Saturday, December 31, 2011


Eurozone is closer to break-up, warns Standard Chartered's Peter Sands: The chief executive of Standard Chartered has warned that there is an increasing likelihood of a country falling out of the eurozone because of the inability of politicians to resolve the crisis. (The Telegraph)

Greek bank chief warns against quitting euro -- would "be a real nightmare at least for the first few years" (Agence France-Presse)

Italian president urges sacrifices to save economy -- " to prevent the financial collapse of Italy" (Agence France-Presse)

Credit card debt: Are consumers returning to bad habits?: Credit card debt increased an estimated $64 billion in 2011, far more than in the previous two years. Holiday shopping bills will swell credit card debt even more in early 2012. (The Christian Science Monitor)

Cities turn off their lights as budgets get slashed and revenues decline: "When you come through at night, it's scary; you have to wonder if anyone is lurking around waiting to catch you off your guard" (The New York Times)

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

Friday, December 30, 2011

Friday roundup (12-30-11)


El-Erian: IMF Must Stand Up to 'European Bullying' (CNBC)

Europe's Dance Of Death (The Huffington Post blog) ICONOLOGY OF THE EARLY DEATH CARDS (Tarot.com)

Spain Misses Deficit Target, Sets Cuts: New Conservative Government Proposes Wide Range of Budget Cuts to Close Gap; Reverses Promise Not to Raise Taxes (The Wall Street Journal) Spain revises up 2011 budget deficit forecast to 8 percent of GDP; fresh austerity announced (The Associated Press) As Spain Acts to Cut Deficit, Regional Debts Add to Woe (The New York Times) Spain spells out new austerity measures (Agence France-Presse)



German MP Criticizes Greek Privatization Efforts, Patience Might End (The Dow Jones Newswires)

Germany May Speed Payments to Bailout Fund to Help on Ratings for Bonds (Bloomberg)

Merkel Says She’ll ’Do Everything’ to Save Euro (Bloomberg) 'Euro will be stable' claim is ridiculed: Germany's finance minister has been accused of groundless optimism after he claimed that Europe's leaders will have "banished the dangers" of the euro crisis within 12 months. (The Telegraph) [Allegria, amici ascoltatori!]

Huge blow for the High Street as shoe chain Barratts sheds 1,600 jobs after last minute rescue deal fails (The Daily Mail)

Why European loans could hurt U.S. taxpayers (CNN)

Fed seeks to curb risks (Cliff Küle's Notes blog)

Is there any deleveraging? (Cliff Küle's Notes blog)

Could Bank of America Survive a Deposit Run in 2012? (Forbes)

Nation's largest welfare state [= California] makes deep cuts (The Associated Press)

Recipe for Disaster: The Formula That Killed Wall Street (Wired)

Five Economic Trends to Watch in 2012 (The Wall Street Journal blogs)

Insane Levels of Leverage by the Too Big to Fail Banks – Not Deadbeat Borrowers – Caused the Financial Crisis (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.

Thursday, December 29, 2011

Thursday roundup (12-29-11)


European Sovereign Debt Is ‘Toxic,’ Pimco’s Crescenzi Says (Bloomberg)

Recession 'to return' to Europe, say economists (The BBC)

Eurozone credit crunch fears on M3 money contraction: Europe is at mounting risk of a fresh credit crunch after the eurozone money supply contracted for a second month in November and the volume of private loans began to shrink. (The Telegraph)

Banks Bunker Hundreds of Billions in Deposits at ECB: Just before Christmas, the European Central Bank flooded the financial markets with 500 billion euros -- a move that may not ultimately have the desired effect of stabilizing banks. Instead of passing that money on in loans to businesses to spur the economy, European banks have redeposited the money with the ECB at low interest rates. (Der Spiegel)


Angela Merkel's economic adviser Weder di Mauro refuses to rule out eurozone break-up: One of German Chancellor Angela's Merkel's economic advisers, Beatrice Weder di Mauro, has refused to rule out a break-up of the eurozone, in an interview published on Thursday. (The Telegraph)

Italian debt costs shoot back into danger zone: Despite a successful debt auction, Rome's 10-year borrowing costs rise above critical level (The Independent) Italy seeks bigger euro fund after tough debt sale (Reuters) Eurozone debt fears confirmed as Italy auctions off ten-year bonds at 'unsustainable' level (The Daily Mail) Italy calls for bigger euro fund after tough debt sale (Euronews)



Business Confidence Falls to Two-Year Low Amid Italian Austerity Measures (Bloomberg)

Fed Secretly Bailing Out Europe: A former Fed official says in the Wall Street Journal that the Federal Reserve is covertly bailing out Europe. Insight with Gerald O'Driscoll, Cato Institute senior fellow, who says the Fed operated a "temporary U.S. dollar liquidity swap arrangement." (CNBC)



Voters in Iowa, New Hampshire Say Federal Budget Deficit Is No. 1 Issue (The Heritage Foundation blogs) What worries us most: Economic collapse (MSNBC)

     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, 12-29-11)


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.)

