Saturday, June 30, 2012

Saturday roundup (06-30-12)


Quote of the Day:

"Italy and Spain got what they wanted: It'll be easier to borrow excessively again... It was the first time in more than two crisis years that euro states didn't follow Germany's orders." -- German tabloid Bild (Reuters)

ECB, Bank of England seen easing next week: European Central Bank is expected to cut interest rates (Marketwatch) Bank of England poised for another £50bn QE injection as economy stalls (The Scotsman)

Merkel seen as big loser in euro zone showdown (Reuters)

Germany denies Schaeuble talk of Greece euro exit (Reuters)

Japan economy 'faces same risks as Europe' [says Prime Minister] (Agence France-Presse)

Three [US] states declare emergency after storms leave 9 dead and millions without power (FoxNews) Millions lose power in storms as triple-digit temps continue: Air-conditioning out to 1.5 million D.C. homes, businesses; 15 deaths tied to storms, heat (MSNBC) At least 12 deaths blamed on eastern U.S. storms (CBSNews)

Columbia briefly hits 109 degrees; East Coast swelters (The State of Columbia SC) 109-degree temp sets all-time record in Nashville (The Leaf Chronicle of Clarksville TN) High of 106 breaks record set in 1936 (The Augusta [GA] Chronicle) Another day, another 104-degree high: Friday’s 104 temperature tied record; high of 105, higher humidity on tap (The Charlotte [NC] Observer) Death Valley heat in Kansas? How the end of June got so hot.: Norton Dam, Kan., hit 118 F. on Thursday, and 32 communities from Colorado to Indiana just posted their highest temperatures ever. Forecasters say back-to-back La Niñas are partly to blame. (The Christian Science Monitor) Drought Grows Nationally Even As Florida Gets Soaked (The Weather Channel) Drought raising concerns about Ky. water supplies (The Associated Press) [Meanwhile, Britain Experiences the] Wettest April to June since records began and more unsettled weather to come: Late spring and early summer have been the wettest on record with much of the country receiving more than a foot of rain. (The Telegraph)

Stockton bankruptcy resulted from common reckless borrowing (The San Jose Mercury News)

Unofficial Problem Bank List declines to 917 Institutions, Quarterly Transition Matrix (Calculated Risk blog)

Structural Interest Rate Fraud Is The Real Reason The Global Economy is Stuck And Consumers Have Stopped Spending (Max Keiser)

     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, June 29, 2012

Friday roundup (06-29-12)


The Global Slowdown Will Accelerate (Comstock Partners)

Greyerz - Greatest Financial Collapse The World Has Ever Seen (King World News)

Europe summit surprises with bold moves: EU leaders find surprise success at summit, to use bailout fund to prop up struggling banks (The Associated Press) How Italy and Spain Defeated Merkel at EU Summit: Angela Merkel took a tough stance ahead of the EU summit, insisting she would not make concessions. But Italy and Spain broke the will of the iron chancellor by out-negotiating her in the early hours of Friday morning. Germany caved in to demands for less stringent bailouts and direct aid to banks. (Spiegel Online) Eurozone bank bailout deal throws lifeline to Spain and Italy: Angela Merkel softened hard line on fiscal discipline and debt repayment to hand Mariano Rajoy summit triumph (The Guardian)

Financial ‘Armageddon’ Will Happen Despite EU Deal: Rogers (CNBC) EU Debt Deal Only Making Problems Worse: Jim Rogers: Jim Rogers, Chairman of Rogers Holdings says the latest euro zone deal does nothing to help solve the region's biggest problem, which is its high debt levels. (CNBC)



German Parliament Approves Fiscal Pact and Euro Bailout Fund (Bloomberg) German parliament approves EU bailout fund (Reuters)

A Weaker German Economy Could Further Slow Europe (The Associated Press)

French economy stalls as debt nears 90% of GDP (Marketwatch)

The Fate Of The Euro Hinges On Italy. Italy's Looking Iffy. (Forbes)

Overhaul at Italy's oldest bank looks to new investors [while cutting 4600 jobs] (Reuters)

'For a Donation of 3,000 Euros, Every Greek Can Buy Freedom': Greek shipping heir Peter Nomikos has taken matters into his own hands. While EU leaders wrangle for a solution to Greece's problems, Nomikos started a non-profit to wipe out the country's debt. If all of his countrymen do their part, he tells SPIEGEL ONLINE, they will be able to shore up the country's finances. (Spiegel Online)

Bank of England attacks "deceitful" bank culture (Reuters) King Says Libor Deceit Shows How Wrong U.K. Banking Became (Bloomberg) Barclays COE: some false LIBOR reports were effort to protect bank’s reputation in crisis (The Associated Press) A Huge Break in the LIBOR Banking Investigation (The Rolling Stone blogs) How many other banks will be drawn into the market-rigging scandal? Barclays is just the tip of the iceberg, say U.S. investigators (The Daily Mail)

