Wednesday, November 30, 2011

Wednesday roundup (11-30-11)

Central bank action: stunning move highlights sense of desperation: European governments are desperately seeking a lender of last resort as sovereign debt exposure fears grow (The Guardian)

Central banks act as euro zone crisis rages (Reuters) Central Banks to the Rescue? What Today's Action Means (CNBC) Why Central Banks Took Action Today [see graphic from Der Spiegel] (The Mess That Greenspan Made blog) "'They're basically responding to the looming failure of the European Summit on December 9,' said Cornelius Hurley, director of Boston University's Morin Center for Banking and Financial Law and former assistant general counsel at the Federal Reserve. 'They're putting foam on the runway.'" (Reuters)

Central Bank Intervention Raises Questions (Forbes)

CRAMER: The Central Banks Did This Because A European Bank Was Going To Fail (The Business Insider) CRAMER: 'We Are In DEFCON 3, Two Stages Away From A Financial Collapse So Huge It's Hard To Get Your Mind Around' (The Business Insider)

Central banks ease liquidity. Did they avert meltdown?: Central banks in a surprise announcement Wednesday announce moves to ease strains in the global financial system. Central banks' moves should ease concerns over European banks but does not begin to solve long-term problems of European debt. (The Christian Science Monitor) Central banks haven't saved the eurozone yet: After the central banks' action, the next eurozone crisis summit can at least get down to business – but it needs to come up with something other than bolstering the bailout fund (The Guardian)

Why central bank intervention should make us more worried (The Globe and Mail of Toronto)

Fed saves Europe's banks as ECB stands pat: Stripped to essentials, America is once again having to rescue Europe from itself. (The Telegraph) Fed Move Is a Painkiller, Not a Cure (The Wall Street Journal) What Are Fed Swap Lines and What Do They Do? (The Wall Street Journal blogs) The central bank deal: Five things to know (The Washington Post blogs) Fed Statement on Coordinated Central Bank Action on Currency Swaps (The Wall Street Journal blogs)

Save the euro in 10 days or see the EU disintegrate, ministers are warned: Olli Rehn, EU economic affairs commissioner, says the choice is between deeper integration and Europe falling apart (The Guardian) EU monetary chief: 10 days to save the euro (EuroNews)



Euro Ministers Seek Greater IMF Role as Bailout-Fund Expansion Falls Short (Bloomberg) How exactly would the IMF bail out Europe? (The Washington Post blogs)

Halting Deflation’s Spiral [to avoid another Depression] (The New York Times)

Euro Zone Crisis Tracker: See economic, political and markets news from across Europe as governments and financial institutions deal with the continuing debt crisis. (The Wall Street Journal)

Italy Reportedly in Exploratory Talks With IMF for Aid (Reuters)

Crisis-hit Portugal braces for deeper austerity next year as lawmakers ratify new measures (The Associated Press)

Bank of England urges crisis contingency plan (Bloomberg)

Osborne Vows More Austerity as Slump Hits U.K. Deficit Plan (Bloomberg)

BOJ's Nishimura warns of risk of broad credit crunch (Reuters)

Detroit council braces for state intervention in budget mess (The Detroit Free Press)

Beiersdorf Plans 1,000 Job Cuts Over Three Years to Cut Costs (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.

Tuesday, November 29, 2011

Tuesday roundup (11-29-2011)

George Osborne prepares for run on banks in troubled eurozone countries [of Greece, Italy, and Portugal]: Tories warn of collapse of eurozone and danger of a depression as Germany is criticised for slow response (The Guardian blogs)

Italy Auctions Debt at More Than 7% for Third Time in a Week (Bloomberg) Italy borrowing costs surge (Reuters)

Italy at risk of insolvency, European finance ministers warned: Mario Monti must tackle Italian tax evasion to avoid other eurozone economies being damaged, says report (The Guardian)

Roubini: Italy's Debt Must Be Restructured To Avoid Disorderly Default - FT (Dow Jones Newswires) Nouriel Roubini: Italy's Debt Must Be Restructured (CNBC)

EU continues scramble to avoid currency collapse (The Associated Press)

Euro Zone Falls Short on Funds: EU Ministers Look to IMF as Expected Rescue Pool Isn't Big Enough to Mount Italy, Spain Rescues (The Wall Street Journal) Eurozone bailout fund falls short of €1 trillion target: Attempts to boost EFSF five-fold scuppered by high bond yields and disappointing interest from China and other cash-rich Asian governments (The Guardian)

European Officials Agree to Bolster Bailout Fund (The New York Times) Eurozone Bailout Fund Beefed Up With New Leverage Tools (Forbes) Citigroup sentences Europe to Lost Decade (The Telegraph blogs)

