Tuesday, May 31, 2011

Tuesday roundup (05-31-11)

[US] Home prices enter double dip, falling more than in the Great Depression (Economic Signs of the Times blog) "Thomas Di Galoma, the managing director of government securities at Oppenheimer & Co, said: 'Based on the weakness in housing prices, Chicago PMI and consumer confidence, it appears as though the economy [as a whole!] could be headed for a double dip, especially as federal and state spending slows rapidly over the next six months.'" (The Independent) "'Falling house prices damage the economy in several ways,' explained IHS Global Insight economist Patrick Newport. 'They reduce wealth, which reduces consumer spending. They squeeze builder profits, which reduces housing starts. They force lenders to tighten lending standards, since the collateral is depreciating in value off the bat, reducing existing home sales. They reduce state and local property tax collections, resulting in spending cutbacks.'" (Agence France Presse)

Housing Imperils Recovery: Home Prices Sink to 2002 Levels; Consumer Confidence Falls as Pessimism Grows (The Wall Street Journal)

Consumer Confidence Index drops unexpectedly to 6-month low in May; gas, job worries persist (The Associated Press)

Food Stamp Usage Hits Fresh Record (ZeroHedge blog) Congress Mulls Cuts to Food Stamps Program Amid Record Number of Recipients (ABCNews blogs)

Florida’s Juvenile Justice Eliminating 1,200 Jobs and Closing 3 Youth Prisons (News Service of Florida)

Marcus Says Greek Debt Crisis Deteriorating, Threatening Global Economy (Bloomberg)

Eurozone crisis risks 'systemic' fallout, says Draghi (Agence France Presse)

Currency Guru Stephen Jen Gives 4 Reasons The Euro Crisis Will Only Get Worse (The Business Insider)

Moody’s Warns That It Might Downgrade Japan’s Debt (The New York Times) Japan fiscal scheme may not be enough to avoid downgrade:Moody's (Reuters)

Hunger crisis worsens, food system broken: Oxfam (Reuters) 'Perfect storm' looms for world's food supplies (Agence France Presse)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Home prices enter double dip, falling more than in the Great Depression

'Double dip' in home prices is official, and prices could drop more: Home prices fell sharply during the first quarter of 2011, according to the S&P/Case-Shiller index. The 'double dip' means they dropped below their Great Recession low point, reached in early 2009. (The Christian Science Monitor) Home Prices in U.S. Probably Kept Falling as Housing Absent From Recovery (Bloomberg) Why House Prices are Double Dipping (Time)

U.S. home prices have fallen more than in Great Depression (The Financial Post) Home Prices Double Dip to Levels Before Housing Bubble Burst -- "home prices in major metro areas are back to mid-2002 levels, with no end to the declines in sight" (ABCNews)

Home-price index at lowest point since 2006 bust: 12 cities reach lowest levels in nearly 4 years; home prices rising only in DC, Seattle (The Associated Press) Real House Prices and Price-to-Rent: Back to 1999 (Calculated Risk blog)

Falling Home Prices Erode Nest Eggs, Local Government Budgets (FoxNews) Like a Virus, Falling Home Prices Spread the Pain (The Wall Street Journal blogs)

Falling Home Prices Hit Big Banks, Fannie, Freddie (CNBC) What Does the Housing Double Dip Mean for Banks? (The Wall Street Journal blogs)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Monday, May 30, 2011

Monday roundup (05-30-11)

Danger of Greek Contagion Climbs (The Wall Street Journal)

The Risk of Political Unrest Increases in Europe (Pragmatic Capitalism) CIA Warns Of A Greek Military Coup, Rebellion, If Austerity Intensifies (ZeroHedge blog)

EU racing to draft second Greek bailout (Reuters) Greek Aid Package to Be Decided by June (Bloomberg) Reports: Next Greek bailout to include external supervision (Calculated Risk blog)

Europe misses Strauss-Kahn in its hour of need (Reuters)

Mobius Says Fresh Financial Crisis Around Corner Amid Volatile Derivatives (Bloomberg)

Carl Icahn Confesses That The "System Is Not Working Properly", Warns Of Another "Major Problem" Coming (ZeroHedge blog) Carl Icahn Issues Warning (CNBC)


Atlanta Fed's 2011 Financial Markets Conference: Interview with Simon Johnson (Youtube)


The Wall Street Takeover and the Next Financial Meltdown (Youtube)


