Saturday, March 31, 2012

Saturday roundup (03-31-12)


ECB’s Constancio urges IMF funding hike: reports (MarketWatch) EU wants G20 to boost IMF funds after Eurogroup move (Reuters) EU Ministers Urge Steps Toward IMF Support (The Wall Street Journal)

Bundesbank rejects Greek bonds: German central bank refuses debt from countries in bailout programs as collateral for liquidity (Ekathimerini)

Spain budget deficit goals remain a serious challenge (Reuters)

Sir Mervyn - come clean on the bank crisis: To learn from any crisis, financial or otherwise, two essential things must happen. There must be a full and frank admission of what went wrong and there must be a fundamental change in the ways of behaving to ensure - as far as is possible in an imperfect world - that such a calamity never happens again. (The Telegraph)

Unofficial [US] Problem Bank list declines to 948 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, March 30, 2012

Friday roundup (03-30-12)


Euro zone pumps up bailout fund to nearly $1 trillion (The Washington Post) Europe Beefs Up Firewall To Almost $1T As Spain Unveils Austerity (Forbes)

Fund Managers Aren’t Showing Much Faith In Euro-Zone Debt (The Wall Street Journal blogs)

Greek PM does not rule out new bailout package (Reuters)

Spain unveils unprecedented austerity budget to avoid EU bailout (The Los Angeles Times blogs) Spain reveals deep cuts to meet deficit goal (Reuters)

Danske to Tap $2.7 Billion From Central Bank Lifeline (Bloomberg)

China’s Feast Is Ending by Satyajit Das (Prudent Bear)

Debt-hit Japan moves closer to doubling sales tax (Agence France-Presse)

Expanding the debt bubble to a tipping point – US government debt growing 4 times faster than GDP. Retail investors largely out of stock market. (My Budget 360)

The Deleveraging Conundrum (Forbes)

Barry Ritholtz on Causes of the Financial Crisis (The Browser)

Three Major Banks Prepare for Possible Credit Downgrades (The New York Times blogs)

FDIC shutters bank in Michigan, tallies 16 US bank failures so far this year (The Associated Press) Fidelity Bank of Dearborn MI had a troubled assets ratio of 125.6% (BankTracker)

Ford prepares to lay off 1,200 in Kansas City [for about a month] (Business First)

QVC cuts over 600 jobs in Chesapeake (WTKR)

The future of the USA - 2012-2016: An insolvent and ungovernable United States (first part) (Global Europe Anticipation Bulletin)

     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, March 29, 2012

Thursday roundup (03-29-12)


Euro zone to back higher combined bailout fund: draft (Reuters)

Germany launches strategy to counter ECB largesse: Germany is preparing a raft of measures to safeguard its financial system and prevent excess stimulus from the European Central Bank leaking into an inflationary credit boom. (The Telegraph)

Greece May Have to Restructure Again, S&P’s Kraemer Says (Bloomberg)

Spain's banks may need more public cash (Reuters)

Rajoy to Unveil Deepest Spanish Budget Cuts in 30 Years (Bloomberg)

European Debt Crisis Flares Again Amid Violent Protests In Spain (The Huffington Post blog) Tens of thousands join anti-austerity strike in Spain (The Associated Press) Spain struggles to avoid downward spiral (EuroNews)



DAVID KOTOK: 'PORTUGAL IS UNRAVELING' (The Business Insider)

Storm clouds gather over Monti's Italy reform drive (Reuters)

Britain 'in recession' as recovery falters: OECD says economy has shrunk for second successive quarter, but Osborne disputes report (The Independent)

Britain's economy: The long bust (The Economist blogs)

Bank of England faces calls for full review of handling of financial crisis: Publication of Treasury review admitting mistakes prompts MPs to call on Threadneedle Street to follow suit at 'soonest appropriate time' (The Guardian)

UK House Prices Suffer Worst Monthly Fall in 2 Years (Reuters)

Japan May Understate Deflation, Hampering BOJ, Economist Says (Bloomberg)

Oil output in 2011 falls to lowest since 1970s (Reuters) A rational reason for high oil prices (EconBrowser)

