Tuesday, August 31, 2010

Tuesday roundup (08-31-10)

Most Small Business Owners Are Worried About a Double-Dip Recession (FoxBusiness)

Fed officials discussed further stimulus steps (The Associated Press) Fed Officials Saw Risk of Sending Wrong Policy Signal (Bloomberg)

Problem bank list climbs to 829 [says FDIC quarterly survey] (CNN) (Deposit Accounts blog) (Calculated Risk blog)

The bedridden banking recovery: The banks are feeling less woozy but have yet to get back on their feet -- let alone lend a struggling economy a hand. (Fortune blogs)

State Default Risk [in the United States] (Bespoke Investment Group)

SEC won't pursue fraud case against Moody's (The Washington Post)

Coup d'Etat: Standard & Poor's Is Now Giving Orders to Congress ... and the American People (The Huffington Post blog)

Wall Street Insiders Want Out, Selling $100 Million in Stock (CNBC) Major hedge funds cut back equity risk (Reuters)

Davidowitz Says 'Worst to Come' for U.S. Retail Sales: Howard Davidowitz, chairman of Davidowitz & Associates Inc., talks with Bloomberg's Mark Crumpton about the outlook for U.S. retail sales. Davidowitz also discusses discount and luxury retailers, and speculation that Saks Inc. may receive a takeover offer from a private-equity group. (Bloomberg)

U.S. Auto Sales [for August, to be announced tomorrow] May Hit 28-Year Low as Discounts Flop (Bloomberg)

On Case-Shiller House Prices: October is the "Witching Hour" (Calculated Risk blog)

European Sovereign Debt Risk Heads for Biggest Increase in at Least a Year (Bloomberg) Corporate Default Swaps Head for Biggest Monthly Rise Since May in Europe (Bloomberg)

Greek 5-Year CDS Continue to March Toward All-Time Highs (Seeking Alpha blog)

Anglo Irish Bank losses hit record level in first half (Agence France-Presse) "'To be perfectly frank, I think that anybody today who says that they can put a total figure on what the total losses are going to be is taking a pure punt,' [Anglo Irish's chairman Alan] Dukes said, using Irish slang for a gamble. 'Nobody knows.'" (The Associated Press)

Europe’s Debt Crisis Is Over. Probably. Or Maybe Not. (The Wall Street Journal blogs)

Second Leg of Crisis Beginning: Hedge Fund Manager (CNBC)

Banks flock to park cash at ECB amid ongoing tensions (Reuters)

IMF Eliminates Borrowing Cap On Rescue Facility In Anticipation Of Europe Crisis 2.0; US Prepares To Print Fresh Trillions In "Rescue" Linen (ZeroHedge blog)

Japan Airlines to Cut 16,000 Jobs in Restructuring (DailyFinance)

Monsanto cutting 700 more jobs (Triangle Business Journal)

Miami Imposes Pay and Benefit Cuts to Ease Deficit (Bloomberg)

Face It, Nobody Is Bullish Anymore (The Business Insider)

Seven lean years: No recovery till 2016: 10 reasons Jeremy Grantham's betting $100 billion on historic game-changer (Marketwatch)

The Great Deleveraging Lie by Jim Quinn [senior director of strategic planning at an Ivy League university] -- "The Big Lie will eventually lose out to the grim truth. America's economy is built on a debt-based foundation of sand and the tide of reality is relentlessly eating away at that foundation of debt. Collapse is just a matter of time." (Lew Rockwell.com)

Delusions of safety [by Satyajit Das, author of the just released revised edition of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives] -- "A huge amount of securities and risk now is held by central banks and governments, which are not designed for such long-term ownership of these assets. There are now no more balance sheets that can be leveraged to support the current levels of debt." (The Australian Broadcasting Commission)

How Much Is Left? The Limits of Earth's Resources, Made Interactive: This Web-only article is a special rich-media presentation of the feature, "How Much Is Left?," which appears in the September 2010 issue of Scientific American. The presentation was created by Zemi media. Find all our other interactive offerings here. (The Scientific American)

Monday, August 30, 2010

Monday roundup (08-30-10)

Record number in government anti-poverty programs -- "Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand." (USAToday)

Global markets fall as investors are braced for poor US economic results -- "'People are concerned policymakers don't have further tools available – the real problem is final demand, creating demand in the economy to generate consumption and exports,' one fund manager said." (The Guardian)

Quantitative Easing Won't Help the Economy, But Will Just Create Another Wave of Mergers and Acquisitions (Washington's Blog)

World's bankers ask if US faces its own lost decade (The Scotsman)

It's all very clear how Japan lost a decade, but will others make the same mistake?: Unless a decent recovery is already in the bag, the public will have doubts about the potency of policymakers and the tools at their disposal (The Independent)

What Bernanke doesn’t understand about deflation (Steve Keen's Debtwatch blog)

Quote of the Day [from Felix Zulauf]: Double Dip or Not (The Big Picture blog)

Obama Plans Refinancing Aid, Loans for Jobless Homeowners, HUD Chief Says -- "'The July numbers were worse than we expected, worse than the general market expected, and we are concerned,' Donovan said on CNN’s 'State of the Union' program yesterday. 'That’s why we are taking additional steps to move forward.'" (Bloomberg)

