Wednesday, June 30, 2010

Wednesday roundup (06-30-10)

Quote of the Day:

"By the way, a depression is not coming, we are clearly in one, a deflationary one at that. Once again, those chanting hyperinflation all missed the boat by light-years. Various safety nets like food stamps, unemployment insurance, and of course people no longer paying their mortgage and living in their houses for free all mask over the depression." -- Blogger Mike Shedlock (Mish's Global Economic Trend Analysis blog)

Relief as European Central Bank's [Euro]442bn support line for banks ends without panic (The Indepedent)

[But...] European Banks Aren’t ‘Out of the Woods Yet’ After ECB’s Tender -- "European banks are still dependent on life-support from the region’s central bank even after asking it for less money than analysts estimated. ... Juergen Lanzer who helps manage about $230 billion at Schroders Plc ... [says that] 'Some of the Spanish, Portuguese, Greek and Irish banks still have sizeable balance sheets that they would struggle to refinance without the ECB.'" (Bloomberg)

Spain’s Aaa on Downgrade Review at Moody’s as Note Sale Nears (Bloomberg)

[US] National debt soars to highest level since WWII (USAToday)U.S. debt to reach 62% of GDP by year-end: CBO: Debt would grow more rapidly if tax cuts extended (Marketwatch)

CBO's math on budget deficit presents daunting choices for US: The gloomy outlook for the federal budget deficit, outlined by the CBO director Wednesday, comes as politicians and economists are arguing over what the US economy needs most: another jolt of government stimulus or sharp spending cuts. (The Christian Science Monitor)

Fed Officials Offer Dim View Of US Economic Recovery (The Wall Street Journal) Fed’s Lockhart Says U.S. Recovery Not Yet Sustainable (Bloomberg)

Eight ways the Great Recession has changed Americans: Fifty-five percent of Americans in the labor force have experienced a job loss, a pay cut, or a reduction in hours since the onset of the Great Recession in 2007, a new survey finds. (The Christian Science Monitor)

Why The Greater Depression Still Lies Ahead: Obama, Bernanke pile on debt when de-leveraging is needed by Michael Pento (Forbes)

If There's A Bottom In Sight For Commercial Real Estate, We Can't See It (The Business Insider)

Detroit Schools budget deficit grows 66%: [state-appointed emergency financial manager Robert] Bobb to announce spending cuts; power struggle with board will be in court today (The Detroit News) "Despite cuts and restructuring, the city faces a deficit of at least $85 million, while Detroit's Public Schools will stare at a $363 million legacy deficit." (The Chicago Tribune)

California Cities Shutting Police Forces to Close Budget Gaps (Bloomberg)

Tuesday, June 29, 2010

Tuesday roundup (06-29-10)

Quotes of the Day:

"Basically, RBS’ European rates team, Andrew Roberts, Giles Gale and Harvinder Sian, are advising their clients to prepare for a ‘cliff edge’ in the global banking system. That entails, amongst other things, market turmoil caused by the end of US fiscal stimulus and eurozone banking problems. Plus some concern that the new 2a-7 rule will limit US money markets and shatter global liquidity. ... RBS’s advice is to 'think the unthinkable.' Move into 'safe haven' US, UK and German government bonds. Go long gold and get ready for ultra-low yields on Treasuries, courtesy of that 'monster.'" -- Tracy Alloway at FT Alphaville. (
FT Alphaville blog)

"The fact that the equity market ended up in the red yesterday [Monday], even fractionally, after spending most of the day in positive territory, is an ominous sign ahead of quarter-end. A head-and-shoulders pattern is becoming highly visible [see charts at The Big Picture blog] and should the S&P 500 break below the 1,050 mark, it is very likely going to slide towards 880 and probably very quickly.

"The bond market is telling a very important story here and it is one of a deflationary depression. We may not agree with Paul Krugman’s cure of solving a credit collapse by trying to create even more credit, but his diagnosis ["We are now, I fear, in the early stages of a third depression" (
The New York Times)] is spot on." -- David Rosenberg, chief economist & strategist, Gluskin Sheff (Scribd)

"The more the industrialized nations talk about reducing spending, the greater the risk that the global economy tilts back toward recession and deflation. At least, that’s how new bond buyers see it, said Tom Di Galoma, head of U.S. rates trading at Guggenheim Partners in New York." -- Journalist Tom Petruno (
The Los Angeles Times blogs)

Warning signals of a double-dip recession flash brightly across the world: Global bond markets are flashing warning signals of a sharp slowdown in growth across the world and a possible slide toward a double-dip recession and outright deflation. -- "The yield on two-year US Treasuries has fallen to a record low of 0.61pc in a flight to safety, a level not seen during the depths of the Great Depression. Ten-year yields dropped below the psychologically sensitive level of 2.96pc. Such levels are clearly incompatible with assumptions on Wall Street for 3pc growth in the second half of this year. 'If the bond market is correct then this recovery could be dead in the water,' said Jim Reid, credit strategist at Deutsche Bank. The credit markets tend to sniff out trouble first and have acted as an early warning alert at every stage of the financial crisis over the past three years." (
The Telegraph) Treasuries Have Entered “Autumn 2008” Mode -- "Does this mean we’re going straight into a full-scale Crash now? Not necessarily. But it does mean that the 'smart' money is extremely worried and getting defensive now for what’s to come. ... This is a BIG deal." (Phoenix Capital Research)

ECB seeks to calm markets as one-year drain looms: European Central Bank officials scrambled to reassure nervous markets on Tuesday that the expiry of nearly half a trillion euros of emergency loans would not hurt the banking system, though they acknowledged some individual banks might face strain. (
Reuters) "The looming due date for repayment of the European Central Bank's 442 billion euro ($543 billion) in one-year loans to banks is stoking renewed fears over liquidity in the 16-nation euro zone. ... 'Though commodities are proving resilient, the scale of the rallies in bonds and Swiss franc and Japanese yen in currencies is worrying and suggests participants could be preparing for a proper rout in risk assets as EU banks scramble for funds and worries mount over the U.S. economy,' said Kenneth Broux, market economist at Lloyds TSB." (Marketwatch) Here's Why The European Banking Bloodbath Could Get Way, Way Worse (The Business Insider) Agua caliente at the ECB (FT Alphaville blog)

European Union triples number of banks for stress tests (
The Australian) EU Stress Tests Add More Banks, Sovereign Risks (The Wall Street Journal)

Europe's Recovery Falters (The Wall Street Journal)

