Sunday, January 31, 2010

Sunday roundup (01-31-10)

Bailout watchdog: Response to financial crisis response leaves US with even more risk (The Associated Press) (CNN) (Marketwatch) (ABCNews) (The BBC) (Reuters) (FoxNews)

Quarterly Report to Congress (SIGTARP - Office of the Special Inspector General for the Troubled Asset Relief Program)

Regulatory onslaught the top concern for global banks: AN onslaught by politicians and regulators around the world poses the biggest risk to the financial system and may threaten economic recovery, according to an influential annual survey of the industry. (The Daily Telegraph)

UK risks Greek-style crisis on on deficit, Conservatives say (Bloomberg)

Swiss warn UBS bank could collapse (AFP)

Should Germany bail out Club Med or leave the euro altogether?: Germany faces a terrible dilemma. Either Europe's paymaster agrees to underwrite a Greek bail-out and drops its vehement opposition to a de facto EU economic government, treasury, and debt union, or the euro will start to unravel, and with it Germany's strategic investment in the post-war order. (The Daily Telegraph)

White House projects record deficit this year: source (The Washington Post)

How to Reform Our Financial System by Paul Volcker (The New York Times)

Unemployed for six months or more – and still looking for a job: The number of long-term unemployed – 6.1 million – is the most since the US started keeping track in 1948. Here is a look at some of these people as they search for a job. (The Christian Science Monitor)

Formula Shows Why It's So Hard to Cut Jobless Rate (The Associated Press)

Allstate may shed 20% of its agents: Insurer also raising expectations for agents, like target of generating annual premiums of at least $4 million per location (The Chicago Tribune)

City put homeless into foreclosed homes and illegally converted apartments (The New York Daily News)

Saturday, January 30, 2010

Saturday roundup (01-30-10)

Quote of the Day:

“These declines [in commercial real estate property values and rents] have severely threatened bank balance sheets, contributing to the failures of 30 Georgia banks since August of 2008-more than in any other state in the nation. Many experts believe that Atlanta’s experience could foreshadow a problem that could echo across the country. Such a crisis could cause damage far beyond the borrowers and lenders who participate in any one transaction.” -- Elizabeth Warren, chairman of the Congressional Overight Panel. (DSNews)

Obama says U.S. deficit could jeopardize recovery (Reuters)

Spending Puts Economy in Jeopardy: Histrorian Neal Ferguson argues Washington's spending is causing our economy serious problems. (Fox Business)

'Underemployment' tops 20 pct in 3 states (The Associated Press)

Fed [Via Its No. 2 Official] Warns Complacency Will Trigger New Turmoil (The Wall Street Journal) Kohn: Banks must train attention on interest-rate risk: As economy improves it will be appropriate to raise rates, says Fed's No. 2 (Marketwatch)

Frank leads push to disband mortgage corporations [Fannie Mae and Freddie Mac] (The Boston Globe)

EU to tell Greece to do more to cut deficit - report (Reuters)

Glaxo Smith Kline set to slash 4,000 jobs: Pharmaceutical giant pushes into emerging markets as it squeezes costs in the West (The Sunday Times of London)

L.A. considering 500 more layoffs: In an effort to close the city's $208-million budget shortfall, the proposal would be in addition to 1,000 job cuts already threatened. (The Los Angeles Times)

Teachers pension fund is $43 billion short: The California State Teachers' Retirement System says that as of June 30, 2009, it could meet only an estimated 77% of its future pension obligations -- far less than the 100% recommended by actuaries (The Los Angeles Times)

Poverty stalks the middle class (The Financial Post)

Friday, January 29, 2010

Friday roundup (01-29-10)

Quotes of the Day:

"The economy is showing no signs of a self-sustaining recovery. ... we are now beginning a down cycle that I expect to be prolonged and severe." -- David Wright, portfolio manager at Sierra Core Retirement Fund in Santa Monica. (Reuters)

"Will they default or will they depreciate?" -- The debt overhang is threatening the global economy, Niall Ferguson, professor of history at Harvard University, told CNBC. (CNBC)

GDP Surges 5.7%: Inventory-Led False Recovery Intact (Expected Returns blog)

America’s Economy Expanded. Did Yours? (The New York Times blogs)

The Growing Underclass: Jobs Gone Forever (The New York Times)

On Obama's watch, Americans worry more about deficit (Reuters)

Some truths about that deficit (The Boston Globe)

Why we should expect low growth amid debt by Carmen Reinhart and Kenneth Rogoff (The Financial Times)

The Decline: The Geography of a Recession by LaToya Egwuekwe (OFFICIAL): According to the U.S. Department of Labor's Bureau of Labor Statistics, there are more than 31 million people currently unemployed -- that's including those involuntarily working parttime and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. "The Decline: The Geography of a Recession," as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 -- approximately one year before the start of the recession -- to the most recent unemployment data available today. *Updated 01-10-10* (Youtube)

