Thursday, June 30, 2011

Thursday roundup (06-30-11)

Strauss-Kahn Case [in which the former IMF chief was accused of raping a hotel maid] Seen as in Jeopardy [following discoveries about the accuser dug up by the prosecutors themselves] (The New York Times) Dominique Strauss-Kahn Accuser's Credibility Under Fire (ABCNews) AP source: Ex-IMF leader’s bail to be reduced because of issues with accuser’s credibility (The Associated Press)

Greece's Parliament implements austerity measures: Legislation enabling swift enactment of budget cuts totaling $40 billion and the sell-off of $72 billion in state assets is passed by the Greek Parliament, the second and final piece of austerity legislation put to the test this week. (The Los Angeles Times)

Europe didn't dodge judgment day: Why Greece's bailout may not prevent a Continental credit crisis and another global economic slowdown. (Fortune)

How Europe's elites turned PIGS into a full-bore financial disaster (The Australian)

Greek default would trigger debt repricing: Fitch (Reuters) Contagion biggest threat to insurers in Greek crisis (Reuters)

How Greek Default Could Lead to a Double-Dip U.S. Recession (Seeking Alpha blog)

Weak economy may force second bailout of Ireland (Reuters) Irish [Existing] Bailout Is Making Matters Worse (The Wall Street Journal blogs)

Italian cabinet approves tough austerity plan (Reuters) (The New York Times) Italy’s bold austerity plan is all smoke and mirrors -- "Mr. Berlusconi’s term ends in 2013, when he is expected to step down. That means the worst of the cutbacks are being passed on to the next government." (The Globe and Mail [of Toronto] blogs)

Portugal Plans One-Time Tax Surcharge on Citizens for $113 Billion Bailout (Bloomberg)

Why China’s Heading for a Hard Landing, Part 1: A. Gary Shilling -- "Few countries are more important to the global economy than China. But its reputation as an unstoppable giant -- as a country with an unending supply of cheap labor and limitless capacity for growth -- masks some serious and worsening economic problems." (Bloomberg) Part 2 (Bloomberg) Part 3 (Bloomberg)

BOJ Tankan Shows Sentiment Worsened Sharply After Quake (The Wall Street Journal) (Marketwatch)

Geithner Says Failure to Raise Debt Ceiling Unthinkably Damaging -- "much more damaging than even what we faced in that dark period of ’08 and ’09” (Bloomberg) [FDIC Chairman] Bair Warns of 'Dangerous Game' in US Debt Talks (Reuters) (The Wall Street Journal blogs)

Obama Pushes for a Deficit Deal by July 22 (The Wall Street Journal)

The real reason America’s playing debt ceiling roulette -- "The truth is that most liberals have no stomach for cutting spending, especially on the Social Security and Medicare programs that dominate the nation's long-term budget problems." (The Washington Post blogs)

Double-Dip Watch: Did the Economy Shrink in May?: A roundup of the month's reports suggests that the U.S. economy failed to meaningfully improve. In fact, it may have contracted. (The Atlantic)

Consumer Income Only Kept Afloat by Government Payments (The Wall Street Journal blogs)

Accounting for American public pensions is still flawed -- "There is crazy and then there is accounting for American public-sector pensions." (The Economist)

Pimco’s Simon: There Was Never a Housing Recovery (The Wall Street Journal blogs)

Lockheed's aeronautics unit to cut 1,500 jobs (Reuters)

HSBC to Cut 700 Jobs in U.K. (The Wall Street Journal)

[Chicago Mayor] Rahm Emanuel: 625 city worker layoffs if union won’t accept reforms (The Chicago Sun-Times)

Connecticut Steps Closer to Widespread Layoffs -- "after state employee unions rejected a labor deal meant to balance the state’s $40.1 billion two-year budget" (The New York Times) "Facing tough opposition, [Gov.] Malloy dropped his plan to cut aid to cities and towns. That means Malloy may consider laying off an additional 1,000 state employees, on top of the 6,400 jobs he's already cutting, according to the Hartford Courant." (NBC Connecticut)

Bill to stop Harrisburg bankruptcy sent to Pa. gov (The Associated Press)

US banker gets 30 years in big fraud case (Agence France Presse) How Fannie’s Silence Opened Way to $3B Fraud (Bloomberg)

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, 06-30-11)

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.)