Roubini says Greece needs orderly debt restructuring to avoid 'inevitable default' -- "'It is time to recognised that Greece is not just suffering from a liquidity crisis; it is facing an insolvency crisis too,' he writes in the Financial Times." (The Telegraph) The column reprinted from (The Globe and Mail of Toronto)

Japan’s Bond Yields Drop to Seven-Year Low on Slowdown Concern (Bloomberg)

[US] Consumer confidence craters in June -- "'Today's report on confidence provides little reason to expect a meaningful pickup in consumer spending in the near term,' said Jim Baird, partner and chief strategist at Plante Moran Financial Advisors. 'Consumers are still exceedingly nervous about the jobs market.'" (CNN) "'What we need are consistent job gains, not just a month or two,' said Richard DeKaser, chief economist at Woodley Park Research in Washington, whose confidence forecast was the lowest of those surveyed. 'Until we get that, I don’t think we’re going to see any gains in consumer confidence.'" (Bloomberg)

Enough debt, already -- "The world's leading economies had a message for President Obama over the weekend: Enough, already." (The Chicago Tribune) Big Call From Jeff Gundlach: "The US will 'Politely Default' on its Debt" -- In addition: "'The logic for runaway inflation doesn't lead us to a good explanation of current conditions,' [DoubleLine’s Jeff] Gundlach said. Examining the examples of hyperinflation in Zimbabwe and in the Weimar Republic, he said none of the factors that characterized those situations are features of today’s economy: excessive printing of money, high interest rates, rising equity and commodity prices, and, most notably, relentlessly escalating consumer prices." (ZeroHedge blog)

BP has options before bankruptcy, lawyers say: But oil giant may file to avoid 'perpetual' liability, bankers and lawyers warn (Marketwatch)

Derivative Monster: Alive and Kicking Despite Reforms by Martin D. Weiss, Ph.D. (Money and Markets)

Fannie-Freddie Bailout Could Cost Taxpayers $1 Trillion (CNBC)

Treasury lacks staff to monitor [how big companies use] bailout funds: report (Reuters)

Time to shut down the US Federal Reserve? blog post by journalist Ambrose Evans-Pritchard about criticism of economics bloggers (The Telegraph)

Monday, June 28, 2010

Monday roundup (06-28-10)

BIS Says It’s Time to Consider an End to Measures [to Stimulate Economic Growth] (Bloomberg) BIS Warns Central Banks Against Keeping Rates Low for Too Long (The Wall Street Journal blogs)

Britain 'might not cope with another bank emergency' -- "Britain's mountain of debt could leave the country powerless to launch another rescue bid in the wake of a fresh financial crisis, the world's central bankers warned yesterday [Monday]." (The Independent)

Chicago Fed: Best Days Behind Us? -- "here’s the Chicago Fed letting us know that we may well have seen the best of what this 'recovery' had to offer." (The Big Picture blog)

Recession Warning by John P. Hussman, Ph.D. -- "Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn. ... my concerns about the economy and financial markets are escalating quickly." (Hussman Funds)

Is It Different This Time? -- "The evidence is accumulating that the U.S. economy is heading into a double dip, if it isn’t there already. Sure, the various red flags could be wrong; it could be different this time. But the weight of probability is definitely on the downside." (The Wall Street Journal blogs)

Is a Double-Dip Recession Ahead for the U.S.? (Daily Finance)

Top US lawmaker: 'Debt is a national security threat' (Agence France-Presse)

New York Fed Probes Wall Street Exposure to BP Say Sources -- " ensure that if the oil giant buckles under the costs of the Gulf oil spill, it won't put Wall Street or the global financial system at risk, according to two sources familiar with the matter." (Reuters)

Barack Obama and David Cameron agree BP must not collapse: BP must not be allowed to implode in the wake of the Gulf of Mexico oil spill disaster, Barack Obama and David Cameron have declared, as the company starts the week with its shares at a 14-year low. (The Telegraph)

Savings rate inches higher in May: Consumer spending rises, but incomes rise faster -- "'Until people become more comfortable with their financial situations, they will continue to spend cautiously,' wrote Joel Naroff of Naroff Economic Advisers. 'The recovery is proceeding at a modest pace.'" (Marketwatch)

Mortgage crisis could damp consumer consumption for years to come: Borrowers who defaulted could have low credit scores for years, crimping their spending. And changes in scoring and how it's applied could dramatically affect all Americans' ability to borrow. (The Los Angeles Times)

Fitch: Florida Real Estate vs BP (Infectious Greed blog)

Sunday, June 27, 2010

Sunday roundup (06-27-10)

World leaders walk economic tightrope in Canada -- "'Serious challenges remain,' they cautioned in a closing statement. 'While growth is returning, the recovery is uneven and fragile, unemployment in many countries remains at unacceptable levels, and the social impact of the crisis is still widely felt,' according to the document from the Group of 20 major industrial and developing nations." (The Associated Press) "'There's a recognition that we could slide back into recession and no one wants to slide back into recession so we're trying to get the right resolution, the right balance here,' [Canadian Finance Minister Jim] Flaherty told CTV television in an interview aired on Sunday but taped on Saturday." (Reuters) "'Here's the tightrope that we must walk,' Canadian Prime Minister Stephen Harper said at the start of meeting. 'To sustain recovery it is imperative that we follow through on existing stimulus plans ... but at the same time advanced countries must send a clear message that as our stimulus plans expire, we will focus on getting our fiscal houses in order.'" (Reuters) "The world's leaders agreed Sunday to begin transitioning from spending to saving ... Some budget experts interpreted the G-20 deal as a defeat for the Obama administration's approach, which still emphasizes targeted government spending to reduce unemployment and help struggling states and localities. Congress has blocked additional stimulus spending thus far. 'It is a pretty strong repudiation,' said Douglas Holtz-Eakin, former director of the Congressional Budget Office and a top adviser to Republican Sen. John McCain's presidential campaign in 2008. He said Obama 'is operating as if the past six months did not happen. The financial market fallout on the European sovereigns is real, and they have to respond.'" (USAToday) "Europe has no more room to spend through increased budget deficits, European Commission President Jose Manuel Barroso said on Thursday, stressing fiscal consolidation was necessary to rebuild confidence for growth." (Reuters)

