Monday, November 30, 2009

Monday roundup (11-30-09)

Quote of the Day:

Deflation watch: "While retailers are encouraged by the number of Americans who shopped over Black Friday weekend, they know they have their work cut out for them to keep people coming back through Christmas. Shoppers can continue to expect retailers to focus on low prices and bargains through the end of December." -- Tracy Mullin, National Retail Federation president and chief executive. (Marketwatch)

Hero of the day: Jackie Ramos (Reuters blogs)

Why Bank Of America Fired Me (Youtube) -- Jackie Ramos: "there was something inherently evil about my job."

Angela Merkel alarmed by worsening credit crisis: The German government is rushing through a fresh package of measures to shore up ailing banks and prevent a second wave of the debt crisis suffocating large parts of manufacturing industry. (The Telegraph) (Bloomberg)

Will the emirate's default push us into another crash? (The Independent)

Investors face huge losses as debt-ridden Dubai World is abandoned by government (The Times of London)

Insolvency Vs. Illiquidity (Sudden Debt blog)

Morgan Stanley fears UK sovereign debt crisis in 2010: Britain risks becoming the first country in the G10 bloc of major economies to risk capital flight and a full-blown debt crisis over coming months, according to a client note by Morgan Stanley. (The Telegraph)

The World's Biggest Debtor Nations (CNBC)

Gluskin-Sheff economist David Rosenberg surveys the landscape

Commercial property weighs on banks - Fed official (Reuters)

TD Bank's U.S. [commercial] real estate exposure higher than thought, report says (The Globe and Mail of Toronto)

"I call it FHA insurance Armaggedon" -- Dr. Gary Lacefield, former HUD investigator
(CBS News)

Regulators list systemic risk institutions: report (Reuters)

US Shoppers Spent Less Over Black Friday: NRF (Reuters)

Lloyds Banking Group cuts 535 more jobs: Workers at Lloyds Banking Group have been dealt another blow after the lender revealed plans to cut another 535 jobs. (The Telegraph)

Hussman: 80% Chance Of A Market Crash Over The Next Year (The Business Insider)

New era in newspaper ownership: Lenders taking control of troubled dailies in major markets (The Associated Press)

Sunday, November 29, 2009

Sunday roundup (11-29-09)

Quote of the Day:

"This is the most urgent time for our feeding programs in our lifetime, with the exception of the Depression.It’s time for us to face up to the fact that in this country of plenty, there are hungry people." -- Kevin Concannon, a US under secretary of agriculture (The New York Times)

U.A.E. Will Support Banks in Dubai Credit Crisis (The New York Times)

How Dubai's dream sank in a sea of debt: The emirate’s debt-fuelled spree has been exposed by the recession. Will UK banks and contractors get back their money? (The Times of London) This paper's distribution was blocked in the UAE. (Bloomberg)

Comptroller's budget red alert [for New York State] (The New York Post)

Falling rents aid homeowners in mortgage trouble: Southern Californians facing the loss of their homes are finding refuge in rentals. At larger apartment complexes, monthly rents have declined an average of 4.9% in the last year. (The Los Angeles Times)

Expansion may be rickety as US joblessness mounts (Reuters)

Saturday, November 28, 2009

Saturday roundup (11-29-09)

Quote of the Day:

"Right now is an absolutely horrible time to be in the hotel business." -- Ben Thypin, senior market analyst for market research firm Real Capital Analytics. (The Associated Press)

Fujii Says Japan to Contact U.S., Europe If Needed as Yen Jumps (Bloomberg)

Dubai debt fears threaten credit crunch 2 — and RBS is exposed (The Times of London)

Is Britain on the brink of financial armageddon? (Opinion piece written by the founder of the Ministry of Sound disco and recording label, "who recently put all his investments into cash") (The Daily Mail)

Kazakh Bank Lost Billions in Western Investments (The New York Times)

Food banks nationwide report more 1st timers (The Associated Press)

Harvard ignored warnings about investments: Advisers told Summers, others not to put so much cash in market; losses hit $1.8b (The Boston Globe)

Friday, November 27, 2009

Friday roundup (11-27-2009)

Quotes of the Day:

"The Dubai debacle reinforced the view that any sort of recovery in the global economy is far away." -- Devandra Das, fixed-income dealer at Development Credit Bank Ltd. in Mumbai. (Bloomberg)

"One cannot rule out -- as a tail risk -- a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s." -- Bank of America strategists Benoit Anne and Daniel Tenengauzer (Bloomberg)

"As I see it, the turmoil that has occurred in global markets over the past 48 hours essentially confirms that investors in risky asset classes have not made allowances for surprises -- or even predictable events. In fact, it seems pretty clear that during the past nine months or so, many people have (again) come to believe they can achieve high returns with little or no risk." -- Author Michael J. Panzner (Financial Armaggedon)

"In the midst of deflation, such a sharp rise in the yen is a very serious problem and could drag down the economy. I certainly hope the government responds with emergency steps." -- Fujio Mitarai, head of the Nippon Keidanren, the country's biggest business group. (The Associated Press)

UAE faces up to $184 billion total debt: BofA-Merrill Lynch (Reuters)

Dubai Debt Woes Raise Fear of Wider Problem (The New York Times)

