The 10 Greediest People of the Year

By Sam Pizzigati, Campaign for America’s Future
Posted on December 20, 2010, Printed on December 30, 2010

http://www.alternet.org/story/149273/

 

Hard times can be good times — for the aggressively avaricious. Where others see pain, they see opportunity. In desperation, they delight. The grimmer the economic outlook, the more ghastly their grabbing.

And who grabbed the most outrageously in 2010? We offer below our annual take on America’s ten greediest of the year.

Looking Back at the Great Recession

Ist sie denn schon vorüber ??? (hfk)

James Hamilton, RGE Monitor, Dec 29, 2010 1:16PM

Some people use the end of December as an opportunity for a retrospective on the year. But I decided to take a look back at the last three years, by way of updating some comparisons I made in April 2009 between the Great Recession and the average characteristics of other postwar recessions.

My inspiration at the time came from Bill McBride (as my better inspirations often do). Bill had commented on a typical pattern in recessions that I summarized using the figure below.

 

Average cumulative change in 100 times the natural log of real GDP or its respective component beginning from the business cycle peak for the 10 recessions between 1947 and 2001. Horizontal axis denotes quarters after the peak.

The horizontal axis indicates the number of quarters since the start of the recession. The vertical axis gives the average percentage change (measured logarithmically) in real GDP or its components from the value at the business cycle peak, with the average calculated across the 10 U.S. recessions between 1947 and 2001. GDP reached a low point on average in the third quarter of the recession, at a value 1.6% below the peak, and was back to its pre-recession value after 5 quarters. Consumption spending tended to be more stable, often showing no dip at all. Investment spending has always been one of the more volatile components of real GDP, with housing construction down 8% at the trough, but typically rebounding to make a positive contribution a year after the recession began. Business purchases of structures and equipment were on average still 7% below peak even after GDP had returned to pre-recession levels.

The corresponding magnitudes are reported for the most recent recession in the figure below. Note that a change in scale is necessary for both the horizontal and vertical axis in order to accommodate the fact that the last recession was significantly longer and deeper than normal. Real GDP was down more than 4% at the low point and had still not returned to its pre-recession value after 2-3/4 years, though presumably the 2010:Q4 numbers to be reported at the end of January will finally put us back to a new high. The substantial and prolonged decline in overall consumption spending was also unusual. But the real outlier was housing, which was still making a new low 11 quarters after the recession started at a value almost 50% (logarithmically) below its level when the recession started.

 

Cumulative change in 100 times the natural log of real GDP or its respective component from the most recent business cycle peak. Horizontal axis denotes quarters after 2007:Q4.

This is not to say that housing alone was responsible for the recession. Although the drop in percentage terms has been pretty spectacular, new home construction had been a relatively modest share of total spending to begin with. Home construction (quoted at a real annual rate) fell by $190 billion between 2007:Q4 and 2009:Q2, whereas real GDP fell by $554 billion.

With home sales bumping along the lowest levels on record, it’s hard to believe they could keep going lower. And any improvement, even to almost-but-not-quite record lows, would allow this sector to start making a positive contribution to GDP growth.

 

Source: Calculated Risk

Of course, that’s also what I thought last summer.

But fortunately, this time I see that Bill McBride agrees with me.

 

Quarterly percent change (at an annual rate) of real GDP, 1947:Q2 to 2010:Q3, and three of its components. Data source: BEA Table 1.1.3. Shaded areas denote NBER recession dates

Gemeindeschulden in einem Jahr um 50 Prozent gestiegen

orf.on, 30.12,

Die Staatsverschuldung ist binnen Jahresfrist – von September 2009 auf September 2010 – um 10,5 Mrd. Euro oder 5,7 Prozent angestiegen. Wie die Statistik Austria heute mitteilte, betrug der Schuldenstand von Bund, Ländern, Gemeinden und Sozialversicherung zum dritten Quartal genau 195,605 Mrd. Euro. Das entspricht 69,5 Prozent der Wirtschaftsleistung (Bruttoinlandsprodukt/BIP).

Am stärksten war der Anstieg mit über 50 Prozent bei den Gemeinden. Für das Gesamtjahr 2010 geht das Finanzministerium von einem gesamtstaatlichen Schuldenstand von 70,2 Prozent des BIP aus.

Dramatischer Anstieg

Während der Anstieg der Bundesschulden von September 2009 auf September 2010 relativ moderat ausgefallen ist (plus 3,9 Prozent auf 172,966 Mrd. Euro) nimmt sich das Plus bei Ländern und Gemeinden teils dramatisch aus. Die Gesamtverschuldung der Bundesländer kletterte um 22,7 Prozent auf 13,062 Mrd. Euro. Bei den Gemeinden ist die Verschuldung im Jahresvergleich sogar um 50,8 Prozent auf 7,18 Mrd. Euro angewachsen. Gesunken sind dagegen die Schulden der Sozialversicherungen (minus 26,2 Prozent auf 2,396 Mrd. Euro).

