Sunday, June 16, 2013

Sunday roundup (06-16-13)

Euro Zone Faces Make-or-Break Summer (CNBC)

A European Solution to the Eurozone's Problem [April 9 speech, in which investor George Soros speaks of "the deepening depression that is enveloping the Eurozone," which he suggests might be solved by Germany leaving the Eurozone, allowing debtor nationst to issue Eurobonds: "By contrast, if Italy left, its euro-denominated debt burden would become unsustainable and it would have to be restructured. This would plunge the rest of Europe and the rest of the world into an uncontrollable financial meltdown. The collapse of the Euro would likely lead to the disorderly disintegration of the European Union and Europe would be left worse off than it had been when it embarked on the noble experiment of creating a European Union. So, if anyone must leave it should be Germany, not Italy. ... There is a real danger that the euro will destroy the European Union. A disorderly disintegration would leave Europe worse off than it was when the bold experiment of creating a European Union was begun. That would be a tragedy of historic proportions."] (Project Syndicate) George Soros Lecture at the Center for Financial Studies, Frankfurt Germany. April 9, 2012 (Youtube)

Fitch says China credit bubble unprecedented in modern world history: China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned. (The Telegraph) Fitch warns on risks from shadow banking in China [June 10] (Reuters)

Homing in on housing, Fed’s latest moves: Effect of higher mortgage rates, bank’s bond buying in spotlight (Marketwatch)

     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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