The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Sunday, May 29, 2011

Sunday roundup (05-29-11)

Greece’s crisis could torpedo Europe’s recovery -- " A year after rescuing Greece from default, Europe is staring into the abyss." (The Washington Post)

Containing Greek debt crisis is priority: analysts (Agence France Press) "The idea that a Greek debt restructuring could be carried out in an orderly way is a 'fairytale', European Central Bank board member Lorenzo Bini Smaghi told the Financial Times in an interview published on Monday." (Reuters)

Here's What's Going To Happen When Greece Defaults by John Mauldin (The Business Insider)

How to Fix Greece: It's time for the devastated nation to face reality. The only way out is to restructure now, with bondholders taking a 50% hit. (Barrons) (The Big Picture blog)

Ireland to honour bailout loans, but wants a better rate (Bloomberg) We must fight back to renegotiate bailout: Dithering on the ECB's incompetent deal will only lead to further financial heartbreak, writes Colm McCarthy (The Irish Independent) Ireland May Need Another Loan From EU/IMF: Official (Reuters) (The Business Insider)

[The British Chambers of Commerce, known as the] BCC urges further stimulus over fears of stalling UK growth (The Independent) [To wit:] "Households will be clobbered by an interest rate rise this summer despite weaker than expected economic growth, business leaders warn today." (The Daily Mail) British Chambers of Commerce adds to UK woe by cutting growth forecasts: The British Chambers of Commerce (BCC) has cut its UK growth forecasts for the second time in six months. (The Telegraph)

David Stockman, Reagan economist, on debt spree -- "We're basically following the same path as the Greeks and the rest of Europe, and there's going to be a great day of reckoning, of reawakening. Once that starts, there could be a rapid, severe and even violent adjustment." (Bloomberg)

“The Risks Are Enormous”: Why Morgenson and Rosner Are So Worried -- "'We have even more 'too big to fail' institutions; more politically interconnected, very deep and wide institutions that could create another systemic event,' says Morgenson, a Pulitzer Prize-winning columnist at The New York Times. 'It's almost as if the situation that brought us to Fannie Mae and Freddie Mac having to be bailed out has now been squared or quadrupled. It's worse, not better.'" (Yahoo!'s The Daily Ticker)



Republicans still firmly against raising debt ceiling without big cuts: Sen. Mitch McConnell and presidential candidate Tim Pawlenty reiterate opposition to raising the U.S. debt ceiling without major moves to slash the deficit. (The Washington Post) Gross Believes Not Raising Debt Ceiling Would Crush Dollar (Benzinga)

Prof Steve Keen: Will there be a Double Dip in the USA? Part One (Youtube)



Prof Steve Keen: Will there be a Double Dip in the USA? Part Two (Youtube)



Mysterious fund allows Congress to spend freely, despite earmark ban (CNN)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Saturday, May 28, 2011

Saturday roundup (05-28-11)

Inspectors say Greece missed all fiscal targets: magazine (Reuters)

Time running out for Greece's economy, EC warns (Agence France Presse)

Eurogroup eyes Greek debt reprofiling (Reuters) Greek debt should not be restructured - ECB's Stark (Reuters) European Officials Warn Against Greek Debt Restructuring (The Wall Street Journal)

The Bank of England's astonishing escape from the financial crisis: The Bank of England has stood at the centre of the Britain's financial system for 317 years. (The Telegraph)

BOJ [Again] Calls Japan Fiscal State 'Very Serious' (The Wall Street Journal)

U.S. Has Binged. Soon It’ll Be Time to Pay the Tab. (The New York Times)

The U.S. Postal Service Nears Collapse: Delivery of first-class mail is falling at a staggering rate. Facing insolvency, can the USPS reinvent itself like European services have—or will it implode? (Bloomberg BusinessWeek)

Number of the Week: Glut of Vacant Homes Complicates Recovery (The Wall Street Journal blogs)

Unofficial Problem Bank list increases to 997 Institutions (Calculated Risk blog)

Top US lobbying banks got biggest bailouts - study (Reuters)

Peak oil and the Fall of the Soviet Union: Lessons on the 20th Anniversary of the Collapse (The Oil Drum)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Friday, May 27, 2011

Friday roundup (05-27-11)

Global Economic Rebound Weakens on Quake, Oil Price, European Debt Crisis (Bloomberg) Where's the Recovery? Hopes For Economic Rebound Fade (CNBC) http://www.cnbc.com/id/43194727 Economic Soft Patch Creates Political Problems
(The Wall Street Journal blogs)