"There were 428,000 initial jobless claims filed in the week ended June 25 -- 1,000 fewer than the week before, the Labor Department said. It marked the 12th straight week initial claims have stayed above the 400,000 mark -- and was worse than the 420,000 claims economists surveyed by Briefing.com had expected." (CNN)

"'Another disappointing report,' Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. 'This report does nothing to reassure anyone that the job environment is improving.'" (The Associated Press)


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, June 29, 2011

Wednesday roundup (06-29-11)

[Euro zone's] Sovereign debt crisis still dangerous - ECB's Orphanides (Reuters)

Greece ties Europe in knots: Tiny nation's chaos threatens world's economic order (The Chicago Tribune)

Money markets, banks may spread Greek contagion [to the US] - IMF (Reuters)

Those who call for austerity [in the UK] are calling for a second Great Depression by David Blanchflower (The New Statesman) "David Blanchflower is Bruce V Rauner Professor of Economics at Dartmouth College, New Hampshire, professor at the University of Stirling and a former member of the Bank of England's Monetary Policy Committee. He is the Economics Editor of the New Statesman." (The New Statesman)

Moody’s Warns on Spanish Regional Debt (The Wall Street Journal blogs)

Portugal's 1Q Budget Deficit Higher Than Expected (The Wall Street Journal)

IMF Urges U.S. Debt-Ceiling Increase to Avoid a ‘Severe Shock’ to Economy (Bloomberg)

S&P to deeply cut U.S. ratings if debt payment missed (Reuters) Moody's warns of spillover if US downgraded (Agence France Presse)

U.S. enters next round of public pensions fight (Reuters)

The number that's killing the economy -- "the total debt Americans and their government owe as a percentage of the gross domestic product" (CNN)

The state [of Washington] is shutting down its tourism agency (KAPS) Recession forces states to rethink tourism funding (The Associated Press)

New Lloyds bank boss set to axe more jobs -- "could unveil another 15,000 jobs cuts" (Agence France Presse)

[CT Gov.] Malloy: Eliminate 6,466 State Jobs (NBC Connecticut) Beneath Connecticut’s Image of Affluence, Deep Fiscal Pain (The New York Times)

Credit Suisse to Cut 600 Jobs (The New York Times blogs)

MPS [Milwaukee Public Schools] to lay off 519 employees (The Business Journal)

Soggy Corn Fields Curb Planting as Demand for Ethanol, Animal Feed Climbs (Bloomberg)

Epic Too Big To Fail Infographic! (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.

Tuesday, June 28, 2011

Tuesday roundup (06-28-11)

Europe drifting to an inevitable, disastrous crisis by Satyajit Das, author of Extreme Money: The Masters of the Universe and the Cult of Risk (The Digital News Agency)

Lagarde wins IMF top job, presses Greece on crisis (Reuters)

Greece most complex debt crisis for years: IIF chief (Reuters)

Why France's Rescue Plan for Greece Won't Work Either (CNBC)

EU’s Rehn: ‘No Plan B to Avoid Greek Default’ (The Wall Street Journal blogs)

In a Greek Default, Higher Risk for Money Market Funds (The New York Times) Is There Greek Debt in My Money-Market Fund?: Lawmakers again question the amount of European debt in money-market funds, held for their perceived safety (The Wall Street Journal)

Portugal shows austerity zeal, postpones high speed rail (Agence France Presse) Portugal Government Confirms It Will Speed Up Austerity Measures (The Wall Street Journal)

As Greece goes, so goes Italy?: A panic of sorts is sweeping through European trading desks concerning all things Italian. A sovereign default in the world's third-largest public debt market would be catastrophic. (Fortune) Italy Ranked Riskier Than Hungary, Ireland in BlackRock Index (Bloomberg) Contagion fears build as Italy’s forced to pay more (City A.M.) "Italy’s 10-year borrowing costs rose to the highest in almost three years at a second day of bond sales" (Bloomberg)

Consumers [in the UK are] spending less, forcing shops to shut: data (Agence France Presse) Disposable Income Falls in U.K. (The Wall Street Journal)

U.S. Consumer Confidence Hits Seven-Month Low (Bloomberg) Consumer confidence in June worst in eight months (Marketwatch) Consumers Weighed Down by Concerns About Jobs, Income (The Wall Street Journal blogs)

Zandi: Debt default would trigger recession (Yahoo! News blogs) Top economist: Raise the debt ceiling or blow the recovery 'out of the water': The US economy will double its growth rate by the end of the year, if Congress raises the debt ceiling, says economic forecaster Mark Zandi. Otherwise, 'we would be thrown into recession.' (The Christian Science Monitor) Key economist: Failure to raise debt ceiling will cause serious damage (The Hill blogs)

Debt ceiling delay would be 'chaotic' (CNN) Failure to Raise U.S. Debt Cap May Idle 800,000 Workers, Budget Group Says (Bloomberg)

