Friday, April 30, 2010

Friday roundup (04-30-10)

Gulf of Mexico oil spill could cost BP $3 billion or more -- "'The implication it will have on the fishing industry there is going to be huge,' said Robbert Van Batenburg, head of global research at Louis Capital Markets, a Manhattan-based brokerage. 'It's just a nightmare to think about.'" (CNN)

Experts: Oil May Be Leaking at Rate of 25,000 Barrels a Day in Gulf (The Wall Street Journal)

Threats grow to Gulf Coast commerce as oil spreads (Marketwatch)

A ‘Three Mile Island for Offshore Oil’?: How the Deep Horizon accident seriously hampers offshore drilling. (Newsweek)

EU jobless rate stuck at record high (Agence France-Presse)

Talks with Greece Could End Saturday: EU Official (CNBC)

Moody’s Downgrades Debt Ratings on Greek Banks (The New York Times blogs)

Lehman-Greece parallels du jour (FT Alphaville blog)

The UK is the next Greece (FT Alphaville blog) (The Wall Street Journal)

Goldman Sachs Says ‘No Guarantee’ U.K. Will Keep AAA Rating (Bloomberg)

British Banks Say Capital Rules May Mean Double-Dip (The New York Times blogs) (SkyNews blogs)

Spanish unemployment tops 20% in first quarter (Marketwatch)

After Downgrade, Spain Hit by Unemployment Report [20%+] (The New York Times blogs) (The Business Insider)

The euro crisis - can politicians catch up with the avalanche? (Danske Research) Greece debt meltdown -- what's next? (Danske Research)

Japan deflation goes into 13th month (The Times of London)

Treasury Redeems A Gargantuan $643 Billion In Treasuries In April - "This number is simply ridiculous. Forget the interest expense: this ever increasing roll is the number one danger to the US and world economy. Should the Treasury be unable to keep issuing shorter and shorter dated debt (and it already is skirting away from even the belly of the curve), it is for all intents and purposes game over." (ZeroHedge blog)

Greece’s lesson for the U.S.: When bond investors turn on you, it’s over: The U.S. economy’s rebound and the country’s relative financial flexibility have insulated America somewhat from Europe’s debt woes. But Washington’s deficits still look like a time bomb. (The Los Angeles Times)

Sovereign Debt Problems in Advanced Industrial Countries by William Buiter (Citigroup Global Markets)

Economic growth slower than expected -- "evidence that the economic recovery continues to plug along but that growth is not accelerating in a way that would bring down joblessness rapidly." (The Washington Post)

US GDP growth rate is unsustainable; recovery will fade (Credit Writedowns blog)

Homeowners Tax Credit Expires Today - the Start of a Double Dip? (The Huffington Post blog)

Higher consumer spending in Q1 still lacks vigor: Consumers bounce back but not enough to catapult economic growth beyond 3.2 percent (The Associated Press)

Oakland Council favoring tax-raising measures to fill $42 million deficit (The Oakland Tribune)

Banks closed in Puerto Rico, Mich., Mo., Wash. (The Associated Press)

Of the mainland banks:

CF Bancorp of Port Huron MI had a troubled assets ratio of 182.9%. (BankTracker)

Champion Bank of Creve Coeur MO had a troubled assets ratio of 350.9%. (BankTracker)

BC National Banks of Butler MO had a troubled assets ratio of 194.4%. (BankTracker)

Frontier Bank of Everett WA had a troubled assets ratio of 409.2%. (BankTracker)

Thursday, April 29, 2010

Thursday roundup (04-20-10)

Greece Agrees to Austerity Plan (Calculated Risk blog)

Greece Aid May Not Be Enough To Avoid a Default: Analysts (CNBC) The Greek Contagion: Discussing whether the United States is safe from the sovereign debt contagion, with Allen Sinai, Decision Economics chief global economist. (CNBC)

To Save The Eurozone: $1 trillion, European Central Bank Reform, And A New Head for the IMF (Baseline Scenario blog)

[Pimco's] El-Erian says Greece will default (Reuters blogs)

Why Greece Will Default by Martin Feldstein (Project Syndicate)

Merkel Reaches Her Overdraft Limit: Greek Bailout Could Push German Debt Through the Roof (Der Spiegel)

As size of Greek bailout soars, supply of German sympathy runs short: Possible tripling of contribution provokes anger on streets (The Independent)

PIGS: The Beginning Of The End For The E.U.: Think the rise in Treasury yields was something? Check out Greece, Portugal and Spain. Watch out. (Forbes)

Now It's a European Banking Crisis: While the EU hesitated on a remedy for Greece's debt woes, a virus spread (Bloomberg)

Europe banks to see major comm. prop. impairments - S&P: UK, Spain, Irish impairments for CRE to total 92 bln eur (Reuters)

Warning Signal on U.K. Debt?: Value of Default Protection Has Doubled in 2010 and Is Outpacing Spain, Italy (The Wall Street Journal)

Bank of England governor 'warned of tough times': A US economist has claimed that the governor of the Bank of England told him "tough" budgetary measures would be necessary in the UK. David Hale said Governor Mervyn King had said the measures would keep whoever wins the next election "out of power for a whole generation". (The BBC)

David Hale On Inevitable Tax Rises: The Bank of England is refusing to confirm comments attributed to the Governor, Mervyn King, by an American Economist, regarding the political implications of the tax rises that are inevitable after the election. This is what David Hale told ABC [Australian Broadcasting Commission] news. (SkyNews)

[UK's] Private sector job recovery seen as gloom grips the public sector: Public sector employers are preparing the ground for substantial post-election cuts that could result in 750,000 jobs disappearing according to surveys published todayahead of the final TV election debate between political leaders. (The Telegraph)

Deflation tightens grip in Japan (Dow Jones Newswires)