ECB's Balance Sheet Contains Massive Risks: While Europe is preoccupied with a possible restructuring of Greece's debt, huge risks lurk elsewhere -- in the balance sheet of the European Central Bank. The guardian of the single currency has taken on billions of euros worth of risky securities as collateral for loans to shore up the banks of struggling nations. (Der Spiegel)

Greek Debt Default Chatter Continues to Fester (The Wall Street Journal blogs)

No light at end of the tunnel for Greece means dark clouds on Ireland's horizon (The Irish Times) Roubini Says Banks to Plunge Irish Into ‘Disastrous’ Crisis (Bloomberg)

Bank of England's Spencer Dale warns of hard times (The BBC) Growth outlook "bleak" in near term - Bank's Dale (Reuters)

Fitch Puts Japan Debt Rating On A Negative Outlook (The Wall Street Journal)

[In the US] Pending home sales dive 11.6 percent in April -- "dealing a blow to hopes of a recovery in the housing market" (Reuters) "'This makes me believe it will take longer to clear the excess inventory,' said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. 'It pushes the housing recovery even further out into the future.'" (Bloomberg)

If Mortgage Rates Keep Falling, Why Are Home Sales So Bad? (CNBC)

U.N. sees risk of crisis of confidence in dollar (Reuters)

Washington State Bank Is Shut; 44 Failures in 2011 (The Associated Press) First Heritage Bank of Snohomish WA had a troubled assets ratio of 387.6%. (BankTracker)

BBC HARDtalk - Jim Rogers - 17/5/2011 (Part 1/2) (Youtube)



BBC HARDtalk - Jim Rogers - 17/5/2011 (Part 2/2) (Youtube)



The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Thursday, May 26, 2011

Thursday roundup (05-26-11)

Economic Slowdown: Temporary or Something Worse? (Calculated Risk blog)

Foreclosure sales slow, but remain very high: Huge backlog of distressed properties means any housing recovery is a long way away (The Associated Press)

Report shows nearly a quarter of nation's foreclosures are in Florida (Palm Beach Post)

Less Income, More Layoffs (The Wall Street Journal blogs)

Could Money Make Strauss-Kahn Case Go Away? (Reuters)

Sony breached again, hackers disclose 2,000 more customer accounts (USAToday)

Could Japan’s Debt Lead to a Crisis? (Reuters)

Global Food Production May Be Hurt as Climate Shifts, UN Forecaster Says (Bloomberg)

Telefonica cutting extra 2,500 jobs: source (Agence France Presse)

Heinz 4Q profit climbs, will cut 800 to 1,000 jobs (The Associated Press)

Bayer to cut 540 jobs in Emeryville (Contra Costa Times)

What happens to your Facebook page when you accuse Liz Warren of lying (The Big Picture blog)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Is it a recovery yet? (Weekly report, 05-26-11)

According to Linda Duessel, a market strategist at Federated Investors in Pittsburgh, a recovery would be indicated by initial jobless claims below 500,000. (See this post.)

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.)

"Jobless claims increased by 10,000 to 424,000 in the week ended May 21, Labor Department figures showed today in Washington. The median estimate of economists in a Bloomberg News survey called for a drop to 404,000. The economy grew less than forecast in the first quarter, a separate report showed." (Bloomberg)

"'The rise in claims in this week provides further evidence that the underlying trend for jobless claims has deteriorated, suggesting a slowing in the labor market recovery,' economists at Merrill Lynch wrote." (Marketwatch)

SEE LAST WEEK'S POST HERE.

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Wednesday, May 25, 2011

Wednesday roundup (05-25-11)

Global Crisis 'May Not Be Over Yet': OECD (CNBC)

Greece's 100 billion-euro shadow over banks -- "said one European banker who has advised dozens of such banks ... [']Right now, all they can do is shut their eyes and hope.'" (Reuters)

Third Depression Watch (The New York Times blogs)

US Default ‘More Likely Than in Indonesia’ (The Financial Times)

A Debt Deal to Save America [David Walker, former comptroller general of the US, is interviewed] (CNBC)


Porter Stansberry: We're All Going to Have a Big Problem (Casey Research)


