America in depression

We Are Living in a ‘Modern-Day Depression’: David Rosenberg

By Aaron Task The Federal Reserve cut its growth forecast for the second half of 2012 and 2013 last week, raising concerns yet again about the potential for a "double-dip" recession. While some, notably the cycle watchers at ECRI, believe the U.S. economy is definitely heading for another recession (or already there), Gluskin Sheff's chief economist and strategist David Rosenberg goes a big step further.
"We are living in a modern-day depression," he declares.
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Williams' Government Shadow Statistics have told us that already for a long time.
http://www.shadowstats.com/

The trouble with Spain is 2012

Maturity of Spanish bonds is concentrated in 2012

Massive bank downgrad

Ratings agency Moody's downgraded the long-term credit ratings of 15 major U.S., Canadian, and European banks today after markets in New York closed

Read more: http://www.businessinsider.com/downgrade-watch-five-us-banks-will-be-hit-in-moodys-cuts-2012-6#ixzz1yWGQSG71
Below, a summary of the major ratings action taken.

Cut One Notch:

• HSBC downgraded to Aa3 from Aa2
• Lloyds TSB downgraded to A2 from A1
• RBS downgraded to Baa1 from A3
• Societe Generale downgraded to A2 from A1

Cut Two Notches:

• Bank of America downgraded to Baa2 from Baa1
• BNP Paribas downgraded to A2 from Aa3
• Barclays downgraded to A3 from A1
• Citigroup downgraded to Baa2 from A3
• Credit Agricole downgraded to to A2 from Aa3
• Goldman Sachs downgraded to A3 from A1
• JP Morgan Chase downgraded to A2 from Aa3
• Morgan Stanley downgraded to Baa1 from A2
• RBC downgraded to Aa3 from Aa1
• UBS downgraded to A2 from Aa3

Cut Three Notches:

• Credit Suisse downgraded to (P)A2 from (P)Aa2

In February, Moody's also placed Nomura and Macquarie credit ratings on watch for downgrade. However, the agency took action before today, lowering Nomura and Macquarie by one level each, to Baa3 and A2, respectively.

Read more: http://www.businessinsider.com/downgrade-watch-five-us-banks-will-be-hit-in-moodys-cuts-2012-6#ixzz1yWFR4zg0

Fed continues "Twist"

WSJ
Comment: 
Let's twist again like we did last summer,
lets's twist again until the end.
It's hyperinfaltion that's what I meant.

More easing by the Fed

The Fed acts, just

Operation Twist

Jun 20th 2012, 17:06 by G.I. | WASHINGTON

THE Federal Reserve has once again eased monetary policy to boost the flagging recovery, announcing a modest extension of "Operation Twist", that is the purchase of long-term bonds financed by the sale of short-term paper. The stockmarket initially sold off, but has bounced back as of this writing.

In its statement, the Fed said:

The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.

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Comment: Fed officials won't rest until they'll have finally fabricated hyperinflation.

Policy changes at the Fed

The Federal Reserve's inflation target

Shiny, new, unopened & unused

When Federal Reserve officials meet this week, they will despondently confront an economy yet again falling short. Employment growth has flagged. GDP probably grew less than 2% (annualized) in the first half of this year; clouds from Europe, Asia and America's own "fiscal cliff" darken the second half. The Federal Open Market Committee's full year forecast of 2.4% to 2.9% looks out of reach.

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Comment: To say that Fed officials are confused would be too generous. 

Greek election results mean no Grexit

Euro Climbs as Greek Pro-Bailout Parties Could Form Coalition

By Keith Jenkins and Emma Charlton - Jun 17, 2012 6:18 PM GMT-0300

The euro strengthened as official projections showed Greece’s two largest pro-bailout parties winning enough seats to forge a parliamentary majority, easing concern the country would be forced from the currency bloc.
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Comment: The assault against the euro has failed. 

European debt crisis

Global Business

Map of data

The situation in Europe might be worse were it not for a system that was created to clear transactions between central banks. That system is now providing loans to central banks of countries whose banks are suffering withdrawals. The money comes from the central banks of nations with healthier banks, like Germany, the Netherlands and Luxembourg.

Germany already has substantial exposure to the weaker economies, which is one reason it has been reluctant to agree to issue pan-European bonds.

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Announcing the end of the euro

Euro zone on the brink

By Roger C. Altman, The Washington Post

Roger C. Altman is chairman of Evercore Partners and former deputy Treasury secretary under President Clinton from 1993 to 1994.

Europe is on the verge of financial chaos. Global capital markets, now the most powerful force on earth, are rapidly losing confidence in the financial coherence of the 17-nation euro zone. A market implosion there, like that triggered by Lehman Brothers collapse in 2008, may not be far off. Not only would that dismantle the euro zone, but it could also usher in another global economic slump: in effect, a second leg of the Great Recession, analogous to that of 1937.

Read more about this debate: 
Roger C. Altman, Euro zone on the brink
Robert J. Samuelson: Europe’s grim choices
Charles A. Kupchan: The euro can be saved. But can the E.U.?
The Post’s View: Europe’s financial fog
The Post’s View: Keeping Greece in the euro zone
David M. Smick: No easy answers to vicious cycle
Barry Ritholtz: How the FDIC can curb banks’ reckless speculation

Comment:  Clip it so that in the future you may wonder what nonsense major US media and so-called experts have tolds you.

