Economics Update

Well, we have Bernanke and Paulson acknowledging that the economy is in trouble, but denying that there will be a recession in 2008.

The thing is, we are already in a recession. Let's seem consumer spending is flat, with a false increase being driven by increasing food and fuel prices, and the growth rate is less than the real inflation rate.

In bond insurance, we have NY governor Elliot Spitzer saying that the Monolininers have 4-5 business days to recapitalize, or they will lose their AAA ratings, and regulators will have to, "have to step in and separate bond insurers' municipal businesses from their more troubled structured finance units".

Bet that offer from Warren Buffet does not look so awful now.

In mortgage loans, banks are lobbying hard to put off their bad investment choices on the US tax payers, which is not surprising, considering that house prices took their biggest quarterly drop ever, a national median price drop of 5.8% in Q4 of 2007.

Annually, that comes to about 23%/year.

The credit crisis is extending further, with delinqencies in assets backed by auto loans surging.

The Trade deficit fell in 2007, for the first time since the 2001 recession.