The Answer to a Housing Recovery: Lower Prices (Pragmatic Capitalism)

The Post-Crisis Decade: More Ugliness To Come (National Public Radio blogs) "While evidence of lost decades, as in the depression of the 1930s, 1980s Latin America and 1990s Japan are not ubiquitous, GDP growth and housing prices are significantly lower and unemployment higher in the ten-year window following the crisis when compared to the decade that preceded it." (American Enterprise Institute)

[A paradox:] Citi: Even During This Crisis, Consumers Lack The Discipline To Save Properly (The Business Insider) [And yet ...] Credit is finally available, but no one wants it (Fortune)

AAA Ratings Are A Grim Fairy Tale (Forbes blogs)

[Another paradox: head of the European central bank Jean-Claude] Trichet: Reducing debt is the great challenge for coming decade (The Washington Post) [And yet...] U.S. Should Put Growth Ahead of Deficit Cuts, Economists Say (Bloomberg) [But yet again...] The US Government Matches Every Dollar In Tax Revenue With A Dollar In New Debt (ZeroHedge blog)

Europe's Sovereign Debt Crisis: Is Round Two Around the Corner? (DailyFinance)

Battle of the Impotent Central Banks (The Wall Street Journal)

Japan renews QE as recovery falters: Japan has launched a fresh monetary and fiscal boost to shore up its faltering recovery and stem the slide into deflation, becoming the first major country to inject further stimulus since the Great Recession ended. (The Telegraph) "... the impact of the decision will be 'close to zero,' said Macquarie Bank's Richard Jerram. 'It's largely a charade,' he said." (Agence France-Presse) (Bloomberg)

Rogers: Stop Printing Money (The Mess That Greenspan Made) (CNBC)

Runaway Central Banker? Rumors China Suffers Massive Treasury Losses (Barron's blogs) (Stratfor Global Intelligence)

China's rising bank debt could leave nation exposed: Moody's rating agency is concerned that China is powering its economic growth by raising the gearing of the banking system, leaving the country exposed if the outlook darkens. -- "The banks are expanding their balance sheets rapidly through higher leverage – a policy that relies entirely on the continuance of torrid growth. 'Pain lies ahead if China's economic growth slows and the banking business model cannot adjust accordingly in time,' said Yvonne Zhang, the agency's senior China analyst."
(The Telegraph)

Bad statistics for summer employment for youth (McClatchy Newspapers)

The Age of Mammon (Burning Platform blog)

Sunday, August 29, 2010

Sunday roundup (08-29-10)

Obama says U.S. economy not growing fast enough (Reuters)

Wall Street: A 'huge' week ahead (CNN)

Hiring, Manufacturing Probably Cooled on Signs U.S. Recovery Is Stumbling (Bloomberg)

Widespread Fear Freezes Housing Market (The New York Times)

Increasing Risks (The Boeckh Business Newsletter)

BOE Will Keep 0.5% Rate Until Second Quarter [of 2011] on Double-Dip Risk, BCC Says (Bloomberg)

New [UK] tax cuts unlikely before 2015, says Danny Alexander (The BBC)

[Ireland's] Urgent need to calculate bottom-line cost of banks: There are strong doubts about whether Ireland has an accurate measure of the scale of the problem, writes DOMINIC COYLE (The Irish Times)

EU's Barroso warns Italy on high debt (Xinhua)

Greek Young People Would Opt to Emigrate for Jobs, Poll Shows (Bloomberg)

Hungary 'Can't Afford' to Delay Deficit-Cutting Program, EU's Rehn Says (Bloomberg)

BOJ Holds Emergency Meeting as Yen Threatens Growth (Bloomberg)

Saturday, August 28, 2010

Saturday roundup (08-28-10)

Economists Consider Asset Purchases By Central Banks -- [And yet...] "There’s a great deal of uncertainty about whether these unconventional efforts worked and whether it would make sense to do them again." (The Wall Street Journal blogs)

Further policy action may be needed: Bank's Bean (Reuters)

Threat of a double-dip deflation: What’s happening in the US, euro zone and Japan points to a hard slog ahead. [By Tan Sri Lin See-Yah, "a Harvard educated economist and a British Chartered Scientist who now spends time writing, teaching & promoting the public interest."] (The Star of Malaysia)

What Can Be Done to Cure the Ailing Economy? (The New York Times)

The path to depression: While experts argue over semantics - 'Great Recession' vs. 'Contained Depression', the economy continues collapsing. -- "Eventually, the whole system will blow up in a spectacular fireball. But not until America’s investors are fully committed to US paper. Then, after having suffered huge losses in stocks and real estate, they can be finally ruined in what they thought were the safest investments in the world – dollar-based US Treasury bonds." (The Christian Science Monitor blogs)

Most Executives Don’t See Recession Ending Until 2011 (CNBC)

Will Bank's Procrastination on Foreclosure Backfire? (The Atlantic)