Six banks fail, in Florida, Georgia and California (CNN)

First National Bank of Georgia of Carrollton GA had a troubled assets ratio of 481.1%. (BankTracker)

Florida Community Bank of Immokalee FL had a troubled assets ratio of 489.3%. (BankTracker)

Marshall Bank, National Association of Hallock MN had a troubled assets ratio of 106%. (BankTracker)

Community Bank & Trust of Cornelia GA had a troubled assets ratio of 382.8%. (BankTracker)

First Regional Bank of Los Angeles CA had a troubled assets ratio of 204.1%. (BankTracker)

American Marine Bank of Bainbridge Island WA had a troubled assets ratio of 176.5%. (BankTracker)

Beef Bowl Economics [How Deflation is Hitting Japan] (The New York Times)

Japan's finmin pressures BOJ, deflation deepens (Reuters)

Japan’s Housing Starts Slump to Lowest Since 1964 Olympics (Bloomberg)

Greece, others, move to quash rumors about bailout (The Associated Press)

Credit risk growing most in Greece, Portugal, France (Reuters) -- "A widely tracked sovereign credit default swap index shows that 16 of the top 81 countries have shown credit risk increasing by more than 50 percent, with Greece's sovereign credit default swap levels rising by more than 250 percent since September."

Britain needs to cut or face Greek-style crisis, says David Cameron: David Cameron last night warned that Britain needed to cut its deficit or risk a full-blown fiscal crisis like the one which has engulfed Greece. (The Telegraph)

Brown faces nightmare of pre-poll credit downgrade: S&P rates UK alongside Chile and Portugal because of weak economy and debt (The Independent)

Stuck in Recession, Spain Plans Deep Budget Cuts (The New York Times)

Iceland president: We are being bullied (CNN)

Macy's to cut 1,500 store-level jobs - Bloomberg (Reuters)

Hank Paulson: Without Bailout, Unemployment Could Have Reached 25% (CBSNews)

Car dependent neighborhoods more at risk of foreclosures (San Francisco Chronicle blogs)

Thursday, January 28, 2010

Thursday roundup (01-28-10)

Quotes of the Day:

"... Germany's ... economy minister Rainer Brüderle ... said [Thursday in testimony before his country's parliament that] there would be 'no bail-outs' for struggling debtors and no move to a 'European economic government'.

"'A few European nations are exhibiting dangerous weaknesses. That could have fatal consequences for all countries in the eurozone,' he said. Despite the warning, he said each country must solve its own problems." -- Ambrose Evans-Pritchard (The Daily Telegraph)

"Nobel laureate Eric Maskin, who won the Nobel prize for economics in 2007, said on Thursday that investors anxious about the finances of Greece and other euro zone countries were right to question the future viability of the euro currency.

"'Investors would be well advised to consider seriously the possibility of the single currency being undone,' Maskin told journalists at a conference organised by asset manager Pioneer Investments. 'I don't see an obvious solution.'" -- Reuters (Reuters)

"'I am not sure that a Greek default is inevitable, but the clock is ticking with regard to difficult policy choices. ... Greece is the canary-in-the-coal-mine for the entire sovereign risk concern, but the problem goes beyond Greece to all high-debt, high-deficit sovereigns." -- Marc Seidner, a portfolio manager at Pacific Investment Management Co. in Newport Beach, California. (Bloomberg)

"Deflationary pressure remains intact, while there is a risk that the economic recovery [in Japan] will come to a standstill." -- Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. (Bloomberg)

Banks Reviving Synthetic Bets as Volcker Blasts Default Swaps (Bloomberg)

Fed Chairman Bernanke Wins Confirmation for Second Term (CNBC)

Experts See Another Global Dip Ahead: Davos Attendees Pin Hopes on Emerging Economies, Saying Debt and Deficits Will Trouble U.S.; Sparring Over Bank Rules (The Wall Street Journal)

US, EU deficits not sustainable: Trichet (AFP)

Fed Lays Ground for End to Stimulus With Recovery Declaration (Bloomberg)

Weak demand keeps Japan in deflation, exit far off (Reuters)

Greece, Portugal Debt Concerns Start to Infect Companies, Banks (Bloomberg)

Spain to Announce Deficit Cut Plan, Seeking to Avoid Greek Fate (Bloomberg)

‘Huge’ U.K. Bank Sales May Surpass Thatcher’s Privatizations (Bloomberg)

Va. education groups warn of big school job cuts [at least 23,300 in the 2010-12 biennium] (The Associated Press)

[Anglo-Swedish pharmaceutical company] AstraZeneca to Cut 8,000 Jobs Amid Weak Earnings (The Associated Press)

Siemens to cut about 2,000 jobs: Low market demand hits German industrial conglomerate (The Associated Press)

Macy’s reported to cut 1,500 jobs (Bloomberg)

NYC mayor proposes cuts, layoffs but no new taxes (The Associated Press)

University Endowments: Worst Year Since Depression: Plunging stocks, fewer donors, and risky investments resulted in average losses of 18.7% last year. Now endowments are spending far more than they earn (Business Week) The report. (National Association of College and University Business Officers)

California Teachers Pension Fund $42.6 Billion Short (Bloomberg)

Domestic airfares tumble in 3Q for largest year-over-year decline ever (USAToday blogs)

Lenders Pursue Mortgage Payoffs Long After Homeowners Default (Bloomberg)

Is it a recovery yet? (Weekly report 01-28-10)

According to an analyst quoted here, a recovery would be indicated by initial jobless claims below 500,000.


