The National Bureau of Economic Research has published a new paper analyzing 138 years of economic history in 14 advanced economies, which proves that high levels of private debt cause severe recessions.
Money As Debt
"Some date the crisis to August 9 2007, the day it became clear that Europe’s banks were up to their necks in US housing debt. The ECB flooded markets with €95bn of liquidity. It seemed a lot of money then. The term “trillion” was still banned by the Telegraph style book in those innocent days. We have since learned to swing with the modern dance music from central banks." [Five years on, the Great Recession is turning into a life sentence
Welcome to the world of Britain's working poor.
The Rowleys belong to a section of society not much mentioned in ministerial and media dispatches. They are neither the very wealthy affected by the 50p tax nor the "squeezed middle" expressing anxiety about child benefit and this week's budget; nor are the Rowleys representative of the long-term unemployed or one of the 120,000 "troubled families" in which the government is investing £448m over the next three years. [more inside]
China's economy poised to join the rest of us in the toilet.
I certainly hope one of you smart people can prove this article wrong.
"Imagine if you had never been homeless before and you'd just lost your job and you lost your home. What would you do? Would you immediately go begging or knocking on a door? No, you would downsize, move into cheaper accommodations, if that did not work you'd move in with friends or relatives and then you'd move into a cheap motel and then ... where would you want to go before winding up at a shelter door? You would much prefer to live at a park with your family and your dog." ... "In just about every major city, there are tent cities. Unfortunately, we're in a growth industry and the numbers are going to continue."
-- Michael Stoop, a community organizer for the National Coalition for the Homeless
, explaining that the surge
in American tent city shantytowns, first highlighted on MeFi in 2008/09: 1
, has not slowed. The Great Recession: Life in Tent City, Lakewood NJ
/ Photo Gallery
. [more inside]
9 Ideas From Around the World to Fix the American Economy. "People in the U.S. confuse big government and small government as the only two models. What we need is smart government".
Selected economic and social policies that actually work - from Germany, Brazil, Israel, Canada, Australia, China, Thailand and Singapore.
BBC News asks independent trader Alessio Rastani "what would keep investors happy, make them feel more confident?
" and gets a surprisingly honest answer: "Personally, it doesn't matter. See, I'm a trader. I don't really care about that kind of stuff. If I see an opportunity to make money, I go with that. So, for most traders, we don't really care that much about how they're going to fix the economy, about how they're going to fix the whole situation; our job is to make money from it. And, personally, I've been dreaming of this moment for three years. I have a confession which is I go to bed every night and dream of another recession, I dream of another moment like this." [SLYT]
Coming Apart: After 9/11 transfixed America, the country’s problems were left to rot.
"No national consensus formed around 9/11. Indeed, the decade since has destroyed the very possibility of a common narrative."
Markets declined sharply this week in preparation for a U.S. credit downgrade by Standard & Poor's
ABC news felt confident to break the news of the U.S. government preparing for an expected S&P down grade sometime after market close this weekend. [more inside]
After more than 160 years of treating patients, historic St. Vincent's Hospital
in New York City's Greenwich Village filed for bankruptcy protection on Wednesday
and will close its doors to new patients. The last remaining Catholic Hospital
in NYC, St. Vincent's was originally founded in 1849 to serve the poor
. The effect is already being felt
at other hospitals in the area.
But despite the filing, there was still time for one last cry
: Abigail Jancu
was the the last baby
ever born in St. Vincent's maternity ward
A year and a half ago, Henry Chung was an assistant vice president at Merrill Lynch. Now he's an NYPD patrol officer.
It sounds like a George Lopez joke. “Times are so bad that I saw an Anglo day laborer standing outside Home Depot the other day.” Except it’s true.
Last week in Detroit, where unemployment is close to 30%, one third of all households are in poverty, and whole neighborhoods have been abandoned
, chaos ensued
as an estimated 15,000 to 30,000 people lined up in the hopes of getting federal aid
. 65,000 applications were taken for a new program that will fund only 3,500 people (via
A government stimulus can overwhelm the impact of a credit crunch, and the innate dynamic of a productive economy can re-assert itself after such a crisis, leading to renewed growth. But this not merely a crisis of liquidity. It is one of excessive private debt, on a scale that is also unprecedented.
Economist Steve Keen
on the global debt bubble
. [more inside]
A gigantic fleet of semi-abandoned cargo and container ships
has been photographed east of Singapore. Meanwhile, the ship-breaking yards
are booming, and the shipping industry is looking for ways to weather the storm
. As the recession slashes demand, it seems the shipping industry may be heading for dry dock...
The economy is abjectly terrible, right? It's so bad that nowadays, a picture is only worth 200 words
. On the other hand, the recession is over in Germany and France
, and in the United States, the unemployment
rate dropped just a smidgen
last month. [more inside]
How green was my valley: California's economic meltdown The fields of wheat, cotton and cantaloupe that sustained his family for three generations are gone. The land is a mess of fallow fields, cracked earth and swirling dust. (PDF - By some estimates, 12.8% of the United States' agricultural production (as measured by dollar value) comes from California, and the majority of that is in the Central Valley).
However, his particular scene of devastation, Mr. Allen argues, has nothing to do with the credit crisis, the housing crash or the downturn that has California in a vice grip.
