Category: Economics & Investing

Greg L. suggested this Housing Storm piece: Is it too early to declare mortgage modifications a complete failure? Reader HPD mentioned this commentary by Mish Shedlock: Collectively, Economists Are A Perpetually Optimistic Lot Ukraine’s Naftogaz indicates default on bonds (Thanks to Danny S. for the link.) The latest installment of the now predictable FDIC Friday Evening Follies: Three more banks go down. (Hat tip to Bill R. for the link.) Items from The Economatrix: Wall Street Money Rains on Senate, Especially Schumer Governments Dip Deeper Into Alcohol-Tax Well Shoppers Cash in on E-Coupons Job Seekers Exceed Openings by Record “Great …

Reader DLF spotted this: Detroit: Too broke to bury their dead Foreclosure Rate Rises 17 Percent. (Thanks to The Other Chris for the link.) A residential real estate shadow inventory case study. Items from The Economatrix: Manufacturing, Employment Pounds Stocks Jobs and Manufacturing Suggest Slow Recovery Banks Trim Use of Emergency Fed Programs September US Auto Sales Fall Amid Clunkers Letdown Natural Gas Tumbles with Most Ever in Storage Unprecedented US Corporate Defaults Seen for 2009 [JWR’s comment: So where is the “recovery” that the CNBC cheering section keeps talking about? I think that a recovery around 2022 may be …

A Year Later, TARP Inspector General Barofsky Sees a ‘Far More Dangerous’ Financial Situation Officials: Fed will need to boost rates quickly. (Thanks to El Jefe Jeff E. for the link.) Bob G. sent the link to this Wall Street Journal piece: Plenty More Bank Losses Expected Globally; Additional $1.5 Trillion in Write-Downs Forecast by End of 2010 Account overdrawn: FDIC Fund Goes Negative. Although the US Treasury is the guarantor of last resort, it now won’t take much to trigger bank runs. (A hat tip to K.T. for the link.) Items from The Economatrix: Hard Times Good for Your …

Reader GG spotted this sobering piece: Corpse of a Thousand Houses. More foreclosures will soon be flooding the market, further depressing the housing market. This is the negative feedback loop (aka “death spiral”) that I’ve been warning about since late 2006. From El Jefe Jeff E.: US large-loan bank losses triple to $53 billion; Regulators say US lenders expected to lose $53 billion in 2009 on loans larger than $20M. Jeff’s comment: “53 Billion is a lot to lose, and they were ‘surprised’ by the losses….I wonder what else is lurking that will cause these banks more surprises.” Also from …

From veteran blog content contributor GG: A $4 billion Postal Service bailout Also from GG: Ten reasons for an imminent stock market crash Reader mark S. flagged this: Another housing slump coming? Analysts say 7 million soon-to-be foreclosed properties have yet to hit the market. Items from The Economatrix: Simmons (Mattress) Plans to File for Chapter 11 Bankruptcy Protection Housing Crash to Resume on Seven Million Foreclosures The Long Slog: Out of Work, Out of Hope Volcker Unleashes Another Volley on the Wizards in Wall Street and D.C. Rare Earths are Vital and China Owns Them All US Issues $7 …

SurvivalBlog’s Editor at Large Michael Z. Williamson sent a link to: Dollar under scrutiny at G20 summit Lost Vegas: Living Underground in Flood Tunnels. In Las Vegas, 1 in every 33 homes is in foreclosure. Where did all the people go? The answer might surprise some. There are an estimated 700 troglodytes live beneath Las Vegas.. Do they realize the mortal danger in the uncommon event of a flood? (A tip of the hat to David R. for the link.) From Jim D.: Social Security strained by early retirements. An ever bigger budget deficit! Items from The Economatrix: FDIC is …

From Paul D.: US faces Armageddon if China and Japan don’t buy debt Investors gird for post-recession inflation HH latched on to this article: U.S. Debt Crisis May Cause ‘Fall of Rome’ Scenario, Duncan Says From FG: Detroit hits 28.9% unemployment Items from The Economatrix: Fed Admits Hiding Gold Swap Arrangements New Jobless Claims Drop Unexpectedly to 530,000 Fed Scales Back Two Emergency Lending Programs Iran Replaces the US Dollar with the Euro New Deadly Dollar Carry Trade Gold to Reach $1,500 This Fall?

