Tuesday, January 31, 2012

Tuesday roundup (01-31-12)


Goldman Sachs Fears Massive European Bank Run (The Street.com)

Euro Zone Jobless Hits Highest Level Since Birth of Euro (Reuters)

As jobless rate soars, Europe rethinks austerity moves (The Globe and Mail of Toronto)

Why the Latest Euro Zone Debt-Crisis Agreement Shows How Europe Just Doesn’t Get It (Time)

Italy’s Jobless Rate Climbed to Eight-Year Highest in December Amid Cuts (Bloomberg)

[US] Home prices drop more than expected in November: S&P (Reuters) Housing Bottom Calls Continue Despite Evidence (The Big Picture blog)

Consumer confidence retreats in January to 61.1 amid worries about income (The Associated Press) Confidence Decline Points to Cooling U.S. Growth (Bloomberg)

New Fund Hopes to Prove Outspoken Analyst’s Thesis (The New York Times blogs)

[British] Army to cut 20,000 jobs two years earlier than expected: General Sir Peter Wall says the army will speed up its redundancy programme by cutting the posts by 2018 (The Guardian)

Nokia Siemens to Cut 2,900 German Jobs [+ 1,200 Jobs in Finland] in Profitability Push (Bloomberg)

Grower to lay off more than 2,100 seasonal workers (The Bakersfield Californian)

Lexmark to cut 625 jobs as earnings fall (The Associated Press)

Tellabs to cut 530 jobs as it narrows loss (The Chicago Tribune)

Daiwa Posts $283 Million Quarterly Loss, Cuts [500] More 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.

Monday, January 30, 2012

Monday roundup (01-30-12)


[Donald Tsang speech at World Economic Summit in Davos on Jan. 28, 2012] [CLICK IMAGE TO LAUNCH VIDEO] (Youtube)



On a Knife's Edge: The global economy is balanced precariously between total collapse and salvation. Here are four tipping points toward disaster and four things that could get it back on track. by Mohamed El-Erian (Foreign Policy)

Europe signs up to German-led fiscal pact (Reuters) Germany's budget discipline plan for EU approved (Euronews)



Pressure grows on EU leaders to relax strict austerity: Spain on course for another recession after GDP contracted 0.3% at the end of last year, while the cost of insuring Portuguese debt has hit a new record (The Guardian)

We’re on the brink, warns Greece ahead of EU summit: Greece faces “the spectre of bankruptcy and all the dire consequences that entails”, the Greek prime minister warned last night. [Posted Jan. 29] (The Telegraph)

Portuguese storm gathers as EU leaders fight over Greece: Surging borrowing costs in Portugal have raised the spectre of a second full-fledged contagion crisis in the eurozone, eclipsing the latest efforts by European Union leaders in Brussels to agree on Europe's bail-out machinery and a strategy for Greece. (The Telegraph) From Greece To Portugal, Fear Spreading; Portuguese Bond Yields Spike (The Wall Street Journal blogs) Markets push Portugal towards [situation like that of] bond pariah Greece (Reuters)

Spain seen heading for recession as economy shrinks (Reuters) Spain’s economy contracted by 0.3 percent in fourth quarter, edging toward new recession (The Associated Press)

Italian Business Confidence Falls to 2-Year Low on Economic Woes (Bloomberg)

France cuts 2012 growth forecast (Agence France-Presse)

Bank's [= Bank of England's] Tucker says banks must reclaim proper role - report (Reuters)

The Baltic Dry Meltdown Continues (The Wall Street Journal blogs)

Consumer Spending in U.S. Stalls (Bloomberg)

Robert Shiller: A Housing Bottom? What Are They Thinking? (The Daily Ticker)

Freddie Mac Bets Against American Homeowners (ProPublica) Report Prompts Calls To End Freddie Mac's Conflict Of Interest (National Public Radio blogs)

Anxiety Mounts Over Maturing Real Estate Loans (The New York Times)

Fed Survey: Euro Crisis Has Hurt U.S. Loans (The Wall Street Journal)

Goldman Sachs Among Banks Lobbying to Exempt Half of Swaps From Dodd-Frank (Bloomberg)

MF Global client money feared gone (The Wall Street Journal/Newscore) MF Global: A Despicable State of Affairs (Jesse's Café Américain blog)

John Reed on Big Banks' Power and Influence (Bill Moyers & Company)


John Reed on Big Banks' Power and Influence from BillMoyers.com on Vimeo.


