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2012 could be the year Germany lets the Euro die - (www.telegraph.co.uk) There will be no Chinese credit explosion this time, no real help from post-bubble India or over-stretched Brazil. It will be a global downturn on all fronts, aborting what remains of recovery even before industrial output in the OECD bloc has regained its pre-Lehman peak. The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc. We will hear more about Italy's Red Brigades, Greece's Sect of Revolutionaries, and America's militia groups, and how democracies respond. Proto-fascism in Hungary is our warning. China's surgical soft-landing will slip control, like Fed tightening in 1929 and 2007, or Japan's squeeze in 1990. Once construction has run amok, bears will have their way.
VIDEO: Zillow CEO on housing market: 'Not good' - (money.cnn.com) Good video, but not good if you are bullish on housing….
Bring back boring banks - (www.nytimes.com) CENTRAL bankers barely averted a financial panic before Christmas by replacing hundreds of billions of dollars of deposits fleeing European banks. But confidence in the global banking system remains dangerously low. To prevent the next panic, it’s not enough to rely on emergency actions by the Federal Reserve and the European Central Bank. Instead, governments should fully guarantee all bank deposits — and impose much tighter restrictions on risk-taking by banks. Banks should be forced to shed activities like derivatives trading that regulators cannot easily examine. The Dodd-Frank financial reform act of 2010 did nothing to secure large deposits and very little to curtail risk-taking by banks. It was a missed opportunity to fix a regulatory effort that goes back nearly 150 years.
World�s Biggest Economies Face $7.6T Debt - (www.bloomberg.com) Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.
Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show. Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show. The International Monetary Fund cut its forecast for growth this year to 4 percent from a prior estimate of 4.5 percent as Europe’s debt crisis spreads, the U.S. struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.
A Run On The Global Banking System—How Close Are We? - (gonzalolira.blogspot.com) Nine weeks after its bankruptcy, the general public still hasn’t quite realized the implications of the MF Global scandal. My own sense is, this is the first tremor of the earthquake that’s coming to the global financial system. And how the central banks and financial regulators treated the “Systemically Important Financial Institutions” that had exposure to MF Global—to the detriment of the ordinary, blameless customer who got royally ripped off in its bankruptcy—is both the template of how the next financial crisis will be handled, and an accelerator that will make the next crisis happen that much sooner.
Did Psychopaths Take Over Wall Street? - (www.bloomberg.com)
Signs Point to Tepid Consumer Spending During 2012 - (www.nytimes.com)
A world in denial about what it knows - (www.nytimes.com)
The Year Governments Lost Their Credibility - (www.nytimes.com)
Charting how house prices are moved by rates - (www.marketwatch.com)
How do decide a reasonable home price for income level - (www.patrick.net)
Banks can't keep up with foreclosures anymore - (www.rt.com)
German Car Makers Pay Workers Twice As Much As US, Still Profitable - (www.remappingdebate.org)
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