It has to do with a seven-centimetre-long, semi-translucent, steel blue fish known as the Delta smelt. [more inside]
Standard & Poor’s changed the UK's credit outlook from stable to negative
a few days ago, and warned that there is a chance the UK could lose its AAA rating. Meanwhile, Moodys, another of the big 3
rating agencies, has warned that the US might also eventually lose its AAA rating
. The UK announcement caused sterling to drop by 1% and the FTSE by 2%
. However, many blame
the same rating agencies for their part in triggering
the subprime crisis. The irony of this is not lost on the Wall Street Journal
, who note that "After all, those governments are jacking up spending, in part, to bail out the financial firms who gobbled up those 'AAA' asset backed securities duly blessed by the credit ratings firms." [more inside]
Unemployment: good for the heart and the soul
. "In studies over the past 10 years, Ruhm has consistently found death rates decline during recessions and rise when the economy expands. If unemployment rises 1 percent, he estimates the death rate will fall by about half a percent."
Dear FileFront User:
We regret to inform you that due to the current economic conditions we are forced to indefinitely suspend the FileFront site operations on March 30, 2009. If you have uploaded files, images or posted blogs, or if you would like to download some of your favorite files, please take this opportunity to download them before March 30th when the site will be suspended.
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Keep gaming alive,
FileFront Management and Team.
Twilight Of The Autocrats
: Will the global economic downturn usher in a new era of democracy
, or will things only get worse
? [first link via
out there. It can make you just want to hide
"Iceland is no longer a country. It is a hedge fund."
Also: exploding Range Rovers and the environmental impacts on elves. (Pre
Newly jobless and homeless former members of the Japanese upper or upper-middle class are turning to a distinctly 21st century version of the flophouse, the net room
: a tiny cubicle, rented by the day, with that all-important feature... an internet connection and a computer. [more inside]
" ... the recession, particularly if it turns out to be as long and deep as many now fear, will accelerate the rise and fall of specific places within the U.S.—and reverse the fortunes of other cities and regions." From The Atlantic Online - How the Crash Will Reshape America
Dating A Banker Anonymous Are you or someone you love dating a banker? If so, we are here to support you through these difficult times. Dating A Banker Anonymous (DABA) is a safe place where women can come together – free from the scrutiny of feminists– and share their tearful tales of how the mortgage meltdown has affected their relationships. Via
Nassim Nicholas Taleb
, author of the award-winning book The Black Swan
), was interviewed recently by Charlie Rose: A conversation about economics with Nassim Taleb
(as well as Time Magazine
.) Taleb is more pessimistic than Nouriel Roubini
) who thinks that the total sum for this current global meltdown may be somewhere between 10-20 Trillion US dollars.
In economic hard times, public libraries generally get a lot busier
. With that in mind, here's a handy list of the top 20 things librarians in public libraries wish patrons knew or did
(original article here
Anatomy of a Meltdown
- Ben Bernanke and the financial crisis (in one page)
Another economic post. With the debt
markets in a comparative calm, a lot of people are asking what next
? One area little examined is the idea of sovereign risk
. Basically, those with the armies make to rules, and you don't want to be invested there when they change the rules,. The USA has been the power behind globalisation
for over half a century, enforcing the rules of the marketplace
we have grown to accept. Some are questioning
whether it can maintain this position. [more inside]
U.S. Republican presidential nominee Senator John McCain may be computer illiterate
, but his campaign does think highly of eBay. Sen. McCain and Governor Palin have each suggested eBay as a fix for the economy
, tool for government reform
, and strategy for homeland security
. Perhaps it's because former eBay CEO Meg Whitman, in spite of disagreeing with parts of his technology platform
, is co-chair of McCain's campaign?
"Hard Numbers: The Economy is Worse than You Know
" [full article for Harper's subscribers, a different abridged version]
discusses how the Consumer Price Index and other US economic statistics have been manipulated over time. Among other things, the article claims, these changes make Social Security checks 70% lower than they would otherwise be. [more inside]
The Financial Crisis: An Interview with George Soros
. "We are in the midst of a financial crisis the likes of which we haven't seen since the Great Depression." (video
, April 4)
Tent cities spring up in L.A.
With foreclosures rates still rising
, shantytowns have started springing up in Los Angeles.
The change in private employment, two years after recession began, for 1953 to Present.Details
: The jobless recovery continued in March 2003 as the nation's payrolls contracted by 108,000, according to report released today by the Bureau of Labor Statistics (BLS). These losses are in addition to last month's payroll declines, which also were revised up to 357,000. Taken together, the economy has lost 465,000 jobs in the past two months. In the two years since the recession began in March 2001, total payrolls have fallen by 2.1 million and private sector payrolls are down by 2.6 million.The Jobless Recovery
. Low growth accompanies record trade deficit
Last month in Beijing, Robert Zoellick, President George W. Bush's international trade ambassador, had nothing but praise for China's growing trade surplus. Meanwhile in St. Louis in January, the president stumped for more tax cuts, standing before a facade of boxes with the words "Made in China" covered over in tape. 2001 Tax Cuts and the Proposed 2003 Cuts
Details: Discarding pretense of tax cut equity
Also: Economists Voice Opposition to Bush Tax Cuts
Recession? What recession?
"An economic research group declared Monday that the United States has been in a recession since March of this year." It's official.
Cuts in interest rates don't seem to be helping. Layoffs persist (and not just tech/dotcoms). The market bounces
, but can it sustain itself
? Some say the market will rebound in the 2nd quarter of next year, but these are the same people who saw an uptick coming this fall. Are we headed towards a recession
? Lucent even had to sell their golf course
Is the US really entering a recession?
Even with recent layoffs, the last time unemployement was this low before 1999 was 1970. And maybe a recession is not such a bad idea
, what with spending outmaching saving in recent years. [more inside]