Thursday, May 31, 2012

Thursday roundup (05-31-12)


PIMCO's Gross warns of economic "breaking point" (Reuters) Gross Says Low Quality Of Debt Threatens Monetary System (Bloomberg) Is the Global Monetary System Reaching its Breaking Point? (Cliff Küle's Notes blog) Wall Street Food Chain (PIMCO)

ECB, EU officials warn euro's survival at risk (Reuters)

European leaders should ready big steps: [World Bank President] Zoellick (Reuters)

[Fed's] Bullard Says Europe Must Prevent Meltdown -- ["It's a grave situation indeed"] (Dow Jones Newswires)

Eurozone 'must act to avoid disintegration [and depression]' [according to the EU's economics commissioner, Olli Rehn] (Agence France Press) Euro zone needs deeper integration to survive: EU's Rehn (Reuters)

ECB says deposit guarantee fund needed to fight bank runs: Italy central banker says investors losing confidence in euro (Reuters)

Euro Setup Is Unsustainable, ECB Chief [Mario Draghi] Warns (The Associated Press) A Terse Warning for Euro States [from Draghi]: Do Something Now (The New York Times) Draghi says euro is 'unsustainable' without action (CNNMoney)

EU calls for "banking union" to fight debt crisis: The European Commission proposed Wednesday that such a body should oversee banks directly, sidestepping national governments. (The Associated Press)

Europe's Crisis Spotlight Shifts to Spain (Bloomberg)

Spain reels under mounting cost of borrowing as huge EU bailout looms (The Belfast Telegraph)

IMF Begins Internal Talks Over Spain Loan (The Wall Street Journal)

Italy's recession is becoming severe (Sober Look blog)

Italy's Monti Urges Germany To Reconsider Austerity Push (Dow Jones Newswires) Monti warns of backlash if debt crisis not solved (The Associated Press)

U.K. Economy Will Barely Grow This Year On Euro Crisis, BCC Says (Bloomberg)

Cautious approach to credit cards from [UK] consumers: Credit card lending in April recorded its biggest monthly contraction since August 2006, Bank of England figures show. (The BBC)

IMF boss condemns the Greeks for avoiding tax. But Christine Lagarde pays NOTHING on earnings of £350,000 (The Daily Mail) IMF Chief 'Regrets' Greece Remarks Were 'Misunderstood' - Spokesman (Dow Jones Newswires)

US growth slows to 1.9 percent annual rate in January-March period, weaker than first thought (The Associated Press)

Chicago Business Barometer Signals Economy on Edge of Recession (The Wall Street Journal blogs)

U.S. Savings Rate Falling Amid Stagnant Incomes (The Wall Street Journal blogs)

Student loan debt continues to rise (The Los Angeles Times) More Student Loans Are Past Due (The Wall Street Journal blogs)

Optimism Among Wealthy Americans Is Down, Economy Worries Are Up (CNBC)

Yeah! The Housing Bottom Is Here! (PWBC™) [= Perennially Wrong Bottom Callers] by Barry Ritholtz (The Big Picture blog)

US wages and Europe's austerity: the perfect storm: What if Europe and the US converged on a set of economic policies that brought out the worst in both – European fiscal austerity combined with a declining share of total income going to workers? Given political realities on both sides of the Atlantic, it is entirely possible by Robert Reich (The Christian Science Monitor blogs)

Defaults May Loom On California Redevelopment Agency Debt (Bloomberg)

Embry - People Will Be Shocked at the Chaos Heading Our Way (King World News)

Robert Prechter and James Turk on inflation vs deflation (Youtube)



We need a stronger Glass-Steagall Act to regulate financial firms: The 1933 law, which in effect barred commercial banks from owning investment banks, was repealed in 1999. A former Treasury Department official proposes an updated version. (The Los Angeles Times)

Former bank regulator Bair wants to tighten Volcker rule (The Washington Post)

United Airlines to slash 1,300 jobs (The Associated Press)

Lufthansa May Scrap 1,000 Posts At Biggest Inflight Caterer (Bloomberg)

BAE Systems plans to axe 600 jobs (The Belfast Telegraph)