Dismiss this new Dubai crisis at your peril (The Daily Mail)

Max Keiser analyzes the Dubai debacle on Russia Today:

What price an Abu Dhabi bailout? (The Telegraph blogs)

Dubai Debt May Be Higher Than $80 Billion, UBS Says (Bloomberg)

Dubai debt problems cast shadow over region (The Associated Press)

RBS Led Dubai World Lenders; HSBC Most at Risk in UAE (Bloomberg)

Dubai debt woes may hit U.S. property market (Reuters)

Billionaire investor Wilbur Ross doesn't like it:

Deutsche Welle report on Dubai crisis, already in full swing back in February

The dark side of Dubai: Dubai was meant to be a Middle-Eastern Shangri-La, a glittering monument to Arab enterprise and western capitalism. But as hard times arrive in the city state that rose from the desert sands, an uglier story is emerging. Johann Hari reports (The Independent) -- written in April

Stalemate in Albany as [New York] State Nears Its Last Dollar (The New York Times)

[Canada's] Federal deficit grew $5B in September: Heading toward biggest shortfall in country's history (CBC)

British Columbia still sees deficit at C$2.8 bln [$2.6 billionUS] (Reuters)

Don't Bank on the Banks by Eric Sprott & Daniel Franklin (Sprott Asset Management)

German steelmaker ThyssenKrupp has loss of euro1.87 billion ($2.8 B), plans to cut 5,000 jobs (The Associated Press)

Thursday, November 26, 2009

Thursday roundup (11-26-09)

Quote of the Day:

"Dubai shook investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001." Bloomberg (Bloomberg)

"Put simply, everyone in the markets thought that, in the end, the federal government in Abu Dhabi would stand by all of Dubai's bad bets. Apparently, they won't." -- Stephanie Flanders, BBC economics editor (The BBC)

"This is not just a couple of billion story. ... I think this is going to shake some investor confidence which may not be reversed as quickly as people expect. So they have to be careful." -- Turker Hamzaoglu, EMEA economist at the Bank of America Merrill Lynch Global Research speaking to CNN. (CNN)

"Anything from Dubai or Abu Dhabi is getting absolutely hosed. There is massive pressure across the board, exacerbated by the thin liquidity." -- A bond trader in London (Reuters)

(How do you say "This sucker is going to go down" in Arabic?)

Fears of double-dip recession grow as Dubai crashes: Debt crisis in millionaires' playground could herald new phase in global financial meltdown (The Guardian)

Dubai: Minor upset in playground of the rich – or first domino of new crash?: After a traumatic year, markets were breathing a sigh of relief. Then the emirate's bubble burst, raising fears of a new meltdown (The Guardian)

Dubai request for debt 'standstill' raises fear (The Associated Press)

Dubai debt fears rattle global markets: Stock markets in Europe were rattled as the attempt by Dubai to delay payments on its debt risked precipitating the largest sovereign default in almost a decade. (The Telegraph)

Pound Falls Broadly on Dubai (Reuters)

Sterling, Dubai: a liquidation love story (FT Alphaville blog) Property firesale seen as Dubai stares down default (Reuters)

U.K. Stocks Slide Most in Eight Months; LSE, HSBC Lead Decline (Bloomberg)

European banks may have $40 billion Dubai exposure (Marketwatch)

European Stocks Slump Most in Seven Months on Dubai Concern (Bloomberg) "biggest one-day drop since April" (The Wall Street Journal)

US Markets Bracing for Selloff On Worries About Dubai's Debt (CNBC)

A Five-Star Ghost Town at the End of 'The World' (Time) -- a report in October on the Dubai World development

[UK] Recession 'is even worse than feared': Chancellor predicts steepest slump ever (The Daily Mail)

Japan Prices Fall 2.2%, Reinforcing Deflation Concern (Bloomberg)

Dollar falls to 14-year low vs yen on US outlook (The Associated Press) (The Wall Street Journal)

Country reports for China and Brazil, members of BRIC (Brazil, Russia, India, China, much vaunted for their vast economic potential):

Chinese credit tightening chills Asian markets: China has stepped up efforts to halt the explosive growth in credit, ordering the country's five top banks to raise capital over coming weeks or face lending sanctions. (The Telegraph) -- "The move amounts to monetary tightening in China's state-run banking system. The news triggered a sell-off on Asian stock markets and raised broader concerns about the strength of the global rally."

Brazil Posted 1 Billion Real October Budget Deficit (Bloomberg) -- "Brazil posted a budget deficit for a 12th straight month"

$430 Billion in CRE [= commercial real estate] Losses? (Calculated Risk blog)

Bombardier to cut 715 jobs (AFP)

BAE [British defence and aerospace company] job losses rise to 2,300 with new cuts (The Times of London)

LA City budget deficit may hit $1 billion in 2013 (The Associated Press)

The Card Game (PBS)

Wednesday, November 25, 2009

Quote of the Day:

"There are still some important losses that have not been unveiled. It's possible that 50 percent (of bank losses) are still hidden in their balance sheets. The proportion is greater in Europe than in the United States." -- International Monetary Fund chief Dominique Strauss-Kahn (Reuters)