[US] Consumers Become More Pessimistic (The Wall Street Journal blogs) Consumer spending stalls, morale at 6-month low (Reuters) Consumer Spending In U.S. Stalls As Hiring Weakens: Economy (Bloomberg)

Prescription for Decline: The Supreme Court's ruling was a step in the right direction. But spiraling health-care costs could still doom America's recovery. (Foreign Policy)

7 Reasons the Fed Should Raise Interest Rates… ...and Still Keep Easy Money Flowing through the Economy (The Fiscal Times)

How Record Heat Wave Is Threatening a Key US Crop (CNBC) USDA: Farmers planted 96.4 million acres of corn, most since 1937, anticipating more profit (The Associated Press)

Ford Motor, Citing Europe’s Woes, Says Foreign Losses to Triple in Quarter (The New York Times) Why The European Car Market Is Headed For A Meltdown (Forbes)

     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, June 28, 2012

Thursday roundup (06-28-12)


Euro zone crisis saps business confidence again in June (Reuters)

Doug Casey on the Coming Eurocrash (Casey Research)

Battle over Spain, Italy rescue erupts at EU summit (Reuters) Emergency measures proposed for Italy, Spain (The Globe and Mail of Toronto)

Italian Yields Rise at Auction Ahead of EU Summit (Reuters)

Italy employers slash GDP outlook in "abyss" (Reuters) Confindustria: «L'Italia è nell'abisso danni come in guerra, colpite parti vitali»: Stime-choc di viale dell'Astronomia: Pil a -2,4% nel 2012, persi un milione e mezzo di posti di lavoro. Niente pareggio di bilancio nel 2013 ["Confindustria [, Italy's businessmen's association, says]: "Italy is in the abyss, damaged as if at war, vital parts struck": Shocking estimates from the headquarters [= viale dell'Astronomia]: GDP to -2.4% in 2012, a million and a half jobs lost. No balanced budget in 2013."] (Il Messaggero) "'Italy's [sic] has fallen into a serious recession. This happened after only after two years of slow and partial recovery from the deepest fall recorded in the last 80 years,' Confindustria's research center said." (Marketwatch)

Italy's Monti under pressure, president worried (Reuters)

Bankia Valued at EUR -13.635 Billion; Spain Becomes Sole Owner, Shareholders Totally Wiped Out; Entire Bankia Board Resigns (Mish's Global Economic Trend Analysis blog)

A slowdown in Germany, eurozone’s biggest economy, could complicate continent’s debt crisis (The Associated Press)

[UK] Recession deeper than feared (The Independent) http://www.independent.co.uk/news/business/news/recession-deeper-than-feared-7896032.html Double dip recession deeper than feared as new figures show another GDP drop (The Daily Mail)

Court Backs Obama on Health Law: In Surprise Ruling, Chief Justice Sides With Liberals to Uphold Insurance Mandate for All Americans; GOP Vows Repeal (The Wall Street Journal) Romney to campaign as only hope against "Obamacare" (Reuters) Romney campaign: 'Day one, job one, repeal ObamaCare' (The Hill) Day One, Job One #FullRepeal (Youtube)



WHY ROMNEY WON’T REPEAL OBAMACARE (The New Yorker blogs)

JPMorgan Trading Loss May Reach $9 Billion (The New York Times)

Stockton, California Bankruptcy is Only the Beginning (Economic Policy Journal blogs)

Vital Signs: Cooling Demand for Durable Goods (The Wall Street Journal blogs)

RIM to cut 5,000 jobs, delay new phones (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.

Is it a recovery yet? (Weekly report, 06-28-12)


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.)

"About 386,000 people filed for initial jobless claims in the week ending June 23, down 6,000 from the revised 392,000 the week before, the Bureau of Labor Statistics said Thursday." (CNNMoney)

Jobless Claims In U.S. Hovered Last Week Near 2012 High (Bloomberg)

Tepid economic growth weighs on US job market (The Associated Press)

SEE LAST WEEK'S POST HERE.