     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, 05-31-12)


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 said Thursday that weekly applications for unemployment aid rose 10,000 to a seasonally adjusted 383,000. The four-week average, a less volatile measure, increased for the first time in a month to 374,500." (The Associated Press)

"'All the signposts are in the same direction -- which is for slowing job growth,' said Michelle Meyer, a senior U.S. economist at Bank of America Corp. in New York, who projected claims would rise." (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, May 30, 2012

Wednesday roundup (05-30-12)


Watching A Global Depression Develop In Slow Motion (Forbes)

Europe's money [supply] contracts again (The Telegraph blogs)

Rush for havens as euro fears rise (The Financial Times)

Eurozone economic confidence slides by more than anticipated in May (The Associated Press)

BoE's Fisher says can't rule out euro break up: paper (Reuters)

German Two-Year Yield Declines To Zero As Debt Crisis Escalates (Bloomberg)

Europe Fears Bailout of Spain Would Strain Its Resources (The New York Times)

Spain bank fears send [the country's] bond yields to euro-era high (The Associated Press)

Spain faces 'total emergency' as fear grips markets: Spain is facing the gravest danger since the end of the Franco dictatorship as the country is frozen out of global capital markets and slides towards an epic showdown with Europe. (The Telegraph) Investors flee Spain as banking fears deepen, Greeks warned of catastrophe (Reuters)

[Threat of a] Greek Exit From Euro Seen Exposing Deposit-Guaranty Flaws (Bloomberg)

Italian bond yields rise above 6pc danger level: Italy's borrowing costs rose to dangerously high levels as the government failed to meet its target for bonds sales when investors stayed away from the latest auction. (The Telegraph)

Italy's austerity drive can't save it from Spanish fate: Unlike most EU countries, including the UK, Italy has simply switched off a vast array of government spending (The Guardian blogs)

Household debt a 'threat to UK economy' (The Independent) Credit card borrowing plummets as the crisis bites - but banks are also writing off £6m debt on cards every day (This is Money)

Japan industrial output gains slow, stirs recovery doubts (Reuters)

More unemployed Americans to lose jobless benefits (WLS)

Vital Signs: Home Prices at New Low (The Wall Street Journal blogs)

MBA: Mortgage Rates Drop to New Survey Lows (Calculated Risk blog)

NAR: Pending home sales index declined 5.5% in April (Calculated Risk blog)

Providence [RI] Sets Deal [with Union Leaders and Retirees] to Prevent Bankruptcy (Bloomberg)

Sorkin’s Glass-Steagall straw man: Of course its repeal contributed, directly and indirectly, to the financial crisis (The Columbia Journalism Review)

Dylan Ratigan: The Troubling Revolving Door Between Federal Reserve Officials and Wall Street (Cliff Küle's Notes blog) Audio @ (Financial Sense)

Olympus to cut 2,500 jobs, sell equity stake: media (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.

Tuesday, May 29, 2012

Tuesday roundup (05-29-12)


The End Of The Euro: A Survivor’s Guide by Peter Boone and Simon Johnson (Baseline Scenario)

Get Ready For Widespread Bank Runs In Europe? [It is possible, according to Plaza Futures Group, affiliated with the Royal Bank of Canada.] (Cliff Küle's Notes blog) Bank runs spreading across Europe! What next? by Martin D. Weiss Ph.D. (Money and Markets)

Funds Cut Exposure to Euro Zone Banks (The Financial Times)

Euro zone bank safety net leaves holes unplugged (Reuters)

Germany Has A Generous Proposal To The Broke PIIGS: "Cash For Gold" (ZeroHedge blog) Europe’s debtors must pawn their gold for Eurobond Redemption: Southern Europe’s debtor states must pledge their gold reserves and national treasure as collateral under a €2.3 trillion stabilisation plan gaining momentum in Germany. (The Telegraph)

Fate of euro zone lies with Germany by Martin Wolf (The Financial Times)

Dangers Of Contagion: EU Banks Sitting On A Lot Of European Bonds (Forbes)

The future of the euro is at stake: Spanish deputy PM (Reuters)