Central Bankers Urge Europe to Sort out Debt Crisis -- "Former ECB policymaker Tommasso Padoa-Schioppa told the meeting the root of the financial crisis lay with governments, which had believed too strongly in the self-regulating power of the markets and focused too much on their domestic economies, rather than taking a global view. 'The crisis is still with us and, like the HIV virus, it shows a pertinacious capacity to renew its destructive potential through continuous mutation,' he said." (Reuters)

Banks told to hoard cash in case of crisis: G20 hammers out deal to avoid future bail-outs (The Daily Mail) [Financial Stability Board chief Mario] Draghi Says World's Banks Need 'Significantly Higher' Capital (Bloomberg)

RBS tells clients to prepare for "monster" money printing by the Federal Reserve: As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve. -- "'Sufficient injections of money will ultimately always reverse a deflation,' said Bernanke. The question is whether he can muster support for such action in the face of massive popular disgust, a Republican Fronde in Congress, and resistance from the liquidationsists at the Kansas, Philadelphia, and Richmond Feds. If he cannot, we are in grave trouble." (The Telegraph)

As 1.3 Million Americans Are About To Lose Their Jobless Benefits This Week, The Unemployment Rate Will Surge To 10.5% (ZeroHedge blog)

States of Crisis for 46 Governments Facing Greek-Style Deficits -- "Forty-six [US] states face budget shortfalls that add up to $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities, a Washington research institution." (Bloomberg)

The US housing horror story is about to get even worse (Money Week)

States Weigh Big Claims Against BP (The Wall Street Journal)

Zoning toward a greener Baltimore (Baltimore Sun blogs)

Lost Generation (Youtube)

Saturday, June 26, 2010

Saturday roundup (06-26-10)

Spain's Debt Maturity Wave Hits Next Month And It's Already Obvious They Don't Have Enough Cash (The Business Insider)

IMF report advises G20 to make spending cuts top priority: Sacrifices would be great, but rewards would be enormous, with millions of new jobs, widespread reduction in poverty, and stronger global growth, paper says (The Globe and Mail of Toronto)

Geithner Stresses Need to Balance Austerity With Growth (Reuters)

G20 split over recovery plan (Agence France-Presse) (The Associated Press)

For Germany, U.K. and U.S., Deficit Cuts Now May Sink Economy (Daily Finance)

G20 summit has major implications for the UK's economic recovery: David Cameron will be waiting to see if growing policy rifts within the G20 are likely to hamper the UK's efforts to haul itself out of recession. (The Telegraph)

Greek-Style Deficits in America? (The Big Picture blog)

Unofficial Problem Bank List [in US] increases to 797 Institutions (The Calculated Risk blog)

Stop the Next Crisis? This wouldn’t have stopped the last one . . . (The Big Picture blog)

Dutch Postal Company TNT To Cut Thousands Of Jobs At Mail Unit -- "'We will lay off all employees that sort and deliver the mail that work more than 25 hours a week, while all mail collectors that work more than 15 hours a week will also lose their jobs, all together, the total number will run into thousands of employees,' TNT spokesman Ernst Moeksis said to Dow Jones Newswires" (The Wall Street Journal)

Friday, June 25, 2010

Friday roundup (06-26-10)

Quote of the Day:

''Today in the market the notional value of over-the-counter derivatives is approximately 12 times that of world GDP. The same as before the collapse of bank pyramiding in the fall of 2008! This finance mass grew, and is growing, out of all proportion, oriented toward its own ends, and interacting with the real economy in the immanent and permanent form characteristic of systemic risk.'' -- Italian Economic Minister Giulio Tremonti speaking on June 22 to the Guardia di Finanza in Rome. (ASCA in Italian)

"... I strongly believe that escalating global economic imbalances have dramatically increased the vulnerability of the global recovery. The chances of a growth relapse in the second half of the year are higher than the equity market, and to a lesser extent the credit market, have priced in. ... People have to understand that 80% or higher debt-to-GDP ratio is a new dynamic and a game changer in Europe and in the United States. ... all of us have to stop thinking that all recoveries are the same and all selloffs are buying opportunities because of what happened in the past. If my reading is accurate, this next wave of debt restructuring will be extremely painful." -- David A. Rosenberg, chief economist and strategist at Gluskin Sheff, writing in today's Breakfast with Dave (Scribd)

Unemployment benefits extension nixed for nearly 1 million (CNN) Nancy Pelosi: Without Jobs Bill 'We Could Slip Back And Have Another Recession' (The Huffington Post blog)

Joint Chiefs chairman reiterates security threat of high debt (The Hill)

The Scariest Financial Chart of the United States Bar None (Housing

History Tells US The Euro Will Not Survive, Greece Will Get Worse, And There Will Be A Trade Shock (The Business Insider)

Europe's Strikers Make G-20 Protesters Look Like Sissies (Forbes blogs)

France may need new cuts to tackle deficit - [Prime Minister] Fillon (Reuters)

Budget cuts paramount, Britain’s Osborne says: Chancellor of Exchequer believes spiralling debt greater threat than another recession (The Globe and Mail of Toronto)

Cameron's Austerity Sets Benchmark for G-20 Summit (Bloomberg)

Crash-test dummies: The tortuous process of “stress testing” Europe’s wobbly banks -- "... European banks rely heavily on wholesale borrowing that needs to be refinanced now. Europe will have to bite the bullet soon." (The Economist)

The next Icelandic banking crisis (Reuters blogs)

Regulators close three [US] banks, total [for the year] now 86 (Reuters)

Peninsula Bank of Englewood FL had a troubled assets ratio of 858.8%. (BankTracker)

First National Bank of Savannah GA had a troubled assets ratio of 462%. (BankTracker)

High Desert State Bank of Alburquerque NM had a troubled assets ratio of 510.6%. (BankTracker)

Thursday, June 24, 2010

Thursday roundup (06-24-10)

Quotes of the Day:

"The clowns pulling the levers of fiscal and monetary policy will take us back into recession. But this time outright deflation beckons and we will all be turning Japanese." Société Générale's Global Strategy Team head Albert Edwards in the report "We are now walking on the deflationary quicksand". (Scribd) Albert Edwards Goes All Out: Sees New Recession By End Of Year, Market Collapsing "Like Pack Of Cards" (ZeroHedge blog)

"The US recovery is in imminent danger of stalling. Growth could be negative again as soon as the fourth quarter. There is no easy way out since fiscal stimulus has already been pushed as far as it can credibly go without endangering US credit-worthiness." -- Stephen Lewis, from Monument Securities. (The Telegraph)

