I hesitate to disagree with a proven seer like Nouriel Roubini, but in a Bloomberg interview, he was asked the following question: If President-elect Barack Obama was to call you today and say ‘Nouriel, how are we going to get ourselves out of this mess,’ What would you tell him?   Roubini surprised me by advocating a massive and expensive government intervention .  He is advocating, in a nutshell: $700B stimulus package Recapitalization of banks Reducing the debt burden of households Ease money supply and restore liquidity I’m of the opinion that our economy is too dependent on housing and…
Read more…

"The overall picture now bears more resemblance to the early industrial economy of the mid-to-late-19th century – when industries such as automobiles, chemicals and electronics were just emerging – than to the relatively mature industrial economy of the 1930s." … I should add, again. Over two years ago Professor Florida’s name came up in connection with some crack-pot theory on why San Diego’s house prices would stay permanently inflated, and I spent a day or so swatting down some transparently bogus statistics and heat charts he’d perpetrated on some ignoramus of an editor at The Atlantic. Now he’s saturating the…
Read more…

It seems like however much "liquidity" goes in the doors of the banks, not much comes out the other side: [Thanks L!] WASHINGTON – The Federal Reserve boosted its lending to commercial banks and investment firms over the past week, indicating that a severe credit crisis was still squeezing the financial system. The Fed released a report Friday saying commercial banks averaged $93.6 billion in daily borrowing for the week ending Wednesday. That was up from an average of $91.6 billion for the week ending Nov. 19. The report also said investment firms borrowed an average of $52.4 billion from…
Read more…

  "New intrigue will arrive in the late afternoon when the Fed releases its balance sheet, an exercise it does usually every Thursday at 4:30 p.m., but will instead do so today [Friday]."   A few more mainstream people are starting to pick up on the importance of these weekly H.4.1 updates. The above was from a Friday article [1] at CNBC, which put readers on the lookout for … … Foreign central bank holdings of agencies: For the past 7 weeks, foreign central banks have sold U.S. agency securities bringing the Fed’s holdings of these securities on behalf of…
Read more…

I’ve heard a lot of scary comments from Treasury Secretary Hank Paulson, but this one ranks near the top: [Thanks L!] "Millions of Americans cannot find affordable financing for their basic credit needs. And credit card rates are climbing, making it more expensive for families to finance everyday purchases. This lack of affordable consumer credit undermines consumer spending; as a result, it weakens our economy." What in heck are Americans doing financing their "everyday purchases"? Credit should never be for the "everyday" stuff, that would mean you are borrowing money EVERY DAY.

"Given a story like this, the media will always try to depict it as the apocalypse on roller blades, but the general public didn’t buy it." – about 7/7 2005 This tough old warrior is usually good for some sense.  Another must-read.[1]

As the retail and commercial real estate domino falls, we are about to enter a whole new mortgage default crises that was never planned for; but one that a smart third grader could have seen coming. Doom friend Mike sends along these happy thoughts to kick off the Holiday Shopping Season — including a special offer on his self-published bubble book. The Next Domino to Tumble by Mike Folkerth As America’s shoppers hit the stores for the traditional Black Friday sales, the mood is somewhat more reserved than in years past. Most shoppers are searching for deep discounts and will…
Read more…

but … "Great Britain’s main city has the best infrastructure of lawyers, accountants and financial experts in the world. " … Crina Boros: There are still issues to be discussed about the economic crisis. George Iacobescu: They cut down forests to write about it. I believe that such an economic crisis had never happened before. The entire mankind lives in the fear and surprise of this economic crisis. Practically, it will last for at least three or four years. It is only in 2011 that the values will begin to look familiar with the 2008 siblings. … Oh, heck. Just…
Read more…

Doomers please adjust your tin-foil hats — we’re going deep. Thank-you, I think, to Doom friend W.C. Varones, whose comment — "… The Conservatives are not neo-cons. They are common-sense centrists, …" — got me going. Pardon me if I get touchy whenever our present government starts messing around with the franchise. The Civitas speech remains elusive, but something like its reputed contents came up in the campaign leading up to the January 23, 2006 Federal Election. The fun bit was preserved on Wayback from the Liberal Party’s home page as of December 17, 2005. The article link isn’t live,…
Read more…

It’s not a holiday up here, so with the American MSM stuffed with turkey, what better time to foment a small coup? An economic crisis is a fine time to suppress the opposition.  This just in from CBC World Report (last story on the 8AM AST package — later: Fitz-Morris’ story squeezed out of the final version of the package): Dwight Smith [10:50]: CBC News has learned that one of the programs first in line to get chopped today is the funding subsidy for political parties that’s based on the number of electoral votes they earned.  James Fitz-Morris has more…
Read more…

I’m trading in my computer for an apron today- I have some serious cooking to do.  Economic catastrophe can wait for tomorrow, today is a day to ponder all that we have been blessed with.  Even with all the problems the U.S. is facing, there is a great deal to be thankful for.

From CNBC this morning: Lower U.S. mortgage rates lifted demand for mortgage applications last week, a trade group said on Wednesday, and demand should escalate after a new broad-brushed government plan to support the housing markets. On Tuesday, the Federal Reserve and Treasury unveiled a plan to buy up to $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac and Ginnie Mae, as well as up to $100 billion of debt issued by Fannie, Freddie and the Federal Home Loan Banks. This massive infusion is expected ultimately to reduce U.S. mortgages rates further, as they have been hovering…
Read more…

The bailouts are being rolled out at such an incredible pace now, it's difficult to keep track of them all- and America's debt is growing by the second.  Here's some "highlights " [If you can call them that] from yesterday's news in today's Guardian: US treasury secretary Henry Paulson announced plans to pump $200bn into the consumer credit market after admitting that millions of Americans could not borrow any money last month. The Federal Reserve, the US central bank, also announced that it will buy up to $600bn worth of mortgage-backed assets in an attempt to free up the mortgage…
Read more…

  "Bill Gross must be smiling"   That quote comes from the comment thread for Calculated Risk’s post [1] covering a new Fed program to buy up to $600 billion of GSE Agency Debt. It’s not often that our blogging world invades the kitchen at Doom North, but CBC News World at Six Tuesday at suppertime had my ears perked up. Bernie McNamee [6:13]: In the U.S. another day, another $800 billion. The Treasury and the Federal Reserve took more extraordinary action to shore up credit markets in an attempt to drive down interest rates. Most of the money, $600…
Read more…

Yes Doomers, even in the unsinkable city of Austin, Texas, developments are beginning to stall: