Thursday, July 25, 2013

Thursday roundup (07-25-13)

IMF fears Fed tapering could 'reignite' euro debt crisis: The tapering of stimulus by the US Federal Reserve risks reigniting the eurozone debt crisis and pushing the weakest countries into a "debt-deflation spiral", the International Monetary Fund has warned. (The Telegraph)

ECB should cut rates, launch new cheap loans to banks to help growth, IMF says (Reuters)

Greece clears last hurdle to unlock EU-IMF bailout funds (Reuters)

British Recovery Picks Up, But Still Remains Fragile (The New York Times)

Japan Economist Makes Rare Call to Tackle Debt (The Wall Street Journal blogs)

Scientists warn on Arctic ‘economic time bomb’ [The Financial Times via] (CNBC)

Oil Sands: 4,000 Environmental Infractions, 40 Punishments [in Canada] (The Huffington Post)

Is Long-Term Deflation US Economy’s Inevitable Danger? (The Desert Sun of Palm Springs, California blogs)

Mortgage delinquencies take a sharp turn up (CNBC)

Banks Run The Economy?: Are Banks Becoming Oil Companies, Commodity Distribution Companies, Airport Operators etc? (Cliff Küle's Notes blog)

Whitney Says Wall Street's Biggest Layoffs Ahead: Meredith Whitney, chief executive officer of Meredith Whitney Advisory Group, talks about Detroit's decision to file for bankruptcy, the municipal bond market and the outlook for financials. Whitney speaks with Tom Keene, Sara Eisen and Scarlet Fu on Bloomberg Television's "Surveillance." Ralph Schlosstein, chief executive officer of Evercore Partners Inc., also speaks. (Bloomberg)



Detroit has lots of company in long-term-debt quagmire: Chicago recently saw its credit rating downgraded because of a $19 billion unfunded pension liability that Moody’s ratings service puts closer to $36 billion, and Los Angeles — by some estimates — could be facing a liability of more than $30 billion. (The Detroit Free Press)

Labor’s Only Hope Is Detroit Bailout or New Taxes (Bloomberg) GOP lawmakers push measures to prevent federal bailout for Detroit bankruptcy (The Detroit Free Press)

History offers few happy endings for Detroit to follow (Reuters)

Chicago schools budget seen sinking deeper in the red despite cuts (Reuters)

     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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