Bankruptcies spike 33%: Number of bankruptcy filings in third quarter of 2009 soars to highest level since 2005. Business bankruptcies filed this year top 2008 total. (CNN)

Credit card usury bill coming soon in U.S. House (Reuters)

Lending Declines as Bank Jitters Persist (The Wall Street Journal)

IMF: 50% of Bank Losses Still Hidden (The Big Picture blog)

Darling defends secret loans to keep HBOS and RBS afloat: [British] Chancellor says loans had to be kept confidential to prevent a run on the banks (The Independent) (The New York Times)

Bundesbank fears relapse as German banks face [Euro]90bn fresh losses: The Bundesbank has told German banks to take advantage of renewed confidence while they can to prepare for likely losses of [Euro]90bn (£81bn) over the next year, warning that the delayed shock waves of the economic crisis still pose a major threat to global recovery and bank finance. (The Telegraph)

Dubai Seeks Debt Delay, Some Units Cut to Junk (Reuters)

U.S. dollar collapse could devastate economy: book (Reuters)

Retailers Extend Deals Beyond Black Friday (The New York Times)

Taxpayers face a generation of pain (The Financial Times)

N.J. budget deficit could reach $1.5 billion (Gannett)

Is it a recovery yet? (Weekly report 11-25-09)

I just noticed that this report, normally released on Thursdays, had been moved to today because of the Thanksgiving holiday tomorrow in the United States.

On Aug. 20, Linda Duessel, a market strategist at Federated Investors in Pittsburgh, said at the release of the weekly initial claims for state unemployment insurance benefits:

"I think that we're hoping for the numbers to stay below 600,000, and not until we get below 500,000 can we be more certain that there is an economic recovery." (Economic Signs of the Times blog)


CNN reports: "Jobless claims plummet to 14-month low: Number of initial filers for unemployment insurance sinks to 466,000, the lowest since Sept. 13, 2008."

But within the article appears this quote:

"It seems to be a statistical pop," said Tim Quinlan, economist at Wells Fargo. "As much as I'd like it to continue, I don't see claims continuing to fall at this pace." (CNN)

So there is a question of how permanent the recovery is.

Tuesday, November 24, 2009

Tuesday roundup (11-24-09)

Quotes of the Day:

"It's hardly a rip-roaring recovery. Usually coming out of a recession you get growth more like a rodeo bull -- at a pace of 6 or 7 percent in the early quarters of recovery. That isn't happening. It is coming out of the stalls more like a fat cow." -- Stuart Hoffman, chief economist at PNC Financial Services (The Associated Press)

"At some point it is absolutely inevitable that the U.S. will have to ‘default' on part of its existing liabilities, since the long-run trajectory of government borrowing is clearly unsustainable. With the unfunded liabilities of the Social Security and Medicare systems now around $100-trillion, these look like the most vulnerable budget headings." Harvard financial historian Niall Ferguson (The Globe and Mail of Toronto)

One in Four Borrowers Is Underwater (The Wall Street Journal) (Expected Returns blog)

Most global banks are still unsafe, warns S&P: Standard & Poor's has given warning that nearly all of the world's big banks lack sufficient capital to cover trading and investment exposure, risking further downgrades over the next 18 months unless they move swiftly to beef up their defences. (The Telegraph)

US economy: revised GDP numbers raise specter of a relapse: New GDP figures released Tuesday suggest that the US economy is growing more slowly than initially thought. Obama warns that loss of confidence could lead to a 'double-dip' recession. (The Christian Science Monitor)

U.S. State Tax Revenue Fell 11 Percent in Fourth Quarterly Drop (Bloomberg)

No lending, no recovery: Loans keep falling as banks tidy up their balance sheets. Can the economy grow without their help? (CNN)

FDIC's DIF Dips Into Negative Territory For First Time Since 1982 (CF Economics blog) (The Wall Street Journal)

FDIC’s problem bank list grows to 552, DIF now negative (Reuters blogs)

Round-Up of Holiday Spending Surveys, Reports (Financial Armaggedon blog)

General Motors to Cut up to 9,500 Jobs in Europe (Reuters)

Are We “Vastly Better Off Than We Were” Pre-Lehman? (The Big Picture blog)

Proof that we are in another Great Depression (The Examiner) 1929 And Today - Sobering Parallels Abound (Yahoo! Finance)

Washington Post to Shut U.S. Bureaus (The New York Times)

Monday, November 23, 2009

Monday roundup (11-23-09)

Quotes of the Day:

"The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means." (The New York Times)

"We're going to have a political crisis. Obama realises that you can't keep spending money when it's not even having much effect. It will come to a head when the current tax credit expires in April [2010] – then people will say, enough is enough." -- Graham Turner of consultancy GFC Economics (The Guardian)

Bail-outs would imperil democracy, warns IMF: Dominique Strauss-Kahn, head of the International Monetary Fund, has warned the financial elite that its behaviour has stretched the patience of Western democracies to near snapping point, precluding any possibility of a second rescue if recovery falters. (The Telegraph) Washington's blog states the case more bluntly: IMF Warns of Revolution if Another Round of Bailouts are Handed Out (Washington's blog)

Bank crisis shows need to expect the very worst: study (Reuters)
(Reuters blogs) Extreme risks report (Watson Wyatt)

Citi: The Commodity Collapse Could Be "Subprime Part II" (The Business Insider) The Citi report is here, the relevant section starting with "Nightmare on Commodity Street" on p. 2.