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

Wednesday, June 27, 2012

Wednesday roundup (06-27-12)


Quote of the Day:

"It's not just a slowdown … The recession will become a depression. Output has fallen from the peak 15% in Greece. The same thing in Spain ... This could become like Japan, but worse. Japan did not have a sovereign debt crisis because it was a net creditor country. But all of these countries are net debtors. They would be lucky to end up in stagnation like Japan. It's getting worse, there's already a sovereign debt crisis, a banking crisis, a balance of payment crisis, an economic crisis and all of those things together are getting worse." -- Economist Nouriel Roubini (Benzinga)

If this 'last chance' [European summit] fails, it really will be time to brace for the final crash (The Independent)

After the Sovereign Debt Crisis Comes the Deleveraging -- ["That suggests the world most likely could experience a long deflationary period."] (EconMatters)

FITCH: The Eurozone Is Entering The 'Danger Zone' (The Business Insider)

Europe: No solution 'til it gets much worse (CNNMoney)

Europe's Worst Nightmare: What If Euro Can't Be Saved? (Reuters)

Don Coxe - Get Ready, Banks to Collapse In Europe (King World News)

Germany's Liability From Rescue Funds Up To E310 Bln: Press (Market News International)

Zoellick says German caution raises euro-zone risk (The Washington Post)

Merkel Rebuffs Rajoy Plea, Shuts Door To Euro Area Bonds (Bloomberg) Merkel to face down summit pleas for crisis action (Reuters) Merkel Refuses to Yield on Eve of Summit Meeting (The New York Times) Germany leader opposes full debt sharing in Eurozone crisis: On the eve of a European summit, German Chancellor Angela Merkel touts tighter budgetary controls and says debt sharing will not occur 'as long as I live.' (The Los Angeles Times)

Will Angela Merkel Save Europe’s Banks? [editorial] (Bloomberg)

Spain, Italy Governments, Banks In Vicious Debt Cycle (Investors Business Daily) EU Summit -- why more 'integration' won't help Spain, Italy and others (FoxNews)

Spain wins time from EU with bank liquidity support (Bloomberg)

Spain debt warning ahead of summit -- ["Spain cannot finance itself for long at the high rates it now pays on the markets"] (SkyNews Australia)

Italy warns of euro disaster as debt costs rise (The Associated Press)

French Jobless Claims Rise to 12-Year High as Growth Stalls (Bloomberg)

French Debt Less Attractive as Reality Bites (Bloomberg)

Norway's Housing Bubble Makes Ours Look Almost Cute By Comparison (The Atlantic)

US fiscal cliff is as bad as eurozone crisis, says Bootle: The looming 'fiscal cliff' could be as destructive to the global economy as the eurozone crisis, warns Capital Economics' Roger Bootle. (CityWire)

Fed's Lockhart: not time for the bigger guns yet (Reuters)

10 Million Underwater Mortgages And Shadow Inventory Worth $246B Mean Housing Trouble (Forbes)

Rise in Durables Orders Not Enough to Dispel Caution (The Wall Street Journal blogs)

Stockton bankruptcy will make history; residents reeling (The Los Angeles Times blogs) Stockton to file for bankruptcy, will be largest U.S. city to fail: The Stockton City Council halts bond payments, slashes employee benefits and adopts an emergency budget as mediation ends. The Central Valley city becomes the largest in the U.S. to seek bankruptcy protection. (The Los Angeles Times) Stockton bankruptcy is hard hit for city retirees (KTVN) Stockton, Calif., tests legalities of city bankruptcies (USAToday)

Stockton, Calif., prepares for bankruptcy. Are other US cities at risk?: Stockton, which lost tax revenues from the housing bust and faces high pension costs for retired public workers, serves as a warning. Some US cities face tough choices to avoid bankruptcy. (The Christian Science Monitor)

Mass. lawmakers approve MBTA bailout, roads bill (The Boston Globe)

Fiscal Drag from the State and Local Sector? (The Federal Reserve Bank of New York)

Big banks craft "living wills" in case they fail (Reuters)

JP Morgan Managers Being Told Trade Loss is $9 Billion (Teri Buhl blog)

Americans' Confidence in Banks Falls to Record Low: More Americans have little or no confidence in banks than have a great deal or quite a lot (Gallup Polls)

The truth about bank failures and lightning deaths [Money Rates via] (FoxBusiness)

Vital Signs: Consumer Confidence Dips (The Wall Street Journal blogs)

Drought May Rival 1980s U.S. Scorcher That Cost $78 Billion -- [Said David Anderson, an agricultural economist at Texas A&M University: “Everyone’s worried about this.”] (Bloomberg)

5,000 public servants learn their jobs are at risk: [Canada's] Federal government looking to eliminate 19,200 public service jobs over the next 3 years (The Canadian Broadcasting Corporation)

Roche to Cut 1,000 Jobs with Closure of US R&D Site (The Wall Street Journal)

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

Tuesday, June 26, 2012

Tuesday roundup (06-24-12)


Quotes of the Day:

[Speaking of Mitt Romney:] "His basic vision is one in which if wealthy investors like him, folks at the very top are freed up from any kind of regulations, if they are maximizing their profits, even if they are polluting more, or offshoring jobs or avoiding taxes or busting union, whatever the strategy is — if they are doing well, then everybody else is automatically doing well." -- US President Barak Obama in Atlanta, GA (The Associated Press)

[Commenting on prosecution of criminal fraud in the Great Recession:] "And we’ve been living for some years in the time of President Obama, and he has done absolutely nothing to reestablish the criminal referral process. And as a result, there are virtually no prosecutions of any elites." -- William K. Black, associate professor of economics and law at the University of Missouri-Kansas City and author of The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry [from October 2011] (Democracy Now)

Collapse of Euro a “Very Likely Scenario” – Spiegel (Global Macro Monitor blog) Euro break-up could severely hit German economy: Report (Agence France Presse) Pricing the German costs of a euro break-up (FT Alphaville blog) Finanzministerium rechnet mit katastrophalen Folgen für deutsche Wirtschaft nach möglichem Zusammenbruch des Euro [Google translation: "Treasury anticipates catastrophic consequences for the German economy after the possible collapse of the euro"] (Der Spiegel)

SURVEY: The World's Top Executives Are Losing Faith In The Economy (The Business Insider)

Leaders weigh urgent steps as Europe summit nears (The Associated Press)

'A Tragic, Historical Mistake by the Germans': With the EU summit set to start on Thursday, pressure is on European leaders to find a way out of the euro crisis. Investor George Soros is pessimistic that a solution will be found and says time is extremely short. In an interview with SPIEGEL ONLINE, he warns that Germany could develop into a hated, imperial power. (Spiegel Online)

Germany's Credit Rating Slashed by Egan-Jones (Reuters)

History doesn't bode well for future of the Eurozone: Maintaining monetary union without real fiscal or political union eventually imposes unsustainable costs on someone. (The Los Angeles Times)

Austerity Policy Has Pushed Europe to the Brink (The Huffington Post blog)

Draghi May Enter Twilight Zone Where Bernanke Fears To Tread [= Interest Rates to Zero or Even Lower] (Bloomberg)

Spain's short-term debt costs nearly triple (Reuters)

Bank bailout to spark firesale of corporate Spain (Reuters)

What was Spain supposed to have done? by Martin Wolf (The Financial Times blogs)

Spain Considers Sweeping Tax Hikes to Please EU (Reuters)

Italy 2-yr debt costs soar to 4.7 pct at auction (Reuters)

Cyprus rescue package may equal half its economy (Reuters) Now Cyprus asks for bailout – but Angela Merkel stands firm: Chancellor refuses to give ground despite leaked report detailing impact of eurozone collapse on Germany (The Independent)

BOE Governor Warns of Euro-Zone Crisis Impact on U.K. (The Wall Street Journal) Gloomy BoE sees outlook darken (Reuters)

Dire state of Britain's finances underlined by new figures showing public borrowing continues to grow (The Independent) U.K. Budget Deficit Swells as Recession Hits Taxes: Economy (Bloomberg) Worsening U.K. Public Finances Dent Austerity Plans (Dow Jones Newswires)

We Are Living in a ‘Modern-Day Depression’: David Rosenberg (Yahoo! Finance blogs)


S&P says U.S. faces 20-percent risk of double dip (Reuters)

Why Would A Bad Situation in Europe Hurt the US? (Bond Dad blog)

Fed's "Operation Twist" has only minor effects [and is doing more harm than good]: Fisher (Reuters)

Consumer Confidence In U.S. Declines To A Five-Month Low (Bloomberg) Consumer Confidence: Deflationary Behavior Is a Risk, Washington Isn't Helping (Minyanville) Misc: Richmond Fed Survey shows contraction, Consumer confidence declines (Calculated Risk blog)

Glass-Steagall Return ["Is Absolutely Necessary" And] Would Boost Banks, FDIC’s Hoenig Says (Bloomberg) FDIC's Hoenig on Glass-Steagall II, Bank Regulation: Thomas Hoenig, director of the Federal Deposit Insurance Corporation, talks about his proposal to reinstate the Glass-Steagall Act and regulation of the financial industry. Hoenig, speaking with Kathleen Hays and Vonnie Quinn on Bloomberg Radio, also discusses JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon’s seat on the board of the Federal Reserve Bank of New York. (Bloomberg)



US Corn Crop at Risk: Next Two Weeks Critical (CNBC)

Top secret: $80B a year for food stamps, but feds won’t reveal what’s purchased (The Washington Times)

Stockton braces for possible bankruptcy as key vote looms (The Los Angeles Times)

Rhode Island Cuts Benefits to Current, Future State Retirees (CNBC)

     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, June 25, 2012

Monday roundup (06-25-12)


