Thursday, September 30, 2010

Thursday roundup (09-30-10)

Foreclosures Slow as Document Flaws Emerge

Fraud Factories: Rep. Alan Grayson Explains the Foreclosure Fraud Crisis: This is Rep. Alan Grayson explaining the crisis of foreclosure fraud and how it links to the entire securitization chain of Wall Street. (Youtube)


Bill Black's eye-popping opening statement at House FinServ hearing on Lehman Bros. failure [Testimony before Congress in April 2010] (Youtube)

BILL MOYERS JOURNAL William K. Black PBS: The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with Bill Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout. This show aired April 3, 2009. (PBS)

Big Bank Foreclosure Delays Signal Big Trouble (CNBC)

SEC charges State Street employees (FT Alphaville blog)

Hotel Occupancy Rate: Slightly below 2008 Levels -- "even with the similar occupancy rates, hotel room revenue is off sharply compared to two years ago." (Calculated Risk blog)

Postal Service close to going broke (The Washington Post)

Weak mortgage data fuel consumer spending collapse fears: Fears of a looming collapse in consumer spending have ratcheted up a notch after weak mortgage and personal lending figures from the Bank of England. (The Telegraph)

Debt throws eurozone back towards dangerous waters (Agence France Presse)

ECB to lend banks [Euro]29.4bn [for six days] (The Irish Times)

ECB hawks spook debt markets: Eurozone experts are increasingly worried that the European Central Bank (ECB) is moving too fast in pulling the prop from under the financial systems of Greece, Ireland, Portugal and Spain, risking a repeat of the premature tightening in mid-2008 that ended in grief. (The Telegraph)

Spain's hurting economy hit with debt downgrade (The Associated Press)

Spain Cooking the Books? (The Atlantic)

Output fall [in Japan] stokes double-dip fears (The Japan Times)

Six Lectures on Depression Economics by J. Bradford DeLong at U. C. Berkeley (Grasping Reality with Both Hands blog)

20 Signs that the Economic Collapse Is Already Upon Us: This year, millions of Americans are discovering that the music has stopped playing and they are left without a seat at the table. (Alternet)

Is it a recovery yet? (Weekly report, 09-30-10)

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 the Aug. 19, 2010 report.)

"There were 453,000 initial jobless claims filed in the week ended Sept.18, down 16,000 from an upwardly revised 469,000 the previous week, according to the Labor Department's weekly report. Economists surveyed by were expecting 457,000 new claims." (CNN)

"It's a small 'beat', but essentially keeps initial claims in limbo between approaching 400,000 (which would be a great sign of improvement) or heading back above 500,000 (which would be very bad)." (The Business Insider)

"'Employers are still kind of cautious,' said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who forecasted claims would fall to 455,000. 'We need to regain that broader momentum in the economy, and something like that is just slow to develop.'" (Bloomberg)

Wednesday, September 29, 2010

Wednesday roundup (09-29-10)

Quote of the Day:

"Nearly eight-in-ten (77 percent) workers report that they live paycheck to paycheck to make ends meet. ... Workers went on to say that sometimes they are unable to make ends meet at all, with one-in-five (22 percent) saying they have missed payments on bills in the last year." -- CareerBuilder press release. (CareerBuilder)

America's New Recession-Altered Life: Census statistics suggest Americans have changed their habits in slower economy. (ABCNews)

Survey: Half of bank executives anticipate a double-dip recession -- "only 15% of bank leaders believe the economy will improve over the next six months." (Charlotte Business Journal)

J.P. Morgan Chase to freeze foreclosures over flawed paperwork (The Washington Post) JPMorgan suspends certain foreclosures -- "more than 50,000" (The Associated Press)

Foreclosure "mess" unfolds state by state (Reuters)

Florida’s Ongoing Foreclosures Nightmare (The Big Picture blog) "And the biggest fear is that the fraud uncovered at GMAC is the tip of the iceberg for what is going on nationwide. Keep your eye on this situation." (Rortybomb blog)

Chris Whalen: Bank Bailouts 2.0 Is Coming - All Major U.S. Banks Will Need Restructuring, Government Receivership [link to audio at King World News] (The Daily Bail)

Harrisburg, Pennsylvania Council Decides to Retain Bankruptcy Lawyers (Bloomberg)

The Recovery That Wasn't? (Seeking Alpha blog)

The Future of the American Economy by James K. Galbraith (Scholars Strategy Network)

The (Unofficial) Beginning of the Double Dip Recession (Daily Reckoning)

ECB says EU banking sector still vulnerable (Reuters)

Europe's austerity anger grows: More than 100,000 marchers converged on Brussels from across the EU to protest austerity measures on Wednesday, while Spanish unions took the extraordinary step of breaking ranks with Spain's socialist government by launching a general strike. (The Telegraph) Explainer: Why Europe is protesting (CNN)

Capital controls eyed as global currency wars escalate: Stimulus leaking out of the West's stagnant economies is flooding into emerging markets, playing havoc with their currencies and economies. (The Telegraph)

Irish bank may get more aid; Spain credit rating may sink -- "'We're at potentially a crossroads,' said Marc Chandler, global head of currency strategy for Brown Bros. Harriman in New York, who worries that markets could next turn on Spain or even Belgium." (USAToday)

Portugal Credit Risk Rises to Record on Budget Deficit Concern (Bloomberg)

Telstra Plans to Cut at Least 6,000 Jobs, Financial Review Says (Bloomberg)

Philip Manduca Says There Has Never Been An Empire So Willing To Give Its Wealth And Power Away Like America (The Business Insider)

Tuesday, September 28, 2010

Tuesday roundup (09-28-10)

Quotes of the Day:

"Within a single week 25 nations have deliberately slashed the values of their currencies. Nothing quite comparable with this has ever happened before in the history of the world. This world monetary earthquake will carry many lessons." -- Ben Davies, CEO of gold hedge fund Hinde Capital. (FT Alphaville blog)

"What’s happening right now is that every country wants to export their way out of the recession. That means, first devaluing your currency or asking a key trade partner to increase the value of theirs." -- Brazil Finance Minister Guido Mantega. (FT Alphaville blog)

World in a "currency war," Brazil finmin says (Reuters)

U.S. Dollar Is 'One Step Nearer' to Crisis as Debt Level Climbs, Yu Says (Bloomberg)

September consumer confidence falls: ‘Quite grim’ outlook seen likely to stymie pace of economic growth (Marketwatch) U.S. Consumer Confidence Fell More Than Forecast (Bloomberg)

Sour economic mood in living room and boardroom: 2 polls show declining confidence among consumers and CEOs on economy, a Catch-22 for recovery (The Associated Press)

[And even the bedroom:] Recession rips at US marriages, expands income gap -- "Marriages have hit an all-time low while pleas for food stamps have reached a record high and the gap between rich and poor has grown to its widest ever." (The Associated Press)

Richmond Fed: Regional manufacturing activity contracted after seven months of expansion (Calculated Risk blog)

Home Prices in U.S. Cooled in July After Tax Credit Expired (Bloomberg) "'The housing market is in awful shape; it is probably as bad as it has been in 60 years,' said Patrick Newport, U.S. economist for consultancy IHS Global Insight. 'You have weak demand, a lot of foreclosures and a big glut, and even though the Case-Shiller numbers were up for the month, we still think they are going to drop.'" (The Los Angeles Times)

Home prices to take hit next year in many markets: Small uptick in home values won't last; prices in many areas predicted to fall into next year (The Associated Press)

States Are Poised to Be Next Credit Crisis for US: The financial challenges states face could be the next systemic risk within the financial markets, according to Meredith Whitney, CEO of the Meredith Whitney Advisory Group. (CNBC) Meredith Whitney Warns Of Massive Pain Coming For The States, 80K Layoffs On Wall Street (The Business Insider)

Fed's Lockhart sees some risk of U.S. deflation (Reuters)

David Rosenberg on Why David Tepper is Wrong -- "Is it possible that QE2 won’t work? The answer is yes. How do we know? Well, because the first round of QE didn’t work. After all, if it had worked, the Fed obviously would not be openly contemplating the second round of balance sheet expansion." (Credit Writedowns blog) Breakfast with Dave (Sept. 27) (Scribd) Why QE Doesn’t Work by Ed Yardeni (Investor Insight blogs)

Investors remain bearish on PIIGS: Bond spreads have returned to the levels from the height of the crisis [Op-ed by Harel Group provident funds managers] (Haaretz)

Ireland Swaps Surge to Record on Anglo Irish Bailout Cost Wager (Bloomberg)

Banks Return Ireland to Crisis Footing: Dublin Treads Carefully in Dual Effort to Save Anglo Irish and Calm Markets (The Wall Street Journal)

Ireland risks downgrade on Anglo Irish cost - S&P (Reuters)

Irish Banks Hooked on ECB Cure as Lenihan's Financing Fails: Euro Credit (Bloomberg)

Spanish Credit Rating Set for Moody's Cut as Growth Slows, Investors Say (Bloomberg)

OECD calls for more austerity in Portugal: Portugal must brace for fresh austerity to bring the budget deficit under control and stem capital flight, despite signs that political consensus is unravelling. (The Telegraph)

Bond sell-offs fuel fears that Ireland, Portugal will go the way of Greece (The Washington Post)

Murata to Eliminate 3,000 Temporary Jobs in Japan to Combat Yen's Strength (Bloomberg)


Unedited Jon Stewart Interview: Raw video of 'Daily Show' host on 'The Factor' [Sept. 22] Fox News

Part 1

Part 2

Bill O'Reilly: Bill O'Reilly explains why Jon can't talk to Glenn Beck and refuses to attend the Rally to Restore Sanity. [Sept. 27] (The Daily Show with Jon Stewart)

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Bill O'Reilly
Daily Show Full EpisodesPolitical HumorRally to Restore Sanity

Monday, September 27, 2010

Monday roundup (09-27-10)

Anglo Irish Bank downgrade raises pressure on Ireland: Anglo Irish Bank's debt cut close to junk status amid speculation government will admit bailout has cost [Euro]35bn (The Guardian)

S&P's Head of Sovereign Ratings Says Government Downgrades Will Continue (Bloomberg)

IMF calls on banks to rein in bonuses to free up cash to lend to small businesses (The Daily Mail)

[UK] Savers told to stop moaning and start spending: Savers should stop complaining about poor returns and start spending to help the economy, a senior Bank of England official warned today. -- "The comments angered groups representing the elderly and those putting money aside." (The Telegraph)

Brazil’s finance minister: World in "international currency war" -- [Says blogger:] "It seems everyone wants to devalue to export more." (Calculated Risk blog)

Avoiding another recession won't stabilize the economy: San Francisco Fed (Housing Wire)

Shut Down the Fed (Part II) (The Telegraph blogs)

JPMorgan Foreclosure Disputed, Casting Wider Doubts (The Huffington Post blog)

Raters Ignored Proof of Unsafe Loans, Panel Is Told (The New York Times) (Daily Finance)

More prosecutions of investment banks coming? (Reuters blogs)

Get Ready For The Fixed Income Bloodbath -- "'We're easily going to cut a quarter to a half of our traders and back office in fixed income. Everyone else is going to do it too,' [a highly placed Wall Street insider] says. (CNBC)