"The Labor Department reported Thursday that unemployment claims stood at 381,000 for the week that ended on Christmas Eve, an increase of 15,000 from the week before." (The Hill blogs)

Jobless Claims in U.S. Hit Three-Year Low [over the past month] (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.

Wednesday, December 28, 2011

Wednesday roundup (12-28-11)


Dithering at the Top Turned EU Crisis to Global Threat (The Wall Street Journal)

Three big risks the world faces in 2012: HSBC (The Financial Post)

Euro crisis blocks the path to full economic recovery: The year ahead looks gloomy, but quantative easing and inflation across Europe should prevent a full-blown depression. (The Telegraph) ["should"]

Europe's Banks Face Pressure on Collateral (The Wall Street Journal)

Lagarde rings a Euro alarm bell (The Business Spectator)

Liquidity Returns To Flood The ECB Basement (The Wall Street Journal blogs)

Bond sale puts Italy to the test: Italy faces a crucial test tomorrow as the technocrat government of Mario Monti launches its first big auction of long-term bonds since a disastrous upset a month ago. (The Telegraph) Italy short-term debt costs halve at auction (Reuters) A welcome reprieve for the eurozone – but only a reprieve: Alas, even now, the contradictions at the heart of the crisis remain unresolved (The Independent)

Greek retailers say Christmas sales worst in years amid acute financial crisis (The Associated Press)

Greek economic crisis turns tragic for children abandoned by their families: Nation shocked by stories of parents forced to give up children because of poverty – but charities warn of more cases to come (The Guardian)

1,000 metal thefts every week as growing 'menace' blights Britain: Metal theft has reached "epidemic" proportions in Britain with more than 1,000 offences taking place every week, according to official figures obtained by The Daily Telegraph. (The Telegraph)

Deflation Grip Returns in Japan as Production Declines: Economy (Bloomberg)

Europe's Besieged Banks Have Trillions In Claims Against US Banks (Forbes)

A Grim Forecast for [US] Corporate Earnings: With an unusually large percentage of companies revising their fourth-quarter estimates downward, prepare to see many results that miss the Street's current estimates. (Barron's)

Foreclosures Take Twice As Long To Process Now As They Did In 2007: Study -- "If the American housing market is ever to recover -- and provide some momentum to a broader economic turnaround -- it needs to work its way through the millions of foreclosed properties that have yet to be processed and auctioned off. But ..." (The Huffington Post blog)

Clouded Title: The Gross Illegality of MERS (The Big Picture blog) Stop payment! A homeowners' revolt against the banks (Harper's)

Less than a quarter of companies to hire in 2012: CareerBuilder (The Los Angeles Times blogs)

U.S. commodity markets shrink after MF Global failure (Reuters)

More than 700 Sparrows Point steel workers laid off until early March: Jobless workers can apply for unemployment insurance (The Baltimore Sun)

Hawaii Medical Center layoffs number 500 (Pacific Business News)

106-year-old stockbroker talks shop: Irving Kahn has been following the swings of the market since before the Great Depression...and he still does. (CNNMoney)



What Is Money and How Do You Destroy It? (The Wall Street Journal blogs)

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

Tuesday, December 27, 2011

Tuesday roundup (12-27-11)


A Run On The Global Banking System—How Close Are We? (Gonzalo Lira blog)

LTRO "Bazooka" Is Epic Disaster As Banks Scramble To Redeposit "Free Carry" Cash With ECB, Lose Money On "Inverse Carry" (ZeroHedge blog) Nervous banks deposit record €412bn with ECB: High levels of distrust over lending point to liquidity freeze (The Guardian) ECB Overnight Deposits Reach Record After Three-Year Loans (Bloomberg)

The Federal Reserve's Covert Bailout of Europe: When is a loan between central banks not a loan? When it is a dollars-for-euros currency swap. (The Wall Street Journal)

[UK] Treasury plans for euro failure: The Government is considering plans to restrict the flow of money in and out of Britain to protect the economy in the event of a full-blown euro break-up. (The Telegraph)