Roubini Says Rising Sovereign Debt Leads to Defaults (Bloomberg)

Sovereign Debt May Hurt Markets for Decade, Scots Managers Say (Bloomberg)

US Starts Criminal Probe into Goldman Trading: Report (CNBC) (Bloomberg)

More Than a Million in U.S. May Lose Jobless Benefits (Bloomberg)

M.T.A. Plans More Rounds of Layoffs [more than 550 bus workers] by July 4 (The New York Times)

The Crash Course - Exponential Growth Meets Reality: Peak Moment 166: "The next twenty years will be totally unlike the last twenty... Well face the greatest economic and physical challenges ever seen by our country, if not humanity. So opens Chris Martenson's much-viewed online Crash Course illuminating the relationship between economy, energy and the environment. Starting with the power of exponential growth, he tidily sums up our economic problems: Too Much Debt. Chris discusses the implications if we continue the status quo, and ways to prepare. He believes that if we manage the transition elegantly we can actually improve things. (PeakMoment) The Crash Course (

The Imminent Crash Of The Oil Supply (Market Oracle)

Is it a recovery yet? (04-29-10)

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

IT'S A RECOVERY! (And it has been a recovery for every week since the Nov. 25, 2009 report.)

"The Labor Department said Thursday that initial applications for jobless benefits dropped by 11,000 to 448,000, the lowest level in four weeks. The new total was slightly higher than economists had expected.

"The four-week average for claims edged up slightly to 462,500, still above the level that economists believe signals sustained improvements in the job market." (The Associated Press)

"'Claims are still hovering at that tipping point around 450,000, which we think is the junction between corporate hiring and continuing a wait-and-see process,' said Alan Gayle, senior investment strategist at Ridgeworth Investments in Richmond, Virginia. 'The report is moving in the right direction but is inconclusive.'" (Reuters)

"'Though the drop-back in claims is encouraging, the overall rate of improvement has stalled,' wrote Mike Englund, chief economist for Action Economics, in a research note. 'Painfully, the claims stall-point sits right around levels consistent with a flat trend for private payrolls.'" (Marketwatch)

Wednesday, April 28, 2010

Thursday roundup (04-28-10)

Quote of the Day:

"The contagion is definitely spreading and spreading quite rapidly to Portugal, Spain, Ireland and Italy. The market has been in a show-me-the-money mode for well over three months and the lack of guidance is slowly and steadily sowing the seeds of a double-dip." -- Mehernosh Engineer, credit strategist at BNP Paribas, in a report published Tuesday. (The Globe and Mail of Toronto)

EMU domino fears as Spain downgraded, Germany drags feet on rescue: German leaders have agreed in principle to a rescue package of up to €135bn for Greece in emergency talks with EU and IMF officials, but failed to offer any clarity on the conditions for such aid. -- "'Europe risks the biggest coordination failure in modern history,' said David Simmonds, research chief at RBS." (The Telegraph)

Meanwhile, the Euro Zone Approaches an Implosion Point (The Wall Street Journal blogs)

Financial Crisis in Greece, Europe Could Threaten US> and World Economy (The Los Angeles Times)

How the Greece debt crisis threatens the world (The St. Petersburg Times)

Why Should You Be Freaked Out About Greece? Remember, The Great Depression Had Two Parts -- "The most terrifying words I've seen written so far about the growing crisis in Greece were penned by Yves Smith yesterday: 'So the whole idea that the financial crisis was over is being called into doubt. Recall that the Great Depression nadir was the sovereign debt default phase. And the EU's erratic responses (obvious hesitancy followed by finesses rather than decisive responses) is going to prove even more detrimental as the Club Med crisis grinds on.'" (The Business Insider)

Wake The President by Simon Johnson -- "This is not now about Greece (with 2 year yields reported around 20 percent today) or Portugal (up 7 basis points) or even Spain (2 year yields up 27 basis points; wake up please) or even Italy (up 6 basis points). ... This is about the fundamental structure of the eurozone, about the ability and willingness of the international community to restructure government debt in an orderly manner, about the need for currency depreciation within (or across) the eurozone." (Baseline Scenario blog)

UK, US, Japan risk sovereign debt crises, says ECB (Financial Times blogs)

Bernanke Knows Avoiding a Disorderly Collapse Is Increasingly Unlikely (Seeking Alpha blog)

Greek Bonds Downgraded to 'Junk': Debt disaster plaguing Greece having ripple effect in markets across globe (FoxNewsChannel)

Roubini: "In A Few Days Time, There Might Not Be A Eurozone For Us To Discuss" (The Business Insider)

Greece Just Tip of Debt Crisis Iceberg: Roubini -- "'Bond-market vigilantes already have taken aim at Greece, Spain, Portugal, the United Kingdom, Ireland, and Iceland, pushing government bond yields higher.' 'Eventually they may take aim at other countries – even Japan and the United States -- where fiscal policy is on an unsustainable path,' he wrote." (CNBC)

Greece Will Need up to 135 Billion Euros -- "On Wednesday, German Economy Minister Rainer Brüderle said ... the risks for Germany could be far greater than initially anticipated." (Der Spiegel)

Spain’s Rating Cut to AA by S&P as Contagion Spreads (Bloomberg) (Calculated Risk blog) Spain downgraded, Europe debt crisis widens: Germany says aid for Greece could be passed by May 7 (The Associated Press) Europe's debt crisis spread its contagion to another country Wednesday when a major credit agency downgraded Spain's credit rating, even as Germany grudgingly moved closer to bailing out Greece from imminent collapse. (Youtube)

Why Spain Is So Much Larger Of A Problem Than Greece (CF Economics blog)

Italian Debt Sale to ‘Feel the Heat’ as Greek Contagion Spreads (Bloomberg)

The Greek debt crisis is spreading “like Ebola” and Europe must act now to protect the stability the financial markets, according to the Organisation for Economic Co-operation and Development. (The Telegraph)

