Wednesday, June 26, 2013

Wednesday roundup (06-26-13)

Italy Faces Restructured Derivatives Hit [The Financial Times via] (CNBC) About That €8 Billion Italian Derivatives Hit… (The Wall Street Journal blogs) Italy denies risk to public finances from debt derivative deals (Reuters)

BoE warns banks of risk of sharp global interest rate rise (Reuters) Millions face debt crisis if interest rates start to rise: Bank launches investigation into impact small increase may have (The Daily Mail)

More spending cuts for Britain, but austerity pill is sugared (Reuters)

The Canadian Banking System: Jason Jones teaches regulation-loving Canadian bankers the advantages of harmless free-market fun. [Juxtaposition of genuine interview with Peter Aceto, CEO & President of ING Direct Canada and satirical interview with "hedge fund manager John Tobacco".] (Comedy Central's The Daily Show with Jon Stewart)

Risk of 1937 relapse as Fed gives up fight against deflation: The US Federal Reserve has jumped the gun. It has mishandled its exit strategy from quantitative easing, triggering a global bond rout that it did not anticipate, and is struggling to control. (The Telegraph) It's About The Calendar (Tim Duy's Fed Watch blog)

The Ugly GDP Report Is A Sign That Americans Are Getting Slammed By Fiscal Austerity (The Business Insider) Slower US growth might lead Fed to delay tapering (The Associated Press)

Run-up in mortgage rates raises questions about housing recovery: The 30-year fixed rate home loan has jumped a full percentage point above recent record lows, raising borrowing costs and posing a threat to consumer confidence. (The Los Angeles Times) [versus] Housing Market Shrugging Off Rise in Mortgage Rates [The New York Times via] (CNBC)

Direct Line May Cut 2,000 Jobs in Effort to Cut Expenses (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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