Morgan Stanley Said to Freeze Investment-Bank Hiring for 2010 (Bloomberg)

RBS Said to Cut 500 Administrative Jobs at its Investment Bank (Bloomberg)

Northrop Grumman to Cut 500 Jobs (KTLA)

[MAPS:] Tracking Bank Failures (The Big Picture blog)

Sunday, September 26, 2010

Sunday roundup (09-26-10)

Mistakes widespread on foreclosures, lawyers say (USAToday)

Ireland Prepares to Outline Anglo Irish Costs to Calm Markets -- "'The market needs absolute clarity,' said Cathal O’Leary, head of fixed-income sales at NCB Stockbrokers in Dublin. 'Investors need to see a number for Anglo and they need to be convinced that it’s the final, final number.'" (Bloomberg) (Business Spectator)

Gold is the final refuge against universal currency debasement: States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s. (The Telegraph) Countries competing to force down the value of their own currencies (Fund Strategy)

Saturday, September 25, 2010

Saturday roundup (09-25-10)

Policy makers must do more than print money and hope for the best: Quantitative easing might seem the easiest option but it is storing up major problems for the future. (The Telegraph)

Taleb Says Unawareness of Deficit Risk Has Him 'Extremely Bearish' on U.S. (Bloomberg)

Bernanke Says U.S. Economic Growth Too Slow Even With Fed Bond Purchases (Bloomberg)

Job Loss Looms [involving "tens of thousands of people"] as Part of Stimulus Act Expires (The New York Times)

Regulators seize 3 corporate credit unions [on Friday], to sell assets (Reuters)

Securitization used to fix toxic credit unions: $50 billion of toxic securities to be resold with government backing (Marketwatch) (ZeroHedge blog)

Feds Seize Control Of 3 Credit Unions: CNBC's Rick Santelli has the details on Fed regulators seizing control of three wholesale credit unions. (Youtube)

Unofficial Problem Bank List increases to 872 institutions (Calculated Risk blog)

The Credit Meltdown and the Shadow Banking System: What Basel III Missed (The Huffington Post blog)

GMAC move calls foreclosures into question (United Press International)

Few Have Remained Unscathed -- [by the effects of "the worst downturn since the Great Depression"] (Financial Armaggedon blog)

Ireland faces up to spectre of double-dip recession: Government of Ireland is forced by dire economic data to deliver another austerity budget in December – its fourth in two years (The Observer)

Citigroup Sued by Norway’s Central Bank -- "Citi is accused of making 'repeated material untrue statements and non-disclosure of material information to investors' from Jan. 19, 2007, through Jan. 15, 2009, that caused Norges Bank, the central bank, to buy the securities at inflated prices." (The New York Times blogs)

Friday, September 24, 2010

Friday roundup (09-25-10)

New U.S. Home Sales Hold at Second-Lowest Level Ever -- "'There is no upside momentum in housing, period,' said Eric Green, chief market economist at TD Securities Inc. in New York who correctly forecast the level of sales. 'Unemployment is so high, consumer confidence is so low, household wealth is eroded and the psychology remains negative.'" (Bloomberg) New Home Sales Still Dismal (Forbes blogs)

The American Dream of Home Ownership Has Become a Nightmare: The disappearance of home equity value is a lead weight on the recovery by Mortimer B. Zuckerman (U. S. News & World Report)

More than half of homeowners in foreclosure relief program have fallen out -- "'The problem is just so huge in magnitude that there's no viable solution that can come out of the government to solve it,' said Anthony Sanders, a finance professor at George Mason University." (The Washington Post)

Frank, Grayson Grill Fannie on "Foreclosure Mills" (Mother Jones) (The Washington Post)

A Very Different Christmas Holiday Forecast: A Dismal Outlook -- "'Pessimism among Americans about the upcoming Christmas season is off the charts,' said C. Britt Beemer, founder and CEO of America's Research." (CNBC)

Looking Behind the Decline in Credit Card Debt -- is it because of frugal customers or "financial institutions writing off billions of dollars in credit card debt as losses"? (The New York Times)

Volcker: Financial System Still at Risk (The Big Picture blog)

Janet Tavakoli on the "Myth of the Immoral Debtor"; An email from a Charlie Munger student; "Business as Usual" (Mish's Global Economic Trend Analysis blog)

Bond markets fret at eurozone divergence: Irish and Portuguese government bonds have hit new lows after data pointed to growing divergence within the eurozone. (The BBC)

Ireland: The next Greece? (The BBC blogs)

Money-Laundering Probe Sparks Another Vatican Scandal (Time)

Five world markets themes in the coming week (Reuters)

Banks in Florida, Washington Are Seized as Failures This Year Climb to 127 (Bloomberg) North County Bank of Arlington WA had a troubled assets ratio of 407.2%. (BankTracker) Haven Trust Bank Florida of Ponte Vedra Beach FL had a troubled assets ratio of 351.3%. (BankTracker)

Why Companies Should Insist that Employees Take Naps (The Harvard Business Review)

Thursday, September 23, 2010

Thursday roundup (09-23-10)

Quotes of the Day:

"Economies are slowing, so the central banks will have to do an awful lot more to help them. It’ a done deal that more quantitative easing is coming and then the only question now is when we get it." -- Stuart Thomson, international fixed income fund manager at Glasgow-based Ignis Asset Management, which manages about 70 billion pounds ($110 billion). (Economic Times of India)