Greek Collateral Concerns Trigger Surge in Bank Swaps -- "'It’s a double whammy: you’re downgraded, so you have to post more collateral, and the collateral you post gets downgraded, so you have to post more of it,' Mehernosh Engineer, a credit strategist at BNP in London, said in an interview." (Bloomberg) "With the Standard & Poor’s downgrade of Greece’s credit rating into junk territory, there is a real question about whether Greek bonds will qualify as collateral for the European Central Bank’s repo operations. That could deprive some European banks, particularly Greek banks, of an important source of liquidity at just the wrong time, according to the debt research firm CreditSights." (The Wall Street Journal blogs)

Exposure fears weigh on French, German banks: Banks with local subsidiaries, government-lending exposure most at risk (Marketwatch) (Bloomberg) (The Wall Street Journal)

German Banks Have Big Investment in Greece [some 28 billion euros, or $37 billion] (The New York Times blogs)

Credit Agricole, SocGen Face Greek Risks as Debt Crisis Deepens -- "French banks have the biggest exposure to Greece among European lenders, accounting for $78.8 billion of the $193.1 billion of total claims European banks have on Greece, according to the Bank for International Settlements." (Bloomberg)

UK banks sitting on £100bn exposure to Greece, Spain and Portugal: Shares in UK lenders slide amid fears of renewed credit crunch but French, German and Swiss most at risk from Greek default (The Guardian)

Greek financial crisis could hit Britain, warn economists: Businessmen and economists are warning the crisis affecting Greece could be coming to Britain unless the next Government takes drastic action to cut the national deficit. (The Telegraph)

Pan-European Sovereign Debt Dominoes Falling as Anticipated (Seeking Alpha blog)

Europe's next bankruptcy candidates? (Deutsche Welle)

Black Swan Capital Currency Currents of Tuesday 27 April 2010 (Scribd)

All S&P sovereign credit ratings in order from AAA to junk (Credit Writedowns blog)

U.K. Economy Remains in ‘Fragile State,’ Besley Says (Bloomberg)

Carpetright CEO fears UK heading for "double dip" (Reuters)

[Deflation watch:] Farmers in Paris protest falling prices (United Press International)

99 of 100 [US] metros lost jobs in past year (Business First of Buffalo)

What Recovery? 49 of 50 State Economies Worse Off Than Last Year (CF Economics blog)

U.S. Households Lost $100,000 From Crisis, Study Says (Bloomberg)

Detroit leads the way in urban farming: Detroit is ideal for urban farming, with the city beginning to provide a model for the world. (The Christian Science Monitor)

Citi's Pandit Backs Obama on Reform (The Pandit's letter to Obama (Scribd)

Who Wants to Beat a Millionaire (The Daily Show with Jon Stewart) SOURCES: The world says they are guilty – yet bankers protest their innocence: Congressional hearing brings Goldman executives accused of profiting from mortgage misery into the open. (The Independent) Detailed in emails, how Goldman lost a fortune and then made it back: Desperate to salvage its reputation, the investment bank has released correspondence dating from height of the credit crisis (The Independent)

The Daily Show With Jon StewartMon - Thurs 11p / 10c
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Tuesday, April 27, 2010

Tuesday roundup (04-27-10)

Quote of the Day:

[On the Greek debt crisis:] "The market is now pricing in a debt rescheduling, There’s an assumption that 45 billion euros will be inadequate." -- Robin Marshall, director of investment management at Smith & Williamson in London. (The New York Times blogs)

"It takes many cuts of a saw to fell a giant sequoia redwood. EMU is a few pulls of the saw from toppling and asset prices and the EUR have a long way to run (lower) to reflect this ever nearer event." -- David Gilmore, a partner at Foreign Exchange Analytics. (The Wall Street Journal blogs)

"Policy makers need to get ahead of the curve. This is no longer a problem about Greece or Portugal, but about the euro system." -- Eric Fine, who manages Van’s Eck’s G-175 Strategies emerging-market hedge fund. (Bloomberg)

Europeans Fear Greek Debt Crisis Will Spread -- “The situation is deteriorating rapidly, and it’s not clear who’s in a position to stop the Greeks from going into a default situation,” said Edward Yardeni, president of Yardeni Research. “That creates a spillover effect.” (The New York Times)

ECB may have to turn to 'nuclear option' to prevent Southern European debt collapse: The European Central Bank may soon have to invoke emergency powers to prevent the disintegration of southern European bond markets, with ominous signs of investor flight from Spain and Italy. -- “We have gone past the point of no return,” said Jacques Cailloux, chief Europe economist at the Royal Bank of Scotland.“There is a complete loss of confidence. The bond markets are in disintegration and it is getting worse every day." (The Telegraph)

Greek Crisis Poses ECB Risk: A default would cost the central bank, which accepts sovereign debt as collateral for loans (The Wall Street Journal)

Euro zone is no longer an irrevocable construct: Merkel's actions in Greek crisis open door to euro's demise (Marketwatch)

Greek debt drops to junk status, Portugal's also downgraded; markets slide on fears of crisis -- "The latest developments mean that the chances of Greece solving this situation without restructuring its debts are now dim," said Diego Iscaro, senior economist at IHS Global Insight. (The Associated Press)

Greek, Portuguese Bonds Drop as S&P Cuts Debt Ratings -- “We’re entering into a phase of blind panic,” said Orlando Green, an interest-rate strategist at Credit Agricole CIB in London. (Bloomberg)

Greek spreads are widening and it is contagious: We are now in a critical phase (Danske Research)

Greek Banks Face Mounting Pressure as S&P Cuts Ratings to Junk (Bloomberg) Greek Banks May Run Out of ECB Collateral, Citi Says (Bloomberg)

