The government forks over another $13.8 billion to Fannie Mae and Freddie Mac to cover their losses for the last quarter. The regular drumbeat of bailout billions handed to these zombies barely enters the nation’s consciousness anymore, but it adds up: $184.8 billion since 2008. And there is no end in sight. Supercommittee, where art thou?
In what may be a precursor of a monumental shift, Toyota and Honda are planning to export U.S.-made vehicles to South Korea. Apparently, it’s now cheaper to produce cars here and ship them halfway across the world than it is to produce them in Japan. But to what banana-republic levels will the dollar and real wages have to sink before U.S. manufacturing is competitive with China?
Yakuza just can’t catch a break. Now it’s life insurance companies that are tightening the noose. Organized crime is big business in Japan. Extortion, built on a culture of shame, is phenomenally successful. But…. In 1963, there were 184,000 yakuza. In 2009, they were 80,900. And new laws disrupt the ambiguous relationship between them and society.
No country is economically more dependent on the survival of the euro than Germany: the export powerhouse thrived because Eurozone countries could borrow unlimited amounts of euros to buy German goods. But now that the gravy train has stopped in front of a mountain of unmanageable sovereign debt, Germany finds itself at war—with itself.
Participants in the G-20 meeting in Cannes thought it would be a relaxed affair of photo ops, handshakes, and fancy dinners, interrupted by rubber stamping the Grand Plan of bailing out Greece, bondholders, and European banks. But then Giorgios Papandreou, prime minister of Greece, fired his bazooka. And the Greek extortion racket was back on.
The season’s ditty: companies announce big profits after they jack up prices. But even the inexplicable American consumer, the toughest creature out there, struggles with these prices as misery spreads into the middle class. Now add HoneyBaked to the list, just in time for the holidays. But there is hope.
The members of the congressional panel on deficit reduction are struggling to come up with something that will—I mean, let’s be realistic—get them reelected and fill their campaign funds. Even if they come up with a plan that will reduce the gargantuan budget deficits, Congress won’t follow through. Because it doesn’t have to, thanks to the Fed.
According to last week’s GDP number, the economy has been growing supposedly at a rate of 2.5% in the third quarter—thanks largely to the inexplicable American consumer, the toughest creature out there. But there are some pernicious trends and unpleasant zigzags that point the opposite way.
Tokyo’s organized crime exclusionary laws went into effect in October—and are wreaking havoc. Now doing business with the yakuza is a crime. In an ingenious twist, paying off the yakuza is also a crime. Even victims of blackmail—hush money is an outright industry in Japan—commit a crime if they pay.
Real estate in Cyprus has been popular with foreigners—they own 100,000 homes in a country with 803,000 people. Turns out, it’s Cyprus’ national sport sponsored by dumb money. Now the underlying title-deed scandal is unraveling the finances not only of expat owners, but also of the banks and the government … who are hushing it up.