"The reality is that this is the weakest recovery ever in terms of the growth rate in real final sales and as it pertains to employment, housing, and organic personal income, there has not really been any recovery at all. Every single measure of consumer and small business sentiment is locked in recession terrain, but these do not go into the NBER determination process. In fact, the Investor’s Business Daily cites a survey of small business owners conduced by the U.S. Chamber of Commerce, which found that 78% of the respondents believe that the economy will 'remain stagnant or get worse over the next year.'" -- David Rosenberg, chief economist & strategist for Gluffkin Sheff. (Scribd)

"I agree that the inflation case looks compelling on the surface of it. ... The problem, though, is that the markets and the economy to date have offered scant evidence to support the inflation case. Stocks are down over the past 10 years. Real estate is down hard over the last five years. Commodities are down sharply over the last two years. Instead of spiking to double digits, bond yields are hugging the ground. M3, which is now calculated only by private economists, is down nicely over the past year. And of course money velocity is moribund: Society has looked into the debt abyss and decided enough is enough with the debt-based consumer economy. So, deflationary forces still prevail." -- Jeffrey Gundlach, founder of DoubleLine, and lead portfolio manager of the DoubleLine Total Return Fund and the DoubleLine Core Fixed Income Fund. (Morningstar)

"The greatest threats for Ireland surround the two ‘ghost banks’, Anglo Irish Bank and Irish Nationwide. These banks have no economic significance going forward, but the cost to the Irish Government to wind them down is huge." (Dansk Research)

"If Anglo Irish Bank is unable to pay back all of its lenders, it will raise fresh concern about the country’s need for assistance which would undoubtedly have a negative impact on the euro." -- Kathy Lien, director of currency research at GFT. (Marketwatch)

"This is a dismal situation and is now so grave that the Irish have no choice but to introduce even tougher austerity measures. On every measure – the depth of the recession, the cost of the bailout, the collapse of the construction sector, and the higher cost of issuing debt – Ireland is top of the tree. And it is going to live through a prolonged slump – there is unlikely to be any meaningful growth for at least a couple of years. Estimates of 4 per cent growth in two years are now almost impossible to achieve." -- Chris Scicluna, an economist at Daiwa Capital Markets. (The Independent)

Europe’s Financial Footing Is Rocky, Central Bank Says -- "Money markets in the euro zone continue to function unevenly while the overall volume of transactions has declined from last year, data released by the European Central Bank indicated on Thursday. It was a reminder that the banking system remains fragile." (The New York Times)

Why a Sovereign Default Remains on the Table (The Wall Street Journal)

ECB WATCH: Threat Of Double Dip May Prompt Unexpected ECB Moves (The Wall Street Journal)

Crackdown on Hedge Funds May Snare European Commercial Property Investors (Bloomberg)

European Bond Spreads -- [they "remain elevated" with some new record highs] (Calculated Risk blog)

Ireland's Growth Just Went Negative As Country Teeters On Brink Of Double Dip Recession (The Business Insider)

Cost of insuring against Irish debt default hits record high (The Irish Times) (Bloomberg)

Ireland faces double dip, mulls restructuring of junior bank debt: Irish borrowing costs have surged to a post-EMU record after Ireland's recovery buckled over the summer and Dublin said creditors of Anglo Irish Bank may be asked to "share" losses, a warning to bondholders that the dam may at last be breaking on debt restructuring in the eurozone. (The Telegraph) (The Guardian)

Stat of the Day: Ireland now fifth for highest government default probabilities in the world (Credit Writedowns blog)

Why The Irish Debt Crisis Could Be Worse Than Spain, England, And Even Iceland (The Business Insider)

It's over? Really? -- "The recession is over. Are they kidding?" [Editorial] (The Milwaukee Journal-Sentinel)

Luminaries say recession not over (Reuters) Trying to get a Yes or No Answer: During a Financial Services Committee hearing, Congressman Posey asks Treasury Secretary Geithner if he thinks the recession is over. - September 22, 2010 (Youtube)

Did Buffett just flip-flop on his recession view? (The Los Angeles Times blogs) (The Huffington Post blog) (Credit Writedowns blog)

Illinois’s $25 Billion of Bonds Get Negative Moody’s Outlook (Bloomberg) (The Chicago Tribune)

NJ rating outlook negative as Moody's cites pension woes (Reuters)

Western U.S. at risk of double-dip recession: Five years after bubble, it’s still all about housing (Marketwatch)

[Meanwhile back East:] Paterson: NY needs to eliminate 2,000 state workers -- "'We must acknowledge the continued weakness in the overall economy and in state revenue. The alternatives available to ensure we remain on a stable fiscal course are limited,' the memo said." (The Business Review of Albany)

Bristol-Myers to cut about 840 jobs worldwide (The Associated Press)

Existing Home Sales Rise 7.6%, But Remain Very Low (The Atlantic)

Economists React: Not Start of ‘Sustained Recovery’ in Housing (The Wall Street Journal blogs) Housing isn’t close to stabilizing: Shadow inventory paints a more dismal outlook [Sept. 22] (Marketwatch)

Alan Greedscam: A Curtain Call for the Maestro (Mortage Rates)


Infographic by Mortgage Rates

Is it a recovery yet? (Weekly report, 09-23-10)

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 the Aug. 19, 2010 report.)

"The number of people who filed new claims for unemployment benefits jumped 12,000 to 465,000 in the latest week, underscoring the lack of hiring in a weak U.S. labor market." (Marketwatch)

"'It's a problematic level and really inconsistent with any meaningful job growth,' said Mark Vitner, senior economist with Wells Fargo. 'It raises the risk that the unemployment rate is going to move back toward 10% toward the end of the year.'" (CNN)

"[Today's data] confirm there is not going to be an expansion in employment for the foreseeable future. We have an unemployment rate that is stubbornly high, that breaks with tradition in terms of there being any sort of sustainable rebound. It's just not there, the employment numbers are just not speaking to a rebound.