Central Banks Commit To Ease As Threat Of Lost Decades Rises (Bloomberg) Is There a Limit on Central Bank's Ability to Inflate? (Mish's Global Economic Trend Analysis blog)

Soros Calls on EU to Start Joint Debt Fund: Billionaire investor George Soros speaks about Europe's sovereign-debt crisis. Soros called on Europe to start a fund to buy Italian and Spanish bonds, warning that a failure by leaders meeting this week to produce drastic measures could spell the demise of the currency. He spoke yesterday with Bloomberg Television's Francine Lacqua in London. (Bloomberg)



Soros: Germany must change its "can't do" attitude - FT (Reuters) Germany’s reticence to agree threatens European stability (George Soros)

Soros Pushes EU To Start Joint Debt Fund Or Risk Summit Fiasco [from yesterday's blog] (Bloomberg) [In apparent response:] Merkel says shared debt "wrong" ahead of EU summit (Reuters)

France fights to avoid euro zone bank contagion (Reuters)

Spain makes official debt bailout request: Spain bailout: The country has made a formal request for a loan  to help clean up its troubled banking sector. The Spain bailout could take up to $77.7 billion to help the country's banks survive. (The Associated Press) Spanish Bailout Begins Tense Week of Euro Bluff (Forbes) Summit doubts [are expected] to drive up Spain's debt costs [tomorrow] (Reuters)

Moody’s downgrades its ratings of 28 banks in Spain, cites weakening of government’s credit (The Associated Press) Moody's cuts Spanish banks on [heels of] sovereign downgrade (Reuters)

Cyprus seeks EU bailout for banks, budget [on account of exposure to Greece] (Reuters) Fitch Cuts Cyprus to Junk as Greek Exposure Hits (CNBC)

Greek finance minister resigns, crisis deepens (Reuters)

Italy banks, employers call for ECB bond buying - letter (Reuters)

US Government Backstops Most Derivatives (Firedoglake blog)

Two-thirds of Americans wouldn't survive a financial emergency (The Los Angeles Times)

The Federal Reserve is Destroying Retirees & Their Pension Funds (Cliff Küle's Notes blog)

Is Your Pension Underfunded? (The Wall Street Journal blogs)

Members of Congress trade in companies while making laws that affect those same firms (The Washington Post)

Chesapeake and rival plotted to suppress land prices -- [which "could provide evidence that the two companies violated federal and state laws"] (Reuters)

Bankruptcy looms for Calif. city deep in debt (CBSNews)

Vital Signs: Lessors’ Confidence Slipping (The Wall Street Journal blogs)

Gol Plans To Cut Twice As Many Jobs By Year-End, CFO Says [Making a Total of 2,500 Jobs] (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.

Sunday, June 24, 2012

Sunday roundup (06-24-12)


In Brussels, Pressure for Action (The New York Times)

Soros Pushes EU To Start Joint Debt Fund Or Risk Summit Fiasco (Bloomberg)

Be afraid: Some in U.S. see shades of 2008 in euro crisis (Reuters)

Central bank group: Crisis fixes still needed (The Associated Press) BIS backs banking union to ease euro zone crisis (Reuters) Central Banks Face Power Limit As Debt Persists, BIS Says (Bloomberg) BIS Official Warns of Central-Bank Overreach (The Wall Street Journal blogs) BIS: Banks must recognize losses, boost capital (Marketwatch) Central banks hold 30% of global GDP: Bank for International Settlements reports that world's central banks are holding £11tn after purchasing government bonds (The Guardian) BIS’s Cecchetti Sees Too Much Reliance on Global Central Banks (The Wall Street Journal blogs) The Coming NWO: Bankruptcy, Credit Counseling, and Debt Renegotiation (The Business Insider)

Eurozone austerity hits world's poor as Europe's aid falls by €700m: Charities' fears grow as EU short of 2005 G8 summit targets, though UK is praised for being on course to meet 2013 pledges (The Guardian)

Germany tells Greece to stop asking for help and start cutting budgets: Germany has told Greece to stop asking for more help and get on with implementing the reforms it has already promised as tensions mount before this week’s crucial summit of European Union leaders. (The Telegraph) Germany To Confront United Euro Bloc As Leaders Head To Summit (Bloomberg) Merkel Backs Debt Sharing in Germany [Among its Member States] Amid Closer EU Union Push [Rejected by Germany] (Bloomberg) [German Finance Minister] Schaeuble says "no" to throwing money at euro crisis (Reuters) Germany fears eurozone collapse would decimate country's economy: German finance ministry projections show Berlin is far from negotiating solution to eurozone crisis from position of strength (The Guardian) Bundesbank Swipes At Draghi As European Fault Lines Deepen (Bloomberg) Tony Blair says only Germany and a 'grand plan' can save the euro: Tony Blair, the former British Prime Minister, said the euro can only be saved by a "grand plan" in which Germany is prepared to treat the debts of all nations as one. (The Telegraph) Blair: To save eurozone, Germany must underwrite debts of struggling members (The Associated Press)

