The Postal Service announced a staggering loss for fiscal 2011: $5.1 billion. Plus $5.5 billion for retiree health benefits that it should have paid in 2011 but deferred to fiscal 2012. Now it’s due. But there’s no money. Default? Nope. Congress will find a way to stick it to the taxpayer. But amazingly if run right, the Postal Service could be a decent business.
When The Truth About The US Economy Comes From China
by Wolf Richter • • Comments Off on When The Truth About The US Economy Comes From China
In his “enough’s-enough” speech in Hawaii, Obama castigated China for its currency peg, a perennial complaint. Congress too regularly hyperventilates about the yuan being “artificially undervalued.” If China just allowed the yuan to trade freely, they say, it would solve the U.S. economic quagmire. Cheap political posturing—and full of bitter ironies.
Germany Sees Greece’s ‘Worst-Worst-Case-Szenario’
by Wolf Richter • • Comments Off on Germany Sees Greece’s ‘Worst-Worst-Case-Szenario’
Judging from the stream of rumors and energetic denials, German bureaucrats, experts, and politicians are furiously working on dozens of projects that all deal with the debt crisis, and they go off in as many directions. But at the end, there is what they call in their inimitable German a Worst-Worst-Case-Szenario.
The Eurozone Turns Down Chinese Money And Quid Pro Quo
by Wolf Richter • • Comments Off on The Eurozone Turns Down Chinese Money And Quid Pro Quo
For months, rumors China would use its foreign exchange reserves to bail out the Eurozone with the stroke of a plastic pen goosed financial markets. But China has a list of demands. German industry refuses to cede ground. People shudder at becoming dependent on money from the communist regime. Clearly, the debt crisis isn’t deep enough yet.
Bailing out Zombies, Again
by Wolf Richter • • Comments Off on Bailing out Zombies, Again
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?
The Price of Hope in the Mayhem of Manufacturing
by Wolf Richter • • Comments Off on The Price of Hope in the Mayhem of Manufacturing
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 Ineligible For Life Insurance
by Wolf Richter • • Comments Off on Yakuza Ineligible For Life Insurance
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.
Germany at Its Rubicon
by Wolf Richter • • Comments Off on Germany at Its Rubicon
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.
Greece’s Extortion Racket Jumps To The Next Level
by Wolf Richter • • Comments Off on Greece’s Extortion Racket Jumps To The Next Level
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.
Inflation High on the Hog For the Holidays
by Wolf Richter • • Comments Off on Inflation High on the Hog For the Holidays
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.