Wednesday, July 10, 2013

Wednesday roundup (07-10-13)

Federal Reserve’s Easing of Stimulus Could Hamper a European Recovery (The New York Times)

The wheels are coming off the whole of southern Europe: Europe’s debt-crisis strategy is near collapse. The long-awaited recovery has failed to take wing. Debt ratios across southern Europe are rising at an accelerating pace. Political consent for extreme austerity is breaking down in almost every EMU crisis state. And now the US Federal Reserve has inflicted a full-blown credit shock for good measure. (The Telegraph)

Merkel ally says new Greek debt restructuring possible in 2014 or 2015 [Bloomberg via] (Kathimerini)

Portugal’s political turmoil could lead to debt restructuring [The Financial Times via] (The Globe and Mail of Toronto)

Japan consumer mood slips in challenge to Abenomics (Reuters)

Diverging Debate at Fed on When to End Stimulus (The New York Times)

Risk council designates AIG, GE Capital for tougher oversight (Reuters)

Detroit edges toward brink of bankruptcy (MSNBC) From Bad to Worse in Detroit (The Mess That Greenspan Made blog) As Detroit teeters on bankruptcy, creditors are left holding the bag (The Washington Post) Financial Crisis Just a Symptom of Detroit’s Woes (The New York Times) Detroit Police and Fire pension fund may try to force city's $30M payment (The Detroit News) Bankrupt Cities, Municipalities List and Map (Governing)

     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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