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Moody's threatens New York state's Aa3 credit rating if it doesn't cut spending to address a $3.2B deficit. The rating is stable for now, assuming cuts go through and that revenue from Wall Street bonuses exceed the state's projections.

Here's Moody's, trying desperately to gain credibility.... Don't worry, as soon as you publicly dismiss all of your 'experts' who rated mortgaged backed securities AAA, we'll forgive you.

Government Spending Binge Weighing on Markets and Consumers

Based on some of the comments, I'm not sure its clear that blaming Obama for the current deficit is absurd...

Before Obama even took office, the OBM was prediciting a deficit in the range of $1.2 trillion.

Let's be clear: this is a Republican manufactured issue. Shifting responsibility to the party that is cleaning up the mess another created is childish.

The Fed: Backed into a Corner?

Are you saying that its the Democrats' fault we don't have usury protection because of the Supreme Court's decision?

Why the Market Is Going Up: A Ludicrous Theory

I'm not sure this theroy is too far fetched...

A few weeks ago I was reading in the Economist that somewhere around 30% of stimulus money in China has found its way into national equities (That is, the Chinese stock market).... Not sure how the writers were able to devine that percentage, but even if it were just a faction of that, it would still be very significant. And yes, there is that absurdity of debt - paid for by taxes - that is simply used to support and rally equity or bond prices.

U.S. Healthcare Legislation Investment Impact

We all due respect, I find it absurd that the author does not account for the vast increase in market that most all device manufacturers, pharma corporations, etc will witness: More people covered, more healthcare coverage, more money spent on the industry...

Currently the budget office is estimating roughly $120 billion a year in added expenditures. That's around $1,000 per household. Any other industry would be jumping for joy, but healthcare is next to the energy industry when it comes to playing nice with government and the public... ANYTHING that restricts freedom is greeted negatively, never mind the necesity of it.

Additionally, if you don't think taxes on devices will simply be past along to the patient / insurer you haven't been paying attention to business in America. Companies will not lower margins; they will not absorb taxes.

Just my opinion, but I work for a device manufacturer and help set pricing and deal with insurance reimbursement issues everyday.

The Demise of Japan as an Economic Power?

The major problem with Japan is their reluctance to consume?

Nope... You would then find the same issue with all northern European and Scandinavian countries, which operate with large trade surpluses and conservative domestic consumer behaviors. These are the most robust economies in the world.

Look instead to the way Japan subsidizes the largest businesses at the expense of the population in general. Japan has macro economic issues stemming largely from an economy geared to provide cheap capital and vast structural support to entrenched multi-nationals... This short changes roughly 80% of the remaining business activity, including consumer spending.

Capital at roughly zero percent interest, for decades and decades? Yes, but only if you are part of a keiretsu (part of a chain of interlocking businesses, often with banking and heavy industry at the center). These include all Japanese companies with household names - Sony, Mitsubishi, Komatsu, etc.

Recently, we have seen the devastating effects of giving away money with almost no oversight and bogus expectations for returns... try doing that for years and years, and you'll end any forward momentum an economy might have.

How Auto Bailout Is Punishing Ford

Anyone who is familiar with Michael Porter's landmark management theories might have easily predicted much of what has happened in the US auto industry... although with a different outcome.

We studied him in school - particularly the 'five forces' model - and its so interesting to see how the issues with suppliers and their overlapping relationships with GM, Ford, and Chrysler are always referenced as a reason to NOT let a company go bankrupt. There's that 'collateral damage' argument: one failure brings down one or more 'innocent' companies...

The problem I have with this is that a good supplier strategy would have insulated a manufacturer from this outcome. These are not innocent companies. The manner in which the US auto manufacturers made a habit of beating-up their suppliers on price and product was legendary. It has now come back to haunt them... but under our new rules of capitalism it is a virtue, not a vice. They drove suppliers out of business and destroyed opportunities for alternative sources of parts. They did this intentionally, and without regret. And so now, rather than having to face the consequences of their bad management (collateral damage), they're rewarded for it. I find this absurd.

A Look at Annual Real GDP Growth

Agreed with the comment about gov't spending and GDP "growth"....

How can we have intelligent conversations about macro economics without looking at the gov't debt that is driving the larger economy?

Frankly, this is as stupid as an unemployed person claiming "growth" just because he maxed-out his VISA with a cash advance.