The eurozone could survive apocalypse in Athens but not a meltdown in Madrid (The Daily Mail) Spain’s problems add pressure on Europe’s leaders to accelerate crisis response (The Washington Post)

Roubini’s Das: Spain Needs a Bailout ‘Sooner or Later’ (CNBC) The market to Spain: recapitalize the banks or face funding problems (Sober Look blog)

Chief's exit paves way for Bank of Spain rehabilitation (Reuters)

Record drop in retail sales adds to Spain's woes (The Associated Press)

Bank of England readies plan for Euro collapse: The Bank of England is poised to cut interest rates or launch another round of quantitative easing if the euro collapses, it has emerged. (The Telegraph)

Fed up with austerity, Britons want plan B - poll (Reuters)

Japan jobless rise stokes slowdown fear (Marketwatch)

'The American Dream For the Average Man Doesn't Exist Any More' (Financial Armageddon blog)

Warning: America’s new Age of Austerity starts now: Denials, delays will deepen the impact (Marketwatch)

Housing Double-Dip Worsens As Prices Fall To New Lows; Recovery Nears (Forbes) Home Prices Hit Lows, But 'We See Signs of Hope' (CNBC) Case Shiller: House Prices fall to new post-bubble lows in March NSA (Calculated Risk blog) Real House Prices and Price-to-Rent Ratio at late '90s Levels (Calculated Risk blog) [Wasn't there already supposed to have been a bottom in housing, according to some pundits? Wasn't that already a sign of hope? If we're making new lows, where is the bottom?]

Consumer confidence falls to 5-month low (CNNMoney)

JPMorgan dips into cookie jar to offset "London Whale" losses (Reuters)

Calif. 9/11 fund raided for deficits (The Associated Press)

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

Monday, May 28, 2012

Monday roundup (05-28-12)


ECB repayments point to more use of emergency funds (Reuters)

Southern Europeans Wire Cash to Safer North (Reuters)

Debt crisis: a $46 trillion problem comes sweeping in: Bad stuff, they say, comes in threes. We've already got the banking and the eurozone sovereign debt crises. Next comes the corporate funding crisis. (The Telegraph)

European Firms Plan for Greek Unrest and Euro Exit (Reuters)

Greece Pours $22.6 Billion Into Four Biggest Banks (Reuters) Greece Extends Cash Boost To Major Banks (The Wall Street Journal)

Greece will run out of money by end of June, warns former PM Lucas Papademos: Former Greek prime minister Lucas Papademos has reportedly warned that Greece may run out of money by the end of June if international bailout funds are cut off following next month's election. (Agence France Presse)

Borrowing costs increase for Spain and Italy (Calculated Risk blog)

Spain Debt Insurance Costs At Record As Banking Woes Weigh (Dow Jones Newswires) Spain's borrowing costs near crisis level (The Financial Times) Spanish debt costs spiral as crisis deepens (Reuters) Spanish Bank Bailout Hits Nation's Bonds: Country's Borrowing Costs Soar to 2012 High; Prime Minister Calls on EU for Action to Support Fragile Euro Members (The Wall Street Journal)

One bust bank could bring Spain to its knees, warns prime minister: Government will not allow any bank or regional government to collapse 'otherwise country will fall,' says Mariano Rajoy (The Guardian) Spain's Rajoy fights losing battle to stave off EU rescue: Spanish premier Mariano Rajoy has given a fateful hostage to fortune. He told the nation that there will no EU rescue of Spain's banking system, even as `Black Monday' brought a further crash in bank shares and the IBEX index dropped to nine-year lows. (The Telegraph)

Spain Delays and Prays That Zombies Repay Debt (Bloomberg)

Portugal Municipalities To Get 1 Billion Euros For Debt (Bloomberg)

Italy Business Confidence Falls To Lowest In Almost 3 Years (Bloomberg)

UK's Cameron Discusses Euro-Crisis Contingency Plans With BOE, FSA Chiefs (Dow Jones Newswires) Cameron Discusses Euro Contingency Plans With Bank Of England (Bloomberg)

