Friday, September 30, 2011

Friday roundup (09-30-11)

The Scariest Economic Forecast You'll Read Today (The Atlantic Wire) Forecast says double-dip recession is imminent (CNNMoney) U.S. Is Heading Toward Another Recession, ECRI’s Achuthan Says: Tom Keene (Bloomberg) "On its Web site, ECRI said the U.S. economy is 'indeed tipping into a new recession.'" (The Wall Street Journal blogs)

Be afraid: Unless politicians act more boldly, the world economy will keep heading towards a black hole (The Economist)

Europe In 2011 A Worse Crisis Than The U.S. In 2008 (Forbes)

40-50% Chance of Recession in Euro Zone: Goldman Sachs (CNBC)

Debt crisis: live: Mounting fears of a second global recession drove the FTSE 100 down 1.3pc today, bringing losses to 13.7pc over a quarter which saw £212bn wiped off the value of shares. (The Telegraph)

Global Stock Markets Suffer Worst Quarter Since 2008 (Bloomberg)

Worst quarter for UK, German, French stocks in 9 years (Reuters)

Banks putting eurozone rescue at risk by refusing to increase capital buffers: Europe's biggest banks are jeopardising a potential rescue plan for the single currency bloc by refusing to boost their loss-absorbing buffers. (The Telegraph)

George Soros On Euro Zone: Recapitalize Banks, Create Common Treasury, Protect Vulnerable States (Reuters)

NEIN, NEIN, NEIN, and the death of EU Fiscal Union -- "The furious debate over the erosion of German fiscal sovereignty and democracy – as well as the escalating costs of the EU rescue machinery – has made it absolutely clear that the Bundestag will not prop up the ruins of monetary union for much longer." (The Telegraph blogs)

U.S. economic recovery tied to European debt crisis (The Washington Post)

US incomes fall for first time in nearly 2 years: Consumer incomes fall for first time in 22 months; spending rises as many tap savings (The Associated Press) Consumer Spending, Wages, Cooled in August (Bloomberg)

California breaks from 50-state probe into mortgage lenders (The Los Angeles Times blogs)

One in Five Modified Loans Default Again, U.S. Comptroller Says (Bloomberg)

The Hartford Plans To Cut At Least 500 Jobs Over Next 18 Months (The Hartford Courant)

Regulators close Texas bank, 74th failure in 2011 (The Associated Press) First International Bank of Plano TX had a troubled assets ratio of 266.3%. (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.

Meltdown

The men who crashed the world: The first of a four-part investigation into a world of greed and recklessness that led to financial collapse. (Al Jazeera)



A global financial tsunami: Meltdown examines how an epidemic of fear caused banks to stop lending, triggered protests and led to industrial action. (Al Jazeera)



Paying the price: As the toll of the financial crisis continues to mount, many are looking for its true causes - and finding a crime. (Al Jazeera)


After the fall: Some responded with denial, others by re-thinking capitalism, but who is preparing for the next crisis? (Al Jazeera)



Meltdown home page (Al Jazeera)

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, September 29, 2011

Thursday roundup (09-29-11)

World on verge of second Great Depression, Soros warns (Financial Post) The Road from Depression by George Soros (Project Syndicate)

Eurozone economic confidence falls further (The Associated Press)

Global economic weakness more persistent-BoE's Dale (Reuters)

German bailout vote is 'too little, too late': Germany's Bundestag has voted overwhelmingly to boost the scope of the EU's rescue fund but implicitly capped its firepower at €440bn, leaving it no clearer whether Europe has the means to halt debt contagion to Italy and Spain. (The Telegraph) Germany lawmakers vote decisively to boost Europe bailout fund: Analysts welcome the move to strengthen the fund to $600 billion, but say a far larger fund and even a partial default by Greece will almost certainly be necessary amid the debt crisis. (The Los Angeles Times) "'The German parliament is voting for too little, too late,' Fredrik Erixon, head of the European Centre for International Political Economy in Brussels, said by phone before the ballot. 'Merkel can’t possibly believe this is the final point in a rescue package that will calm global markets and lead us out of the crisis.'" (Bloomberg)

