Top of the News: The markets are sifting Fed Chairman Ben Bernanke’s remarks before Congress today. Bottom line: The economy has slowed its rate of collapse; a few signs of bottoming out have emerged; the Fed is now starting to worry about deficits.
Aware of inflation concerns in the Treasury market and in China, Bernanke made it clear the Fed wouldn’t print money to sustain high deficits indefinitely. “Crucially,” he said, “whatever size of government is chosen, tax rates must ultimately be set at a level sufficient to achieve an appropriate balance of spending and revenues in the long run.”
Pimco’s Bill Gross is not convinced. According to Bloomberg, the founder of the big investment management outfit urged diversifying out of the dollar.
Midweek briefing: One dolorous trend we’ve escaped so far is landing on the list of worst places for credit-card debt. Add in foreclosure rates and Florida, California and its economic colonies of Las Vegas and Phoenix are recession central.
–$391 million in Washington general obligation bonds have earned a “AA” rating from Fitch. The rating service cited the state’s “sound financial and debt policies and a generally solid economy, although the state’s financial and economic position has substantially weakened in the current downturn, particularly in consumer spending.” “AA” is the second highest investment grade bond rating.
–How can Detroit reinvent itself? Wired-o-Nomics says learn from the Apple Store. “To rise from the ashes, automakers must think like Silicon Valley — blow up ‘stores’ in favor of experience centers. Let people buy what they want, when they want, and how they want.”
–Economist Mark Perry notes that the degree gap is growing. Women now dominate educational achievement at every degree level.
Today’s Econ Haiku:
A tip for Starbucks:
Is Job One fighting in court
Over the coin jar?