Canada hikes retirement age to 67 in budget that tackles first budget deficit since mid-’90s (The Associated Press)

[US] JOBS Act benefits financial criminals: Congress declares open season on small investors (MarketWatch)

As Detroit Bankruptcy Looms, Rhode Island City [of Central Falls] Offers Gloomy Lesson (The Huffington Post blog)

Former MF Global Exec Takes 5th At Hearing: Her former colleagues pleaded ignorance about the scandal at the brokerage that Jon Corzine headed. (National Public Radio)



     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, 03-29-12)


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 Labor Department reported that 359,000 people filed for initial claims. That's down from the 364,000 who sought help the previous week, a reading that was revised higher." (CNNMoney)

U.S. Jobless Claims at Lowest Since April '08 (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, March 28, 2012

Wednesday roundup (03-28-12)


'No Time for Complacency' in Europe: Ex-ECB Official (CNBC)

Roubini Economics' Euro-Zone Specialist: LTRO Euphoria 'Overdone' -- [she says Greece, Portugal, Spain, and Italy will all  be forced to restructure their debt] (Dow Jones Newswires)

Germany criticizes call for even bigger eurozone firewall, says no point in worrying markets (The Associated Press)

ECB Cash Isn't Reaching Private Sector (The Wall Street Journal)


Central banks, interest rates and the big Ponzi scheme by Steen Jakobsen, chief economist at Saxo Bank (Russia Today)


Prepare for a New Era of Oil Shocks: Martin Wolf (The Financial Times)


Spain likely to need bailout this year: Citi (Agence France-Presse) Citi Rings Warning Bell On Spanish Debt (Forbes) Risks Rising for Troubled Spain: Citi (CNBC) Spain edges toward economic abyss amid Europe woes (The Associated Press) Worries about Spain resurface ahead of talks on EU 'firewall' (The Irish Times) Worries on Italian Debt? Passé. Trouble Seekers Are Now Eying Spain (The Wall Street Journal)

A national sex strike! Spain's 'high-class hookers refuse to sleep with bankers until they open up credit lines to cash-strapped families' (The Daily Mail)

For Portugal, Moment of Truth Nears (The Wall Street Journal)


Greeks Embrace Potato as Symbol of Struggle to Survive Austerity
 (Bloomberg)


UK GDP fell faster than previously estimated in fourth quarter, ONS says (The Guardian) Downgrade to growth triggers new fears of a double dip: ONS estimates 0.3 per cent fall between October and December, but trade balance improves (The Independent) Technical recession or not, the UK economy is sick: Judging by today's updated estimate of the economy's performance in the final three months of 2011, this long and miserable saga is not over yet (The Guardian)

Britons See Disposable Incomes Plunge Most Since 1977: Economy (Bloomberg)

Britain's anaemic recovery has left it in the grip of the longest economic slump for 100 years (This is Money)

Britain’s austerity experiment is faltering (Reuters blogs)

Ireland sets May 31 date for EU treaty referendum (Bloomberg)

Dutch government hangs by a thread as austerity negotiations halted for a day (The Associated Press)

WILLEM BUITER: War With Iran Could Bring Four Shocks (The Business Insider)

Four Numbers Add Up to an American Debt Disaster (Bloomberg)

Stockton [CA] Gets Ratings Cut by Moody’s as Bankruptcy Option Looms (Bloomberg)

Providence [RI] Bankruptcy Seen as Unavoidable on Budget Gap (Bloomberg) Another credit agency drops Providence's rating closer to junk-bond status (The Providence Journal)

'I Don't Know' Dominates MF Hearing (The Wall Street Journal)

The Dogs That A City Forgot: Detroit and the Stray Dog Epidemic (Traer Scott Photography 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, March 27, 2012

Tuesday roundup (03-27-12)


Eurozone finance ministers must raise ONE TRILLION euro bailout for the 'mother of all firewalls' says OECD chief (The Daily Mail) Euro crisis needs 'mother of all firewalls,' OECD warns (The Los Angeles Times)

Euro zone debt crisis far from over - OECD (Reuters)

