The Times – Obama administration’s latest attempt to stem the housing crisis. NEW YORK – In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave. This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions. Read Article
Business Journal – Employers took 1,521 mass layoff actions in January, which resulted in 182,261 workers losing their jobs, said the Bureau of Labor Statistics. Each mass layoff involved at least 50 people from a single employer – and both layoff events and initial claims increased during January, after four consecutive decreases. Manufacturing had the most number of mass layoffs, with 62,556 people losing their jobs in 486 different actions. Read Article
Telegraph – The head of China’s central bank has given the strongest signal yet that the country will move away from pegging its currency to the dollar, but he said any changes would be gradual. At the annual session of the legislative National People’s Congress in Beijing, Zhou Xiaochuan, governor of the People’s Bank of China, said that the days of the “special yuan” policy were numbered. He described the dollar peg as a “temporary” response to the global financial crisis, but gave no timescale for any change in policy. The currency has been pegged at about 6.83 yuan per dollar since July 2008. Read Article
Washington Post – President Obama’s proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall. The 10-year outlook released by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama’s budget request would produce deficits that would add about $8.5 trillion to the national debt by 2020. Read Article
Business Insider – Is your nation under massive financial pressure due to deteriorating sovereign debt ratings?
Rising interest costs got you down? Rather than having to actually tackle your mounting debt problems, here’s an innovative solution from some Eurozone finance ministers — create your own, friendlier credit ratings. Read Article
BBC – Voters in Iceland have overwhelmingly rejected proposals to pay the UK and the Netherlands in the wake of collapse of the Icesave bank.With a third of results counted, 93% of voters said “No” in a referendum. Iceland’s prime minister says her government will remain in office and continue to seek a repayment deal. The British and Dutch governments want reimbursement for the 3.8bn euros (£3.4bn; $5.2bn) they paid out in compensation to customers in 2008. Read Article
New York Times – As Greece’s debt troubles batter the euro, Britain has done its utmost to stay above the fray. The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in months. Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets. The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape. Read Article
Politico – Senate Democrats are furious that the vast majority of grants from the clean-energy program from last year’s stimulus have been awarded to foreign companies. Democratic Sens. Chuck Schumer of New York, Bob Casey of Pennsylvania, Sherrod Brown of Ohio and Jon Tester of Montana announced Wednesday a new initiative to require the “Buy America” provision of the stimulus to all programs, not just the government ones. A study done by the Investigative Reporting Workshop found that 79 percent of the $2 billion in clean-energy grants allocated since Sept. 1, 2009, has gone to foreign wind companies. Read article
Reuters – Icelanders are set to reject the terms for repaying Anglo-Dutch debts in a referendum on Saturday, forcing new negotiations with creditors and delaying financial aid the country needs to fix its shattered economy. Read Article
Daily Telegraph – More than nine million savers have seen a “severe” drop in their income since the Bank of England cut interest rates to their lowest level exactly one year ago, it has been disclosed. It is equivalent to one in five Britons, according to the research by campaign group Save Our Savers. During the past year, savers have been hit by “pitiful” interest rates, it said. The reduction in rates means many savers no longer receive a real return on their money once inflation and tax is taken into account. Read Article
Bloomberg — George Soros is helping drive up gold prices by doubling his bet in a market even he considers a “bubble” as Goldman Sachs Group Inc., Barclays Capital and HSBC Holdings Plc predict more gains before it bursts. Soros Fund Management LLC, which manages about $25 billion, increased its investment in SPDR Gold Trust, the world’s largest exchange-traded fund for the metal, by 152 percent in the fourth quarter, a Feb. 16 Securities and Exchange Commission filing shows. While prices have fallen 9.2 percent since reaching a record on Dec. 3, 15 of 22 analysts in a Bloomberg survey say gold will reach a new high, with the median forecast predicting a 17 percent advance to as much as $1,300 an ounce this year. Read Article
Ed – With the coming inflationary crisis in the USA & UK (due to significant ‘quantitative easing’ over the last 2 years – in other words printing lots of extra money) the smart money will go to the safest bet there has always been in such times, gold.
