Thursday, December 31, 2009

Quote of the Day:

"Fewer people are getting fired, but nobody is finding a job." -- Dan Greenhaus, chief economic strategist at Miller Tabak, in an article entitled "20 million-plus collect unemployment checks in '09." (The Associated Press)

The Worst May Not Be Over for Europe (The New York Times)

European Commision Warns: Eight Countries Charging Off A Sovereign Debt Cliff In 2010 (The Business Insider)

How Commercial Real Estate Could Trigger a Double-Dip (Daily Finance, an AOL site)

Hotels: Worst Year Since Great Depression (Calculated Risk blog)

Apartment renters win as vacancy rate climbs (USAToday) -- "'I've been at this 35 years, and it's by far the worst I've seen it,' says Jeff Cronrod of the American Apartment Owners Association."

[New York] State Ends Year With Operating Deficit and Little In the Bank (Politics on the Hudson blog)

New York Drains General Fund, Enters Crisis Mode (Expected Returns blog)

Snow-Removal Bills Leave States Scrambling: Paying for Future Storms Worries Officials After Blizzards Squeeze Cash-Strapped Budgets in Midwest, East (The Wall Street Journal)

Colorado's Minimum Wage Becomes 1st in US to Drop: Colorado's minimum wage going down 3 cents in 2010, first drop in the nation since 1938 (The Associated Press)

2009 Retrospective: Party like it’s New Year’s Eve 1930 (Steve Keen's Debtwatch)

Is it a recovery yet? (Weekly report, 12-31-09)

As noted earlier in this blog, one measure of economic recovery would be weekly initial jobless claims below 500,000.

IT'S A RECOVERY!

"The Labor Department said Thursday that new claims for unemployment insurance fell by 22,000 to a seasonally adjusted 432,000, the lowest since July 2008. That's much better than the rise to 460,000 that Wall Street economists expected." (The Associated Press)

Wednesday, December 30, 2009

Wednesday roundup (12-30-09)

Quotes of the Day:

"They've put out the biggest punch bowl in U.S. history and people are guzzling from it." -- Haag Sherman, chief investment officer at Salient Partners in Houston, in an article entitled "String of investment bubbles marked 2000-09: The bubble decade: Get-rich-quick lure of stocks, oil, mortgages led to trillion-dollar losses" (The Associated Press)

"Unprecedented state assistance has prevented a collapse of the financial system, but a second act cannot be ruled out in the years ahead, as excessive risk-taking incentives have not been addressed. Another systemic threat could prove disastrous as governments in the developed world have all but used up their spare fiscal capacity." -- Charlie Feel in an article entitled "Unprecedented state assistance helped avert global meltdown" (The Irish Times)

Eurozone credit contraction accelerates: Bank loans and the M3 money supply in the eurozone contracted at an accelerating pace in November, raising the risk that a lending squeeze will choke the region's fragile recovery next year. (The Telegraph)

Deflation could derail world economy: report (Emirates Business 24/7)

Fannie, Freddie proving too big to shrink: Taxpayer tab for Fannie Mae, Freddie Mac likely to rise after Treasury's Christmas Eve pledge (The Associated Press)

Treasury Commits $3.8 Billion more to GMAC (Calculated Risk blog)

State Tax Revenues Still Collapsing: Can The Recovery Be Trusted? (Expected Returns blog)

Jon Shure Says States May Cut 900,000 Jobs: Jon Shure, an analyst at the Center on Budget & Policy Priorities in Washington, talks with Bloomberg's Tom Keene and Ken Prewitt about national and local budget issues for states including New Jersey. (Bloomberg Listen/Download)

NY's general fund almost out of money: State Comptroller Thomas DiNapoli warns that the New York state's operating account “will literally be down to petty cash.” (Crain's New York Business)

Tuesday, December 29, 2009

Tuesday roundup (12-29-09)

Quotes of the Day:

"... the bottom line is brutally clear: 2009 saw the sharpest percentage decline in ad spending since the Great Depression." -- Ad Age (Ad Age)

"Delinquencies are a precursor to foreclosures. We're not seeing any decreases in delinquencies, which is very concerning." -- Cameron Findlay, chief economist at LendingTree.com. (The Wall Street Journal)

"The turnaround in home prices seen in the spring and summer has faded. Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip." -- David Blitzer, chairman of the Index Committee at Standard & Poor's, in a statement. (CNN)

How Many Ways is the Gov't Supporting Artificially High House Prices? (CF Economics blog)

Fannie Mae: Delinquencies Increase Sharply in October (Calculated Risk blog)

Foreclosures aren't fading in 2010 (Chicago Sun-Times)

Are Homes now "Cheap"? (Calculated Risk blog)

Shiller Sees 'Huge Shadow Inventory' of U.S. Homes: Karl Case, a professor at Wellesley College, and Robert Shiller, a professor at Yale University, talk with Bloomberg's Tom Keene and Ken Prewitt about the outlook for the U.S. housing market. The S&P/Case-Shiller home-price index increased 0.4 percent in October from the prior month on a seasonally adjusted basis following a 0.2 percent gain in September. (Listen/Download)

Moody's report shows consumers fall further behind on credit card payments in November (The Associated Press)

Consumer Confidence 2009: Worst Year on Record [in 24 years of weekly polls]: Just 8 Percent of Americans Rate the Economy Positively (ABCNews)

Germany's inflation rate hits record low: German consumers have gotten a break this year as prices have held steady. The inflation rate is likely to be a mere 0.4 percent for 2009, the lowest 12-month average in 20 years. (Deutsche Welle)

Spain's deficit worsens to 6.79 percent of GDP (The Associated Press)

Global tinderbox: 2010 could be a year that sparks unrest (The Economist)

Local tax coffers fall lower nationwide (CNN)

