Plenty of good stuff as I catch up on my web surfing. First of all, “Maxed Out” is available for viewing online. This movie is an indictment of the credit card industry and is a must view before you brandish that plastic.
Bill Moyers interviews John Bogle. “Well, let me say it very simply. The rewards of the growth in our economy comes from corporate, largely – from corporations who are a very important measure, from corporations that are providing goods and services at a fair price innovating and bringing in new technology — providing a higher quality of life for our society and they make money doing it. I mean, and the returns in business in the long run are 100 percent the dividends a corporation pays and the rate at which its earnings grow. That still exists. But, it’s been overwhelmed by a financial economy. The financial economy, which is the way you package all these ways of financing corporations, more and more complex, more and more expensive. The financial sector of our economy is the largest profit-making sector in America. Our financial services companies make more money than our energy companies — no mean profitable business in this day and age. Plus, our healthcare companies. They make almost twice as much as our technology companies, twice as much as our manufacturing companies. We’ve become a financial economy which has overwhelmed the productive economy to the detriment of investors and the detriment ultimately of our society.
BILL MOYERS: By the financial sector, you mean?
JOHN BOGLE:Banks, money managers, insurance companies, certainly annuity providers. They’re all subtracting value from the economy. They have to subtract. To be clear on this now — I don’t want to overstate it. To be clear on this, they have to subtract some value. But, the question is–
BILL MOYERS: What do you mean they subtract some value?
JOHN BOGLE:In other words, — you’ve go to pay somebody something to provide a service. It’s just gotten totally out of hand. My estimate is that the financial sector takes $560 billion a year out of society. Five hundred and sixty billion.”
A good summary from the Financial Times of where we are: ”
If the economy – above all the job market – takes a serious turn for the worse, the risk of fresh turmoil would increase substantially.
The macroeconomic data are still cloudy, with weak figures on housing, soft durable goods orders and lower confidence set against yesterday’s resilient consumer spending report.
It is possible for improvement in market functioning to co-exist with increasing concern about the economy – but not for long. Either the economic data will point upwards, in which case the market healing process should speed up, or they will point downwards and then markets are likely to take another turn for the worse.”
Brian Milner of the Globe&Mail and Don Coxe on the TED spread: ”
As the U.S. dollar plumbed new depths yesterday against the euro and other major currencies and woes stemming from the U.S. mortgage mess continued to mount, the question in the marketplace was not if, but when the next major financial crisis would hit.
To which we would add: Will we have enough warning to take cover from the coming storm? And what form should that shelter take?
It’s certain that we can’t rely on central bankers or other government officials to clue us in. Most are still reassuring the public that all is right with the world and that there will be little economic spillover from the turmoil in the credit and currency markets.
…But for all that, if the good old TED spread widens again beyond, say, 1.75, it’s a safe bet that the system has yet to repair itself. “
September 30th, 2007 by 
reality
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