Eurozone finance ministers turn to IMF to help bailout fund: Fears of the debt crisis spreading, forcing the collapse of the euro and plunging the global economy into recession (The Guardian)

German minister admits to euro zone 'contagion' -- "the entire eurozone is caught up" (The Irish Times)

Gross Says Europe Won’t Escape Debt ‘Straitjacket’ for Years (Bloomberg) BILL GROSS: There Are Two Big Problems With The Eurozone (The Business Insider)

Europe's Real Problem? Deflation (CNBC) Here’s One Reason the ECB Can and Should Start Printing Money, and a Lot of It, Now. (The Wall Street Journal blogs)

Eurozone Economic And Consumer Sentiment Hits Two-Year Low (Reuters)

In euro zone crisis, companies plan for the unthinkable (Reuters)

U.K. Growth, Debt Outlook Erode (The Wall Street Journal) Osborne’s Deficit-Reduction Targets Seen at Risk as U.K. Economy Stagnates (Bloomberg)

Britain has no more room to keep AAA rating: Fitch (Agence France-Presse)

Fed Officials Warn on World Economy (The Wall Street Journal)

Retirement Preparation in U.S. Reaching Crisis Levels: Small-Business Survey (The Huffington Post blog)

States face bleak economic forecast, report says (The Washington Post) The Fiscal Survey of States Fall 2011: An Update of State Fiscal Conditions: A report by the National Governors Association and the National Association of State Budget Officer (The National Governors Association)

Sheboygan Common Council creates garbage fee to cover 2012 budget deficit: Households will pay extra $7.16 a month to balance budget (The Sheboygan [WI] Press)

American Airlines files for bankruptcy (Reuters)

NY’s Steuben Glass factory shuts down, ending 108 years as a maker of handcrafted crystal (The Associated Press)

How Paulson Gave Hedge Funds Advance Word -- "'You just never ever do that as a government regulator -- transmit nonpublic market information to market participants,' says [Prof. William K.] Black, who’s a former general counsel at the Federal Home Loan Bank of San Francisco. 'There were no legitimate reasons for those disclosures.'" (Bloomberg) Hank Paulson’s inside jobs (Reuters blogs)

MF Global Explained: This video explains causal links between OTC derivatives, the financial crisis of 2008, Alan Greenspan, Robert Rubin, Larry Summers, Jon Corzine and MF Global. (Youtube)



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

Monday, November 28, 2011

Monday roundup (11-28-11)

OECD issues stark warning on global economy: OECD warns Europe's recession will spread, warns of 'highly devastating outcomes' (The Associated Press)

OECD warns of a deep depression as euro meltdown threatens global economy (This is Money) OECD warns of worldwide depression if no action is taken over the euro crisis (The Telegraph blogs) OECD issues depression warning on debt (Agence France-Presse) Eurozone Exits 'May Spark Global Depression' (SkyNews)

Euro Zone in Mild Recession, US May Follow: OECD (Reuters)

Europe's shrinking money supply flashes slump warning: All key measures of the money supply in the eurozone contracted in October with drastic falls across parts of southern Europe, raising the risk of severe recession over coming months. (The Telegraph)

Thinking the unthinkable on a euro break-up (The Financial Times blogs)

Inner Workings of Currency Trades Are Being Readied for Euro Breakup (The Wall Street Journal)

How The Fed Could Force A Euro-Crisis Solution In Just A Matter Of Hours (The Business Insider)

Italy borrowing rates skyrocket (The Globe and Mail of Toronto)

Is Germany the next victim of the euro crisis? (Time blogs)

Germany resists radical steps as Europe’s debt crisis deepens (The Washington Post)

Britain faces 'double-dip recession' [per the OECD] (Agence France-Presse) Bank of England governor tells Britain to brace for devastating financial crisis as OECD warns country is facing double dip recession (The Daily Mail) Blow for George Osborne as London firms [also] predict double-dip recession (The London Evening Standard) King Says U.K. Must Have Contingency Plan as Euro Risks Increase (Bloomberg)

Majority of U.K. Voters Want Government to Ease Up on Austerity (The Wall Street Journal blogs)

U.S. Outlook Cut to Negative by Fitch After Committee Fails (Bloomberg)

Grantham Calls Corporate Profits Freakish (Bloomberg)

New Home Prices: Average Lowest since 2003 (Calculated Risk blog) "Builders sold fewer new houses in the U.S. than forecast in October, delaying a recovery as the industry heads for the weakest year on record." (Bloomberg) New Home Prices Facing Growing Pressure (CNBC)