Ky. budget shortfall could exceed $1.5 billion (The Associated Press)

The Next Big Crisis: How the forthcoming state and local budget crises could slow down the American economy. (Newsweek)

Tech Ticker's Best of 2009: Fan Favorite, Howard Davidowitz (Yahoo! Tech Ticker) And Bloomberg concurs: "Does anybody get more fan mail than Howard? I don't think so! Howard gets the most." -- Tom Keene (Bloomberg Listen/Download)

Monday, December 28, 2009

Quotes of the Day:

"What we've got right now is a recovery that first of all is not showing up very much in jobs yet. It's being driven by fiscal stimulus which is going to fade out in the second half of next year and by inventory bounce... So the things we know about are all going to be negative in the second half of next year." -- Nobel Prize winning economist Paul Krugman in an ABC video clip under the blog title "Krugman: 'Reasonably High Chance' the Economy Will Contract." (ABCNews blogs)



"It's reasonable to think that, when placing odds on something bad happening, an economist who says there's a good chance of it occurring but who then quickly follows it up with the qualifier 'less than 50-50 odds' is virtually certain of the bad thing happening." Tim, blogger at The Mess That Greenspan Made (The Mess That Greenspan Made blog)

Sovereign Debt: The Big Question (Seeking Alpha blog)

Ailing JAL faces bankruptcy option: report (AFP)

KT to Eliminate 5,992 Jobs, Reduce 16% of Workforce (Bloomberg)

The Recession Begins Flooding Into the Courts (The New York Times)

Sunday, December 27, 2009

Sunday roundup (12-27-09)

Concerns grow over sovereign debt risk (The Financial Times)

Are jobs cut during recession gone for good?: Experts, economists predict positions won't come back (The State Journal-Register of Springfield IL)

Walking Away From The House She Can Afford (NPR)



Investors see farms as way to grow Detroit: Acres of vacant land are eyed for urban agriculture under an ambitious plan that aims to turn the struggling Rust Belt city into a green mecca. (The Los Angeles Times)

Zack Carter on OCC Chief John Dugan in The Nation: “A Master of Disaster “ (The Big Picture blog)

Washington Mutual's final days — The deal: Third in a series of exclusive reports on the events that toppled a century-old institution (Puget Sound Business Journal). Presumably Part One is The downfall of Washington Mutual: Inside the frenzied effort to prevent the largest bank failure in U.S. history (Puget Sound Business Journal) and Part Two is The Washington Mutual decision: Why did regulators abruptly close Washington Mutual when it had the cash to operate? Help was coming in six days (Puget Sound Business Journal). Further links on the subject may be found here (Puget Sound BizTalk blog).

Saturday, December 26, 2009

Friday, December 25, 2009

Friday roundup (12-25-09)

Quote of the Day:

"Japan's public debt is already the largest in the world." -- The Associated Press (The Associated Press)

Hatoyama Proposes Record Budget, Exacerbating Japan Debt Burden (Bloomberg)

Japan jobs, price data grim but expected [= deflation rising] (Marketwatch)

Credit crunch: Home equity lending evaporates: Hock the house? Home equity lending evaporates as real estate values fall, banks get stingy (The Associated Press)

Max Keiser interviews Gail Tverberg of The Oil Drum.com about the credit crunch and peak oil (Youtube)



Calif. Struggles to Pay Billions in Pensions (PBS)


Berkshire Eliminates 21,000 Jobs as Manufacturing, Retail Slump (Bloomberg)

Thursday, December 24, 2009

Thursday roundup (12-24-09)

Quotes of the Day:

"In terms of the GDP, we are about halfway to depression level. If you look at retail sales, industrial production, we are already well into depressionary. If you look at things such as the housing industry, the new orders for durable goods we are in Great Depression territory." -- Economist and statistician John Williams. (Fairfield Weekly.com) article: "We're Screwed! ShadowStats.com founder John Williams explains the risk of hyperinflation. Worst-case scenario? Rioting in the streets and devolution to a bartering system"

"It's possible we may see some horrendous numbers for the fourth quarter and, thus 2009, and Treasury wants to calm the markets." -- Bert Ely, a banking consultant in Alexandria, Va. (The Associated Press) article: "Treasury removes cap for Fannie and Freddie aid: Fannie Mae and Freddie Mac receive unlimited future funds from taxpayers to stay afloat"

"The Obama administration is 'beginning to realize it’s not getting better and it’s not likely to get better' soon in the housing market, said Julian Mann, who helps oversee $5.5 billion in bonds as a vice president at First Pacific Advisors LLC in Los Angeles. 'They don’t want the foreclosures now, so they’re saying, we’ll pay whatever it takes to continue to kick the can down the road.'" (Bloomberg) article: "U.S. Ends Cap on Fannie, Freddie Lifeline for 3 Years"

"Japan won’t be able to keep up this huge spending forever. Prospects for the fiscal situation look extremely grim." -- Yuichi Kodama, chief economist in Tokyo at Meiji Yasuda Life Insurance Co. (Bloomberg) article: "Hatoyama May Propose Record Budget, Deepening Deficit Concern"

"Japanese companies remain unconfident about the strength of demand and they anticipate the income and employment situation will remain severe. They’re afraid it’s getting more difficult to pass costs onto customers and that could prolong deflation even more." -- Mari Iwashita, chief market economist at Nikko Cordial Securities in Tokyo. (Bloomberg) article: "Japan Consumer Prices Slide 1.7%, Deflation Persists"

Congress raises debt ceiling to $12.4 trillion (The Associated Press)

Tempting the tipping point: Can the U.S. escape a fiscal death spiral? -- commentary (The Washington Times)

Treasury: More Support for Fannie and Freddie (Calculated Risk blog)

Arizona Governor Jan Brewer: "We face a state fiscal crisis of unparalleled dimension" (Mish's Global Economic Trend Analysis blog)

Is it all just a Ponzi scheme? by Eric Sprott & David Franklin (Sprott Asset Management)

Banks Bundled Bad Debt, Bet Against It and Won (The New York Times)

Is it a recovery yet? (Weekly report, 12-24-09)

By the standard of initial jobless claims being below 500,000 (blog):

IT'S A RECOVERY!