Time to let home prices fall?: Many expect another wave of foreclosures to further deflate prices. The government could offer new incentives — or let market forces rule. (The Los Angeles Times)

Service Canada to cut 600 employees who handle EI claims: The layoffs are expected to come from the ranks of term employees hired on contracts (The Globe and Mail of Toronto)

Man has lived without money since 2008 (Yahoo! Canada News)

Friday, August 27, 2010

Friday roundup (08-27-10)

Astute Observation of the Day:

"You can't expect a recovery in the housing market in the absence of a recovery in the jobs market. It takes a paycheck to make a mortgage payment." -- Jay Brinkmann, the Mortgage Bankers Association's chief economist. (CNN)

Economic growth slows to 1.6 pct. in the spring -- "mostly due to the largest surge in imports in 26 years and a slowdown in companies' restocking of goods." (The Associated Press) "If not for the massive government stimulus, the economy would [have] 'contracted outright,' said economist Josh Bivens from the Washington-based Economic Policy Institute, an independent research institute. 'This is most troubling, as (stimulus) money is almost spent and will provide no boost to growth going forward,' he said, pointing out that 'the case for more action from policymakers to support the recovery and return the job-market to health is now overwhelming.'" (Agence France-Presse)

[US Joint Chiefs of Staff] Mullen: Debt is top national security threat (CNN) ECB chief Trichet warns failure to tackle high debts risks a 'lost decade': Jean-Claude Trichet, the European Central Bank President, said governments risk causing a “lost decade” of weak economic growth if they delay reversing the surge in public debt triggered by the financial crisis. (The Telegraph)

European Sovereign Debt Risk Heads for Biggest Increase in at Least a Year (Bloomberg)

Slow economic recovery leads to lower birthrate: Couples have postponed having children as they wait for the economy to improve, causing the lowest birthrate in 100 years. Fed Chairman Ben Bernanke said Friday the Fed is ready to intervene to keep the country out of another recession. NBC's John Yang reports. (NBC Nightly News)

Visit msnbc.com for breaking news, world news, and news about the economy

Has Fed Done All It Can to Prop Up U.S. Economy?: Federal Reserve Chairman Ben Bernanke said Friday that the central bank is prepared to take new action to help the sagging economy if needed. Jeffrey Brown talks to economists Paul Krugman and Douglas Holtz-Eakin about whether the Fed is doing enough to lift the economy. (PBSNewshour)

The Fed Is Running Low on Ammo by Alan S. Blinder, former vice chairman of the Federal Reserve Board. (The Wall Street Journal)

The Fed Is In A Box, And The Next Round Of Quantitative Easing Won't Do Anything (The Pragmatic Capitalist)

Why another fiscal stimulus won't do by Mohamed A. El-Erian (The Washington Post)

Rosenberg Explains Why Not One New Home Priced Over $750,000 Sold In July (ZeroHedge blog) Breakfast with Dave (Scribd)

Housing's new nightmare -- "... the number of people falling behind on their mortgages for the first time is on the rise." (CNN)

Struggling Cities Shut Firehouses in Budget Crisis (The New York Times)

U.S. birth rate hits a new record low (Time blogs)

The Coming Food Crisis: Global food security is stretched to the breaking point, and Russia's fires and Pakistan's floods are only making a bad situation worse. (Foreign Policy)

The Great Deleveraging Lie (The Burning Platform blog)

Thursday, August 26, 2010

Thursday roundup (08-26-10)

S&P Says US Should Act to Protect AAA-Rating: Report (Reuters)

Pessimism Over Economy Deepens: Nancy Cordes reports on the results of a recent CBS Poll that shows a sharp increase in the number of Americans who think the economy is getting worse. (CBSNews) 8 in 10 Americans Say Economy Is Bad: Fewer than Half of Americans Approve of Obama's Job, More than Half Say Bush Tax Cuts Should Expire (CBSNews)

Roubini Says Q3 Growth in U.S. to Be 'Well Below' 1% (Bloomberg)

Chances of Double Dip Now Over 40%: Roubini (CNBC) Rising Double Dip Risk: Discussing whether the chances of a double-dip recession have reached perilous levels in the United States, with Nouriel Roubini, RGE chairman & founder. (CNBC)

Markets Battle Back: Insight on the markets and the rising risk of a double-dip, with Mohamed El-Erian, PIMCO. (CNBC)

New mortgage delinquencies rise again: The number of home loans 30 days in arrears has risen two straight quarters, leading to new worries about the economy. Severely delinquent mortgages and foreclosures decline. (The Los Angeles Times) Foreclosure crisis isn't over yet: New figures from the Mortgage Bankers Association show still-high rates of delinquency. (The Christian Science Monitor Editorial Board blog)

Mortgage rates hit low of 4.36 percent -- "Mortgage rates fell to the lowest level in decades for the ninth time in 10 weeks, as concerns grow that the economy is weakening." (The Associated Press)

Scarcity of jobs puts more at risk of foreclosure: One in 10 homeowners with a mortgage face foreclosure, risks closely tied to high unemployment (The Associated Press)

RBS Details Plans For Insurance Site Closures, 2,000 Job Cuts (The Wall Street Journal)