[Britain's] FSA moves to ward off threat of bank runs (City AM) Banks told to display 'your money is protected' notices: Banks must make much greater efforts to tell savers how much money they will get back in the event of them going bust, the regulator has said. (The Telegraph)

Eurozone crisis is raising borrowing costs for UK firms, says Bank adviser: Bank of England policymaker Ben Broadbent says euro crisis is key factor in UK's return to recession (The Guardian) Threat Of Euro-Zone Breakup Harming UK (The Wall Street Journal)

Embattled British high street will struggle with effects of recession until 2020: The country’s beleaguered high street will not recover for another three years and will underperform for the rest of the decade, according to leading economic commentators. (The Telegraph)

Ireland could face downgrade if EU treaty rejected: PM (Agence France Presse)

Focus on China, not Europe (Humble Student of the Markets blog)

Is Chinese real estate nearing a tipping point? (FT Alphaville blog)

[US] Debt-Ceiling Deja Vu Could Sink Economy (Bloomberg)

U.S. Needs a National Safety Board for Financial Crashes (Bloomberg)

Paul Krugman Destroys Every Republican Argument for Austerity (The Political Carnival) (Youtube)



Woonsocket [RI] seeks state control of finances (The Associated Press)

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

Sunday, May 27, 2012

Sunday roundup (05-27-12)



World scrambles to prepare for collapse of the eurozone: Swiss central bank admits planning for end of single currency as pressure on member states builds (The Independent)

BOE'S Dale says expects euro zone uncertainty set to continue [for the next few years] (Reuters)

Europe prepares bailout fund to rescue banks [according to the Sunday Times of London] (Investment Week)

Euro banks on the brink: Harvard University history professor Niall Ferguson talks about Europe's banking crisis (The Canadian Broadcasting Corporation)



Europe: A Political Crisis Not for Economists to Solve (CNBC)

Harsh Language from Lagarde: "IMF Has No Intention of Softening Terms"; From Head of Deutsche Bank: "Greece is a Failed Corrupt State"; Purposely Inflammatory Statements to Force Greece Exit (Mish's Global Economic Trend Analysis blog)

Europe May Be Unprepared for Greece Exit: Official (Reuters) Forecasters Flying Blind When Predicting Repercussions of Greek Exit (The Wall Street Journal blogs)

Greek euro exit flowchart: what happens next: Lombard Street Research has provided a handy flowchart of the options ahead for the eurozone. After the election on 17 June, all the possible outcomes are considered, including austerity, referendum, euro exit and contagion (The Guardian)

Europe's Maquina Infernal has crippled Spain: Spain is spiralling into the vortex of debt-deflation. This has nothing to do with Greece. It is not the result of fiscal extravagance over the past decade, or other such Wagnerian myths. (The Telegraph) Spain Bails Out Its Third-Largest Bank Move to Pump $24 Billion Into Bankia Is Latest Step in Government's Bid to Ease Concerns About Financial Sector (The Wall Street Journal) Spain may recapitalize Bankia with government debt: source (Reuters) Spain To Inject Public Debt Instead Of Cash To Bankia, Pais Says (Bloomberg) Bankia’s Writedowns Cast Doubts on Spain’s Bank Estimates (Bloomberg)

[Britain's] Northern Rock Bank Run Offers A Lesson For Europe (Reuters)

[The number of] UK retailers going bust jumps 38 pct in quarter (Reuters)

Greece could decide fate of U.S. economy by Mark Zandi (The Philadelphia Inquirer)

Americans Are Hooked...on public assistance (Financial Armageddon blog)

Center of gravity in oil world shifts to Americas (The Washington Post)

Icahn buys Chesapeake stake, seeks board changes (Reuters) Icahn sinks his teeth into Chesapeake: Feasting in McClendon’s own boardroom (Marketwatch) Chesapeake Conflict Of Interest Seen In Thunder Playoffs (Bloomberg) Chesapeake's Strange Plan To Make 'Green' Gasoline (Forbes)

Unofficial Problem Bank list increases to 931 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.