Debt crisis: live: Markets wary as German parliament votes in favour of expanding eurozone rescue fund and auditors are back in Greece to decide bailout loans to avoid default. (The Telegraph) Eurozone crisis: live blog (The Financial Times blogs)

German Finance Minister Shoots Down Levered Euro-TARP (CNBC)

US job machine remains badly broken (MSNBC)

CEO Survey Shows Less Confidence in U.S. Hiring, Outlook (The Wall Street Journal blogs)

Consumers Won’t Save the Economy: Economists (CNBC)

Pending-Home Sales Hit a Four-Month Low (Reuters)

Freddie Mac: Record Low Mortgage Rates (Calculated Risk blog)

Copper signaling recession …. (The Big Picture blog)

North Sea gas production falls 25%: Alarming slump could put pressure on coalition to approve controversial shale gas projects (The Guardian)

Nokia to Eliminate 3,500 More Jobs (The New York Times)

TUI cuts [up to 550] German jobs as tourists move online (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.

Is it a recovery yet? (Weekly report, 09-29-11)

A recovery would be indicated by weekly initial jobless claims holding 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.)

"Initial claims for state unemployment benefits fell 37,000, to 391,000, the Labor Department said, well below economists’ expectations of 420,000." (Reuters)

Weekly Initial Unemployment Claims decline sharply to 391,000 (Calculated Risk blog)

New Jobless Claims Lowest in 6 Months (Time)

"Ryan Sweet, a senior economist at Moody’s Analytics, said, 'We have to take [the report] with a bit of a grain of salt,' because of the technical caveats and what he described as tight financial market conditions and weak business confidence." (The Washington Post blogs)

[Says Paul Dales, senior U.S. economist with Capital Economics:] "Further falls will be needed before we can conclude a downward trend is underway." (The Street.com)



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, September 28, 2011

Wednesday roundup (09-28-11)

Quote of the Day:

"I continue to expect that the coming years will contain far more disruptive behavior in the economy and the financial markets than investors may be conditioned to believe is 'normal' from a post-war standpoint, and especially from the misleading experience of the recent bubble period." -- John P. Hussman PhD of Hussman Funds (Hussman Funds)

ECB head urges quick action against debt crisis (The Associated Press) Trichet: i governi rispettino i patti L'Italia? Con la crescita può farcela: «Contro la crisi più unità in Europa. La Grecia si adegui alle decisioni» (Corriere della Sera)

Europe Needs $5 Trillion In Bailout Funds -- "... I advise all of you to read Martin Wolf in the Financial Times today for his sharply reasoned analysis of how the world economic system has 'entered a new and, in crucial respects, more dangerous phase.'" (Forbes) Fear and Loathing in the Euro Zone by Martin Wolf of The Financial Times (via CNBC) (via The Globe and Mail of Toronto)

Euro Is Beyond Rescue in Debt Crisis, Szalay-Berzeviczy Says (Bloomberg) UniCredit Banker Causes Buzz Predicting Euro's End (Dow Jones Newswires) European Banker’s Apocalyptic Rant Goes Viral (The Wall Street Journal blogs) Step Aside BBC "Trader": Head Of UniCredit Securities Predicts Imminent End Of The Eurozone And A Global Financial Apocalypse (ZeroHedge blog) Two Top Italian Bank Execs Sound Terrified Of EuroCrisis Contagion (The Business Insider) A nagy bankrablás [in Hungarian] (Index)

Sovereign Debt Turmoil Risks Financial Contagion - ECB's Mersch (Dow Jones Newswires)

Lachmann: ‘What’s really at stake here is the European banking system.’ (The Washington Post blogs) Is Europe's debt crisis becoming a banking crisis? -- "Something truly scary might be about to take place in Europe." (Time blogs)

Is the Whole World Going Into a Recession at the Same Time? -- [Says Alec Levine, a derivatives strategist with Newedge Group:] "Time is not on the side of the policy makers." (CNBC)

Obama Says Europe’s Debt Response Not Effective Enough (Bloomberg) Crisis in Europe means trouble at home for Obama (Politico) Obama's Euro-Crisis Lecture Is 'Pitiful and Sad': US President Obama has given the Europeans a harsh lecture on the dangers of their ongoing debt crisis. Offended by the unsolicited advice, Europeans have suggested the US get its own house in order first. Obama's remarks were "arrogant" and "absurd," German commentators say on Wednesday. (Der Spiegel)