"The Labor Department says first-time jobless claims dropped by 8,000 to a seasonally adjusted 470,000. Analysts had expected a steeper drop to 450,000." (The Associated Press)

Wednesday, January 27, 2010

Wednesday roundup (01-27-10)

Quote of the Day:

"Nearly one in five U.S. households ran out of money to buy enough food at least once during 2009, said an antihunger group on Tuesday, urging more federal action to help Americans get enough to eat." -- Reuters (Reuters) Food Hardship: A Closer Look at Hunger - Data for the Nation, States, 100 MSAs, and Every Congressional District (Food Research and Action Center)

What us, worry? Banks double down on risk (Reuters)

CBO chief warns of long, slow recovery: Huge deficits, joblessness seen persisting (The Washington Times)

FDIC Friday Lotto: Another Reason Why Banks Are Not Lending (Mish's Global Economic Trend Analysis blog)

Global unemployment hits highest levels on record, warns UN labour agency (UN News Centre) ILO press release (ILO)

At Davos, Sarkozy Calls for Global Finance Rules (The New York Times)

Sovereign debt fears shadow Davos (Marketwatch)

Swaps Trading [Against Defaults on Sovereign Debt] Surges as National Deficits Rise: Credit Markets (Bloomberg)

Japan retail sales down for 16th month in December (The Associated Press)

Inside China's Tightening: Banks Literally Tearing Up Letters Of Credit, Importers In Disarray, Orders Cancelled (The Business Insider)

Portugal Deficit Plan May Increase Risk of Rating Cut (Bloomberg)

Why are more than 100,000 children poverty stricken here in the South West [of the UK]? (The Bournemouth Daily Echo)

Sales of new homes fall 7.6% to nine-month low (Marketwatch) -- "capping the worst year for housing since World War II."

Air travel splutters in worst year since the war (The Times of London)

New York Mayor Bloomberg to Call for Cut of 4,286 City Jobs (Bloomberg)

Mayor Says Teachers Must Take Smaller Raise in Next Contract or 2,500 Jobs Will Be Cut (The New York Times)

Oracle said to lay off fewer than 2,000 after Sun merger (The San Jose Mercury News)

When Elizabeth Warren stresses the urgency of Wall Street reform, Jon wants to make out with her. (The Daily Show with Jon Stewart)

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Georgia Banks Fear Fallout from Commercial Loans [with audio interview of Elizabeth Warren] (Public Broadcasting Atlanta)

Future Of Finance: Volcker Rules, QnA: Paul Volcker responds to questions after his comments on financial innovation at the Future Of Finance Initiative, 2009. (The Wall Street Journal)

The SEC Passes Regulation Which Only STRENGTHENS Case to Own Gold (The Golden Truth blog)

Suspending Money Market Redemptions Is Now Legal; SEC Approves New Money Market Regulation In 4-1 Vote (Zero Hedge)

Tuesday, January 26, 2010

Tuesday roundup (01-26-2010)

Quotes of the Day

"The global financial system remains 'fragile,'' with sovereign debt posing a risk to markets and substantial losses expected from commercial real estate, the International Monetary Fund said." -- Bloomberg (Bloomberg)

"There is no clear sign of a sustained, broad-based recovery." -- David M. Blitzer, chairman of the Index Committee at Standard & Poors, commenting on the release of the latest data in the S & P’s Case-Shiller Home Price Index. (The New York Times)

"Given what we see in terms of the number of distressed properties that are in the pipeline we do expect that foreclosures will mount as borrowers are not able to make it from a trial modification to a permanent modification. This will cause home prices to start falling again." -- Celia Chen, senior director at Moody's (The Los Angeles Times)

"For all intents and purposes, the United States home mortgage market has been nationalized without anybody noticing. ... If it’s true that most of the financing in the single-family home market is being facilitated by government guarantees, that should make everybody very, very concerned. If government support goes away, and it will go away, where will that leave the home market? It leaves you with a catastrophe ... The public doesn’t have any idea of the scale of the guarantees the government is taking on through Fannie, Freddie, and FHA. It’s huge. If people understood what the federal government has done and subjected the taxpayers to, there would be a public outrage." -- Real estate entrepreneur Andy Miller. (The Big Picture blog)

