the situation is made worse because of budget cuts impacting serious news gathering.
I have for many years thought and said that the press is a big part of our problems. Frankly I don't think the majority of the local and national media are worth scat. They don't report information. They report gossip. I don't think must of them have experience and education concerning the issues for which the report.
To have CBS or one of my local papers report intelligently about the economy and finance would be as pointless as asking my dog.
The Wall Street Journal is an exception. The mess at AIG goes all the way back to Spitzer. Remember him? He was blackmailing and bullying companies a few years ago. One of his targets was AIG. The guy that created AIG is named Greensburg. Greensburg did not back down from Spitzer and fought back. Greensburg kinda won kinda lost. He had made AIG into the company it WAS at this point and was up there in years. After the fight with Spitzer he was force out of the company that he built. This was going on YEARS ago.
The new CEO is the guy that made the investments that wiped out AIG. That CEO is gone. The new CEO was brought in to clean up the mess.
Its doubtful if Greensberg would have made the investments that his replacement did and thus AIG would not be a TLA(Thee Letter Acronym) known by many people.
Spitzer. Remember him? The Attorney General for NY? Somehow elected to be the Govenor of NY. Then he got caught with the high priced ladies.
The WSJ had reported on his shenanigans for years. You just had to shake your head as you watched the train wreck about to happen. Maybe it was covered by the media in NY/NYC but it sure did not get coverage else where until the ladies became invovled.
What I find interesting are links to speeches by Bernanke and Warrent Buffet posted on TBN. My take on Bernake's speech in 2006 was that nobody really understands the finacial markets. Its a technology, my word, that changes to fast for people to figure out. You might understand at a given point in time but that understanding may not be valid at a different point in time.
Buffet's article on government deficits or as he calls it, Stealth Stealing, hits the nail on the head. The Feds just created a trillion dollars out of nothing. Mortgage rates are falling. For now. But inflation is on the way. Oil prices are going back up as the value of the dollar drops. I just bought a new camera and I paid about 10-15% more for it compared to a few months back. Why? Because of the falling value of the Dollar vs the Yen. With the cheaper dollar those people holding US investments see a loss of value. Who holds lots of investments in Dollars? The Chinese. That is why they are making noise about what is going on in the US economy.
We are hunkering down as best we can. But we always hunker so there is not much more hunkering we can do.
On the other hand we are still taking a vacation this spring. If not for the kids we would likely not go. But the kids are at an age where they would enjoy these vacations. They wont be this age again. The money we spend on the vacation is not going to stop us from loosing the house if things go bad so we might as well build the memories when things are not bad.
Notice I did not say good.
Later,
Dan