Newark [NJ] submits plan to eliminate nearly 1,000 city jobs (Newark Star-Ledger)

We've got no choice on cuts: Police chief Steven House last night insisted he had "no choice" - as plans to chop 800 jobs from the country's largest force emerged. (The Scottish Sun)

[Deflation Watch: ] Firm Makes Bold Bet on Falling Prices: A Wager by Fairfax Financial Risks $174 Million. If Deflation Arrives, It Could Be Worth Billions. (The Wall Street Journal)

Watch Out for Sovereign Default in Disguise: Analyst (CNBC)

Balls Warns Plans to Slash U.K.'s Budget Deficit Might Cause Second Slump (Bloomberg)

Japan consumer prices fall [for the 17th straight month], deflation to persist (Reuters)

Is it a recovery yet? (Weekly report, 08-26-10)

According to Linda Duessel, a market strategist at Federated Investors in Pittsburgh, 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, with the exception of last week.)

"New claims for jobless aid dropped by 31,000 to a seasonally adjusted 473,000, the Labor Department said Thursday. Still, claims remain much higher than they would be in a healthy economy." (The Associated Press)

"The government revised the prior week’s claims figure up to 504,000 from a previously reported 500,000." (Bloomberg)

"'While initial jobless claims were much better than expected at 473,000, they remain at exceptionally elevated levels in comparison to where we stand in the recovery,' chief economist strategist Dan Greenhaus of Miller Tabak & Co. wrote in an email." (Marketwatch)

"'It's good to see a sizable decrease in initial claims, but the labor market remains impaired,' said Robert Dye, a senior economist at PNC Financial Services in Pittsburgh. 'We are not seeing the type of job gains that we need to generate a self-sustaining economic expansion. The recovery is definitely in jeopardy.'" (Reuters)

Wednesday, August 25, 2010

Wednesday roundup (08-25-10)

Weak US housing, business data fuel 'double-dip' concerns (Agence France-Presse) "Taking out the volatile transportation category, orders for durable goods fell at the steepest rate since January. ... 'The rebound in manufacturing was one of the bright spots in an otherwise disappointing recovery,' said Paul Ashworth, senior U.S. economist at Capital Economics. 'Take it away, throw in a relapse in housing, and you don't have much left.'" (The Associated Press) "'If you don't get a pick up in the next couple of months, it sure looks like it's possible the economy could contract in the third quarter,' said Keith Hembre, chief economist at First American Funds in Minneapolis, Minnesota." (Reuters)

New home sales hit lowest level ["since the government started tracking the numbers more than four decades ago"] (The Washington Post) (The Los Angeles Times) "'There is nothing good you can say about the number,' said Steven Ricchiuto, chief economist at Mizuho Securities in New York. 'The odds of the dreaded double-dip [recession] are increasing.'" (The BBC) (FT Alphaville blog) Breakfast with Dave (Scribd)

Instant View: New home sales at record low in July [analysts' comments] (Reuters)

Durable goods orders disappoint in latest sign of economic weakness -- "'All in all, today's report represents a very soft start to Q3,' said Theresa Chen, an economist at Barclays Capital, in a report." (The Washington Post)

Recession or Depression?: David Rosenberg, Gluskin Sheff & Associates chief economist, discusses his belief that we are in a depression, a prolonged recession, despite the government's best efforts. [Broadcast yesterday.] (CNBC)

Are We Now in a Depression? (Seeking Alpha blog) (The Huffington Post blog)

Is A Double-Dip Recession — Or Worse — Finally Here? (Mother Jones)

Demand for gold soars on double-dip recession fear (The Independent)

Credit card debt drops to lowest level in 8 years: Credit card debt drops 13 percent in 2nd qtr to lowest level since 2002; late payments decline (The Associated Press)

U.S. millionaire index turns sharply bearish -- "'The millionaires' decline is particularly troubling since it suggests millionaires, typically more sophisticated than the broader affluent population, are reverting to a bearish frame of mind,' said George Walper, president of Spectrem Group." (Reuters)

Illinois Pension May Sell $3 Billion of Assets to Pay Benefits (Bloomberg) (ZeroHedge blog)

Northrop Grumman to cut 642 at Miss. shipyard (The Associated Press)

[Deflation watch:] Food price inflation lowest since 1992: USDA (Reuters)

Debt Fears Slink Back in European Markets (The New York Times)

Morgan Stanley Asks When Not If Euro Debt Will Default (Barrons blogs) (Bloomberg) (Fortune blogs) (FT Alphaville blog) (The Business Insider) Morgan Stanley report via Zero Hedge blog (Scribd)

Europe's debt fears revive as Irish bond yields jump (The Los Angeles Times blogs)

Ireland's 'Vicious Circle' Leaves Banks Facing Higher Debt Financing Costs (Bloomberg)

Fresh flight to Swiss franc as Europe's bond strains return: The Swiss franc has surged to an all-time high against the euro on capital flight from the eurozone after Irish, Greek, and Portuguese bonds came under renewed fire. (The Telegraph)

The Scariest Economy: Japan, not Greece, is the real worry. (Newsweek)