Can you spell monetization? Federal Reserve Accounts For 50% of Second Quarter Treasury Purchases (Thanks to GG for the link.) GG also flagged this piece in the Globe and Mail: Desperately seeking an exit strategy. (Roubini says debt monetization and inflation “the path of least resistance”) J.O. suggested this piece by Peter Schiff: Lehman Brothers Revisited Items from The Economatrix: UK: Crude Price “Shock” Next Threat to Recovery UK: Markets in Government-Fueled Bubble Says Hedge Fund Manager US Debt Crisis May Cause “Fall Of Rome” Scenario Things are Getting Better? Thank The Fed for Your Lack of Purchasing Power (The …

FG and Adam W. both flagged this: Homeowners who ‘strategically default’ on loans a growing problem. The article begins: “Who is more likely to walk away from a house and a mortgage — a person with super-prime credit scores or someone with lower scores? Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to “strategically default” — abruptly and intentionally pull the plug and abandon the mortgage — compared with lower-scoring borrowers.” El Jefe Jeff E. recommended this piece by famed …

From Karen H.: Trailing Indicators: Out of a Job, Some Decide to Take a Hike Don’t Trip in Your Search for Higher Bond Yields Blaine sent this: Ten Big Companies Veering Towards Bankruptcy DD flagged a news item: FDIC considers borrowing cash from banks; Insurance fund that protects depositors is quickly running out of money Jim Jubak asks: Will US repeat mistakes of 1937? Items from The Economatrix: Reversal: FDIC May Need Bailout from Banks Ten Big Companies that are Veering Toward Bankruptcy Rebound In Commodities Carry Stocks Higher Oil Rebounds as Dollar Weakens Landmark Decision Promises Massive Relief for …

Jim: I am not surprised that ordinary people in Dallas, Texas (or anywhere else in the US) are not aware that pre-1965 US quarters and dimes are 90% silver. After 40 years of continual dumbing down the average high school graduate today probably couldn’t tell you what the word “sterling” means either. I just checked Dex Online for coin dealers in Dallas, Texas. Dex brought up 18 coin dealers. Dex also brought up 18 antiques and collectibles dealers (who always know the value of old coins.) I don’t think there would be a problem converting pre-1965 “junk” silver coins into …

Tamara (of the View From The Porch blog), linked to this by Les Jones: Three tales of inflation From DD: Retraining roulette: New skills, no new job Trent forwarded this video link: Bullish Today, Marc Faber is “Highly Confident” the Future Will Be Very Bleak Items from The Economatrix: Weiss: From Deflation to Inflation. This is a significant change, because up until just recently, Marty Weiss had for more than two decades been warning about deflation. World Stocks Lower as Investors Eye Fed Meeting Oil Falls Below $71 Amid Weak Demand House Moves to Extend Unemployment Benefits IRS Extends Amnesty …

Unemployment in California at 12%, Highest in Nearly 70 Years GG flagged this: UK Public debt hits £800 billion – the highest on record Tom B. sent this item: Charts predict: “Risk of Full- Fledged Dollar Crisis” Items from The Economatrix: Obama: G-20 Good Time to Assess Economy Low Expectations for New Loan Help Program Regulators Seize Two Banks; 94 Failures This Year Irwin Financial’s Two Bank Units Seized Ohio Town Struggles After Package Giant DHL Leaves Meredith Whitney: “Roaring Recover”? Unlikely Fed Eyes Sweeping Bank-Pay Regulations Summers: Troubled Firms Should be Allowed to Fail Obama Adviser Blasts Big Business …

Greg sent us this: FDIC Considers Borrowing From Treasury to Shore Up Deposit Insurance Chaz liked this one: The U.S. Balance Sheet: Households See Net Worth Down by $12 Trillion Since Peak and Total Debt Floating in the Market of $33 Trillion Items from The Economatrix: Housing, Jobless Data Point to a Slow Economic Recovery Stocks Zigzag After Rally as Jobless Claims Dip FedEx First Quarter Profits Fall, Sees Improving Economy Oil Edges Higher on Hints of Economic Improvement Paul’s “Audit The Fed” Bill One Co-Sponsor Away from Being Veto Proof A Deluded G-20 Odds ‘n Sods: Federal Judge Rules …