Consumers continue to unload debt (CNNMoney)

[New York's Gov. Andrew] Cuomo: State budget numbers ‘collapsing quickly’ (WNYC)

[Hartford CT's] Mayor: City Budget Is $11.5 Million In The Red (The Hartford Courant)

Quelle Surprise! Banks Lied About Bailout Funds and Got $13 Billion in Profit from Them (Naked Capitalism blog) Secret Fed Loans Helped Banks Net $13B (Bloomberg)

“Many Americans Are Struggling To Understand Why Banks Deserve Such Preferential Treatment While Millions of Homeowners Are Being Denied Assistance And Are At Increasing Risk Of Foreclosure” (Washington's Blog)

Banking System Rotten to the Core by Prof. William K. Black (Financial Sense)

The Failure to Forecast the Great Recession (The Federal Reserve Bank of New York)

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, November 27, 2011

Sunday roundup (11-27-11)

Wolfgang Münchau [in the Financial Times of London]: "Only days to avoid collapse" of eurozone, Currency Market prepares for breakup (Credit Writedowns blog) "Wolfgang Münchau is associate editor and European economic columnist for the Financial Times and runs eurointelligence.com, an internet service providing daily comment and analysis of the euro area." (CFA Institute) Ten days to rescue the euro Wolfgang Münchau, Financial Times (The Business Spectator)

The Euro Area Is Coming to an End: Peter Boone and Simon Johnson (Bloomberg)

Double-dip recession growing more likely than 'soft landing' for Europe: After attempts to revive Italy, it will be Spain that decides the fate of the euro, writes former Irish hedge fund boss Sean Ewing (The Irish Independent)

Prepare for riots in euro collapse, Foreign Office warns: British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain. (The Telegraph)

Is a Eurozone breakup now inevitable -- and imminent? (The Los Angeles Times)

Time Runs Short for Europe to Resolve Debt Crisis (The New York Times)

Mounting Euro Breakup Risk Seen by Banks as Debt Crisis Festers (Bloomberg)

Central Banks Ease Most Since 2009 (Bloomberg)

Should the Fed save Europe from disaster?: The dam is breaking in Europe. Interbank lending has seized up. Much of the financial system is paralysed, setting off a credit crunch just as Euroland slides back into slump. (The Telegraph)

Euro Zone Weighs Plan to Speed Fiscal Integration (The Wall Street Journal) Franco-German secret negotiations for new euro contract (Credit Writedowns blog) Germany, France examine radical push for eurozone integration (Reuters)

Italy Is Closer To Collapse Than Anyone Realized, And So Is The World (The Business Insider)

Italy debt 'problem' would hit heart of eurozone: France (Agence France-Presse)

["The IMF is preparing 600 billion to take care of Italy: Negotiations between Lagarde and Rome: if the situation worsens, a loan will give Monti 18 months of time for reforms"] E l'Fmi prepara una cura da 600 miliardi per l'Italia: Trattative tra Lagarde e Roma: se la situazione peggiora un prestito per dare a Monti 18 mesi di tempo per le riforme (La Stampa) IMF readying $794 billion bailout plan for Italy (Agence France-Presse) Officials Dismiss Report On IMF Italy Package (Dow Jones Newswires) Italy's Monti in austerity race as IMF role eyed (Reuters) Tim Duy: "Europe Scrambles for Solutions" (Calculated Risk blog)

[In the US, Black Friday shopping spree was actually] Not So Good (Financial Armageddon blog)

What Really Happened to Strauss-Kahn? by Edward Jay Epstein (The New York Review of Books)

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, November 26, 2011

Saturday roundup (11-26-11)

New Strains Hit Euro, Global Markets: Common Currency Falls After Italy's Borrowing Costs Soar; Coming Week Poses Key Test of Sentiment (The Wall Street Journal)

Greece Faces 'Mortal Danger' Amid Deepening Euro-Zone Crisis - Fin Min (Dow Jones Newswires)

Belgian parties reach deal on austerity budget after downgrade: At the urging of Belgium's caretaker prime minister the nation's bickering political parties have reached an agreement on a 2012 budget. Premier Yves Leterme wanted to ease market fears after a debt-rating downgrade. (Deutsche Welle)

Can Britain cope if the eurozone collapses?: As the unthinkable looms, ministers are starting to prepare for the worst. (The Telegraph)

Unofficial Problem Bank list increases to 980 institutions (Calculated Risk 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, November 25, 2011

Friday roundup (11-25-11)

Quote of the Day:

"The present crisis is not about Italy's debt — not anymore, anyway. Yields on short-term Italian debt are now higher than on long-term Italian debt. Italy, like much of the euro zone, is facing a serious short-term funding crunch. If left to run, that crunch will eventually rip the currency area apart." -- Blogger at The Economist (The Economist blogs)

Euro zone struggles to stay alive -- "'The threat that the crisis is more aggressively migrating into the core economies is real,' warned Scotia Capital Inc. economist Derek Holt." (The Globe and Mail of Toronto)

Eurozone debt crisis creating `dire' problem for global economy: Flaherty (The Financial Post)

Fear of new financial crisis grows as European contagion spreads (The Australian)

Europe debt crisis poses grave risk to Japan, says Furukawa (The Dow Jones Newswires)

European debt crisis: Risks grow as borrowing rates for Italy, other nations rise (The Washington Post)

EU's Rehn says swift action needed to contain euro (Reuters)

European banks' asset sales face disastrous failure (International Financing Review)

European debt crisis escalates in Italy as rates rocket (The Associated Press) European debt crisis: Risks grow as borrowing rates for Italy, other nations rise (The Washington Post)

New blow in eurozone debt crisis as Italy is forced to pay monumental rate for short-term borrowing (This is Money)

Italy: Default [by the country] 'would mean the end of the euro' [according to German and French leaders] (ADNKronos)

Now Spain may face bailout shame - report (The Irish Independent)

OECD figures suggest Britain's economy will slip back into recession at the start of next year: Britain will slip back into recession at the start of next year, ministers have been told. (The Telegraph)

Belgium’s Credit Rating Cut to AA by S&P (Bloomberg)

Utility plans to slash 700 jobs to meet reduced rate expectations: Higher trading revenues, spending cuts and deferrals also part of amended application (The Vancouver Sun)

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, November 24, 2011

Thursday roundup (11-24-11)

Quote of the Day:

"As further and urgently necessary step in the program to promote economic recovery, I ask the Congress for legislation to protect small home owners from foreclosure and to relieve them of a portion of the burden of excessive interest and principal payments incurred during the period of higher values and higher earning power.

"Implicit in the legislation which I am suggesting to you is a declaration of national policy. This policy is that the broad interests of the Nation require that special safeguards should be thrown around home ownership as a guarantee of social and economic stability, and that to protect home owners from inequitable enforced liquidation in a time of general distress is a proper concern of the Government." -- President Franklin D. Roosevelt, April 13, 1933 (The American Presidency Project)

[Another Great Depression is inevitable, unless ...] Economist Steve Keen (Youtube)



Germany Buys Itself First-Class Ticket on Titanic (Bloomberg)

In today's debt crisis, Germany is the US of 1931: Germany's own history shows that dictating economic decline to other nations only stores up trouble for the future (The Guardian)

Dexia using emergency liquidity facilities: source -- "'The emergency window of the ECB ... is very expensive, so it shows that the liquidity situation is very dramatic,' the analyst said, speaking on condition of anonymity." (Reuters)

Portugal’s credit rating downgraded to junk status, protesters rail against austerity measures: Latest setback in country’s attempt to end economic crisis (The Associated Press) Portugal’s Credit Rating Is Cut to Junk by Fitch on Debt (Bloomberg)

Japan: Deflation worsens in November (FXSTreet.com) Japan’s Consumer Prices Fall for First Time in Four Months (Bloomberg)

IMF Warns Japan Debt Could "Quickly Become Unsustainable" (The Dow Jones Newswires)

Moody's warns U.S. not to skimp on deficit cuts (Reuters)

Ford Plans 4,000 Temporary Layoffs on Weak Demand in Europe (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, November 23, 2011

Wednesday roundup (11-23-11)

Quote of the Day:

"The world can give thanks that a new Depression is not yet upon it. Enjoy the sentiment now, while it lasts." -- Blogger for The Economist (The Economist blogs)

European Bank Borrowing From the ECB Hits Highest Level of the Year (The Wall Street Journal blogs)

Eurozone recession signals mounting (The Associated Press)

Two Thirds Chance of 2012 Europe Recession: Survey (CNBC)

World economy counts cost of euro zone dithering (Reuters)

S&P: Recession Could Put Euro Zone Ratings at Risk (Reuters)

Eurozone debt crisis worsens as Germany struggles to sell bonds (The Los Angeles Times blogs) "Disastrous" bond sale shakes confidence in Germany (Reuters) Bond Auctions Become a State of Mind (The Wall Street Journal) Weak Sale of Bonds Tests Germany’s Stature in Crisis (The New York Times) Germany’s Bond-Auction Fail: Here’s What It Means (The Wall Street Journal blogs) Is it time for Germany to hit the panic button? (The Washington Post blogs)