Germans Show Lowest Support For Keeping Euro In Four-Nation Poll (Bloomberg)

France Is Main Obstacle to a Euro Solution (The Wall Street Journal)

Spain to ask for aid as EU fights debt crisis (The Financial Times)

Capital Controls Hit Spain: Government Laws Prohibit Cash Transactions Over €2,500; Minimum Fine of €10,000 for Failure to Report Foreign Accounts  (Mish's Global Economic Trend Analysis blog)

Bank of England's money printing is putting UK economy at risk: The Bank of England may be putting the economy at risk by persisting with low interest rates and money printing, according to the world's central banking supervisor. (The Telegraph) Printing money stores up trouble for the for future, Bank of England told by leading financial watchdog (The Daily Mail)

NatWest customers fear running out of food and electricity: NatWest's online forum becomes a diary of disillusionment as those unable to go to the bank's branches run out of money (The Guardian)

Chinese Data Mask Depth of Slowdown, Executives Say (The New York Times)

Japan Announces Huge New Incentives for Solar Power (Good Environment)

U.S. Banks Aren’t Nearly Ready for Coming European Crisis by Simon Johnson (Bloomberg)

A Loophole Big Enough to Lose a Billion (The New York Times)

Why Congress Won’t Touch Jamie Dimon: JPM Derivatives Prop Up US Debt (Common Dreams)

Three Key Reasons Housing Not Coming Back: Demographics, Student Debt, No Jobs (Mish's Global Economic Trend Analysis blog)

City in California [= Stockton] Nears Bankruptcy (The Wall Street Journal)

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

Saturday, June 23, 2012

Saturday roundup (06-23-12)


Another week, another euro summit: but this one won't find an answer either: Every 'grand bargain' and 'comprehensive solution' so far has failed to acknowledge the deep-seated imbalance between Germany and everyone else in the single currency (The Observer)

Greek coalition seeks two extra years to meet bailout deficit targets: Coalition partners aim to water down terms of rescue agreement, as two of its leading politicians recover from health scares (The Observer)

A Sense of Humor at the Wall Street Journal (Iacono Research)

As RBS' ATM "Glitch" Enters Fifth Day, The Bailed Out Bank Issues A Statement (ZeroHedge blog)

US teeters on a fiscal cliff edge: The world's biggest economy risks recession unless Congress acts swiftly. (The Independent)

A Sober New Reality in Credit Downgrades for Banks (The New York Times)

Robert Rubin Rewrites the Rules: Former Treasury Secretary Robert Rubin gets cozy with the banking industry while helping push through a bill freeing financial institutions to merge into ever larger megacorporations while largely absolving them of much of their legal obligation to invest in the communities in which they do business. (Mother Jones)

[Meanwhile ...] Unofficial Problem Bank list increases to 921 Institutions (Calculated Risk blog)

Moody's downgrades $64 billion of U.S. muni debt (Reuters)

Grim prospects for Stockton [CA] as bankruptcy looms (Reuters)

The Scam Wall Street Learned From the Mafia: How America's biggest banks took part in a nationwide bid-rigging conspiracy - until they were caught on tape (Rolling Stone) Matt Taibbi and Yves Smith on the Follies of Big Banks and Government: Matt Taibbi and Yves Smith join Bill to discuss how the folly and corruption of both banks and government leaves deep wounds in our democracy. (Moyers & Company)



States Face Pressure on Pension Shortfalls (The Wall Street Journal)

Deutsche Telekom Will Cut 1,300 Jobs Without Firings, FAS Says (Bloomberg)

HP may cut up to 1,000 jobs in Germany: magazine (Reuters)

[Off topic:] Jerry Sandusky Guilty: The victims and  a breakdown of the counts in which the jury found him guilty: Explosive child sex-abuse case against former Penn State football coach ends with jury convicting Sandusky of 45 of the 48 counts against him (The New York Daily News) Jerry Sandusky Trial Did Not Include All of His Alleged Victims (ABCNews)

     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, June 22, 2012

Friday roundup (06-22-12)


Ghost of Nazi Past Haunts Austerity-Gripped Europe (Bloomberg) Europe’s bankers have forgotten the lessons of the Depression by Liaquat Ahamed, author of ‘Lords of Finance: The Bankers Who Broke the World’ (The Financial Times)

Greece's Lawyer: EU Bailout Will Cost Trillion Euros & Cyprus Is Next (Bloomberg)