Will sovereign debt be the new subprime? (The Financial Times)

AP-GfK Poll: Debt turning shoppers into Scrooges (The Associated Press)

Late Card Payments Rose in October, Moody’s Reports (Bloomberg) -- "highest level since February"

"The Card Game" airs on PBS Frontline tomorrow night

Financial job cuts toll hits 50,000 [in the UK] (The Daily Express)

Russian post office says it will cut 33,000 jobs (AFP)

Aetna says cutting roughly 1,250 jobs (Reuters) (Bloomberg)

Predatory lending local government version (Credit Writedowns blog) (Business Week)

Existing Home Sales: Distressing Gap (Calculated Risk blog)

Dollar Slump Persisting as Top Analysts See No Bottom (Bloomberg)

Here Is Why The Dollar Is Now Effectively Worthless (Zero Hedge)

Calming Sign of Troubled Past Appears in Modern Offices (The New York Times)

Sunday, November 22, 2009

Sunday roundup (11-22-09)

Quotes of the Day:

"It will be such a shock to the public when they find out how serious the financial peril that we’re in actually is, that they will be angry at everybody; those who have been unable to solve the problem and those who sat around not even commenting on it." -- Gov. David Paterson of New York (Bloomberg)

"Rhode Island faces a nearly $220 million budget deficit for the fiscal year ending in June. The state started the year with a $62 million deficit." -- The Associated Press (The Associated Press)

Wall St. Finds Profits by Reducing Mortgages (The New York Times) -- read first four paragraphs especially.

Commercial Real Estate Slide Kills City Budgets (The Business Insider)

Renters becoming latest victims as foreclosure crisis widens: Multifamily defaults rising: Some tenants left in dilapidated buildings (The Washington Post)

Bets rise on rich country bond defaults (The Financial Times)

Greece tests the limit of sovereign debt as it grinds towards slump: Greece is disturbingly close to a debt compound spiral. It is the first developed country on either side of the Atlantic to push unfunded welfare largesse to the limits of market tolerance. (The Telegraph)

RBS dumping toxic assets on Ireland: Hester stirs diplomatic row by using EU rules to force Dublin into accepting £7bn bad loans (The Times of London)

Newspaper circulation may be worse than it looks: New rules allowed newspapers to boost circulation even if they aren't selling more copies (The Associated Press)

Saturday, November 21, 2009

Saturday roundup (11-21-09)

Quote of the Day:

"Had we not bailed out the largest banking institutions in the world there would have been a depression. Flat, blown-out depression. ... If we did not bail them out, we would be in the position where there would have been a literal depression, not a recession, a depression. ... Had you let them go under, not capitalize them, let them capitalize themselves again with the help from the federal government, there would have been just literally a worldwide depression. There was no choice. ... The economists from across the board -- from conservative to liberal economists -- all agreed that there was no way to let them go under. You could not let them go under." -- US Vice President Joe Biden (The Daily Show with Jon Stewart)

Just one problem: nothing has changed since the bailout. "The toxic assets remain on the books of the banks," according to Elizabeth Warren, head of the Congressional Oversight Panel. (Economic Signs of the Times blog)

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Joe Biden Pt. 2
Daily Show
Full Episodes
Political HumorHealth Care Crisis

"Furloughs, layoffs, borrowing, downgraded credit ratings, delayment of payments to schools, delayment of payments to local governments, delayed payments to service providers, delayed payments to the workforce. I've been telling you what's happened in the other states, that's what we're going to have to do. Twenty six states shut down their early childhood education and pre kindergarten programs, and that's what we're going to have to do, all of the above." -- Gov. David Paterson of New York State (The New York Daily News)

Inside UCLA student protest

Think-tank study finds foreclosure crisis hits blacks, Latinos hardest (The Associated Press)

Can the Postal Service be Saved?: With Losses Mounting, Postal Service Seeks Autonomy, Pushes to Cut Saturday Service; Rep. Danny Davis Calls for a Bailout (CBSNews)

NYC Has Lost Nearly 60,000 Jobs in Media (The Associated Press)

Unburied bodies tell the tale of Detroit — a city in despair (The Times of London)

Friday, November 20, 2009

Friday roundup (11-20-09)

Quotes of the Day:

“I don’t think the housing crisis is over. I think we’re going to see another leg down.” -- Mark Zandi, chief economist with Moody’s (Bloomberg)

"The stability we've started to see in U.S. housing was likely a false calm before a bigger storm. There are millions of homeowners under threat of losing their homes in the next two years." -- Derek Holt, vice-president of economics for Scotia Capital (The Globe and Mail of Toronto)

"Japan’s recovery will be very, very weak. Deflation could persist for another four years and keep weighing on the economy." -- Mitsumaru Kumagai, a senior economist at Daiwa Institute of Research Ltd. in Tokyo. (Bloomberg)

Unemployment rates rise in most states in October (USAToday) (CNN)

Three States Set New Unemployment Records (CNBC)

Map: State Unemployment Rates (NPR) (CNN)

