Bailout Fail

All Eyes on Europe This Summer

"Nothing, and I mean nothing, has been solved in Europe. The crisis will soon escalate with a vengeance. When, not if, Europe’s economy roils again, likely later this summer: First, you’re going to see trillions of euros stampede for the exits. Second, that will likely send global interest rates rocketing higher. Third, it’s going to send the U.S. dollar into rally mode, right along with gold. Fourth, it’s also going to send our stock markets roaring higher. Fifth, it’s going to give you many profit opportunities to potentially make more money that you ever dreamed of. In stocks. In commodities. In the dollar. And in gold and silver." Continue reading →

Continue ReadingAll Eyes on Europe This Summer

Foreclosures are the Solution, Not the Problem

"The majority of those foreclosed on and who sold short would have become clean potential buyers in 3 to 7 years ensuring a housing recovery was not only on deck but would be 'durable'. Millions of legacy HELOCs and HELOANs preventing folks from rebuying real estate indefinitely would have been exterminated making millions more potential buyers within 2 to 5 years. Bottom line, history will not be kind to loan mods and workouts. It will show that modifications, anti-foreclosure laws, banks protecting their HELOC assets — in general, unabated can-kicking — was responsible for housing to remain in a depression for years longer than it would have." Continue reading →

Continue ReadingForeclosures are the Solution, Not the Problem

76% of Americans are living paycheck-to-paycheck

"Roughly three-quarters of Americans are living paycheck-to-paycheck, with little to no emergency savings, according to a survey released by Bankrate.com Monday. Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all. Even more disappointing; The savings rates have barely changed over the past three years." Continue reading →

Continue Reading76% of Americans are living paycheck-to-paycheck

Portugal and Greece highlight eurozone fragility

"Political turmoil in Portugal and concerns about the pace of reform in Greece have raised fears that the eurozone crisis may be about to reignite. Nervous markets pushed up borrowing costs in Portugal to a painful 8 percent Wednesday (3 July) after the governing coalition of Pedro Passos Coelho saw the resignation of its finance and foreign ministers over the social and economic costs of austerity measures. Coelho's weakened position raises doubts about whether Lisbon - until recently routinely praised for putting into place a series of harsh budget-cutting measures - will be able to meet the terms of the its €78 billion bailout, agreed in 2011." Continue reading →

Continue ReadingPortugal and Greece highlight eurozone fragility

German Chancellor Angela Merkel says no country will have to leave eurozone

"Pushing her message of the need for greater fiscal discipline, structural reform and strengthened competitiveness, she said: 'All of us have to jointly become better, and for that we need European unity.' Merkel, who faces elections on September 22 in Europe’s biggest economy, has long championed fiscal discipline that has forced painful spending cuts in countries such as Greece and Spain. More recently she has focussed on the need to help the victims of the crisis, almost six million jobless under-25-year-olds, and repeatedly said that 'Germany will only do well if Europe does well'." Continue reading →

Continue ReadingGerman Chancellor Angela Merkel says no country will have to leave eurozone

ECB Suspends Cyprus Government Bonds as Collateral

"Cyprus’s local-currency issuer rating was lowered to restricted default by Fitch Ratings yesterday after the nation completed an exchange of government bonds for longer-dated securities. The bond exchange is part of commitments under a 10 billion-euro ($13 billion) bailout that saved Cyprus’s financial sector from collapse in March. Under the rescue program, deposits above 100,000 euros are taxed after an initial plan with a levy on deposits of less than 100,000 euros was rejected by parliament. Banks using such bonds to obtain funding will have to tap their national central banks’ Emergency Liquidity Assistance programs." Continue reading →

Continue ReadingECB Suspends Cyprus Government Bonds as Collateral

Jobless Greek youth find innovative ways to make a living

"For many, mass migration or further education have been the answer. Rapti is among those who do not want to join the exodus that has already seen about 120,000 young professionals emigrate – mostly to Germany and other countries in the eurozone’s wealthier north but also as far as away as Australia, Canada and the US. But force of circumstance has pushed growing numbers to think outside the box. Exploiting their flair for enterprise and entrepreneurship – a spirit doused by decades of dependence on state largesse – young Greeks are also behind an explosion of bars and restaurants nationwide, but especially in Athens." Continue reading →

Continue ReadingJobless Greek youth find innovative ways to make a living

Jobless Greek youth find innovative ways to make a living

"For many, mass migration or further education have been the answer. Rapti is among those who do not want to join the exodus that has already seen about 120,000 young professionals emigrate – mostly to Germany and other countries in the eurozone’s wealthier north but also as far as away as Australia, Canada and the US. But force of circumstance has pushed growing numbers to think outside the box. Exploiting their flair for enterprise and entrepreneurship – a spirit doused by decades of dependence on state largesse – young Greeks are also behind an explosion of bars and restaurants nationwide, but especially in Athens." Continue reading →

Continue ReadingJobless Greek youth find innovative ways to make a living

QE Won’t End—It Will Increase

"Bernanke and the Fed are going to reconsider the end of QE, and then decide against it. And eventually, if yields continue to rise (that is, if bond prices continue to fall), Benny and the Fed will up the dosage on the QE. Whatever it takes to keep yields down and interest rates low. Remember, Bernanke and the Fed are convinced that higher interest rates will kill any sustained recovery. Nothing will shake them from that idée fixe. Therefore they will do anything to prevent high interest rates—including walking back this talk of ending QE, and upping the dosage as need be to achieve their goal of sustained, consistent zero-percent interest." Continue reading →

Continue ReadingQE Won’t End—It Will Increase

Italy could need EU rescue within six months, warns Mediobanca privately

"Mediobanca, Italy’s second biggest bank, said its 'index of solvency risk' for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs. The report warned that Italy will 'inevitably end up in an EU bail-out request' over the next six months, unless it can count on low borrowing costs and a broader recovery. Emphasising the gravity of the situation, it compared the crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures. Italy’s €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan." Continue reading →

Continue ReadingItaly could need EU rescue within six months, warns Mediobanca privately