The Hidden Risks Lurk in ECB's Accounts: Some economists warn that the German central bank faces hidden liabilities of 500 billion euros in the form of unsettled claims within the European payments settlement system, and could lose that sum if the euro zone breaks apart. According to SPIEGEL, the German government has said it sees no such risks. But a Greek euro exit could still cost the German central bank billions. (Spiegel Online)

Why Europe's attempt to muddle through isn't working (CBS MoneyWatch)

Greece Must Boost Economy Revamp for Rescue to Work, EU Says (Bloomberg)

Spain to slash spending as economy slumps back into recession: Spain’s fragile economy has fallen back into recession and the country faces a year of grinding economic decline as premier Mariano Rajoy slashes spending yet further to meet EU demands. (The Telegraph) Spanish PM Mariano Rajoy's election defeat fuels bail-out fears: The Spanish ruling party’s failure to win control in a key state election is a “serious setback” that casts doubts over the government’s ability to stick to its financial reforms, economists have warned. (The Telegraph) Spanish Economy Enters Second Recession, Bank of Spain Says (Bloomberg)

Spain risks years without economic growth (Reuters)

Fitch Sees Portugal Econ Contracting More, Target Risks (Dow Jones Newswires) For resilient Portugal, time is the enemy (Reuters)

Jubilee holiday [celebrating queen's 60-year reign] 'to harm the economy': Bank governor warns that recovery could stall (The Daily Mail)

Bernanke: Far too early to call victory in recovery (Reuters)

Home prices hit a 10-year low (CNNMoney) Case-Shiller: Home prices fall in January: Index records fifth straight decline; prices lowest in nine years (MarketWatch)

FHA Bailout Risk Looming Larger After Guarantee Binge: Mortgages (Bloomberg)

Detroit nears deal to avert bankruptcy, but is it a state takeover?: Both city and state officials say they are close to an agreement that could force extensive restructuring of city finances, as Detroit faces a $200 million deficit and bankruptcy by May. (The Christian Science Monitor)

More municipalities betting on pension bonds to cover obligations: Local governments are increasingly borrowing money to plug shortfalls in their employee pension funds by exploiting a loophole in federal law. Market experts say the risks and long-term costs are frequently ignored. (The Los Angeles Times)

The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent (ZeroHedge blog)

Student Debt, the New Home Equity Loan (Bloomberg)

1,800 jobs cut under [UK's] MoD reforms (The Press Association)

Bill Gross: "The Game As We All Have Known It Appears To Be Over" (ZeroHedge blog) The Great Escape: Delivering in a Delevering World by Bill Gross (PIMCO)

     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, March 26, 2012

Monday roundup (03-26-12)


Draghi Says Governments Must Continue to Take Decisive Measures (Bloomberg)

German Leader Agrees to More Bailout Money for Euro Zone Nations (The New York Times)

Eurozone collapse would be ‘disastrous’ to UK, OBR: OBR tells TSC that it is irrelevant how a disaster happens but if it does happen, “it will lead to a severe credit crunch”. (FT Adviser)

[In the US,] Housing And Economy Starting To Crash Hard (The Golden Truth blog)

Is Deflation the Biggest Risk to the Economy?: Wall Street legend Robert Prechter argues the biggest risk to the economy is deflation, not inflation. (FoxBusiness)



New Brunswick government to cut 4,500 jobs over three years: source (The Canadian Press)

American Ordnance laying off 500 at Milan Arsenal, estimated $30 million hit to local economy (The Republic of Columbus IN)

     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, March 25, 2012

Sunday roundup (03-25-12)


European Leaders Warn Against Backsliding on Spending Cuts (The New York Times)

Top [Eurozone] Bailout Fund Option Seen Last (The Wall Street Journal blogs)

Report: Germany to allow increase to "Firewall" [probably still not enough to bailout Spain or Italy] (Calculated Risk blog) Germany 'must let bailout fund grow': European leaders have united to urge Germany to agree to boost the "big bazooka" bail-out fund this week amid fears that markets will turn against Spain, Ireland and Portugal without urgent support. (The Telegraph)