"The Fed's outlook confirmed the prospect of a very anemic rebound and really, flagging production, flagging demand domestically. These numbers really speak to that in a very clear way. They couldn't be more spot-on in terms of speaking to an economy that is just barely hanging on to razor thin gains." -- Peter Kenny, managing director, Knight Equity Markets, Jersey City, NJ (Reuters)

"'What's becoming increasing clear is that this isn't a normal recovery,' said Dan Greenhaus, chief economic strategist at Miller Tabak. 'There's little we can do to create jobs until demand returns, and demand isn't returning.'" (The Associated Press)

Wednesday, September 22, 2010

Wednesday roundup (09-22-10)

Quote of the Day:

[On what a journalist notices about interviewing job seekers:] "The striking thing -- one striking thing -- and actually, a somewhat disturbing thing when you're ...doing the interviewing, is how many of them are now -- or have been in the last six months months, let's say -- crying on camera. It's just happening spontaneously. Now, I've been doing reporting on TV about business and economics for 33 years -- I swear to you, in the last six months I've had more people cry on camera than in the entire thirty-two-and-a-half years before that." PBS financial journalist Paul Solmon (Financial Armaggedon blog)

Ben Bernanke admits concern over US recovery: Federal Reserve chairman's monthly statement shows deepening fears about sluggish pace of economic growth (The Guardian) Redacted Version of the September 2010 FOMC Statement (The Aleph Blog) The Fed, Translated Into English (National Public Radio blogs)

Central Banks Have Tough Time Finding Exit as Recovery Weakens -- "'Economies are slowing, so the central banks will have to do an awful lot more to help them,' said Stuart Thomson, international fixed income fund manager at Glasgow-based Ignis Asset Management, which manages about 70 billion pounds ($110 billion). 'It’s a done deal that more quantitative easing is coming and then the only question now is when we get it.'" (Bloomberg)

Gold hits record high on double-dip fears -- "'Look at Japan,' said Paul Dales, U.S. economist with Toronto-based Capital Economics. 'Once it fell into deflation all of its problems intensified. Once an economy is in that spiral it’s very hard to get out. The best action is to avoid getting into it in the first place.'" (The Financial Post)

Albert Edwards On Terminal Competitive Devaluation, The Nuclear Option, And How The Fed's Policies May Start An All Out War (ZeroHedge blog)

U.S. house prices lowest in nearly six years: Prices fall 0.5% in July, and June price drop revised to 1.2% (Marketwatch) "So in this recovery there is less job creation, less household formation, and less demand for housing units than in a normal recovery. This is sort of a circular trap for both GDP growth and employment that will persist until the excess housing units are absorbed." (Calculated Risk blog) "'We have a lot of homes for sale, and a lot of them are distressed properties,' said Thomas Lawler, founder and president of Lawler Housing and Economic Consulting in Leesburg, Virginia. 'That is putting downward pressure on home prices.'" (Bloomberg)

Obama Homeowner Program Hits 10-Month Low As Prices Drop And Foreclosures Surge -- "The number of homeowners receiving permanent relief under the Obama administration's primary foreclosure-prevention initiative hit a 10-month low as home prices dropped and repossessions jumped, threatening more homeowners just as the administration's aid program winds down." (The Huffington Post blog) Amid mountain of paperwork, shortcuts and forgeries mar foreclosure process (The Washington Post)

Mortgage Applications Index in U.S. Declines for a Third Week -- "An unemployment rate near a 26-year high and battered household finances will probably restrain housing, even as record-low mortgage costs and decreasing prices make buying more affordable." (Bloomberg)

AIA: Architecture Billings Index shows contraction in August -- "Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment." (Calculated Risk blog)

Senators question lack of Wall Street prosecutions -- "in the wake of the most severe financial crisis since the Great Depression." (Reuters)

The U.S. Debt Position Is A 'House Of Cards' And It's Becoming Even More Unstable (The Business Insider) The Boeckh Investment Letter (Scribd)

GM must sell for $134 a share for U.S. to recover investment (The Washington Post)

Warren Buffett and Charlie Munger: Winning the Class War by Janet Tavakoli (The Huffington Post blog) Alternative to Treasury Bailouts: One that does not violate the Spirit of Democracy by Janet Tavakoli (Tavakoli Structured Finance)

Bank of England ponders fresh stimulus measures: Pound slumps over speculation that Bank may need to embark on fresh round of quantitative easing (The Guardian) Bank of England rate-setters edge towards stimulus: Bank of England rate-setters voted 8-1 to hold rates at 0.5% this month, but some argued more action may be needed to boost the economy, minutes show. (The BBC)

"Prepare for a double dip Xmas [in the UK]," warns BDO (Real Business)

Debt Restructuring in Euro Zone Inevitable: Economists (CNBC) (The Business Insider)

Cost of Insuring Irish Debt Hits New High (The Wall Street Journal)

Will the US and China Be Locked in a Global Battle Over Oil?: China has overtaken the United States to become the world's number one energy consumer, a development that signals a massive global power shift. (Alternet)


Global food risk from China-Russia pincer: World food supplies are caught in a pincer as China becomes a net importer of corn for the first time in modern history and Russia's drought inflicts even more damage than expected, raising the risk of a global grain shock in 2011. (The Telegraph)

Millions of Dead Fish ... Authorities Pretend It Is Wholly Unrelated to BP Oil Spill (Washington's Blog)

Is the Era of Cheap Food Ending? (Gizmodo)

Tuesday, September 21, 2010

Tuesday roundup (09-21-10)