Consumer bankruptcies [in Canada] continue to soar [up "47.4% from a year ago"] (The Financial Post)

Wash. [state] budget gap zooms to $2.6B through mid-2011 (Seattle Times) "By law, [Governor Chris] Gregoire's plan must be balanced without the use of new revenue from tax or fee increases." (Heraldnet)

State, local budget cuts a "time bomb" for jobs (Reuters)

DIRE STATES: State and Local Budget Relief Needed to Prevent Job Losses and Ensure a Robust Recovery (Economic Policy Institute Briefing Paper)

Local woes spark fears of US double-dip recession (The Financial Times)

Deflation returns to the Japanese economy (The BBC)

Deflation: could it happen here [in the UK]? Britain's CPI is only higher because of the sharp fall in the pound over the past 18 months (The Guardian)

U.K. Housing Market May Not Recover Peak Until 2014 (Bloomberg)

Mish Shedlock of the Global Economic Analysis blog appears on Max Keiser's program On the Edge:

Regents Raise College Tuition in California by 32 Percent (The New York Times)

Layoffs hit The Washington Post after BusinessWeek, AP (Reuters blogs)

Behold: The $9 Billion Check That Rescued Morgan Stanley (Business Insider)

FDIC announces 124th bank failure: State regulators shutter Commerce Bank of Southwest Florida. Closure will cost the FDIC $23.6 million. (CNN) Commerce Bank of Southwest Florida in Fort Myers, FL, had a troubled assets ratio of 276% (Bank Tracker).

"The Secret of Oz" trailer - How to Fix the 2010 Depression - directed by Bill Still (Youtube) (Nathan's Economic Edge blog)

Thursday, November 19, 2009

Thursday roundup (11-19-09)

Quotes of the Day:

"The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve," -- Jay Brinkmann, the Mortgage Bankers Association chief economist. (The Washington Post)

"If they [the Federal Reserve] pull back from the [mortgage] market, or if they stop buying from the market, we think there's an asset collapse here. ... They have not discussed in any way, shape, or form an exit strategy. They've extend[ed] the program once. You know, they've become that much more dependent upon supporting the mortgage market and it's a very, very scary situation. ... This is probably the issue that scares me most across the board. If you go through the numbers, you almost can't believe that you didn't focus on this earlier, you know?" -- analyst Meredith Whitney (Bloomberg podcast listen/download)

"Unless foreclosure modification efforts begin succeeding on a permanent basis — which many analysts say they think is unlikely — millions more foreclosed homes will come to market.

"'I’ve been pretty bearish on this big ugly pig stuck in the python and this cements my view that home prices are going back down,' said the housing consultant Ivy Zelman." -- The New York Times (The New York Times)

"Here’s a new abbreviation to add to our crisis vernacular: FAS 167

"That’s short for Federal Accounting Standards revision 167, effective Jan. 1, 2010. In essence, it’s a new accounting rule that will force financials to bring bad, off-balance sheet assets onto their books… thus a potential trigger for more Wall Street carnage." (The Daily Reckoning)

$4.8 trillion - Interest on U.S. debt: Unless lawmakers make big changes, the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels. (CNN)

Worst-case debt scenario: Protecting yourself against economic collapse (SocGen)

Fear of Double Dip in Housing: Home Starts Tumble and Mortgage Delinquencies Rise, Casting Cloud Over Recovery (The Wall Street Journal) (USAToday)

One in 7 U.S. mortgages foreclosing or delinquent (Reuters)

Foreclosures hitting more people with prime loans: Delinquencies and foreclosures set 9th straight record in 3rd quarter as layoffs keep rising (The Associated Press) (Bloomberg)

Foreclosure crisis weighs on economy as more people with good credit risk losing homes (The Associated Press)

A Forecast for Real Estate by Martin Armstrong (Scribd) -- the graph on the cover of his brief report shows a decline in housing prices for many years to come.

Leading economic indicators signal slow growth: Private forecast of US economic activity rises less than expected in Oct., slow growth in 2010 (The Associated Press)

Commercial Real Estate Will Collapse: The long-feared financial disaster is still looming. Bad court decisions could set it off. (Forbes)

U.K. Budget Deficit for October Was Worst Since 1993 (Bloomberg)

OECD warns Britain risks 'debt spiral': Britain is at growing risk of a "public debt spiral" unless the Government takes "drastic" action to cut the deficit, according to the OECD, world's leading economic institution. (The Telegraph)

BOE Should Hold Interest Rate at Record Low to 2011, OECD Says (Bloomberg)

Fitch warns on 'record' French debt: France's plan for a €35bn (£31bn) investment blitz on research and hi-tech projects threatens to push the fiscal deficit above 10pc of GDP and erode the country's safety-margin as a triple-A borrower, say credit watchdogs. (The Telegraph)

OECD Says Japan’s Growth Is Inhibited by High Debt, Deflation (Bloomberg)

BOJ May Signal Rates to Stay Low on Deflation Threat (Bloomberg)

Dutch bank ABN gets new euro4.4 billion bailout (The Associated Press)

The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed (CNBC)

AOL Plans to Cut One-Third of Employees, About 2,300 (Bloomberg)

Food banks burdened by high demand in sour economy (The Associated Press)

