Top of the News: The OECD has good news and bad in its latest report on the world economy. Growth has resumed thanks to China. A sobering thought that, for Americans accustomed to being the enterprise engine of the globe. But that’s the good news.
The bad: The growth is not nearly enough to avoid further job losses in the U.S. and EU. “The economic recovery now spreading across OECD countries is still too timid to halt the continuing rise in unemployment,” according to the report by the organization of major industrialized nations.
Sure enough, today’s jobs numbers are bad. First-time jobless claims for the most recent week were 505,000. The 4-week moving average was down slightly, but still at 514,000. It’s better than the same time last year, but the U.S. economy must produce 127,000 net new jobs every month just to keep up with the natural growth of the labor force. Meanwhile, foreclosures are rising and mortgage deliquencies hit a record.
The Back Story: Goldman Sachs’ boss Lloyd Blankfein got into trouble by saying the bank was “doing God’s work,” backtracked, apologized for Goldman’s past sins and promised more charitable contributions and lending to small business. It will be a fraction of the $16.7 billion the bank has already set aside for executive bonuses this year (the small biz program comes in at $500 million).
Now comes Tyler Durden of Zero Hedge with a fascinating “forensic reconstruction” of Goldman’s charitable fund, and with it finding much more about the firm. Bottom line is that Goldman’s big profit surge has more to do with fewer competitors and tons of federal money than its trading acumen.
Matt Taibbi, who famously called Goldman, a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” weighs in, of course, trenchantly.
“I’ve heard more than once from traders who tell me that Goldman makes all its money gouging its clients, who either don’t know any better or are reluctant to get on the wrong side of the bank, for obvious reasons,” he writes on his blog. “Also, the fact that not only Goldman but all the banks have made mountains of money this year by borrowing cheap from the government and lending dear to the rest of the world is also manifestly obvious…”
Today’s Econ Haiku:
Howard’s pay is just a tall
Amid venti peers