Debt crisis: live: Markets fall as uncertainty over the eurozone bail-out brings this week's rally to a close, ahead of crucial votes by EU member states this week. (The Telegraph) Rolling blog: the eurozone crisis (The Financial Times blogs)

Expansion of European Bailout Fund Clears Hurdle (The New York Times)

The dangerous subversion of Germany's democracy by Ambrose Evans-Pritchard (The Telegraph blogs)

Germans Reconsider Ties to Europe: Merkel Scrambles on Bailout Vote as Key Allies Desert Her (The Wall Street Journal)

Greece faces auditor verdict, fresh aid at stake (Reuters)

Former ECB Chief Economist Issing Says Greece Will Exit the Euro (Bloomberg)

Argentina 2001-02 meltdown ugly example for Greece (Reuters)

Portugal PM says country vulnerable if [a country in the] euro zone default[s] (Reuters) Portugal Sees Economy Shrinking More Than Forecast in 2012 (Bloomberg)

French Budget Plan Calls for €1 Billion in Spending Cuts (The New York Times) France sets out budget, faces growth challenge (Reuters)

France, Italy and Spain Extend Short-Selling Bans (Reuters)

Banks must prepare for further shocks, warns BoE's Financial Policy Committee: Britain's banks should slash bonuses and cut shareholder dividends to shore up their balance sheets in the face of another potential downturn, the Bank of England has warned. (The Telegraph) Households and small firms face fresh credit squeeze as bank funding hit by eurozone crisis (This is Money)

Debt crunch threatens China and emerging markets: Europe's banking woes have begun to set off a funding crunch in the emerging markets of Asia, Latin America, and Eastern Europe, leaving them nakedly exposed as the rich world slides into a double-dip downturn. (The Telegraph)

Bernanke says Fed would act if inflation falls (Reuters)

Americans Have No Cause to Feel Smug About Euro Zone Crisis (The Wall Street Journal blogs)

TBTF! TOO BIG TO FAIL [chart showing the consolidation of numerous financial entities in recent years] (Cliff Küle's Notes blog)

Layoff Notices Sent to 3,500 [New York] State Workers (The Wall Street Journal)

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, September 27, 2011

Tuesday roundup (09-27-11)

US and UK already in recession, warns Nouriel Roubini: Most advanced economies are lapsing back into recession, while the US is already in the throes of an economic contraction, according to Nouriel Roubini, co-founder and chairman of Roubini Global Economics LLC. (The Telegraph)

Euro Crisis Makes Fed Lender of Only Resort as Funding Dries Up (Bloomberg)

Is the Latest Eurozone Bailout a Game Changer or More of the Same?: It actually resembles the U.S. bank bailout, but it may not work out as well (The Atlantic) Europe Nears Agreement on Bailout Fund That May Be Inadequate (The New York Times) Debt crisis: live: Markets rally as investors take heart from pledges by European politicians to solve the debt crisis, and US leaders urge a speedy resolution. (The Telegraph) Rolling blog: the eurozone crisis (The Financial Times blogs)

German Ruling Coalition Faces Tricky Bailout Vote (The Wall Street Journal) Merkel risks rebellion on euro rescue fund (Reuters)

Germany slams 'stupid' US plans to boost EU rescue fund: Germany and America were on a collision course on Tuesday night over the handling of Europe's debt crisis after Berlin savaged plans to boost the EU rescue fund as a "stupid idea" and told the White House to sort out its own mess before giving gratuitous advice to others. (The Telegraph) German FinMin says increasing EFSF is "silly idea" (Reuters)

S&P: More bailouts will lead to Germany's eventual downgrade (Credit Writedowns blog)

Frau Merkel, it really is a euro crisis by Ambrose Evans-Pritchard (The Telegraph blogs)

Split Opens Over Greek Bailout Terms (The Financial Times)

Greece passes unpopular property tax in effort to avert default (The Washington Post)

Cash Crunch in China Picks Up Momentum; Chinese Economy "Teetering On the Edge" (Mish's Global Economic Trend Analysis blog)

US Economy Is on 'Knife's Edge': Fed Economist (Reuters) Feel Better? (Financial Armageddon blog)