Greece, Portugal, Spain debt insurance costs soar -- hitting new record highs (Marketwatch) (The Wall Street Journal)

Hunter Says Greece Aid Package Would be 'Band Aid': Constance Hunter, chief economist at Galtere International, talks with Bloomberg's Matt Miller and Carol Massar about potential aid packages for Greece. German Chancellor Angela Merkel said she wont release Greek rescue funds until the country shows its got a "sustainable, credible" plan to cut its budget deficit. A decision may be in a "few days," she said. (Bloomberg)

The depressing outlook for Greece (Reuters blogs)

Portugal risk premiums leap to euro lifetime highs (Reuters)

S&P’s Portugal Downgrade, as Spread Remain High (The Wall Street Journal blogs)

Italy Next? [Euro]9.5 Billion Bill Auction 2 bps Away From Failure, 6 Month Bill Yielding Higher Than Spain's (ZeroHedge blog)

Reminder: It's Not Sovereign Debt That Folks Are Freaking Out About, It's A Run On The Banks (The Business Insider)

Volcanic ash cloud cost European business up to [Euro]2.5bn, says EU: Transport chief vows to push airlines to refund passengers stranded after Iceland volcano as plans for single airspace are fast-tracked (The Guardian) "Europe should help its aviation sector recover from up to euro2.5 billion ($3.3 billion) in losses from the Icelandic volcano ash crisis by combining sweeping reform of air traffic control with short-term relief like lifting bans on nighttime flights, the EU's executive body said Tuesday." (The Associated Press)

Lawmakers say NY budget negotiations going nowhere (The Associated Press)

Pennsylvania Capital Told to Consider Bankruptcy Protection -- Harrisburg has missed $6 million in debt payments since Jan. 1 (Bloomberg)

Cabinet Plant, Largest Employer In Pike Co. [OH], Closing [eliminating more than 1,200 jobs] (10TV)

Goldman Sachs gets grilled: At Goldman Sachs' hearing on Capitol Hill Tuesday, three current and former members of the company's mortgage trading operation faced withering questions from Senators on both sides of the aisle. NBC's Lisa Myers reports. (MSNBC)

Visit for breaking news, world news, and news about the economy

James Cramer: Goldman Has No Defense (The Big Picture blog)

Cramer Prediction: Goldman to Get Record-Breaking $2-3 Billion Fine and Management May Not Stay (MSNBC)

S 510 is hissing in the grass (Food Freedom blog)

Monday, April 26, 2010

Monday roundup (04-26-10)

Quote of the Day:

"Greece is not the only potential problem. Other countries also have major problems and in a worst-case scenario, this could develop into a debt crisis in several countries, which also affects the bank system." -- Swedish central bank first deputy governor Svante Oeberg. (Bloomberg)

"The case for a double-dip recession lies in the fact that demand growth, which has been pretty good, has come from two sources: fiscal stimulus and the end of inventory disinvestment. Both sources of stimulus are inherently transitory and will run down in 2010, so that's cause for worry. We need to hope that consumption and investment catch fire. Without it, we won't have a sustained recovery. Furthermore, there could be new shocks, including another Iceland, Dubai, Greece, or a hard landing for the U.S. dollar." -- Jeffrey Frankel, Harpel professor of capital formation and growth at Harvard University's Kennedy School of Government. (The Montreal Gazette)

Greek Debt Restructure a ‘Necessity’ Without More Aid -- “On the face of it, a restructuring, a rescheduling or an external prop for the debt looks unavoidable,” [Citigroup Inc. analyst Mark] Schofield wrote in a client note. That “could trigger rapid contagion that would cause a much graver problem should Spain, Portugal and Ireland be impacted,” he wrote. (Bloomberg)

German opposition to Greek debt bailout gathers pace -- "Greece is practically bankrupt," leading German economist Hans-Werner Sinn told news magazine Der Spiegel, warning [that] any country that comes to Greece's aid is at risk of getting pulled into the quagmire. (The Guardian)

Merkel Hits Campaign Trail Warning That Greek Bailout Not Yet Guaranteed -- “It is extraordinary that a euro-zone member country finds itself a mere three weeks away from a potential default with a clear possibility that uncertainty will only be resolved at the last minute,” said Marco Annunziata, chief European economist at UniCredit Group in London. (Bloomberg)

A Rescue Package for Greece: Will the Bailout Work? -- "A default of some sort — or debt restructuring — is highly likely and people holding government bonds will have to agree to a haircut," says Philip Whyte, senior research fellow at the London-based Center for European Reform think tank. "But given the alternative, that would not be the worst possible outcome, which would be for Greece to leave the euro zone. And for Greece's problems to spread to other vulnerable countries, like Spain and Portugal." (Time)

Questions and answers on the Greek debt crisis -- "Unlike equally indebted Italy and Portugal, its bondholders aren’t at home but from other countries, mainly France and Germany. 'That could cause contagion and become a crisis for the big banks,' says Ian Begg, an expert on the European Union at Chatham House in London. 'That’s the last thing anyone in Europe wants now.[']" (The Toronto Star)

FACTBOX - Progress towards approving emergency loans to Greece -- an overview of how much donors would contribute, dependent on their shares in the capital of the European Central Bank, and the legal hurdles the loans face (Reuters)

Greek, Portuguese, Spanish CDS spreads hit records (Marketwatch)

Confidence in Greek Debt Sinks Again (The New York Times)

Greece: 10-Year debt yield spread widens to new record (Calculated Risk blog) contagion increasing (Credit Writedowns blog)

Yield on Greek Two-Year Bonds jumps to 13.5% (Calculated Risk blog)

Greece riskier than Pakistan? (Marketwatch blogs)

Portuguese 5-yr CDS at record high, spread wider -- "The Greek crisis has started to spread to the rest of the periphery and Portugal seems to be next in line. The situation there is less urgent than in Greece, but the medium-term outlook is challenging," said Darren Williams, senior economist at Alliance Bernstein. "Unless Europe's leaders can draw a line under the situation, Portugal could face an uncomfortable period." (Reuters) "'We have argued for some time that the activation of the EMU/IMF package would add more uncertainties to already fragile markets. First, Greece asking for the package is a sign of failure as private funds failed to finance the ever bigger Greek deficit. The failure to fund Greece by non-official funds has put the focus on other peripheral countries such as Portugal,' wrote BNP Paribas currency analysts Monday." (The Wall Street Journal blogs) Graphic (CF Economics blog)

Italy Bond Spread Widens to Highest Since July on Greek Concern (Bloomberg)

Dollar, Euro, Pound Are All ‘Ugly Sisters,’ HSBC’s King Says (Bloomberg)

The New Face of Japanese Deflation: Falling prices in the 1990s were a sign of restructuring. Now they're a warning that something's going wrong. (The Wall Street Journal)

[US] National debt: A tsunami of red ink (The Chicago Tribune) Graphic (The Chicago Tribune)

Looming Big Fiscal Tightening Will Complicate Fed's Exit Plans (Investors Business Daily)

Economists: The stimulus didn't help -- "About 73% of those [National Association for Business Economics members] surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act, which the White House's Council of Economic Advisers says is on track to create or save 3.5 million jobs by the end of the year." (CNN)

Housing Headwinds: Delinquencies and Shadow Inventory (Expected Returns blog)

Top 10 mortgage fraud states -- Florida, New York, California, Arizona, Michigan, Maryland, New Jersey, Georgia, Illinois, Virginia (CNN)

R.I. public pensions on the line as [$220 million] budget deficit looms (The Providence Journal)

Orlando Faces Nearly $50M Deficit: Layoffs, Program Cuts Possible (WESH)

Senate probe: Goldman planned to profit from housing bust, made billions at clients' expense (The Associated Press)

Sunday, April 25, 2010

Sunday roundup (04-25-10)

Quotes of the Day:

[Commenting on the call by the UK's Chancellor of the Exchequer Alastair Darling calls for a swift response to the economic woes faced by Greece:] "The country is literally on the verge of collapse, the budget deficit is out of control and the Greek government is literally running out of money. This comes at a time when debt markets are concerned about the potential knock on effect to the European economies and we are on the verge of a potential nightmare scenario." -- Financial Advice (Financial

"Greece is not the only country that is suffering a sovereign credit crisis. Sovereign credit ratings of Iceland, Ireland, Mexico, Italy, Portugal and Spain have also been downgraded. Moreover, the sovereign credit of the United States, Britain, Germany and France has also been questioned." -- Xinhua, the official news agency of China, one of the largest buyers of US debt. (Xinhua)

"The EU-IMF 'therapy' of deflation for Greece repeats the catastrophic errors of Chancellor Heinrich Bruning in the early 1930s and must lead to a depression, [Tübingen Professor Joachim Starbatty] said." -- Ambrose Evans-Pritchard. (The Telegraph)

"Most important week of Europe’s monetary union" -- "... from Wolfgang Münchau at the Financial Times: Greece is Europe’s very own subprime crisis [']This is going to be the most important week in the 11-year history of Europe’s monetary union. By the end of it we will know whether the Greek fiscal crisis can be contained or whether it will metastasise to other parts of the eurozone.[']" (Calculated Risk blog)

Germany refuses to help Greece unless it agrees to tougher terms: Germany's finance minister Wolfgang Schauble has raised fresh obstacles to the €40bn (£35bn) aid package for Greece, warning that Berlin will not transfer funds until Athens agrees to tougher terms. -- "Mr Schauble said no decision had yet been taken by Berlin or the European Union and that the outcome may yet be 'negative'." (The Telegraph)

Germany, France signal hard line with Greece -- meanwhile, "doubts emerged over whether a 45 billion euro ($60.2 billion) aid package was sufficient to prevent a default." (Reuters)

For Greece, Restructuring [— a polite way of saying “default” —] Is No Longer Unthinkable (The New York Times)

Rogoff Says Greece Probably Won’t Be Last IMF Bailout in Europe (Bloomberg)

IMF official warns on Japan debt: report (Agence France-Presse)

Weakness Begets Weakness: from Banks to Sovereigns to Banks by Eric Sprott & David Franklin (Sprott Asset Management LP)

G20 growth forecasts don't add up (Reuters)

Commercial real estate remains one of biggest threats to economy: Office-space demand is gone. Companies aren't expanding, and tenants can take advantage of cheaper rents as well as competition to land them in space finished as the market collapsed. -- "It would be nice to say 'don't even breathe' and hope the situation is indeed stabilizing and can slowly work itself out. Unfortunately, the remaining imbalances and uncertainties in commercial real estate remain one of the biggest risks for a double-dip recession." (The Seattle Times)

Number of the Week: 103 Months to Clear Housing Inventory (The Wall Street Journal blogs)

Saturday, April 24, 2010

Saturday roundup (04-24-10)

Quote of the Day:

"I told my G20 colleagues that some countries, especially Japan, should be somewhat cautious about heading toward an exit [from fiscal and monetary stimulus programs] now." -- Japan's Finance Minister Naoto Kan. (Reuters)

Greece's financial bailout: So what conditions will a bailout bring? And what of the rest of Europe? (AlJazeeraEnglish)

How credit watchdogs fueled the financial crisis (CNN)

Goldman Cheered As Bubble Burst: E-mails from Goldman Sachs executives in 2007 show how the collapse of the housing market made the company serious money. Tony Guida reports. (CBSNews)

Goldman knew it profited in crisis (CNN) (The Associated Press)

