Wednesday, May 29, 2013

Wednesday roundup (05-29-13)

No saviour in sight as world credit cycle rolls over: This may be as good as it gets for the world economy. The HSBC index for the global business cycle hit a three-year high around Easter, and has since rolled over. (The Telegraph)

Global economy remains weak, OECD says, cutting growth forecast (The Los Angeles Times)

Risk of Bank Failures Is Rising in Europe, E.C.B. Warns (The New York Times) ECB Warns Financial Weakness Could Break Best Lull in Two Years (Bloomberg)

EU shifts policy focus [away from austerity] in quest for growth (Reuters) "... France, Spain, the Netherlands, Poland, Portugal and Slovenia, will be given more time to make spending cuts ..." (The BBC)

EU urges France to revamp pensions, rein in spending (Reuters) Francois Hollande tells European Commission it can't 'dictate' to France: Francois Hollande has warned the European Commission not to “dictate” orders on how France should run its economy after the Brussels executive called for urgent eurozone reforms to avert a “social emergency”. (The Telegraph)

Italian bankruptcies hit record high (ANSA)

Greek Seven-Year Slump Seen by OECD Testing Limit of Bailout Aid (Bloomberg)

Portugal sticks to bailout targets, plays down OECD warning (Reuters)

OECD cuts UK economic growth forecasts for 2014: Thinktank says eurozone crisis to drag on growth next year, but urges chancellor to stick with spending cuts as Brussels loosens EU austerity throttle (The Guardian)

A housing bubble era loan makes a comeback [in the US], with a twist: More and more people are borrowing against their brokerage accounts to buy condos and expand their businesses. That's not reassuring. (Fortune)

Big Banks Still Write the Rules: Fmr. Inspector General of Bank Bailout [Neil Barofsky] (Yahoo!'s The Daily Ticker)

Sibanye Gold to Cut 1,110 Jobs to Return Beatrix West to Profit (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 an energy shock may be coming much closer in time than is generally imagined.

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