Consumers' confidence remains weak in September: What will it take for consumers' confidence to improve? (The Associated Press)

Consumers earned less, spent less for 2nd straight year (The Associated Press)

Many cities imposing broad cuts as revenue shrinks: Weak economy, lower tax revenue force cities to cut jobs, add fees, cancel projects (The Associated Press)

Illinois budget deficit to hit $8 billion despite tax increase (The Chicago Tribune)

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, September 26, 2011

Monday roundup (09-26-11)

We're making same mistakes that led to Great Depression: BMO's Sherry Cooper (The Montreal Gazette) We’ve learned nothing from Hoover and the Depression (The Globe and Mail of Toronto) Recovery will take years, BMO chief economist says: Canada remains solid; 'we're the envy of the world' (The Vancouver Sun)

Europe’s Banking Crisis Is No Longer a Liquidity Crisis, nor Is It a European Version of ‘Subprime’ – It’s a Sovereign Coordination Crisis (EconoMonitor)

Euro zone struggles to stem crisis; Obama urges action (Reuters)

Euro zone cobbling together bigger bailout package (The Globe and Mail of Toronto) Multi-trillion plan to save the eurozone being prepared: European officials are working on a grand plan to restore confidence in the single currency area that would involve a massive bank recapitalisation, giving the bail-out fund several trillion euros of firepower, and a possible Greek default. (The Telegraph) Multi-Trillion Euro Bailout Plan Allegedly in the Works; Plan Has Failed Already (Mish's Global Economic Trend Analysis blog)

Euro Area Facing 'Outright Recession' [in Fourth Quarter]: Economist (CNBC) Eurozone teeters on the brink of recession (The Financial Times blogs)

In European Banking Crisis, Inaction Isn't an Option (The Wall Street Journal)

Bankruptcy threat to Greece as euro ministers delay vital €8bn: Euro ministers refuse to give date for release €8bn bailout: Greece may not be able to pay civil servants next month (The Guardian) Greece's debt crisis odyssey (The BBC)

The global economy waits on action from Berlin [editorial] (The Washington Post)

[Meanwhile...] German turmoil over EU bail-outs as top judge calls for referendum: Germany's top judge has issued a blunt warning that no further fiscal powers may be surrendered to Europe without a new constitution and a popular referendum, vastly complicating plans to boost the EU's rescue machinery to €2 trillion (£1.7 trillion). (The Telegraph)

German Business Morale Falls Again in September (Reuters)

Euro Zone Primer: Where Things Stand (The Wall Street Journal blogs) Europe on Their Minds: A sampling of what economic officials from around the world said during the Washington meetings of the International Monetary Fund, World Bank and Group of 20 finance ministers and central bankers over the weekend. (The Wall Street Journal blogs) Debt crisis: live: Markets nervous after reports of G20 plan to boost European rescue fund and Greek default with 50pc haircut for bondholders as IMF says it may need billions in extra funding to stem eurozone debt crisis. (The Telegraph)

Worried [US] workers stall housing market (Marketwatch)

New-home sales fell in August for 4th month: New-home sales dipped 2.3 pct. in August to a six-month low, median prices plunge 9 pct. (The Associated Press) On Pace for Record Low New Home Sales in 2011 (Calculated Risk blog) "Economists say housing prices will remain depressed until all the foreclosures work their way through the system." (KUOW)

Counties (Finally) Suing MERS Over Recording Fees by Barry Ritholtz (The Big Picture blog)

US Senate OKs Deal to Avoid Government Shutdown (Reuters)

For Social Security, it’s print as you go by Christopher Whalen -- "Rick Perry is right: Social Security is a Ponzi scheme." (Reuters blogs)

Most Food Stamp Recipients Have No Earned Income [most = "some 70%"] (The Wall Street Journal blogs)

Deflation fears are back (CNNMoney) Deflation is already here, says investment manager: While inflation is a long-term worry, deflation is a concern for investors in the short- to medium-term, says one industry figure. (FT Adviser)

'That Is How Recessions Are Born' (Financial Armageddon blog)

The Shape of the Global Economy Will Fundamentally Change: It's not a crash, it's the new normal. by Mohamed El-Erian (Foreign Policy)

Lockheed's aeronautics unit to cut 540 jobs (Reuters)

It's Getting Very Ugly Out "There" -- [Quotes James Turk, founder and chairman of GoldMoney.com, saying:] "We're going through something - it's not just a cyclical problem that we're dealing with, we're dealing with a structural problem. And that's why what we're heading into is probably going to be much worse than what we saw in 2008." (The Golden Truth 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.