Has Petroleum Production Peaked, Ending the Era of Easy Oil?: A new analysis concludes that easily extracted oil peaked in 2005, suggesting that dirtier fossil fuels will be burned and energy prices will rise (The Scientific American)

     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, January 29, 2012

Sunday roundup (01-29-12)


ROUBINI: Advanced Economies Face A U-Shaped Recovery (The Business Insider)

Core Euro Area Banks Still Very Exposed to Contagion from a Greek Exit (EconoMonitor)

Nations Risk Backsliding on Credit Rules (The Wall Street Journal)

E.U. Leaders Set to Admit Austerity Is Not Enough (The New York Times)

Germany resists calls to give more to $657B eurozone bailout (USAToday)

Resistance to eurozone bailout boost 'scandalous': Former European Commission chief Delors (Agence France-Presse)

Did Germany sow the seeds of the eurozone debt crisis? (The BBC)

Mario Draghi, the Latin Bloc’s monetarist avenger: The eurozone money supply is contracting at an accelerating pace on all fronts. The broad M3 gauge has fallen for the last three months in a row. A slump is already baked in the pie. (The Telegraph)

Greeks reject 'impossible' German plan for budget veto (The BBC)

Restructure of Ireland's [and Spain's] bank debt 'probable' [plus, it is "needed" in Greece and Portugal, all according to Harvard professor of economics Kenneth Rogoff] (The Irish Times)

Japanese Debt Concerns Rise: Default-Insurance Costs Climb as Raters Weigh Downgrades; 'Absurdly Unsustainable' (The Wall Street Journal)

Destructive Austerity, USA (The New York Times blogs)

U.S. Banks Tally Their Exposure to Europe’s Debt Maelstrom (The New York Times blogs)

Smallest U.S. cattle herd in 60 years may raise beef prices (Bloomberg)

Penn. town blames contaminated water on fracking: Residents of Dimock, Penn., have lived with contaminated water wells for more than three years, and they blame the contamination on fracking for natural gas. Tony Guida reports on the tiny town's struggle to get clean water. (CBSNews)



A modern Pecora Commission could right Wall Street wrongs by Barry Ritholtz (The Washington Post)

John Mauldin: It's Time To Make The Hard Decisions (Chris Martenson . com)



Economic collapse in the Western nations - On the Edge with Max Keiser - 01-27-2012 (Press TV)



     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, January 28, 2012

Saturday roundup (01-28-12)


Quotes of the Day:

“I’ve never been as scared as now about the world. ... We do not know how deep this hole would be when the whole thing implodes on us.” -- Donald Tsang, chief executive of Hong Kong, speaking at Davos. (The New York Times)

"You need decisive action, you need overkill. You need to inspire confidence. ... That confidence must come from the decisive action of governments working together and doing it quickly. ... Two months ago in Greece you can do with 20 per cent haircut. Now even 50 per cent is not easy, maybe 70 per cent is needed. So do it quickly. You need resolution and you need decisiveness." -- Donald Tsang, chief executive of Hong Kong, speaking at Davos. (Agence France Presse)

European austerity measures could be 'grave' for world: Former Canadian finance minister issues warning at World Economic Forum (The Canadian Broadcasting Corporation)

Davos Leaders Urge Europe to Fix Crisis Risking World Economy (Bloomberg) At World Economic Forum, Fear of Global Contagion Dominates (The Huffington Post)

Most of the World Wants More Bank Regulation (The Big Picture blog)

The Report That Will Blow Up The Eurozone (The Automatic Earth blog)

Roubini Says Eurozone ‘Wreck’ May Force Greece Out in Year (Bloomberg)

Ackermann Says Greek Default Would Be ‘Playing With Fire' (Bloomberg)

Greek troika sees second bailout up to 145 bln euros - report (Reuters)

In New High, Spain's Jobless Rate Nears 23% (The Wall Street Journal)