Italian auction may prove obstacle for euro (Reuters)

Italians Cut Spending in Worst Christmas in 10 Years: Economy (Bloomberg)

Chinese banks under pressure to raise cash next year: source (Reuters)

Protesters Worldwide Demand An End to Crony Capitalism (Washington's Blog)

Obama administration to seek $1.2 trillion debt ceiling increase (CNN blogs) Debt-Ceiling Lift Could Trigger Fight Before Elections (National Journal)

Economists not hopeful about 2012 (The Myrtle Beach Sun News)

A country too big to fail (The Financial Post)

Home Prices In Major Cities Hit New Lows, Yanked Down By Foreclosures (Forbes) Case Shiller: House Prices fall to new post-bubble lows in October (seasonally adjusted) (Calculated Risk blog) U.S. Home Prices Fell More Than Forecast (Bloomberg) Home prices in largest U.S. cities fall in October from September: The S&P/Case-Shiller index shows home prices dropped in 19 of 20 cities in October, dashing hopes that the sluggish housing market was headed for an upturn. (The Los Angeles Times)

America becoming a nation of renters: Trend is helping to boost construction, and jobs, in struggling industry (Reuters)

A Detroit bankruptcy would be long, costly: Municipal experts fear that a Chapter 9 filing would be complex and difficult (The Detroit News)

Morgan Stanley May Eliminate 580 Jobs in New York City (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.

Monday, December 26, 2011

Monday roundup (12-26-11)


From 2011's Santa Claus Rally To 2012's Perfect Storm (Forbes)

UK faces bleak 2012 and risk of recession's return, warns thinktank: Britain's jobless rate to rise as Osborne's economic strategy fails to halt slide back into recession, says IPPR (The Guardian)

Italy’s uphill financial fight [editorial] (The Washington Post)

Spain's economy minister says year ended with contraction in economy (The Irish Times) Spain faces more pain before economy recovers, warns minister: Luis de Guindos, economy minister expects the economy to shrink in the final three months of 2011 and again in the first quarter of the new year (The Guardian)

BOJ Nov minutes: Some said Europe woes affecting Japan mkts (Reuters)

Japan hopes Europe will boost rescue mechanism - sources (Reuters)

Slowing Inflation [in the US] Cheers Fed: Falling Commodities, Easing Price Rises Give Central Bank Room to Spur Growth (The Wall Street Journal)

Falling home values mean budget crunches for cities (The Washington Post)

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

Sunday, December 25, 2011

Sunday roundup (12-25-11)


IMF's Lagarde warns global economy threatened (Reuters)

Noda’s ‘Urgent’ Task Is Tax Rise as Japan Debt Load Swells (Bloomberg)

[US's Jefferson County] Bankruptcy Filing Raises Doubts About a Bond Repayment Pledge (The New York Times)

The Banking Oligopoly (The Big Picture blog)

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

Saturday, December 24, 2011

Saturday roundup (12-24-11)


ECB's Visco hints at lower rates if economy worsens (Reuters)

S&P Report on Euro Zone Ratings Expected in Jan: Sources (Reuters)

Is the curtain falling on the eurozone?: The eurozone will be a different place from what it is today, even if EU leaders take the serious steps necessary to tackle the eurozone's debt problem. (The Christian Science Monitor)

Italian unions warn government over austerity plan (Agence France-Presse)

Japan Approves Record Budget Despite Debt Woes (The Wall Street Journal) Japan Budget’s Dependence on Bonds to Rise to Record Next Year (Bloomberg)

The Housing Bubble and the Big Lie (Mother Jones) NYTimes Takes on “The Big Lie” (The Big Picture blog)

The myth of renewable energy -- "The only genuinely sustainable energy scenario is one in which energy demands do not continue to escalate indefinitely." (Bulletin of the Atomic Scientists)

     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, December 23, 2011

Friday roundup (12-23-11)


Quote of the Day:

"America's crisis began with a level of financial sector debt of 120% of GDP. So [in Britain] we're talking about a level of debt that's four, possibly five times as high as the level that caused the catastrophe in the United States! ... We're talking Iceland type figures there and beyond, in some ways. ... You're talking a debt level of 600% of GDP [in the financial sector]! You're so dependent upon that debt level rising to keep the entire mechanics of leveraging up going forward and maintaining those astronomical house prices in London and the salaries that those guys are used to raking off on the top of debt. As soon as that turns from growth to decline, that's got to be the biggest financial downturn in this crisis. ... When it hits, it should hit incredibly quickly." -- Economist Steve Keen to commentator Max Keiser (Youtube)