Saturday, May 26, 2012

Saturday roundup (05-26-12)


Spain region, Greek exit warnings rattle euro zone (Reuters) Why Crisis in Spain This Week Became More Important Than Greece (Forbes)

Bank of England governor Sir Mervyn King hosts secretive summit on euro crisis (This is Money)

Number of the Week: Half of U.S. Lives in Household Getting Benefits (The Wall Street Journal blogs)

Postal Service offers buyouts to 45,000 workers: The agency has asked Congress to let it end Saturday delivery and make other changes (Reuters)

Chip Maker Renesas to Cut Up to 14,000 Jobs, Sell Plant (The Wall Street Journal)

RIM May Cut at Least 2,000 Jobs in Restructuring: Report (Reuters)

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

Friday, May 25, 2012

Friday roundup (05-25-12)


Marc Faber: 100% Chance of Global Recession (CNBC)

Europe debt crisis dragging world economies down: New data show the Eurozone woes intensifying a global slowdown, with signs that even Germany, China and other pillars of growth are in trouble. (The Los Angeles Times) New Signs of Global Slowdown: Weak Reports in U.S., Europe and China Suggest Economies Are Slipping in Sync (The Wall Street Journal)

Analysts: Europe bank run is under way (CBS MoneyWatch)

Spanish Lender Seeks 19 Billion Euros; Ratings Cut on 5 Banks (The New York Times) In Spain, Bank Transfers Reflect Broader Fears (The New York Times) S&P Revises Spain's Economic Risk Score, Sees Entering Double-Dip Recession (Dow Jones Newswires) Bankia, Catalonia pile on Spanish debt worries (Reuters)

One in 7 Irish mortgages in trouble - Central Bank (Reuters)

Romney Messes Up, Tells the Truth About Austerity by William K. Black (The Huffington Post blog)

30% of U.S. Economic Growth Has Been From Car Sales! (Bad News) (The Atlantic)

Breaking up Chase: Good for shareholders and taxpayers by Sheila Bair (Fortune) Why JP Morgan’s gamblers need to be spun off (Reuters blogs)

JPMorgan Gave Risk Oversight To Museum Head With AIG Role (Bloomberg)

Could the Global Derivatives Market Tip Over? (Safe Haven)

Demand Strong for Government Program Paying Farmers Not to Plant Crops (The Wall Street Journal blogs)

Daimler Bus Unit To Cut 630 Jobs In Mannheim (Dow Jones Newswires)

     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, May 24, 2012

Thursday roundup (05-24-12)


Europe's slump deepens as Kabuki summit falls short: Once again Europe's leaders have swooped into Brussels and vanished hours later without offering any clear way out of the pulsating crisis at hand. (The Telegraph) Euro-zone countries appear far from compromise (The Washington Post)

Fate of Eurozone: Back on the Brink? (PBS NewsHour)




European Sovereign Debt Insurance Costs Rise, Italy Widens Most (Dow Jones Newswires) Spain, Italy insurers exposed to Greek exit - Fitch (Reuters)

Eurozone governments ponder Greek exit contingency (Reuters)

Greek Exit Could Trigger a Run on European Banks (Bloomberg)

Greek exit from euro could plunge US into recession (FoxNews) What would Greek exit mean for the U.S. economy? (Reuters) On Growing Tensions, Spreading Global Downturn And A Dead-End Greek Resolution (ZeroHedge blog)

Italy’s new off balance sheet wheeze (Reuters blogs)

Britain's deep double-dip raises questions about austerity (The Los Angeles Times) Double dip is deeper than we had feared: Headwinds turning into a hurricane, warns analyst (The Daily Mail)

William Black on JP Morgan and the Failure to Regulate Wall Street Fraud (Youtube)



Six Billion Dollar Bet: FRONTLINE investigates MF Global’s disastrous bet on European debt [in one segment of the program]. (PBS Frontline)


Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.


     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, 05-24-12)


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.)