Catastrophic to let Greece leave the eurozone: Merkel (Agence France-Presse)

Italy PM says the higher the firewall the better - Nikkei (Reuters) Monti Signals Spanish Euro Risk as EU to Bolster Firewall (Bloomberg)

'Mission impossible' for Spain's PM – another €40bn in cuts: Mariano Rajoy expected to win Andalucia regional elections, then order further austerity measures (The Guardian) Spain's PM denied symbolic austerity boost in local vote (Reuters) Spain PP Misses Majority in Andalusia, Undermining Budget Fight (Bloomberg)

Spain ‘causing concern,’ Monti warns (The Financial Times)

BOJ Crosses Rubicon With Desperate Monetary Policy, Hirano Says (Bloomberg)

Austerity or Stimulus? What We Need Is Growth (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.

Saturday, March 24, 2012

Saturday roundup (03-24-12)


Quotes of the Day:

"This obscene JOBS Act that is about to go through with a Kum ba yah bipartisanship is actually the most incredible fraud-friendly legislation in US history and it will produce an epidemic of accounting and securities fraud. ...

"Whatever they say, what Congress and the Administration are actually doing, as we speak, is trying to push forward an act, the JOBS Act, that everybody involved that knows anything about fraud, the Securities and Exchange Commission, the Commodities Future Trading Commission, the state securities regulators, the accounting profession, everybody that knows about fraud has said this bill is calamitous. It's not bad, it is unbelievable. It is the wish list of every fraud-friendly practice in the world put together in a bill and we have Congress deliberately screwing up the congressional rules, preventing hearings, because they know that this could never be exposed to real discussion by experts and passed. There is a saying that goes all the way back to the Bible, 'All those that doeth evil hateth the light.' And that's what you saw at MF Global. That's what you saw in this crisis. That's what you saw in the Savings & Loan crisis. And they are trying to push us into an area where the light never enters again." -- Former bank regulator William K. Black, interviewed by Lauren Lyster, host of the Capital Account program (Russia Today)

"And this is the condemnation, that light is come into the world, and men loved darkness rather than light, because their deeds were evil. For every one that doeth evil hateth the light, neither cometh to the light, lest his deeds should be reproved." -- John 3:19,20 (King James Version of The Holy Bible)

The JOBS Act Is So Criminogenic That It Guarantees Full-Time Jobs for Criminologists (The Huffington Post blog) JOBS Act is the “Face of Fraud” — An Interview with Prof. Bill Black (The Daily Agenda)

Capital Account with Lauren Lyster, Wednesday, March 21, 2012


William K. Black is associate professor of economics and law at the University of Missouri, Kansas City; former executive director of the Institute for Fraud Prevention; former litigation director for the Federal Home Loan Bank Board; author of The Best Way to Rob a Bank Is to Own One How Corporate Executives and Politicians Looted the S&L Industry

____________


Euro Zone Needs To Complete Its Crisis Response - EU's Rehn (Dow Jones Newswires)

Euro Leaders Need to Step Up Austerity, Finland’s PM Says (Bloomberg)

Trichet warns of nations’ ‘behavioral contagion’ (MarketWatch)

Italy PM Monti says worried about contagion from Spain (Reuters) Monti says EU is worried about ‘contagion’ from Spanish debt crisis (The Associated Press)

A Bailout by Another Name (The New York Times)

10 Reasons Why The U.S. Is On The Verge Of A Major Municipal Debt Crisis (ETF Daily News)

The Age of the Shadow Bank Run (The New York Times)

Money Talks: If you cover Wall Street [as a journalist], should you take Wall Street speaking fees? (The Columbia Journalism Review) Trust no one: You won’t believe the conflicts lurking among financial journalists. (Finance Addict) When journalists take money from Wall Street (Reuters blogs)

Unofficial Problem Bank list declines to 949 Institutions (Calculated Risk blog)

US intel: water a cause for war in coming decades (CBSNews)

     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, March 23, 2012

Friday roundup (03-23-12)


ECB Preparing Exit From Easy Money (Reuters)