"I was counting on the Fed and the Administration to begin to get the point that low rates held too long promote asset bubbles, which are extremely dangerous to the economy and the financial system. Now, however, the penny is dropping, and I realize the Fed is unwittingly willing to risk a third speculative phase, which is supremely dangerous this time because its arsenal now is almost empty." -- Jeremy Grantham, chief investment strategist at Boston-based institutional money manager GMO, in his latest quarterly letter to institutional clients, released Monday. (Marketwatch)

Bleak Economic Projections as Obama Prepares for State of the Union Address: Congressional Budget Office warns of slow employment gains, unsustainable long-term fiscal situation, increasing debt (The Voice of America)

Paul Volcker has president's ear on economy (The New York Post)

Home prices suggest tenuous housing rebound (Reuters)

Case Shiller home prices go up ... and down (The Mess That Greenspan Made blog)

Forecast says home values won't regain bubble heights for at least a decade: A New Jersey financial publishing house assumes conservative rates of growth in its formulas but acknowledges that its conclusions take a 'real leap of faith.' (The Los Angeles Times)

Report: Fall in Las Vegas home prices reaches 39 months (The Las Vegas Sun)

Fear and foreclosure in Las Vegas: Nowhere has America's housing crisis taken a heavier toll than in Nevada, where a glut of new homes lie empty (The Telegraph)

Gulf between rich and poor [in the UK] has grown under Labour and is now widest since WWII (The Daily Mail)

ECB's Stark Warns Of Further Downgrades (Reuters) (Bloomberg)

Greece Still Downgrade Risk After Sale [of Bonds], Moody’s Says (Bloomberg)

Roubini Never More Pessimistic on Euro Area, Calls Spain a Risk (Bloomberg) -- "Down the line, not this year or two years from now, we could have a breakup of the monetary union."

Pressure mounts on Portugal as deficit soars (AFP)

IMF Paper Warns On Market Ability To Absorb Japan's Big Debt (Dow Jones)

S&P: Outlook on Japan to negative (Standard & Poors)

Japan’s High Debt Prompts Credit Rating Warning (The New York Times)

Japan's debt at risk. Is U.S. next? (CNN)

Q+A-Will Japan face a sovereign debt crisis? (Reuters)

Verizon to cut 13,000 jobs [this year] (CNN)

Home Depot to cut 1,000 staffers as it consolidates jobs, ends some pilot programs -- the cuts are not "in reaction to broader economic pressures," the company claims. (The Associated Press)

St. Vincent's Hospital [in NYC] on brink of second bankruptcy: Facing crushing cash flow crunch it seeks deal that could keep system from returning to bankruptcy court; Continuum Health Partners says it has entered discussions. (Crain's New York Business)

Monday, January 25, 2010

Monday roundup (01-25-10)

Quote of the Day:

"Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit. ...

"'It's 'exit stage left' for first-time homebuyers,' wrote Guy LeBas, an analyst with Janney Montgomery Scott.

"The report 'places a large question mark over whether the recovery can be sustained when the extended tax credit expires,' wrote Paul Dales, U.S. economist with Capital Economics." -- The Associated Press (The Associated Press)

"The drop in home sales is the payback for the acceleration of sales that occurred with the original first-time home buyers tax credit. ... There is an issue as to whether the decline represents a fundamental weakening." -- Pierre Ellis, senior economist at Decision Economics in New York. (Reuters)

"We are absolutely outraged that so many children have to go without essentials - we're talking about winter coats and proper shoes, real basics that families just can't afford." -- Douglas Hamilton, Save the Children's program director in Scotland. (The BBC)

"Seven more things to worry about ...

"No. 1: The middle class may never be the same again
"No. 2: The recovery could take a really long time
"No. 3: The recovery could only be temporary
"No. 4: Then what? This time, we don't have the tools to get out of a recession
"No. 5: The ‘very serious' people in Washington are still obsessed with the deficit
"No. 6: Whatever is making the stock market go up could go away
"No. 7: The hugely irresponsible financial sector remains unchastened" -- The Huffington Post, via The Mess That Greenspan Made blog (The Mess That Greenspan Made blog) 7 Things About The Economy Everyone Should Be Worried About (The Huffington Post blog's original piece)

And from the Tail Wagging the Dog mailbag: "People were aghast by what happened in the markets on Friday, and do they really want to get angry letters from constituents who have lost money in the stock market because of the Bernanke vote?" -- Greg Valliere, chief policy strategist at Potomac Research Group in Washington. (Bloomberg)

Obama Faces Political Minefield Over Deficit (NPR)

Chris Whalen: Obama 'Overly Optimistic' On Bernanke Vote; Sources Say Confirmation 'Far From' Assured (The Daily Bail blog)

Bernanke Nomination By The Numbers And What Saves Him (The Big Picture blog)

Jim Rogers Says Bernanke Part of Problem, Not Solution -- half-hour video (Bloomberg)

Moody's: Credit card charge-offs dip a bit in December, but spike is likely in coming months (The Associated Press)

[New York Gov.] Paterson’s Budget Could Cripple [NY] City, Bloomberg Says (The New York Times blogs) -- "All told, Mr. Bloomberg said, the budget would cost the city $1.3 billion in cuts and force the layoffs of about 19,000 city workers."