Blinder Says Wall Street May Be Underestimating Impact of Budget Impasse (Bloomberg)

Home Prices Drop Again, Extending a Double-Dip (The National Journal) Home Prices in 20 U.S. Cities Fell 4% in April -- "the biggest drop since November 2009 ... showing the housing market remains an obstacle for the U.S. recovery" (Bloomberg) Home Prices in 20 U.S. Cities Fall by Most in 17 Months, Case-Shiller Says (Bloomberg) Case-Shiller Brings No Good News, More Bad News For Housing (Forbes blogs) Chicago-area home prices set another recession low (The Chicago Sun-Times)

Commercial Lenders Take Step Into Riskier Deals (The New York Times)

5 Banks At Risk of a Commercial Real Estate Double Dip (The Street.com)

Minn. budget talks go to wire; shutdown hours away (The Associated Press)

New Jersey Asks JP Morgan For $2.25 Billion Loan (The Business Insider)

[CT Gov.] Malloy: Lay Off 5,466 State Workers, Cut 1,000 More Jobs Now Vacant, Close Minimum Security Prison: Governor Also Taking $54 Million Away From Municipalities In Each Of Two Years (The Hartford Courant) (Reuters)

Pennsylvania Senate threatens state control of Harrisburg (Reuters)

Nearly half U.S. states close budget gaps with cuts: CBPP -- "All states except Vermont must end their fiscal years with balanced budgets." (Reuters)

Campbell to cut 770 jobs, close Russian operations (The Associated Press)

Worst drought in 60 years hitting Horn of Africa: U.N. (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.

Monday, June 27, 2011

Monday roundup (06-27-11)

Greek woes may eclipse Lehman - Ackermann (Reuters)

France seeks 30-year lifeline for Greece (Agence France Presse)

Euro Area Crisis: Is Control About to Be Lost? (Seeking Alpha blog)

Opec chief hits at IEA for releasing oil (The Financial Times)

Fed's Hoenig - Large firms imperil financial system (Reuters) Biggest banks threaten 'future of capitalism,' Fed official says (The Los Angeles Times blogs) Fed’s Hoenig Sees Economic Danger in Big Financial Firms (Bloomberg) Fed official: Bring back tough Wall Street rules (CNN) Do SIFIs Have a Future? (The Kansas City Federal Reserve)

Pimco’s El-Erian Says U.S. Debt Default Might Have ‘Catastrophic’ Effect (Bloomberg)

The Next Mortgage Bombshell -- "The private insurers that cover $700 billion of U.S. mortgages are facing an onslaught of foreclosures. " (Barron's)

Dollar Seen Losing Global Reserve Status (The Financial Times)

How to Think About Mega-Bank Capital Requirements (CNBC)

Are We Months Away From Recession? (Seeking Alpha blog)

Austerity Is Already Here, and It's Killing the Recovery: State and local government spending has already declined over the past 18 months, dampening growth and hiring (The Atlantic)

Layoff notices heading to 1,300 Hennepin County [MN] employees (Minneapolis Star-Tribune)

CPS Set To Lay Off 1,000 Teachers This Week (The Huffington Post blog)

Greater Manchester police force confirms 900 job cuts (The BBC)

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, June 26, 2011

Sunday roundup (06-26-11)

Advanced economies must 'cut debt' to prevent new crisis (Agence France Presse)

Bankers agree on plan to increase capital buffers: Central bankers agree to minimum capital levels for the world's biggest banks (The Associated Press)

The euro: A project in peril: The catastrophe in Greece is merely the starkest incidence of long-running flaws within the eurozone (The Guardian)

Austerity plan key to Greece bailout: European Union leaders advise Greeks to accept the unpopular tax increases and spending cuts if they want a loan to save their country from default and possible bankruptcy. (The Los Angeles Times)

Teetering on a Greek precipice (The Business Spectator) "'We are on the verge of an economic collapse which starts, let's say, in Greece but it could easily spread,' the 80-year-old investor [George Soros] said. 'The financial system remains extremely vulnerable.'" (The Independent)

Greek debt restructure inevitable: PIMCO's El-Erian (Reuters)

How did a marginal, misgoverned little nation push all of Europe to the brink? (Newsweek)

[Irish] Private sector debt default inevitable, say analysts (The Irish Times)

Italy government tensions rise over austerity plans (Reuters)

Lawmakers work to prevent need for U.S. Postal Service bailout (The Hill)

Lloyds strategic review puts up to 15,000 jobs at risk: New chief executive António Horta-Osório expected to unveil major cost-cutting drive this week (The Guardian) Lloyds has largest exposure to risky loans -- "more than double that of any of its top five rivals" (The Financial Times)