"The Labor Department said the number of new jobless claims fell to a 452,000 last week, down 28,000 from the previous week, on a seasonally adjusted basis. That's a better performance than the decline to 470,000 that economists had expected. ...

"But the Labor Department warned that seasonal employment from holidays and other variables in the calendar made last week a difficult one to seasonally adjust. The actual number of new claims was higher than the previous week, but fewer than expected. The process of adjusting for seasonal variation reduced the number." (The Associated Press)

"Seasonal issues come into play this time of year which is probably adding some volatility but the larger idea that fewer and fewer people are getting fired holds true. The bigger issue at this point is how quickly people getting jobs, not losing them. We have not yet seen any indication within the continuing claims data that people are finding jobs." -- Dan Greenhaus, chief economic strategist with Miller Tabak. (Marketwatch)

Wednesday, December 23, 2009

Wednesday roundup (12-23-09)

Quotes of the Day:

"Of course you can say that Latvians were borrowing irresponsibly but to borrow irresponsibly you need someone to lend irresponsibly. We had very easy credit in a very overheated economy. Now we have almost no credit in a very deep recession." -- Latvian Prime Ministere Valdis Dombrovskis (The Financial Times)

"I know that we'd like to get money out of the Street and I know that we'd like people to borrow money, but people need to have a reason to borrow money to get money flowing. ... We need credible borrowers who have a reason to borrow money and we're just not finding the support in the economy for that yet." -- John Kanas, CEO of BankUnited (CNBC)

"The supply of new homes for sale continues to fall. We now have fewer new homes on the market than at any time in more than 38 years. There's still plenty of competition from used homes, especially distressed property. But even that overhang is gradually coming down." -- Mike Larson, real estate analyst at Weiss Research in Jupiter, Fla., in a research report. (CNN)

"The housing recovery is far from becoming self-sustaining. The current rebound remains very much dependent on government support." -- Anna Piretti, an economist for BNP Paribas. (Marketwatch)

"It’s the worst I’ve seen since I got in the industry in 1977. Right now, one out of eight trucking lines is thinking of quitting business. In the last 12 months, there has been a 20 percent drop in general freight." -- said Dan Case, executive director of the Oklahoma Trucking Association. From the article "Arrow Trucking suspends operations, but talks reported" (Tulsa World)

Weak U.S. home sales show recovery's shakiness (Reuters)

Gilts sell-off as Britain joins Italy in debt house: The cost of borrowing for the British Government has surged to within a whisker of Italian levels as global markets issue their punishing verdict on the Government’s spending plans. (The Telegraph)

Japan won't guarantee loans to struggling JAL (Reuters)

So Far, 25 States Have Emptied Their Unemployment Funds (Crooks and Liars blog)

Schwarzenegger to seek federal help for California budget: Facing another huge deficit, the governor wants $8 billion or threatens massive cuts in social services. He also plans to renew push for offshore oil drilling. (The Los Angeles Times)

What Happens When California Defaults? by Bill Watkins, professor at California Lutheran University and head of the Center for Economic Research and Forecasting (NewGeography.com)

Five things that should keep you awake at night about the unfolding economy (The Canadian Press)

'Tis the season to be jolly:

Tuesday, December 22, 2009

Tuesday roundup (12-22-09)

Quote of the Day:

"If you start having serious problems credit wise with the likes of Spain, then the issue for the euro’s credibility and its pricing against other currencies becomes a much bigger issue." -- Jim O'Neill, chief global economist for Goldman Sachs Group Inc. (Bloomberg)

Wall St did better during the Great Depression (The Independent) -- "Noughties" refers to the years 2000-2009 (nought = zero and 2000 has three of them) (Seeking Alpha blog)

Charles Goodhart warns of return to recession as bank lending falls: The contraction of bank lending and the M3 money supply in the US and Europe over recent months has become a serious concern and raises the risk of a slide back into recession, according to one of Britain's most celebrated economists. (The Telegraph)

FDIC's need for cash squeezes small banks (The Star-Ledger of Newark NJ)

Lack of Bank Liquidity Threatens Commercial Real Estate Market (DSNews.com)

Small-business bankruptcies rise 81% in California: With credit tight and consumers still pinching their pennies, many business owners find they can't go on. (The Los Angeles Times)

Nationwide, small business bankruptcy filings are up 44 percent. As Ben Tracy reports, California has been hit particularly hard. (CBSNews)



States' jobless funds are being drained in recession (The Washington Post)

Unemployment funds going ‘absolutely broke’: 40 state programs to be emptied by the jobless tsunami within two years (MSNBC)

More prime mortgages default in 3rd quarter: Also: Many homeowners with modified mortgages fall behind again. And the number of homes in foreclosure rises, though new foreclosures are steady, report shows. (The Los Angeles Times)

British economy still limping (The Associated Press)

Record number of [UK] companies go bust: 227,000 firms forced to close during economic crisis, Conservatives say (The Independent)

[UK] Families hit by the worst wages crash in 50 years (The Daily Mail)

[UK] Families are putting aside the biggest amount of savings ever as they take drastic measures to pull themselves out of debt, it has emerged. (The Telegraph)

Moody's downgrades Greece's credit rating (The Associated Press)

Fitch warns that Britain and France risk losing their AAA rating: Fitch Ratings has given its bluntest warning to date that Britain and France risk losing their AAA status unless they map out a clear path to budget discipline over the next year. (The Telegraph)