Tishman Venture Gives Up Stuyvesant Project: High-Profile Purchase of Manhattan Complex Collapses Under Debt Mountain (The Wall Street Journal)

N.Y. Housing Complex Is Turned Over to Creditors (The New York Times)

It's official: CalPERS loses $500 million on New York apartment deal (The Los Angeles Times blogs)

Stuyvesant Town gamble costs Church of England £40m: Church backed $5.4bn Stuyvesant investor that became mired in litigation to extract higher rents (The Guardian)

Stuyvesant Town to be handed over to creditors: Lisa Colagrossi reports (ABC7)

Tishman Speyer's deal for Stuyvesant Town and Peter Cooper Village, which was the biggest real estate deal at the time, may end up in bankruptcy, the News Hub panel reports. (The Wall Street Journal)

Commercial real estate is a hot market, for court-appointed caretakers: As the sluggish economy deprives building owners of their property, receivers are in high demand. (The Los Angeles Times)

[UK Opposition leader David] Cameron Says U.K. Deficit Threatens to Push Up Interest Rates (Bloomberg)

Cameron: Government must act over economy: The [opposition] Tory leader has accused the Government of putting "naked political calculation" ahead of Britain's economic interest. (ITN)

Japan Says Debt to Grow at Faster Pace in Fiscal 2010 (Bloomberg)

[Italian automaker] Fiat [which owns 20% of Chrysler] reports 4th-quarter loss (The Detroit Free Press)

With Sales Declining, Ericsson Plans [1500] More Jobs Cuts (The New York Times)

Tyson Foods To Cut 480 Jobs (Food Manufacturing)

U.S. companies need to refinance $513 billion this year (Reuters)

A Blueprint for Financial Reform by John P. Hussman, Ph.D. (Hussman Funds)

'Quants,' The Math Whizzes Behind the Crisis: A small group of brainy math whizzes are emerging as the unlikely group who nearly brought down the finance industry. As WSJ's Scott Patterson reports, a group called "The Quants" developed complex systems to trade securities such as mortgage derivatives, which were at the heart of the crisis. (The Wall Street Journal)

The Minds Behind the Meltdown: How a swashbuckling breed of mathematicians and computer scientists nearly destroyed Wall Street by Scott Patterson (The Wall Street Journal)

[South Carolina] Lt. Gov. Andre Bauer drew a comparison to feeding stray animals during a speech about people on government assistance, babies having babies, and parents whose children are on free and reduced-price lunch. (Youtube)

Full audio (Youtube)

SEC mulled national security status for AIG details (Reuters) (Washington's Blog)

Sunday, January 24, 2010

Sunday roundup (01-24-10)

Quote of the Day:

"Without significant changes to tax and government spending policies, the budget outlook will deteriorate rapidly even after the costs associated with the financial crisis abate." -- Mark Zandi of Moody's, quoted in an article entitled "Obama facing huge economic challenges ahead." (The Associated Press)

A big week ahead for Ben Bernanke (The Mess That Greenspan Made blog)

Uncertainty on Bernanke vote raises economic fears: A Bernanke defeat could raise risk of 'double dip' recession, but approval seems more likely (The Associated Press)

The economic case against Bernanke by Prof. Steve Keen (Debt Deflation blog) The Debt-Deflation Theory of Great Depressions by Irving Fisher (The St. Louis Fed)

Stakes are high as government plans exit from mortgage markets (The Washington Post)

Economists warn federal deficit growing at unsustainable levels (Ithaca Journal)

Debt worries erode euro (AFP)

Forecast: Many banks will be loath to lend in 2010 (The Columbian of Vancouver WA)

State [of Illinois] poised to collapse under debt (The Herald-Review of Decatur)

9 banks [in Utah] teetering after bad land bets: Lenders hold more in sour loans than they have money to cover losses. (The Salt Lake Tribune) -- "The seizure of even one more bank could further deprive cash-hungry businesses of money, potentially amplifying the credit crunch and retarding Utah's economic recovery."

