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The Economy

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Happy Fashion Week: Crappy Weather, Crappy Economy

Good morning! Are you ready for the first official day of Fashion Week? Let's start with the weather forecast: We're due for rain — no, wait, it's positively biblical out already, so put those open-toed satin pumps back on the shoe rack. Don't bother straightening your hair. And make sure you've found your big umbrella (it's by your air conditioner) with the extra-wide span to reduce sog and maximize chic. Yes, it's a nuisance, but it's a handy weapon for any bitch who tries to edge in on your seat. Just be sure to keep it close at your side and not sticking out on the runway, for the models are fragile … and the only ones who can fit into the clothes we need to see over the next seven days.

Harry Macklowe Doesn't Own Those Seven Buildings Anymore

Harry Macklowe
Harry Macklowe got a little carried away last year: He bought seven midtown office buildings, including the General Motors Building, in ten days. He spent over $7 billion on the deal — but only $50 million of that was his own money. So lately, Harry has been in a pickle: Next week, his loans are coming due, and seeing as we're smack in the middle of a worldwide credit crunch, there's no way for him to refinance. Which is why this week, The Wall Street Journal has just reported, Harry has made a tentative agreement with his lender, Deutsche Bank, to turn the buildings over to them. No more buildings for Harry. Well, not exactly. Even though Deutsche Bank would control the properties, "Macklowe would still retain the titles, to avoid triggering costly New York City transfer taxes, and Macklowe Properties would still manage the buildings." So basically, dude just went from being a mogul to being a super. Macklowe in Deal to Cede Control Of Seven Manhattan Properties [WSJ]

Fed Lowers Interest Rate; Senate Teases Us by Holding Up the Stimulus Package

Well! Well! After their agressive three-quarter-point rate cut last week, the largest cut in 20 years, Fed chairman Ben Bernanke and his merry Board of Governors decided to cut the interest rate again today, by half a point, to 3 percent. "It is clear that the Fed has moved into a crisis-fighting posture," David Jones, chief economist at DMJ Advisors, told the AP. Great! Meanwhile, Bush was just on TV, and he was extremely put out that the Senate was cockblocking the $146 billion stimulus package, which sailed through the House yesterday. Seriously, he was PO'd at the Senate. ""Ah I understand that people have got different opinions, and we welcome different opinions in Washington," he said. "But they have a lot of 'em." Also, he really wants us to get that $300. "The sooner you get a check, the more likely it is that the stimulus package will break through and make a difference," he said. Right? Give us our cash, dudes. We've got some credit-card bills that have minimum payments coming due. Fed Statement Fed Cuts Interest Rates by 1/2 Point [AP] $146 Billion Stimulus Plan Passes House [WP]

Can Eli Manning Save the Stock Market?

It's another bum Monday on Wall Street, and market watchers are glumly certain that when the Fed meets on Wednesday, they'll bow to pressure and offer another rate cut, which could have some nasty long-term effects on the economy. So maybe they should hold off until after the Super Bowl? After all, according to Super Bowl Stock Theory by legendary Times sports writer Leonard Koppett, the market is likely to surge if the Giants beat the Patriots. Koppett's theory holds that if the January Super Bowl winner was in the NFL before it merged with the AFL in 1970, the market will rise. The Giants have been a part of the NFL since 1925; the Patriots joined the AFL in 1960. If the Patriots win, the theory holds, the market will drop. We have no idea why this is, but according to Business Week, the Super Bowl hypothesis has had a 75 percent success rate. Which means that if they win, the Giants will not only be saving New York's sports record; they might save America, and by extension, the global economy, from a terrible recession! But, you know, no pressure or anything. The Super Bowl Stock Indicator [Business Week] What the Fed is considering at its meeting. [Reuters] Related: Underdog [NYM]

Bush Says State of the Union Will Mostly Address Economy; Guest List Begs to Differ

Bush State of the Union
Are you guys as excited for President George Bush's State of the Union Address tonight as we are? Hoo-ah! Wait. You realized there still is a president, even though everybody's busy trying to pick who the next one will be, right? We know, it's hard to remember. And even though there are primaries tomorrow, tonight belongs to current president George Bush. Early reports say that his address will largely focus on the economy, which is probably what most ordinary citizens are hoping he will talk about. "Expect few surprises and no big initiatives," says the Associated Press. Housing reform will come up, press secretary Dana Perino says, as well as health care and veteran's care, alternative energy sources, climate change, faith-based initiatives, and conditional troop withdrawal in Iraq. But today the list of Presidential guests has been released for the event. These are the people who sit up with Laura Bush in the balcony, who are generally alluded to in the text of the speech (to much unilateral applause). In addition the lovely Bush twins and that sexpot Lynn Cheney, we've summarized the guest list for you.

Washington Stimulates Us, Tentatively, With Its Package

Oh, yeah. House leaders and the White House this morning reached a tentative agreement on the economic-stimulus package that Bloomberg was so crotchety about yesterday. They're pledging $150 billion of government funds, to be doled out to the American public in the form of tax incentives for businesses and rebates of $300–$1,200 per family, provided you make less than $150,000. Don't go buying that boat — or, er, inflatable raft? — just yet, though. The plan may not fly with the Democrats in the Senate, who would like a package that includes plans for infrastructure projects and unemployment benefits. It also may not work, since (a) $300 is actually not a lot of money and (b) everyone in America will probably do what we're planning on doing with our influx of cash, which is turn it into gold and squirrel it away in our mattresses in preparation for the end times. Tentative Deal on Economic Stimulus Plan [NYT]

Which Republican Will Instantly Restore America’s Furious Economic Might?

Tonight’s Republican debate in Florida could tip voters one way or another in what is basically a four-way race (though the latest polls show McCain and Romney, about even, putting distance between themselves and Giuliani and Huckabee, also about even). With recession looming, everyone wants to know who's going to perform a miracle on the economy once in office. The pundits, for their part, have humbly offered up their opinions on the candidates with the best fiscal credentials.

Bush to Economy: ‘Hey, Did You Get a Haircut? Something's Different.’

FINANCE • Bush acknowledges slower economy, but he stops short of warning about recession. Still, will he go for another round of tax cuts? [NYT, NYT] • Financial titans Warren Buffett and Maurice Greenberg came under attack in the Gen Re trial. Neither stands as a defendant, but both were accused of being intimately involved in a fraudulent transaction worth $500 million. [NYT] • Now that Jimmy Cayne's out of the picture, which hedge fund will step in to buy Bear Stearns? [Deal Journal/WSJ]