Sunday, September 25, 2011

Sunday roundup (09-25-11)

Geithner Plan for Europe is last chance to avoid global catastrophe: Europe, the G20, and the global authorities have one last chance to contain the EMU debt crisis with a nuclear solution or abdicate responsibility and watch as the world slides into depression, endangering the benign but fragile order that has taken shape over the last three decades. (The Telegraph) Geithner sounds alarm on Europe (CNNMoney) Memories of 2008 drive U.S. pressure on Europe crisis (Reuters)

IMF: 'we are in a precarious situation' over euro crisis: The executive committee of the International Monetary Fund vow that world leaders will take collective action to bolster the global economy and prevent the euro crisis from escalating. (The Telegraph)

IMF warns on funding levels if crisis worsens: The International Monetary Fund (IMF) has warned it may not have enough money to bail out larger eurozone countries if the debt crisis were to spread. (The BBC)

‘Barrier’ Around Greece Needed: Merkel (Bloomberg)

Amount and Concentration of Derivatives Still Threaten Global Economy (Washingtons' 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, September 24, 2011

Saturday roundup (09-24-11)

Euro Debt Crisis Is Worse Than US in 2008: George Soros (CNBC) (Dow Jones Newswires) "'The alternative [to helping the troubled eurozone nations] is a breakdown of the global financial system, a real meltdown,' he said." (CNNMoney)

Meltdown fears for euro as G20 makes plans for Athens to default on debt: Finance Minister signals Greece may opt for 50 per cent writedown on bonds as top economist warns Spain and Italy could be forced out of single currency (The Independent) Lehman Weekend Redux? (ZeroHedge blog)

Eurozone pledges "whatever necessary" to halt debt contagion: European officials consulted with the International Monetary Fund and World Bank over the weekend in a bid to calm market fears that the sovereign debt crisis could lead to a series of defaults within the eurozone. (Deutsche Welle)

Geithner Urges End to European 'Cascading Default' Threat (Bloomberg)

IMF vows to 'strongly support' European debt rescue efforts (Bloomberg)

Portugal Downgrades 2012 Economy Outlook (The Wall Street Journal)

Unofficial Problem Bank list [in the US] at 986 Institutions (Calculated Risk blog)

Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure; Is Morgan Stanley Sitting On An FX Derivative Time Bomb? -- "The top 4 banks: JPM with $78.1 trillion in exposure, Citi with $56 trillion, Bank of America with $53 trillion and Goldman with $48 trillion, account for 94.4% of total exposure." (ZeroHedge blog)

Number of the Week: Americans Spend Smaller Share of Income Paying Debt (The Wall Street Journal blogs)

BAE Systems to cut 3,000 jobs: BAE Systems, Britain’s biggest manufacturer, is poised to cut 3,000 jobs in a major setback for the UK economy. (The Telegraph)

Novartis cutting 2,500 jobs globally - paper (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.

Friday, September 23, 2011

Friday roundup (09-23-11)

Trichet - Risks to stability have risen considerably (Reuters)

Trichet: Sovereign Debt Crisis Is Global, Europe At Epicenter (Dow Jones Newswires)

Japan Finance Minister: Crisis May Be More Problematic Than '08 (Dow Jones Newswires)

'Six weeks to eurozone meltdown' says George Osborne (The Scotsman)

ECB’s Knot No Longer Excludes Greek Default, Dagblad Reports (Bloomberg)

Massive bank capital gap looms in Europe (Reuters)

Sovereign-debt ‘spiral’ seen imperiling Europe: Investors, economists look for leveraged EFSF, other steps (Marketwatch) Debt crisis: live: Markets in Europe rally while Wall Street marks time after the G20 pledges to support financial and banking markets, although investors remained nervous of a Greek default. (The Telegraph)