"Applications for jobless benefits decreased by 2,000 to 370,000 in the week ended May 19 from a revised 372,000 the prior week, Labor Department figures showed today." (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, May 23, 2012

Wednesday roundup (05-23-12)


IMF Chief: World Facing Most Economic Insecurity Since Great Depression (The Wall Street Journal blogs) IMF Chief: World Facing Possibly Worst Economic Insecurity Since Great Depression (Dow Jones Newswires) Lagarde: Global Connections And Global Citizens – Speech (EurAsia Review)

Exclusive: Eurozone tells members to make contingencies for "Grexit" (Reuters) EU urges Greece to stay in euro, but plans for possible exit (Reuters)

Debt crisis: Germany holds a gun to Greece's head: Pressure on Greece increased dramatically on Wednesday night after Germany's central bank called for a suspension of financial support to Athens and eurozone finance ministries agreed to draft contingency plans for a Greek exit from the euro. (The Telegraph)

Greece Is Tearing Europe Apart Politically, Socially and Economically: William Black (Yahoo!'s The Daily Ticker)




Could Greece End Up as Europe's Lehman Brothers? (FoxBusiness)

Greek banks to get $23 billion from bailout fund (The Associated Press)

European Banks Unprepared for Greek Exit From Euro (Bloomberg) Is Europe ready for a banking union? (The Globe and Mail of Toronto blogs)

What Happens When A Country Defaults (The Big Picture blog)

Spain struggles to meet regions' 36 bln-euro debts (Reuters)

Italian Consumer Confidence Falls to Lowest Since 1996 (Bloomberg)

BOE's Bailey: Banks Need Clearer Targets After IMF Warning (Dow Jones Newswires)

Cut interest rates even further IMF tells Osborne: And if that doesn't work, start to make tax cuts, says finance chief (The Daily Mail)

Punk Economics 4: Irish Referendum Preview (Youtube)



Could China Derail The Global Economy? (Cliff Küle's Notes blog)

BOJ Shirakawa says no change to powerful easing stance [to beat deflation] (Reuters)

Japanese Debt Downgraded by Fitch; No Urgency for Japan (Until Sudden Panic Hits) (Mish's Global Economic Trend Analysis blog)

JPMorgan’s Senior Officers’ Addiction to Gambling on Derivatives by William K. Black (The Big Picture blog)

JPMorgan’s “Wild, Crazy Insane Gamble” Puts Global Economy at Risk: Bill Black (Yahoo's! The Daily Ticker)




Recovery or Collapse? Bet on Collapse (Paul Craig Roberts)

LA Council moves to ban plastic grocery bags (The Associated Press) Los Angeles to become largest U.S. city to ban plastic bags (Reuters)

HP to cut 27,000 jobs (CNNMoney)

CP Rail to lay off up to 3,400 non-strikers, paper says (Reuters)

San Diego Unified Approves More Than 1,500 Layoffs (San Diego 6)

     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, May 22, 2012

Tuesday roundup (05-22-12)



OECD: Europe debt could derail global recovery (CNNMoney) OECD: Global economic recovery is 'fragile,' uneven (CBS Moneywatch) O.E.C.D. Sees Euro Zone Crisis Hurting World Recovery (The New York Times)

Eurozone warned 'severe recession' looming (The Associated Press)

The world holds its breath as Europe struggles in the quicksand (The Age)

Europe's leaders to tackle growth at summit (The Associated Press)

Germany, France draw battle lines over common bonds (Reuters) Germany reiterates opposition to jointly guaranteed debt for eurozone ahead of EU summit (The Associated Press)

Luxembourg Min: Very Difficult For Greece To Stay In Euro If Voters Reject Bailout (Dow Jones Newswires) IMF Lagarde: Expect Greek Government To Implement Bailout Program (Dow Jones Newswires)

Greece banks being propped up by emergency liquidity (Catholic Online) Greek banks get 18 billion euro recapitalisation (Reuters)

Economists React: What Happens If Greece Leaves Euro Zone? (The Wall Street Journal)

Spain Will Remain In Recession Next Year, OECD Forecasts (The Associated Press) Spain to sink further into recession but says will hit deficit goal: Spain said it would meet its deficit targets this year despite the economy shrinking again in the second quarter and another slippage in its regions' accounts. (The Telegraph)

Bank 'should cut interest rates to zero' to save UK economy from eurozone threat, says IMF (This is Money) IMF urges Britain to cut interest rates, resume QE (Agence France Presse) IMF Says UK Should Ease Austerity Drive If Economy Weakens (Dow Jones Newswires)