Durable-Goods Orders in U.S. Dropped 3.6% in April, the Most in Six Months (Bloomberg) US Economy Damaged More Than Thought by Japan Quake (CNBC) "A slowdown in goods production virtually guarantees a soft patch for overall U.S. economic growth." (The Wall Street Journal blogs)

Home Prices in U.S. Fell 5.5% in First Quarter, Biggest Drop in Two Years (Bloomberg)

Deadly tornadoes continue to plague Midwest: Tornadoes hit Oklahoma and Arkansas, resulting in 14 deaths and hampering cleanup and rescue efforts. Severe storms are brewing over eastern Kansas and are expected to roll across Illinois, Indiana and Kentucky. The storm season's death toll nears 500 in the South and Midwest. (The Los Angeles Times)

Robert Mundell: Deflation, Not Inflation, Should Be the Greater Concern (Seeking Alpha blog)

Bush/Obama Fraud Prosecutions Down 39% Since 2003 (The Big Picture blog)

State Auditor Says Pittsburgh Pension Plan 'Severely' Underfunded (WTAE)

THE 10 BANKS WHICH POSE THE GREATEST SYSTEMIC RISK (Pragmatic Capitalism)

Ricoh to cut 10,000 jobs to increase profit - Nikkei (Reuters)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Tuesday, May 24, 2011

Tuesday roundup (05-24-11)

Debt contagion fears return to the eurozone -- "'It is looking increasingly like a game of dominoes. Last year was a case of if. Now it is a case of when,' says Neil Williams, chief economist at Hermes, the UK fund manager." (The Financial Times)

Bullard: European debt turmoil could weigh on U.S. (Reuters)

Shades of 2008: A Greek Default Won’t Be ‘Contained’, John Mauldin Says -- "I'm worried that this one has a lot of contagion and that it'll infect the world." (Yahoo!'s The Daily Ticker)



Sovereign debt crisis: What rescue? -- "The most worrying element for the authorities is the two countries at the bottom end of this scale; Italy and Spain." (The Economist blogs)

Europe's Split on Debt Crisis Hardens: Central Banker Calls Greece Restructuring 'Horror Scenario' in Debate Over Solutions That Is Reigniting Investors' Fears (The Wall Street Journal) Greek economic crisis highlights EU divisions (Agence France Presse) Division Over Greek Default Is Sharpening (The Wall Street Journal)

Greece crisis worsens amid political stalemate: A damaging political stalemate [internally] is threatening to plunge Greece deeper into crisis as hopes of cross-party support for further austerity measures were dashed on Tuesday by the main opposition leader. (The Telegraph)

Greek default would hit others in euro zone -- "could push Portugal and Ireland into junk territory" (Reuters)

Irish face junk status if Greece restructures -- [Says Alastair Wilson, Moody’s chief credit officer in Europe: "If there were to be a Greek default there could potentially be multi-notch downgrades to the weakest sovereigns."] (The Irish Times)

[UK] Budget Deficit Widens to $16.1 Billion as Tax Receipts Fall on Slow Growth (Bloomberg)

Lloyds and RBS Among 14 U.K. Banks on Moody’s Downgrade Review (Bloomberg) Glum Times for Europe’s Banks (The Wall Street Journal blogs)

Italy joins the suspect list as eurozone pressure rises (The Independent)

Fitch cuts Belgium's ratings outlook: Fitch ratings agency cuts outlook on Belgium's government bonds, affirms their AA+ rating (The Associated Press)

[US's] QE2 was a bust: Economic data is worse than before (Marketwatch)

More Concern about Raising Debt Limit than [about] Government Default (Pew Research Center for the People & the Press)

New-home sales up, but pace remains sluggish -- "far below the pace that would represent a healthy housing market" (The Associated Press)

Is Deflation in the US Housing Sector Accelerating? (The Institutional Risk Analyst)

Troubled banks made up about 12 pct of total in Q1 ["the highest level in 18 years"] (The Associated Press) Revenue Slide Dents Banks' Recovery Despite Big First-Quarter Profits, Shrinking Loan Balances Keep Concerns About Sector Simmering (The Wall Street Journal) Banks post solid profits, but problems persist: U.S. banks still showing aversion to risk, chief Sheila Bair says (Marketwatch)

[Five Largest] Banks Face $17 Billion in Suits Over Foreclosures (The Wall Street Journal)

Big-bank CEOs: the billion-dollar bust: Has any group ever been more richly rewarded for failure than the CEOs of the six biggest U.S. banks? (Fortune)