Bailout Worries See Spanish Bond Yields Rise (The Associated Press) Spain Starts to Feel the Heat (The Wall Street Journal blogs)

Spain may be euro zone's next source of contagion (Reuters) Spain Is Not Out of the Woods Yet (The New York Times)

Spain to Tighten Fiscal Screws (The Wall Street Journal)

Spain’s Critical Issue Is Its Private Debt (The Wall Street Journal blogs)

Potential risks to [Ireland's] economy outlined in financial review (The Irish Times)

BoE Advises UK Banks to Raise More Capital Urgently (Thomson Reuters)

Household debt [in Canada is] a mounting concern as rates appear set to rise (The Financial Post)

The Biggest Bellwether In The World Is Giving Some Ominous Comments About Growth (The Business Insider)

Gas could hit $8 on Iran showdown, experts say (USAToday)

MF Global's Corzine Ordered Transfer of Client Funds: Memo (CNBC)

Robert Prechter: Signs of an Impending Credit Implosion: Prechter sees the Stock Market in the process of topping (Financial Sense(audio)

The One Chart That Says It All by Charles Hugh Smith (Of Two Minds blog)

Choosing the Road to Prosperity: Why We Must End Too Big to Fail -- Now by Harvey Rosenblum, Executive Vice President and Director of Research at the Federal Reserve Bank of Dallas (Federal Reserve Bank of Dallas)

Nokia Siemens, German unions agree on 1,600 job cuts (Reuters)


State regulators close two banks (Reuters) Summary Box: FDIC shutters 2 small banks (The Associated Press)

Covenant Bank & Trust of Rock Spring GA had a troubled assets ratio of 655.7%. (BankTracker)

Premier Bank of Wilmette IL had a troubled assets ratio of 355.5%. (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, March 22, 2012

Thursday roundup (03-22-12)


Euro Zone Economy Shows Unexpected Decline in March (Reuters)

A technical recession in the eurozone? (FT Alphaville)

‘Worst Still to Come’ for Europe: Citi Economist (CNBC)

European Central Bank’s €1 trillion infusion buys time to eurozone’s bailout candidates (The Associated Press)

IMF Threatens to Cut Off Greece if €12 Billion of Austerity Isn’t Made in 3 Months (ForexCrunch)

Experts say 2nd Greece rescue won’t slow down Europe’s bailout merry-go-round (The Associated Press)

Spanish, Italian Borrowing Costs Rise (The Wall Street Journal) The Spain-Italy Spread Widens (The Wall Street Journal blogs)

Italy [and Spain] Too Big for Firewall to Save, Schaeuble Aide Says (Bloomberg)

Contagion Risk in Europe Is Back and Spain Is Top Worry (CNBC)

Portugal Town Halls Face Default Amid $12 Billion Debt (Bloomberg)

Republic of Ireland falls back into recession (The BBC)

[UK] Retail sales data delivers double-dip recession reality check: The rally in consumer spending has run out of steam and a double-dip recession is once again a real possibility (The Guardian) UK recovery threatened as eurozone powerhouses stumble -- [Markit's chief economist, Chris Williamson, said:] "The risk is now geared towards a steeper downturn than any sort of recovery. The German and French numbers came in below even the lowest expectations." (The Independent)

The American Recovery ["Is Not Yet Guaranteed"] by Mohamed El-Erian (Project Syndicate)

Despite Gains, This Is the ‘Weakest Recovery Ever’: Rosenberg (CNBC)

Former Fed analyst: Household debt hurting recovery (Reuters)

Student Loan Debt: $1 Trillion and Counting (Forbes)

Did the SEC Facilitate the Fraud at MF Global? (Jesse's Café Américain blog)

T-Mobile cutting 1,900 jobs across U.S. (The Associated Press)

AMR to Trim Eagle Costs $75 Million With Up to 600 Job Cuts (Bloomberg)

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

Is it a recovery yet? (Weekly report, 03-22-12)


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.)