On the edge with Max Keiser - Wall Street Fraud - 04-23-2010




Feds shuts down bank owned by Giannoulias: Feds close bank owned by family of Ill. treasurer, candidate for Obama's old US Senate seat (The Associated Press)

Friday, April 23, 2010

Friday roundup (04-23-10)

Greece Requests EU-IMF Rescue in Euro’s Biggest Test (Bloomberg)

Greece formally requests activation of rescue package: E.U.-IMF aid unlikely to dispel euro-zone default worries (Marketwatch)

Germany's Merkel: No aid for Greece until talks with IMF finished; amount still unclear (The Associated Press)

Greece: Ceding defeat, but not (yet) default -- "The questions will now turn to when, exactly, Greece and the IMF will be able to reach a deal; what the conditions will be; and whether the amount of money involved can possible be enough. ... Update, 18:17: I've now spoken to senior G7 officials now meeting in Washington. The message from there, as you'd expect, is that right now, a default by a sovereign European government is 'unthinkable'. At such a delicate time, the risks of contagion - and higher borrowing costs - for other countries are just too great." (The BBC blogs)

RBS: A Greek default would be tantamount to the end of the euro (FT Alphaville blog)

Bail-out money will buy Greece only a year: Bail-out money will buy Greece only a year. The Greek prime minister's formal request for €45bn from the eurozone and the International Monetary Fund should deal with its immediate financing needs. But there's still no hard promise of cash for year two. (Reuters) (The Washington Post blogs)

For Sake of Euro, Let Greece Go Bankrupt: Jim Rogers (CNBC)

Fitch warns Japan credit rating at risk from debt (The Associated Press)

[Canada's] Sovereign Debt Only Lags Behind Greece, Portugal (Bloomberg)

Don’t Get Too Excited About New Home Sales (The Big Picture blog)

2,000 Connecticut Teachers Face Layoffs Before Next School Year -- "This is absolutely the worst I've seen in my tenure," said John Yrchik, executive director of the Connecticut Education Association, the largest statewide teachers' union. "Even teachers who have lived through earlier rounds of layoffs have not seen anything quite like this." (The Hartford Courant)

A Short Citizen’s Guide to Reforming Wall Street (Robert Reich's blog)

10 Things You Don’t Know (or were misinformed) About the GS Case (The Big Picture blog)

Regulators shut down 7 banks in Illinois; 57 closures for the year (The Associated Press)

Amcore Bank, National Association of Rockford IL had a troubled assets ratio of 147.6%. (BankTracker)

Broadway Bank of Chicago IL had a troubled assets ratio of 433.4%. (BankTracker)

Citizens Bank and Trust Company of Chicago of Chicago IL had a troubled assets ratio of 502.3%. (BankTracker)

New Century Bank of Chicago IL had a troubled assets ratio of 318.2%. (BankTracker)

Lincoln Park Savings Bank of Chicago IL had a troubled assets ratio of 406.8%. (BankTracker)

Peotone Bank and Trust Company of Peotone IL had a troubled assets ratio of 330.7%. (BankTracker)

Wheatland Bank of Naperville IL 58429 had a troubled assets ratio of 606.6%. (BankTracker)

Thomas Jefferson's Words Coming True -- (Mortgage Debt now exceeds housing net worth, first time in US history.) (CF Economics blog)

SEC staffers watched porn as economy crashed (CNN)

Thursday, April 22, 2010

Thursday roundup (04-22-10)

Quote of the Day:

"It seems as though the only way Greece stands a chance of refinancing the 8 billion euros or so of debt that matures in mid-May without paying an exorbitant interest rate will be to put the bailout package in motion as soon as possible." -- Mark Williams, an economist at Capital Economics. (Marketwatch) [On May 19, Greece must repay 8.5 billion Euro.]

EU Sees Wider Greek Deficit, Roiling Markets: Bonds Fall as Investors View Bailout and Default as Givens (The Wall Street Journal)

Escalating Greek default fears rock Europe's debt markets: Greece's debt crisis has reached a dramatic crescendo after the EU revealed that the country's debt and deficit figures are even worse than feared and leading banks began to talk openly of debt-restructuring. (The Telegraph)

Greece's spiraling debt shakes Europe: Moody's downgrades credit rating (The Washington Times)

Rising public debt threatens world financial system: IMF (Agence France-Presse)

UK borrowing hits record £163.4bn (The BBC)

Fitch warns of debt 'shock' for Japan: Fitch Ratings has warned that Japan's sovereign debt is rising to ominously high levels as the workforce shrinks and deflation grinds deeper, while the government's reserve assets may prove unusable for defence in a funding crisis. (The Telegraph)

The Great Global Bank Robbery [Interview with Prof. William K. Black]
(Part 1) (Part 2)

Lehman Bankruptcy Bill Approaches $750 Million (The New York Times)

Economist James Galbraith: Economists Should Move into the Background, and "Criminologists to the Forefront" (Washington's Blog)

Cobb [County GA] schools cut 734 jobs (The Atlanta Journal-Constitution)

The image Microsoft doesn't want you to see: Too tired to stay awake, the Chinese workers earning just 34p an hour (The Daily Mail)

[US] Government Taking Donations To Pay Down Debt -- "Believe it or not, the government has established a website whereby you can make a donation to help pay down the public debt. Absolutely classic." (Square Feet blog)

Are policymakers, economists and peak oilists starting to speak the same language? (Financial Times blogs)

Weekday Vegetarianism And The Importance Of Baby Steps (Big Think blog)

Is it a recovery yet? (04-22-10)

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

IT'S A RECOVERY! (And it has been a recovery for every week since the Nov. 25, 2009 report.)

"The number of people filing an initial claim for unemployment benefits declined by 24,000 last week to a seasonally adjusted 456,000, the first drop in three weeks, the Labor Department reported Thursday. ...

