There were empires before ours…
Walking Back the Cat: US stocks fell, US government debt rose. Thus the investor does not think stocks are worth the risk and is running to US bonds for safety. From this you conclude the US economy looks pretty bad while US government debt looks remarkably reliable. Did the investment community seize on the S&Pretext and use it to dump equities because they see things going to hell in a handbasket and wanting to put their funds someplace safe – US Treasury Bonds?
Suspicion: Will the rest of the story turn out to be that S&P's hatchet job on America's credit rating was a favor for someone? Qui bono is still a valid question.
Twofer: AIG, which took down the financial system back in 2008, is trying hard to do it again. Their lawsuit against BofA, seeking to reclaim $10 billion from the $28 billion in MBS that BoA palmed off on them, on top of the NY & Delaware AGs stepping in to halt the previously announced $8.5 billion settlement for some other MBS hanky-panky, has likely put BoA either into bankruptcy court or federal receivership. Can you say TARP 2?
Grid Search: Sometimes it is more important to figure out what's missing, what didn't happen. The things that are apparent at a glance are usually less interesting as the things that at first seem absent.
The Long Way Home: The European Financial Stability Facility (EFSF) is pocket change, barely enough to cover Greece and Portugal. The Germans think the Italians should take care of their own little problem.
Asked & Answered: Is the whole world going bankrupt? Going?
Liquidity, Trapped: US banks are so stuffed with cash - $981 billion and counting – that they really want not want any more; they cannot find places to invest it. If this reminds you of the Lehman Weekend, it should.
Performance Canceled: At the end of June 4.1 houses were either 90+ days delinquent or in foreclosure. The average foreclosure was 587 days delinquent. A total of 6.45 million loans were either delinquent or in foreclosure.
A View From Over There:The current recession is being experienced in Great Britain not as a catastrophe, but as a slow erosion of hopes and aspirations. But misery loves company and the US is racing to join them. There may not be riots here, there will certainly be consequences.
Going Through The Motions: The ECB bought €700 million in Italian and Spanish debt. Good for them, but that is €250 million short of what they need to do. Every day. Every day for the next 5 years.
Villains of the Piece: The Tea Party is proud to have hamstrung the government, preventing it from taking any creative action to stimulate growth or create jobs. As house prices tumble, consumer confidence deteriorates even further, the stock market collapses and the banks shuffle into stasis, remember to send a Thank You note.
Not Even A T-Shirt: In 2001 the US debt was $5.95 trillion. Now it is $14.3 trillion on its way to $16.7 trillion. The Federal Reserve's balance sheet has gone from 10.3 billion to $1. trillion in three years. What did we get for all that money? Stability? Economic growth? Jobs? Oh, right. Two dead bad guys.
Auction Block: Twenty percent of the House of Representatives are getting vacations in Israel this summer, courtesy of AIPAC – the leading pro-Israel lobby.
Don't Bet On It:Many expect the Fed to bail out the market with an announcement of QE3. It no longer has the credibility to pull it off, having lost its superhero status. We may still believe in God and Motherhood, but the Fed... not so much. The best Bernanke can hope for now is to save what's left of his own reputation.
Porn O'Graph: A Gaussian distribution of employment over time.