"Jobless claims decreased by 5,000 to 348,000 in the week ended March 17, the fewest since February 2008, Labor Department figures showed today in Washington." (Bloomberg)


"... when these jobless claims fall ... below 370,000, it suggests jobs are actually being created rather quickly. We've now dropped below 370,000 for seven consecutive weeks, and eight of the last 10 weeks." (MSNBC blogs)

Jobless claims fall to new four year low (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, March 21, 2012

Wednesday roundup (03-21-12)


Ben Bernanke tells EU to clean up banks: Federal Reserve chairman Ben Bernanke has exhorted Europe’s leaders to take further action to beef up banks and help southern Europe claw its way back to health, warning that the world financial system is not yet on a sound footing. (The Telegraph)

Spain may be euro zone's next source of contagion (Reuters) Spain’s Default Risk Is Rising, Buiter Says: Tom Keene (Bloomberg) Europe's Debt Woes Getting a Spanish Accent (Bloomberg)

Portugal to Follow Greece: Roubini's Das (CNBC)

'The American Economic Model Is Broken' (Financial Armageddon blog) ASR’s Survey of U.S. Household Finances (Absolute Strategy Research)

HSBC Financial winds down consumer finance business in Canada, cutting 500 jobs (The Associated Press)

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

Tuesday, March 20, 2012

Tuesday roundup (3-20-12)


Martin Wolf: There Is Only One Thing Standing Between The Economy And Recession (The Business Insider)

Fed Is Ready to Act if Europe Falters Again: Bernanke (CNBC)

If the BRICs are Slowing, Where Does That Leave The Rest of Us? (The Bonddad Blog)

Rescue creditors: Greece may miss debt target (The Associated Press)

Euro crisis not over yet as Portugal looks likely to default (The Irish Times) Portugal May Need a Plan B (The Wall Street Journal)

Italy's President: Austerity Measures Only Way To Face Difficult Yr (Dow Jones Newswires)

It's not funny when even the Dutch can't meet the austerity targets: How southern Europe must be laughing. Of all the European “hardliners” who have demanded austerity from the “sinner states” few have been as rabid as the Dutch. (The Telegraph) Dutch in same budget hole as euro strugglers: govt agency (Reuters)

Is The [US] Economy Really Healing? (Forbes)

Economists offer more pessimistic view on manufacturing in upcoming report (The Washington Post)

Housing Starts: Expect ‘Long And Slow’ Recovery Ahead (The Wall Street Journal blogs)
Housing Starts decline slightly in February (Calculated Risk blog)

Postal Service: We need more junk mail (CNNMoney)

Aveos Fleet Performance to begin liquidation; puts 2,600 employees out of work (Winnipeg Free Press)

Tieto Cuts 1,300 Jobs in Strategy Revamp to Focus Offerings (Bloomberg)

Transcontinental to cut 500 jobs: Nova Scotia, Quebec plants to be closed (The Canadian Broadcasting Corporation)

     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, March 19, 2012

Monday roundup (03-19-2012)



EXCLUSIVE: GERMAN BANKERS GIVE MERKEL ULTIMATUM: EITHER GREECE LEAVES THE EUROZONE, OR GERMANY MUST (The Slog blog)

Geithner, Bernanke to discuss European debt crisis with Congress [on Tuesday] (The Hill blogs) Geithner [in testimony released today] warns EU against hasty budget measures (Reuters)

Greece must strictly apply bailout plan: central bank (Reuters)

Is Greece Really 'More Than Halfway' Done With Crisis [As It Claims It is]? (The Business Insider) Greece is heading for hell, thanks to the EU's botched handling of the crisis: We now have a debt structure that will lead to ructions between the EU, the IMF and a Greece asked to consent to suicide (The Guardian)

Italy is trapped in a monetary Völkerkerker (The Telegraph blogs)

Italy Holds Derivatives on $211 Billion of Debt (Bloomberg)

Italy Must Reschedule Its Debt Now (The Huffington Post blog)

Spain Torments Draghi on Deficit as Banks Tap Loans: Euro Credit (Bloomberg) Spain Moves to Center Stage .. but When Will the Performance Begin (The International Business Times)

Portuguese death rate rise linked to pain of austerity programme: Portugal's health service is being forced into sweeping cuts as last May's EU/IMF bailout terms begin to bite (The Guardian)