Fed's September Statement Hints at Deflation Concern (The Atlantic)

Fed says it's ready to take action to avert deflation: The central bank makes clear that it's worried about a downward spiral of prices. Some see it as a sign that Fed is prepared to make a massive purchase of Treasury bonds to stimulate the economy. (The Los Angeles Times) "'It would take an economic miracle of revived prices and jobs in the coming months to prevent another expansion of the Fed’s balance sheet,' said Mark Spindel, founder and chief investment officer of Potomac River Capital LLC in Washington, which manages $200 million. 'The triggers are unacceptably low inflation and high unemployment. These triggers have already been tripped.'" (Bloomberg)

Can anything stop US deflation? -- "Can the US fall into outright deflation whatever Ben Bernanke does? As Barack Obama might say, yes it can." (The Business Spectator) Says former US Labor Secretary Robert Reich in his blog: "It’s a vicious cycle. And once deflation sets in, it’s hard to reverse. Just ask Japan." (The Christian Science Monitor blogs)

Double dip or global deflation? by banking analyst Christopher Whalen (Reuters blogs)

Obama economic adviser Summers leaving White House (CNN) "This is quite a turnover: Christina Romer, Peter Orszag, and now Lawrence Summers." (Calculated Risk blog)

A Home Buyer/Seller Standoff this Fall (The Mess That Greenspan Made blog)

Payrolls Decrease in 36 U.S. States, Led by Michigan -- "indicating the labor market will take time to rebound from the worst recession since the 1930s. ... 'We’re still in a very weak employment environment because demand remains weak,' said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit." (Bloomberg)

Abbott to cut 3,000 jobs (CNN)

Textron's Cessna to Cut 700 Jobs, Output on Weak Demand for Business Jets (Bloomberg)

Is America Today In Worse Shape Than Japan During Its Lost Decade? (Washington's Blog) (ZeroHedge blog)

Gibbs says tackling U.S. deficit top priority in 2011 (Reuters) "Today, the economy is sluggish and the national debt is soaring to worrisome levels." (The Washington Post) How Large a Debt Level Is "Worrisome?" (Center for Economic and Policy Research)

Study Finds Consumers Accumulating Debt in Fragile Economy (Technorati)

Goldman Shareholder Lagged CDs as [its CEO Lloyd] Blankfein Earned $125 Million (Bloomberg)

Wall Street's greatest heist: the Tarp: The notion that without the $700bn bailout we would be reduced to bartering was a ruse by the banks to get taxpayers' money writes Dean Baker (The Guardian)

Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway (Mish's Global Economic Trend Analysis blog) "'Charlie Munger is misrepresenting history, and that’s why the public is angry at Wall Street,' said Joshua Rosner, an analyst at research firm Graham Fisher & Co." (Bloomberg)

Hatred is killing your profits; new meltdown ahead: Washington and Wall Street cannot hear warnings; you must protect yourself (Marketwatch)

BP's Shock Waves: How the oil giant's catastrophic spill in the Gulf could trigger another financial meltdown (Rolling Stone)

Top Economist: [In Britain] Double-Dip Risk 'Rising Daily' (Sky News)

U.K. Posts Largest August Budget Deficit Since at Least 1993 [when recordkeeping began] (Bloomberg)

Anglo Irish Bank Bailout Clouds [Irish Prime Minister] Cowen's Future After Successful Bond Sale -- "'Dark clouds are gathering over the Atlantic right now, and they could hit Irish banks first,' Italian Finance Minister Giulio Tremonti said in an advance copy of an interview with weekly magazine Oggi. A spokeswoman confirmed the remarks. 'The weather is ugly up there, and when it’s ugly in one region, it can get ugly in others.'" (Bloomberg) "'The message from the markets to the European Central Bank is: come in and do something to help the situation, increase your purchase of Irish government bonds to bring yields down,' said Ashok Shah, Chief investment officer at London & Capital. 'Ireland can't afford to pay these kind of rates when the economy is contracting. The cost of capital is too high for an economy that's barely growing. If there are more spending cuts, the economy will be going into recession again, because there won't be any demand.'" (The Guardian)

Dutch face budget cut of at least 3.2bn euros (The BBC)

Vatican Bank Chairman Under Investigation for Money Laundering (The Wall Street Journal blogs)

Monday, September 20, 2010

Monday roundup (09-20-10)

Quote of the Day:

"... the recession officially ended in June 2009, which might come as a surprise to those who recall that month, when General Motors declared bankruptcy and 515,000 jobs were lost." -- ABC News senior White House correspondent Jake Tapper (ABCNews)

Longest recession since 1930s ended in June 2009, group says (Bloomberg) (The Washington Post) (Calculated Risk blog)

Great Recession ended in June 2009, but who knew? (McClatchy Newspapers)

Recession's over, economists say to a skeptical public: A declaration that the turning point came in June 2009 gets an indignant reaction, showing that many Americans see little difference between the recession and current conditions. (The Los Angeles Times)

Not Buying It (Financial Armaggedon blog)

The recession is over! So where's the party? -- "'Every single one of the individuals who wrote the report needs a serious reality check,' said Bob Johnson of the Queens borough of New York, who is 46, had worked in communications and has been looking for a job for more than three years." (Reuters)

The Recession's Over. The Emergency Isn't (The Huffington Post blog)

The housing recession isn't over (CNN) [John Hussman writes:] "My view remains that the underlying condition of the U.S. housing market is one of deep insolvency. The Treasury, Fed and the FASB have effectively made a policy out of opaque disclosure, so that at least the deterioration in the housing market is slow to appear on the balance sheets of major banks and financials." (Hussman Funds) The Recession and the Housing Drag: The more the government tries to prevent prices from finding an equilibrium, the longer it will take for the economy to begin growing again. By Mortimer Zuckerman. (The Wall Street Journal)