Tuesday, August 24, 2010

Tuesday roundup (08-24-10)

Quotes of the Day:

"The housing market is undermining the already faltering wider economic recovery. With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse." -- Paul Dales, U.S. economist with Capital Economics. (The Associated Press)

"The numbers are worse than I thought they would be. The threat of a double dip seems to grow with every economic data point." -- Nicholas Colas, chief market strategist for ConvergEx Group. (The Street)

"Falling housing prices strain the overall confidence in the economy and discourage Americans from spending. They also mean that banks lose money on their investments and curtail lending, meaning there is less money out there to invest and boost the economy." -- Economist Paul Dales of Capital Economics. (CNN)

"A sustained upturn [in the housing market] will depend on an improvement in the jobs market, which at the moment is slowing down rather than gathering pace." -- Nigel Gault, an economist at IHS Global Insight. (The Christian Science Monitor)

Hard-nosed Fed sends global markets reeling: The global bond markets and the twin havens of the yen and Swiss franc have been flashing warning signs for weeks, tracking leading indicators as they topple like dominoes. They always sniff trouble first. -- "'This has been one of the most interesting days in finance ever,' said Andrew Roberts, head of credit at RBS. 'We are right at the tipping point. Yields are about to collapse even further, equities are about to turn over. The end game approaches, probably in next few weeks.'" (The Telegraph)

Home Sales Plunge to Lowest in 15 Years: Sales of previously occupied homes fell to the lowest level in 15 years last month as the economy weakened. AP's Mark Hamrick reports. (The Associated Press)

Big Blow for Housing Market: Sales were down 27.7 percent, an all-time low for July existing home sales. (ABCNews)

Diving home sales stoke new worries about economic recovery: U.S. sales fall for the third consecutive month to the lowest rate since 1999, pushing down stocks and fueling fears of a 'double dip' in the housing market. (The Los Angeles Times)

Fears grow of double-dip slump after US home sales plummet: Gloomy news that US property transactions fell by 27% last month has prompted a Bank of England member to predict trouble for the UK economy (The Guardian)

[GRAPHS:] Existing Home Sales Swan Dive (The New York Times blogs) Existing Home Sales Hit All Time LOW (CF Economics blog) Housing Inventory Supply Jumps To Over 12 Months (CF Economics blog)

The recovery is losing steam, fast (The Washington Post)

Economy Caught in Depression, Not Recession: Rosenberg (CNBC) Breakfast with Dave (Scribd)

Debt growing faster than the economy (Gannett)

Stiglitz Says European Economy at Risk of Double-Dip Recession (Bloomberg)

U.S., Europe in ‘Same Boat’ on Recession Risks, EU’s Rehn Says (Bloomberg)

Euro falls to record low against the Swiss franc (Reuters)

Why the Euro Is Doomed (Seeking Alpha blog)

Britain is at 'significant' risk of a return to recession, warns Bank of England expert (The Daily Mail) (Sky News)

Massive Commercial Real Estate Loans Now Blowing Up In Ireland (The Business Insider)

S&P cuts Ireland's rating on cost of bank support -- "'The projected fiscal cost to the Irish government of supporting the Irish financial sector has increased significantly above our prior estimates,' S&P said in a statement." (Reuters)

[Ireland's] Debt to take 10% of taxes, says [Moody's] ratings agency (Irish Times)

German budget deficit jumps to 3.5 pct in 1st half -- "putting it on track to break EU budget rules due to the costs of the global economic and financial crisis, official data showed Tuesday." (The Associated Press)

Spain uses social security fund to prop up the bond market (The Telegraph blogs)

Russian drought to slow economic recovery (Agence France-Presse)

Japan export growth slows for fifth month in July (The Associated Press)

Inside Job Official Trailer: From Academy Award® nominated filmmaker, Charles Ferguson ("No End In Sight"), comes INSIDE JOB, the first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, INSIDE JOB traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia. Narrated by Academy Award® winner Matt Damon, INSIDE JOB was made on location in the United States, Iceland, England, France, Singapore, and China. (Youtube)

How low can we fall this fall? (The Automatic Earth blog)

Deflation: the Neutron Bomb of Balance Sheets: Asset values and returns are decimated while pension liabilities are left standing. (Barrons)

Monday, August 23, 2010

Monday roundup (08-2310)

Housing Slide in U.S. Threatens to Drag Economy Into Recession (Bloomberg)

Fed's Hoenig: Mistake To View Housing As Investment Opportunity (The Wall Street Journal) (The Business Insider)

Hoenig on Leverage: Kansas City Fed President Thomas Hoenig discusses the idea that big American banks were exceedingly over-leveraged and the lessons smaller banks have to teach larger institutions. (CNBC)

How a homeownership fetish hurt the American dream (The Washington Post)

Housing delusions (FT Alphaville blog)

The barely discernable economic recovery: What happened?: The US is no longer in a recession, most economists say. But the economic recovery has slowed due to cautious attitudes among consumers and businesses, among other factors. (The Christian Science Monitor)

Maybe the Recession Never Really Ended (The Atlantic)

Nothing Has Changed -- "in the past two years of global financial turmoil." (Of Two Minds blog)

BoA sees US double-dip danger from 'fiscal chicken': Bank of America has accused the Democrats and Republicans in Congress of endangering the US economy in a game "fiscal chicken", risking a grave policy error by tightening too early. (The Telegraph)

Rajan and White to Fed: “Raise Interest Rates” (The Mess That Greenspan Made blog)

California Delays $2.9 Billion School, County Payments Amid Budget Impasse (Bloomberg)

Is Hollywood settling into a prolonged recession of its own? (The Los Angeles Times blogs)

Chrysler to have difficulty turning '10 profit: CEO (Reuters)

Fed loses bid to review bailout disclosure ruling (Reuters) (The Los Angeles Times blogs)

"Enron Accounting" Has Bankrupted America: U.S. Deficit Really $202 Trillion, Kotlikoff Says (Yahoo! Tech Ticker)

Moody's warns of growth risks in Europe: Moody's says European governments risk compounding their economic problems by cutting spending too quickly. (Fortune blogs)

European Government Budget Cuts Pose Risk to Debt Ratings, Moody's Says (Bloomberg) (The Wall Street Journal)

Pressed to Act, Bank of Japan Sees Few Ways to Lift Demand (The New York Times)

We've gone into the ecological red: On 21 August our environmental resource budget ran out. Now we're living beyond the planet's means to support us (The Guardian)

Sunday, August 22, 2010

Sunday roundup (08-22-10)

Quote of the Day:

"The stock market is crumbling -- actually crumbling before our very eyes. ... I'm saying that half the issues in the Dow, the NYSE, S&P and NASDAQ have now sunk below their important 200-day moving averages. And the same is true of the big stock averages. And the incredible thing is that even as the stock market is falling apart, the experts and the media are taking in and believing the government reports, and they think everything is bright and sunny. It's as if they can't see or take in what the market is doing -- the whole financial world seems to be brain-washed ... I've never seen anything like it. ... Believe me if the stock market continues the way its been going (particularly if it crashes) it's going to scare the living hell out of America's consumers. If consumers freeze up, you're going to see all the deflation you want. So who to believe, the analysts and economist or the stock and bond markets? ... I want subscribers OUT of all stocks and bonds except for gold and gold items. Before this bear market is over, it's going to take down everything. We're in cash and gold, and probably less cash as time goes along. This is not a recession, but rather a depression. Recessions tend to break people, depressions on the other hand tend to consume them." -- Richard Russell, editor of the Dow Theory Letters (King World News)

Germany Must Focus on ‘Huge Mountain of Debt,’ Kampeter Says (Bloomberg)

America no longer needs Chinese money, for now: As the Sino-American showdown in the South China and Yellow Seas escalates into the gravest superpower clash since the Cold War, the United States cannot wisely rely on China to help fund its budget deficit for any longer. -- "The cacophony of voices in Beijing questioning or mocking the credit-worthiness of the US is now deafening, from premier Wen Jiabao on down." (The Telegraph)

Schedule for Week of August 22nd -- "Three key housing reports and the second estimate of Q2 GDP will be the highlights this week." (Calculated Risk blog)

Housing Fades as a Means to Build Wealth, Analysts Say (The New York Times)

How a homeownership fetish hurt the American dream (The Washington Post)

Commercial Real Estate Much Worse Than Reported on TV (CF Economics blog)

Portions of the Gulf are So Toxic that Dolphins, Fish, Crabs, Stingrays and Other Animals are "Trying to Crawl Out of the Water" (Washington's Blog)

GMO Crop Sabotage on the Rise: French citizens destroy trial vineyard (Food Freedom blog)

Saturday, August 21, 2010

Saturday roundup (08-21-10)

BP sends letters with no checks to hundreds of oil spill claimants (Press-Register blogs of Mobile AL)

With consumers slow to spend, businesses are slow to hire (The Washington Post)

What Does the Philly Fed Contraction Signal Really Mean? -- "In and of itself the Philly Business Outlook number is not that serious. In the context of other worrisome economic weakness it is more problematic." (Credit Writedowns blog)

Federal foreclosure prevention program is struggling: Under the main Obama administration program to ease foreclosures, fewer than 37,000 homeowners received permanently lowered mortgage payments in July. Modification cancellations are up. (The Los Angeles Times)

Post-Mortgage Meltdown, Where Do We Go Now?: As finance experts rethink federal housing policy, some say homeownership isn't what it used to be. (NPR)

Clear Signals That Market Risk Is Elevating (Money and Markets)

Conn. gov predicts $63.4 million budget deficit (Bloomberg)

Pension Fraud in New Jersey Puts Focus on Illinois (The New York Times)

The Erosion of America's Middle Class (Der Spiegel)

The next global crisis: Hungry millions, on the move: Scarcities of water, land, oil and fish could lead to mass starvation in 50 years – or sooner. Why is the West refusing to swallow the facts? (The Globe and Mail of Toronto)

Friday, August 20, 2010

Friday roundup (08-21-10)