Japan's fiscal death is a warning to the West: Fitch Ratings has downgraded Japan two notches to A+, citing a surge in public debt since the Lehman crisis and the lack of any plan to restore fiscal probity. (The Telegraph) Japan Rating Cut Rings Alarm For Lawmakers Gridlocked On Taxes (Bloomberg)

[In the US,] CBO Warns About 'Fiscal Cliff' (The Wall Street Journal) CBO Warning: Recession Will Follow 2013 'Fiscal Cliff' (The Atlantic Wire)

Will America Ever Recover From The Housing Crisis by Barry Ritholtz (The Big Picture blog)

Renesas to cut 6,000 jobs, raise capital: report (Marketwatch)

Brazil's Gol to cut 1,200 jobs (Marketwatch)

Medtronic to lay off 1,000, including 250 in Twin Cities (Twin Cities)

General Mills to eliminate about 850 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.

Monday, May 21, 2012

Monday roundup (05-21-12)


The anatomy of the eurozone bank run (The Financial Times blogs) Slow Bank Run Now, Bubble Next (The Wall Street Journal blogs) Full-Fledged European Bank Run Underway; Monetarist Fools are Everywhere; Believe in Gold by Mike "Mish" Shedlock (The Market Oracle) Bank Runs in Italy & Spain? [NBC's Meet the Press via] (Cliff Küle's Notes)




MPC's Adam Posen warns eurozone leaders must address the region's banking crisis: Adam Posen, the Bank of England policymaker, said the eurozone’s undercapitalised banking system and not Greece is the real driver of the region’s woes. (The Telegraph) Posen tells Europe: Pour in billions to beat debt crisis (The London Evening Standard)

Polish finmin says catastrophe looms without EU firewall - FT (Reuters)

Cracks are appearing in Europe's state-backed lenders: European taxpayers face having to bankroll a new wave of bailouts amid growing funding problems at state-backed borrowers across the region, according to senior bankers. (The Telegraph)

Europe faces difficult search for growth (The Associated Press)

Europe’s depressing prospects by Michael Pettis (China Financial Markets blog) [Bio] (Seeking Alpha blog)

Germany isolated as Latin Bloc calls the shots: The eurozone's 'Latin Bloc' is in full revolt. The trio of French, Italian, and Spanish leaders - backed by world powers - are to push for a radical shift in Europe's economic strategy at crucial summit on Wednesday. (The Telegraph) Rebellion Against Austerity From Greece To Washington (Forbes) Merkel And Hollande Head For A Showdown On Debt At EU Summit (Bloomberg) The euro end game (The American Enterprise Institute)

Merkel's 'Austerity,' Obama's 'Growth,' and the Power of Framing by James Rickards (U. S. News & World Report blogs)

Euro zone needs growth and austerity: ECB's Asmussen (Reuters) G8 Talk of Growth Over Austerity Could Be Red Herring (CNBC)

Obama sketches four-pronged strategy for Europe, sees EU consensus (Reuters)

Drachma scarecrows and the Myths of Greek Exit (The Telegraph blogs)

Obama: World Leaders Agree Greece Must Stay in Euro Zone (CNBC) German, French Finance Chiefs Pledge Support for Greece Staying in Eurozone (The Voice of America blogs)

Cameron tells Greece to accept austerity or quit the eurozone: David Cameron has issued an ultimatum to the Greek people to accept austerity or leave the eurozone. (The Telegraph) David Cameron defends vocal approach to eurozone debt crisis: David Cameron has defended his increasingly outspoken approach to the Eurozone crisis, saying it would be more dangerous not to speak out. (The Telegraph)

Maybe Greece needs a run on the banks (Fortune)

Provisioning for Spanish Bank Losses Is Insufficient, IIF Says (The Wall Street Journal blogs)

Bank of England facing review of bank crisis role (The BBC)

Latest data raise red flags likely to burst China’s bubble: economist (The Globe and Mail of Toronto) Real Estate Crash in China Underway (Financial Sense)