Warning lights on Europe flash red: THE European financial crisis has worsened during the past three months and the warning lights are "flashing red", the European Systemic Risk Board has warned. (The Times of London)

ECB wall of cash pushes liquidity to all time high (Reuters) [That said, according to] Satyajit Das: Europe's problem is not one of liquidity but rather solvency (The Independent)

Bank Deposits at European Central Bank Reach High for Year (The Associated Press)

ECB's £489bn will 'buy valuable time' but is no eurozone debt bazooka: The European Central Bank's (ECB) unprecedented provision of a €489bn (£407.5bn) in cheap loans will "buy valuable time" for eurozone banks but has not improved their credit outlook, a director of Standard & Poor's (S&P) has warned. (The Telegraph)

ECB's Stark: IMF Cannot Be Used for Monetary Financing - Press (Reuters) Departing European Central Bank official says bond buys sealed sense eurozone on wrong track (The Associated Press)

Italian Consumer Confidence Declines to 16-Year Low: Economy (Bloomberg) Italy consumer morale plummets after austerity budget (Reuters)

Japan Budget’s Dependence on Debt Sales to Rise to Record Next Fiscal Year (Bloomberg)

New Home Sales Rose 1.6%, but 2011 Likely Worst [Year] Ever (The Associated Press)

Banking Crisis Will Spark Deflationary Spiral (Big Government)

UK authorities fight for MF Global's $700 million (CNNMoney)

Fed’s Once-Secret Data Compiled by Bloomberg Released to Public (Bloomberg)

Unofficial Problem Bank list declines to 973 institutions (Calculated Risk blog)

Unprecedented Fraud, Toothless Watchdogs (The Big Picture blog) Special Report: The watchdogs that didn't bark (Reuters)

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

Thursday, December 22, 2011

Thursday roundup (12-22-11)

Quotes of the Day:

"This is really ground-breaking research. I've actually been looking at the Mayan code. It's 2012. And if you look at it, you find out that they were not astrologers. They were actually economists. And they were clearly predicting the end of Europe and not the end of the world. I mean, the symbols there, you can see! Greece is upside down, the Italian wheels come off, you just -- once you realize they were economists, it all becomes clear. So 2012 is the year we see Europe fall apart." -- John Mauldin, president of Millennium Wave Investments LLC (Bloomberg)

"Entering 2012, we are facing uncertainty on the grandest of scales. ... This loss of faith is reminiscent of the collapse in confidence in 2008, when the wheels came off the global economy. Back then, forecasters completely failed to grasp the gravity of the situation. The same may be true today." -- HSBC economists, led by Stephen King, in their latest quarterly report (Reuters)

Bank Official in Europe Says Outlook Is Darkening (The New York Times) [Bank of England Governor] King Says Debt Crisis Threatens to Hurt Europe’s Real Economy (Bloomberg)

ESRB's warns financial stresses have worsened (Reuters)

Bini Smaghi Says ECB Should Use QE If Deflation Danger Arises (Bloomberg)

The ECB's Backdoor Bailout: Wednesday's mammoth lending spree won't fix what ails the euro zone. (The Wall Street Journal)

Q&A: The ECB’s three-year loans (FT Alphaville)

Banks Retrench in Europe While Keeping Up Appearances (The New York Times) Gloomy Picture for Banks in Europe's Core (The Wall Street Journal)

Britain's banks "planning for collapse of eurozone" (The Daily Mirror)

French downgrade could be inching closer (Marketwatch)

Greece’s Creditors Said to Resist Pressure From IMF to Take On More Losses (Bloomberg)

Fleeing Greeks bank on new Australian gold rush: The debt crisis has sent desperate Greek graduates to the other side of the world to a place they see as a land of opportunity (The Guardian)

German Two-Year Note Yields at Almost Record Low on Debt Turmoil Concern -- "'I see a high risk of the debt crisis getting worse again,' said Niels From, chief analyst at Nordea Bank AB in Copenhagen." (Bloomberg)

Spain, Italy yields rise; hope of ECB relief wanes (Reuters)

Italy Gives Austerity Plan Final Go-Ahead (The Wall Street Journal)

Spanish banks use ECB cash to cover maturing debt - sources (Reuters)

Economists ponder effect of European banking crisis on U.S. (The Washington Post)

Pimco Forecasts U.S. Economy May Stagnate (Bloomberg)

U.S. housing prices will continue to fall, but at a slower rate (The Real Deal) More House Price Indexes show price declines in October (Calculated Risk blog)

U.S. 30-Year Mortgage Rates Fall to Record Low (Bloomberg)

Break up the banks: Feds must end ‘too big to fail’ by Charles Gasparino, a Fox Business Network senior correspondent (The New York Post)

The boy wonder of the MF Global nightmare (Fortune) Legality Of MF Global Asset Transfer Questioned (ZeroHedge blog)

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

Is it a recovery yet? (Weekly report, 12-22-11)

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.)