Dipping into dwindling nest eggs: A record number of Americans without jobs and with nowhere else to turn are trying to ease their burden by withdrawing from their retirement funds--and they're paying dearly for it. NBC's John Yang reports. (NBC Nightly News) (CNN) (The Associated Press)

Visit msnbc.com for breaking news, world news, and news about the economy

Initial Jobless Claims the Latest Indicator in Support of a Double Dip -- "The double dippers seem to have the upper hand, I’d need to see further deterioration in the ISM indices and the ECRI leading index to confirm that scenario." (Seeking Alpha blog)

ECRI Declines To -10.0 From Unrevised -9.8% (Yet Prior Is Conveniently Revised To -10.2%) -- [-10 is "double dip predictive"] (ZeroHedge blog)

Forget a double dip: We're still in one long big dipper: The great recession isn't over. Job growth after the Great Depression was faster than today's, and even that was an illusion of recovery, by Robert Reich (The Christian Science Monitor blogs)

And Now We're Headed For The GREATEST Depression, Says Gerald Celente (Yahoo! Tech Ticker)

America Won the Cold War But Now Is Turning Into the USSR, Gerald Celente Says (Yahoo! Tech Ticker)

'Too Big to Fail' Is Killing the Middle Class, Celente Says (Yahoo! Tech Ticker)

Huge miss coming on Existing Home Sales? (Calculated Risk blog)

Obama mortgage-aid effort struggles as nearly half of those enrolled fall out of program (The Associated Press) (Reuters) Under the main Obama administration program to ease foreclosures, fewer than 37,000 homeowners received permanently lowered mortgage payments in July. Modification cancellations are up. (The Los Angeles Times) (The New York Times) (The Wall Street Journal)

A good idea for fixing housing: Baker's rental plan would stabilize prices (Marketwatch) The Right to Rent Plan (Center for Economic and Policy Research)

Outsourcing to the US? -- "Could jobs that were once outsourced to India come back to the US? It seems that could happen." (CNBC)

U.S. restaurants starved for business -- The number of restaurants operating nationwide dropped this year for the first time in more than a decade, a survey shows, with California accounting for almost a third of the losses. -- "'Most restaurateurs are just living on the edge,' said Jot Condie, president of the California Restaurant Assn." (The Los Angeles Times)

The Facts of Life -- "... the retirement safety net is going to be (dramatically) reshaped and scaled back; defense spending is going to be slashed, and taxes are going to be raised, in some cases by a lot" (Financial Armageddon blog)

Economy is on a knife-edge, warn Bank of England policymakers: Britain's economy is teetering on a knife-edge, with "substantial" risks of a relapse balanced against signs of "gathering momentum" in the recovery, according to minutes from the Bank of England's August rate-setting meeting. (The Telegraph)

Ditch the queen: UK public's wild ideas for cuts (The Associated Press)

Europe’s Dangerous Bonds (Seeking Alpha blog)

Greek Debt Crisis Finally Over? Maybe Not. (Time blogs)

Believe It or Not, the U.S. Is In Worse Financial Shape Than Greece (FoxNews)

France cuts growth outlook and says deficit top priority (Reuters)

It Looks Like U.S. Government Bonds Aren't Supported By China Anymore (The Business Insider)

Big Chicago-based community bank, 7 others shut down; 118 total US bank failures in 2010 (The Associated Press)

Community National Bank at Bartow of Bartow FL had a troubled assets ratio of 215.6%. (BankTracker)

Independent National Bank Ocala FL had a troubled assets ratio of 242.7%. (BankTracker)

Imperial Savings and Loan Association of Martinsville VA had a troubled assets ratio of 142%. (BankTracker)

ShoreBank of Chicago IL had a troubled assets ratio of 300.5%. (BankTracker)

Pacific State Bank of Stockton CA had a troubled assets ratio of 149.4%. (BankTracker)

Butte Community Bank of Chico CA had a troubled assets ratio of 170.6%. (BankTracker)

Los Padres Bank of Solvang CA had a troubled assets ratio of 74.9%. (BankTracker)

Sonoma Valley Bank of Sonoma CA had a troubled assets ratio of 138.4%. (BankTracker)

Thursday, August 19, 2010

Thursday 08-19-10

Economic numbers point to darker outlook (Reuters)

More tough economic times forecast by CBO (Reuters)

Unemployment Claims Rise, Stocks Sink: Nearly half a million new unemployment claims reported; Dow drops 144. (ABCNews)

Jobs Outlook Isn't Just Bad, It May Be Getting Worse -- "'... particularly when you piece it together with all of the other data we're getting,' says Paul Ashworth, senior economist at Capital Economics in Toronto. 'This isn't just rising claims and nothing else is going on. We're seeing activity rates going down, we're seeing confidence weaken — a lot of not very encouraging signs.'" (CNBC) [Mark Zandi, chief economist for Moody's Analytics, said:] "This recent slowdown is making me nervous primarily because the economy coming into this is already very weak." (ABCNews)

Philadelphia Fed Factory Index Drops as Manufacturing-Led Recovery Weakens (Bloomberg)

Double-dip recession talk will be heating up (The New York Post)

