Bailout Fail

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

The Source of Systemic Crisis: Risk and Moral Hazard

"No government agency ever projects deep, long-lasting recessions, because such a period of stagnation would upend all the rosy projections that the status quo is eternally sustainable and stable. Where does all this lead us? To this: Programs that backstop banks and social insurance systems like Medicare are not like fire or life insurance because they are effectively open-ended in terms of costs and in exposure to risk. A system which pools risk without distributing it to the participants and eliminates the causal connection between risk and consequence introduces moral hazard on a grand scale." Continue reading →

Continue ReadingThe Source of Systemic Crisis: Risk and Moral Hazard

Greece will need third bailout, German minister says

"A month before general elections in Germany, finance minister Wolfgang Schaeuble has broken the taboo of admitting that Greece will need a third bailout when the current one runs out, in 2014. 'There will have to be another programme in Greece,' Schaeuble said on Tuesday during a campaign rally in the northern-German town of Ahrensburg. As part of a third programme, he mentioned another lowering of the interest rates on the loans the eurozone has given to Greece. So far, the German government has steered clear of admitting that the current bailout, worth €130 billion, will not suffice to get Greece out of the vicious spiral of deficit and debt." Continue reading →

Continue ReadingGreece will need third bailout, German minister says

Spanish banks’ bad loan ratio rises to record in June

"The overall bad debt ratio for Spanish banks was up from 11.2 percent in May and has been steadily increasing since a drop-off at the end of last year when rescued lenders transferred toxic property assets to Spain's so-called bad bank. Spanish lenders' earnings were gutted last year by steep government-enforced provisions on properties and loans to developers, in the wake of a 2008 real estate crash. Those unable to cope were bailed-out with European funds, and most of their real estate loans were transferred to a government-backed bad bank." Continue reading →

Continue ReadingSpanish banks’ bad loan ratio rises to record in June

Monthly Home Payment Soars 40% To 2008 Levels

"The following chart from Credit Suisse fully explains why the US housing 'recovery' has just ground to a halt: in a few short weeks, US housing affordability (a topic we first covered a month ago) has collapsed as a result of the monthly payment on the median home sold soaring by nearly 40% from under $800 to just shy of $1100, a level not seen since 2008. Now if only US personal incomes would keep pace, instead of doing this." Continue reading →

Continue ReadingMonthly Home Payment Soars 40% To 2008 Levels

In homebuying, cash is king again

"If you’re looking to buy a home right now, you'd better find some cash and you'd better find it fast. Right now homebuyers across the country, already in frenzied bidding wars for homes, are increasingly losing out to the almighty all-cash buyer. These folks are mostly investors -- but not just the monolithic, institutional investment investors that have been snapping up distressed properties and foreclosures over the past few years. There are also a slew of well-heeled individuals with extra cash to invest, and they believe the real estate market is the place to put it. In fact, many of the buyers paying cash don’t plan to actually keep all that cash in the house." Continue reading →

Continue ReadingIn homebuying, cash is king again

Justice seeking to block Bernanke testimony

"The government is trying to block questioning of Federal Reserve Chairman Ben Bernanke in a lawsuit by the former head of American International Group Inc. The Justice Department told a federal appeals court Friday that high-ranking officials should not have to testify except in extraordinary circumstances. Former AIG CEO Hank Greenberg sued the government over the $182 billion bailout of the insurance giant that has since been repaid. It is rare for a Fed chairman to be questioned in a lawsuit, but Judge Thomas Wheeler ruled that Bernanke has firsthand knowledge of the bailout and should undergo questioning." Continue reading →

Continue ReadingJustice seeking to block Bernanke testimony

Greek teen’s death after argument with bus ticket inspector sparks anti-austerity protests

"The incident quickly touched a nerve in Greece, where the government is using increasingly tough methods to collect revenue under pressure from its international lenders to fix its finances. About 300 people, among them anti-bailout groups, marched to the cemetery where Kanaoutis’s funeral was held on Friday evening. After the service, dozens of youths pelted riot police with stones near the spot where he died. Protesters smashed the windows of a bus in the area and scrawled 'Murderers' in red paint on the windshield. 'Kanaoutis died because he didn’t have a ticket worth 1.20 euros ($1.59),' said the main opposition Syriza party in a statement." Continue reading →

Continue ReadingGreek teen’s death after argument with bus ticket inspector sparks anti-austerity protests

Internal Bundesbank Report Predicts New Greek Bailout In Early 2014, Contra Merkel

"An internal Bundesbank document discovered by Der Spiegel states, in opposition to the comments by Germany's electioneering Chancellor Merkel, that Europe 'will certainly agree to a new aid program for Greece' by early 2014 at the latest. As Reuters reports, Frau Merkel has repeatedly played down suggestions Greece will require more aid (or debt relief) in light of German voters major skepticism over moar of their money being flushed into the Mediterranean. The document notes that the risks of the current aid package for Greece are 'extremely high' and that recent approval of the tranche payments were politically motivated." Continue reading →

Continue ReadingInternal Bundesbank Report Predicts New Greek Bailout In Early 2014, Contra Merkel