The Federal Reserve Board announced on Thursday that Chairman Ben S. Bernanke will deliver a series of lectures aimed at college students. Beginning on March 20, he will lead four classes on “The Federal Reserve and the Financial Crisis” as part of a course offered to undergraduates at the George Washington University School of Business. The class will feature a variety of speakers who will discuss central banking. Chairman Bernanke’s lectures are scheduled for March 20, 22, 27 and 29 and will begin at 12:45 pm EDT.
To access the lecture series live, use the following link: http://www.ustream.tv/federalreserve
Every so often I come across something that stops me dead in my tracks; something so fascinating that I simply have to stop what I am working on [regardless of how important it is] and take an excursion that, in the end, proves to be paradigm-changing. This happened today.
A friend of mine referred me to a site that has a good video explanation of enterprise value and EBITDA. It wasn’t necessarily the content (though it was exceptional). It was the manner in which the information was being presented. I witnessed firsthand the future of learning.
Ever wished you could take a self-paced course or simply learn more about topics such as banking and money, the credit crisis, currency, current economics, finance, the Paulson bailout, valuation and investing, venture capital and capital markets? Now you can. Or, if you just wanted to brush up on your statistics, chemistry, algebra, biology, etc.? Now you can.
As an educator, my paradigm has been rocked. I now declare myself officially challenged to think even further outside the box. Stand back, this could be dangerous!
Want to see what I’m talking about…go to http://www.khanacademy.org and explore. Watch the TED Conference video (BTW, you should subscribe to the weekly TED conference presentations). Choose one of the 2,100 educational videos in the library and see for yourself. See the future of learning for yourself.
Hat tip to Rick Brown for the link (thanks buddy).
Care to take a guess at the top events affecting businesses in 2010? The struggling economy was voted the top business story of the year by U.S. newspaper editors surveyed by The Associated Press. The rest, as they say, is history.
1. Economy struggles: Climbing out of the deepest recession since the 1930s, the economy grows at a healthy rate in the January-March quarter. Still, the gain comes mainly from companies refilling stockpiles they had let shrink during the recession. The economy can’t sustain the pace. The lingering effects of the recession slow growth. The benefits of an $814 billion government stimulus program fade. Consumers cut spending in favor of building savings and slashing debt. Businesses hesitate to hire. Cities and states lay off workers. Growth slows through spring and summer. Unemployment stays chronically high. In May, the number of people unemployed for at least six months hits 6.8 million — a record 46 percent of all the unemployed. Pointing to the deficits, Congress resists backing more spending to stimulate the economy. The Federal Reserve seeks to fill the void by announcing it will buy $600 billion in Treasury bonds to try to further lower interest rates, lift stocks and coax consumers to spend. As the year closes, the economy makes broad gains. Factories produce more. Consumers — the backbone of the economy — return to the malls. Congress passes $858 billion in tax cuts and aid to the long-term unemployed. Yet more than 15 million Americans are still unemployed. Economists say a full economic recovery remains years away.
2. Gulf oil spill: An explosion at a rig used by BP kills 11 workers and sends crude oil gushing into the Gulf of Mexico. The spill devastates the fishing and tourism industries along the Gulf Coast and causes environmental damage that may last for decades. BP sets up a $20 billion fund to compensate fishermen, restaurateurs and others whose livelihoods were damaged. The oil giant still faces civil charges and a criminal investigation by the Justice Department and lawsuits from hundreds of individuals and businesses. BP’s stock market value shrinks by more than $100 billion after the April 20 disaster before bouncing about halfway back.
3. China’s rise: China passes Japan as the world’s second-biggest economy. The World Bank says it could surpass the United States by 2020. China’s gross domestic product is spread out over 1.3 billion people — amounting to about $3,600 per person. That compares with GDP in the U.S. of about $42,000 per person. In Japan, it’s about $38,000 per person. China’s thirst for raw materials and other products helps the rest of the world recover from the recession. Still, the U.S. and Europe complain that China gives its exporters an unfair competitive edge by keeping its currency artificially low.
4. Real estate crisis: Housing remains depressed despite super-low mortgage rates. The average rate on a 30-year fixed mortgage dips to 4.17 percent in November, the lowest in decades. But home sales and prices sink further. Nearly one in four homeowners owe more on their mortgages than their homes are worth, making it all but impossible for them to sell their home and buy another. An estimated 1 million households lose their homes to foreclosure, even though the pace slows after evidence that lenders mishandled foreclosure documents. Some did so by hiring “robo-signers” to sign paperwork without checking their accuracy.
5. Toyota’s recall: Toyota’s reputation for making high-quality cars is tarnished after the Japanese automaker recalls 10 million vehicles for sudden acceleration and other problems. Toyota faces hundreds of lawsuits alleging that some models can speed up suddenly, causing crashes, injuries and deaths. Toyota blames driver error, faulty floor mats and sticky accelerator pedals for the unintended acceleration. The uproar damages its business. Toyota’s U.S. sales rise just 0.2 percent through November in a year when the industry’s overall sales climb more than 11 percent.