At last, a politician who dares to admit that we need 'full disclosure' from banks: It's easy to criticise Mitt Romney. The former Massachusetts governor and erstwhile runaway leader in the Republican nomination race has had a bad two weeks. (The Telegraph)

Taxpayers owed $132.9 billion from GM, others (USAToday)

Number of the Week: Dismal New Home Sales in 2011 (The Wall Street Journal blogs)

Unofficial Problem Bank list declines to 958 Institutions (Calculated Risk blog)

Christus to cut 700 jobs in Houston (The Houston Chronicle)

Les jeux sont faits - intervista a Nicole Foss - INGLESE SENZA SOTTOTITOLI (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, January 27, 2012

Friday roundup (01-27-12)


ECB Chief Says Bank Helped Avert Disaster (The Wall Street Journal)

Greek Debt Wrangle May Pull Default Trigger (Bloomberg) What we worry about when we worry about Greek debt (The Associated Press)

Germany wants Greece to give up budget control (Reuters)

Portuguese Borrowing Costs Hit New Record (The Wall Street Journal) Investors cue up Portugal as the next Greece (Reuters)

Fitch cuts Italy, Spain, other euro zone ratings (Reuters) Greek debt deal hit by eurozone ratings downgrades: Hopes of a Greek debt deal were undermined on Friday night after Fitch downgraded the ratings of five eurozone countries, including Italy and Spain. (The Telegraph)

Spain demands new 'realism' from EU over austerity (The Guardian)

The European fallacy of Ireland and the Baltics (The Telegraph blogs) The Baltic states and Ireland are not a model for Italy and Spain (Centre for European Reform blog)

[US] Economy Grows at 2.8% Clip, but Slowdown Likely Ahead (Reuters)

US Postal Service 'Unsustainable' Situation, Leader Says (CNBC)

Federal Mortgage Insurer [= Federal Housing Authority or FHA] Headed Toward Collapse (The Epoch Times)

P&G to Cut 1,600 Jobs, Bank on Digital for Long-term Savings (Ad Age)

ArcelorMittal cuts production, jobs in east Europe [630 in the Czech Republic, plus 1,000 jobs "will be affected" in Poland] (Reuters)

Nearly 600 Employees At ConocoPhillips Refinery Losing Their Jobs (CBS Philly)

Hundreds of Calif prison employees [= 545] get layoff notices amid continued drop in inmate population (The Associated Press)

Serco looks to cut at least 500 [UK] jobs (Reuters)

Regulators close banks in Tennessee, Florida, Minnesota, making 7 bank failures in 2012 (The Associated Press)

Tennessee Commerce Bank of Franklin TN had a troubled assets ratio of 266.9%. (BankTracker) [Celebrity tour of Franklin:] Miley Cyrus goes Back Home to Tennessee [with her parents] (Youtube)



First Guaranty Bank and Trust Company of Jacksonville of Jacksonville FL had a troubled assets ratio of 522.6%. (BankTracker)

Patriot Bank Minnesota of Forest Lake MN had a troubled assets ratio of 272.6%. (BankTracker)

BankEast of Knoxville TN  had a troubled assets ratio of 260.5%. (BankTracker)

Bill Moyers on Occupy Wall Street (Moyers & Company)



     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, January 26, 2012

Thursday roundup (01-26-12)


Quote of the Day:

"... what the Fed is doing is setting the stage for the biggest, and finally last, credit bubble in the history of the world." -- Blogger Tyler Durden (ZeroHedge blog)

EU's Juncker: We Must Do Everything To Avoid A Greek Default - Report (Dow Jones Newswires) Euro Group’s Juncker Says Greek Default Would Lead to Contagion (Bloomberg) Juncker : «Il faut à tout prix éviter un défaut de la Grèce» -- "You can not ask Germany to do everything all by itself. Its room for maneuver is not as great as people say." (Le Figaro)

Why Europe’s crisis can’t be averted (Reuters blogs)

More pain awaits euro zone periphery [Greece, Portugal, Spain, and Ireland] (Reuters)

Austerity 'Does Not Deliver': HSBC Chief Economist (CNBC)

Debt-stricken euro citizens must back austerity or governments will struggle, EU leaders say (The Associated Press)

Europe searches for mythical "jobs and growth" formula (Reuters)