World Bank: euro zone threatens emerging Europe, Asia (Reuters)

ECB Policy Makers Signal Readiness to Act in October as Debt Woes Deepen (Bloomberg)

15-20 European Banks Need Recapitalizing: France Regulator (CNBC)

Euro zone leaders hint at boost to emergency bailout fund (The Globe and Mail of Toronto) Europe Weighs Speedier Enactment of Permanent Rescue Fund to Stem Crisis (Bloomberg) Geithner certain euro zone will boost bailout fund (Reuters)

Global leaders struggle to calm recession fears: Global leaders pledge coordinated effort to address economic challenges but markets skeptical (The Associated Press)

Moody's downgrades 8 Greek banks (The Associated Press)

IMF suggests Spain get 'outsider' banks audit (Agence France-Presse)

Franc Demand Pushes Swiss to Deflation Brink: Chart of the Day (Bloomberg)

Slovak Prime Minister Speaks at New York University: Eurozone based solely on the existence of the central bank is dead, Prime Minister Radicova says. (Webnoviny) Radičová: Stará eurozóna je mŕtva. Nová je príležitosť: Eurozóna založená iba na existencii centrálnej banky a politickej vôli mať euro je mŕtva. (HN online)

U.S. Pushes Europe to Act With Force on Debt Crisis (The New York Times)

Senate rejects GOP spending plan as shutdown looms (CNN)

Regulators close Va., Calif. banks; 73 for year (The Associated Press)

Bank of the Commonwealth of Norfolk VA had a troubled assets ratio of 259.9%. (BankTracker)

Citizens Bank of Northern California of Nevada City CA had a troubled assets ratio of 165.6%. (BankTracker)

At UBS, It’s the Culture That’s Rogue (The New York Times)

Hay The Latest Target For Thieves As Prices Skyrocket (CBS Dallas-Fort Worth)

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, September 22, 2011

Thursday roundup (09-22-11)

Look Back: Economic Concerns Mount World-Wide (The Wall Street Journal blogs) Global economy hits 'danger zone': reaction: News from the world economy in the past 48 hours has dealt a severe blow to hopes that a second global recession can be avoided. It has been so bad that European markets fell by around 5pc on Thursday. Here is the reaction of some of the top people in the financial sector. (The Telegraph)

Economic Signals Heighten Worries of a Double-Dip (The Wall Street Journal)

Fear gauge enters the red zone: Europe's debt crisis risks escalating out of control as the world economy slides towards a double-dip slump with few shock absorbers left to limit the damage. (The Telegraph)

El-Erian: World on Eve of Next Financial Crisis (Bloomberg)

EL-ERIAN WARNS: 'These Are All The Signs Of An Institutional Run On French Banks' (The Business Insider)

Reuters' Global Editor-at-Large Chrystia Freeland believes the European financial crisis could be bigger than America's economic crisis in 2008 (The Colbert Report)



ECB's Stark study says debt crisis threatens euro (Reuters)

The Danger Zone: Financial Stability Risks Soar (IMF Direct blogs)

Euro-zone debt crisis threatens 'global stability': UK Prime Minister David Cameron (Dow Jones Newswires)

A Lack of Lending at European Banks Increases the Fear of Stagnation (The New York Times)

UK Companies Seen Pulling Cash From European Banks, Governments (Dow Jones Newswires)

GOP Leaders Scramble to Avoid Government Shutdown (Reuters)

In U.S., 6 in 10 Do Not Expect Economy to Improve Soon: Eight in 10 say U.S. is in recession (Gallup)

German utility E.On to cut 500 U.K. jobs (Marketwatch)

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, 09-22-11)

A recovery would be indicated by weekly initial jobless claims holding 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.)

"Applications for unemployment benefits dropped 9,000 to 423,000 in the week ended September17, the Labor Department said on Thursday." (Reuters)

"'September is shaping up to be another difficult month for the job market,' said Ryan Sweet, an economist at Moody's Analytics." (The Associated Press)

"'The labor market has been quite weak and employment growth has been quite soft,' Conrad DeQuadros, senior economist at RDQ Economics LLC in New York, said before the report. 'It's hard to imagine we're going to get the kind of employment growth we would need to see to get the jobless rate to come down significantly.'" (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.