"First-time filings for claims fell 4,000 to a seasonally adjusted 364,000 in the week ended Dec. 17." (Marketwatch)

Claims lowest since [April] '08 as job market improves (The Associated Press)

SEE LAST WEEK'S POST HERE.

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

Wednesday, December 21, 2011

Wednesday roundup (12-21-11)

Banks gorge on ECB loans (Reuters) ECB Lends Banks $645B, Exceeding Forecast (Bloomberg) European Banks Devour ECB Emergency Funds to Refinance Most Debt Due 2012 (Bloomberg)

Kyle Bass: Bearish On The European Banking System (Seeking Alpha blog)

Herr Draghi or Signor Draghi, and the ECB's Santa Rally (technical) (The Telegraph blogs)

The European Debt Crisis: A Beginner's Guide (The Huffington Post blog)

European Debt Crisis Explained (Ciovacco Capital Management)


Europeans migrate south as continent drifts deeper into crisis: Tens of thousands of Irish, Greek and Portuguese people leave in search of a new life as the eurozone's woes worsen (The Guardian)

Italian GDP Contracts as Nation Enters New Recession: Economy (Bloomberg)

Italian banks tap 116 billion euros of ECB loans -- "nearly a quarter of the total" (Reuters) Italy Banks Said to Use State-Backed Bonds for ECB Loans (Bloomberg)

French Banks Won't Be Able To Handle Inevitable Italian Restructuring (Forbes)

Doubts Arise in Euro's Birthplace: Netherlands' Support Weakens Amid Concern Over Bailouts (The Wall Street Journal)

Euro zone crisis could hurt U.S. states (Reuters)

U.S. Faces 2013 Fitch AAA Downgrade Unless Deficit Cuts Made (Bloomberg)

Austerity and the Modern Banker by Simon Johnson (Project Syndicate)

Home sales during housing bust worse than thought (CNNMoney) Housing Market Worse Off Than Estimated (The Associated Press)


Why This Crisis Will Be Worse Than 2008 by Chris Martenson (Seeking Alpha blog)

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

Tuesday, December 20, 2011

Tuesday roundup (12-20-11)

Pimco’s El-Erian Sees Risk Europe May Spark a Lehman-Like Financial Crisis (Bloomberg)

Shilling: Europe Recession Will Be Severe, And It'll Affect U.S. Financials (Forbes)

IMF Bazooka Is Between Meaningless and Dangerous: Simon Johnson (Bloomberg)

Pimco's El-Erian on 2012 Financial Markets: Mohamed El-Erian, chief executive officer for Pacific Investment Management Co., talks about the European sovereign-debt crisis and the market outlook for 2012. El-Erian, speaking with Tom Keene on Bloomberg Television's "Surveillance Midday," also discusses the death of North Korea's Kim Jong Il. (Bloomberg)

Fitch Warns on Bailout Fund's Rating (The Wall Street Journal) Europe’s Rescue Fund May Lose Top Debt Rating as France’s Grade at Risk (Bloomberg)

'The Euro-Zone Bailout Programs Must Be Stopped': How to save the euro? Some believe that the European Central Bank is the key to any solution. Others think that the euro zone should be contracted and the weak members squeezed out. SPIEGEL spoke with two leading German economists about the currency's future. Their one area of agreement? Something must be done quickly. (Der Spiegel)

Emergency cash for banks if the euro goes bust, says Bank of England: British banks would be propped up by emergency loans from the Bank of England if the euro collapsed, the deputy governor admitted. (Metro) Bank of England chief warns of 'flat' output and says double dip recession is 'always possible' (The Daily Mail)

Osborne rocked by warning that Britain could be stripped of AAA credit rating due to 'formidable challenges (The Daily Mail) Moody’s Says Britain Isn’t Immune to Debt Turmoil in Euro Area (Bloomberg)

Consumer confidence [in the UK] falls to post-recession low: GfK NOP poll finds confidence at its lowest level since early 2009, when the economy was still contracting (The Guardian)

