As Boeing kills aviation capital and trading partners tank, US export goals Made in a Fairytale?
Just what is the impact of a bad reputation? According to a Harris Interactive poll, the “reputation quotient” of Too Big to Fails Bank of America and Goldman Sachs has slipped below the “dangerous” threshold of now defunct companies including Enron and Worldcom! In fact, financial services companies suffered four of the five worst losses in reputation in the last year.
Meanwhile, this week, Moody's reminded us of banking risk when they reported they may downgrade pretty much all of investment banking. Meanwhile, according to the Wall Street Journal Goldman Sachs and Morgan Stanley have reduced their use of mark-to-market accounting. They'll use cost accounting for some corporate loans – this is where assets are held at their original value. Sound sketchy? We think so. Couple declining reputations with rising bank risk, and where is Wall Street headed? We speak to chief economist and senior analyst at Greencrest Capital Max Fraad Wolff about it. He says Couple this with other US economic problems and looking at the rally we’ve seen in markets Wolff warns “it looks like people have gotten ahead of themselves.”
Meanwhile, US President Barack Obama is at a Boeing plant in Washington touting his initiative to double exports in five years. But Woff notes about the US economic outlook, “the other really big problem is we’re planning to do really well in the next few years through exports and no one kindly mentioned 20% of all our exports go to the European Union, which is in the worst recession in years, and another 10% go to Japan, which is also in one of the lower growth periods it’s been in its 20 year economic downturn, so it’s not exactly clear to me which areas of strength we’re planning to export ourselves into.” And as Obama takes “victory lap” over US manufacturing touting Boeing as an example, the corporation shutters its production completely in the “aviation manufacturing capital” of Wichita, Kansas leaving workers wondering if the city is the next US manufacturing casualty.
It's also the three year anniversary Obama signing the $787 billion dollar economic stimulus. So we take a look at a good hard example of how things get done in Washington when business interests and money is at stake. Last year Congress passed three trade deals, with South Korea, Panama, and Colombia. They were touted as "free trade deals,” but Zaid Jilani, communications and outreach coordinator for United Republic, argues they are anything but. He breaks down how the deals were tailor made to moneyed business interests based on big lobbying bucks.
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