NY & California AGs Are Prosecuting Bank Fraud (The Big Picture blog)

Insurers face big losses from weather disasters (Reuters) More Deadly Storms Could Hit U.S. Plains (Bloomberg)

Energy Rationing Globally? (Cliff Küle's Notes)

It can go wrong? It will go wrong. (The Washington Post)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Monday, May 23, 2011

Monday roundup (05-23-11)

EU debt crisis spreads to richer nations (The Globe and Mail of Toronto) Europe Debt Concerns Grow: Spanish Vote Results, Greek Woes, Ratings Warnings Add to Fears (The Wall Street Journal)

Ferguson Interview on European Debt Crisis: Niall Ferguson, a history professor at Harvard University and a Bloomberg Television contributing editor, discusses the European sovereign-debt crisis. Ferguson speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Bloomberg)



Italy to bring forward deficit-cutting decree: sources (Reuters)

How Spain could rip the eurozone apart (Money Week)

Spain and Italy Turn Against Greece Over Reform Efforts (The New York Times)

Greece must bolster budget steps urgently - EU's Rehn (Reuters)

Greece to start selling domestic assets to ease debts (The BBC) (Bloomberg)

What happens when Greece defaults -- "Every bank in Greece will instantly go insolvent. ... The Greek government will forbid withdrawals from Greek banks." etc. (The Telegraph)

DSK downfall a blow for Ireland: The frontrunner for the IMF's top job, Christine Lagarde, has taken a hard line on our corporation tax, writes Daniel McConnell (The Irish Independent)

Why the Next IMF Chief Will Come from Europe (Der Spiegel)

Moody's warns Japan recession is negative for rating (Reuters)

Nearly Half of Americans Are ‘Financially Fragile’ (The Wall Street Journal blogs)

US and global markets have entered into a liquidity crisis -- "The world did not learn the lessons of 2008, and the credit and liquidity crises that nearly shutdown the global economy. And now that the US has little capital to offer because of their own debt ceiling issues, along with Europe unable to deal with their member states who are on the brink of default, this coming crash may be too big for any amount of bailout money given to help stave off disaster." (The Examiner)

Spillway flood [in Louisiana] could cause $2 billion in damage (CNN)

Tornadoes Batter Central United States (The New York Times)

State and local governments may cut 450,000 jobs in FY2012 (Reuters) A Savage Lesson From Europe for Muni Bonds (CNBC)

Housing Market's Prospects Bleak As Foreclosed Property Backlog Grows (The Huffington Post blog) "Simply put, the foreclosure wave is overwhelming banks and putting a significant strain on the housing market and the greater economy." (Firedoglake blog) How the Foreclosure Flood Is Swamping Home Prices (CBS's Bnet) Implications of Foreclosure Inventory Growing (The Atlantic)

U.S. Commercial Real Estate Prices Decline to Post-Crash Low, Moody’s Says (Bloomberg) Definitely a Duck -- "If it [the weak economy] looks like a duck, swims like a duck, and quacks like a duck, then it's probably a duck, right?" (Financial Armageddon blog)

Measuring systemic financial risk (Econbrowser blog)

'Too Big to Fail' captures the frustration of government officials and the arrogance of Wall Street leaders: The HBO docudrama accurately depicts the panic that gripped the Federal Reserve Bank and the Treasury Department as they scrambled to avoid another Great Depression. (The Los Angeles Times)

What Destroyed Rome?: Martin Armstrong says it was Rome's unfunded government employee pensions that destroyed it ... (Cliff Küle's Notes) What Destroyed Rome was its Unfunded Government Employee Pensions (Martin Armstrong.org)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Sunday, May 22, 2011

Sunday roundup (05-22-11)

Italy Rating Review Fuels Contagion Risk From Greece’s Deepening Debt Woes (Bloomberg) S&P warning heralds tough times ahead for Italy (Reuters)

Deep in crisis, Portugal tries to transform (The Washington Post)

[US] States shorten duration for unemployment benefits: Some states seek to limit business tax increases by shortening length of unemployment benefits (The Associated Press)

Unofficial Problem Bank list increases to 988 Institutions (Calculated Risk blog)

David Buckner faints on Glenn Beck's show (Youtube)



The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Saturday, May 21, 2011

Saturday roundup (05-21-11)