Sovereign Debt Crisis Has Increased Stability Risks, BOE Says -- "'The speed with which Greece’s problems were transmitted to other countries and markets highlighted persistent fault lines in the global financial system,' the central bank said in its Financial Stability Report today in London. 'U.K. banks face a number of challenges and need to maintain resilience in a difficult environment.'" (Bloomberg) BOE: U.K. Banks Face Refinancing Hurdle (The Wall Street Journal)

[UK] Families on the brink of 'insolvency crisis' after decade-long credit card binge -- "Steven Law, president of [the insolvency practitioners group] R3, said: 'We stand on the brink of a personal insolvency crisis that will take years to work through the system. We know there are nearly a million people out there who are struggling with their debt. While it may be the case that these problems are resolved without help, there is a risk that they might snowball out of control.'" (The Daily Mail)

Greek CDS Wider, Bonds Down On Index, Economic Fears (The Wall Street Journal) "'The prospects for slower growth in Europe, and the consequence of austerity measures, have left the investor community unconvinced about whether Greece and other olive-belt nations will be able to avoid the risk of an eventual debt restructuring,' said analyst at Action Economics." (Marketwatch)

Baltic Dry Index (The Big Picture blog) (The Wall Street Journal blogs) [Oct. 24, 2003:] "The BDI is a good leading indicator for economic growth and production. After all, it doesn't deal with container ships carrying finished goods. It deals with the precursors to production: bulk carriers carrying building materials, cement, grain, coal, and iron. Unlike stock and bond markets, the BDI 'is totally devoid of speculative content,' says Howard Simons, an economist and columnist at People don't book freighters unless they have cargo to move." (The Slate)

Goldman: Sorry, Housing Prices Will Keep Falling For Two Years (The Business Insider)

Deutsche Bank: U.S. Financial Conditions Just Collapsed Back To Crisis Levels (The Business Insider)

Double-Dip Recession Fears Putting Scare Back in Market -- "'The pattern of the market seems to be variations of, "I've fallen and I can't get up,"' says Walter Zimmerman, senior technical analyst at United-ICAP in New York. 'The market's taken a big hit. We're not optimistic. We think we'll be fortunate if the double-dip is the worst that lies ahead.'" (CNBC) "'The Fed downgraded their economic outlook [on Wednesday], which is not good for the markets,' said David Chalupnik, head of equities at First American Funds. 'It tells us that the economy is losing steam and earnings are at risk.'" (CNN)

The Media Campaign Begins: BP Is Now Too Big To Fail -- "... BP is the new AIG ..." (ZeroHedge blog)

Is it a recovery yet? (Weekly report, 06-24-10)

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.)

"First-time applications for state unemployment benefits fell by 19,000 last week to a seasonally adjusted 457,000, the lowest in six weeks, the Labor Department reported Thursday, confirming that U.S. labor markets remain weak.

"The previous week's initial claims were revised higher by 4,000 to 476,000 as more complete data were collected." (Marketwatch)

"'We at least went in the right direction this time, but it certainly doesn't indicate an overall improving trend,' said Robert Dye, senior economist at PNC Financial Services. 'The broader pattern is a sideways movement and an overall lack of improvement.'" (CNN)

Wednesday, June 23, 2010

Wednesday roundup (06-23-10)

New-home sales plummet nearly 33% in May from April: Commerce Department says new homes sold at a seasonally adjusted annual rate of 300,000 units in May, a record low and an 18.3% drop from a year earlier. Sales in the West were down by more than half. -- "'No two ways about it, these figures were just awful, when you look at the magnitude of the decline,' said Michael D. Larson, a housing and interest rate analyst for Weiss Research." (The Los Angeles Times) "'We fear that the appetite to buy a home has disappeared alongside the tax credit,' Paul Dales, U.S. economist with Capital Economics,' wrote in a note. 'After all, unemployment remains high, job security is low and credit conditions are tight.'" (The Associated Press) "'If there is a sharp decline not only in housing sales but in housing prices, that could threaten a recovery,' said Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School in Philadelphia." (Bloomberg)

A Blistering Ride Through Hell. Key Property Charts to Make Sense of This Week’s Housing Numbers and This Year’s Financial Crisis. (

New Home Starts - Welcome To The Double Dip (CF Economics blog)

Less Than One Percent Of Modified Mortgages In Obama Foreclosure Plan Involve Principal Cuts -- "The low number reported by the federal bank regulators -- less than 0.1 percent -- calls into question the administration's entire approach to modifying the mortgages of distressed borrowers suffering from negative equity, a stagnating economy, and near-10 percent unemployment." (The Huffington Post blogs)

States Face New Pinch as Stimulus Ebbs: Tax Receipts Aren't Rebounding Quickly Enough to Offset Declining Federal Aid; Push for Additional Medicaid Help Stalls (The Wall Street Journal)

80 Percent of Americans Think We're Still in Recession (The Atlantic)

Recipe for a Lost Decade, or Two (Northern Trust)

Congress Defends the Big Guys -- "If lawmakers are unwilling to enact fundamental investor protections, there is little hope that they will act boldly on far-reaching structural reforms, like curbing banks’ risky involvement in derivatives dealmaking and establishing a strong new regulator for consumer financial protection." (Editorial in The New York Times)

Flight to safety? Follow the US Treasuries -- "According to William O’Donnell of RBS this 'superb auction' shows investors are still worried about weak growth and deflation..." (FT Alphaville blog)

Gulf spill plays havoc with real estate: Phone calls from retirees have dried up, and fears mount over foreclosures by people thrown out of work (The Globe and Mail of Toronto)

[Dow Theory expert Richard] Russell: This is one of the largest tops in stock market history (Pragmatic Capitalism)

Europe spurns Obama's plea for more spending -- "'Obama has been having difficulties selling that story domestically,' said Stewart M. Patrick, a senior fellow at the Council on Foreign Relations in Washington. 'Europe is very inward looking right now, and there are some large differences in how they see this issue.'" (Fortune)

[UK] Budget brings longest, deepest cuts since second world war, IFS says: Institute for Fiscal Studies director Robert Chote questions George Osborne's claim that budget was 'progressive' (The Guardian) (The Telegraph)

European Central Bank faces threat to euro and unity (The Washington Post)

Soros tells Germany to step up to its responsibilities, or leave EMU: Legendary investor George Soros has called on Germany to leave the euro unless it willing to embrace a growth strategy, describing Berlin’s austerity doctrine as a threat to democracy and political stability in Europe. -- "'German policy is becoming a danger that could destroy the European Project. A collapse of the euro cannot be excluded,' he told the German weekly Die Zeit." (The Telegraph) "'Right now the Germans are dragging their neighbors into deflation, which threatens a long phase of stagnation. And that leads to nationalism, social unrest and xenophobia. Democracy itself could be at risk,' he said." (Reuters)

