Citizen-generated stories to help people cope with the economic crisis, and questions answered by a stable of personal finance experts.
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Last week, Microsoft and Yahoo agreed to join forces after years of rumors, back-and-forth brokering, and debate in the Internet industry. And just the week before, another big online force, Amazon, bought successful online shoe retailer Zappos. Do these deals mean the weak economy could be a good time for mergers and acquisitions?
WNYC’s Brian Lehrer Show spoke with Web guru and Mahalo search engine founder Jason Calacanis today for his take on the Yahoo/Microsoft deal.
“I think this is a disaster for Yahoo and their shareholders…search is just an awesome business in terms of revenue and profitability… it’s the greatest advertising medium ever created…The big irony of it was, yahoo gave their search business to Google.”
PBS blog Mediashift asks for your opinion on the new Microsoft search engine Bing and gives a roundup of sources analyzing the Yahoo deal. And Marketplace looked at the details of who gets what out of the search agreement.
Last year, Nightly Business Report discussed the likelihood of mergers and acquisitions in recession eras.
Linda Gridley, CEO of Grindley & Co. said in an interview:
“You are seeing a big land grab for strategic maneuvering and positioning and market share building in that market environment. And companies have strong stock prices. They’ve got lots of cash and so they’ve got the money to be able to spend.”
Are more big deals from Silicon Valley to Wall Street in the works as the economic climate falters?
The government’s Cash for Clunkers plan has dominated headlines this week – working so well in some places that dealerships have run out of cars.
Nightly Business Report’s Xchange blog details how the program is working so far, and which members of Congress are voicing their support to extend it.
“Today, Senators Diane Feinstein (D-California) and Susan Collins (R-Maine) announced their support for extending the program. Despite earlier concerns, they are happy with how consumers are using the program, particularly the increase in the number of fuel efficient vehicles purchased.”
But some senators are skeptical, Capitol News Connection reports:
Sen. Claire McCaskill (D-MO) said she worries any new spending will further burden taxpayers.
“Most of the folks who are buying cars with this program would have probably bought a car. Maybe not today or tomorrow or next week, but probably in the next 18 months,” McCaskill said. “What does that say for demand next year, when this recovery needs to be sustained? Aren’t we just robbing Peter to pay Paul?”
KCRW’s “Which Way LA” spoke with California car dealers who are hoping Cash for Clunkers funding continues.
And for a car-related (and gas-saving) fun fact of the day, NewsHour’s Paul Solman finds out why different makes of cars have the fuel doors on different sides.
Economic Naturalist author Robert Frank explains:
“Putting fuel filler doors on different sides of different cars thus means that some cars can access pumps from the left. And this makes it less likely that drivers will have to wait in line for gas. That benefit greatly outweighs the cost of occasionally pulling up to the wrong side of the pump in a rental car.”
Everyone seems to have France on the brain lately, but today it wasn’t just because of the Julia Child craze that’s sweeping the nation — the recession was declared over in France and neighboring Germany. While it doesn’t seem that Europe’s good fortune is coming to the States anytime soon, the economy stateside may not be all doom and gloom.
“History shows the deeper the recession, the stronger the bounce. And some people are now wondering what’s different this time around. Why should this time be any different? Even coming out of the Great Depression the U.S. economy did grow quite substantially,” Marketplace senior correspondent Bob Moon reported.
But even with growth in certain sectors, Nightly Business Report put a reality check on any reported comebacks in the job market here in the U.S.
“Just to stay even with the new workers entering the job market every year, the economy needs to produce about 130,000 jobs a month. We’re losing more than 300,000 jobs. To begin whittling down the unemployment rate, you need job growth of around 300,000 jobs a month.”
There’s little consolation for the hard numbers, but maybe the proof is literally in the pudding. If finance follows flavor, this USA Today story suggests that French cooking may be on its way out in the U.S. Is it just a little bitterness over the slow-to-follow-suit economic recovery, or is the economy really making duck a l’orange take a back seat to a good burger?
Fannie Mae headquarters/Credit: Flickr/FutureAtlas
It’s been a year since both Freddie Mac and Fannie Mae were taken over by the federal government (here’s a look at why), followed by the fall of Lehman Brothers. While the recession may have deeper roots, the banking collapse got the media looking at how we got here, and now – how to get out. Planet Money’s first podcast, a year ago this week, looks at how investments in China may have contributed to banking insecurity.
Fast forwarding to this week, NPR’s Tell Me More spoke with Wall Street experts Marcus Mabry of the New York Times.
“You already had a recession, and recessions happen. That’s a normal part of life in a capitalistic system… The financial crisis took what was already a recession that was well underway and just amplified its effects,” Mabry said on the program. “I mean, the fear here – and we saw this with the recovery under George W. Bush. We saw jobless recovery for the majority of that recovery, which meant that the economy was growing, but companies were exacting so much from their current workers that they actually -as far as work and productivity – that they were actually not hiring new workers….Ironically, those banks that we talked about, the ones that survived the economic cataclysm of a year ago, are actually many of them wealthier and richer – Goldman Sachs comes to mind – than ever.”
Has the stimulus package had an effect yet on helping average Americans survive the crisis that started with the banking system? On the 200th day since the Recovery Act was passed, Vice President Joe Biden argued that the bill was an overall plan, not a single “silver bullet” for bringing back jobs and helping those in need. ProPublica’s Shovelwatch blog fact-checked some of Biden’s claims:
“According to Biden, one of the main goals of the Recovery Act was to “bring relief to those hardest hit by the recession.” But as ProPublica reported last month, a county-by-county breakdown of contracts, grants and loans showed no relationship between where the stimulus money is going and either unemployment or poverty.”
Recovery.gov has a new chart plotting tax relief so far from the Recovery Act
But while most economists agree that the worst is over, even many major banks aren’t out of the woods yet. NewsHour reported just this week that more banks may be on the road to failure, having not recovered from bad loans and the mortgage crisis.
Wall Street/ Credit Flickr user carlossg
Today, President Obama was on Wall Street, discussing the financial crisis and next steps on the one-year anniversary of the Lehman Brothers meltdown. Nightly Business Report revisited the collapse and also shared Treasury Secretary Larry Summers’ reaction from one year ago.
“As for Wall Street itself, there is little evidence any lessons have been learned,” NBR’s New York Bureau Chief Scott Gurvey writes.
In Congress, things are also slow to change.
Rep. Barney Frank (D-Mass.) recently answered a popular question posed on Ask Your Lawmaker: “It seems that a simple fix to one of the key causes of the current financial meltdown would be to create regulation or statute that requires mortgage originators to service the loans they originate through the life of the loan. Will you enact such legislation now?”
His response was tempered:
“It is important that whoever the servicer is have full rights to restructure the mortgage. So I think it’s acceptable to say it can be sold, as long as the originator—the originator should not be able to sell the entire responsibility for the loss—the originator should have to retain some of the risk.”
Have we learned anything in the past year? On a more personal level, people are making adjustments, even where Wall Street has not. Marketplace spoke with experts and everyday people about how our habits have changed.
“Our family did little things, like making coffee at home instead of stopping at Starbucks on the way to work. And big things, like putting together an emergency fund. Even for those of us lucky enough to keep our jobs, the fear was palpable, intimate, because it was our money at stake, yet utterly global in scale,” correspondent Tess Vigeland reported.
What little things have you done to reflect the larger financial changes the country has faced this past year?
From Twitter NPR: Economy Nightly Business Report Marketplace Business Desk WNYC: Economy Economy Story: Featured VideosReporters and producers from around the country are attending "economy bootcamps" to understand the current downturn.
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