IMF Urges European Firewall Around Ireland as Prospects Fragile (Bloomberg)

Senate Begins Debate on Monti’s Budget as Italy Faces Recession (Bloomberg) Fitch cuts UniCredit, puts Italy, Spain's banks on watch (Reuters)

Will China Break? by Paul Krugman (The New York Times)

Kadenko to cut 1000 contract jobs - Nikkei (Reuters)

Nouriel Roubini: U.S. Double-Dip Recession 'Could Materialize' by 2013 (The International Business Times)

US asks [too-big-to-fail] banks to keep more cash at hand (Agence France-Presse) Fed Details 'Too Big To Fail' Battle Plan (Forbes)

Multi-family Starts and Completions, Record Low Total Completions in 2011 (Calculated Risk blog)

California AG Sues Fannie, Freddie For Mortgage And Foreclosure Answers (Forbes)

$500 mil PA budget deficit by June? (The Pittsburgh Post-Gazette)

The Astonishing Collapse of MF Global (The Motley Fool)

Understanding Peak Water (Cliff Küle's Notes 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.

Monday, December 19, 2011

Monday roundup (12-19-11)

Financial markets in greater danger than 2008 - BoE's Fisher (Reuters)

World Economy Heading For Repeat Of 1930s - UN Body (SkyNews blogs) On the brink: fiscal austerity threatens a global recession (The United Nations Conference on Trade and Development)

 DSK says Europe has ‘only weeks’ (The Financial Times) Europe’s prophet of doom (The Business Spectator)

2012: The Year of Debt Restructuring (EconoMonitor)

Europe, prepare for a riotous 2012: If eurozone countries continue to pursue misguided policies, social movements will gain steam and the EU will unravel (The Guardian)

E.C.B. Warns of Dangers Ahead for Euro Zone Economy (The New York Times) ECB says eurozone leaders created 'cycle of risk': Protracted indecision among political leaders has created a "cycle of risk" with "systemic crisis proportions not witnessed since the collapse of Lehman Brothers", the European Central Bank (ECB) has warned. (The Telegraph)

Draghi's Risky ECB Bet: Reject QE, Hope Merkozy Makes Bailout Fund Work (Forbes) Draghi Tells Financial Times Bond Buying Unlikely as ECB Abides by Mandate (Bloomberg) Mario Draghi: more dangerous than Kim Jong-il (The Telegraph blogs)

Eurozone Finance Chiefs Fall Short on Bailout Fund (The Voice of America)

UK investors bolt for cash as crisis continues - Reuters poll (Reuters)

Incomes [in the UK] fall for fifth year in a row says Bank (The BBC) U.K. Consumers’ Retrenchment Is a Drag on Recovery, BOE Says (Bloomberg)

Odds of a French AAA Downgrade (Bespoke Investment Group)

Italy president says firewalls to save euro still insufficient (Reuters)

Spain grits teeth yet again as austerity deepens: Spain's new premier Mariano Rajoy has launched a fresh blast of fiscal austerity at his inauguration, describing the national outlook as "desolate" and his task like that of a father feeding four hungry mouths with bread for two. (The Telegraph)

IMF Board Approves 2.9 Billion-Euro Payment to Portugal (Bloomberg) [However] IMF says [it is] key [that] Portugal perseveres with reforms (Reuters)

End of road for [Swedish automaker] Saab, files for bankruptcy, blames GM (USAToday) Saab Files for Bankruptcy After Chinese Deal Fails (The Associated Press) Saab Auto on the brink of shutting down (The Washington Post)

Europe debt crisis poses risk to U.S. banks: Fed paper (Reuters)

Will the economy turn around in 2012? (CBS Moneywatch)

Signs Of Deflation Grow (Seeking Alpha blog)

Single-Family Home Building Headed For Worst Year on Record (Bloomberg)

The Silver Rush at MF Global (Barron's)  Report: States Have Cut Thousands of Government Jobs Since Recession (The Associated Press)

Technicolor warns on profit, to cut 600 jobs (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.