Cost of Insuring Greek Debt Jumps (The Wall Street Journal blogs)

Belarus threatens to cut off Europe's gas: Belarus warned it would cut off gas supplies to Europe on Thursday unless Moscow handed over £175 million in transit fees. (The Telegraph) "In Minsk, deputy prime minister Vladimir Semashko said ... if this was not done by 10am local time (8am UK time) then 'we will be forced to shut down hydrocarbon transit through Belarussian territory'." (SkyNews)

Tuesday, June 22, 2010

Tuesday roundup (06-22-10)

Europe's tough measures expose trans-Atlantic rift -- "Obama 'has a point, but there are some countries that don't have a luxury of a choice, they have got to get a grip and start cutting quickly because the alternative of becoming the next Greece is not palatable to them,' said Jonathan Loynes, chief European economist at Capital Economics in London." (The Associated Press) (FT Alphaville blog)

Budget 2010: Fears tough budget could plunge UK back into recession: Private sector could be unable to create the jobs badly needed to make up for public sector cuts, TUC warns (The Guardian)

Britain unveils painful budget: The plan calls for increases in sales and capital gains taxes and cuts in welfare benefits. George Osborne, chancellor of the exchequer, says the tough measures are unavoidable. (The Los Angeles Times)

UK budget 2010: New era of austerity in Europe?: Britain today unveiled budget cuts to raise £40 billion in state revenues through tax increases, welfare cuts, and salary freezes. But history suggests that raising taxes during a recession can cause a double-dip. (The Christian Science Monitor)

Spain Must Cut Budget Deficit To Keep Aaa Rating - Moody's (The Wall Street Journal)

New Treasury Bond Contract Bets on Deflation, Not Inflation (CNBC)

US existing home sales falls despite tax credit -- "Bottom line: The residential property market in the US is now in high season. If the housing market were improving, we would not have this kind of weak data." (Credit Writedowns blog)

The 13 Week ECRI WLI Says Recession is on the Horizon -- "The following note comes to us courtesy of Chad Starliper, the CIO at Rather & Kittrell: 'The 13-week annualized rate of the WLI is now at -23.46%, something that usually only happens in, or prior to, recessions. This is very ominous economic momentum.[']" (Pragmatic Capitalism)

Stat of the day: Illinois takes over from California as state most likely to default (Credit Writedowns blog)

Harrisburg, Pa., other cities overwhelmed by economic downturn and debt (The Washington Post)

Maywood [CA] to lay off all city employees, dismantle Police Department (The Los Angeles Times blogs)

What Would Fiscal Austerity Look Like In The U.S.? (CNN)

After BP oil spill, 'peak' oil seems nearer than ever: Without alternative supplies of energy to offset it, a decline in oil production would send shock waves through the world, rattling economies and politics alike. (The Christian Science Monitor)

BP's Bankruptcy Would Impair 117 (18% Of Total) Collateralized Synthetic Obligations, Lead To Pervasive Losses (ZeroHedge blog)

Jim's Mailbox -- "[Trader Jim Sinclair:] A bankrupt BP is worse for the financial world than Lehman Brothers was for exactly the same reason. ... [CIGA Pedro:] People are seriously underestimating how much liquidity in the global financial world is dependent on a solvent BP. BP extends credit – through trading and finance. They extend the amounts, quality and duration of credit a bank could only dream of. ... God only knows how many assets around the planet are dependent on credit and finance extended from BP. It is likely to dwarf any banking entity in multiples. ... As we are beginning to see, the Western pension structure, financial trading and global credit are all inter-twined. BP is central to this, as a massive supplier of what many believe(d) to be AAA credit. ... The price tag and resultant knock-on effects of a BP failure could easily be equal to that of a Lehman, if not more. It is surely, at the very least, Enron x10." (Jim Sinclair's MineSet)

Monday, June 21, 2010

Monday roundup (06-21-10)

Quote of the Day:

"... at the end of the day, essentially nothing in the entire [financial reform] legislation will reduce the potential for massive system risk as we head into the next credit cycle. ... The financial crisis of fall 2008 revealed serious dangers have developed in the heart of the world’s financial system. ... Welcome to the next global credit cycle – with too big to fail banks at center stage." -- Simon Johnson, former chief economist of the International Monetary Fund and professor at the MIT Sloan School of Management. (Baseline Scenario)

Borrowers exit troubled Obama mortgage program -- "The Obama administration's flagship effort to help people in danger of losing their homes is falling flat." (The Associated Press)

Housing Double-Dip to Slow Economic Recovery: Banking analyst Meredith Whitney says the housing market is headed for a double-dip and banks will struggle. (CNBC)

Remember How We Saved The Banks So They Would Keep Lending To The "Real Economy"? (The Business Insider)

In Budget Crisis, States Take Aim at Pension Costs (The New York Times)

Deflation fears mount [globally] as debt crisis curbs growth (The Financial Times)

And now, for a new worry: deflation (The Dallas Morning News)

Impact of BP oil spill felt far from Gulf as Europe, Asia rethink drilling safety measures (The Los Angeles Times)

UK says to slash deficit now despite U.S. warning (Reuters)

Ex-BOE Panelist Blanchflower Says [Proposed UK] Budget 'Certain' to Lead to Double Dip (Bloomberg)

Freight fright *alert* (FT Alphaville blog)

Sunday, June 20, 2010

Sunday roundup (06-20-10)

China's Announced Yuan Hike Could Send U.S. Treasury Yields Soaring This Monday (The Business Insider) "Timothy Geithner and his team at the U.S. Treasury should keep on ice the champagne they’re tempted to open. Now it’s time to start getting their own imbalances in order. The debt explosion of the past two years isn’t just unsustainable, it’s a growing threat to global stability. ... The crisis of the past two years didn’t come from the periphery of the global economy, but its core. It’s the irresponsible policies of the U.S., the euro zone, Japan and the U.K. that are imperiling markets, not those of China, India or Brazil." (Bloomberg)