1,000 Chicago teachers to be let go in annual layoff: Budget cuts, school closings and lower enrollment pare workforce, but many teachers typically are rehired (The Chicago Tribune)

Our Dwindling Food Variety (National Geographic)

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, June 25, 2011

Saturday roundup (06-25-11)

Europe playing Russian Roulette: The EU should have long ago isolated the fiscal crisis to Greece, Ireland and Portugal, says Colm McCarthy (The Irish Independent)

The words which count in eurozone-Greece crisis: A single word, default, what it means, how it works and the damage it could spread around the world is the fulcrum of the next step in the Greek-eurozone debt crisis. (Agence France Presse)

Five economic lessons from Sweden, the rock star of the recovery (The Washington Post)

Forecasts for [US] Growth Drop, Some Sharply (The New York Times)

The mother of all tail risks: A US technical default would convulse markets. Nothing else is certain (The Economist)

Unofficial Problem Bank list at 1,001 Institutions and Transition Matrix (Calculated Risk blog)

FDIC orders Colorado Capital Bank to capitalize (The Denver Post) Feds take action against Iron Range bank: The Federal Deposit Insurance Corporation has ordered American Bank of the North on the Iron Range to take better care of its finances. (Duluth [MN] News Tribune) FDIC checks up on area bank’s administration -- "Waumandee State Bank is the latest addition to a list of more than 50 Wisconsin banks that have been ordered to improve by the Federal Deposit Insurance Corp." (The Winona Daily News)

The Moral Hazard of Money Market Fund Madness (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.

Friday, June 24, 2011

Friday roundup (06-24-11)

Big bills racked up to buttress economic recovery are coming due: Although a Greek fiscal meltdown has been averted for now, governments and central banks worldwide face hard choices as pressures mount to lower debt burdens. (The Los Angeles Times)

Why Austerity Doesn't Matter: Greece Is Still Going to Default (CNBC)

Grecian Burn: Young people and the elderly throw incendiary devices and yogurt to protest Greece's proposed austerity measures. (The Daily Show with Jon Stewart)


Grecian Burn - Credit Default Swaps: Aasif Mandvi explains how Goldman Sachs helped Greek people to continue retiring a few years before puberty. (The Daily Show with Jon Stewart)


Why Greek debt matters to EU, U.S. (The Atlanta Journal-Constitution)

Worsening Debt in Europe Is Called Major Threat to British Banks (The New York Times)

Spain to Cut 2012 Spending 3.8% in Deficit Fight (Bloomberg)

Investors pull cash from U.S. money funds on Greece worries (Reuters)

State Lawmakers in U.S. Race to Close Budget Deficits as Deadlines Loom (Bloomberg)

Looking Worse (Financial Armageddon blog)

Mountain Heritage Bank fails, 48th closure of 2011 (Marketwatch) Mountain Heritage Bank of Clayton GA had a toxic assets ratio of 861.7%. (BankTracker)

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, June 23, 2011

Thursday roundup (06-23-11)

Sovereign Credit Risk Increases to Record in Europe, Default Swaps Show (Bloomberg) Portugal and Ireland debt yields hit fresh highs (The Financial Times)

Fear of fear itself: Is this Europe’s Lehman moment? (The Economist)

Greece Warned Bailout Will Stop If Austerity Program Not Implemented - Sources (The Wall Street Journal)

Could Italy go the way of Greece? (Reuters blogs) Moody's Warns On Ratings Of Italian Banks (The Wall Street Journal)

Fed worries about spillover from Europe's debt crisis to U.S. financial system (The Los Angeles Times blogs)

US, other nations releasing oil from reserves: World markets were shocked Thursday by a surprise announcement of a coordinated, global release of oil from emergency stockpiles: 60 million barrels in all, 30 million of which will come for the US Strategic Petroleum Reserve. NBC's Tom Costello reports. (NBC Nightly News)


U.S. and allies to tap into oil reserves: The White House exercises one of its last remaining options to stimulate the struggling economy by adding to the supply of oil. (The Los Angeles Times) (Economic Signs of the Times blog)

Budget Talks Near Collapse as G.O.P. Leader Quits (The New York Times) Republicans: Walkout from Biden-led negotiations was long planned (The Hill) Tax issue leads to impasse in debt reduction talks (USAToday)

Layoffs, housing data point to chronic problems -- "'We have had a worrisome string of soft numbers which is painting a fairly bleak picture of the recovery,' said Sal Guatieri, senior economist at BMO Capital Markets. 'The labor market is weakening according to the jobless claims numbers, confidence appears to be slipping among households and small businesses and home sales are still very depressed.'" (The Associated Press) "'Things are still going to be weak for a while,' said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. 'We need to see much better job growth and more confidence in general,' he said, adding that new-home sales are 'still sort of bouncing around the bottom.'" (Bloomberg)