Banks [in Europe] Face Bind Over Cash Pile (The Wall Street Journal)

Banks Hoarding ECB Cash to Double Company Defaults: Euro Credit (Bloomberg)

EU Red-Flags 'Volcker': Planned U.S. Rule on Banks' Bets Is Seen as Threat to Worsen Debt Crisis (The Wall Street Journal)

Freighter Oversupply [Globally] Weighs on Shipowners and Banks (The New York Times)

British Economy Now Doing Worse Than During the Great Depression (Slate blogs) The British Economy Is Now Doing Worse Than In The Great Depression (Seeking Alpha blog) The Greater Depression by Paul Krugman (The New York Times blogs) Vote of no confidence has crushed Britain's economic recovery: Fourth-quarter GDP figures will show that Britain is in a Japanese-style depression lasting well beyond the usual cycle of a recession (The Guardian)

Chancellor George Osborne to unveil new powers to rein in the banks: The Treasury will on Friday publish plans for a radical overhaul of financial regulation that will hand the Chancellor new powers to take charge in a crisis, rein in the might of the Bank of England, and provide extra protection for consumers. (The Telegraph)

More public money likely for Greek bailout: EU's Rehn (Reuters)

For Greece, the Outlook Is Still Grim (The New York Times) What to do about Greece: Its insolvent economy needs a bigger debt reduction. A precipitous exit from the euro would be a disaster (The Economist)

Investors fear mounting losses in Portugal as second rescue looms: Portugal is fighting a losing battle to contain its public debt and may be forced to impose haircuts of up to 50pc on private creditors, according to a top German institute. (The Telegraph)

Forget Greece; it’s Portugal that’ll destroy euro: One default is an accident; two is a systemic crisis (Marketwatch) Why Portugal Might Be The Real Trigger That Causes The Eurozone To Spiral Out Of Control (The Business Insider)

Italian Consumer Confidence Stays at Lowest Level for 16 Years in January (Bloomberg)

China’s very mysterious data (The Telegraph blogs)

Japan's rising financing risks: James Saft (Reuters)

Japan prices fall [for third consecutive month], mild deflation to persist (Reuters)

Democratic-controlled Senate declines to block Obama debt request (The Associated Press) Debt ceiling increase allowed by Senate (Politico)

The New Meme: 2013 Is When We're Really Screwed (The Business Insider)

US new-home sales fell in December to make 2011 worst sales year on record (The Associated Press)

New initiative will coordinate probes of mortgage meltdown: A team of attorneys, agents and analysts will try to speed up existing federal and state probes and launch new ones into the highly risky mortgage-backed securities that fell apart. (The Los Angeles Times) A Mortgage Investigation [editorial] (The New York Times)

Why All the Robo-signing?: Shedding Light on the Shadow Banking System by Ellen Hodgson Brown -- "Not only has the system destroyed county title records, but it is highly vulnerable to bank runs and systemic collapse." (Dissident Voice)

Foreclosures keep pushing house prices lower (MSNBC)

Old mortgages rise from the dead, haunt homeowners (Reuters)

Why Home Prices Have Much Further To Fall (Streettalk Live) Glaeser: Don’t Count on Housing Market to Lead Recovery (Bloomberg)

Enforce Dodd-Frank: Break Up Bank of America (The Nation blogs) Activists Call for Breakup of Bank of America (The New York Times blogs)

Bank of America Settlements Impede Fraud Probe, Arizona Says (Bloomberg)

CT budget deficit doubles in 2 days (WTNH)

Warren Buffett's Secretary Likely Makes Between $200,000 And $500,000/Year (Forbes)

20,000 Marines to be cut, Pentagon announces (Marine Corps Times) Budgeting for a new military vision (CNN blogs)

NEC to Cut 10,000 Jobs on Forecast of Third Loss in 4 Years (Bloomberg) Japan's NEC to slash 10,000 jobs, sees huge net loss (Reuters)

[UK's] Ministry of Defence to cut further 3,000 civilian jobs: Defence secretary will be forced to admit MoD has miscalculated how many staff it can afford, Guardian learns (The Guardian)

Briggs & Stratton shutting plants, to cut 767 jobs (The Associated Press)

