As they say, a picture is worth a thousand words. This chart provides a really good overview of the hideously complex stimulus package without making you read a small book.
Can a torn-up application for a credit card still be used? Does posing the question betray the answer?
Thankfully, this is clearly an excess of easy credit from back in the days when banks didn’t know better.
I should note, though, that if credit card applications or banks in general insisted that you call from a phone traceable to a permanent residence, I would be unable to get credit despite my single place of residence and continuous gainful employment for over a year.
FEARS are mounting that Ireland could default on its soaring national debt pile, amid continuing worries about its troubled banking sector.
It is hard to tell, but I think an eastern European country will beat Ireland to the punch as far as defaulting goes. Still, it will be forever to Ireland’s shame if they default before one of the Mediterranean countries do. They are supposed to be the ones that are poorly governed.
This week’s rant of the week is the Audacity of Doing Nothing by Philip Greenspun.
The scale of angry comments that he has received is quite amusing. People refused to believe that pain can be good. And they refuse to believe that there is not some magical pill out there that will make the pain go away.
For a change, we are putting forth a short, simple, and easy to understand essay for this week’s essay of the week. Like all short and simple things, The German Hyperinflation by George J.W. Goodman has its shortcomings. For one thing, the author’s knowledge of economics is poor. There is nothing mysterious or hard to fix about hyper inflation. One simply has to stop running the printing presses.
But such quibbles aside, the essay is full of valuable anecdotes for those who are not well acquainted with the history of German hyper inflation. The one lesson to take from this short essay is that inflation can get very bad and still not bring about the apocalypse. The apocalypse did come to Germany, but it came after the hyperinflation had been brought under control.
In other words, hell on earth does not come from economic systems that are not functioning properly. Rather, it comes from men who have been deified.
A discussion on the latest evidence on the effectiveness of Satins. Comments more interesting then the post.
The socks that America’s special forces want to wear. Here is the company web site.
Texas tries to decided how it will deal with the fall out if Mexico collapses. The debate centers around the question of whether they should shoot them as they cross the river or build concentration camps? (I am exaggerating for shock value, but actual practices probably won’t differ too much from the spin I am putting on the choices being considered.)
But European banks may be in far worse shape. Bruno Waterfield of the London Daily Telegraph reports to have seen an eyes-only document prepared by the European Commission for the finance ministers of the various EU member countries. The problem revealed in the report is an estimated write-down by European banks in the range of 16 trillion pounds, or about $25 trillion dollars! The concern is that bailing out the various national banks for such an unbelievable amount would push the cost of government borrowing to much higher levels than we see today.
From the Telegraph (Bold Tags added to highlight the shocker)….
The sums needed are beyond the limits of the IMF, which has already bailed out Hungary, Ukraine, Latvia, Belarus, Iceland, and Pakistan – and Turkey next – and is fast exhausting its own $200bn (€155bn) reserve. We are nearing the point where the IMF may have to print money for the world, using arcane powers to issue Special Drawing Rights.
Its $16bn rescue of Ukraine has unravelled. The country – facing a 12pc contraction in GDP after the collapse of steel prices – is hurtling towards default, leaving Unicredit, Raffeisen and ING in the lurch. Pakistan wants another $7.6bn. Latvia’s central bank governor has declared his economy “clinically dead” after it shrank 10.5pc in the fourth quarter. Protesters have smashed the treasury and stormed parliament.
Based on my dim understanding of what the special drawing rights are, I don’t think it is fair to characterize them as giving the IMF the ability to print money. But I am hardly an expert on the IMF so what do I know?
For what it is worth, here is the IMF description of Special Drawing Rights and here is the the IMF description of its lending constraints.
It’s been taking place slowly, week after week, but low gas prices have brought gasoline demand back up. There has been anecdotal evidence that suggested demand might be heading higher, such as recovering sales of gas guzzling cars. But for watchers of This Week in Petroleum, the data confirm the anecdotes: Gasoline demand has recovered to the point that it is now higher in the U.S. than it was a year ago. This week’s Summary of Weekly Petroleum Data (off of which This Week in Petroleum is based) shows that the 4-week rolling average has for the first time in recent memory increased above (albeit slightly) the level of a year ago.
Granted, gas prices have fallen a lot. But for gas demand to have risen above where it was at last year shows that America can’t be that badly off yet.