"'Even after recent declines, the level of claims is higher than one would expect it to be if private nonfarm payrolls were really poised to begin sustained gains,' wrote Joshua Shapiro, chief economist for MFR Inc." (Marketwatch)


"'The initial claims pretty much in-line with expectation, but still an awful number, that is just not a positive sign.[']" (Reuters)

Wednesday, April 21, 2010

Wednesday roundup (04-21-10)

Sovereign Debt Crisis Likely to Spread: Roubini (CNBC)

IMF and Bundesbank fear contagion from Greece as bond spreads soar to fresh records: The International Monetary Fund has warned that Greece’s debt crisis risks spinning out of control, threatening to spill over across the region unless action is taken soon to restore confidence. (The Telegraph)

Greek debt hammered as EU/IMF aid talks get under way (Reuters)

Greece Could Make Aid Request Before Talks End -- "The aid package led by the euro-region nations and backed by the IMF has 'failed spectacularly' to stem rising funding costs for Greece, said Steven Major, global head of fixed-income research at HSBC Holdings Plc." (Bloomberg)

Michael Moore's 'Capitalism: A Love Story' -- Former Bank Regulator Bill Black (Youtube)

Bill Black's eye-popping opening statement [on Tuesday] at House FinServ hearing on Lehman Bros. failure (C-SPAN)

"Public Policy Issues Raised by the Report of the Lehman Bankruptcy Examiner" -- Statement by William K. Black, Associate Professor of Economics and Law, University of Missouri, Kansas City, before the Committee on Financial Services of the United States House of Representatives (US House)

Portugal Spread to Bunds Widest in 13 Months on Greek Contagion (Bloomberg)

Japan Must Curb Debt to Avoid ‘Unprecedented Crisis,’ BNP Says (Bloomberg)

[From Victoria in Australia:] Vic's worst locust plague in 40 years (Farmonline Network) (The Herald Sun)

U.S. Offers a Hand to Those on Eviction’s Edge (The New York Times)

L.A. Mayor Axes Firefighters, Clerks [eliminating more than 3,500 city jobs] to Cover Budget (Bloomberg)

California tops borrowing for jobless benefits -- "It's the state with the worst problem but nearly all states are in some form of financial distress," said Mark Zandi, chief economist at Moody's Analytics. (Reuters)

The Worst 2011 State Budget Gaps (CNBC)

Is Deflation the Real Problem? (The Bonddad Blog)

Tuesday, April 20, 2010

Tuesday roundup (04-20-10)

Financial reform now being considered would not have prevented the crisis (Credit Writedowns blog) An Open Letter to Senators Reid and McConnell (The Big Picture blog) (The Agenda Project)

Greek bank worries could worsen - ECB document (Reuters)

Greek Bailout Unconstitutional, Report Says (The New York Times blogs)

Sovereign debt tops IMF worries: Spiralling sovereign debt in Europe, the US, and Japan has emerged as the top threat to the world economy and risks setting off a fresh financial storm, the International Monetary Fund has warned. (The Telegraph) (The Times of London)

IMF warns debt pile could trigger new crisis -- "The situation in Britain is particularly dire." (The Daily Mail)

Lengthy eruption would put economy under a cloud -- "Tim Clark, president of the Dubai-based Emirates airlines, said the worldwide airline industry faced the threat of 'implosion' if the crisis lasts too long. (The Associated Press)

Airline losses from volcanic ash climb over $1 billion; airlines seek EU bailout for crisis (The Associated Press) (AOLNews)

SEC Looking Into Accounting at 19 Biggest Banks (The Associated Press) The Securities and Exchange Commission is examining whether any of the 19 largest U.S. banks are using an accounting trick that a bankruptcy examiner has said led to the collapse of Lehman Brothers. (The Associated Press)

Rule 10b-5: Manipulative and Deceptive Practices by Barry Ritholtz, author of Bailout Nation (The Big Picture blog)

How Goldman exploited the information gap -- "The way Goldman and John Paulson profited handsomely on their Abacus trades was to exploit the fact that they could see into the bag, but others, including Goldman's customers, could not." (Fortune)

The Goldman Sachs ABACUS Fraud Flow Chart (CF Economics blog)

Newsweek: 'Another Big Shoe' To Drop On Goldman Sachs? (Crooks and Liars blog) (Newsweek blog)

Goldman gets ex-White House counsel -- "Talk about a revolving door between Wall Street and Washington. If this weren’t true, it would be a joke. Has anyone picked up on this story? I’m speechless (hat tip Marshall)." (Credit Writedowns blog)

Goldman Faces Formal U.K. Probe After SEC Fraud Suit (Bloomberg)

U.S. Housing Program Fails to Stem Foreclosures, Watchdog Says (Bloomberg)

The Day of Reckoning For State Pension Plans (Everything Finance blog)

Districts Warn of Deeper Teacher Cuts -- "School districts around the country, forced to resort to drastic money-saving measures, are warning hundreds of thousands of teachers that their jobs may be eliminated in June." (The New York Times)

Telecom Italia Says It Will Cut About 6,800 Jobs Through 2012 (Bloomberg)

DPS [Detroit Public Schools system] sends layoff notices to 2,000 teachers (Detroit Free Press)

Hinds [County MS] to furlough 900-plus workers (The Clarion Ledger)

James Bond franchise on hold as MGM studio announces it can't afford 007 project -- "MGM has amassed a staggering $3.7 billion in debt, Variety reported, and was put up for sale in November." (The New York Daily News) "James Bond is MGM's most lucrative franchise. ... But Michael Wilson and Barbara Broccoli, the producers of the Bond movies, said in a joint statement, 'Due to the continuing uncertainty surrounding the future of MGM and the failure to close a sale of the studio, we have suspended development on BOND 23 indefinitely.'" (Reuters)

I've a feeling we're not in Kansas anymore... [From the 1939 MGM classic "The Wizard of Oz"] (Youtube)