Problems pile up in the IMF in-tray: Dominique Strauss-Kahn's successor will face a stack of pressing issues (The Observer) Another IMF leader from Western Europe would be a historic mistake: Appointing the next IMF boss from Western Europe would be a mistake of historic proportions – not least given the extent to which the centre of economic gravity has now shifted to the emerging markets of the east. (The Telegraph)

Meltdown in Greece threatens entire union (The Times of Johannesburg, South Africa) 'Soft Debt Restructuring Cannot Solve Greece's Problems' (Der Spiegel) ECB officials [Nowotny and Stark] warn on Greek debt restructuring-papers (Bloomberg) [ECB Governing Council member] Weidmann Says ECB May No Longer Take Greek Debt If Maturities Are Extended (Bloomberg) Greek PM, ECB officials reject debt restructuring (Reuters)

IMF Says Ireland’s Ability to Sell Bonds Remains ‘Elusive’ (Bloomberg) IMF's Chopra says Europe must do more for Ireland: Rift widens between Fund and Europe over bailout terms (The Irish Independent)

S&P: Italy’s rating outlook revised to negative on concerns of low growth, other debt fears (The Associated Press) Italy Pledges to ‘Intensify Its Reforms’ After S&P Warning (Bloomberg) Italy Treasury: Italy Will Always Respect Fiscal Commitments (The Wall Street Journal)

The Euro Doom Scenario Starts With What's Happening In Spain Right Now (The Business Insider)

Number of the Week: 95 Days to Wipe Out 2011 Growth [in the US] (The Wall Street Journal blogs)

States cut money sent to cities, counties (Reuters)

Jim Rogers - Oil price to rise beyond expectations 17 May 2011 (Youtube)



The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Friday, May 20, 2011

Friday roundup (05-20-11)

Central Banks Snap Up Gold in First Quarter (CNBC)

IMF Calls for New EU Debt Plan (The Wall Street Journal)

Rifts widen over Europe's debt crisis as Greek borrowing costs soar (The Times of London)

Fitch cuts Greece, warns against ‘re-profiling’ (Marketwatch) (TheStreet.com)

European Central Bank threatens to pull the plug on Greek lending: The European Central Bank has threatened to stop lending to banks using Greek government bonds as collateral if Athens changes the terms of the debt, a move which could bring down the country's banking system. (The Telegraph)

Italy Outlook Revised to Negative by S&P; Ratings Affirmed (Bloomberg)

Spanish Hidden-Debt Worries Poke the PIIGS (The Wall Street Journal blogs)

IMF Board Approves $36.8 Billion Loan to Portugal (Bloomberg)

Panasonic Says Impact of Quake This Year ‘Extremely Severe’ (Bloomberg) Panasonic Sees 'Very Tough' Year Ahead (The Wall Street Journal)

Hackers hit Sony sites raising more security issues (Reuters)

Why Japan's earthquake caused a recession (Time blogs)

Dimon: U.S. Debt Default Could be 'Catastrophic' (Fox Business) "Failure by the U.S. to get its fiscal house in order will trigger financial consequences that will 'dwarf Lehman Brothers' and seriously diminish the nation’s role as a world economic leader, Jamie Dimon told a Denver audience Thursday night." (Phoenix Business Journal) "'When I say worse, think of a Lehman times 10,' he said of the investment bank whose failure put the nation on the brink of financial ruin in September 2008." (The Denver Post)

Credit Growth Drives Economic Growth, Until It Doesn’t (Cliff Küle's Notes blog)

Strauss-Kahn Released on Bail, IMF Battle Heats Up (Reuters)

The New Geopolitics of Food: From the Middle East to Madagascar, high prices are spawning land grabs and ousting dictators. Welcome to the 21st-century food wars by Lester Brown (Foreign Policy)

Stink bug spread worries growers across nation: Researchers scramble as voracious stink bugs hit mid-Atlantic crops, spread across US (The Associated Press)

F.D.I.C. Closes Three Banks (The Associated Press)

Atlantic Southern Bank of Macon GA had a toxic assets ratio of 501.2%. (BankTracker)

First Georgia Banking Company of Franklin GA had a toxic assets ratio of 262.4%. (BankTracker)

Summit Bank of Burlington WA had a toxic assets ratio of 145%. (BankTracker)

Rule of Law: Banker Criminality Demands Prosecution (The Big Picture blog)

TATA Steel to cut 1,500 UK jobs in shake-up (Reuters)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Thursday, May 19, 2011