Re-Living The Fall Of Rome (The Golden Truth blog)

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

Is it a recovery yet? (Weekly report, 01-26-12)


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 number of people seeking unemployment benefits rose last week to a seasonally adjusted 377,000, after a nearly four-year low the previous week." (The Associated Press)

Weekly Jobless Claims Climb (Reuters)


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, January 25, 2012

Wednesday roundup (01-25-12)


World Bank’s action on Europe reflects fear of another global meltdown (The Washington Post)

George Soros on CNBC: More Needed to Safeguard Euro Zone (CNBC)



Merkel rejects calls for boost to euro bailout fund (The Associated Press)

Merkel demands closer EU links to avoid financial meltdown (The Daily Mail)

Soros: Germany Risks Pushing Europe Into Deflationary Debt Sprial (The Wall Street Journal blogs) Euro Breakup Would Cause Global ‘Meltdown,’ George Soros Tells Newsweek (Bloomberg)

Deflation risk up in some G20 states: IMF (Reuters)

Angela Merkel casts doubt on saving Greece from financial meltdown: German chancellor speaks candidly to the Guardian and five other leading European newspapers as part of a unique collaboration to explore the EU's predicament (The Guardian)

Portugal Debt Insurance Costs Hit Record As Yields Rise (Dow Jones Newswires) Portugal debt insurance cost hits record (Marketwatch)

UK heading for first double-dip recession since 1975: Britain is heading for its first double-dip recession in 37 years after the economy slumped in the final quarter of 2011 and officials warned of a new threat to jobs. (The Telegraph) Double-dip looms as slump hits economy: Manufacturing's worst quarter since early 2009 renews fears of a return to recession (The Independent)

IMF Warns Hungary of Debt-Repayment Risk If Euro Crisis Worsens (Bloomberg)

Japan's first trade deficit since 1980 raises debt doubts (Reuters) Japan reports first trade deficit in 32 years after tsunami: Trade figures reveal collapse in sales to Europe, as cost of oil gas and yen rise (The Guardian)

President Obama's State of the Union: Ten Skirted Issues (Nomi Prins's blog) The Belated Mortgage Fraud/Crisis Investigation (The Big Picture blog)

Consumer group to feds: Break up Bank of America (CBS MoneyWatch) Consumer group to regulators: Break up Bank of America (The Hill blogs)

MF Global Clients May Lose in $700 Million Bankruptcy Fight (Bloomberg)

Stanford Told ‘Lie After Lie’ to Investors, U.S. Prosecutor Says (Bloomberg) Ex-Stanford employee tells jurors he saw problems (The Associated Press)

Abbott cuts 700 jobs primarily in manufacturing (Marketwatch)

We've hit "peak oil"; now comes permanent price volatility (ArsTecnica)

My Horrific Experiences With Sony Customer Support (Mish's Global Economic Trend Analysis 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, January 24, 2012

Tuesday roundup (01-24-12)


Quote of the Day:

"The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system." -- Financier George Soros in an interview with Newsweek (The Telegraph)

IMF warns of another great depression [AUDIO @ WEBSITE] (The Australian Broadcasting Commission)

IMF Warns Debt-Crisis Inaction May Mean Steep EU Recession (Dow Jones Newswires) IMF Cuts Growth Forecast; Sees Recession (Bloomberg) IMF Cuts Global Growth Estimates (The Wall Street Journal) IMF slashes world growth forecast (Agence France Presse) Global Recovery Stalls, Downside Risks Intensify (The International Monetary Fund)

Euro Crisis in 'Perilous New Phase': IMF (CNBC) I.M.F. Trims Estimates for Global Growth on ‘Sharply Escalating’ Risks in Europe (The New York Times) When Downside Scenarios for the Economy Play Out (The Wall Street Journal blogs)

Austerity Could Again Sow Seeds of Extremism in Europe (The New York Times blogs)

Global bosses are gloomy about the economic future (The BBC)

EU ratchets up pressure with Greek default threat: European Union officials have stepped up pressure on Greece and its creditor banks in a complex game of three-way brinkmanship, signalling that they will allow a Greek default to run its course unless both sides accept more pain. (The Telegraph)

The Greek debt talks fall apart (Reuters blogs)