Causes of the Current Crisis...and the Next One (Financial Armageddon)

15 Drill-Crazy Countries That Are Rapidly Running Out Of Oil (The Business Insider)

Keiser Report No. 35: Markets! Finance! Scandal!: This time Max Keiser and co-host Stacy Herbert examine the qualities of a banana republic and also look at the scandals of Lehman's alter ego; Magnetar's binary bets; and JP Morgan's sacred contracts. In the second half of the show, Max talks to Business Insider's Joe Weisenthal about the Magnetar Trade, record bank profits, CantorX and KFC's double down. (Russia Today)

Monday, April 19, 2010

Monday roundup (04-20-10)

Sideswipe of the Day:

"We don't have time to go into details. I want to remain shallow, in deference to Mr. Cramer." -- Sylvian Raynes of RSR Consulting (CNBC video posted on The Huffington Post blog)

Germany warns of 'Lehman' crisis if Greece defaults: German finance minister Wolfgang Schauble has pleaded with his country's citizens to back a joint EU-IMF bail out for Greece worth up to [Euro]45bn (£40bn), warning that failure to act risks a financial meltdown. (The Telegraph)

Merrill Lynch Accused of Same Fraud as Goldman Sachs; Tip of the Iceberg of Fraud Charges (Mish's Global Economic Trend Analysis blog)

SEC's probe of Goldman could widen to other banks (The Associated Press)

The SEC and other Banks (Calculated Risk blog)

Commercial Real Estate Prices Resume Downward Trend (CFEconomics blog)

California Foreclosure Sales Soar in March (

Unemployment Insurance Tracker by Olga Pierce and Jeff Larson, ProPublica: The unemployment insurance system is in crisis due to a combination skyrocketing unemployment and – in some cases – poor planning. A record 20 million Americans collected unemployment benefits last year, and twenty-six states have run out of funds and been forced to borrow from the federal government, raise taxes, or cut benefits. In many other states the situation is deteriorating fast. Using near real-time data on state revenues and the benefits they pay out, we estimate how long state trust funds will hold up. Click on a state to find the latest, plus historical data, and details on tax increases and benefit cuts. (Updated Weekly: last update March 25, 2010) (ProPublica)

Some European airlines set to close - industry body (Reuters)

PAL [= Philippine Airlines], buffeted by economic turbulence, cuts 2,000 jobs (Manila Standard Today)

The coming famine: risks and solutions for global food security (Science Alert)

Sunday, April 18, 2010

Sunday roundup (04-18-10)

Quote of the Day:

"In filing its lawsuit against Goldman Sachs (NYSE: GS) on a Friday, the Securities and Exchange Commission sent what I call the 'kiss of death' message to the embattled company. ...

"When a company or individual receives a surprise subpoena on a Friday from the SEC, it is usually designed to ruin their weekend plans. ...

"The 'kiss of death' message is deliberately sent on Fridays to chill the bones of criminals. Some criminals wait in anxiety during the weekend until Monday to consult with their attorneys about what to do next. Other criminals or SEC targets like Goldman Sachs don't want to wait until Monday. So they make rash decisions and major errors in prematurely reacting to the 'kiss of death' message to their own peril and find themselves in legal quicksand.

"Goldman Sachs chose not to wait until Monday and fully digest the implications of the SEC complaint. After a relatively short consultation with its attorneys, the company hastily issued a detailed press release later Friday afternoon that I believe will land it into deeper potential trouble." -- Sam Antar, the former CFO of Crazy Eddies who now specializes in training investigators how to uncover white collar fraud (White Collar Fraud blog) (The Big Picture blog)

Germany, UK demand Goldman Sachs probe (Reuters) (Bloomberg)

Goldman Sachs: Brown attacks firm's 'moral bankruptcy': Gordon Brown has called for a "special investigation" into Goldman Sachs after reports that the bank is to pay £3.5bn in bonuses. (The BBC)

EU’s Investigation of Goldman Will Be ‘Profound,’ Rehn Says (Bloomberg)

Goldman CDO case could be tip of iceberg (Reuters)

Abacus Let Goldman Shuffle Mortgage Risk Like Beads (Bloomberg)

Profiting from Investments Designed to Implode (The Big Picture blog)

Bloomberg & NPR Roll Out Special Goldman Sachs Programming (Infectious Greed blog)

Simon Johnson On 'Real Time': Broken System If Goldman Conspirator John Paulson Is Not Charged (The Huffington Post blog)

Bill Maher Roundtable - 04/16/10 (Mediaite)

No prospect of any more German rescues as Portugal hits a brick wall: Portugal, not Greece, poses the greater existential threat to Europe's monetary union. (The Telegraph)

If CDS Traders Are Right, France Is Next Up For A Sovereign Shakedown (As Are Spain And Portugal); Greece Long Forgotten (ZeroHedge blog)

The UK isn't so different from Greece: a financial crisis could happen here too: The markets fear a hung parliament but the real risk for the UK's grotesquely unbalanced economy lies further ahead (The Guardian)

Talks on Greek bailout package are postponed [until Wednesday "because of the global travel chaos caused by Iceland's volcano"] (The Associated Press)

Volcanic Ash May Weigh on European Economy (The New York Times)

Air Travel Crisis Deepens as Europe Fears Wider Impact (The New York Times)

Killer Quakes on Rise With Cities on Fault Lines -- "Never before has it been possible to kill 1 million people in a single earthquake, but cities are now big enough to make this possible." (Bloomberg)

Lessons from the Great Depression: Speaker to compare present with past turmoil -- "Today isn’t over yet, and it’s still the very, very early days, from a historian’s point of view, to come to any kind of judgment on what will be the lasting historical footprint of the current crisis." -- Stanford University history professor and best-selling author David M. Kennedy. (The Times Record News of Wichita Falls TX)