Treasury yields signal deflation risk (The Financial Times) Broaddus Says Deflation Risk Would Prompt Fed to Weigh Stimulus (Bloomberg)

CBO: Ending the wars could save $1.4 trillion (The Washington Post)

Without Concessions, Conn. Could Begin [more than 7,500] Layoffs Monday (The Wall Street Journal blogs)

Ericsson to cut $120 million in costs, 500 jobs (Reuters)

Why Does Bernanke Lie To Us? Why Can't He Just Admit What The Problem Is? (The Business Insider)

Century of Hunger Is Warning From France as Farm Ministers From G-20 Meet (Bloomberg)

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, 06-23-11)

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 rose by 9,000 to a seasonally adjusted 429,000 in the week ended June 18, the Labor Department said. Initial claims from two weeks ago were revised up to 420,000 from an originally reported 414,000." (Marketwatch)

"Applications have been above 400,000 for 11 straight weeks." (The Associated Press)

"'The numbers still remain elevated, and they’re still consistent with a labor market that’s improving at a glacial pace,' said Brian Jones, an economist at Societe Generale in New York. 'This fits in with Bernanke’s view that the labor market improvement is just not enough.'" (Bloomberg)

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.

Obama administration, IEA announce release of 60 million barrels of strategic oil reserves

White House announces plan to tap oil reserve: The Obama administration joins with other nations to release 60 million barrels of oil from the Strategic Petroleum Reserve — with the U.S. getting 30 million of those. -- "We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery," [Energy Secretary Steven] Chu said. "As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary." (The Los Angeles Times)

"It is the third time the [International Energy Agency, founded in 1974, and known as the] IEA coordinated release from the emergency stockpiles since the agency was founded in 1974. Oil was released during the 1991 Persian Gulf War, and after Hurricane Katrina damaged oil rigs and refineries in the Gulf of Mexico in 2005." (Bloomberg)

The US depleted oil reserves on one other occasion:

"The U.S. Strategic Petroleum Reserve, created in 1973-74 after the Arab oil shock, has sold oil reserves three times -- after Hurricane Katrina in 2005, after the Persian Gulf War in 1991 and as a deficit reduction measure in 1996-1997." (FoxNews)

"In a background briefing for journalists, senior officials at the White House said some 140 million barrels of oil had been lost to the market as a result of turmoil in Libya." (The Christian Science Monitor)

[A senior official:] "'We’re not making predictions about market prices, which go up and down,' the official said. 'This is about addressing the supply disruption and the prices will be what they are.'" (The Hill blogs)

"John Kilduff, partner at Again Capital LLC[:] 'The (IEA) move is significant, as it represents a reach by member countries for the remedy of last resort to high oil prices. Clearly, the energy price spike is being cited as the reason for the economic slowdown and this is a reaction to that. The Libyan outage provides good cover.'" (Reuters)

"One person with knowledge of the decision said ... 'It looks like it’s about price management, but you will never hear that from the I.E.A.'" (The New York Times)

Oil Prices Were Already Falling, So Why Tap Reserves Now? -- "'This is a desperation move that is at best only very, very temporary, very ephemeral,' said Michael Pento, senior economist at Euro Pacific Capital in New York." (CNBC) The White House Releases Oil From the Strategic Petroleum Reserve. Is That Strategic? (Time blogs) "'Notwithstanding the short-term volatility, it’s important to put 60 million barrels into context,' said Pavel Molchanov, oil analyst with Raymond James. 'This is less than one day of global oil demand, currently near 87 million barrels a day. It is also less than the oil volumes shut-in in Libya over a two-month period.'" (The Washington Post)

Texas Republicans, oil industry slam Obama decision to open Strategic Petroleum Reserve (The Houston Chronicle blogs) (Bloomberg)

The Dark Side of the OECD Oil Inventory Release -- "Today’s release of inventory is confirmation that the era of permanently constrained supply is now very much with us." (Gregor.us)

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, June 22, 2011

Wednesday roundup (06-21-11)

Fed cuts GDP forecast; no hint of more support (Reuters) Fed Lowers U.S. Outlook (The Wall Street Journal) Fed to Maintain Record Stimulus After Ending Asset Purchases (Bloomberg)

Federal Reserve chair: Congress shouldn't cut budget too much, too soon: Ben Bernanke, head of the Federal Reserve, suggested Wednesday that lawmakers should instead focus on cutting the deficit over the medium to long term, in light of the slow recovery. (The Christian Science Monitor)