Thursday roundup (05-19-11)

Japan’s economy slips back into recession: GDP drops at a 3.7% annualized rate due to March 11 disaster (Marketwatch) Japanese Economy Collapses: Q1 GDP Drops At Double Consensus Rate, Epic Nominal Plunge Of -5.2% (ZeroHedge blog)

Japan’s Recession Heightens Pressure for Stimulus (Bloomberg) [However ...] Bank of Japan Refrains From Adding Stimulus (Bloomberg)

Home Sales in U.S. Drop, Manufacturing Stalls in Sign Recovery Is Flagging (Bloomberg) (The Wall Street Journal) Housing Double Dip: Why Prices Will Keep Dropping (The Fiscal Times)

Fed’s Dudley: Underlying Inflation Still Too Low (The Wall Street Journal)

The Debt Ceiling Fiasco: Fights over the budget are normal and proper in a democracy. But threatening to default could have dire consequences for the dollar, interest rates and the economy. (The Wall Street Journal)

One in Ten Americans Receives Food Stamps? (The Mess That Greenspan Made blog) New breed of Americans going hungry (USAToday) Drought in Europe Hits Wheat Crop (The New York Times) Post-Mubarak Egypt 'running out of food' (United Press International)

Dominique Strauss-Kahn Indicted on Seven Counts [Updated: And Out of Jail] (New York Magazine) IMF Begins Succession Process (The Wall Street Journal blogs)

Of the 1%, by the 1%, for the 1% by Nobel Prize winner Joseph E. Stiglitz (Vanity Fair)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Is it a recovery yet? (Weekly report, 05-19-11)

According to Linda Duessel, a market strategist at Federated Investors in Pittsburgh, a recovery would be indicated by initial jobless claims below 500,000. (See this post.)

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.)

"Jobless claims declined by 29,000 to 409,000 in the week ended May 14, Labor Department figures showed today in Washington. The median estimate of economists in a Bloomberg News survey called for a drop to 420,000." (Bloomberg)

"There have been several indicators lately that the recovery is losing steam, and while the direction this week was right, the level is not that encouraging. This is the sixth straight week we have been above the 400,000 level." (Zack's Investment Research)

SEE LAST WEEK'S POST HERE.

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Wednesday, May 18, 2011

Wednesday roundup (05-18-11)

Geithner: "The Size Of The Shock Was Larger Than What Precipitated The Great Depression” (Washington's Blog) World on course for next crisis, warns Gordon Brown: The global economy is heading towards another meltdown despite the lessons of the last financial crisis, Gordon Brown has warned. (The Telegraph)

Fed’s Bullard Sees Europe Debt Crisis as Top Risk to U.S. Economic Outlook (Bloomberg) With IMF chief Dominique Strauss-Kahn behind bars, bailouts are iffy (Politico)

Could Greece be the next Lehman Brothers? Yes – and potentially even worse: If Athens reneged on its debts it would shatter the markets' confidence in the eurozone project (The Guardian)

Greek Restructuring Rejected by ECB Officials in Clash With EU Politicians (Bloomberg) ECB's Wellink warns against Greece restructuring -- "saying it could lead to a chain reaction affecting other European countries and banks" (Reuters)

Pressure Builds for Greece and Portugal Despite Bailouts (Reuters) The Greek crisis: Miles to go before they sleep (The Globe and Mail of Toronto) Q+A-Merkel's position on Greek debt crisis solutions (Reuters)

Spain’s peripheral problems – €26.4bn of hidden debt? (FT Alphaville blog)

Japan’s Economy Shrinks More Than Forecast (Bloomberg)

US Economic Worries Hit 2 Year High (ZeroHedge blog)

Fed’s Bullard Says U.S. Must Fix Deficit Before Crisis Strikes -- "When it does blow up it will be too late" (Bloomberg)

Buffett’s silly talk about the U.S. debt: U.S. isn’t special and can’t avoid default forever (Marketwatch)

World Bank Sees Dollar Reserve Status Ending Over Next Decade (ZeroHedge blog)

State finances threaten recovery: Whitney (Reuters) The Hidden State Financial Crisis: My latest research into opaque state financial statements suggests taxpayers will be surprised by how much pensions are underfunded by Meredith Whitney (The Wall Street Journal)

'Waterfall' of muni downgrades will trigger rapid sell-off: Whitney: Insurers in line to get soaked, controversial analyst predicts; buying opp after carriers unload (Investment News)