Deflation next big trend, says Comstock (The Globe and Mail of Toronto)

Merkel, Monti and Co. Agree to European Growth Pact: Agreeing that austerity alone will not be enough to pull the euro zone out of its deep crisis, the leaders of Germany, France, Spain and Italy agreed on Friday to the blueprint for a growth pact for Europe. With a value of 130 billion euros, the leaders hope to impress markets with the pact at next week's EU summit. (Spiegel Online) European Leaders Push for $163 Bln in Measures (The Associated Press)

Angela Merkel defies Latin Europe and the IMF on bond rescue: German Chancellor Angela Merkel has shot down calls for full mobilisation of the eurozone's bail-out funds to halt the raging bond crisis in Spain and Italy, ignoring unprecedented pleas for action from the International Monetary Fund. (The Telegraph)

NIALL FERGUSON: The Fate Of Europe Is Riding On 'The Psychological State Of One German Woman' (The Business Insider)

Mario Monti: we have a week to save the eurozone: Italian prime minister warns that there is no room for failure in talks between single currency's big four countries (The Guardian)

Italy Consumer Confidence Falls [To A Record Low] Amid Rising Taxes, Unemployment (Bloomberg)

Rajoy’s Blown Credibility Puts Spain at Risk of Bailout (Bloomberg)

Spain to Make Official Aid Request Monday (The Wall Street Journal) Spain’s Banks Need Up To $78 Billion, Report Shows (Bloomberg)

Dull Dutch Rabobank blooms as rivals struggle through debt crisis (Reuters)

Commercial Real Estate [in the US] Not Out of the Woods Yet (The Dallas Morning News)

Illinois Budget Deficit Worst In The Nation: State Is Reportedly $43.8 Billion In The Red (The Huffington Post blog)

[Australian] Premier Ted Baillieu sneaks out details of 3600 job cuts (The Herald Sun of Melbourne)  

Arch Coal laying off 750 workers in Appalachia (Bloomberg)

Local Competition forces Barclays to cut 600 jobs in India (First Post)

[Pittsburgh's] Port Authority To Cut Many More Routes, Raise Fares [And Potentially Lay Off 560 Workers]: Bus, Trolley Service To Be Slashed Deeply In September (WTAE)

Vital Signs: Worrying Jobless Claims (The Wall Street Journal)

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

Thursday, June 21, 2012

Thursday roundup (06-21-12)

IMF head warns of 'acute stress' in Europe (The Associated Press)
IMF unveils its blueprint to salvage the stricken euro: The International Monetary Fund has directly confronted Germany by urging the eurozone to take a "determined and forceful move" to "complete economic and monetary union" by sharing government debt and underwriting failing banks. (The Telegraph) Europe Weighs Options for Easing Pain for Weak Nations (The New York Times)

Eurozone business activity shrinks; US, China output slows (Reuters)

Europe's risk panel urges governments to wind up non-viable banks (The Associated Press)

Euro Finance Chiefs Weighing Greek Debt Relief (The Voice of America blogs)

Euro's big four seek way out of crisis in Rome [in Friday meeting] (Reuters)

[Germany's Chancellor] Merkel Balks at Sovereign Debt Purchases to Beat Crisis (Bloomberg)

Angela Merkel’s mania for austerity is destroying Europe: The German Chancellor is terminating growth and pushing us towards a new Depression. -- ["Merkel is the most dangerous German leader since Hitler. "] (The New Statesman)

Spain to seek bank aid as borrowing costs soar (Reuters)

Italy, Spain Head for Bailouts, Fidelity’s Stuttard Says (Bloomberg)

Debt crisis: desperate Monti needs Merkel summit deal to stop revolt at home: Italy's technocrat government risks a parliamentary mutiny unless premier Mario Monti can secure major concessions from Germany at a crucial summit of the eurozone's Big Four powers in Rome on Friday. (The Telegraph) Forget Greece, Spain: The euro stops at Italy (The Globe and Mail of Toronto)

Merkel Ally Rejects Bailout Concessions for Greece: As New Democracy tries to form a government in Greece, there have been suggestions that the terms of the EU bailout could be relaxed. But now a senior member of German Chancellor Merkel's conservatives has insisted the deal stands. Athens needs to "make up for lost time," he told SPIEGEL ONLINE. (Spiegel Online)

Moody's downgrade of Britain's banks to hit families: Home owners and businesses face having to pay higher interest rates following a downgrade in the credit ratings of Britain’s biggest banks, analysts warned on Thursday. (The Telegraph)

[In the US,] Factory, jobs data highlight struggling recovery (Reuters) Philly Fed factory activity contracts again in June (Reuters)

Existing Home Sales Down, Philly Fed Way Down (Iacono Research) Existing home sales fall 1.5 percent in May (Reuters)