Clock is ticking: US politicians clash over budget (The Washington Post)

Ex-IMF Chief Economist: Debt Ceiling Default Would Be “A Calamity” (TPMDC)

Conservatives Pressure GOP Lawmakers To Demand Deep Cuts Before Agreeing To Raise Debt Ceiling (The Huffington Post blog) [But] GOP doubts over long-term deficit deal grow: Short-term increase ‘not a good idea,’ Rep. Camp says (Marketwatch)

Congressional Budget Office warns of debt explosion (The Washington Post) CBO warning to Congress: national debt needs action, and soon: As if Congress needed any more reminding, the national debt will soon get out of control without significant tax hikes or spending cuts – or both, the CBO said Wednesday. (The Christian Science Monitor) Obama, Congress warned: National debt growing faster (USAToday)

Financial World's 'Day of Reckoning' is Imminent: "I think monetary policy has been the great enabler," David Stockman, former director of the OMB told CNBC. "The central banks, the Fed and the European Central Bank have kept interest rates at absurdly low levels for years now. That has encouraged politicians in European governments and in the United States to believe that sovereign debt is a lot cheaper than it really is," Stockman added. (CNBC)


Home sales hit 6-month low, supply rises (Reuters)

Moody's: Commercial Real Estate Prices declined 3.7% in April, Prices at new Post-Bubble Low (Calculated Risk blog) AIA: Architecture Billings Index indicates declining demand in May -- "So this suggests another dip in CRE investment towards the end of this year - and into 2012." (Calculated Risk blog)

Regulators at odds on bank capital cushions (CNN)

U.S. post suspends retirement payments to save cash (Reuters) (Politico) Lawmakers: USPS cost-cutting measures not enough (The Hill blogs) (FoxNews)

Government layoffs slow U.S. cities' recoveries - report (Reuters)

U.S. mayors find few recovery signs as cutbacks pose new risks (Bloomberg)

Harrisburg City Council Takes Steps to Prepare for Possible Bankruptcy (Bloomberg) [Meanwhile] Pa. lawmakers move to stop Harrisburg bankruptcy ["if it does not follow the advice of a state task force set up to give it financial guidance"] (The Associated Press)

[Houston] Council OKs $1.8 billion budget, hundreds of layoffs: Fiscal 2012 to see [747] layoffs, shorter hours at libraries, but no tax hike (The Houston Chronicle)

UBS to cut almost 6 percent of tech staff [about 500] (Reuters)

EU’s risk monitor warns debt troubles could spread beyond Europe -- "its chairman said the current level of danger was coded 'red' for the highest level of risk" (The Associated Press)

Greece Budget Hole Threatens to Swallow Europe (Bloomberg)

Derivatives Cloud the Possible Fallout From a Greek Default -- "the possibility that some company out there may have insured billions of dollars of European debt has added a new tension to the sovereign default debate" (The New York Times)

PIMCO's El-Erian predicts Greece, others will default (Reuters)

Greece Risk Aversion Is Pushing Up Spanish Banks' Borrowing Costs (The Wall Street Journal)

BoE flags chance of more QE as outlook darkens (Reuters)

That Stalling Feeling by Nouriel Roubini (Project Syndicate)

Why 2011 is much worse than 2008: Leaders want time; bankers want capital; investors want out (Marketwatch)

Deflation in our future (Benzinga)

Ocean life on the brink of mass extinctions: study (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, June 21, 2011

Tuesday roundup (06-21-11)

EU pushes banks to quantify sovereign debt risks (Reuters)

New Greek Bailout Would Put Most Debt With EU, IMF, Report Says (Bloomberg)

Why another Greek bailout is a stupid idea (Time blogs)

Deflation could still hit the UK, insists defiant Bank of England official Fisher (City A.M.) BoE policymaker Paul Fisher: 'More QE could be needed': Britain's economic recovery remains fragile and more quantitative easing could yet be needed if deflation becomes a risk, BoE policymaker Paul Fisher said on Tuesday. (The Telegraph)

IMF Warns of ‘Considerable’ Risks in Spain as Debt Crisis Threatens Growth (Bloomberg) Spain's economy still at risk despite strong progress, says IMF: Considerable risks remain to Spain's recovery despite the solid progress made with the nation's public finances to date, the International Monetary Fund (IMF) has warned. (The Telegraph) IMF says crisis, slow recovery key risks for Spain (Reuters) IMF says Spain needs more labor reforms to cut high jobless rate, keep recovery going (The Washington Post)

