The bill is coming due, and you're not going to like it. Ilargi
Enigma: Of late some metrics point toward a recovery, some suggest a downward spiral; maybe that's what years of stagflation will be like. Meanwhile: Retail sales were up 3.7% in February, a third consecutive monthly increase, in the face of declining consumer confidence. Factory orders also increased. But first-time claims for jobless benefits remain elevated, despite a drop last week of 29,000. Nearly 5.9 million people were receiving extended benefits in the week that ended Feb. 13, up about 200,000 from the previous week. And pending home sales fell 7.6% in January.
Greed: Credit card companies now claim they have the right to classify your account “in default” (and thus the balance in full due immediately” “if we obtain information that causes us to believe that you may be unwilling or unable to pay your debts to us or to others on time.” Even my first wife was more tolerant than that.
Quintessence: Illustrating today's complete divorce Wall Street from anything approaching investing is the emphasis on speed, on being able to intercept and manipulate the market in “milliseconds” rather than draggy old “microseconds”. It's a replay of “The Sting” without the music.
Bears in the Woods: Over 10% of the money American banks have in outstanding loans stands a better than even chance of not being repaid. As many as 1,000 could fail, and the FDIC along with them. Great graphs, too.
Political Speech: Valero Energy and Tesoro Corp have pledged to speak out against making their California refineries stop warming the planet. The first utterance amounts to $2 million to gather signatures in support of a ballot initiative to rid the state of a bothersome anti-emissions law.
Quoted: “Today’s bailouts are tomorrow’s spending cuts. The enormity of the government cutbacks that lie ahead is yet to be appreciated.” And he wasn't talking about Greece.
Call of the Wild: A non-partisan group including Nobel economist Joseph Steiglitz and Tarp watchdog Elizabeth Warren warns that the country is in a "doomsday cycle" as banks take immense risks with TARP funds and money borrowed cheaply from the Fed, expecting the taxpayer to bail them out when things go wrong. We don't need no stinkin' reform - what could go wrong?
Walk/Run: California is having another baby step demonstration today as students and teacher from K -12 and college called for a strike to protest budget cuts. In Portugal, 90% of government helath-care workers took to the streets to protest cuts in public sector wages.
The Mirror: While everyone is beating up on Greece and Portugal &tc, the US structural deficit-to-GDP ratio is actually higher, at 7.8% than Greece's 6.1%. But the US only takes about 30% off the top, while Greece takes 40%. Which means the bankers see a better chance for higher taxes in the US to repay the debts – but only if the taxes are on the poor and middle class.
Re-Runs: Children born in Fallujah are being born with a "massive, unprecedented number" of birth defects. Suspicions are being laid at the feet of the American military, which sprayed depleted uranium munitions wildly about Fallujah during the siege. Similar birth defects have been reported repeatedly, both from other areas of Iraq and previous US crusades. The US military says they are simply recycling – which is good for the environment.
Fun With Numbers: The Royal Bank of Scotland – RBS of British bail out fame – hid £4.7bn of losses off the books, claimed a £5.7bn profit, then paid out £1.3bn in bonuses on an actual profit of just £1bn.