Cash for Clunkers was estimated to account for roughtly 1% of GDP growth alone. That is all debt, and is not sustainable... How many different ways does this need to be said?

GMAC's Bond Offering: When Junk Isn't Junk

I'm an Onion reader, and you definitely hit the nail on the head...

The GMAC situation is an insult to our intelligence. Why this thing hasn't been allowed to fail is beyond me... (Of course, if I consider the political realities and the GM / gov't relationship the water is less murky, if more ridiculous.)

At its peak, roughly 40% of GM's profits were attributable to GMAC, which should tell you something about the unholly alliance GM made with financing.

Obama's crew is going to need to grow some balls and end these pathetic subsidies if they want to remain credible. Support for idiot business does nobody any good in the long term... Unfortunately, they seem only to be looking at next month's figures.

We're Out of Recession, But a Long Way from Recovery

Sorry to be an ass, but this interpretation of GDP is absurd without even a cursory glance at the government spending involved:

Cash for Clunkers, first time home buyer credits, etc are attributable to roughly 50% of the increase in GDP... Is this healthy growth? Sustainable?

Savy investors look at ongoing operations, rather than one time events to judge trends... Why is it so difficult for economists to apply the same logic?

Is This Rally Toast?

Reading P/E ratios as an index are difficult - in part - because they include many companies that have negative earnings... Typically, a company that is at a loss simply does not report a P/E, which may be controversial, but does suggest that the

U.S. Dollar Now Testing $1.50 Per Euro

Sure... but the Chinese somehow stimulating their internal market and suddenly turning into a large consumer?

This is absurd... 80% of the Chinese population is rural, meaning life is semi-primitive. Imagine neighborhoods that go dark at night because there is no electricity, and you have some idea of what rural China is like.

Looking to Short the Mexican Peso Despite the Drawbacks

At roughly 1 US dollar to 13 Pesos, the dollar is already much stronger in Mexico than it has been for many years... A significant decline in the Peso against the dollar would put the two currencies in a range not seen for decades.

Also, anyone who has done much traveling in Mexico - I own property on the west coast - would have first hand knowledge of just how much improvement Mexico has seen in the last twenty years... Infrastructure is much improved, and life is far less thugish than I've ever seen. Mostly the violence is related to border-cities (Juarez, especially) and is indeed extreme, but as for economic disruption? That has yet to happen aside from some tourism, and on the scale that would effect the currency, it would need to be massive.

I read that Economist article, and yes, the management at Pemex is just atrocious... If anything, the article was kind to the government, its minions and its outlook.... The oil situation is what would cause me to doubt the stability of the Peso more than anything.

Its interesting, though... If you track both the Bolsa (the Mexican market) and the Dow, they tend to move very much in concert. A big split between the dollar and the Peso would certainly show up there as well.... It will be interesting (at the very least) to watch in the next year.

The Marginalization of Risk

Are we really going to blame the underclass and policies to help the working poor for a 30% decline in markets around the world?

Consider that 27% of second mortgages were used in 2006 to finance new vehicle sales (a depreciating asset) and you have some idea of how stupidly credit was spread across the ENTIRE US economy.

Yes, we all know that subprime loans were the begining of the end for the many banks, but to shift blame to low income earners is just a tactic to disguise the real incompetence of the whole structure - from credit rating agencies to the Oval Office.

Cramer's Mad Money - The Oddest Retail Phenomenon in 30 Years (10/7/09)

Covidien is indeed a well-run company... In general, medical device companies are FAR better profit generators than healthcare delivery companies, and Covidien has a strong device business.

Cramer's comments on the healthcare industry, however, continually show how little he and other talking heads understand that business and how it will be effected by government intervention. The last time our government 'intervened' in the healthcare system in any force, it was a boon to the business, particularly to Pharma -- think of Bush's giveaway in prescription drug subsidies. (The budget office actually lied their asses off and risked felony counts to restate numbers and silence critics... but we've all forgotten about that now)

Here's a clue: companies with strong lobbying activities and built-in relationships will benefit the most. Fringe players - like homehealthcare business that actually demonstrate value and need - will continue to struggle against a market that only cares about scale and profits.

Changes to our healthcare system will likely expand coverage, greatly... But the downward pressure on prices will be no more felt than in any other government supported industry -- think of our $1 trillion for the Iraq and Afghan wars with zero oversight, and you have the model for modern healthcare.

Healthcare reform will simply be a money grab for the big players until a more reasoned and moderated system arrives years and years from now.