[US] Home sales hit 6-month low, supply rises -- "pointing to a housing market still struggling to regain its footing" (Reuters) News The Double-Dip Housing Recession: Where It Hurts the Most (Mint.com)

Money Anxiety Index Latest Indicator of a Double-Dip -- "[It's] at its highest level in 30 years at 91.9 but also two months away from indicating another dip into recession. In the past, five straight months of increases in the index often signaled recession." (CNBC)

U.S. Reaching Limits of Debt? (Cliff Küle’s Notes blog)

PIMCO Co-Founder Bill Gross Thinks Budget Cuts Are Terrible Idea (Benzinga) Bill Gross: Deficits Can Wait, Spend Now On America’s Unemployed (Barron's blogs) School Daze, School Daze Good Old Golden Rule Days (PIMCO)

Gannett to Cut About 700 Jobs at Local Papers as Economy Slows Ad Recovery (Bloomberg)

Harrisburg Hoping God Can Help Balance the Books (CNBC)

JPMorgan Chase accused in two mortgage-backed securities cases: Banking giant is accused of misleading big investors about the riskiness of mortgage-related securities it was selling as the home-loan market was melting down. In the SEC's case, it agrees to pay $153.6 million. (The Los Angeles Times)

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, June 20, 2011

Monday roundup (06-20-11)

Europe on brink over Greek debt -- "Europe and the world's financial system face a critical few days as Greece runs out of options to stave off economic collapse." (The Sydney Morning Herald) (The BBC)

Eurozone must act before Greek crisis leads to global meltdown, IMF warns: Stop squabbling over Greek bailout terms and act to prevent domino effect through eurozone, IMF tells European Union (The Guardian) IMF: Eurozone crisis poses global threat (CBSNews) IMF warns euro zone crisis could 'overwhelm' recovery (The Irish Times) (The Wall Street Journal)

Greece crisis: Not Europe's Lehman (it could be worse) -- "... if this eurozone brinkmanship nudges the Greek parliament to reject the further budget squeeze, we'll be closer than is remotely prudent or sensible to a 1930s-style financial and economic disaster." (The BBC)

Pimco's El-Erian: Delay On Greece Endangers Ireland, Portugal - CNBC (The Wall Street Journal)

Europe gives Greece ultimatum: austerity for loans (Reuters) I.M.F. Warns of New Austerity Measures Ahead [for countries like Greece, Portugal and Ireland] (The New York Times)

Fitch sees risk of Greece, U.S. debt defaults (Reuters)

Why won't the EU's leaders accept the euro is fatally flawed - and allow Greece to go bust? by Daniel Hannan, Conservative Member of the European Parliament for South East England (The Daily Mail)

41% Of Belgian Central Bank Gold Has Been Lent Out (ZeroHedge blog)

Economic recovery at risk [in the UK] as households forced to dip into savings (The Guardian) UK household finances suffer steepest decline since recession as more borrow to pay bills: Britons’ finances have suffered their steepest decline since the recession in June as people loaded up with more debt to finance the rising cost of living, according to the monthly household finance index from Markit. (The Telegraph) (The Daily Mail) Soaring bills force families into debt (The Sun)

U.S. debt talks enter make-or-break week (Reuters)

A Government Owned Mortgage Market (The Mess That Greenspan Made blog)

Household deleveraging continues (The Bonddad Blog)

[Even so ...] As Economy Slows, 1 in 4 has Nothing Saved (FoxBusiness)

House Prices May Not See Recovery Until 2014 (The Wall Street Journal blogs)

Why the Jobs Situation Is Worse Than It Looks: We now have more idle men and women than at any time since the Great Depression by Mortimer B. Zuckerman (U. S. News & World Report)

Credit Downgrade Pushes Rhode Island Town Closer To Bankruptcy (The Business Insider)

Overly Swift Spending Cuts Scarier Than Temporary Default, Economist Argues -- "Bank reserves swelling and commodity prices surging — ... it also was the case back in 1937. And that’s what worries Ethan Harris, North American economist at Bank of America Merrill Lynch." (The Wall Street Journal blogs)

The Destruction of Economic Facts: Renowned Peruvian economist Hernando de Soto argues that the financial crisis wasn't just about finance—it was about a staggering lack of knowledge (Bloomberg BusinessWeek)

19 Reasons Why Another Great Depression Is Likely in the Next 12 Months (Investing Answers)

World's oceans in 'shocking' decline (The BBC)

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, June 19, 2011

Sunday roundup, 06-19-11

Europe Fails to Agree on Greek Aid Payout (Bloomberg) Deal on Lifeline to Avert Greek Bankruptcy Is Delayed Until July (The New York Times) Euro zone finance ministers' statement on Greece (Reuters)

