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A Consumer Financial Product Safety Commission will take over financial and regulatory oversight of the credit card and mortgage industry from the Fed and other banking regulators. Its job will be to protect consumers and ordinary investors. The Fed under former chairman Greenspan failed to do anythingabout the deceptive practices in these industries which led to the current crisis.

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Speakers at the National Summit in Michigan agreed that the US's traditional role of leadership was slipping away. The causes were attributed to many things including a less than rigorous educational system to a lawsuit happy legal system. The second theme that emerged was that government is not the problem or the cause of what is happening. Beth Chappell, CEO of the Detroit Economic Club said that "a new era of cooperation and collaboration between business and government" is taking place. She defined the needs of the private sector as:, stable and predictable policies that alig with the nation's longterm goals and a policy of leaving the choosing of winners and losers to the marketplace. Another theme at the summit was the opportunity facing American companies as the problems facing the country are addressed and the country heals from the wounds inflicted by the bubble economy.

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The House-Senate conference report contains $1 billion for the cash for clunkers program. It provides funding through the end of the current fiscal year September 30, 2009. It is expected to result in 250,000 better mileage cars being put on the road. Originally the House had voted in facvor of a $4 billion 2 year program. To qualify older trade-in vehicles must be driveable, insured by the same owner for at least one year prior to the trade-in, have been manufactured in the 1984 model year or later, and have a city-highway combined fuel rating of 18 mpg or less. Vouchers are baed on the mileage of the new vehicle compared with the old and can be worth upto $4500.

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News on several fronts in June 2009. On housing, a month to month improvement but still stuggling compared to a year ago levels. The Commerce Department said that an increase in multifamily units led to housing starts jumping 17% in May from April to a 532,000 annual rate. Compared to ayear ago level housing starts was down 45% from May 2008. There were 10 times more homes for sale in April as sold that month, with the typical ratio at 6. With layoff, tight credit and rising mortgage rates laying aheavy hand on these markets, even as developers cut prices deeply to clear unsold homes. On Manufacturing. Industrial production fell 1.1% in May from April, according to the Federal Reserve. Capacity utilization fell to 68.3%. See the graph for the steep drop for auto and auto parts manufacturing. On inflation. The producer price index showed its largest decline in 60 years, according to a Labor Department report. The PPI was down 5% from one year ago, the biggest decline since 1949. It went up from April to May by 0.2%. Part of this was rising oil prices. The core PPI which excludes food and energy dropped 0.1% in May from April. Rising oil prices, a falling US dollar and stabilization in the economy are reducing defaltion risk. At the same time the sign that inflation is not taking root are clearly evident in the slack that is building up with the drop in the capacity utilization rate to 68%, and further declines expected as the auto industry shrinks in 2009, with the huge overcapacity worldwide in that industry. ...

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Peter Eavis says the too big to fail problem remains unsolved, and with the recent consolidation the "big four" accounting for 70% of all assets held by domestically cahrtered banks. There is no effort by the Obama administration to prevent banks from getting too big. And the Fed has accumulated greater powers as a regulator. It is still the same Fed, Eavis reminds one that failed as abank regulator by letting Citigroup's common equity ratios drop to perilous lows. And its overstimulative monetary policies having built up more risk than the system could handle. There will be more regulatory capital at these big banks as a result of actions by Treasury, but risk remains.