Wednesday, May 28, 2008

DAILY FISCAL POLICY REPORT -- May 28, 2008

Economy -- Consumer Confidence Drops to 16-Year Low: The Conference Board Consumer Confidence Index, based on a representative sample of 5,000 U.S. households, fell to its lowest level since October 1992. "Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers' confidence in the overall state of the economy." Press Release.

Government Oversight -- Defense Inspectors Stretched Thin: Pentagon auditors say billions of dollars in military spending is going unchecked because they are having trouble keeping pace with the ever-expanding defense budget and combat operations in Iraq and Afghanistan, Government Executive magazine reports today. 10 years ago, a single auditor would have reviewed some $642 million in defense contracts, individual investigators are now charged with auditing more than $2 billion in spending. Story.

WSJ Expose -- Bearing the Bad News: The Wall Street Journal opens a three-part expose today of the fall of Bear, Stearns. Part One: As the firm's fortunes spiraled downward, executives squabbled over raising capital and cutting its inventory of mortgages. Part Two: Executives believed they were about to turn a corner, but rumors and fear sent clients, trading partners and lenders fleeing. Part Three: The Fed pressured Bear Stearns to sell itself, but a misstep in the hastily drawn agreement nearly scuttled the deal.