Wednesday, September 21, 2011

Wednesday roundup (09-21-11)

‘Time Is Running Out,’ I.M.F. Warns on Global Economy (The Associated Press)

Recession risk mounts for developed markets: Roubini (Reuters)

IMF: Banks need more cash to hedge against euro crisis: Europe's debt crisis has exposed the region's banks to €300bn (£264bn) of potential losses, putting the financial system in its greatest danger for years, the International Monetary Fund (IMF) has warned. (The Telegraph) Banks need urgent access to eurozone fund: IMF (Agence France-Presse) Europe Banks Have $410 Billion Credit Risk: IMF (Bloomberg)

EU [also] warns that banks could need extra cash (The Irish Independent)

Euro could collapse without progress on fiscal union, says Commerzbank (The Irish Times)

IMF: 'dangerous new phase' for global economy: Olivier Blanchard from the International Monetary Fund (IMF) has warned that stock prices have fallen due to fear of the unknown. [posted 9-20-11] (The Telegraph)



Munchau: 'we are moving closer towards an involuntary [eurozone] break-up' (Credit Writedowns blog)

Greece sharpens austerity; IMF warns on banks (Reuters)

Spain, not Greece, may be biggest eurozone threat (The Financial Times)

What happens to Ireland if Greece defaults?: With more job losses feared at Aviva, guest economist Megan Greene believes Ireland will have few practical options if Athens exits the euro (The Guardian blogs)

Standard & Poor’s downgrades 7 Italian banks because of sovereign debt risk (The Associated Press)

U.K. Has Biggest August Budget Deficit on Record on Spending (Bloomberg)

Small businesses still struggle to secure credit, says Bank of England: Nervousness over the economy means some businesses are reconsidering expansion plans and those keen to borrow still report that banks are reluctant to lend (The Telegraph)

Lloyd’s of London Pulls Deposits From Banks on Debt Crisis (Blooomberg) ING Cuts Italian, Spanish Sovereign Holdings by a Third (Bloomberg)

Default Swaps Hit Record With Bonds Near Year Low: Japan Credit (Bloomberg)

[In the United States] Commercial Space Starts to Wobble (The Wall Street Journal)

Home Sales Jump 7.7 pct. as Foreclosures Rise [= rise in sales was driven by foreclosures] (Time) Home sales jump in August: why it's not enough to revive housing market: Even as home sales increased in August, median prices fell. Experts point to a 'shadow inventory' of homes that will eventually face foreclosure and say prices won't keep up with inflation for years. (The Christian Science Monitor) Bernanke Battling Housing Collapse Shows Fed Has Few Tools to Heal Economy (Bloomberg)

Bank of America, Wells Fargo: The Downgrade Shoe Finally Drops (The Wall Street Journal blogs) (Bloomberg)

GOP To Fed: Let Economy Fail (Capital Gains and Games blog)

Doomsday Debt Machine Roars as Wizard Das Chides Buffett: Books (Bloomberg)

Lackluster PlayBook Sales Force [1,000] Layoffs at Quanta (All Things D)

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, September 20, 2011

Tuesday roundup (09-20-11)

IMF says global economy in 'dangerous new phase,' slashes growth forecasts for US and Europe (The Associated Press) US and Europe risk double-dip recession, warns IMF: International Monetary Fund's World Economic Outlook says slow, bumpy recovery could be jeopardised by Europe's debt crisis or over-hasty attempts to cut America's budget deficit (The Guardian) Eurozone debt crisis threatens banks, rest of world: IMF (Agence France-Presse) "'Borrowing spreads have risen significantly in larger economies, including Italy and Spain, showing that market sentiment can change abruptly,' the IMF said in the report released today. 'The speed and severity with which financial pressures spread in the euro area should serve as a cautionary tale to Japan and the United States.'" (Bloomberg)

ECB supplying unlimited liquidity, says Trichet (Reuters)

German, Italian Credit Swaps Hit Records as Debt Crisis Deepens (Bloomberg)

German banks need recapitalisation of 127 billion: report (Credit Writedowns blog)

Greece Nears the Precipice, Raising Fear (The New York Times)

Greece to Default But Not Leave Euro Zone: Fitch (Reuters)