Gold reclaims its currency status as the global system unravels: We already know that the eurozone money markets seized up violently in early May as incipient bank runs spread from Greece to Portugal and Spain, threatening the first big sovereign default of our era. Jean-ClaudeTrichet, the president of the European Central Bank (ECB), talked days later of "the most difficult situation since the Second World War, and perhaps the First". -- "Albert Edwards from Societe Generale says the Atlantic region is one accident away from outright deflation - that 9th Circle of Hell, 'abandon all hope, ye who enter'. Such an accident may be coming. The ECRI leading indicator for the US economy has fallen at the most precipitous rate for half a century, dropping to a 45-week low. The latest reading is -5.70, the level it reached in late-2007 just as Wall Street began to roll over and then crash. Neither the Fed nor the US Treasury were then aware that the US economy was already in recession. The official growth models were wildly wrong." (The Telegraph)

IMF bailout: Lessons that Africa can teach Europe -- "In a recent Newsweek article, writer Niall Ferguson admits that ...'even if everything were to go according to plan, the debt would peak at 150 per cent of GDP, with a crippling 7.5 per cent of GDP going to interest payments.' The Greek crisis, he predicts, will then spread like a virus throughout the European economy. ... If Europe can learn one lesson from Africa, it is this: be wary of lending institutions based in Washington and don’t sign a loan before reading the small print." (The Daily Nation, Kenya's leading daily)

The Credit Crunch That Won't Go Away: Forget the improving economy. Entrepreneurs still find it hard to get loans. Here's why we're in this mess — and how we may get out of it. (The Wall Street Journal)

On Fannie and Freddie REO Inventory (Calculated Risk blog)

Now we're reaching "peak water" -- [International water expert Peter Gleick:] "If we do not figure out how to produce food from renewable and sustainable water resources, the food supply of hundreds of millions of people, or even more, may be at risk." (Stock & Land, Australia)

Saturday, June 19, 2010

Saturday roundup (06-19-10)

Merkel signals G20 clash with Obama on finance -- "German Chancellor Angela Merkel said on Saturday spending cutbacks are needed following the spate of throwing money at the global economic crisis, in a direct counter to US President Barack Obama." (Agence France-Presse) Europe to urge exit from stimulus schemes at G20: Merkel (Reuters)

France selling properties for debt reduction: Among the 1,700 state properties deemed unadapted to government purposes are a royal hunting lodge and a Lake Geneva chateau. Anyone can bid, as long as their money is good (read: legally obtained). (The Associated Press)

Irish banks must scale a high debt mountain as eurozone crisis deepens: A staggering [Euro]77bn of Irish bank debt falls due this year. It is called the 'wall of worry' by outside commentators. Can the Irish banks manage to climb it? (The Irish Independent)

[UK] Banks fearful of death by a thousand cuts: As the world's leaders plan new regulations for the financial sector, there are worries that the fragile economic recovery will be put at risk. (The Telegraph)

High speed rail network [in UK] up for sale as part of austerity drive: Plans to reduce the fiscal deficit have renewed fears over foreign ownership of UK assets (The Observer)

Election-year deficit fears stall Obama stimulus plan -- "If Congress doesn't provide additional stimulus spending, economists inside and outside the administration warn that the nation risks a prolonged period of high unemployment or, more frightening, a descent back into recession. But a competing threat -- the exploding federal budget deficit -- seems to be resonating more powerfully in Congress and among voters." (The Washington Post)

Summers cautious about recovery -- "From the Boston Globe: Summers cites recovery, risks[:] [']The US economy has probably begun a lasting recovery, but the outlook has become more uncertain in recent weeks ... said Lawrence Summers, President Obama’s top economic adviser.[']" (Calculated Risk blog)

California tax collections fall almost $5B (Sacramento Business Journal)

California unemployment report fosters doubts on recovery: The addition of 28,300 jobs in May mostly represents temporary census positions, adding to fears that a return to normal will take longer than expected. -- "'It's all census, even more so than last month,' said Jeff Michael, director of the Business Forecasting Center at the University of the Pacific in Stockton. 'The private sector is completely flat.'" (The Los Angeles Times)

California on 'verge of system failure’: Golden State, like many others, is nearly bankrupt and desperately needs a bailout (The Globe and Mail of Toronto)

[M3 Money Supply (blue line) Now At -6% = Deflation] (ShadowStats)

Chart of U.S. Money Supply Growth

Robert Prechter of Elliott Wave International: "In the great inflations of history – such as what occurred in Germany in the 1920s and Zimbabwe in the 2000s – several things happened. The money supply zoomed. Interest rates soared to double and triple digits. Commodity and stock prices went up. Consumer prices rose relentlessly. And people raced to get rid of money as fast as they got hold of it. Today, not one of these events is happening. In fact, the opposite is happening. M3 (a measure of the amount of money and credit in the system) is contracting at its fastest pace since the 1930s. Interest rates on Treasury bills are stuck at zero. The CRB index of commodities is at half its value of just two years ago. The stock market is lower than it was 10 years ago. The PPI and CPI (measures of producer and consumer prices) have a zero rate of change." (Before It's News)

Friday, June 18, 2010

Friday roundup (06-18-10)

Will Spain face a debt crisis? (Time blogs)

No Good Answers From Euro Stress Tests (The Wall Street Journal)

Obama urges G-20 Nations to continue stimulus; Cautions about a Double-dip (Calculated Risk blog)

Greenspan Says U.S. May Soon Reach Borrowing Limit (Bloomberg)

Deflation—Not Inflation—May Be Bigger Threat to Economy (CNBC)

ECRI Weekly Leading Index falls further into negative territory [to -5.7%] -- "Remember, analysts like David Rosenberg are still looking for a –10% reading as a definitive double dip reading. If we do get there and stay there for a couple of weeks, I suspect a double dip is going to happen late this year or early in 2011." (Credit Writedowns blog)

Feds charge 1,200 people in mortgage fraud crackdown: In a nationwide effort, officials file criminal charges against individuals allegedly responsible for $2.3 billion in fraud. 'These schemes are despicable; they are dangerous to our economy,' Atty. Gen. Eric Holder says. (The Los Angeles Times)

Could We Have Prevented Widespread Mortgage Fraud? (The Atlantic)

More families are homeless and on the streets (CNN)

Inside the Dire Financial State of the States (Time)

Regulators close Nev. bank for 83rd failure in '10 (The Associated Press) Nevada Security Bank of Reno NV had a troubled assets ratio of 349.9%. (BankTracker)

The calm [in the markets] -- "It's difficult to see what news might kick off a big upward surge, but it's easy to identify things that could send things down. As a result, few people will be making big bets on a surge while lots of people will be playing it cautious. Absent a real change in the economic picture, the market is set up bearish." (The Economist blogs)