Debt crisis now at German doorstep: Belgian and French yields jump on Dexia bailout worries (Marketwatch)

Merkel affirms her rejection of Eurobonds in budget debate: Angela Merkel is standing strong against calls from Brussels to introduce eurozone-wide bonds, calling the idea "extremely worrying and inappropriate" in a debate over her government's 2012 budget. (Deutsche Welle) Can Euro Zone's Word Become Its Bond? (The Wall Street Journal)

Fitch warns France on rating (Dow Jones Newswires)

Dexia Bailout On Verge Of Collapse, Threatens To Take France AAA Rating Down With It (ZeroHedge blog)

Belgium wants France to pay more in Dexia bailout (The Irish Times)

Ireland demands debt relief, warns on EU treaties: Europe's plans for treaty changes to enforce fiscal discipline in the eurozone may fall foul of popular anger in Ireland unless the EU creditor states agreee to share more of the pain. (The Telegraph)

Fate of Euro May Hinge on Italian Savers (The New York Times)

Pimco's El-Erian Calls U.S. Economy `Terrifying': Mohamed El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., talks about U.S. budget policy and the economy. He speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." [Air date Nov. 22] (Bloomberg)



Postal Service: Bankruptcy looms? Hike rates. Again.: Postal Service will raise rates an average 5 percent on priority and express mail services next year. Is it enough to avoid Postal Service bankruptcy? (The Associated Press)

Some States Are Facing Revenue Shortfall — Again (Reuters)

Troubled Harrisburg now state's problem (CNNMoney)

Nokia Siemens Networks to cut 17,000 jobs (Reuters)

Navy to Lay Off 3,000 Sailors: The Navy began layoffs last week with the first of two rounds of personnel cuts (NBC San Diego)

Celente, Corzine and the Great U.S. Bank Holiday (Youtube)



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

Is it a recovery yet? (Weekly report, 11-23-11)

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 jobless claims rose to 393,000 in the week ending November 19, the Labor Department said. The prior week's number was downwardly revised to 391,000 claims, the lowest level since April." (Agence France-Presse)

"'Claims are below 400,000, but they’re not consistent with a booming job market,' said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. 'The labor market is taking small steps in the right direction. Businesses aren’t panicking by increasing layoffs. We’re only going to see a gradual increase in hiring in the next few months.'" (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.

Tuesday, November 22, 2011

Tuesday roundup (11-22-2011)

Leading Economists Warn Of "Total Social Disintegration" (Sky News blogs)

Europe Banks Seek More Cash From Central Bank (The New York Times) ECB funding demand surges as bank strains build (Reuters)

EU’s Rehn Says Stressed Nations Must Step Up Austerity Measures (Bloomberg)

FSA's Turner warns of the deflationary risks of deleveraging (MoneyMarketing) Debt and deleveraging: Long term and short term challenges (FSA)

Then and Now: The European Debt Crisis: Portugal, Ireland, Greece, Spain and Italy have all had their turn in the credit crisis spotlight lately. But no matter which European country markets cast their scrutiny upon this week, it’s debt that’s at the heart of the issue. Click on “expand infographic” ... to view how the debt of major European countries has evolved from 2000 to 2010. (Mint blog)

France’s AAA Status in Tatters as Yields Surge (Bloomberg)

Greece, Spain Face New Debt Pressures (The Voice of America)

Spain in race against time to avert bail-out: Markets have dashed any lingering hopes of an investor honeymoon for Spain's incoming leader Mariano Rajoy, sending the IBEX index in Madrid crashing through the 8,000 level and pushing borrowing costs to toxic levels. (The Telegraph)

Pain in Spain as borrowing costs double thanks to eurozone debt crisis (This is Money) Spain's cost of borrowing increases sharply (The BBC)

BOE’s Miles Says U.K. Recovery Faltered, Growth ‘Close to Zero’ (Bloomberg)

Bank of England finds risk of crisis biggest since 2008: The risk of a financial crisis in the UK is at its greatest since the collapse of Lehman Brothers in 2008, according to a Bank of England Survey. (The BBC)

Top Bank official Robert Jenkins claims banking lobby 'lying' about cost of reform: A top Bank of England policymaker has accused bankers of lying to try to overturn regulations that would save the taxpayer from another punishing bail-out. (The Telegraph)

Housing market 'unlikely to recover', says Bank of England expert: The housing market is unlikely to ever recover from the financial crisis and it may prove economically beneficial for fewer people to own property, a senior Bank of England expert warned yesterday. (The Telegraph)

Thomas Cook shares crash after default warning (Reuters) Thomas Cook seeks financial help (Channel 4 News)



[US] GDP revised downward; corporate profits up (The Los Angeles Times blogs)

Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’ (Bloomberg)

Fed to Apply Stress Test to Six Big US Banks (CNBC)

Supercommittee Failure Poses Risk to U.S. Economy Even as Rating Affirmed (Bloomberg)

BofA warned by regulators to get stronger: report (Reuters) (The Wall Street Journal)

MF Global Revelations Keep Getting Worse by Janet M. Tavakoli, President, Tavakoli Structured Finance, Inc (Tavakoli Structured Finance)

Detroit to cut 1,000 jobs amid budget crisis (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.