'Bankruptcy' is heard as [Philadelphia] orchestra struggles (The Philadelphia Inquirer)

Wal-Mart to cut more than 10,000 jobs at Sam's Club: The company outsources in-store demonstrations and product sampling at the warehouse stores. Most of the jobs were part time. (The Los Angeles Times) (The Associated Press)

Public Employee Unions Are Sinking California: Months after closing its last budget gap, the Golden State is $20 billion in the red. (The Wall Street Journal)

Joseph Stiglitz: Why we have to change capitalism: In an exclusive extract from his new book, Freefall, the former World Bank chief economist, reveals why banks should be split up and why the West must cut consumption. (The Telegraph)

Sprung from hardships, tent cities of homeless ignite controversy (The Denver Post)

The Andre Bauer solution: Starve the poor, they’ll stop breeding (The Atlanta Journal-Constitution blogs)

Saturday, January 23, 2010

Saturday roundup (01-23-10)

Quotes of the Day:

On This Time is Different by Carmen M. Reinhart and Kenneth Rogoff: "Reinhart and Rogoff have catalogued over 250 financial crises in 66 countries over 800 years and then analyzed them for differences and similarities. This is a VERY sobering book. It does not augur well for the developed world to blithely exit from our woes. The book gives evidence to my adamant statement that we have a lot of pain to experience because of the bad choices we have made. This is the entire developed world, and the emerging world will suffer, too, as we go through it. It is not a matter of pain or no pain. There is no way to avoid it. It is simply a matter of when and over how long a period." -- analyst John Mauldin (The Business Insider)

"The worst investment managers worldwide have been the pension-fund managers in the United States. They bought everything right at the peak and basically got out of things right at the bottom. And so they're now facing a shortfall in unfunded liabilities of $2 trillion. I mean, I tell you, when you look at the United States, you cannot imagine that they can solve their problems. It's a total disaster. We're all doomed! We're doomed!" -- Marc Faber, editor of the Gloom, Boom & Doom Report (CNBC)

ECB President [Trichet]: Greece Must Put Finances in Order (The Associated Press)

The Volcker Revolution - Providing Some Much Needed Answers (Zero Hedge)

Obama's drawn first blood – now it's the UK's turn: We supporters of the US's Glass-Steagall Act used to be regarded as eccentrics. Now the most powerful man in the world is backing it (The Observer)

Private Sector Union Membership Shrinks: Most union members now work for government as private sector unions plunge to record low (The Associated Press)

Friday, January 22, 2010

Friday roundup (01-22-10)

Quotes of the Day:

"... while governments preside over economic policies which make the very rich even richer, national consumption needs to be boosted in some way to avoid underconsumption ending in outright deflation." -- Albert Edwards, chief strategist of Société Générale. (ZeroHedge)

"This is one of the most devastating years for education. This is worse than the Great Depression and worse than Prop. 13 [which curbed revenue for education, among other things]." -- Gentle Blythe, spokeswoman for the San Francisco Unified School District, quoted in an article entitled "School district deficit explodes." (The San Francisco Examiner)

"New Hampshire will soon have to start borrowing money to pay its unemployment claims, the first time the state has had to seek help covering its checks to jobless workers." -- The Concord Monitor (The Concord Monitor)

Economic Woes Raise Questions on Bernanke (PBS NewsHour)

Senate Dems Not Sure They Can Get Enough Votes to Reconfirm Bernanke (ABCNews blogs) (CNBC) (CNN) (CNN) (The Washington Post) (Los Angeles Times blogs) (Fox)

State jobless rates on the rise [in 43 states] (CNN)

Jobless rates [for the year 2009] climb in all 50 states (Business First of Buffalo)

Two Dozen States’ Unemployment Funds in the Red, Nine More Within Six Months (Pro Publica) Unemployment Insurance Tracker (Pro Publica)

Wayne County furloughs 700 to 4 days a week (The Detroit News)

Cities, not just banks, are pursuing foreclosures, too: Desperate for revenue, more cities and counties are proceeding with tax foreclosures when residents fall several years behind on their property taxes. (The Christian Science Monitor)

The Global Debt Bomb (a home page of reports and statistics) (Forbes)

Japan Faces ‘Uncontrollable Rise’ in Public Debt, [Prime Minister] Yosano Says (Bloomberg)

Canada's November budget gap soars on weak economy (Reuters)

U.S. Life Insurers May Face More Real Estate Losses (Bloomberg)

Small wonders: Home sizes fall as builders, buyers embrace economic reality (Marketwatch)

Banks shut in Fla., Mo., NM, Ore., Wash. (The Associated Press)

Premier American Bank of Miami FL had a troubled assets ratio of 431.4%. (BankTracker)

Bank of Leeton in Leeton MO had a troubled assets ratio of 255.2%. (BankTracker)

Charter Bank of Santa Fe NM had a troubled assets ratio of 142.6%. (BankTracker)

Evergreen Bank of Seattle WA had a troubled assets ratio of 185.4%. (BankTracker)

Columbia River Bank of The Dalles OR had a troubled assets ratio of 283.8%. (BankTracker)

Economic Forum gets grim update on Nevada economy (The Associated Press)

Taco Del Mar, a Seattle-based franchisor of 225 Mexican fast-food restaurants, filed for Chapter 11 bankruptcy protection today. (The Seattle Times)

Thursday, January 21, 2010

Thursday (01-21-10)

Quote of the Day:

"This is a devastatingly horrible labor market." -- Michael Rosen, who teaches economics at the Milwaukee Area Technical College. (Milwaukee Journal-Sentinel)