Romania to cut up to 100,000 state jobs in 2010 (Reuters)

Tuition increases, [3,600] job cuts possible to meet Mississippi budget (WDAM)

[Hawaii's Governor] Lingle plans [nearly 1,900] more job cuts, tax shifts (Pacific Business News)

Still Not Surprising (Financial Armaggedon)

Show Us the E-Mail -- op ed by three investigators (The New York Times) MSNBC's Dylan Ratigan discusses the op-ed with Henry Blodget & Eliot Spitzer:



The globalization of "extend and pretend" (The Mess That Greenspan Made blog)

Monday, December 21, 2009

Monday roundup (12-21-09)

Quote of the Day:

"I'd look at it as an investor and say the storms all over the country are probably going to dampen the expectations for any kind of positive surprise that might have come out of this holiday season." -- Fred Dickson, director of retail research at D.A. Davidson & Co. (Reuters)

Stiglitz Says U.S. Should Prepare for Second Stimulus (Bloomberg)

Not Exactly Bullish (Financial Armaggedon blog)

Foreclosures for major sector of bank industry topped 1 million in third quarter, report says: More borrowers with mortgages serviced by national banks and savings and loans, which hold 34 million loans, or 65% of all outstanding U.S. mortgages, fell into arrears from July 1 to Sept. 30. (The Los Angeles Times)

Serious U.S. mortgage delinquencies up 20 percent (Reuters)

Borrowers with modified loans falling into trouble (The Associated Press)

Ford Offers Buyouts to All Factory Workers: Automaker Also Offering Hourly Workers Early Retirement Packages in Effort to Slash Factory Work Force (The Associated Press) (Bloomberg)

Presses stopped forever at 140+ papers in 2009 (Reflections of a Newsosaur blog)

Harvard Swaps Are So Toxic Even Summers Won’t Explain (Bloomberg)

The rise of Germany belies the chaos a strong euro is causing: The super-strong euro is having sharply varying effects on the different countries in the eurozone and causing the rift between north and south to widen further, according to a new report by Standard & Poor's (S&P). (The Telegraph)

Food stamps altering how retailers do business: Record number of Americans — 37 million — depend upon the benefit (MSNBC)

Your blogger has no idea what to say...

Sunday, December 20, 2009

Sunday roundup (12-20-09)

State's budget deficit biggest: Oklahoma has an 18.5 percent shortfall, making it No. 1 in the U.S., a report says. (Tulsa World)

Commercial real estate on shaky foundation (The San Francisco Chronicle)

Commercial real estate faces challenges in 2010: Lease rates have dropped during recession (The Bellingham Herald in Washington state)

Saturday, December 19, 2009

Saturday roundup (12-19-09)

Most Charities Fare Poorly in Crucial End-of-Year Giving Season (The Chronicle of Philanthropy)

Storm Threatens US Retailers' Last Holiday Push (Reuters)

[Deflation watch:] Holiday air deals take off: A week before Christmas, airlines waiving advance-purchase charges (Marketwatch)

Report: Housing Prices Could Tumble Again If More Foreclosures Aren't Prevented (The Huffington Post blog)

The Coming Shortage Of All The World's Most Important Industrial Metals (The Business Insider)

Bernanke ARM OK, Head "Explodes"? (Calculated Risk blog)

Friday, December 18, 2009

Friday roundup (12-18-09)

Quotes of the Day:

"There is no precedence for the panic and chaos will occur next year. The global food supply/demand picture has NEVER been so out of balance. The 2010 food crisis will rearrange economic, financial, and political order of the world, and those who aren’t prepared will suffer terrible losses…" -- Blogger Eric deCarbonnel (Market Skeptics blog)

"The United States cannot force foreign governments to increase their holdings of Treasuries. Double the holdings? It is definitely impossible. ... The world does not have so much money to buy more US Treasuries." -- Zhu Min, deputy governor of the People's Bank of China (Shanghai Daily)

"If you don't have the ability to pay off the credit card at the end of the month, you shouldn't use it." -- Christopher Thornberg, chief economist for the California state controller and a former senior lecturer at UCLA's Anderson School. (The Los Angeles Times)

Outstanding quotes of the day:

Commenting on fourth quarter profits for Carnival Corp. plummeting 48 percent: "We weathered the most challenging economic environment in the company's history exceptionally well.” -- Chairman and CEO Micky Arison, in a news release. (South Florida Business Journal)

"My hope was to have transitioned to retirement earlier, but I stayed on because of the economy and the challenges that the Bank has encountered. Now, both the Bank and the economy are experiencing positive trends, and I am confident that the executive team at First Federal Bank of California is well-positioned to complete our capital-raising effort." -- Babette Heimbuch, chairman and chief executive officer of FirstFed Financial Corp. in her resignation effective Dec. 9. (Business Wire) In today's positive trends for the company, First Federal Bank of California, F.S.B. in Santa Monica, CA, was seized by government regulators. (The Los Angeles Business Journal)

Debt fears to sour holiday mood (Reuters)

Pimco’s Gross Boosts Cash to Most Since Lehman Failed (Bloomberg)

Calling on Congress to stop the debt tsunami (The Washington Post) Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt (The Peterson-Pew Commission on Budget Reform)

U.K. November Budget Deficit Was Highest on Record (Bloomberg)

Canada’s Budget Deficit Widened in October as Tax Revenue Fell (Bloomberg) -- $3.1 billion

States Near Bankruptcy (Expected Returns blog)

Pa gov vows layoffs if gaming bill fails (Reuters)

Palm Springs confronts $4.1M budget deficit (The Desert Sun)

Japan promises to 'beat deflation': Japan's central bank has vowed to fight deflation as it announced interest rates would remain at 0.1%. (BBC)