Is it a recovery yet? (Weekly report, 11-19-09)

U.S. Initial Jobless Claims Unchanged at 505,000 (Bloomberg)

For what this means, see last week's blog, but the key point is:


Wednesday, November 18, 2009

Wednesday roundup (11-18-09)

Quote of the Day:

"There's no reason to panic. But it is a timely reminder that it's not going to be a strong recovery, even in the industrial sector. It is a bit worrying to see that softness so early in the recovery." -- Paul Ashworth, senior economist at Capital Economics, commenting on the fact that (according to the Washington Post) "the expansion of the nation's industrial sector slowed to a crawl in October." (The Washington Post)

1 million jobless face benefits loss in January: Extended benefits will expire unless Congress acts. Recent extension only covers workers through Dec. 31. (CNN) (The New York Times)

Obama: Too much debt could fuel double-dip recession (Reuters) (RGE Monitor)

Geithner: 'The credit crunch is not over': Small businesses took center stage as Washington power players convened to tackle the growing crisis in lending. (CNN)

Small business loans: $10 billion evaporates: Reports to the Treasury confirm what small business owners have known all year: Banks are cutting back on Main Street lending. (CNN)

Société Générale tells clients how to prepare for 'global collapse': Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction. (The Telegraph)

Does US need a second stimulus to create jobs?: With the economy still in rough shape, calls mount for extra infusions of federal money. But critics say the first stimulus hasn't created the jobs it was supposed to. (The Christian Science Monitor)

Job outlook for 2010 grads: Still stinks: Hiring for graduates will remain near its lowest level in decades after 40% plunge last year, new survey says. But hiring will spike 15% at smaller companies. (CNN)

Air France-KLM to cut 1,700 jobs (The BBC)

Aer Lingus running out of time to broker deal on cuts (

Aetna cutting 625 jobs, plans future cuts (The Associated Press) (Reuters)

Banks face major commercial real estate storm (Reuters)

Home construction at lowest point in 6 months: Annual rate of construction falls 10.6% in October in a drop that surprises economists. (CNN) (Reuters)

Housing Leads the Economy, Existing Home Sales are Irrelevant (Calculated Risk blog)

Housing Slump May Worsen Next Year, Not Get Better (CNBC)

S.F. home value drop, jobless drain city budget (San Francisco Chronicle)

Oakland considers selling convention centers (San Francisco Chronicle)

California faces a projected deficit of $21 billion: The legislative budget analyst's projection, to be released Wednesday, threatens to send Sacramento back into gridlock and force more broad cuts to state programs. (The Los Angeles Times)

California faces $20B deficits for years to come (The Associated Press)

[NY Governor] Paterson threatens layoffs as talks stall (Buffalo News)

GAO Reveals New Flaws in Stimulus Job Creation Claims (CNBC) (The Wall Street Journal)

Utah's fictitious '4th Congressional District' gets $1.2 million in stimulus funding (ABC4)

Goldman was exposed to AIG losses: government report (Reuters) (Sigtarp)

65,000 seek work at VW (Chattanooga Times Free Press)

McAfee warns of Cold War-style computer attack (San Francisco Chronicle)

Interactive: State-by-state numbers for the 'cash for clunkers' program (The Detroit News) -- click the on button

Tuesday, November 17, 2009

Tuesday roundup (11-17-09)

Quotes of the Day:

"Though we have seen some signs that the worst may be over, the housing industry is not out of the woods yet; nor is the broader economy." -- Sandra Pianalto, president of the Cleveland Federal Reserve Bank (Reuters)

"Like Fannie Mae and Freddie Mac, the FHA represented a huge federal gamble on the politically popular cause of homeownership. Now that Washington has lost that bet, it is doubling down, in a bid to prop up home prices just enough to prevent a wider collapse of the economy. Perhaps this stopgap will work, perhaps not." -- The Washington Post (The Washington Post)

Core deflation in the US continues to gather pace: Core inflation for factory goods in the US fell to minus 0.6pc in October from a year earlier, edging the country closer towards Japanese-style deflation despite massive monetary stimulus. (The Daily Telegraph)

US public debt tops 12 trillion dollars for first time (AFP)

Report: Record Mortgage Loan Delinquency Rates in Q3 (Calculated Risk blog)(Daily Finance, an AOL site)

Fed's Pianalto: Much Time Will Be Needed To Heal Economy, Markets (The Wall Street Journal)

DeLong: Odds Increasing That We're Headed For A Great Depression (Business Insider) (The Seattle Times)

GM says 10,000 jobs could go in European shake-up (Reuters)

Japan Air Falls After Report on Minister’s Bankruptcy Remarks (Bloomberg)

Pontiac Silverdome Sold to Canadian Buyer (The Wall Street Journal) -- " for $583,000, about 1% of what it cost to build, the city said Monday."