De Spiegel - With Greek finances dragging down the euro, calls for coordinated fiscal policy within the common currency zone have become more frequent. Now, Germany and France have presented a paper outlining what such a regime might look like,” reports Spiegel Online, outlining the move towards a centrally planned economy with Brussels exercising complete control over of the financial affairs of member states in a shocking lurch towards economic fascism. Chair of the European Commission Jean-Claude Juncker, who received the new proposal from German Finance Minister Wolfgang Schäuble and French Finance Minister Christine Lagarde, highlighted the need for a “European economic government” to solve the Greece debt crisis Read Article
Ed – Exactly the turn of events that we predicted would happen on 6th February
Reuters – Greek Prime Minister George Papandreou said on Tuesday his country was fighting for survival against bankruptcy and urged civil servants and pensioners to accept sacrifices to save the debt-burdened nation. In a dramatic speech to his Socialist PASOK party on the eve of a cabinet meeting expected to approve new austerity measures, Papandreou said: “I will fight to save the fatherland from whatever the nightmare possibility of bankruptcy might entail.” Under pressure to meet European Union demands to find up to 4.8 billion euros ($6.5 billion) in additional savings before he visits Germany on Friday, he played up the risk of default, saying speculators had made borrowing costs prohibitive. Read Article
ABC – One of the OECD’s leading economists says there is a strong chance that the world’s leading economies could quickly slide back into recession. The deputy director of the OECD’s financial and enterprise affairs, Dr Adrian Blundell-Wignall, has told ABC1’s Inside Business program that the threat of a double dip recession remained because problems in the banking system have not been solved. “There are many icebergs the ship has to negotiate before we’re out of jail here. This is going to be a 10 year process, not a one year process,” he said. Dr Blundell-Wignall says many of the banks’ problems have been hidden by changes to accounting rules and their most toxic assets have been shifted to the balance sheets of the big central banks in the US and Europe. Read Article
Washington Times – With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt. Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said. Read Article
The Times – Sterling fell sharply on foreign exchanges yesterday after Mervyn King, the Governor of the Bank of England, warned again that it may be necessary to extend the Bank’s asset purchase programme. The pound lost more than a cent against the US dollar in only ten minutes after Mr King told the Treasury Select Committee that the Bank was “ready to do whatever seems appropriate”. Read Article
Wall Street Journal – Greece set off the crisis rattling the euro zone. Spain could determine whether the 16-nation currency stands or falls. The euro zone’s No. 4 economy, Spain has an unemployment rate of 19%, a deflating housing bubble, big debts and a gaping budget deficit. Its gross domestic product contracted 3.6% in 2009 and is expected to shrink again this year, leaving Spain in its deepest and longest recession in a half-century. Read Article
BBC – The role of Wall Street firms in deals that may have helped Greece mask its debt woes are under scrutiny in the US, the Federal Reserve chief has said. Ben Bernanke said the Fed and the US financial watchdog were “looking into a number of questions” related to banks’ derivatives arrangements with Greece. But he stopped short of saying an official inquiry was under way by either the Fed or the regulator. Read Article
The Australian – A SURPRISING climb in the number of idled US workers drawing government benefits has underscored job market weakness. The jobless claims data trumped a report on durable goods that showed orders in January exceeded expectations because of strong airplane demand.A third volley of data showed continued weakness in housing prices. US single-family home prices slipped a slight 0.1 per cent in the fourth quarter, according to a home-purchase index by the Federal Housing Finance Agency. Read Article
China Daily – Contrary to much speculation China may not buy the International Monetary Fund’s (IMF) remaining 191.3 tons of gold which is up for sale as it does not want to upset the market, a top industry official told China Daily yesterday. “It is not feasible for China to buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility,” said the official from the China Gold Association, on condition of anonymity. He said China would continue to shore up its gold reserves by acquiring gold mines abroad rather than purchases on the international market. Some analysts had earlier said China would purchase the IMF gold in an effort to diversify its dollar asset-dominated foreign exchange reserves. According to estimates, over 70 percent of China’s $2.4 trillion foreign exchange reserves are in dollar assets. Read Article
Ed – Preparations are well at hand for the final destruction of the US dollar and economy. Out of the ashes will arise a North American Union and a single currency, the Amero. All exactly to plan
Daily Telegraph – Evidence is mounting that Chinese sales of US Treasury bonds over recent months are intended as a warning shot to Washington over escalating political disputes rather than being part of a routine portfolio shift as thought at first. Read Article
Time – You know the government’s broken when, in the face of tough fiscal times, the President freezes government spending but gives the military a pass. That’s because spending on the military and homeland security, following 9/11 and the launch of two wars in its wake, has become sacrosanct. But it’s too bad — because there is plenty of money to be saved by lopping off the well-marbled fat that clings to the $700 billion the U.S. spends annually on national security. Read article
Bloomberg — Sales of new homes in the U.S. unexpectedly fell in January to the lowest level on record, a sign that an extension of a government tax credit may not be enough to rekindle demand. The report underscores Federal Reserve Chairman Ben S. Bernanke’s comments today that the economy is in a “nascent” recovery still in need of low interest rates. Homebuilders face competition from foreclosed properties that have driven down prices at the same time companies are reluctant to create jobs. Read Article
BBC – Hundreds of thousands of Greeks are on strike to protest at the imposition of austerity measures to save the economy. Greece’s airspace will be closed to all flights, trains and ferries will stand idle, and archaeological sites shut. It is the second general strike in two weeks and coincides with growing anger at the EU’s response to the crisis. Read Article
New York Times — Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits. Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed. Read Article