Greece Default Would Leave German Taxpayers Facing Bills From ‘Bad’ Banks (Bloomberg)

Greek default could be disaster for Portugal: PM (Reuters) Portugal PM Says Country May Need Further Aid If Greece Defaults (The Wall Street Journal)

Slovenia Lawmakers Topple Government in Vote That May Delay EU Rescue Plan (Bloomberg) Slovenia Could Delay EFSF (The Wall Street Journal blogs) [This, however, has been denied:] Ministry: No Confidence Vote Not to Affect Passage of Euro Stability Law (Slovenian Press Agency)

[Bank of Canada Governor Mark] Carney fears European, U.S. economic woes will hurt Canada (The Toronto Star)

August home building fell 5 pct., slide continues: Construction is less than half the level that economists say is needed for a healthy economy (The Associated Press) Housing Is to the U.S. What Greece Is to the Euro Zone (The Wall Street Journal blogs)

Worry About a New Wave of Layoffs (The New York Times)

Weakest Recovery Since Great Depression In Charts (Seeking Alpha blog)

Recent Blackout Highlights Nation's Aging Electricity Grid: Major power outages have more than doubled in the last decade (The Scientific American)

Global energy use to jump 53% [by 2035] (CNNMoney)

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, September 19, 2011

Monday roundup (09-19-11)

Quote of the Day:

"The risks ahead are not just of a mild double-dip recession, but of a severe contraction that could turn into Great Depression II, especially if the eurozone crisis becomes disorderly and leads to a global financial meltdown." -- Economist Nouriel Roubini (Reuters blogs)

Central Banks Net Buyers of Gold for First Time in 20 Years (The Financial Times)

Eurozone contagion spreading, World Bank’s Zoellick warns (The Financial Post)

The ailing euro is part of a wider crisis. Our capitalist system is near meltdown: A 1930s-style crash threatens us and our financial partners. Collective action is the only solution (The Observer)

EU to urge U.S., Japan to act on public deficits at G20 (Reuters)

Roubini: Greece Should Default, Leave The Euro And Reinstate The Drachma (Forbes)

Greek Default Could Tip US Into Recession (CNBC)

Italy's Debt Downgraded by S&P; Outlook Still Negative (Reuters) Italy Debt Rating Lowered by S&P on Weaker Growth Outlook (Bloomberg)

Italy's Finmeccanica says [it plans] to cut 1,200 aviation jobs (Agence France-Presse)

Siemens shelters up to €6bn at ECB (The Financial Times)

America's debt woe is worse than Greece's (CNN)

Boehner: I am worried about a double-dip recession (The Hill blogs)

US builders’ outlook dimmer in September, relatively unchanged over past 6 months (The Associated Press)

Obama endorses ending one day of mail delivery (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.

Sunday, September 18, 2011

Sunday roundup (09-18-11)

Europe's troubles pose a real threat (USAToday) Suddenly, Over There Is Over Here (The New York Times)

In Europe, echoes of Lehman, with much bigger consequences: What started as a sovereign debt crisis in Europe is slowly turning into a potentially disastrous banking crisis. It's like watching a bad rerun of a movie with a worse ending. (Fortune)

Greece must get real, German Finance Minister tells paper (Reuters)

Greece holding emergency debt talks: report (Marketwatch) Greeks Discuss Drastic Moves to Receive Aid (The New York Times) Greece braces for more austerity to avert default (Reuters) "'Greece’s imminent default is assured,' Carl B. Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y., wrote in an e-mail. 'Without an injection of cash within the next weeks, the nation will run out of resources to service its debt.'" (The New York Times)

Bank woes could stymie France's recovery (Reuters)

Italy must not ignore default risk: Intesa CEO (Reuters) [Um, there may be a problem though ...] Silvio Berlusconi Wiretaps: 'Only Prime Minister in His Spare Time' (ABCNews)

Siemens Abandoning Nuclear Power Business (The New York Times)

Geithner and the delicacy of Euro-Dollar diplomacy by Christopher Whalen (Reuters blogs)

States struggle for financing to meet road needs: America's roads, bridges, transit systems are falling apart; who can and will pay to fix them? (The Associated Press)

25 Signs That A Horrific Global Water Crisis Is Coming (The Economic Collapse 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.