Elliot Wave predicts triple-digit Dow in 2016: If you think things are bad now... (Marketwatch)

Thursday, June 17, 2010

Thursday roundup (06-17-10)

ECB must buy 'hundred of billions' of bonds to tame Europe's debt crisis: Fitch Ratings has warned that it may take massive asset purchases by the European Central Bank to prevent Europe's sovereign debt crisis escalating out of control. -- [Indeed, Andrew Balls, head of PIMCO's team in Europe, says:] "The European sovereign problem has started to contaminate the European banking sector and the global economy." (The Telegraph)

Europe's Banks Face a Funding Squeeze: Sovereign debt fears have made it hard for them to sell bonds or borrow from each other -- "Banks' difficulties in raising money will curb their ability to extend loans to companies and consumers, which could threaten the region's recovery, says Morgan Stanley (MS) analyst Huw van Steenis. 'Many euro zone countries are dependent on bank lending; thus this is a major issue,' he says." (

Bank debt set to force Madrid into bailout -- "SPAIN IS facing a massive bank debt crisis. Economists suggest it is virtually inevitable it will have to go looking for money from the EU’s brand new euro-zone bailout mechanism. ... Spanish banks are borrowing from the European Central Bank at record levels as they struggle to get funding from the capital market." (
The Irish Times)

Spain: the new crisis in Euroland -- "A senior Spanish banker, Francisco Gonzalez, chairman of the BBVA financial services group, confirmed that foreign private banks were now refusing to provide liquidity to their Spanish counterparts. 'Financial markets have withdrawn their confidence in our country,' he said. 'For most Spanish companies and entities, international capital markets are closed.' As a result, the European Central Bank is said to have provided record amounts of liquidity to Spanish banks in recent days. The closure of bank-to-bank credit to Spanish institutions recalls to some market commentators the ripple of crisis through the global financial system after the fall of Lehman Brothers in the Autumn of 2008." (The Independent)

Spain In The Vortex Of The EuroZone Debt Hurricane -- "'A default in Spain – which is a much larger economy than Greece – would be disastrous not only for Europe but for much of the world, because it would ignite a wave of deflation across the globe,' said James Cox, managing director of Harris Financial Group in Colonial Heights, Va. 'The deflationary pressures would be transmitted through their banking system, which has exposure to all parts of the globe.'" (The International Business Times)

Spain May Force Europe’s Hand on Bank Stress Tests -- "The Bank of Spain’s decision to publish the results of stress tests on the nation’s lenders may prompt European neighbors to follow suit as investors demand more disclosure of the risks on banks’ books." (Bloomberg)

[And indeed:] E.U. Agrees to Publish Results of Stress Tests on Biggest Banks [before the end of July] -- "'Making stress tests public is counterproductive and could in certain cases lead to misperceptions in markets,' Karl-Heinz Boos, director of the Association of German Public Sector Banks, said in a statement." (The New York Times) [Boos is not on the same page as Germany's leader, however:] "'What’s important right now is that we have maximum transparency,' German Chancellor Angela Merkel said in a separate briefing. 'If you have something to hide, it would come out into the open in the long run anyway.'" (Bloomberg) [Yet even the Spanish, who helped push Europe toward such disclosure, emphasize the risks:] "A [Spanish] government source told newspaper El Pais [a few days ago] that Spanish banks performed well in the tests of their ability to withstand liquidity problems. 'If the results of the tests were known there would be more than one surprise,' one said." (The London Evening Standard)

IMF joins push for Europe bank "stress test" details (Reuters)

Italian economists slam austerity measures: A group of 100 Italian economists has written an open letter warning that the EU austerity policies being imposed on Southern Europe may tip the region into a downward spiral, risking the disintegration of the monetary union. (The Telegraph)

Japan Companies Join U.S. in Hoarding Cash on Europe (Bloomberg)

Who is weak and who is strong? (Scotia Capital)

New jobless claims up sharply as layoffs persist (The Associated Press) The number of people filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed. (The Associated Press)

U.S. Prices Post Biggest Drop in 17 Months (The Mess That Greenspan Made blog) Consumer price index 'inflation report' shows deflation. No Fed rate hike until 2012?: The consumer price index normally tracking inflation now shows deflation. To some forecasters, this signals recession, meaning that central banks will be keeping interest rates low. -- "Disinflationary and deflationary pressures among the major industrialized countries are gaining momentum," says Brian Bethune, an economist at IHS Global Insight, in a report Thursday. (The Christian Science Monitor)

Fed Ponders What To Do If Recovery Fails; Risks to Growth All on Downside (Mish's Global Economic Trend Analysis blog)

Illinois Debt-Default Insurance Climbs to Record, CMA Data Show (Bloomberg)

Commercial Mortgage Delinquencies Continued to Soar in Q1 (The Atlantic)

Commercial Property to Stay 40% From Peak, Pimco Says (Bloomberg)

Time for a Reminder [on commercial real estate] (Financial Armaggedon blog)

Housing Demand Evaporates, Double Dip Underway (Expected Returns blog)

Thousands of home sales depend on tax credit extension (USAToday)

Luxury home buyers wait-and-see: Luxury housing from the suburbs to the cities is facing challenges, driving the industry to get creative. Bobbi Rebell reports. (Reuters)

Feds announce arrests in mortgage fraud crackdown (The Associated Press) (Reuters)

More Than 90 Banks Miss TARP Payments (Reuters)

An Energy-Independent Future: The last eight presidents have gone on television and promised to move America towards an energy-independent future. (The Daily Show with Jon Stewart)

The Daily Show With Jon StewartMon - Thurs 11p / 10c
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America's oil supply: What's Plan B? -- "Plan B can only be less oil consumption. Whether Americans realize it or not, they are already on that path. The disaster in the Gulf is just putting that reality into sharper focus." (The Globe and Mail of Toronto)

BP's Hayward Stonewalling at Hearing: During the third congressional hearing with BP executives, BP CEO Tony Hayward responded to the majority of Rep. John Dingell's (D-Mich.) questions with inconclusive answers. (CBSNews)

BP's CEO offers contrition, but few answers: Asked about specifics regarding the construction of the Deepwater Horizon oil well, which appear to have violated industry standards, BP CEO Tony Hayward had little to say, insisting he was "not part of that decision." NBC's Kelly O'Donnell reports. (NBC Nightly News)

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GRANDE ISLE BEACH: Unprotected and vulnerable, the small strip island of Grand Isle, Louisiana has been dealt the most devastating blow so far from the BP Oil Spill. Chris Hernandez, a dedicated city employee for 30 years takes us on a tour of the 7 mile beach, which normally would be a very popular spot in the summer heat. ... (Youtube)

4 Ways BP and Officials Are Working to Suppress the Outrageous Facts About the Gulf Disaster: From intimidating reporters to trying to enforce no-fly zones, there seems to be a concerted effort to block public access to information. (Alternet)

Is it a recovery yet? (Weekly report, 06-17-10)

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.)