Bank of England house prices paper is grim reading for first-time buyers: The outlook for first-time buyers is not going to get better any time soon, according to MPC member David Miles (The Guardian blogs)

The U.S. Cruises Toward a 2013 Fiscal Cliff: As tax cuts expire and spending falls, the economy will be hit with a 3.5% decline in gross domestic demand. (The Wall Street Journal)

The Banks Win, Again [editorial] (The New York Times)

Fed may fine SunTrust, other banks over foreclosure issues (The Associated Press)

More Colorado churches facing foreclosure with debt, part of nationwide trend (The Denver Post)

California Cities Scramble to Avert Insolvency (Reuters)

Morgan Stanley's Failure To Segregate Client Assets Creates Default Risk (Seeking Alpha blog)  "Oh What A Tangled Web We Weave, When First We Practice To Deceive" (Cliff Küle's Notes blog)

Pew Study: Public Appetite For News Growing, But Industry May Not Profit (The Huffington Post blog) "'A growing number of executives predict that in five years many newspapers will offer a print home-delivered newspaper only on Sunday,' Pew’s report said." (Bloomberg) State of the News Media 2012: New Devices, Platforms Spur More News Consumption (Pew Research Center) [Meanwhile ...] Encyclopedia Britannica ends print, goes digital (Reuters)

Barclays’s Absa to Cut 3,000 Jobs to Curb Costs, Union Says (Bloomberg)

Closing IL facilities to cost at least 2,300 jobs (The Associated Press)

Citigroup’s Handlowy to Cut 590 Jobs as Polish Economy Slows (Bloomberg)

Santorum says "I don't care what the unemployment rate's going to be" (CBSNews)


The meltdown explanation that melts away (Reuters blogs)

In Praise of Deflation (Citizen Economists blog)

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

Sunday, March 18, 2012

Sunday roundup (03-18-12)


Despite Progress, Euro Crisis Is Far From Over: The Greek debt cut worked and the rescue package has gone through. So is the euro crisis over? By no means. The situation in Greece will take a turn for the worse again in a few weeks. The other euro nations will have to use the time until then to get their own houses in order -- especially Germany. (Spiegel Online)

Basel Group Said to Weigh National Firewalls for Bank Failures (Bloomberg)

IMF chief Christine Lagarde fears oil spike poses serious threat to global recovery: The International Monetary Fund has warned that surging oil costs pose a serious risk to the global economy, threatening to smother expansion before a fresh cycle of growth is safely under way. (The Telegraph)

Global economy on road to recovery but no room for mistakes: IMF (Reuters)

PIMCO chief Mohamed El-Erian expects 'second Greece’ in Portugal: The giant bond fund PIMCO said Europe has not yet tamed its debt crisis and will soon face a “second Greece” in Portugal as the country’s economy spirals downwards. (The Telegraph) Top-Investor warnt vor Finanzkollaps in Portugal (Spiegel Online) Majority See Second Euro Member Restructuring Debt - Barclays Survey  -- [most likely Portugal or Ireland] (Dow Jones Newswires)

Britain braced for more austerity in budget (Agence France-Presse)

Federal Reserve Stress Tests Make Us All Muppets by Simon Johnson (Bloomberg)

Are We On the Verge of the Obama Great Depression? (Town Hall)

     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, March 17, 2012

Saturday roundup (03-17-12)


ECB Praet: Situation Still Fragile In Euro Zone - Report (Dow Jones Newswires)

Japan's economy & global economic crisis - On the Edge with Max Keiser - 03-16-2012 (Youtube)



More Seniors Using Reverse Mortgages to Raise Cash (CNBC)

Unofficial Problem Bank list declines to 952 Institutions (Calculated Risk blog)

School districts statewide [in Texas] cut 25,000 positions [in relation to a year ago] after budget cuts (The Houston Chronicle)

More than 20,000 California teachers pink-slipped (The San Francisco Chronicle)

     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, March 16, 2012

Friday roundup (03-16-12)