The 7-Million Housing Shadow Inventory Could Trigger A Price Avalanche (The Business Insider)

NAHB Builder Confidence stuck at low level in September (Calculated Risk blog) (Reuters)

Congressman Grayson to Florida Supreme Court: Stop Illegal Foreclosures (Washington's Blog)

Commercial real estate prices near recession low in July: Moody's (Housing Wire) "No recovery here." (FT Alphaville blog) "Troubled commercial real estate loans brought down five of the six bank failures reported by the FDIC over the weekend, according Trepp, an analytics firm. ... 'We have seen a shift over the last several quarters, with commercial mortgages contributing a larger portion of the distress,' said Matt Anderson, a commercial real estate expert for Foresight Analytics, which is owned by Trepp. 'Construction loans are still the largest source of CRE distress overall, but commercial mortgages have increased their share.'" (Housing Wire)

Investors seeing farmland as safer bet than stocks: Wary of fluctuations on Wall Street, more wealthy Americans, private funds and foreigners are putting money into parcels of cornfields, fruit orchards and other U.S. agricultural products. (The Los Angeles Times)

For the Unemployed Over 50, Fears of Never Working Again (The New York Times)

Retirement plans hit [with] a 'double whammy' (United Press International)

Europe Debates How to Avoid Another Debt Crisis (The New York Times)

Pimco CEO: Europe’s bailout isn’t working (Marketwatch) An Interesting Week Ahead (PIMCO)

Europe's [Euro]440bn rescue fund wins AAA just in time: Goldman Sachs warns of a "measurable risk" that Ireland and Portugal may have to tap the €440bn European Financial Stability Facility. (The Telegraph)

Irish borrowing costs at new high on debt worries (The Associated Press) "The cost of borrowing for Ireland and Portugal reached record highs today amid growing concerns about the two eurozone countries troubled economies." (The Guardian)

Honohan Says Irish Government Must Cut Deficit at Faster Pace (Bloomberg) Honohan says budget cuts need to exceed [Euro]3bn (The Irish Times)

[In the UK] Lending crisis growing as businesses face squeeze -- "lending to businesses contracted for the fifth consecutive month" (The Scotsman)

[Meanwhile] Mortgage lending falls again, lenders say: New figures have underlined the subdued state of the UK property market. (The BBC) (Bloomberg)

Councils to be given powers to borrow millions: Local councils in England are to be handed powers to borrow millions of pounds to pay for major infrastructure projects, Deputy Prime Minister Nick Clegg announced today in his speech to the Liberal Democrat conference. (The Telegraph)

Portugal borrowing costs soar amid uncertainty (Bloomberg)

Cotton Exceeds $1 for First Time Since 1995 on Supply Concern (Bloomberg)

Sunday, September 19, 2010

Sunday roundup (09-19-10)

The IMF itself has become the problem as Europe's woes return: Once a quorum of big names says the game is up in a debt crisis, events move fast and furiously. (The Telegraph)

Bank warns on sovereign debt after Ireland denies approach to IMF for bailout (The Independent)

Fed to Cut Growth Forecast, Europe Rescue Faltering, Pimco's El-Erian Says -- "Concerns about Europe’s solvency are intensifying, pushing up risk measures for Greece, Ireland, Portugal and Spain to 'at or near danger levels,' El-Erian wrote in his piece, which was first published yesterday on’s ftalphaville website section. 'The failure to reduce risk spreads means that the public sector bailout is not working.'" (Bloomberg) (FT Alphaville blog)

Wall Street’s Engines of Profit Are Freezing Up (The New York Times)

Consumer Spending and the Economy -- "What really caused depressions was 'over-indebtedness to start and deflation following after that.'" (The New York Times blogs)

Defaults Account for Most of Pared Down Debt (The Wall Street Journal blogs)

Third world America: Collapsing bridges, street lights turned off, cuts to basic services: the decline of a superpower (Macleans)

Italian carrier Alitalia to cut up to 1,400 jobs: report (Agence France Presse)

BP and Government Representatives Still Keeping Scientists and Reporters Away from Areas Impacted by Oil (Washington's Blog)

Saturday, September 18, 2010

Saturday roundup (09-18-10)

Ireland's finance minister quashes IMF bail-out story: Brian Lenihan moved to calm markets with arebuttal of a report that Ireland is 'perilously close' to a debt crisis. (The Telegraph)

Irish Bank Bailout May Cost $52 Billion, Ex-NTMA Head Somers Tells Times (Bloomberg) (The Irish Times)

Ireland banking crisis: next after Greece?: Can one bank bring down a country? The situation is so serious in Ireland that the whole of Europe has been asking just that. A medium size lender, Anglo Irish bank, collapsed when the property bubble burst 2 years ago and had to be nationalised. The bank has already cost the Irish tax payers over 25 billion euros. Ireland has been downgraded twice by credit rating agencies in a couple of months and thanks to this bank, it has the highest deficit in Europe, over 20% of its Gross Domestic Product (GDP). The cost of saving the whole of the Irish banking sector is expected to cost tax payers around 90 billion euros. And without European financial solidarity, Ireland would be bankrupt. Economists have feared a repetition of the Greek financial crisis, one that could be fatal for the European currency. (France24)

Eurozone revival owes huge debt to Germany [= the recovery in the region is pretty much limited to Germany] -- "Put bluntly, the Eurozone recovery story would be much more convincing if it was not so German-centric." (The Scotsman)

