Bailout Fail

Young Greeks Helping Each Other to Combat Crisis

"The political class may have set the rules, but almost everyone adhered to them. Now the game is over, and there is no money left for fakelaki and rousfeti, corruption and nepotism, two basic principles of Greek political life until now. Suddenly there is room for those who want to set up new rules, and who want change and more cooperation. Some 3,000 initiatives were established throughout Greece in the last three years. They all have the same goal: to do things better than before. There are food cooperatives, community gardens, social pharmacies and neighborhood assistance programs for the poor. In Crete alone, there are now five alternative currencies." Continue reading →

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Employment: Trending Down

"Charts and data provided by longtime correspondent B.C. reflect what many know from first-hand experience: employment is trending down. The growth rate of employment is declining over time, as positive growth weakens and recessionary declines deepen. Though the 3-year average annual change has improved to near-zero, the 5-year (i.e. longer-term trendline) is still solidly negative. There are two other trends in employment: 1. Decline of full-time jobs and the rise of part-time jobs 2. Stagnation of high-wage employment and increases in lower-wage job sectors." Continue reading →

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David Stockman on his Book and the Bailouts

"The panic and bailouts that followed were really about protecting the bonuses and incomes of very wealthy and politically well-connected managers at banks and other heavily leveraged businesses that were eventually deemed too big to fail. What followed was a massive transfer of wealth from the taxpayers and middle-class savers, in the form of bailouts and zero interest rates on bank deposits imposed by the Fed, to the so-called One Percent. As I show in my book, none of this was necessary to save the larger economy, since the losses that would have taken place as a result of the collapse would have been largely limited to Wall Street." Continue reading →

Continue ReadingDavid Stockman on his Book and the Bailouts

Bill Bonner: Where did the US$ 700 billion go?

"You remember TARP? It was the feds' $700 billion program to rescue the US economy from a correction. Neil Barofsky was in charge of it. So we decided to go down and ask him how it turned out: '[..] What did they do with the money? They were supposed to increase lending so as to help bring about a recovery. None of them did that. Instead, they used it to repay each other's loans. In other words, they used it to reduce the amount of credit available...not increase it. And they bought US agency bonds...just as you'd expect. And they paid out their bonuses. In other words, they looked out for themselves...just as you'd expect.'" Continue reading →

Continue ReadingBill Bonner: Where did the US$ 700 billion go?

U.S. seeking $6 billion from JPMorgan to settle mortgage claims

"U.S. government housing finance authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over bonds backed by subprime mortgages, according to a person familiar with the matter. The FHFA litigation is among a raft of legal issues JPMorgan is trying to work through in addition to investigations over its $6.2 billion 'London Whale' derivatives loss of last year. The FHFA, which oversees Fannie Mae and Freddie Mac, sued JPMorgan over some $33 billion of securities two years ago and also sued at least 16 other financial institutions. Fannie Mae and Freddie Mac were seized by the government in 2008 and received $187.5 billion to stay afloat." Continue reading →

Continue ReadingU.S. seeking $6 billion from JPMorgan to settle mortgage claims

Former Cyprus President Named In Loan Write-Offs Leading To Banking Insolvency

"We asked 'how much longer will the rule of law remain in Cyprus once the 99% are generously handed the list of the 1% who were 'informed' enough to pull their money from the flaming sovereign equivalent of Bernie Madoff?' We may get the answer much sooner than expected, as the first iteration of this list, one naming the beneficiaries of millions of loans written off by the now insolvent Cyprus banks and therefore indirectly responsible for the 'impairment' of the banks' depositors, was released yesterday by Greece's daily Ethnos newspaper. But what virtually assures substantial political fallout is that among the people listed is Cyprus' former president, George Vassiliou." Continue reading →

Continue ReadingFormer Cyprus President Named In Loan Write-Offs Leading To Banking Insolvency

Cyprus Bank’s Bailout Hands Ownership to Russian Plutocrats

"When European leaders engineered a harsh bailout deal for this tiny Mediterranean nation in March, they cheered the end of an economic model fueled by a flood of cash from Russia. The exercise was meant to banish what Germany and other Northern European nations viewed as dirty Russian money from Cyprus’s bloated banks. Instead, it has pulled Russia even deeper into Europe’s financial system by giving its plutocrats majority ownership, at least on paper, of the Bank of Cyprus, the country’s oldest, biggest and most important financial institution. 'Whoever controls the Bank of Cyprus controls the island,' said Andreas Marangos, a Limassol lawyer." Continue reading →

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What Is Going To Happen If Interest Rates Continue To Rise Rapidly?

"If interest rates continue to rise rapidly, it will be more expensive for the U.S. government to borrow money, it will be more expensive for state and local governments to borrow money, the housing market may crash again, consumer debt will become more expensive, junk bond investors will be in for a world of hurt, the stock market will experience a tremendous amount of pain and there is a good chance that we could see the 441 trillion dollar interest rate derivatives bubble implode. And that is just for starters. So yes, we all need to be carefully watching the yield on 10 year U.S. Treasuries." Continue reading →

Continue ReadingWhat Is Going To Happen If Interest Rates Continue To Rise Rapidly?

What Is Going To Happen If Interest Rates Continue To Rise Rapidly?

"If interest rates continue to rise rapidly, it will be more expensive for the U.S. government to borrow money, it will be more expensive for state and local governments to borrow money, the housing market may crash again, consumer debt will become more expensive, junk bond investors will be in for a world of hurt, the stock market will experience a tremendous amount of pain and there is a good chance that we could see the 441 trillion dollar interest rate derivatives bubble implode. And that is just for starters. So yes, we all need to be carefully watching the yield on 10 year U.S. Treasuries." Continue reading →

Continue ReadingWhat Is Going To Happen If Interest Rates Continue To Rise Rapidly?

Bernanke’s Bust: Median Household Income Is Lower Today Than in 2009

"Median household income is a good test of a household’s economic well-being. Half of households earn more. Half earn less. With mean average income, the incomes of the rich skew the figure upward. Not with median income. After four years of the Federal Reserve’s tripling of the monetary base, Americans are worse off today. What’s that? Worse than in the supposed bottom of the recession? Yes. This report tells the story. Household income is down 4.4%." Continue reading →

Continue ReadingBernanke’s Bust: Median Household Income Is Lower Today Than in 2009