US Wants China to Buy into Its Small Banks (Reuters)

Greek Government-Bond Shakeout Puts Further Strain on Banks, Budget (The Wall Street Journal)

Insurers Face $23 Billion Loss on Commercial Property (Bloomberg)

Foxwoods fails to make full debt payment: Foxwoods casino defaults on debt by failing to make full interest payment; credit rating drops (The Associated Press)

Cash is king for the holidays: More holiday shoppers paying with cash and debit cards this season. Consumers keeping credit cards in their pockets. (CNN)

The Anatomy of Recovery: Rising Hunger in America (Expected Returns blog)

Judd Gregg: Deficit Worst Problem Behind Terrorism and WMD's -- But No New Taxes to Fix It (Crooks and Liars blog) -- WATCH VIDEO HERE.

Elizabeth Warren on the Economy (PBS)

Monday, November 16, 2009

Monday roundup (11-16-09)

House of Cards (CNBC)
Tip of the hat to the CF Economics blog.

Quotes of the Day:

"I haven't been this bearish in a year" -- Meredith Whitney, CEO of Meredith Whitney Advisory Group LLC (CNBC)

"What should really shock us is that almost one in four children in our country lives on the brink of hunger." -- David Beckmann, the President of Bread of the World, a hunger advocacy organization. (The Associated Press)

"Inflation-adjusted business sales are one of four key indicators used to determine if the economy is in recession or expansion. The others are nonfarm payrolls, personal incomes, and industrial production. Of these, only industrial production has rebounded noticeably." -- Marketwatch (Marketwatch) See also GROWTH – Really? (Nathan's Economic Edge blog)

“People who would have never been caught dead in this industry before are suddenly finding themselves flexible.” -- Chris Ruth, a publicist with pornographic film producer Digital Playground. (CNBC)

The Decline: The Geography of a Recession (Latoya Egwuekwe)

Recession causes more families to go without food, survey finds (The Miami Herald/McClatchy Newspapers) (The Washington Post)

Businesses cut inventories for 13th consecutive month in September, sales also fall (The Associated Press)

Card Issuers Continue To See Higher Delinquencies In October (The Wall Street Journal)

Retail sales figures point to subdued holidays (The Associated Press)

Post Office reports loss, may cut Saturday service: Agency continues to lose money despite $6 billion in cost-cutting measures, and proposes that it drop Saturday delivery. (CNN)

[NY Governor] Paterson Scraps Plan to Close Budget Gap with License Plate Fees (WNYC) (Newsday)

How does your state compare to California? (Pew Center on States)

Roubini: For unemployment "the worst is yet to come" (Credit Writedowns blog)

Jobless hit particularly hard (The Associated Press)

Black male unemployment reportedly comparable to 'Great Depression' (The St. Louis American)

Commercial Mortgage Delinquencies Rise In October (The Wall Street Journal)

U.S. regional banks face commercial real estate risk (Reuters) (FT Alphaville blog) (Bloomberg)

How A Government Bailout Created Today's Commercial Real Estate Catastrophe (Business Insider)

U.S., China Fuel Each Other's Bad Habits (CBS News)

U.S. Dollar Has A Long Way To Fall: China's right, the U.S. government wants to inflate its way out of debt. (Forbes)

Japan heads for financial horror story (The Times of London)

Japan govt set to say country in deflation - Nikkei (Reuters) (Bloomberg)

Japan’s Bonds Poised for Longest Rally This Year on Deflation (Bloomberg)

The new flipping: short sales (Herald Tribune of Sarasota FL)

Deutsche Bank Drowning in Vegas on Costliest Bank-Owned Casino (Bloomberg)

Watchdog: Gov't may have overpaid to bail out AIG (The Associated Press)

Main Street Tells Wall Street, ‘Get a Real Job’ (Bloomberg)

Sheriff's [45] deputies receive layoff notices (Akron Beacon Journal, Ohio) Sheriff delivers 29 layoff notices (Journal-Standard, Freeport Illinois)

Sunday, November 15, 2009

Sunday roundup (11-15-09)

Quotes of the Day

“We’re taking ourselves down the road to third-class status as a nation." -- Sen. Judd Gregg (R) of New Hampshire, commenting on the budget deficit (The Hill)

"... looking into 2010 and perhaps to 2011, the most likely outcome is for growth to be suboptimal, unemployment to remain a vexing problem and inflation to remain subdued." -- Dallas Fed President Richard Fisher (The Federal Reserve Bank)

China has now become the biggest risk to the world economy: Far from taking over as the engine of growth from an exhausted West, China is making matters worse. Its "beggar-thy-neighbour" policies continue to play havoc with global trade and risk tipping the world into a second leg of the Great Recession. (The Telegraph)

Jim Chanos: China Is Headed For A Huge Crash (The Business Insider)

Taxpayers on hook as bailed-out firms fail: Analysts expect other companies to follow CIT Group into bankruptcy court (The Washington Post)

McCain says Chrysler unlikely to survive (The Detroit News)

Commercial real estate woes imperil US recovery (AFP)

Fueling an Even Bigger Public Safety Problem (Financial Armageddon)

Unemployment closer to 20 percent? Leo Hindery, managing director of InterMedia Partners LP, talks with Bloomberg's Pimm Fox about the U.S. unemployment rate.