This Deflation Is Why The Dollar Can Rally A Lot (The Business Insider)

The Second Wave is Already Ashore (The Daily Reckoning)

Fewer states add jobs as recovery sputters along (The Associated Press)

More People Remaining Unemployed Longer (The Hardford Courant)

Americans Most Pessimistic They've Been Since January (CNBC)

The New America: Food Stamp Use on the Rise (Expected Returns blog)

Government helps more Americans pay their heat bills (USA Today)

Utility Shutoffs Climb by 5% Despite Doubling of U.S. Aid (The Wall Street Journal)

GM to shut down Saab: General Motors announces closure of 62-year-old Swedish carmaker after collapse of negotiations with Spyker (The Guardian) (The New York Times)

The recession is over but the depression has just begun (The Big Picture)

Bank failure tally reaches 140 (CNN)

RockBridge Commercial Bank of Atlanta, GA had a troubled asset ratio of 1144.4%. (BankTracker)

Peoples First Community Bank of Panama City, FL had a troubled asset ratio of 641.3%. (BankTracker)

Citizens State Bank of New Baltimore, MI, had a troubled asset ratio of 316.4%. (BankTracker)

New South Federal Savings Bank of Irondale, AL, had a troubled asset ratio of 553.6%. (BankTracker)

Independent Bankers' Bank of Springfield, IL, had a troubled assets ratio of 14.5%. (BankTracker)

Imperial Capital Bank of La Jolla, CA, had a troubled assets ratio of 167.2%. (BankTracker)

First Federal Bank of California, a Federal Savings Bank of Santa Monica, CA, had a troubled assets ratio of 112.4%. (BankTracker)

Is your bank in trouble? (MSNBC)

Thursday, December 17, 2009

Quotes of the Day:

"In 1970 the ratio of the compensation of the top 100 CEOs compared to the average production worker was 45 to 1. By 2006 it was an astounding 1,723 to one!" (The Huffington Post blog)

"Metro is in what might be the worst financial crisis of our existence." -- General Manager John B. Catoe Jr., speaking to Metro's board of directors about Washington DC's mass transit system. (The Washington Post)

Harvard’s Feldstein Says U.S. Economy Still Mired in Recession (Bloomberg)

The banking crisis: Till debt us do part: Some governments are borrowing so much that markets are becoming wary and may stop lending to them. Could this be the next leg of the crisis? (The Sunday Times of London)

Ms. Main Street: Wall Street got its bailout, but Bostonian of the Year Elizabeth Warren keeps asking, "What about the American family?" (The Boston Globe)



‘Shadow Inventory’ of U.S. Homes Climbs, Report Says (Bloomberg) -- "The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic."

4 Big Mortgage Backers Swim in Ocean of Debt (The New York Times) -- "These companies, the American International Group, Fannie Mae, Freddie Mac and GMAC, are not only unable to repay the government, they are in need of continuing infusions that make them look increasingly like long-term wards of the state."

Citigroup, Fannie, Freddie suspend evictions for holidays (Marketwatch) (The Christian Science Monitor)

Nightmare scenarios haunt states (Stateline.org)

Rosenberg: We've Barely Begun The Deleveraging Process (The Business Insider)

Christmas shopping: are consumers waiting for last-minute deals?: US shoppers are less far along in their Christmas shopping this season than in recent years, a new survey shows. That could mean consumers are waiting for last-minute discounts – or just scaling back overall. (The Christian Science Monitor)

"ArcelorMittal, the world's biggest steelmaker, could cut 10,000 jobs worldwide next year" (Reuters)

Paul Mueller Company [in Springfield, MO] lays off entire production staff [a week before Christmas] (KY3) (OzarksFirst.com -- with excellent video, which I cannot embed)



The End of Chimerica by Niall Ferguson and Moritz Schularick (Harvard Business School)

Cheques to be abolished [in the UK]: The Payments Council has voted in favour of abolishing the use of cheques as a means of payment. (The Telegraph)

Tax revenue drop causes $197M La. budget deficit (The Associated Press)

Corruption threatens "soul and fabric" of U.S.: FBI (Reuters)

Is it a recovery yet? (Weekly report, 12-17-09)

As posted back on Sept. 10, economist Linda Duessel had said she would "be more certain that there is an economic recovery" when initial jobless claims reports drops below 500,000.

IT'S A RECOVERY!

"The Labor Department said Thursday that the number of new jobless claims rose to 480,000 last week, up 7,000 from the previous week. That was a worse performance than the decline to 465,000 that economists had expected." (The Associated Press)

"'Overall, the labor market is recovering, although the last two jobless claims numbers suggest that the pace is still fairly gradual,' said Vassili Serebriakov, senior currency strategist at Wells Fargo in New York." (Reuters)

"'The level of new claims remains elevated,' said Steven Wood, president of Insight Economics LLC in Danville, California. 'The labor market is improving, but remains soft.'" (Bloomberg)

Wednesday, December 16, 2009

Wednesday roundup (12-16-09)

Quotes of the Day:

"It is possible that a vicious cycle of tighter credit conditions, weaker growth and rising levels of bad debt [in Eastern Europe] develops." -- Neil Shearing, an analyst at Capital Economics in London. (The Wall Street Journal)

"It's not going to stop and go away. There's still debt that needs to be settled in 2010 and 2011." -- John Sfakianakis, chief economist at Banque Saudi Fransi in Riyadh, Saudi Arabia, speaking of the Dubai crisis. (Bloomberg)

U.S. National Debt Tops Debt Limit (CBSNews) -- "The ceiling was set at $12.104 trillion dollars. The latest posting by Treasury shows the National Debt at nearly $12.135 trillion."