Last week's post quoted a Business Insider headline that read "Initial Jobless Claims [Are] Still Way Too High ...". They just got still higher.

"Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 472,000 in the week ended June 12, the Labor Department said on Thursday.

"Analysts polled by Reuters had expected claims to fall to 450,000 from the previously reported 456,000, which was revised to up to 460,000 in Thursday's report." (Reuters)

"'Most market economists have been expecting claims to fall below 450K for several weeks now,' said Kevin Logan, an economist with HSBC Securities. 'The wait is getting longer and longer. As each week goes by, doubts about the underlying strength of the economic expansion grow.'" (Agence France-Presse)

"'The labor market is not improving,' said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. 'If you really are going to have a sustainable recovery, you need the labor market to improve.'" (Bloomberg)

Yesterday, a post appeared on the Financial Times blog Alphaville on this weekly government report entitled "An initial double-dip indicator." It stated:

"Wells Capital Management wants everyone to forget Payroll Friday.

"The number to focus on as an indicator for the shape of the US recovery, Wells’ chief investment strategist Jim Paulsen says, is not the monthly payroll figure, but initial unemployment insurance claims, reported every Thursday." (FT Alphaville)

This blog has indeed been focusing on this number and will continue tracking it each week.

Wednesday, June 16, 2010

Wednesday roundup (06-16-10)

No Time to Underestimate the Eurozone Crisis (The American Enterprise Institute)

Market turmoil could derail recovery - EU's Rehn (Reuters)

EU Flags the Risk of Debt Snowballs in Southern Europe – Irony or Tragedy? (Credit Writedowns blog)

The euro mutiny begins -- "[The Italian business daily] Il Sole [24 Ore] has published a letter by 100 Italian economists warning that the austerity strategy imposed by Brussels/Frankfurt risks tipping Europe into a self-feeding downward spiral. Far from holding the eurozone together, it will cause weaker countries to be catapulted out of EMU. Others will leave in order to restore sovereign control over their central banks and unemployment policies." (The Telegraph blogs) The letter in English (Lettera degli economisti)

Spanish borrowing costs at new high: The Spanish government's cost of borrowing has hit a new record amid renewed concerns over the state of its economy and public finances. (The BBC) "'Things are getting worse for funding of Spanish banks and corporates, but Spain is not insolvent,' said Jonathan Tepper, an expert on Spain’s economy at Variant Perception, a research firm in London. 'It could be illiquid, though, if people don’t turn up for bond auctions.'" (The New York Times)

Spanish debt wilts amid [Euro] 250bn rescue plan confusion: European debt markets remain under high stress on persistent reports that Spain is in secret talks with EU officials and the International Monetary Fund for a support package of up to [Euro] 250bn (£208bn), the largest rescue in history. -- "'We're in a dangerous and stressful situation,' said Gary Jenkins, a credit expert at Evolution Securities. 'Spain is a big enough borrower to wipe out the EU's rescue fund.'" (The Telegraph)

Spain, Germany agree to release bank "stress test" results (Calculated Risk blog)

Greek Hospitals Near Meltdown As Government Can't Pay For Supplies -- "That means it's sovereign debt crunch time in Athens." (The Business Insider)

[UK] Economy may never recover from banking crisis, warns OBR (The Times of London)

Soros and Hussman See Global Double Dip (Forbes blogs) Soros: European recession next year "almost inevitable" (Reuters)

Bernanke: Fed taking steps to beef up oversight to prevent replay of recent financial crisis (The Associated Press)

Dealing With Deflation: Anthony Sanders, senior scholar at The Mercatus Center, breaks down why cheaper goods may not be better for the country. (FoxBusiness)

What happens if your state government shuts down? -- "'We're in an intractable fiscal situation at the state level,' said Sujit CanagaRetna, senior fiscal analyst at the Council of State Governments." (CNN)

Home builders won’t lift the economy this time: Industry that usually leads country out of recession still stuck in downturn (The Associated Press)

U.S. home building craters after tax break expires: Single-family permits drop 10% to lowest in a year (Marketwatch)

Freddie Mac, Fannie Mae Trading Halted as FHFA Demands NYSE Delisting (Daily Finance)

Fannie, Freddie Delisting Signals Firms Have No Value (The Wall Street Journal)

U.S. government accuses former mortgage executive of multibillion-dollar scam (The Washington Post)

What We Know (and Don't Want to Know) About Housing: The housing market is doomed in the U.S., and the causal factors are all well-known. But we don't want to know, because that knowledge would re-order the American culture and economy. (Of Two Minds blog)

Economists consider tearing down homes to protect housing market (The Washington Post)

Citigroup says it will suspend some foreclosures in gulf region (The Los Angeles Times blogs)

What Coming Wave of Corporate Debt Means to Investors (CNBC)

Sea creatures flee oil spill, gather near shore (The Associated Press)

Gulf Oil Spill Killing Thousands of Animals: Rescue workers have saved thousand of birds, turtles and dolphins from the oil spill area in the Gulf of Mexico. But many others have died, and those that initially survive may experience long term ill effects. Producer Zulima Palacio has more in this report narrated by Elizabeth Lee. (The Voice of America)

BP Chief: "We Care About the Small People" (The Associated Press) (The New York Times blogs)

'Small people' comment causes big flap for BP: BP's Chairman drew fire Wednesday for referring to Gulf residents as "the small people," a gaffe that may have sprung from a language barrier but angered already weary residents in the disaster zone. NBC's Ron Mott reports. (NBC Nightly News)

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We Must Remove BP from the Crime Scene and Let an International Team of Experts Fix This on BP's Dime (Washington's Blog)

Business leaders predict 'global oil supply crunch and price spike' (Peak Generation blog) Sustainable Energy Security: Strategic Risks and Opportunities for Business (Chatham House, formerly the Royal Institute of International Affairs)

The Coming Financial Meltdown (The Motley Fool)