GM is looking worse every day

Looks like its a wrap for GM, their shitty quality is catching up with them again(Reuters)

"General Motors Corp is recalling nearly 1.5 million Buick, Chevrolet, Oldsmobile and Pontiac mid-sized cars due to a potential leak of engine oil that could cause an engine fire...GM said some of the vehicles have a condition in which drops of engine oil may be deposited on the exhaust manifold under hard braking."

Talk that shit now about quality GM, how can you promise customers that you will pay their payments if they lose their jobs if your company wont exist by the end of the year.
Remember the Formula for a company to initiate a recall
Take the number of vehicles in the field (A) and multiply it by the probable rate of failure (B) and then multiply the result by the average out of court settlement(C). A*B*C= X if X is less than the cost of a recall they don't do one. Makes you think how many people GM lit up in fires before they deemed this a problem?



Revelation stress and depression isn't good for your heart. (Reuters)

"Heart patients who become depressed have a higher risk of developing heart
failure, regardless of whether they take antidepressants, U.S. researchers said
on Monday. They said the study is the first to look at whether depression
raises the risk for heart failure, a chronic condition affecting 5 million
Americans in which the heart gradually loses its ability to pump blood
efficiently. "Our data suggest that depression is an important and emerging
risk factor for heart failure among patients with coronary heart disease," Heidi
May of Intermountain Medical Center in Utah, whose study appears in the Journal
of the American College of Cardiology, said in a statement.
Prior studies have shown that depression is about three times more common after a heart attack and depressed patients are at higher risk of a second heart attack.

Break through study doctors way to apply all that schooling. They are probably all depressed about the debt they are left with after surviving a heart attack.

Can anyone really justify trickle down economics?

The term of deflation is rarely used when describing the freemarket economy in the United States, but add it to your vocabulary for Thanksgiving and Christmas dinners. While I will continue to encourage students not to use Wikipedia as a direct source for speech's and papers I will use the explanation presentented by the nice people of the Wikimedia Foundation.

Deflation is the opposite of inflation. Therefore, under the usual contemporary definition of inflation, 'deflation' means a decrease in the general price level(Barro & Grilli, 1994, p.142)

In economic theory, deflation is a general reduction in the level of prices, or of the prices of an entire kind of asset or commodity. Deflation should not be confused with temporarily falling prices; instead, it is a sustained fall in general prices. In the IS/LM model (that is, the Income and Saving equilibrium/ Liquidity Preference and Money Supply equilibrium model), deflation is caused by a shift in the supply and demand curve for goods and interest, particularly a fall in the aggregate level of demand. That is, there is a fall in how much the whole economy is willing to buy, and the going price for goods. Because the price of goods is falling, consumers have an incentive to delay purchases and consumption until prices fall further, which in turn reduces overall economic activity - contributing to the deflationary spiral.

The New York Times today featured an article by JACK HEALY concerning the fear of defelation taking place due to the 1 percent fall in the Consumer price Index this month.

A key measure of how much Americans pay for groceries, clothing, entertainment and other goods and services, fell 1 percent in October, according to the Labor Department, the biggest drop in the 61-year history of the consumer price index. Much of the decline could be traced to a sharp drop of 14 percent in the price of gasoline, but the cost of a broad range of goods including clothes, milk and vegetables also fell sharply.....
The talk about falling prices is all the more remarkable because just a few months ago many economists were concerned about inflation and the prospect of stagflation, in
which inflation and unemployment rise simultaneously.
“It’s funny that just a few months ago everyone was wringing their hands over inflation,” said NarimanBehravesh, chief economist at Global Insight. “It’s gone. It’s over.”(Healy, NYT 2008)

The fact that their are economic analyzt surprised at about the pending deflation to economy ask why. my reason for asking is if the Free market Capitalism economic model is partialiy dependend on the concept of Supply side ecomonics(Supply & Demand). If you have an item and there is high demand for it the price will go up (inflation). It has been the general consesus for many years the USA has become consumer nation, that lives way above its means due to the accessibility to credit that excisted before this current financial downturn. If the country has increased the unemployment rate in the last year by 2 percentage points, the price of gas and other goods increased to the point that families had to make a choice between food and gas. Of couse demand for all the extra crap that is marketed to the masses will decrease. With that decrease of demand its only natural that the sellers have to lower their prices to remain viable in a different market plaace. How is it so inconcivible that deflation is occuring, an should occur to some extent to return the market to a true equilibrium?
I am just dissapointed at the education of the American people is so far lacking that the general public is not equiped with the lingo and knowledge to understand something that effects them so much. I guess that was the goal of the powers that be. And no, there is nothing funny about confused economic analyst who are just playing catchup because their economic predictive models were proven to be invalid.

Some links today and Tech is # 8

The U.S. debt calculated into the GDP :( [Seeking Alpha]

Who would have thought, that the airport screening process would increase theft[NJ.com]

Jim Cramer is sad his show doesnt have a purpose for a while [New York Times]

Texas Tech is #8 in the BCS [ESPN]

Jason Coronel knew, how come Paulson or Bernake didn't

How could none of the economic genius who are selected or elected to help define the countries economic vision not see this coming. Jason Coronel could, and that was in 2002. This has happened before and almost the exact same way 20 years ago in Sweden. This is not just similar to what has occurred in our economy but the exact same in many instances. The The following is an excerpt of a thesis written by Jason Coronel about the collapse of the Swedish economy in the 1990's. page 10-11

"....The resulting deregulation in the domestic capital market would by the early 1990s result in disaster and plunge Sweden into one of the worst economic periods of its history.

From the mid ‘70s forward, Sweden embarked on a deregulation process that phased out most of its financial regulatory rules that had been in place since the decade after World War II. The reason for financial deregulation was due to the government’s continuously increasing budget deficits that required financing and the need to attract foreign private investment (Arter 1999; Bieler 2000). In 1985, the deregulation binge resulted in the removal of lending ceilings by banks (Bieler 2000). The resulting credit-led expansion boom caused by deregulation dramatically increased private sector borrowing and caused a speculative spree within the housing sector (Canova 1994; Moene and Wallerstein 1995). Real estate speculation led to inflated values for assets and property and increased domestic consumption. When the speculative boom ended in the early ‘90s, the massive decline in the value of property and assets triggered a sharp decline in private domestic consumption (Moene and Wallerstein 1995; Ramaswamy 1994). The resulting decline in aggregate demand in combination with a global economic contraction plunged Sweden into one of its worst economic downturns in history (Moene and Wallerstein 1995; Pontusson 1992). Unemployment from 1990 to 1993 was around 8 percent as Sweden suffered one of its worst economic periods since the Great Depression (Miles 1997). On top of the severe economic recession was a banking crisis in which the government was forced to save the banking industry from insolvency. The resulting demand for greater welfare provisions, in accordance with the government’s bailout of the banking sector created massive government deficits equaling to about 17 percent of GDP by 1994 (Miles 1997). The end result of domestic capital deregulation during this period was a catastrophe in two ways: capital deregulation was one of the main reasons for the calamitous early ‘90s recession and investment capital was wasted on unproductive property speculation and consumption (Hubers and Stephens 1998)."

The rest of his paper can be found at the [link].
Coronel, J. (2002). Foundations, decline and future prospects of the swedish
welfare model: from the 1950s to the 1990s and beyond. DePaul University.
10-11