House passes $290 billion boost to debt limit (CNN) (Bloomberg)

Gulf petro-powers to launch currency in latest threat to dollar hegemony: The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate. (The Telegraph)

Abu Dhabi rescues Dubai with $10-billion bailout: World markets rise on the news. Even though the aid will cover a payment due Monday, spendthrift Dubai remains heavily in debt. (The Los Angeles Times)

Debt disaster fears rumble from Athens to London: Game of chicken for bond spreads: Will E.U. honor 'no bailout' clause? (Marketwatch)

Italian banks fear crunch from Basel II: Italy's leading bankers and business leaders have called for the Basel II rules on bank capital to be shelved or delayed, fearing a serious credit crunch next year. (The Telegraph)

S&P downgrades Greece while concerns mount over secret defence budget: Standard & Poor’s has become the second rating agency to downgrade Greek sovereign debt to near junk levels of BBB+, issuing a withering verdict on Spartan plans unveiled this week by premier George Papandreou. (The Telegraph)

Ontario looks to sell assets to bring down $25-billion debt: Pension plans eye assets if they're up for sale (The National Post of Canada)

'Dollar Crisis' Author: 2010 Will Bring More Stimulus (Reuters)

President Obama: Federal Government 'Will Go Bankrupt' if Health Care Costs Are Not Reined In (ABCNews blogs)

Out from under TARP, banks are now free to fail again (The Washington Post)

U.S. forfeiting billions in future taxes to let Citi repay TARP (Credit Writedowns blog)

Paying Back TARP Money (CBSNews)



Another $1 billion in small business credit vanishes (CNN) (San Diego Union Tribune)

Foreclosures lose luster among average buyers (Boston Globe blogs)

Insurers May Lose $10 Billion on Commercial Property (Bloomberg)

Billionaire Mort Zuckerman discusses global recovery and the commercial and regional real estate markets. (CNBC)





GM joins rush to repay bailout funds (The Miami Herald)

2009 U.S. [automobile] dealership closings worst on record, tally shows (Automotive News)

Nearly half of Detroit's workers are unemployed: Analysis shows reported jobless rate understates extent of problem (The Detroit News)

MTA passes huge NYC service cuts [in mass transit] to shut deficit (Reuters) (NY1 -- with video)

"Wake Up, Gentlemen" (The Baseline Scenario)

Officials and Experts Warn of Crash-Induced Unrest (Washington's blog)

California Taxes Fall Short of November Target by $439 Million (Bloomberg) (Reuters) -- Reuters says: "California's revenues since the start of its fiscal year are trailing estimates by more than $1 billion, according to the state's November revenue report..."

[Alabama] State school superintendent: 3,543 teaching jobs could be cut (The Birmingham News)

Still Not Buying It (Financial Armageddon)

Tuesday, December 15, 2009

Tuesday roundup (12-15-09)

Quotes of the Day:

"Japan's economy is in a very severe situation. Some people say it has hit bottom but we cannot be at all optimistic." -- Japanese Prime Minister Yukio Hatoyama, speaking Tuesday at a cabinet meeting called to discuss ways to spur economic growth. (AFP)

"Even though exports are recovering, companies are still cutting costs and hiring, weighing on domestic demand. It’s unavoidable that the recovery will stall in the second quarter of next year." -- Hiroshi Shiraishi, an economist at BNP Paribas in Tokyo. (Bloomberg)

"Whether or not a debt crisis can be avoided in Greece remains to be seen, but the whole affair has once more raised questions about the political and structural mechanisms of the eurozone." -- Neil Mellor, an analyst at Bank of New York Mellon. (The Associated Press)

"I’ve never in more than 15 years in business seen banks so unwilling to lend." -- Jose Aljaro, chief financial officer at Barcelona-based Abertis. (Bloomberg)

"This cut will create an economic crises in every community in the state. Local government was not consulted or forewarned about the cuts and school districts will have to find ways to accommodate cuts while complying with state and federal mandates. It is a case of trickle down misery." -- Timothy C. Duffy, executive director of the Rhode Island Association of School Committees, commenting on Rhode Island governor's cuts in local aid, made to close a $219 million shortfall in this year’s state budget. (Providence Business News)

Raise the debt ceiling! But, just a little... (The Mess That Greenspan Made blog) (The San Francisco Chronicle) (CNN) -- CNN says, "And if the debt ceiling isn't increased by the end of this year, the nation is likely to default on its debt."

U.S. needs plan to tame debt soon: experts (Reuters) -- "The government must craft a plan next year to get its ballooning debt under control or face possible panic in financial markets, a bipartisan panel of budget experts said in a report on Monday." The Peterson-Pew Commission on Budget Reform report is online. (The Pew Charitable Trusts) (Financial Armaggedon)

[Outlook 2010]: Moody’s sees sovereign states a-suffering (FT Alphaville blog) (Independent.ie)

Public Debt Risk Rising, Turbulent Year Ahead: Moody's (CNBC)

Debt troubles show crisis not over for eurozone (The Associated Press)

Bank collapse in Austria brings debt in Eastern Europe center stage (Credit Writedowns blog)

The stimulus programs implemented in 2009 have exacerbated the underlying debt problem, says Kirby Daley, senior strategist at Newedge Group. He offers his take on whether this economic recovery is sustainable into 2010, CNBC's Lisa Oake & Karen Tso. (CNBC)














Debt Is Biggest Threat To US, UK Commercial RE - ING [Real Estate Investment Managment] (Dow Jones)

UK leads [European] exposure to commercial loan risk (The Scotsman)

TARP repayments may signal troubles ahead (The Financial Post of Canada blogs) -- It is possible that "banks see more turbulence ahead, especially from commercial real estate loans, and want to raise equity capital before trouble hits to give them a buffer against potential losses."