Sunday, December 18, 2011

Sunday roundup (12-18-11)

Eurozone bank failures could cause U.S. credit squeeze: Kaufman (Reuters)

ECB's Stark discusses resignation (The Associated Press) Stark quit over buying of bonds by ECB (The Financial Times)

Fifth of UK households 'see drop in income' says Deloitte (The BBC)

[UK] Households run up debt to fund Christmas despite job fears: Bank of England's quarterly bulletin says about half of households reported that they had been affected by the government's austerity drive (The Guardian)

U.K. to Force Banks to Separate Consumer and Investment Business (Bloomberg) British government plans to restructure banks by splitting retail and investment arms (The Associated Press)

British bankers fear worst: Sources in the British banking sector who won't speak on the record say the European debt crisis is shakier than they have been letting on in public. Bankers and fund managers say a Greek default is almost inevitable perhaps even this week, and that could lead to a run on the banks in Greece, Portugal and Ireland. (The Australian Broadcasting Commission) Banks set for worst as eurozone fears gather (The Australian Broadcasting Commission)

Evacuation plan for Brits in Spain amid warning euro collapse coud leave them stranded (The Daily Mirror) Euro won't last another 12 months and leaders should abandon 'hysterical' efforts to bubble gum it together, warns Boris (The Daily Mail) The eurozone will not survive another year, warns Boris: Comments on Greece and Spain by leading Conservatives further enrage the Lib Dems (The Independent)

There Goes the Neighborhood: Bank foreclosures and abandonment are causing high home vacancy levels in neighborhoods across the country. Scott Pelley travels to Cleveland, a city that's fighting back against blight. (CBSNews Sixty Minutes)



Susan Tompor: Investors in Detroit municipal bonds are nervous (The Detroit Free Press)

Bank Layoffs Far From Over: 150,000 Likely in 2012: Bove (CNBC)

The Exchange: Currency Wars: Rob Cox is joined by James Rickards, author of Currency Wars, and Breakingviews columnist Martin Hutchinson to discuss how a global competition to devalue currencies can be avoided. (Reuters)



MF Global Collapse Reveals Systemic Risk (The Big Picture blog) Private Property Now Subject To Seizure (Market Ticker) How George Soros Ended Up With MF Global’s Client Money (Profitimes)

TEDxDirigo - Roger Doiron - A Subversive Plot: How to Grow a Revolution in Your Own Backyard [posted Oct. 22] (Youtube)


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

Saturday, December 17, 2011

Saturday roundup (12-17-11)

Divisions in eurozone over ECB bond-buying: The eurozone was facing fresh splits today after one of the European Central Bank’s most senior figures [executive board member Juergen Stark] said the bank should not be used to fund national debts and that if it was forced to, it would mean the end of the single currency. (The Telegraph)

Why ECB lending won’t solve the euro crisis (Reuters blogs)

More euro zone banks risk money markets freeze (Reuters)

Austerity discredited: Ireland goes into reverse: Praised across the world for its model recovery, Dublin finds the pace of cuts too much to bear (The Independent) Austerity Bites Into Irish Economic Recovery Story (The Wall Street Journal blogs)

Bullets sent to Silvio Berlusconi: Italian authorities intercepted letters containing bullets and threatening messages destined for Mario Monti, the prime minister, his predecessor Silvio Berlusconi and other senior political figures. (The Telegraph)

Portuguese Socialists Threaten "Economic Atomic Bomb"; Fitch Sets France Rating Outlook to Negative; Head of French Central Bank Attacks UK and Rating Agencies (Mish's Global Economic Trend Analysis blog)

Home Prices in Spain Drop 14 Consecutive Quarters; Banks Stuck with Major Losses Not Marked to Market; Expect Conditions to Worsen (Mish's Global Economic Trend Analysis blog)

Latest Price Data Show US on Brink of Deflation as World Economy Slows (EconoMonitor)

SEC Suit vs GSE Execs Is About False Statements, Fraud (The Big Picture blog)

Texas drought shrinks state cow herd (The Los Angeles Times blogs) Texas Drought Takes Cow Numbers Down by 600K (The Associated Press)

Unofficial Problem Bank list declines to 974 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, December 16, 2011

Friday roundup (12-16-11)

Torrent of Bad Financial News Flows out of Europe (The Associated Press)

Fitch: comprehensive euro zone deal "beyond reach" (Reuters) The harsh reality is that the EU has already failed: Only the fear of disorderly and unpredictable collapse is keeping alive the vestiges of its grand ambitions (The Guardian)

Downward Spiral: Europe's crisis is morphing again -- for the third time in only 12 months -- and the implications for the global economy are even more complex, unsettling, and troubling by Mohamed El-Erian (Foreign Policy)

Why the euro zone crisis still has legs (The Globe and Mail of Toronto)

BlueCrest’s Platt Says European Banks Insolvent as Bass Sees Possible Run (Bloomberg) BlueCrest’s Platt Says European Banks Insolvent (Bloomberg)