Greece Is Facing Downgrade To 'Selective Default': S&P (Reuters)

Greek Economy on Track to Implode: Hanke (Bloomberg) [And even the] IMF Says Reducing Greek Debt Alone Not Enough to Revive [Its] Economy (Bloomberg)

Time to Worry About Portugal Again (The Wall Street Journal blogs)

Leaders of Spain, Portugal demand quick decision on new Greek bailout, vow austerity (The Associated Press)

UK at risk as IMF warns of global slump: World growth will slump to levels bordering on stagnation and the whole eurozone will be plunged into severe recession if the crisis in Europe intensifies, the International Monetary Fund has warned. (The Telegraph)

Romanians rally, demand PM's resignation (Reuters) Eastern EU States Under Pressure Amid Social Unrest (The Voice of America)

What is the Strait of Hormuz? Can Iran shut off access to oil? (The Los Angeles Times blogs)

IMF Warns EU Debt Crisis Could Hit U.S. Banks, Cause Funding Strains (The Wall Street Journal blogs)

'There will be riots on streets of America': George Soros predicts class war in U.S. as euro triggers collapse of global economy (The Daily Mail)

Stop the Madness: National Debt Threatens our Prosperity by Rep. Doug Lamborn (R) of Colorado (The Heritage Foundation blogs) In 2012, real solutions needed to combat the national debt by former Rep. Martin Russo (D) of Illinois (The Hill blogs)

Another Bad Bank/Housing Deal Coming Our Way (The Big Picture blog)

Obama to Use Pension Funds of Ordinary Americans to Pay for Bank Mortgage “Settlement” by Yves Smith (Common Dreams)

     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, January 23, 2012

Monday roundup (01-23-12)


'Festering' financial wounds could lead to depression [AUDIO @ WEBSITE] (The Australian Broadcasting Commission) Lagarde: World Economy Risks Depression-Era Collapse In Demand (Dow Jones Newswires) Visión Siete: El FMI redujo sus estimaciones de crecimiento global [LAGARGE SPEAKS IN ENGLISH IN THIS CLIP] (TVPublicaArgentina)



EU faces '1930s moment' unless bigger [bailout] fund is agreed (The Irish Times) IMF’s Lagarde Sounds Alarm Over Europe (The Wall Street Journal blogs) Europe should boost bailout fund, consider euro bonds: Lagarde (Reuters) IMF head wants 'larger firewall' against eurozone crisis (Agence France-Presse)

Lagarde to Europe: Boost Growth and Protections: Christine Lagarde, the head of the International Monetary Fund says Europe's stronger economies should do more to boost growth and beef up the defenses against the continent's debt crisis. (The Associated Press)



European Banks May Deepen Their Dependence on Unlimited Central Bank Loans (Bloomberg)

Eight Leading Economists Sound Off on Europe's Fiscal Woes: As economic contagion continues in Europe, and with the future of the euro imperiled, Newsweek asked eight economists to describe the origin of the problem facing the single currency and what would happen if the euro were abolished. (Newsweek)

Euro-Area Finance Ministers Push For Lower Greek Debt Cost (Dow Jones Newswires) Europe Steps Up Pressure on Greece (The New York Times) Euro zone ministers reject private bondholders' Greece offer (Reuters)

Germany, France press for swift Greek debt deal (EuroNews)



Hard bargaining with Greece has consequences for the whole world [editorial] (The Washington Post)

Paris and Berlin seek to dilute bank rules (The Financial Times)

Spanish central bank warns of double dip recession: The Spanish economy shrank by 0.3pc in the fourth quarter of 2011, the country's central bank said, reflecting falling domestic demand and slowing exports. (The Telegraph) Spanish central bank predicts big drop in economy: Spain central bank predicts 1.5 percent fall in Spanish economy and jobs misery to continue (The Associated Press)

Fears Mount That Portugal Will Need a Second Bailout (The Wall Street Journal)

[Ireland's] Bailout chiefs order banks to slash 2,500 workers: They tell the Government cuts must be made immediately to speed revamp (The Irish Independent)

UK 'has second-highest debt-to-GDP ratio in the world' [second only to Japan] (ThinkMoney)