Defaults to Rise as Credit Issues Remain, Greene Says (Bloomberg)

Debt-to-income ratio [among Canadian households] hits record high (The Globe and Mail of Toronto)

4 Million Foreclosures in 2010? It’s A Real Possibility (CBS MoneyWatch)

Poll Reveals Trauma of Joblessness in U.S. (The New York Times)

Obamaville Tent City



Hoovervilles



‘Naked’ Access Grows to 38% of U.S. Trading Volume, Aite Says ("In the worst-case scenario, electronic fat fingering or intentional trading fraud could take down not only the sponsored participants, but also the sponsoring broker and its counterparties, leading to an uncontrollable domino effect that would threaten overall systemic market stability.") (Bloomberg) (Reuters)

Regulators Resist Volcker['s] Wandering Warning of Too-Big-to-Fail (Bloomberg)

How Big is Too Big to Fail?: Paul Solmon speaks with economist George Shultz about how massive bank mergers affect the idea of "too big to fail". (PBS NewsHour)



Agri-Food Thoughts by Ned W. Schmidt (Safe Haven)

Airline stocks decline after IATA widens loss projection: World's airlines face higher fuel costs and soft ticket prices (Marketwatch)

RI gov cuts millions in local aid to close deficit (The Associated Press)

Monday, December 14, 2009

Monday roundup (12-14-09)

Quotes of the Day:

"The whole Austrian economy has been able to avert a massive threat at a critical moment in time." -- The Austrian National Bank, commenting on the nationalization of Hypo Bank (The Wall Street Journal)

"The risk situation of this bank has created an enormous threat to Austria, to its future as a financial centre, and to the whole economic region in recent days and weeks." -- Austrian Finance Minister Josef Pröll. Hypo Bank's failure would have had "catastrophic consequences." -- Austrian Chancellor Werner Faymann (The Telegraph)

"In the end, ECB [European Central Bank] President Trichet called Chancellor Faymann, to make clear the seriousness of the situation." -- An informed source requesting anonymity. (Dow Jones)

"This state [of New York] is projected to be insolvent by the end of the month." -- Gov. David Paterson (The Associated Press)

“What we’re looking at frankly is the worst budget situation since the war. The bill for unemployment and health costs, legacies of the crisis, will hit us with full force in 2010 before ebbing in 2011.” -- Germany's Deputy Finance Minister Steffen Kampeter (Bloomberg)

CNBC: "Is the worst over in terms of bank failures, banks having to be rescued, etc.?" Sheila Bair, FDIC chairman: "No. ... We do think bank failures will continue to go up next year ..." (From CNBC video)

"When the economy was about to fall off of its axis last year, people say, 'What was on the other side?,' right? It really meant that big and small companies weren't going to be able to make payroll. That McDonald's franchisees weren't going to be able to pay their people. So it was not just Wall Street. And there was an issue -- and you see it in the book -- where they were not just talking about Morgan Stanley and Goldman Sachs going out of business next. They were talking about General Electric going bankrupt. So it did hit Main Street, in a different way." -- Andrew Ross Sorkin, New York Times reporter and author of Too Big to Fail (The Daily Show)

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Bond Traders Put Pressure on Debt-Laden Nations (The New York Times)

ECB orders Austria to nationalise Hypo bank, fearing domino crisis: Austria has nationalised the Carinthian lender Hypo Group after it ran into trouble on hidden losses in Eastern Europe, offering a stark reminder that Europe's banks are not yet out of the woods. (The Telegraph) (FT Alphaville blog) (Reuters blogs)

Japan’s Recovery Too Weak to Spur Domestic Demand, Tankan Shows (Bloomberg)

25% of U.S. Mortgages Are `Under Water’: Laurie Goodman, senior managing director of Amherst Securities LLP, talks with Bloomberg's Ken Prewitt and Tom Keene about mortgage modifications and new plans that could address the negative home equity that is driving foreclosures. (Bloomberg podcasts Listen/Download) -- "This is a problem of absolutely unprecedented proportions." "It's going to be years and years and years" before housing is back to "normal."

Obama to Bankers: Increase Lending (NPR)



Cities Shut Off Streetlamps to Save Money; Indianapolis Threatens $2500 Fines for Challenging Traffic Tickets (Mish's Global Economic Trend Analysis blog)

School Chaos Expands: [Detroit Public Schools Financial Manager Robert] Bobb says he will bankrupt the schools if teachers don’t bargain (The Michigan Citizen)

[Deflation watch:] Desperate times call for deep discounts at the mall: Worried Southland merchants are dropping prices as the holiday shopping days dwindle. Some customers have come to expect discounts, an expert says. (The Los Angeles Times)

2010 Economic Forecast for California: What 10 Reasons Will Keep a lid on the Housing and Economic Recovery for California? (DoctorHousingBubble blog)

Why Britain faces a bleak future of food shortages: Britain faces a 'perfect storm' of water shortage and lack of food, says the government's chief scientist, and climate change and crop and animal diseases will add to future woes. Science is now striving to find solutions (The Observer)

Decidedly Speculative by John P. Hussman, Ph.D. (HussmanFunds) -- with reference to the stock market

Sunday, December 13, 2009

Sunday roundup (12j-13-09)

Quote of the Day:

"Is there any really major regulatory shift to challenge the position of the too-big-to-fail institutions? No! They now have an explicit government guarantee that if they get into trouble, for sure they'll be bailed out, because who wants another Lehman Brothers?

