Blog Posts by Peter Gorenstein

Stocks rallied Wednesday after Federal Reserve Chairman Ben Bernanke suggested the central bank would go ahead with another round of stimulus -- aka quantitative easing -- if the economy continues to slump. In this scenario, the Federal Reserve would once again purchase assets to keep interest rates low in an attempt to support the economy and prop up asset prices.

So far, the Fed's actions have done more good for asset prices like stocks (see: S&P 500 chart since 2009) while doing less to help the economy (see: June jobs report). U.S. gross domestic product grew just 1.9% in the first quarter of the year. For 2011 as a whole, the Fed forecasts U.S. GDP growing at 2.7% to 2.9%, which is lower than the plus 3% forecast they made in April.

Today's guest, Gary Shilling, President of A. Gary Shilling & Co. and author of the Age of Deleveraging says another recession is brewing -- no matter what action the Fed takes. "Economic growth here and abroad is slipping, making a 2012 recession a

With less than three weeks until the August 2 deadline, time is running out on a debt ceiling agreement. Yet both sides of the aisle in Washington seem no closer to a deal.

At the center of the impasses are taxes. Republicans are standing firm against any notion of explicit tax hikes or closing tax loopholes. Meanwhile, President Obama says any tax increases he's asking for won't come until 2013.

That's not good enough for The Daily Ticker's guest Rep. Thaddeus McCotter (R-MI). In the accompanying interview with Aaron Task, McCotter says there's no room to negotiate on what he calls "job killing tax hikes" and that "the Republicans have rightly held out against raising taxes in a recessed and stagnant economy."

Americans "understand that when you take money out of people's pockets and put it into the hands of bureaucrats, there's not going to be economic growth -- certainly in the near term, let alone for the long term prosperity of the people."

When asked about his willingness to

More than money is on the line in the current debt ceiling negotiations. The political futures of President Obama and Speaker of the House John Boehner potentially hinge on a deal.

Long ball vs small ball

Rep. Boehner may have taken a backseat to the President this weekend after he abandoned a plan to cut $4 trillion over the next decade, rather than accept any tax hikes. Meanwhile, the President is willing - against the wishes of Democrats in Congress - to bargain with Social Security, Medicare and Medicaid.

The President is committed to playing "long ball" while the GOP is now settling for "small ball" is how former U.S. comptroller General and current CEO of Comeback America Initiative David Walker describes the current state of affairs. That puts the President in the driver's seat politically, Walker tells Aaron in the accompanying clip. "He's clearly exhibiting leadership and now the Republicans are on retreat."

In contrast to President Obama, "the Republicans right now are

President Obama is scheduled to meet with House Minority Leader Nancy Pelosi at the White House on Friday to discuss the ongoing debt ceiling negotiations. This meeting comes on the heels of Thursday's meeting that included Obama and bipartisan leaders from both chambers, including Pelosi at the White House. Following Thursday's meeting President Obama remained hopeful about a deal but also said major differences remained on a "wide range of issues."

A similar battle over public finances is being waged - on a smaller scale - in Minnesota where the government has been shutdown since last Friday. In an ironic twist, the shutdown over $5 billion budget deficit is costing the state millions of dollars. The North Star State's economy may lose about $23 million a week from the shutdown, according to Tom Stinson, the state's economist.

The state is losing about $1.25 million daily on lottery revenue, $1.68 million in tax revenues because state compliance officers are not tracking down money.

Newspapers have been replaced by the internet as THE source for news; land line phones have been replaced in most of the world by mobile phones. These are clear examples of old media industries that have long ago peaked and are not coming back. They should also come as no surprise.

But what is surprising are the number of burgeoning industries with limited upside and limited futures, according to James Altucher, blogger and principal at Formula Capital. He tells The Daily Ticker's Aaron Task in the accompanying clip alternative energy and cell phone providers are two such business areas that aren't likely to survive the decade.

Here's a surprising list of industries Altucher says have no future:

Casinos: No matter what regulations are passed by the lobbyists in Washington, Altucher is betting internet gambling is going to take down Las Vegas, Macau and Atlantic City. These cities will always carry entertainment value but meccas of money will lose market share to online gambling sites.

Today's Daily Ticker guest Bob Lutz has nearly 50 years of experience in the auto industry. Most of that career was spent with Ford and General Motors, from which he retired in 2010 as the vice chairman. Known as an outspoken, straight-shooting executive, Lutz is also an unabashed car lover.

Now in retirement, Lutz is still as vocal as ever about cars and the auto industry. In his new book, Car Guys versus Bean Counters: The Battle for the Soul of American Business, Lutz documents what he believes was the greatest factor in the demise of the U.S. auto industry.

No, it's not the unions (although that contributed). No, it's not uncompetitive wages compared to Asian manufacturers.

His answer: "Management incompetence."

Over the course of his career, "management became way too scientific, B-school oriented; way too cost-focused; and it was almost considered childish to be to be enthusiastic about automobiles," Lutz explains to Aaron Task in the accompanying clip.

Lutz says auto executives

Last week, global regulators in Basel, Switzerland, agreed to require the world's 30 or so biggest banks to hold an extra 1% to 2.5% of extra capital in reserve, on top of the 7% in capital required by last year's rules. The regulators believe the measures should help protect the global financial system from another major collapse.

Critics say the move will hurt the already fragile recovery and is just another example of over-regulation getting in the way of capitalism. Just last month, JPMorgan Chase (JPM) CEO Jamie Dimon was applauded by his fellow bankers when he took on Federal Reserve Chairman Ben Bernanke over all the new regulations that had been implemented since the crisis.

In the accompanying Daily Ticker segment, Aaron Task moderates a lively discussion on the role of regulation in the financial crisis between Yaron Brook, president of the Ayn Rand Institute, and David Callahan, founder of Demos, a public policy research firm.

The last remaining member of President Obama's original economic team, Treasury Secretary Tim Geithner is said to be considering leaving his post… on his own accord. Geithner wants to leave the administration after budget talks, according to several reports citing people close to the matter.