Should You Worry About Europe's Back Door Bank Run? (Money Morning)

Europe's lenders on central bank life support (Reuters) Cash-Strapped Banks Struggle to Trade Trashed Bonds: Euro Credit (Bloomberg)

The euro crisis: Is everything fixed? -- ["Unfortunately ..."] (The Economist)

Across debt-stricken Europe, austerity's bite is felt: From French bankers and Italian politicians to British strikers and the average Greek, everyone in Europe is feeling the cost-cutting brought on by the euro debt crisis. (The Christian Science Monitor)

France’s AAA Outlook Cut as Fitch Reviews Italy, Spain Ratings (Bloomberg)

Talks with private investors on reducing Greece’s debt run into difficulties, officials say (The Associated Press) No guarantee Greek debt swap will go through: troika source (Reuters) Greeks fearing collapse of eurozone bailout pulled record sums from bank: Bank of Greece reveals that investors fearful of political instability and economic collapse pulled €12.3bn from local banks as Papandreou referendum threatened debt deal (The Guardian)

Major setback for Irish economy as deflation recorded in third quarter: New figures represent big blow to government policy (Irish Central) Irish Economy Slumps as Euro Debt Tensions Mount (The Associated Press)

Moody's Cuts Belgium's Credit Rating by Two Notches (Reuters)

Debt for Spain’s cash-strapped regions soars by 22 percent on year to $176 billion (The Associated Press) Spain Unpaid Bills May Haunt Rajoy as States Crave Liquidity (Bloomberg)

Europe crisis "serious risk" to outlook [in the United States]: Treasury (Reuters) “What the Euro Crisis Means for Taxpayers and the U.S. Economy” by Deputy Assistant Secretary Mark Sobel (The United States Treasury)

Fed’s Fisher Says Crisis in Europe Could Knock U.S. Economy ‘Off Course’ (Bloomberg)

Europe's bad weather is heading America's way: The economic climate really could turn a lot worse. Congress must extend payroll tax cuts and benefits – and do it soon by David Blanchflower (The Guardian)

House Approves $1 Trillion Budget Measure to Avert Shutdown ["sending it to the Senate for action"] (Bloomberg)

Congress Gets Failing Marks on Economy in Year of Gridlock (Bloomberg)

Vital Signs: Declining Industrial Output (The Wall Street Journal blogs)

Fitch sees US govt. financial support for banks declining, says only 8 are candidates for aid (The Associated Press)

SEC sues former Fannie Mae, Freddie Mac execs: Lawsuits allege that six former officials of the mortgage finance giants misled investors about subprime risk. (The Los Angeles Times) SEC charges former execs of Fannie, Freddie (CNNMoney)

Fannie Mae, Freddie Mac Execs Accused of Fraud: U.S. government investigates mortgage bosses for financial recklessness. (ABC World News)

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Ex-Fannie and Freddie CEOs charged with fraud: Federal regulators have charged six former executives -- including former CEOs -- at mortgage giants Fannie Mae and Freddie Mac with securities fraud, alleging they misled investors about their exposure to risky subprime mortgage debt. NBC's Lisa Myers reports. (NBC Nightly News)

Visit msnbc.com for breaking news, world news, and news about the economy


Even home-sales data is bogus, Realtors say (The New York Post)

Two Major Dow Jones Segments Still Flashing Warning Signs Over U.S. Housing Market (Wall Street Pit)

MF Global: Oversight Failure (DailyFinance) Rehypothecation Is Not The Problem When It Comes To The Missing MF Global Funds by Janet Tavakoli, Tavakoli Structured Finance (The Huffington Post blog)

Bloomberg Bird-Dogs Meredith Whitney’s Terrible Call (Columbia Journalism Review) Whitney’s Armageddon Belied by ’11 Returns (Bloomberg)

Regulators shut down small banks in Florida, Arizona for total of 92 bank failures in 2011 (The Associated Press)

Premier Community Bank of the Emerald Coast of Crestview FL had a troubled assets ratio of 1048.9%. (BankTracker)

Western National Bank of Phoenix AZ had a troubled assets ratio of 232.8%. (BankTracker)

Disaster Losses Hit Record Levels in 2011 (The Wall Street Journal)

Energy Crisis in Next 2-3 Years? (Cliff Küle's Notes blog) Dr. Robert Hirsch: “We Are Staring Directly Into An Energy Storm in The Next 2-3 Years”: Nobody is paying attention and we have no “Plan B” (Financial Sense) Audio @ (Financial Sense)

50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe (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.