AIA: Architecture Billings Index [a leading indicator for new commercial real estate] indicates declining demand in April (Calculated Risk blog)

U.S. Housing May Not Recover Until 2014: Survey (Bloomberg) (Inman)

Deflation May Win Out by Richard Russell (Financial Sense) David Rosenberg: Those Complaining of QE Now Will Beg For It Later (Financial Sense)

Many With New College Degree Find the Job Market Humbling (The New York Times)

For teen job-seekers, summer again offers dismal prospects (The Boston Globe)

Flooding [along the Mississippi] Takes Economic Toll, and It’s Hardly Done (The New York Times)

Food: The Hidden Driver Of Global Politics (National Public Radio)



Smoke and Fire: Why France Was Silent About Strauss-Kahn's Womanizing (Time) Sarkozy to IMF chief in 2007: Control yourself (CBSNews) Dominique Strauss-Kahn hired prostitutes from the "Manhattan Madam" who infamously also served Eliot Spitzer, the disgraced former Governor of New York, she claimed on Wednesday night. (The Telegraph) DSK's Past Behavior Under Scrutiny: An 'Avalanche' of Women (The Atlantic Wire) More Allegations of Sexual Assault by Dominique Strauss-Kahn Reported (Care2 blog)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.

Tuesday, May 17, 2011

Tuesday roundup (05-17-11)

The Number #1 Thing Keeping Professional Investors Up At Night [= the European sovereign debt crisis] (The Business Insider) Huge Cracks in Global Recovery Thesis; Industrial Production Unexpectedly Drops in Germany, France; UK Weaker than Expected (Mish's Global Economic Trend Analysis blog)

Greece Default Risk Increasing Since Arrest of Strauss-Kahn, El-Erian Says (Bloomberg) Greece Has Ways to Fix Debt Woes, but All Lead to Misery (The New York Times blogs) EU concedes Greek debt could be restructured (The Irish Times)

BOJ warns [Japan's] economy in severe state, beating deflation not enough (Reuters)

Debt-limit: GOP threatens to blow up economy (The Atlanta Journal-Constitution blogs) Geithner: GOP will bear responsibility for unprecedented debt default if it doesn’t compromise (The Washington Post)

Housing Market Still Plagued by Foreclosures, Mortgage Woes, Tumbling Price: The U.S. housing market showed more signs of weakness Tuesday with the fall of new home construction by more than 10 percent and new building permits by 4 percent. Judy Woodruff discusses the fallout from the disappointing new housing report with Inside Mortgage Finance's Guy Cecala and The Washington Post's Dina ElBoghdady. (PBS Newshour) (Youtube)



Housing starts, permits fall in April -- "pointing to prolonged weakness in the housing sector" (Reuters) Behind the Numbers: Any Hope in Housing Starts? (The Wall Street Journal blogs) New-home builders worried housing market won't recover this year (The Associated Press) "'Job growth is essential to household formation and to keep home prices from falling further,' said Eric Green, chief market economist at TD Securities Inc. in New York, who forecast permits at 550,000. 'I don’t see home sales doing much of anything' for the foreseeable future." (Bloomberg)

High Gasoline Prices impacting consumers (Calculated Risk blog)

Northrop Grumman [500] job cuts come amid defense belt-tightening: Federal budget pressures hit defense industry, a big piece of Maryland's economy (The Baltimore Sun)

IMF Chief Under Suicide Watch at NYC Jail (The Associated Press)



IMF chief claims consent in hotel 'attack' (The New York Post) IMF Chief Dominique Strauss-Kahn's Defense Prompts Reexamination of Timeline, Hotel Video in Alleged Sex Assault Case (ABCNews) IMF’s Strauss-Kahn Said to Be Placed on a Suicide Watch at Rikers Island (Bloomberg) Dominique Strauss-Kahn sex assault case: IMF chief on suicide watch, maid told brother of attack (The New York Daily News) Family, Lawyer: Alleged Victim Unaware Of Who IMF Chief Strauss-Kahn Was (CBS New York) "'She was still crying today,' a friend of the alleged victim told ABC News. 'She was completely devastated. I was the first person she called.'" (ABCNews)

Will Strauss-Khan's Fall Lead to the Dollar's Demise? (Time blogs)

The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest that an energy shock may be coming much closer in time than is generally imagined.