Apologies for a series of uncreative post titles, but they seem to expedite my blogging a little. First, if you haven’t had a chance to vote for the Portfolio Armor iPhone app in the Thomson Reuters StreetApps Challenge, please take a few seconds to do so here. Please note that you do not need to be a member of Facebook to vote: you can also vote through ChallengePost. I know some of you reading this haven’t voted yet, so get to it. Thanks a lot.
– The Financial Times: The Crisis of Middle Class America. A long, gloomy article about how the “Great Stagnation” — the niggardly 10% increase in real incomes of the bottom 90% since 1973 — has been exacerbated by the current Great Recession. The article quotes Harvard economist Larry Katz’s analogy for the impact this has had on upward mobility:
“Think of the American economy as a large apartment block,” says the softly spoken professor. “A century ago – even 30 years ago – it was the object of envy. But in the last generation its character has changed. The penthouses at the top keep getting larger and larger. The apartments in the middle are feeling more and more squeezed and the basement has flooded. To round it off, the elevator is no longer working. That broken elevator is what gets people down the most.”
The article also quotes economist Michael Spence:
. “I have this gnawing feeling about the future of America,” says Spence. “When people lose the sense of optimism, things tend to get more volatile. The future I most fear for America is Latin American: a grossly unequal society that is prone to wild swings from populism to orthodoxy, which makes sensible government increasingly hard to imagine.
No follow up questions there about how importing lots of poor immigrants (most, from Latin America) might have increased our inequality over the last generation, but, aside from the inequality connotation, I think Spence uses the adjective “Latin American” in something of a dated fashion, particularly when Latin American countries such as Brazil and Chile seem to be on a more sustainable macroeconomic trajectory than we are now.
– Bloomberg: “Top Hedge Funds That Dodged Crash, Rode Market Back Turn Gloomy”. I mentioned this before on Short Screen: Bloomberg reports that a handful of hedge fund managers that have had positive returns every year since 2007 — i.e., they made money during the crash in 2008 and also made money during the big recovery rally — have turned bearish, based mainly on macro weakness in the U.S. and Europe.
– Another busy weekend for the FDIC: Five more banks got shut down Friday night, two in Florida, and one each in Washington State, Oregon, and Georgia.
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