Japan says G7 finance leaders discussed Greek crisis -- in "a teleconference over the weekend" (Reuters)

Greek Default Spells ‘Havoc’ for Banks a Year After Bailout -- " investors say the region’s banks haven’t raised sufficient capital or cut loans enough to withstand the contagion that may follow a default. ... [According to Neil Phillips, a fund manager at BlueBay Asset Management Plc in London:] "A Greek default and the ramifications of that would be too ghastly for Europe and the European banking system to contemplate right now." (Bloomberg)

Euro debt crisis faces reality check: With markets viewing Greek default as now inevitable, the ECB itself could go bust, writes Colm McCarthy (The Irish Independent)

Hamish McRae: It's not just Greece we should worry about. The problem is sovereign debt (The Independent) Debt-Hit Eurozone 'Will Break Up in Two Years' (The Daily Express)

Pimco head says EU must change course on Greek aid (Reuters)

U.K. Facing Larger Deficit Due to Weak Economy, Balls Says (Bloomberg)

[US] Debt ceiling: Time's running out -- "'In the next six weeks, there really isn't the time to technically draft that legislation, take it through the Congress, vote on it and have it signed,' said former Congressional Budget Office director Barry Anderson at a conference held by the Committee for a Responsible Federal Budget last week." (CNN)

US Foreclosures: Kicking the Can Down the Road… (The Big Picture blog)

Sun's Output to Fall ... Leading to a Mini Ice Age? (Washington's 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.

Saturday, June 18, 2011

Saturday roundup (06-18-11)

Echoes Of Lehman: World Awaits Another High-Stakes Weekend (The Wall Street Journal)

[Global] Sovereign Debt Crisis Is 'Deepening,' Accounting Group Says (Bloomberg) It's not just Greece we should worry about. The problem is sovereign debt (The Independent)

Bank of England set to voice fears of wider crisis if Greece defaults: Financial policy committee's first risk analysis will focus on global impact of debt emergency (The Guardian)

UK banks abandon eurozone over Greek default fears: UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a “Lehman-style” event connected to a Greek default. (The Telegraph)

Europe needs a new financial deal and Britain must help build it: If we ignore Greece's crippling financial plight, we are inviting the same meltdown in our own system (The Observer)

Greek debt crisis: George Papandreou in emergency talks for more EU money: Greek protesters warn that 'people may die' as anger over fresh austerity measures sees Athens in revolt (The Observer)

Greece expected to default even after a second IMF/EU bailout (The Independent)

Greek debt crisis may be first domino for Europe -- "That's because 'It's not just Greece,' said MKM Partners chief economist Michael Darda, 'but also Ireland, Portugal. Spain. ... And Spain's economy is in deep trouble.'" (CBSNews) [However] "Jean-Claude Juncker, head of eurozone finance ministers, on Saturday cautioned that the ongoing debt crisis of Greece and other countries in the region could hit Italy and Belgium, Suddeutsche Zeitung, a [respected] German daily reported ... even before the crisis hits Spain." (The International Business Times)

Moody's threat to downgrade Italian debt raises eurozone contagion fears: Moody's has threatened to cut Italy's credit ratings on concerns over a possible rise in eurozone interest rates may derail the country's fragile economic recovery, raising more fears of contagion from the Greek debt crisis. (The Telegraph)

[In 1st quarter 2011] Spanish public debt surges to 13-year high (Agence France Presse)

Russia Fin Min: Spain Has Asked Russia To Buy Spanish Debt (The Wall Street Journal)

Could the Eurozone Break Up? by John Mauldin [with insights from Nouriel Roubini] (The Market Oracle)

Alan Simpson, Erskine Bowles Predict Coming Economic Crisis [in the US] (Newsmax.com)

After Dumping 30% Of Its Treasury Holdings In Half A Year, Russia Warns It Will Continue Selling US Debt (ZeroHedge blog) Russia to Lower U.S. Debt Holdings (The Wall Street Journal)

"Are we in a Secular Bear Market: Comstock Partners thinks we are in a secular bear market that began when the market peaked over 11 years ago .. points out there are long periods when the trend of the stock market is distinctly up or down .. believes the main factor that drove the biggest bull market in U.S. stock market history (household debt that enabled unrestricted consumption) will now reverse & continue the deleveraging process that will likely continue for a very long time .." (Cliff Küle's Notes blog) Why We Believe we are in a Secular Bear Market (Comstock Partners)

Unofficial Problem Bank list at 996 Institutions (Calculated Risk blog)

Students at for-profit colleges are taking on debt they can't handle (The Orlando Sentinel)

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.