Americans Hold Dimmest View On Economic Outlook In Five Months (Bloomberg)

Up to 95 Million Low-Skill Workers in Danger of Being Left Behind (The Wall Street Journal blogs)

EL-ERIAN: The Fed's New Policy Is Causing 'Distortions That Will Take Years To Resolve' (The Business Insider)

The scary take on Ben Bernanke’s remarks (The Washington Post blogs)

15 U.S. Banks Downgraded: Stock market suffers after news of banks' credit downgrade. (ABCNews) Major banks downgraded by Moody's -- ["including giants like Bank of America, Goldman Sachs and JPMorgan"] (CNNMoney)

video platformvideo managementvideo solutionsvideo player

Air France to cut [more than 5,000] jobs as seeks recovery (Reuters)

"Hope and Change"...Still? Looking Back at 4 Years of "Change" -- Fox and Friends -- 5-30-12 (Youtube)



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

Is it a recovery yet? (Weekly report, 06-21-12)


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.)

"About 387,000 people filed new jobless claims in the week ended June 16, down from the previous week's figure, which was revised up to 389,000, according to the Bureau of Labor Statistics." (CNNMoney)

More Americans Than Forecast File for Jobless Benefits (Bloomberg)

Weekly Initial Unemployment Claims mostly unchanged, Four week average highest this year (Calculated Risk blog)

Jobless Claims Point to Weak June Jobs Report (The Wall Street Journal blogs)

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, June 20, 2012

Wednesday roundup (06-20-12)


CITI: We Have Reached A Critical Point In The Crisis, Where Things Could Get A Lot Worse (The Business Insider) Citi’s Fitzpatrick - Despite Rally, Crisis To Get Even Worse (King World News)

World Leaders Make Little Headway in Solving Debt Crisis (The New York Times)

Paul Krugman on Europe 'Doing the Unthinkable' (PBS NewsHour) (Youtube)



The Eurozone Crisis is Far From Over (Money Morning)

Debt crisis: prepare for Lehmans re-run, Bank [of England] official warns, as leaders poised to bail out Spain and Italy: European leaders are poised to use two rescue funds to buy Spanish and Italian debts in a £600bn bail-out, as a Bank of England policy maker tells traders to prepare for a devastating market seizure like that seen as the collapse of Lehman Brothers. (The Telegraph)

Spain expected to request bank aid after debt test (Reuters)

Contagion may drag Italy back to heart of crisis (Reuters)

ECB's Weidmann: Greece must keep bailout on track (Reuters) Greek coalition takes power, promises to revise bailout (Reuters) Greece Remains In Economic Death Spiral Despite New Government (The International Business Times)

U.K. Jobless Claims Unexpectedly Rise as Euro-Area Crisis Bites (Bloomberg)

Austerity cuts 'will go on for ten years' according to gloomy warning from [UK] Civil Service chief (The Daily Mail)

Europe Debt Crisis Restrains Rebound in Japan’s Exports: Economy (Bloomberg)

Europe woes may require BOJ action: May minutes (Reuters)

Federal Reserve sees weaker recovery ahead (CNNMoney) Fed 'Prepared to Take Further Action' If Economy Slows (CNBC)

With Output Stumbling, Fed Takes a Modest Step (The New York Times) Fed Extends 'Operation Twist,' Citing Concerns on Economy (CNBC) Fed, wary of Europe debt crisis, takes step to boost U.S. economy: Fed extends a bond-swap program dubbed Operation Twist until year's end to keep interest rates down and trigger more borrowing and spending. It also sharply lowers its U.S. economic growth forecast. (The Los Angeles Times)

G20 warns US over deficit amid fears it is the next crisis to hit: America has been given a rare warning from G20 countries not to botch its own deficit-cutting measures amid fears that the world's biggest economy could fall off a "fiscal cliff" next year. (The Telegraph)

Fiscal cliff could be worse than many think (Fortune)

Job Growth May Fizzle In U.S. As Productivity Gains: Economy (Bloomberg)

Adult children move back home in tough economy (Reuters)

Remember When ... there was excited talk from highly-paid Wall Street "strategists" about a U.S. "decoupling"? (Financial Armageddon blog)

Dimon's Wrong About One Thing: J.P. Morgan Is Way Too Big to Fail (FoxBusiness)

Averting another financial meltdown: If we are serious about protecting our financial systems, we must learn from history -- or be damned to repeat it. (United Press International)

RIM reportedly firing up to 6,000 in $1 billion savings drive (engadget)

TrailBlazer Health to cut 750 jobs (Dallas Business Journal)

[UK] Police forces to cut 650 jobs as part of 'alliance' (The BBC)

     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.