Tuesday, January 29, 2013

Tuesday roundup (01-29-13)

JPMorgan bet against itself in "Whale" trade (Reuters)

Here We Go Again, Underpricing Europe Debt Risk (Bloomberg)

France 'totally bankrupt', says labour minister Michel Sapin: France's labour minister sent the country into a state of shock on Monday after he described the nation as “totally bankrupt”. (The Telegraph)

Spain's crisis strategy under fire as economy buckles again: Spain’s economy has tipped into an accelerating downturn as sales data and the money supply flash serious warnings, calling into question Madrid’s high-risk strategy of refusing an EU-IMF rescue. (The Telegraph) Spanish retail sales slump 10.7% as austerity hurts consumers: Retail figures in Spain have fallen for 30 successive months, the decline accelerating since latest austerity measures applied (The Guardian) Spain Budget Goal Relaxation Signaled Possible by Rehn (Bloomberg)

EU official's remarks [to the effect that Berlusconi did not "respect commitments"] stir Italian political storm (The Associated Press)

Italy’s Billion-Dollar Gambling Epidemic: The economic crisis in Europe is driving people to slot machines and video poker games. (Newsweek)

Mario Draghi confronts Berlin over contagion from Cyprus default: Leading European Union officials have warned Germany it would be a grave mistake to let Cyprus default or to impose losses on private creditors, fearing a repeat of errors made when Greece first flew out of control. (The Telegraph) ECB Warns of Euro-Zone Risk: Draghi Clashes with Berlin Over Aid to Cyprus: The head of the European Central Bank, Mario Draghi, warned German Finance Minister Wolfgang Schäuble last week not to dismiss Cyprus as not being 'systemically relevant' and said a failure to bail out the island nation could threaten the wider euro zone. (Spiegel Online)

Fitch: UK Faces 'Significant' Risk of Downgrade (CNBC)

Japan Cabinet Approves Record Budget (The Wall Street Journal) Japan okays $1-trillion budget for 2013: Will increase defence spending and public-words projects (The Associated Press) Why Japan should not fight deflation (The Cobden Centre)

Consumer Confidence in U.S. Falls to Lowest Level Since 2011 (Bloomberg) Consumer Confidence Plunges in January (Iacono Research) Will consumer pessimism plunge the U.S. into recession?: Consumer confidence is at its lowest level in more than a year. Now's not the time for austerity economics by Robert Reich (Salon)

US debt headed toward 200 percent of GDP even after 'fiscal cliff' deal (The Hill blogs)

Scholar At Conservative Think Tank Basically Tells Other Conservatives To Shut Up About The National Debt (The Business Insider)

How’s the deficit doing? Depends on your timeframe. (The Washington Post blogs)

The Non Zero-Sum Society by Robert Reich (The Huffington Post blog)

Why Employment in the U.S. Isn't Coming Back by Charles Hugh Smith (Of Two Minds blog)

Two U.S. senators [one Republican, one Democrat] press Justice Department on bank prosecutions (Reuters) Sens. Brown, Grassley Press Justice Department On "Too Big To Jail": Senators Question Whether “Too Big to Fail” Status of Some Wall Street Megabanks Undermines Government’s Ability to Prosecute Large Financial Institutions, Impose Appropriate Penalties (The United States Senate) [Their letter] (The United States Senate)

Triple-Digit Oil in Sight as Global Economy Heals (CNBC) Ten Reasons Why High Oil Prices are a Problem (Our Finite World)

Chesapeake CEO McClendon is leaving (Reuters) McClendon Out At Chesapeake - Is A Takeover Next? (Forbes) Chesapeake's McClendon will not receive 2012 bonus (Reuters)

Mayor Bloomberg plans to slash 2,500 teaching positions through attrition in proposed new $70.1 billion budget: No layoffs or tax increases are planned but schools could face cuts to staff and supplies (The New York Daily News)

Boston Scientific plans [up to 1,000] job cuts, 4Q tops St. view (The Associated Press)

Royal Liverpool Hospital trust 'to cut 600 jobs' (The BBC)

Mexico City's Mile-Deep Aquifer Tapping Suggests U.S. Is Polluting Water It May Someday Need (The Huffington Post)

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

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