BOE’s Posen: U.K. Unemployment to Rise as Unproductive Sectors Shed Jobs (The Wall Street Journal blogs)

Small business owners [in the UK are] 'ready to give up and become employees again' in bleak economic state (The Daily Mail)

Japan manufacturers brace for euro zone breakup: Reuters poll (Reuters)

Goldman Says U.S. Data Look Better Than They Are: Economy (Bloomberg)

Fewer U.S. Companies Plan to Boost Hiring in 2012, Survey Shows (Bloomberg)

George Soros on the Coming U.S. Class War: The situation is about as serious and difficult as I've experienced in my career.' (Newsweek)

Fannie, Freddie writedowns too costly: regulator (Reuters)

State Bank Regulators More Lenient Than Federal Counterparts (The Wall Street Journal blogs)

US consumers making progress in paring debt (CBS MoneyWatch) Is America Really De-Leveraging?  (The Golden Truth blog)

J.C. Penney to Cut Thousands of Jobs as Part of Overhaul (FoxBusiness)

David Stockman on Crony Capitalism -- "We need not only a reinstitution of Glass-Steagal, but even a more serious limitation on banks -- [a provision that says] if you're a bank and you want to have deposit insurance (which ultimately, you know, is backed up by the tax payer). if you're a bank and you want to have access to the so-called discount window of the Fed (the emergency lending), then you can't be in trading at all. ... If they're too big to fail, they're too big to exist. And let's start right with that proposition!" (Moyers & Company) (full transcript @ Moyers & Company) (Video @ Vimeo)


David Stockman on Crony Capitalism from BillMoyers.com on Vimeo.


     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, January 22, 2012

Sunday roundup (01-22-12)


Lost decade of growth for the West (Reuters)

Europe Debt Crisis Still Likely to End Badly: Simon Johnson (Bloomberg)

Staring into the Abyss -- [Says John Mauldin:] "When Europe approaches the edge of the Abyss and looks over, the rest of the world gets to take a look, too. We can all be taken to the edge and over" (Cliff Küle's Notes blog

Euro Policy Makers Angle for Long-Term Crisis Solution [in tomorrow's meeting of finance ministers] (Bloomberg)

Greece's creditors leave Athens ["without a deal on a debt swap plan that is vital to avert a chaotic default"], talks to continue (Reuters) IIF says creditors at limits of "voluntary" Greek deal (Reuters) Greece and creditors set to miss deadline for bailout contribution (The Irish Times) Greek Talks Hit a Snag Over Rates (The New York Times) Eurozone finmins to rule on glacial Greek debt talks (Reuters) The Latest Solution For Europe Solves Absolutely Nothing (The Automatic Earth blog)

Italy and Spain call for eurozone rescue fund booster: Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis. (The Telegraph) Spain Calls For Bigger Bailout Fund, More ECB Action, Pais Says (Bloomberg) Mario Monti calls for doubling of eurozone bail-out fund: Italian Prime Minister Mario Monti has called for the eurozone to double the size of the region's permanent bail-out fund to help stricken states. (The Telegraph) Super Mario’s bank rescue no lifesaver for a dying Greece (The Globe and Mail of Toronto)

Germany Rejects Bigger Bailout (The Wall Street Journal)

Irish minister highlights ECB warning on Anglo debt (Reuters)

Could Britain Be Facing A 'Lost Decade'? (SkyNews)

U.S. economy unlikely to [EVER] fully recover: [Bank of Canada governor Mark] Carney (PostMedia News)

Debt sell-off stokes deflation fears (FundWeb)

     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, January 21, 2012

Saturday roundup (01-21-12)


US, Europe Face More Ratings Cuts in Coming Years (CNBC)

Greece debt swap talks drag into weekend (Reuters) Greek debt deal snags on interest rate: report (Marketwatch) Irish finance minister slams bank role in Greece talks (Agence France-Presse)

Italy wants EU bailout fund doubled - German magazine (Reuters) Monti wirbt für den Billionen-Schirm (Spiegel Online)

Obama Says [State of the Union] Address Will Be ‘Blueprint’ for Joint Action (ABCNews blogs)

Unofficial Problem Bank list declines to 963 Institutions (Calculated Risk blog)