Saturday, November 14, 2009

Saturday roundup (11-14-09)

New Derivatives Legislation "Was Probably Written by JPMorgan and Goldman Sachs" (Washington's blog)

USDA Declares Half Of Midwest As Agricultural Disaster Area (Market Skeptics blog)

Job Losses Mount, Enduring and Deep (The New York Times)

Fearing pay cuts as the new normal: What if, for years to come, there are masses of qualified people willing to do what you do -- but for much less? (The Los Angeles Times)

Worst-case for California's budget deficit next year? $25 billion (San Jose Mercury News)

Struggling studio MGM says it's looking for buyer: Metro-Goldwyn-Mayer confirms 'potential sale' of company as lenders extend deadline (The Associated Press)

Unofficial Problem Bank List (507 banks in the US) (Calculated Risk blog)

Bank staff across Britain pay for the financial crisis with their jobs: As City investment bankers look forward to record bonuses, workers in the provinces face redundancy (The Guardian)

Home purchase loan applications are at a low not seen since 2000, report says: Buyers are few despite interest rates dropping to their lowest point in five weeks, according to the Mortgage Bankers Assn. But there's plenty of refinancers. (The Los Angeles Times)

Prolonged deflation to continue here [in Ireland] until 2011 as prices fall 6pc (

Friday, November 13, 2009

Friday roundup (11-13-09)

Quote of the Day:

"I’m scared and leaders should look out. America is doing exactly what Japan did last time." -- Donald Tsang, chief executive of the city of Hong Kong (Bloomberg) See similar analysis here. (The Associated Press)

Government pension insurer's deficit doubles, could eventually require taxpayer bailout (The Associated Press)

State Finance Directors Warn of More Trouble Ahead (The Wall Street Journal)

Bank failure toll reaches 123: Regulators close two Florida banks and on in California, costing the FDIC $986.4 million. (CNN)

Century Bank, a Federal Savings Bank in Sarasota, FL, had a troubled assets ratio of 453.3%. (BankTracker)

Orion Bank in Naples, FL, had a troubled assets ratio of 122.8%. (BankTracker)

Pacific Coast National Bank in San Clemente, CA, had a troubled assets ratio of 134.5%. (BankTracker)

FHA runs low on cash, fueling bailout concerns (The Boston Globe)

Wal-Mart sees global price deflation continuing (ICIS blog)

Deflation a factor in Budget cuts - [says Ireland's Finance Minister Brian] Lenihan (RTE)

AOL To Take $200 Million In Restructuring Charges; Expect Large Layoffs (Barrons blogs)

Thursday, November 12, 2009

Thursday roundup (11-12-09)

Quotes of the Day:

“These are the worst numbers we’ve ever seen.” -- Scott Pattison, executive director of the National Association of State Budget Officers, in reference to deficits in the US states (Bloomberg)

"'Tax revenue is down, incomes are down, profits are down and there are not many capital gains to tax out there,' David Wyss, chief economist at Standard & Poor’s in New York, said before the [budget deficit] report. 'On top of everything else going wrong, you’ve got the baby boomers just hitting retirement age, so there’s going be an increase in entitlement programs,' such as Social Security and Medicare, he said." -- Bloomberg (Via Nathan's Economic Edge blog)

"If [oil] prices keep rebounding, there's a risk to the global economy as a whole, even to some of those economies in the Far East and even the Middle East." -- David Fyfe, the head of the IEA's oil industry division. (The BBC)

"The fundamental forces driving foreclosure activity in this housing downturn -- high-risk mortgages, negative equity, and unemployment -- continue to loom over any nascent recovery. We continue to see foreclosure activity levels that are substantially higher than a year ago in most states." -- James Saccacio, chief executive officer of RealtyTrac (Bloomberg)

"Tens of billions of dollars are likely to be lost on the automotive bailout." -- Neil Barofsky, TARP watchdog (Bloomberg)

"If they go too far in tightening credit, they pull the plug on the housing market. The housing recovery is very fragile." -- Howard Glaser, head of The Glaser Group, a financial services analytics firm, speaking of the FHA. (CNN)

"They have a horrendous foreclosure problem and it's getting worse." (CNN) "They keep saying they’re going to outrun their problems, but some way, somehow, the taxpayer is going to end up on the hook." -- Edward Pinto, a former executive with the government mortgage giant Fannie Mae, speaking of the FHA. (The New York Times)

October deficit $176 billion: For 13th month in a row, outlays trump receipts, adding to the federal government's red ink. Monthly interest: $22.8 billion. (CNN) (Reuters)

NGA, NASBO Say States Will Continue to Face Fiscal Difficulties in Coming Years (National Governor Associations) -- watch the video!

The Federal Housing Authority Is In Trouble (The Atlantic) (Reuters) (The Washington Post)

FHA Reserve Ratio Falls to 0.53%, Lowest in History (Bloomberg)

Banks to prepay FDIC for failures: Agency to collect 3 years of insurance premiums in advance (The Washington Post)

TARP watchdog sees loss on U.S. bailout program (Reuters)

As Shipping Slows, Banks and Carriers Fear Loan Defaults (The New York Times)

Deflation in Ireland hits 6.6% in October (The Irish Times)

Japan’s 10-Year Bonds Gain Most in 11 Months on Deflation Signs (Bloomberg)

Returning Workers Face Steep Pay Cuts: Many Bouncing Back From Layoffs Struggle to Recoup Earning Power as Wage Erosion Threatens to Slow Economic Recovery (The Wall Street Journal)