Darling attacks Germans over help for Greece: The euro has been permanently damaged by Germany's failure to intervene swiftly during the sovereign debt crisis earlier this year, Alistair Darling has said in an unusually frank attack. -- "The former Chancellor [of the Exchequer in the UK], who was in 11 Downing Street when Greece, Spain and Portugal came close to economic meltdown in the spring, made his unguarded comments at a conference of senior German and British officials on Thursday." (The Telegraph)

The real lesson we can learn from Japan's dramatic currency sell-off: Europe's sovereign debt crisis and fears of a US double-dip recession have driven recent demand for the yen as a "safe haven" currency. Japan's economy remains lack-lustre, but investors have been determined to diversify away from the euro and the dollar. -- "In the here and now, if the Western world endures another "systemic shock", or looks as if it might, the yen will remain subject to upward pressure." (The Telegraph)

The Chances of a Double Dip by Gary Shilling via John Mauldin (Credit Writedowns blog)

Niall Ferguson: Empires on the Edge of Chaos -- full hour video can be launched from the website (The Australian Broadcasting Corporation)

Unofficial Problem Bank List increases to 854 institutions (Calculated Risk blog)

Friday, September 17, 2010

Friday roundup (09-17-10)

Consumer sentiment weakest since August 2009 (Reuters) "'Already cautious consumers are even more cautious,' said Jim O’Sullivan, global chief economist at MF Global Ltd. in New York. 'Consumer spending has certainly been a weak part of the recovery and there is no sign in these numbers of any sudden change in that.'" (Bloomberg) "This was a big story in July when consumer sentiment collapsed to the lowest level since late 2009. Now it is even lower ..." (Calculated Risk blog)

Americans' wealth fell in spring as stocks tanked: Americans' wealth drops for first time since early 2009; Wall Street turmoil eats into stocks (The Associated Press) Americans struggle to regain their shrunken wealth (The Associated Press) "'Households are being very frugal in what they spend and allocating more of their income to paying off debt,' said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. 'Over time, consumers need to work themselves into a better financial position and that’s not going to happen overnight.'" (Bloomberg)

Job losses cut wide swath in California: California employers eliminated 33,500 jobs in August as the state unemployment rate rose to 12.4%. -- "'The thing that is disconcerting is that we have lost jobs in virtually every industry,' said Sung Won Sohn, an economist and UC Channel Islands professor. 'At this stage of an economic recovery, we should be doing much better.'" (The Los Angeles Times)

California budget stalemate now longest ever (The San Francisco Chronicle)

[Gov.] Perry guesses [the Texas] budget deficit at $10-11 billion (Fort Worth Star-Telegram blogs)

The Big Interview with David Stockman: "In some ways Herbert Hoover got a bad rap," says David Stockman in an interview with WSJ's Alan Murray. The Former Reagan Administration budget director lays out a plan for economic recovery by cutting spending, raising taxes, and allowing for years of austerity. (The Wall Street Journal)

[In Europe] Sovereign Default Swaps at Record Over Companies on Deficits (Bloomberg)

Peripherals Should Restructure, MIT’s Johnson Says: Tom Keene -- "'The pressure is very much on Ireland right now,' [Simon] Johnson said in a radio interview today on 'Bloomberg Surveillance' with Tom Keene. 'Ireland, in terms of its fiscal position and in term of the sustainability of those policies and the external support polices from the ECB and others, looks pretty fragile.'" (Bloomberg)

Irish bonds reach record high on rumors of IMF aid (Bloomberg)

Ireland and I.M.F. Deny Bailout Rumors (The New York Times) (Marketwatch)

Bank of England's top brass admit: 'We need a plan B' to bolster economic recovery -- "It was the fourth time this week that a member of the MPC has sounded the alarm about the outlook – a sign of increasing jitters on Threadneedle Street." (The Daily Mail)

[British] Investors: get set for the double dip ride: Fund managers are buying defensive shares to counter an economic downturn. (The Telegraph)

[Germany's] Manroland Eliminating 500 Jobs, Consolidating Newspaper Press Manufacturing in Corporate Reorganization (Editor & Publisher)

Trust Greece … To Default (The Wall Street Journal blogs)

Elizabeth Warren: 'If I'm Going to be Loud and Unwelcome, So Be It': Obama's Pick for Consumer Agency Says Economy Can't Grow By 'Tricking' Middle Class (ABCNews)

Warren: "I've never walked away from a fight" -- NBC's Brian Williams talks to newly-appointed Special Assistant to the President Elizabeth Warren, who explains that her role was created to enable work on a new consumer protection agency to start sooner. (NBC Nightly News)

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

Consumer bureau: More disclosure, fewer hidden fees (CNN)

Elizabeth Warren: The Right Appointment At The Right Time by Simon Johnson (Baseline Scenario blog) Interim Plan for Warren Raises Even Supporters’ Eyebrows (The New York Times) 3 Oddities of Warren's Appointment as Consumer Financial Protection Czar (The Atlantic) The Elizabeth Warren end run (Fortune)

Six U.S. Banks Fail ["bringing the failure count this year to 125"] as Georgia Lender Community & Southern Acquires Three (Bloomberg)

Bramble Savings Bank of Milford OH had a troubled assets ratio of 438%. (BankTracker)

Maritime Savings Bank of West Allis WI had a troubled assets ratio of 328.2% (BankTracker)

The Peoples Bank of Winder GA had a troubled assets ratio of 298.9%. (BankTracker)

ISN Bank of Cherry Hill NJ had a troubled assets ratio of 616.8%. (BankTracker)

Bank of Ellijay of Ellijay GA had a troubled assets ratio of 862.1%. (BankTracker)

First Commerce Community Bank of Douglasville GA had a troubled assets ratio of 842.6%. (BankTracker)