Corzine Sued for RICO Violation by MF Global Customers (Bloomberg)

Top Justice officials connected to mortgage banks (Reuters) Is This Why They Won’t Prosecute? Top Justice Officials Represented Big Banks, Freddie, Fannie and Mers (Washington's Blog)

Reckless Endangerment: A Wall Street-Washington Incestuous Legacy and A MUST READ (The Business Insider)

     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, January 20, 2012

Friday roundup (01-20-12)


European banks prepare for worst, hoard cash (Reuters)

Debt ‘Round the World (The Mess That Greenspan Made blog)

Bailouts only buy time for eurozone: German minister -- "'The debt economy itself has reached its limits,' he told the Brookings Institution think-tank in Washington." (Agence France-Presse) [Furthermore ...] Euro-Area Cuts Alone Won’t End Crisis, Westerwelle Says (Bloomberg)

Has Portugal's debt default clock begun to tick? (Reuters) Portugal falls victim to Greece’s debt swap ordeal (Reuters blogs)

Sovereign bond pile main concern for Italy banks (Reuters)

2,700 More Layoffs, New Leaders For Philly Schools (MyFoxPhilly) "In plainer, starker terms than it had ever used before, the School Reform Commission laid out the district's financial woes to the public in a meeting Thursday night." (The Philadelphia Inquirer)

Banks closed in Ga, Fla, Pa; first failures of '12 (The Associated Press)

Central Florida State Bank of Belleview FL had a troubled assets ratio of 479.5%. (BankTracker)

The First State Bank of Stockbridge GA had a troubled assets ratio of 950.5%. (BankTracker)

American Eagle Savings Bank of Boothwyn PA had a troubled assets ratio of 13.7%. (BankTracker)

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

Thursday, January 19, 2012

Thursday roundup (01-19-12)


Eurozone 'back in recession this year': IMF poised to forecast 0.5 per cent contraction and pass the hat for more funds from governments (The Independent) IMF slashes global forecast on eurozone crisis, with drastic falls in Italy and Spain: The International Monetary Fund has slashed its global growth forecast for this year and exhorted the European Central Bank to boost liquidity to stave off a deeper eurozone crisis. (The Telegraph)

Momentum to drain from world economy in 2012: poll (Reuters)

The European Crisis Deepens by Peter Boone and Simon Johnson (Peterson Institute for International Economics)

Fitch Sees 1-2 Notch Downgrade for Some Euro States (Reuters)

Greek Debt Agreement Falls Far Short of What’s Needed to Save Euro (Bloomberg)

Portugal to need "debt haircut" as economy tips into Grecian downward spiral: Portugal's borrowing costs have jumped to record highs and are tracking the moves seen in the culminating phase of Greece's debt crisis, dashing hopes that the country will be able to stave off contagion by embracing drastic austerity. (The Telegraph)

Italy faces lengthy recession, to miss deficit goal (Reuters)

Italian banks [led by Unicredit] are biggest users of special three-year ECB funding (The Irish Times)

The horrifying graph that shows why Britain's debt addiction now equals FIVE TIMES national GDP and why we [in the UK] face a decade of austerity (The Daily Mail)

[US] INFLATION UPDATE – DISINFLATION CONTINUES…. (Pragmatic Capitalism)

Housing: Record Low Total Completions in 2011 (Calculated Risk blog)

Treasury dips into pension funds to avoid debt (Reuters)

Addressing the Budget Deficit: The Next President Must Solve the U.S. Deficit Crisis -- "America is on the edge of a cliff." (The Brookings Institution)

Why it's time to break up the 'too big to fail' banks: Customers would benefit, the U.S. government would benefit, and - believe it or not - the big banks themselves would do better by Sheila Bair, former chair of the FDIC and former member of the Basel Committee (Fortune)

All Eyes on Gingrich in Wake of His Call for a Commission on the Gold Standard (The New York Sun)

Ecolab to cut 500 jobs (The Minneapolis Star-Tribune)

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

Is it a recovery yet? (Weekly report, 01-19-12)




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 number of people seeking unemployment benefits plummeted last week to 352,000, the fewest since April 2008." (The Associated Press)

Jobless Claims Decline to Lowest Level Since 2008 (The Wall Street Journal)

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.