Spain gets a $ 125 bn bailout for its banks

Spain Seeks EU’s Fourth Bailout With $125 Billion Request

By Charles Penty, Emma Ross-Thomas and Ben Sills - 2012-06-10T12:32:43Z

Spain became the fourth euro member to seek a bailout since the start of the region’s debt crisis more than two years ago with a request for as much as 100 billion euros ($125 billion) to rescue its banks.
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Comment: I don't know if this finally calms down the markets which have been all to eager to go against the euro whatever it costs. Yet as I said two years ago when the Greek drama began, governments have bigger pockets than we have. And as to the so-called "euro crisis" they are determined to use them.

QE III in the making

GAME ON: The Best Fed Source In The World Says QEIII Is Now On The Table

Joe Weisenthal|Jun. 5, 2012, 7:06 PM|11,560|41

• The WSJ's Jon Hilsenrath -- whom Cardiff Garcia has dubbed "Fedwire" -- reports that more Fed action is now officially on the table due to the slew of weak incoming data.

There's no gaurantee that it will happen, or that if it did happen it would be at the June 20 meeting, but the presses are being warmed up.

Read more: http://www.businessinsider.com/game-on-the-best-fed-source-in-the-world-says-qeiii-is-now-on-the-table-2012-6#ixzz1x8huaFKo

Comment: Of course, QE III will come. In as much as QE I and QE II did not work, so the logic says, a QE III will be needed. Modern central banking: arrogance without substance, power without restraint.

Spain moves ahead

Spain Market-Access Concern Eases, Bond Sale Beats Target

By Angeline Benoit - Jun 7, 2012 10:56 AM GMT-0300

(Corrects market bond yield in second paragraph.)
Two days after a senior government official said Spain’s access to debt markets was closed, the Treasury beat its 2 billion-euro target ($2.5 billion) at a bond sale, easing concern about financing the region’s third-biggest budget deficit.
Spain sold its benchmark 10-year bond to yield 6.044 percent, the most since Nov. 17 when the yield in the secondary market reached a euro-era record 6.78 percent. Demand for the security was 3.29 times the amount sold, higher than at the previous auction in April. In the secondary market Spain’s 10-year bond yield fell to 6.109 percent after the sale at 10:05 a.m. in London.
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Comment: One more case of an discrepancy between the propaganda of the mass media's opinion makers and market reality.

The case of Estonia

Estonia Uses the Euro, and the Economy is Booming

Published: Tuesday, 5 Jun 2012 | 12:17 PM ET

By: Paul Ames
Globalpost

It’s the euro zone Jim, but not as we know it.

Sixteen months after it joined the struggling currency bloc, Estonia is booming. The economy grew 7.6 percent last year, five times the euro-zone average.

Estonia is the only euro-zone country with a budget surplus. National debt is just 6 percent of GDP, compared to 81 percent in virtuous Germany, or 165 percent in Greece.

Shoppers throng Nordic design shops and cool new restaurants in Tallinn, the medieval capital, and cutting-edge tech firms complain they can’t find people to fill their job vacancies. 

More:

http://www.cnbc.com/id/47691090

Comment: According to Popper it takes only one case to falsify a theory. Here you have one. 

Who is selling euros?

Data seem to suggest that along with hedgefunds its is mainly central banks that sell euros, if this is not a contrarian signal I don't know of any other.

Euro bailout cost

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Euro funding gap

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Ireland votes aye

Ireland's referendum on the fiscal compact

Irish ayes

IRELAND’S voters endorsed the European fiscal compact on May 31^st, but they did so without great enthusiasm in a referendum in which half the electorate failed to vote. Still, this result in favour of ratifying a treaty that sets out rules to control the debt and deficit of euro-zone members (60.29% for, 39.71% against) was greeted with relief by Enda Kenny, the prime minister, who had staked both his government’s and his own reputation on a win for the “Yes” camp. The outcome closely mirrored the opinion polls, which had indicated solid public support for the treaty throughout a dull campaign.
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Comment: You still believe that you're kept well informed by the mainstream media and the popular pundits? Surely not. Did anybody notice that Ireland voted "yes" - how about if the opposite result had happened. The discrepacny between what published and what's happening has always been large. Now it is even larger.

Krugman runs wild

Krugman cries wolf
“We are living through a time where we face an enormous economic challenge,” Krugman told Russia Today (RT). “We are facing — obviously — the worst challenge in 80 years and we are totally mucking up the response.”
Krugman blames policymakers for the impending crash, fearing a replay of Nazi Germany as a result of a radical drop in standards of living on both sides of the Atlantic due to Germany’s (NYSEARCA:EWG) refusal to inflate the euro (NYSEARCA:FXE).

“We’re doing a terrible job. We’re failing to deal with it,” Krugman added. “All of the people, the respectable people, the serious people, have made a total hash of this. That is a recipe for radicalism. It is a recipe for breakdown.”
“There are a lot of ugly forces being unleashed in our societies on both sides of the Atlantic because our economic policy has been such a dismal failure, because we are refusing to listen to the lessons of history,”
“We may look back at this thirty years from now and say, ‘That is when it all fell apart.’ And by all, I don’t just mean the economy.”
etc., etc.
More of the same
Comment: Nothing of that will happen. Comparisons of the current situation with the 1920s and 1930s are more than absurd, they are insane. Krugman runs wild because his nightmarish visions still didn't come true.