6. GM’s comeback: General Motors stock begins trading again. It signals the rebirth of a corporate icon that fell into bankruptcy and required a $50 billion bailout from taxpayers. GM uses some proceeds from its November initial public offering to repay a portion of its bailout. (Washington still holds about a third of GM’s stock.) GM’s recovery helps rejuvenate the industry. Sales of cars and light trucks rise 11 percent through November compared with the same period in 2009. Shoppers who had put off replacing their old cars return to showrooms.
7. Financial overhaul: Congress passes the biggest rewrite of financial rules since the 1930s. The law targets the risky banking practices and lax oversight that led to the 2008 financial crisis. The law creates an agency to protect consumers from predatory loans and other abuses, empowers regulators to shut down big firms that threaten the entire system and shines more light into markets that have eluded oversight. Republican critics say the law goes too far, imposing burdensome rules that will restrict lending to consumers and small businesses.
8. European bailouts: Greece and Ireland require emergency bailouts, raising fears that debt problems will spread and destabilize global markets. European governments and the International Monetary Fund agree to a $145 billion rescue of Greece in May and a $90 billion bailout of Ireland in November. The bailouts require both countries to slash spending, triggering protests by workers. Investors fear that debt troubles will spread to Spain, Portugal and other countries, weaken the European Union and threaten the future of the euro as its common currency.
9. Facebook growth: Facebook tops the 500 million user mark. It expands its dominance of social media and further transforms how the world communicates. If it were a country, Facebook would be the world’s third-largest. Facebook tightens its privacy settings after criticism that personal information is being disseminated without users’ knowledge or permission. Founder Mark Zuckerberg is named Time magazine’s “Person of the Year” and is the subject of a high-profile movie about Facebook’s creation.
10. iPad mania: Apple Inc. unveils the iPad, bringing “tablet” computing into the mainstream and eroding laptop sales. Apple is expected to sell more than 13 million iPads this year. The iPads sell about twice as fast as iPhones did after their 2007 introduction. The price of Apple stock rockets more than 50 percent in 2010. Competitors scramble to try to catch up. They include the Dell Streak, BlackBerry PlayBook, the Samsung Galaxy Tag and HP Slate.
It’s always good to maintain perspective (click on graph to enlarge):
HT: Doug Short of dshort.com (financial planner)
U.S. consumers reduced their debt in May for the fourth consecutive month, the Federal Reserve reported Wednesday. Total seasonally adjusted consumer debt fell $3.22 billion, or a 1.5% annual rate, in May to $2.52 trillion. Consumer credit fell in eight of the past ten months. The drop in May is the smallest of the group. This is the longest string of declines in credit since 1991. Credit-card debt had the biggest drop in May, falling $2.86 billion, or 3.7% to $928 billion. Non-revolving credit, such as auto loans, personal loans and student loans. fell $367.1 million or 0.3% to $1.59 trillion.
The graph above shows the year-over-year (YoY) change in consumer credit. Consumer credit is off 1.8% over the last 12 months. The record YoY decline was 1.9% in 1991 – and that record will be broken over the next couple of months.
Note: Consumer credit does not include real estate debt.
Interesting banking figures from Mark Perry:
Number of bank failures this year so far: 45
Total Assets of the 45 failed banks: $36.965 billion
Total Bank Assets of All 8,246 FDIC-insured banks: $13.542 trillion
Failed Bank Assets as a Percent of Total Bank Assets: .27% (or about 1/4 of 1%)
Bottom Line: The worst of the banking crisis seems to be behind us, the percent last year was 2.69%.
If so, click here.
A week of gains, and not small ones either. The question on people’s mind now is what’s behind the rise and will it last.
Much of the rally appears to have been driven by activity in the drugs sector. A flurry of mergers this week sparked gains that overcame downward momentum in energy. Also, a few of the big banks came out and said they actually made money in the first two months of the year.
Now, making a few million bucks at the very start of the year after being rescued by government billions isn’t exactly a signal that all is well with the financials, but after the battering suffered by the likes of Citigroup Inc. (C), Bank of America Corp. (BAC) and Morgan Stanley (MS), it is apparently enough to spur some buying. As to whether the rally will last or merely sets the stage for a new leg lower, stay tuned.
The Dow Jones Industrial Average (DJIA) rose 53.92 points or 0.8% on Friday to close at 7,223.98. For the week the index was up 9%. The Nasdaq Composite Index (COMP) added 5.4 points or 0.4% to close at 1,431.50 on Friday, a 10.6% gain for the week. The broader S&P; 500 Index (SPX) rose 5.81 points or 0.8% to close at 756.55 on Friday. The index’s gain for the week came to 10.7%.
Maybe the market trend will continue into next week. Hopefully, the combo of rain this week in the South and temps in the 70’s next week will kick start the season into high gear.
Jonathan Jarvis’ animation of the credit crisis is one of the best explanations I’ve seen yet. It’s not perfect, but provides an excellent overview. Be patient though — while it’s only about 11 minutes long, it takes a few seconds to load, but is worth the wait.