How Big Banks Are Rewriting the Rules of Our Economy: Bill Moyers talks with former Citigroup chairman John Reed and former Senator Byron Dorgan to explore how our political and financial class shift economic benefits to the very top. (Bill Moyers & Company) (Vimeo) Banking Act of 1933 [Glass-Steagall Act] (Wikisource)



Gretchen Morgenson on Corporate Clout in Washington (Bill Moyers & Company) (Vimeo)



In positive week for eurozone, warnings rise that crisis isn't over: The Greek bailout and cheap loans may have pulled Europe back from the edge, but economists warn that without real change, the eurozone will continue to teeter. (The Christian Science Monitor)

Eurozone firewall increased to €700bn: German officials believe the scale of the fund will be sufficient to ringfence Greece and allow it to go bust without spreading fears of contagion to other countries (The Guardian)

IMF: Greece May Need More Debt Relief, Financing To Avoid Euro Exit (Dow Jones Newswires) IMF Staff Sees Potential Need for More European Aid to Greece (Bloomberg)

Spanish Debt Load Hits New High (The Wall Street Journal) Spain Debt Reaches Record as Rajoy Becomes Crisis Focus: Economy (Bloomberg)

One Half of Italy's New Sales Tax Receipts Go Directly to Morgan Stanley in New York (Jesse's Café Américain blog)

EU's Barroso: Crisis Not Over, More Sacrifices For Italy (Dow Jones Newswires) Germany's Steinmeier: EU Unity At Risk, Need Strong Italy (Dow Jones Newswires)

Land of the rising sum: Japan's toxic mountain of debt -- "Japan is now far more indebted than Greece was at the worst point of the recent crisis" (The Globe and Mail of Toronto)

Why Greg Smith Is 'Dead Right' About Goldman Sachs: The resignation letter heard round the world proves what we already know: Washington would like to think it can change the culture of Wall Street -- and it can't. (The Atlantic) GOLDMAN HEIR SPEAKS: Greg Smith Was Right, They Ruined My Great-Grandfather's Company (The Business Insider)

Fed Stress Test Is No Guarantee Banks Can Withstand Another Financial Shock (Forbes) What would happen to investment banks in a crisis? (Reuters blogs)

E. Baton Rouge school board to send [potential] layoff notices [to 6,250 people] (The Associated Press)

Barclays’s Absa to Cut 3,000 Jobs to Curb Costs, Union Says (Bloomberg)

1,517 O.C. school employees face [potential] job losses (The Orange County [CA] Register)

Jackson committee approves mass layoffs: A Jackson board committee approved management’s plans to cut more than 1,100 jobs after hearing a string of bad financial news. (The Miami Herald)

     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, March 15, 2012

Thursday roundup (03-15-12)


After Goldman Sachs Resignation, Assessing Wall Street's 'Moral Fiber': Wall Street was abuzz after Wednesday's very public resignation by a Goldman Sachs executive -- a New York Times op-ed piece taking issue with its business practices. Judy Woodruff discusses recent criticism of Wall Street culture with Georgetown University's James Angel and the University of Maryland's Michael Greenberger. (PBS Newshour)




Greg Smith Is `Toast' on Wall Street: William Cohan, author of "Money and Power: How Goldman Sachs Came to Rule the World" and a Bloomberg View columnist, talks about former Goldman Sachs employee Greg Smith's New York Times Opinion piece. He speaks on Bloomberg Television's "InBusiness With Margaret Brennan." [March 14] (Bloomberg)



At Goldman, short-term greed vs. long-term greed (The Washington Post)

Why ECRI’s Recession Call Stands (The Big Picture blog)

Whistleblowers reap millions in U.S. mortgage suits (Reuters)

Scary Oil by Nouriel Roubini (Project Syndicate)

IMF approves new Greek bailout, warns on missteps (Reuters

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

Is it a recovery yet? (Weekly report, 03-15-12)


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.)

"Initial jobless claims tumbled by 14,000 to a seasonally adjusted 351,000 in the week ending March 10, the Labor Department said Thursday." (Dow Jones Newswires)

Initial jobless claims fall to 4-year low; wholesale prices rise (The Los Angeles Times)

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.