Good morning. Hope you had a good weekend. A few items to start the week, including an editorial by former Fed chairman Paul Volcker, an excerpt from Hank Paulson’s new book and some fun with news reporting.
The economy is in big trouble (Real Clear Markets)
Despite claims that the $787 billion stimulus package and bank bailout averted calamity, the U.S. economy is in shambles.
The Commerce Department reported GDP grew 5.7 percent in the fourth quarter, but 60 percent of that was an accounting adjustment. Businesses ran down inventories at a slower pace, but in the arcane world of GDP accounting, that scores an increase in investment and growth.
Two days that upended Wall Street (Wall Street Journal) An excerpt from Henry Paulson’s new book, “On the Brink”:
All weekend I’d been wearing my crisis armor, but now I felt my guard slipping. I knew I had to call my wife, but I didn’t want to do it from the landline in my office because other people were there. So I walked around the corner to a spot near some windows. Wendy had just returned from church. I told her about Lehman’s unavoidable bankruptcy and the looming problems with AIG.
“What if the system collapses?” I asked her. “Everybody is looking to me, and I don’t have the answer. I am really scared.”
President Obama’s quiet regulation revolution (The New Republic)
How to reform our financial system (Paul Volcker/NYT)
Amazon agrees to publisher demands (New York Times) The price of some e-books is going up:
Under Macmillan’s new terms, which take effect at the beginning of March, the publisher will set the consumer price of each book and the online retailer (Amazon) will serve as an agent and take a 30 percent commission. E-book editions of most newly released adult general fiction and nonfiction will cost $12.99 to $14.99.
How to report the news (YouTube) Funny, and oh so true (hat tip, Felix Salmon):