Despite grim predictions, most major U.S. companies have reported positive earnings for the second quarter of 2009. Given how wrong past predictions have been, the fact that earnings have blown away expectations shouldn’t be so surprising. Still, the numbers are genuinely impressive: More than 73% of the companies that have reported so far have beaten earnings estimates—and stocks have rightly rallied.
Read moreYou Can be Great at Soccer or Globally Dominant — You Can’t be Both
So the United States lost to Brazil in the final of the FIFA Confederations cup, in that thrilling but painful tale of two halves, with the U.S. up 2-0 only to see Brazil roar back (or rather dance and prance and glide with balletic ferocity) and win 3-2. All I can say is, thank god.
Read moreYoussou N’Dour and “I Bring What I Love”: An Elegaic Meditation on Faith, Islam and Music
President Obama’s speech in Cairo last week as well as the candid and heated debates in Iran during its contentious presidential election provide yet another opportunity to revisit the sterile images of Islam that dominate the discussion both in the West and throughout the Muslim world as well. That discussion is framed by Muslim terrorists or extremists on the one hand squaring off against secular but resentful populations on the other. That is one facet of a kaleidoscope, a potent one but in no way the only one.
Read moreHow to Save Trade Partners That are Too Big to Fail
America and China accounted for half of global GDP growth last year. To stay strong, they must work more closely together. America, still the global leader, needs to take charge. Karabell sees five ways the U.S. can strengthen the one trade partnership that is too big to fail.
Read moreChina's Relationship With America
China is not happy. That's the title of the bestselling book in China. The five nationalist authors say it is time for China to "split from the West," particularly the United States and the Treasury bonds that Beijing holds to the tune of $1 trillion. This desire for greater distance from America is growing: in a May poll conducted by China's Global Times, 87 percent said they were against buying more U.S. debt.
Read moreWhy Beijing Wants a Strong Dollar
Twenty years ago, in the wake of the suppression of the student movement that had taken over Tiananmen Square, it seemed as if China's brief opening to the world had come to an end. In fact, 1989 marked the beginning of China's supercharged path to economic reform. The results have been tremendous: China is now the second pillar of the global economy and is increasingly vital given the vulnerability of the United States.
Read moreWE ARE NOT IN A GREAT DEPRESSION
It has now been firmly established—and endlessly repeated—that the world is mired in the worst financial crisis since the Great Depression. In the past weeks alone, there have been headlines announcing the "worst industrial production numbers since World War II" and the greatest contraction of prices since the middle of last century.
Read moreJOBS CUTS JUST AREN'T FAIR
More than 4 million Americans have been fired since last fall, and the job losses are far from over. April began with yet another stunningly bad report—663,000 jobs lost. The unemployment rate, now 8.5 percent, is likely to hit double digits over the coming months. Some economists say that even if the economy begins to recover later this year, it may not pick up enough steam to bring down unemployment until well into 2010.
Read moreLook to Beijing
A hundred years ago, London would have made sense as the spot where the world's leaders should gather, as they will this week, to grapple with a spreading economic crisis. The city was the early 20th century's nexus of finance and power, and Britain straddled the globe as the only true superpower. But we're in the 21st century now, and the G20 heads of state should not be plotting in the shadow of Big Ben. They should be sitting across from Mao's Tomb, near the Forbidden City, in the meeting halls off Tiananmen Square in Beijing.
Read moreEnough Already
The financial markets are again getting pummeled, both domestically and globally; the nearly $800 billion stimulus package signed with fanfare by President Obama has done little to alter the mood. In fact, if you read through financial websites and assorted blogs on politics, economics, or anything related to those, you will find a nearly endless sea of misery. The level of anger, pessimism, despair, and sheer hopelessness seems to reach new peaks every week, in inverse relation to the movement of global equity prices and the size of individual retirement accounts.