How deflation [in Australia] is killing electrical sector (The Australian Associated Press)

Most States [in the US] Still Years Away From Getting Back Lost Jobs (The Wall Street Journal blogs)

Bringing Back Glass-Steagall Would Rebuild Shattered Confidence In Wall Street (Forbes)

JPMorgan Chase loss only going to get worse -- [loss is currently "closer to a range of $6 billion to $7 billion" than to the originally announced $2B] (CNNMoney) JPMorgan Counterparty Platt Says Bank’s Loss May Widen (Bloomberg) US Derivatives Regulator Calls JP Morgan 'Stark Reminder' (FoxBusiness) [JPM Whale-Watching Tour] Oh, so now it’s a $5bn loss? (FT Alphaville blog) One Lesson From J.P. Morgan: Wall Street Has Changed (U. S. News & World Report blogs)

Why is Jamie Dimon on a Federal Reserve board? (CNNMoney)

The Need For An Independent Investigation Into JP Morgan Chase by Simon Johnson (Baseline Scenario)

HOW BANKS BOUGHT THE TEA PARTY: Cash Transforms Populist Insurgents To Reliable Vote For Financial Industry (ThinkProgress)

Critics: Chesapeake's Murky Books Obscure Costs (The Wall Street Journal) Investors wary as Chesapeake's finances deteriorate: The company's operations are burning cash, and it has been banking on asset sales to bolster liquidity. (MSN Money blogs) Pickens Dumps Chesapeake, Showing that Natural Gas “Boom” is a Bust (Food & Water Watch)

Houghton Mifflin Harcourt Publishing Files for Bankruptcy (Bloomberg)

Air France-KLM 'to cut 5,000 jobs' (Agence France Presse)

Qantas to cut another 500 maintenance jobs (Reuters)

Strauss-Kahn Investigators Open Group Rape Inquiry (Reuters)

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

Sunday, May 20, 2012

Sunday roundup (05-20-12)


And Now Back To Europe, Which Is More Unfixed Than Ever (ZeroHedge blog)

Global economy weekahead: Global contagion risks rise, markets more deeply interlinked than 2008, says IMF (Reuters)

Euro Zone's Banks Are "In Tatters" Says UK Minister - Report (Dow Jones Newswires)

Europe Banks Fear Flight of Deposits (The Wall Street Journal) Europe Needs a Genuine Financial Union (The Wall Street Journal)

The only way to stop a eurozone bank run (The Financial Times)

Rising US recession risk poses the real threat to Europe: The US economy has slowed to stall speed. A few lonely forecasters fear that America has already fallen back into recession, replicating the terrible double-dip of 1937. (The Telegraph) Economist Nouriel Roubini predicts trouble ahead for economy (USAToday)

Report: Germany’s central bank chief Weidmann warns against raising Greek risk exposure (The Associated Press)

Greek Crisis Poses Choices That Western Leaders Prefer Not to Make (The New York Times)

Greek cash withdrawals raise fear of run on banks: A leftist leader's call to nationalize banks has unnerved middle-class Greeks, whose withdrawals are fueling a drain on deposits of about $1 billion a day from an already threatened financial system. (The Los Angeles Times)

Greek vote for 'cranky extremists' would be disastrous, warns Ken Clarke: Justice secretary says Greece has to 'face up to reality' while Ed Balls warns of catastrophe if Germany doesn't 'change course' (The Guardian)

Europe’s Worst Fear: Spain and Greece Spiral Down Together (The New York Times)

Weaker euro zone nations need more support from core - UK (Reuters)

Rejection [of fiscal treaty by Irish voters] 'may trigger second bailout' (The Irish Times)

Europe a Drag on the U.S. Economy?: Tangent Capital Senior Managing Director James Rickards on the impact on the U.S. of Europe’s economic woes. (FoxBusiness)



JPMorgan’s debacle, and its parallels to AIG by Barry Ritholtz (The Washington Post)

Unofficial Problem Bank list increases to 928 Institutions (Calculated Risk blog)

First Time Ever - Majority of Unemployed Have Some College Education; Five Solutions to Education, Student-Loan Crisis (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.