Monday, November 21, 2011

Monday roundup (11-21-11)

Quote of the Day:

"This crisis is hitting the core of the euro zone. We should have no illusions about this." -- Olli Rehn, European Economic and Monetary Affairs Commissioner (Reuters)

‘We have entered the last days of the euro as we currently know it’: Credit Suisse (The Financial Post) Credit Suisse Says ‘Momentous Deal’ Needed to Save Euro Zone (Bloomberg)

ECB's Stark says debt crisis at euro core (Reuters)

Goldman: SOVEREIGN RISK IS SPREADING LIKE WILDFIRE (The Business Insider)

ECB Stepped Up Bond Purchases Last Week as Debt Crisis Worsened (Bloomberg)

Banks' overnight ECB deposits up; tension high (Marketwatch)

Italy May Have to Restructure Debt Next Year, Roubini’s RGE Says (Bloomberg) Roubini Global Economics: Italy Is Past The Point Of No Return (Dow Jones Newswires)

Germany's Angela Merkel is resolute as Europe's debt crisis grows: The German chancellor continues to demand that Europe's weaker economies accept painful austerity measures, even as the debt crisis has begun squeezing France, considered Germany's partner in managing the crisis. (The Los Angeles Times)

Deutsche Bank Could Transfer Financial Contagion by Simon Johnson (Bloomberg)

Moody's warns on French rating outlook (Reuters)

Hungary turns to IMF as stress mounts in Eastern Europe: Hungary has returned cap in hand to the International Monetary Fund after kicking out inspectors last year, becoming the first country in Eastern Europe to succumb to contagion from eurozone debt stress. (The Telegraph) Debt crisis spreads despite Spanish election result -- [with Austrian banks cutting funds available to Eastern European subsidiaries] (The Irish Times)

Supercommittee [of the US Congress] announces failure in effort to tame debt (The Washington Post)

Pres Obama On Super Congress Failure (Youtube)



Congress Has Over a Year to Thwart Spending Cuts (The Associated Press) Super committee: What's next (CNNMoney)

Super Committee's Failure Means Lost Avenue For Obama's Jobs Bills (The Huffington Post blog)

Postmaster general: Bills to fix Postal Service ‘do not come close’ (The Washington Post blogs)

Are big banks really changing their ways? (CNNMoney)

Trustee in MF Global case says $1.2B in customers’ money missing, twice what firm said (The Associated Press) MF funds shortfall could top $1.2 bln: trustee (Marketwatch)

Jefferies fights back against what it calls 'lies' -- "'By now, everyone should recognize Jefferies is the firm with the least exposure to the sovereign debt of Greece, Ireland, Italy, Portugal and Spain of all of our major competitors,' the letter said." (The Associated Press) Jefferies Cuts European Sovereign Debt Holdings Another 50% (Dow Jones Newswires)

60 Minutes: Jack Abramoff on Lobbying and Gov Corruption (CBSNews 60 Minutes)



Booth layoffs total around 550 (Crain's Detroit Business)

Vital Signs: Start-Up Job Creation Stalled (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.

Sunday, November 20, 2011

Sunday roundup (11-20-11)

Spain - the fifth victim to fall in Europe’s arc of depression: Let us all extend our sympathies to the Spanish people. They face the greatest national emergency since the Civil War yet their vote for drastic change is palpably useless, even if democracy has in this case at least been respected. (The Telegraph) Spanish Conservatives Win General Elections (The Associated Press)

Eurozone debt crisis unnerves Balkan states (Agence France-Presse)

[US] Lawmakers Concede Budget Talks Are Close to Failure (The New York Times) Aides: 'Super Committee' likely to announce failure to reach debt deal (CNN) Deficit Panel Sets Table for Failure (The Wall Street Journal)

U.S. money funds seen at risk from Europe's debt storm (Reuters)

Nuclear giant Areva to 'cut 1,300 jobs' in Germany (Agence France-Presse)

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

Saturday, November 19, 2011

Saturday roundup (11-19-11)

