SAR #12047

An increase in total debt is a prerequisite for economic growth.

Missing In Transit: The EU has yet to authorize any additional payment to Greece, mainly because finance ministers do not believe Athens' promise not to do a Lucy.

He Said She Said: The Financial Times reported that Iran had cut petroleum exports to six EU countries. Reuters reported that they had not. It was all lost in the saber rattling later in the day, which is also more of the he said/she said variety.

Mystery Measures: The seasonal adjustment virus strikes again, this time on the Empire State Manufacturing Survey, which is reported at the highest level in over 18 months. Expected to be at 15.0, it arrived at 19.5... unexpectedly, even though new orders declined , unfilled orders declined, inventories declined, prices paid declined, prices received declined and the number of employees declined. But here in Magic Data land, increases in shipments, average workweek and delivery times were enough to make a purse out of a sow's ear.

Shocker! The British public, in a show of stubborn pig-hotheadedness, clings to an 8.4% unemployment rate (highest in 17 years), just to make Cameron's austerity measures look bad.

Tea Leaves: The Greek deal either won't be made or won't last, for Greece cannot pay its debts. Eventually – months, not years – they will leave the euro. In the resulting chaos on the continent, considerable damage will be done to economies and to democracy.

Another Shoe? Commercial real estate was booming in 2007, almost any projecct could get a loan - apartments, office complexes, shopping strips and malls. That was then. Five years ago. Commercial loans are generally for 5 years and about $150 billion of those mortgages on half-empty office buildings and deserted shopping strips are coming due. But many of these properties are seriously underwater. Experts fear that “50%-60% of the 2007 vintage five-year-term loans maturing next year may fail to refinance, and retail loans are at the greatest risk.” [Memo to self: Check and see if any of my money is in CMBS.]

Rhetorical Question: "Is the $25 Billion Foreclosure Settlement a Stealth Bank Bailout?" No, there's nothing stealthy about it.

Thy Neighbor's Keeper: Iowa Republicans have introduced a bill that would totally outlaw abortion in the state and mandate up to life in prison for terminating a pregnancy. In Virginia GOP lawmakers have approved legislation conferring “personhood” at the moment of conception and outlawing all abortions, no exceptions.

Drowning In Debt, Maybe: Before you give up all hope, note that today the US is paying less to finance its debt than it did in the 80's and 90's. Ditto as a percentage of GDP. And we're also paying less in interest as a percentage of tax receipts than back in the 90's. Great Porn O'Graphs, too.

Good Tidings: The EU economy did not shrink as much as expected, but did contract 0.3%.

Consequences: Long-term municipal bond issuance has fallen 32% y/y as cities large and small cut infrastructure investment by $138 billion, almost all of it ($129 billion) coming from putting off new infrastructure construction. Town fathers are betting the bridge won't collapse, nor the school roof cave in or raw sewage start bobbing down the street when the sewers fail. This, too, ends badly.

Sanity Vs Santorum: “We were put on this Earth as creatures of God to have dominion over the Earth, to use it wisely and steward it wisely, but for our benefit not for the Earth’s benefit." So says Rick Santorum, apparently subscribing to the theory that God made the earth for us to use up. And when it is used up the good (Christian) people will be raptured away, and the unholy will be left behind. He forgets Leviticus 18:26-8. where God said “... if you defile the land, it will vomit you out as it vomited out the nations that were before you." Santorum's seven children should disqualify him from any public office.