"So the system is in a far worse state, in a far more vulnerable state than it was before. And I don't see any evidence of a serious attempt on the part of the administration to change that. The breakup of Citigroup and of Bank of America should be on the policy agenda. It's not enough just to wait for this to happen. Why should it happen, when they have free money from the Fed and a government guarantee? I mean these things are in a fantastic and monopolistic position in our financial system. Meanwhile, too-small-to-save regional banks are going down in their tens if not hundreds. So this is a really incredibly unbalanced state of affairs." -- Harvard Prof. Niall Ferguson

On this week's Consuelo Mack WealthTrack, the lessons of history. Best selling author and historian Niall Ferguson tells Consuelo what the seismic global economic and market shifts of recent years mean for our future, particularly the longer term implications of America's exploding debt. (WealthTrack.com)



For a supporting graphic, see: TBTF: Big Banks Getting Bigger (The Big Picture blog)

Interest Rates Are Low, but Banks Balk at Refinancing (The New York Times)

Thriving small businesses still struggling to get loans (CNN)

Obama to Press Bankers on Lending, Aide Summers Says (Bloomberg)

Drug money saved banks in global crisis, claims UN advisor: Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions (The Guardian)

Greece defies Europe as EMU crisis turns deadly serious: Euroland's revolt has begun. Greece has become the first country on the distressed fringes of Europe's monetary union to defy Brussels and reject the Dark Age leech-cure of wage deflation. (The Telegraph)

Volcker Cautions on Complacency (Calculated Risk blog)

Volcker: There's No Growth Other Than What The Fed's Pouring Into The Economy (The Business Insider)

Interview with US Economic Recovery Advisory Board Chair Paul Volcker: America Must 'Reassert Stability and Leadership' (Der Speigel magazine) -- the source of the above two stories

Morgan Stanley’s Roach Sees Risk in Fed Exit Strategy (Bloomberg)

No quick fix seen in commercial real estate market: A group of panelists who convened for a Minnesota Realtors group said tight credit markets continue to dictate changes in strategies. (Minneapolis Star Tribune)

Germany plans record 2010 debt to support economy (Reuters)

[German rail operator] Deutsche Bahn set to cut 14,000 jobs: report (AFP)

An, as always, somewhat cynical Jim the Realtor tours Carlsbad CA's high-end properties (Youtube)



Child Hunger Is A Lot More Complicated Than Getting Enough Food (Crooks and Liars blog)

Saturday, December 12, 2009

Saturday roundup (12-12-09)

Nations' mounting debts worry global investors: Greece's troubles are a particular concern after bonds took a tumble (The Washington Post)

Greek lessons for UK debt: Greece's collapse into a borrowing crisis this week has been swift. As Sarah Arnott reports, it is a precedent that the Chancellor must heed (The Independent)

Despite Low Mortgage Rates, Homeowners Can't Refinance (The New York Times)

How the financial system fell apart: PIMCO CEO Mohamed El-Erian explains how collapse of Lehman Brothers destroyed confidence in the economy. (Video stream at CNN) (Fortune magazine article with video clips at CNN) -- "We had this notion that the unthinkable is thinkable."

Friday, December 11, 2009

Friday roundup (12-11-09)

Quotes of the Day:

"The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said repeatedly that this recession is really a depression because the recessions of the post-WWII experience were merely small backward steps in an inventory cycle but in the context of expanding credit. Whereas now, we are in a prolonged period of credit contraction, especially as it relates to households and small businesses..." -- Economist David Rosenberg at Gluskin Sheff (Gluskin Sheff) (Reuters blogs)

"New York is now at a breaking point. We are hanging on by a thread. We are about to cross the financial Rubicon into fiscal disaster." -- New York Gov. David Paterson (The Business Review of Albany)

U.S. bank failure tally reaches 133: Regulators close regional banks in Florida, Kansas and Arizona, at a cost of $252.1 million to the FDIC. (CNN)

Republic Federal Bank, National Association of Miami, FL, had a troubled assets ratio of 287.3% (BankTracker)

Valley Capital Bank, National Association of Mesa, AZ, had a troubled assets ratio of 211.5% (BankTracker)

SolutionsBank of Overland Park, KS, had a troubled assets ratio of 125.1% (BankTracker)

Sovereign debt seen as biggest threat [in coming years] (Reuters)

In Japan. Double-Dip Downturn Looms: A bailout for Japan Airlines and a retreat from Japan Post privatization are just two of the signs Japan's become a zombie economy (Bloomberg)

Ireland, Greece May Leave Euro, Standard Bank Says (Bloomberg)

Spain Says Adios to Xmas as 19% Jobless Hits Spending (Bloomberg)

Taxpayers are facing a £2 trillion unfunded pensions liability, equivalent to more than £80,000 for every household in Britain, according to figures quietly released by the Government yesterday [Dec. 9]. (The Telegraph)

Plundering California: Public-sector unions have brought the state to its knees. (The Wall Street Journal)

State, University employees [in Arizona] could end up with IOUs in paycheck in 2010 (Capitol Media Services)

Many See the VAT Option as a Cure for Deficits (The New York Times)

Commercial Real Estate May Be Doomed (The Street.com)

Commercial Real Estate Downturn Marches On (Seeking Alpha blog)

On C-SPAN's "Washington Journal" program [Dec. 10], Elizabeth Warren spoke about the frustrations she encountered as chairman of the Congressional TARP Oversight Panel while trying to make accounting systems at major financial institutions more transparent. (C-Span)



On the Edge with Max Keiser, in which the host interviews William K. Black ["the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s" (Bill Moyers Journal, PBS)]







'Sometimes I think, was it real?' The American bailout nightmare (The Times of London)

Trader Jim Rogers interviewed on Bloomberg (Bloomberg single file version)





Bull Market or BS?: Insight on Citi's plans to pay back TARP, with Christopher Whalen, Institutional Risk Analytics (Dec. 9) (CNBC)














A Bear Market Until 2018?: Major U.S. stock indexes may be headed for new lows, says veteran technical analyst Alan R. Shaw, who predicts gold will reach $2,000 per ounce (Business Week)

Richard Russell: Downturn Will Be 'Vicious' (Seeking Alpha blog)

Review of the documentary Collapse by Roger Ebert (The Chicago Sun-Times)