U.S. ability to avoid deflation hinges on Fed: S&P (Reuters)

Here's Why The Fed's Uber-Dove James Bullard Thinks Deflation Is Threatening America (The Business Insider)

Bullard Favors More Treasury Purchases Should Inflation Fall (Bloomberg) (Reuters)

Deficit to top 1.3 trillion, 2nd worst in 65 years (McClatchy Newspapers)

Long-term debt: The real problem (CNN)

[Kyle Bass on Debt, Part 1:] Ahead of the Money: David Faber and the Strategy Session crew discuss today's top story and keep you ahead of the money. They're joined by hedge fund manager Kyle Bass, managing partner at Hayman Investments. (CNBC)

[Kyle Bass on Debt, Part 2:] Bass' Best Investment Ideas: Hedge fund manager Kyle Bass, managing partner at Hayman Investments, shares his market outlook and investment ideas with the Strategy Session crew. (CNBC)

Retail Spaces Lead Drop in U.S. Commercial Property -- "U.S. commercial real estate prices fell the most in almost a year in June as the economic recovery showed signs of faltering ..." (Bloomberg)

Homeowner Confidence Dips (The Mess That Greenspan Made blog)

Average mortgage rates hit low of 4.42 percent (The Associated Press)

Are Liar Loans Behind The Housing Crisis?: The short answer is liar loans played a major part in the housing crisis. Now the question is who is to blame and who has been held accountable? While many in Congress would like to blame homeowners our investigation reveals that homeowners were duped by brokers and lenders who cooked the books.Most shocking hear 2 experts reveal that those who set up millions of home buyers have gotten away with the crime .Investigative guy John Mattes even had one broker admit on camera his firm falsified documents.Yes he confessed to fraud.. (Youtube)

California state workers face furlough schedules starting Friday (The Sacramento Bee)

California close to issuing IOUs - again (CNN)

With projected revenues dropping by as much as $1 billion, Oregon leaders debate what to do (The Oregonian)

Connecticut may have just a week's worth of cash (Reuters)

Developed economies could get trapped in a limbo land of zero inflation (Financial Times blogs)

European Bond Spreads: Rising Again (Calculated Risk blog)

POLL - Euro zone debt problems to last at least another 12 months (Reuters)

Greek crisis refuses to go away: The European Commission has approved the next [Euro]9bn (£7.4bn) tranche of loans for Greece but the underlying economy continues to deteriorate as Greek banks suffer a record loss of deposits and output contracts at a quickening pace. (The Telegraph)

No Fear of Inflation in Germany as 30-Year Yield Drops Below 3% -- "'The risk of deflation is much more real than the risk of inflation,' said Christoph Kind, head of asset allocation at Frankfurt-Trust, which manages about $20 billion. 'The move in yields is a clear reflection that we are moving toward a deflationary environment. Nobody would be buying if there was a risk of inflation picking up.'" (Bloomberg)

Is it a recovery yet? (Weekly report, 08-19-10)


Back in August 2009, the British news agency Reuters carried the following statement:

"'I think that we're hoping for the numbers to stay below 600,000, and not until we get below 500,000 can we be more certain that there is an economic recovery,' said Linda Duessel, market strategist at Federated Investors in Pittsburgh." (Reuters)

Today is a milestone, marking the end of the recovery. As measured by jobless numbers under 500,000, it began Nov. 25, 2009 and ended Aug. 19, 2010.

IT IS NOT A RECOVERY! If the trend holds, we will have entered a double-dip "recession," as most are calling it.

"In a troubling sign for the economy, the number of first-time filers for unemployment insurance rose to 500,000 last week, according to a government report released Thursday.

"It was the third weekly increase in a row. There were 12,000 more claims filed last week over a revised 488,000 the previous week, the Labor Department said." (CNN)

"Jobless claims declined steadily last year from a peak of 651,000 in March 2009 as the economy recovered from the worst downturn since the 1930s. After flattening out earlier this year claims have begun to grow again." (The Associated Press)

"'The rise in initial jobless claims over the past three weeks makes it difficult to maintain confidence in the recovery and suggests the labor market is backtracking more than we first expected,' Ryan Sweet, an economist at Moody's Analytics, wrote in a note to clients." (The Associated Press)

"'This 500,000 level is very difficult, on both a psychological and semi-technical level,' said Tim Quinlan, an economist at Wells Fargo. Initial claims had been hovering in the mid- to upper-400,000s since November. 'You can sometimes dismiss a big number and say , "Oh, it's just one week," Quinlan added. 'But with the four-week moving average continuing higher, you can see this is just a bad trend.'" (CNN)

"'The labor market is weakening, which is making it more difficult to be sanguine about the job market and the recovery's staying power,' said Ryan Sweet, economist with Moody's Economy.com. 'Overall, this week's data on initial claims is troubling and it may put pressure on the Federal Reserve to put its contingency plan into motion,' he said." (Agence France-Presse)

"'Economic growth is going to slow in the second half and we might face something a little more ominous than that,' said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who accurately forecast the gain in the leading index. Recent economic data 'have shown marked deceleration in economic activity or even some pull-back.'" (Bloomberg)