Europe Fears a Credit Squeeze as Investors Sell Bond Holdings (The New York Times)

Rising Government Bond Rates Push Eurozone Debt Crisis to the Precipice of Collapse (Money Morning)

El-Erian: We Must All Now Be Avid ECB Watchers (CNBC blogs)

Number of the Week: More Stress, More Physical Euros (The Wall Street Journal blogs)

What price the new democracy? Goldman Sachs conquers Europe: While ordinary people fret about austerity and jobs, the eurozone's corridors of power have been undergoing a remarkable transformation (The Independent)

Only Germany can fix the euro (Foreign Affairs)

Spain's leadership latest victims of Europe's debt crisis (Agence France-Presse)

U.S. Deficit Super Committee Stalled as Deadline Looms (Reuters) ‘Supercommittee’ at impasse as deadline approaches (The Washington Post) ‘Doubtful’ Supercommittee Will Agree, Kyl Says (Bloomberg)

Do We Face “A Japan-style Era of High Unemployment and Slow Growth”? (The Big Picture blog)

NYC agencies spend nearly $1 billion more than planned (Reuters)

Unofficial Problem Bank list declines to 977 Institutions (Calculated Risk blog)

Occupy LA Teach In William K Black (Youtube)



McDonald's Cruelty: The Rotten Truth About Egg McMuffins (Mercy for Animals)



McDonald's, Target drop egg supplier (The Associated Press) McDonald's Dumps McMuffin Egg Factory Over Health Concerns (ABCNews)



Statement from Beth Sparboe Schnell (Youtube)



Food Inc - Official Trailer (Youtube)



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

Friday, November 18, 2011

Friday roundup (11-18-11)

Quotes of the Day:

"Contagion stress has spread to France and other economies as well. The pressure is building up and regrettably I don't see any of that capital market pressure reversing." -- Robert Parker, senior advisor at Credit Suisse. (CNBC)

"With the late October 'deal' now in tatters, and with subsequent developments in Italy, in Greece, and in the market pricing of French risk, the future for the euro zone now seems to be all about the ECB and outright monetization." -- Bob Janjuah, co-head of cross-asset allocation strategy at Nomura. (CNBC)

"If you don't think Merkel's tone will change then our investment advice is to dig a hole in the ground and hide. It’s difficult to see any other scenario than widescale Sovereign defaults without an aggressive ECB." -- Jim Reid, credit strategist at Deutsche Bank (The Business Insider)

Sovereign Debt Concern to Spread Beyond EU, Ackermann Says (Bloomberg)

Money-Market Spreads Climb to Two-Year High on Europe Crisis (Bloomberg) Déjà Vu All Over Again (Financial Armageddon blog) Stress Indicators Flash Red in Europe (The Wall Street Journal)

Bank Chief Rejects Calls to Rescue Euro Zone (The New York Times)

European bank chief urges action on rescue fund (Reuters) ECB's Mario Draghi pours scorn on dithering euro leaders (This is Money)

ECB has secret 20 billion euro bond-buying limit: report (Reuters)

Europe needs "plan B" to stop credit squeeze (Reuters)

Fears that eurozone may break up are spreading (The Associated Press)

Eurozone debt web: Who owes what to whom? (The BBC)

This Time Really Is Different (Is the Money There for Europe and the Rest of the World?) (The Huffington Post blog)

Franco-German Battle over the ECB Intensifies: Germany remains adamantly opposed to using the European Central Bank as the lender of last resort to prop up the common currency. But with debt contagion rapidly spreading to several more euro-zone countries, France has upped the pressure. The future of the EU may be at stake. (Deutsche Welle)

Italian Banks Point to Serious Liquidity Problems: If recent reports are true, certain Italian banks are suffering serious liquidity problems as they struggle to fund their balance sheets (Morningstar)

Italy too big to fail? Odds are it's too big to save: With an economy seven times bigger than Greece, Italy could cost the eurozone €1.2 trillion if it requires a bailout like Greece's. That's more than Europe's emergency coffers have, even with leverage. (The Christian Science Monitor)

Spain becomes eurozone's weaker link: The implicit interest rate that investors charge for lending to Spain for ten years - what's known as the yield on the benchmark ten-year bonds - has in the past 24 hours exceeded what they demand of Italy, and is now more or less the same. (The BBC)

US Democrats Reject Latest Deficit-Cutting Plan (Reuters)

Automatic spending cuts a new threat to US economy: Automatic spending cuts and expiring tax breaks could weigh on economy without toppling it (The Associated Press)

Political Gridlock Threatens Commercial Real Estate (National Real Estate Investor)