Cruise ships still find a Haitian berth: Luxury liners are still docking at private beaches near Haiti's devastated earthquake zone for holidaymakers to enjoy the water (The Guardian)

Obama proposes tough new restrictions on banks: The president essentially seeks a return to rules, repealed in 1999, that prevented bank holding companies from owning both commercial banks and Wall Street investment firms. (The Los Angeles Times)

World Bank sees risk of recovery losing steam (Reuters)

Fall in official unemployment rate [in the UK] masks rise in the 'hidden jobless': Figures show 8 million 'economically inactive' people as job market shrinks (The Independent)

U.K. Posts Largest December Budget Deficit on Record (Bloomberg)

France sees record public debt in 2010 (AFP)

Is Your State A Debt Disaster?: California and states in the Northeast and Midwest are piling up debt, and the economic outlook for many of these states is weak. Roll over the map to see how your state stacks up. (Forbes interactive map)

Hawaii's budget deficit sets tone at Legislature's opening: House and Senate leaders urge collaboration to cope with the state's $1.2B deficit (The Honolulu Advertiser)

Public Pensions, Managers Falsify Investment Returns: Fraud gives inflated view of many assets performances. (Forbes)

Pension Crisis Threatens Financial Health of States (The American Legislative Exchange Council) Read their report "State Pension Funds Fall Off a Cliff".

Escalating Pension Crisis Will Bankrupt San Diego (Mish's Global Economic Trend Analysis blog)

[New York] City Jobless Rate Rises to 10.6%, Topping the Nation’s (The New York Times)

Opel to cut 8,300 jobs, close Belgium plant (The Detroit News)

Xerox to cut 2,500 jobs (AFP)

Lloyds to Cut 685 Jobs in Retail, Wholesale Divisions (Bloomberg)

Big Banks Also In Big Commercial Mortgage Trouble (The Atlantic blogs)

So, About the Collapse in Commercial Real Estate... (The Am Law Daily blogs)

Banks in crisis quietly help customers protect cash (The Atlanta Journal-Constitution)

Hard Times Lead To Dramatic Rise In Bankruptcies (NPR)

Jim Wallis [the editor in chief of Sojourners magazine] says we won't get an economic recovery without a moral recovery as well. (The Daily Show with Jon Stewart)

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Bee decline linked to falling biodiversity (The BBC)

Is it a recovery yet? (Weekly report 01-21-10)

According to an analyst quoted here, a recovery would be indicated by initial jobless claims below 500,000.


"First-time claims for state unemployment benefits jumped unexpectedly by the largest amount in eight months.

"The number of initial claims in the week ending Jan. 16 rose 36,000 to 482,000, the Labor Department said." (Marketwatch)

Wednesday, January 20, 2010

Wednesday roundup (01-20-10)

Quotes of the Day:

"The probability of a crisis will build during 2010. Although it might seem natural to think that the probability of a dire scenario falls over time, as more quarters of growth are recorded, in fact the opposite is true. The main reason why is that, faced with resistance to a more fundamentals shift, currently, policymakers are trying to recreate the 'old' world, which was clearly unsustainable in a number of respects, such as in its reliance on 'rich' consumers to spend and 'poor' ones to save. The longer that that continues the higher the probability of a train crash." -- Barclays Wealth chief economist Michael Dicks (Morningstar)

"From Loch Striven in Scotland to the Strait of Malacca in Southeast Asia, more than a tenth of the vessels that transport the world’s manufactured goods in containers are idle." The New York Times (The New York Times)

"The parent company of Uno Chicago Grill has filed for bankruptcy protection ...

"The debt load stemmed from a 2005 transaction in which the company that owned Pizzeria Uno, Pizzeria Due and Su Casa agreed to sell its controlling interest to a New York-based investment firm..." (The Chicago Sun Times) Hmmmm....

The Global Debt Bomb: Spending our way out of worldwide recession will take years to pay back--and create a lot of pain. (Forbes)

Senate discussing a raise in national debt ceiling to above $14 trillion (Washington Post blogs) (The Christian Science Monitor) (ABCNews blogs) (CNN)

Japan govt warns of deflation, sticks to economy view (Reuters)

Greece Worries Might Be Spreading (The Wall Street Journal blogs)

Portugal budget situation 'critical': IMF (AFP)

U.K. Suffers Worst Debt Ratio Damage of G-7: Chart of the Day (Bloomberg)

[Former Bank of England policy maker David] Blanchflower Says U.K. Faces Deflation Risk as Inflation Eases (Bloomberg)

Don't celebrate recovery yet: Despite signs that the crisis is easing, [Bank of England governor] Mervyn King warns that Britain's battered economy is still in serious trouble (The Guardian)

Housing starts slip 4% in December; building permits rise: For 2009, new construction falls to post-World War II low of 554,000 homes (Marketwatch)

Manager guards against housing double-dip: Forester predicted 2008's [housing] crash, and sees another coming soon (Marketwatch)

Mortgage program failing to deliver: Fraction of homeowners needing relief have been helped (The Associated Press)

Foreclosures could hit 3 million in 2010 (Avvo)

Report cites flaws in foreclosure prevention effort, sees new wave of defaults (The Washington Post) (CNN) (The Huffington Post blog) The report can be downloaded here.

State A.G.s Predict Foreclosure Increase in 2010 (WCPN, includes audio report)

Strategic Defaults and the Foreclosure Crisis (US News & World Report)

A Cataclysm in Commercial Real Estate (Seeking Alpha blog)

Unfinished Projects Pressure Commercial Real Estate (Expected Returns blog)

2009 airline revenue: Worst drop ever (CNN)

Unfunded Benefits Dig States’ $3 Trillion Hole: Orin S. Kramer (Bloomberg)

[New York Governor] Paterson Seeks Huge Cuts and $1 Billion in Taxes and Fees (The New York Times)

Mississippi governor eyes using rain day fund (Reuters)

South Dakota Unemployment Fund Still Deteriorating (The Associated Press)

R.I. unemployment trust fund in dire straits (The Providence Journal)

Economy Causes Record Demand for Idaho Public Aid (The Associated Press)

The Suburbanization of Poverty: Trends in Metropolitan America, 2000 to 2008 (The Brookings Institute) The report is available here.

[Georgia] Corrections commissioner: Prison system cut 1,550 jobs without layoffs (Rome News-Tribune)

Smithfield [the world's largest pork processor] to close Iowa plant, slash 1,450 jobs (The Richmond Times-Dispatch)

2009 likely the toughest ever for the trucking industry (The City Wire)

Big bonuses at Citigroup despite huge losses (The Independent)

Is the CDS market sending a warning shot again? (The Pragmatic Capitalist blog)

Saving American Journalism (PBS Now)

The Financial Crisis Inquiry Commission-Team (The Daily Show with Jon Stewart)

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Tuesday, January 19, 2010

Tuesday roundup (01-19-10)

Homebuilder Confidence in U.S. Unexpectedly Decreases (Bloomberg)

Job anxiety threatens any home-building recovery: Any good news for home builders comes with big asterisks (Marketwatch)

Treasury Delay on Home-Equity Debt Imperils Housing (Bloomberg)

Foreclosure picture bleak: Unemployment wreaking havoc (Bloomberg)

Housing Bubble Comparison: US, UK, Canada, Spain, Australia, Japan (Mish's Global Economic Trend Analysis blog)

Color it Red [State Budget Gaps, Fiscal Year 2010] (Financial Armaggedon blog)

New York budget plan a sign of things to come for the states (CNN)

EU Calls on Greece to Toughen Cuts as Crisis Spreads (Bloomberg)(ABCNews)

Germany Will Defend Euro’s ‘Vital’ Stability, Schaeuble Says (Bloomberg)

Debt Repayment Plan Sparks Fiery Debate In Iceland (NPR)

Japan Airlines files for $25 billion bankruptcy [and vowed to slash 15,700 jobs] (Reuters)

JAL Bankruptcy Filing Sets Off Reorganization and State-Led Bailout (The New York Times)

Global airline shake-up looms after Japan Airlines files for bankruptcy (USAToday blogs) (Dallas Morning News blogs)

[French automaker] Peugeot Trims 5,700 French Jobs, Surpassing Target [of 3,550 voluntary departures] (Bloomberg)

[Finnish] Ship engine maker Wartsila lays off 1,400 globally (The Associated Press)

US Does Not Have Capitalism Now: Stiglitz (CNBC)(CNBC)

[US] Consumer Confidence in Retreat, With Worsened Expectations as Well: Just 9 Percent of Americans Rate the Economy Positively (ABCNews)

Deflation Continues (Motley Fool blogs)

Newspaper publisher Morris seeks Ch. 11 protection (The Associated Press)

David Walker says we need policy, operational and political reforms if we want to get America on the right track. (The Daily Show with Jon Stewart)

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Monday, January 18, 2010

Monday roundup (01-18-10)

IMF head in 'double-dip' global economy warning: The International Monetary Fund head has warned that the global economy could experience another downturn - a so-called double dip recession. (BBC)

Greece is the word: Could Europe kill the chances of a global economic recovery? (CNN)

Debt and delveraging: The global credit bubble and its economic consequences (McKinsey Global Institute)

1,380 lost jobs at Birmingham [UK] City Council a small sign of cuts to come (Birmingham Post)

Company collapses set to worsen [in the UK] in 2010 (The Times of London)

Illinois enters a state of insolvency (Crain's Chicago Business)

200 Bank Failures Expected in 2010 by Martin D. Weiss, Ph.D. (Money and Markets Weakest banks (Money and Markets) Strongest banks (Money and Markets)

Now and in the Future (Financial Armageddon blog)