Read moreWashington Has Always Demonized Wall Street
'Wall Street, as we knew it, is dead. The system that allowed the U.S. economy to be a dynamic innovator has been fundamentally broken and the implications of these structural changes have yet to be fully felt." It's now commonly accepted that the economic meltdown has forever changed the nature of the financial industry. But the words above weren't written in the past weeks. They were penned by financial analyst Richard Wayman in 2003, after investigations by then New York Attorney General Eliot Spitzer led to a structural shift in the relationship between research and investment banking following the stock-market collapse of 2001-02.
Read moreThe New Unemployment Figures
As the equity markets take another huge step down, it's assumed that American consumers are so shell shocked by their loss of wealth that they will continue to hoard what little cash they have. Yet this relentless negativity may well be overblown: consumers didn't begin this crisis, but they may very well end it.
Read moreCONSUMERS ARE BETTER OFF THAN YOU THINK
As the equity markets take another huge step downward, it's likely that American consumers will continue to be shellshocked by their loss of wealth in both homes and stocks. Yet the relentless negativity about the state of the American consumer may well be overblown.
Read moreDon’t Demonize Debt
As Wall Street continues its slow-motion hari kari, tens of millions of people on the lower-end of the income spectrum are finding that their access to credit is becoming all but nonexistent. As banks set aside ever more cash to cover themselves against potential future losses, the credit spigot that flowed so promiscuously to riskier customers is now not flowing at all.
Read moreConfessions Of A Pundit
With the financial system in tatters and trillions of dollars of public financing at stake, economic experts have become a priestly caste. Every day, on air, online and in print, dozens of economists and strategists proclaim their views on how bad the crisis will get and how long it will last. But there's reason to be skeptical. Even though a fair number of these economic forecasters are informed and astute, they are not objective or neutral. I should know, because I've been one. And while I have always said what I believe, what I believe sometimes has been subtly shaped by who pays the bills.
Read moreAs Main Street Rejoices, Wall Street is a Basket Case
If you were not one of the 2 million people watching the inauguration on the Mall in Washington, you could watch the spectacle on any number of television channels. Flipping between ABC, CBS, NBC and PBS would have yielded different commentary but largely the same mood: euphoria, awe at the magnitude of electing the first African-American president, and somber urgency about what confronts our financial system and the world. Yet, even as Obama warned of a difficult road, the crowds were wildly enthusiastic, and millions were moved. Main Street has turned a corner.
Read moreConcern About Overindebted Americans Is Overblown
It's become a mantra: American consumers have been living beyond their means, borrowing promiscuously, and now the bill is coming due. Having nearly drowned in a sea of debt, U.S. consumers must now repair their finances, spend more prudently and recognize the wisdom of past generations: spend only what you earn. But while endlessly repeated by financial gurus, politicians and the media, the belief that American consumers as a whole have been living beyond their means is a myth. Wall Street was massively overextended, but on average, consumers are not.
Read morePolitical Expert View - Is the Stimulus Plan Big Enough to Succed?
Political trends expert Zachary Karabell assesses the impact of a new economic-stimulus package and whether it will be big enough to succeed.
Read moreAmericans Don't Spend Beyond Their Means
It's become a mantra: American consumers have been living beyond their means, using their homes as piggy banks, borrowing promiscuously, and now the bill is coming due. Having nearly drowned in a sea of debt, U.S. consumers must now repair their personal finances, spend more prudently and recognize the wisdom of past generations: spend only what you earn and what you have.
Read moreWhy Derivatives Aren't So Bad
They've been dubbed financial weapons of mass destruction, attacked for causing the financial turmoil sweeping the nation and identified as the kryptonite that brought down the global economy. Derivatives have become the universal symbol of Wall Street greed, yet few Main Streeters really know what they are—namely, financial contracts between a buyer and a seller that derive value from an underlying asset, such as a mortgage or a stock. That hasn't stopped public opinion from turning forcefully against them. Most experts believe that Barack Obama needs to put an end to the financial alchemy that turned low-quality mortgages into trillions of dollars of high-priced derivatives. There seems to be near consensus that derivatives were a source of undue risk.
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