The MF Global Money Is Probably Gone: Source (CNBC) "The maestro [Alan Greenspan] admitted in an October [2008] congressional hearing that he had 'made a mistake in presuming' that financial firms could regulate themselves." (Time) MF Global's collapse: a familiar tale of regulatory failure: Looking at MF Global's bankruptcy – over-leveraged and under-capitalised – I must ask: have we learned anything since 2008? [published Nov. 11] (The Guardian)

Banks closed in Iowa, La; 90 failures in 2011 (The Associated Press)

Polk County Bank of Johnston IA had a troubled assets ratio of 420.9%. (BankTracker)

Central Progressive Bank of Lacombe LA had a troubled assets ratio of 467.9%. (BankTracker)

Detroit to cut 1,000 city worker positions by late Feb: mayor (Reuters)

Heinz to close 3 more factories, cut 1,000 jobs (Pittsburgh Business Times)

Cook County OKs budget with taxes, 775 layoffs (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.

Thursday, November 17, 2011

Thursday roundup (11-17-11)

Money market stress mirrors troubles that led to Lehman collapse (Dow Jones Newswires) And Now Banks Are Beginning To Freak Out About Lending To Each Other Again (The Business Insider)

IMF can no longer avoid bigger role in eurozone (Reuters)

ECB must act urgently to prevent Italian death spiral (The Irish Times) [vs.] Fitch: Italian corporate liquidity ok for now; 2012 will be the test (Reuters) European Central Bank Said to Have Bought Italian Government Bonds Today (Bloomberg)

Euro Rescue Plan Falling Short Renews Franco-German Spat on ECB (Bloomberg) [or as an earlier version said:] Merkel Rejects ECB as Crisis Backstop in Clash With France (Bloomberg)

Spanish, French Default Swaps Rise to Records on Bond Auctions (Bloomberg) Euro Debt Worries Shift to Spain and France (The New York Times)

France needs tough reforms to halt debt spike (Reuters)

Spain's borrowing costs hit 14-year high: Spain's borrowing costs have risen at its latest bond auction, as Spaniards prepare to vote for a new government to tackle its financial crisis. (The BBC) Spain latest to take hit in European debt crisis (The Washington Post)

Asian powers spurn German debt on EMU chaos: Asian investors and central banks have begun to sell German bonds and pull out of the eurozone altogether for the first time since the debt crisis began, deeming EU leaders incapable of agreeing on any coherent policy. (The Telegraph)

Resona Chairman Warns Over Japan Debt 'Danger Zone' (The Wall Street Journal)

US Debt Hits $15 Trillion; Will Super Committee Save Us? (Forbes) Gloom around deficit-reduction panel grows: Even as a bipartisan 'gang of 147' lawmakers gathers to urge a far-reaching deal, the impasse on the 12-member 'super committee' intensifies. (The Los Angeles Times)

GM's Dan Akerson: Europe debt crisis can threaten U.S. economy -- [and he feels, in the paper's words, that it is] "a more serious threat to the world economy than the financial crisis of 2008" (The Detroit Free Press)

Goldman Sachs Sees Signs Of Disinflation: Bernanke's Cue For QE3? (Forbes)

Fewer mortgages going bad but foreclosures expected to increase: The Mortgage Bankers Assn. says it could take three or four years to return to a normal pattern of delinquencies and foreclosures. (The Los Angeles Times)

Real Estate: Why home prices won't bottom out (Reuters)

Food Stamp Use Rose in 2010 (The Wall Street Journal blogs)

Detroit Faces $45 Million Gap, State Takeover, Mayor Bing Says (Bloomberg) Economist: Without big reforms, Detroit will default in 4 months, file bankruptcy (CNN) Mayor's last-ditch effort to save Detroit would privatize 88,000 streetlights: Detroit Mayor Dave Bing asked for deep cuts and concessions from unions and city officials to stave off a state takeover. Privatizing streetlights and buses is one part of his plan. (The Christian Science Monitor)

North Las Vegas facing $15.5 million budget deficit: City official: Concessions from police and firefighters unions could solve problem (The Las Vegas Sun)

MF Global Is Said to Have Used Customer Cash Improperly (The New York Times blogs)

IRS Offers Buyouts to 5,400 Employees (Bloomberg)

UBS Plans to Cut 2,000 Jobs, Pay Dividend (Bloomberg)

HardTalk & Kyle Bass 1 of 2 on The Global Economy & Finance Situation - BBC Interview (Youtube)



HardTalk & Kyle Bass 2 of 2 on The Global Economy & Finance Situation - BBC Interview (Youtube)



Real Free Market Capitalists Demand that Financial Fraud Be Prosecuted (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.