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The Spectacle Blog

WH Cautious in Touting Better Than Expected GDP Number

By Philip Klein on 7.31.09 @ 9:48AM

Christina Romer, chairman of President Obama's Council of Economic advisers, was cautiously optimistic on CNBC about the better than expected GDP numbers, which showed the economy shrank at at 1 percent rate last quarter. "It is still minus, but less minus," she said.

Romer said that without the stimulus package, the economy would have shrank 2 or 3 percent instead, and insisted the numbers showed the economy was on "the right trajectory," and would begin to show growth in the second half of the year.

At the same time, she noted that the fact that economy still shrank implied that next week's unemployment report would show another few hundred thousand job losses.

Though the economy contracted at a slower pace, consumer spending was worse than expected, suggesting to economists a sluggish recovery.

The stock market has had a mixed reaction in early trading, fluctuating between slightly positive and slightly negative territory.

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ds80| 7.31.09 @ 11:33AM

Henry Ford had it right when he said: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning"

Derivatives, credit-default swaps, contango, blah-blah-blah ... it's mostly opaque to me too, and that's why We The People tend to just bob merrily along as happy ignorant corks as the financial oligarchy essentially does whatever it damn well pleases.

But here's something we can all grasp. It deserves to be spread far and wide (do your part!). The following is summarized from this blog post, which I recommend as a good read:

"JPMorgan Chase: recd $25 billion TARP, earned $5.6 billion in 2008, paid $8.7 billion bonuses

Goldman Sachs: recd $10 billion TARP, earned $2.3 billion in 2008, paid $4.8 billion bonuses

Morgan Stanley: recd $10 billion TARP, earned $1.7 billion in 2008, paid $4.5 billion bonuses

Citigroup: recd $45 billion TARP, lost $28 billion in 2008, paid $5.3 billion in bonuses

BankOfAmerica: recd $45 billion TARP, lost $24 billion in 208, paid $6.9 billion in bonuses.

"While of course all the Wall Street smartheads would call it a distorted comparison, it IS fair to simply take bonuses minus earnings and claim that what you have left is the part of the bankers' million dollar+ bonuses paid out of the pockets of the millions of Americans who have lost their jobs while and since the bonuses were paid."

So let's do that:

Bonus-Earnings:
JPMorgan Chase $ 3.1 billion
Goldman Sachs $ 2.5 billion
Morgan Stanley $ 2.8 billion
Citigroup $33.3 billion
BankOfAmerica $30.9 billion
TOTAL: $72.6 billion

Using the current 'continuing unemployment claims' number and rounding it down to 6 million,
that's $12,000 each unemployed person 'gave' away to the likes of Tim Geithner, Lawrence Summers, Hank Paulson, Lloyd Blankfein, ...

Nov 2010 can't come too soon.