Der Großteil der Staatsverschuldung entfällt übrigens auf Anleihen (169,2 Mrd. Euro), deutlich weniger auf Kredite (26,4 Mrd. Euro).

The Rising Burden of Government Debt

 Date: 29-12-2010
 Source: The Brookings Institution 

Nations hiked debt in recent years to escape economic crisis ­ with advanced economies doing most of the borrowing. Global debt is expected to more than double from $23 trillion in 2007 to $48 trillion in 2015. Emerging markets not only borrow less, but they also contribute more to economic growth, report Eswar Prasad and Mengjie Ding for the Brookings Institution. The pair examines debt not only in absolute terms and as a percentage of GDP, but also on a per-capita basis. The level of debt per working person projected for the US and Japan in 2015 is $48,000 and $75,000, respectively, compared with $1,200 for China. Aging populations and a lack of population growth, combined with exploding costs of pension and health care costs, add to economic woes of advanced economies. The report concludes, “In the absence of decisive action, ballooning public debt in the AEs could become a major threat to domestic and global financial stability.” ­ YaleGlobal

Ein erfolgreiches Neues Jahr – A Prosperous New Year

allen unseren Lesern und Interessenten – to all our readers.

Und Gelassenheit. Und Zivilcourage, sich gegen die Sozialisierung der Folgen der Finanzkrise zu wehren! And mindfulness. And moral courage, to stand up against socialising the consequences of the financial crisis.

Attached a few wise  thoughts:

 

 

 

 

“The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”

Michelangelo

““We all know what to do, but we don’t know how to get re-elected once we have done it.”
Jean Claude Juncker, Prime Minister, Luxembourg  (cited in The Economist, July 2010)

“There are those who don’t know and those who don’t know they don’t know.”

John Kenneth Galbraith

Taming the ‘Wild West’ of Microfinance

Kavaljit Singh  RGE Monitor, Dec 29, 2010 1:18AM

The recent suicides by over 60 poor borrowers in the Indian state of Andhra Pradesh have brought the operations of microfinance institutions (MFIs) under public scrutiny. It is well documented by both print and electronic media that these debt-driven suicides were due to coercive methods of loan recovery used by commercial MFIs. The commercial MFIs operate as profit-making non-banking financial corporations (NBFCs) in India. 

Going Bankrupt: 100 Bailed Out Banks

Barry Ritholtz, RGE Monitor, Dec 27, 2010 3:02PM

The WSJ reports today that nearly 100 U.S. banks that got TARP funds from the federal government in Q4 2008 are in danger of going bankrupt. 

 

The Wall of Worry for 2011 Is a Big One, as Usual

Richard Smith , Naked Capitalism, Dec 28, 2010 1:37PM

These are things I’m keeping an eye on, or trying to find out more about. That isn’t a prediction that any of them will blow up, nor that nothing else will, just a round-up of the bees in my bonnet. If you’ve been following Naked Capitalism you are up to speed on most of this.

Euroeinführung: Estland geht topfit in die Euro-Zone

Handelsblatt.com, 29/12

Mitten in der Euro-Krise wird die Euro-Zone größer: Zum 1. Januar führt das baltische Land die Einheitswährung ein und beweist sich dabei als beispielhaft. Andere Länder müssen hingegen noch warten, manche lehnen den Euro auch ab.

von Helmut Steuer

Estland tritt 2011 der Eurozone bei. Quelle: dpa

TALLINN . Inmitten der schwersten Euro-Krise ist von Furcht oder Verunsicherung auf dem Weihnachtsmarkt der estnischen Hauptstadt Tallinn wenig zu spüren. Der Handel auf dem Weihnachtsmarkt floriert, viele Touristen sind da, noch bis zum 6. Januar gibt es mollige Strickpullover oder Kunsthandwerk. In diesem Jahr allerdings ist das Einkaufen etwas anders, als es sonst war: Schon seit Monaten müssen alle Preise auf Waren doppelt ausgezeichnet werden – in estnischen Kronen und in Euro.

Estland wird in wenigen Tagen, am 1. Januar 2011, als erstes baltisches Land den Euro einführen. Es wird damit das 17. Mitglied der Euro-Gruppe – und hat sich bestens auf die Einführung der Gemeinschaftswährung vorbereitet. Von einem „Musterschüler“ sprach sogar EU-Haushaltskommissar Olli Rehn. Und das war keine freundliche Übertreibung, denn zurzeit erfüllen nur zwei EU-Mitglieder die Maastrichtkriterien: neben Estland noch Luxemburg.

A new political deal for Eurozone sustainable growth: An open letter to the President of the European Council

Giuliano Amato   Richard Baldwin   Daniel Gros   Stefano Micossi   Pier Carlo Padoan 7 December 2010

The unfolding crisis in Europe has focused policymakers’ attention on reducing debt-to-GDP ratios. This open letter to the President of the European Council argues that, while the top part of that fraction is important, the most critical factor in the long run is the restoration of GDP growth – offering several policy recommendations to this end. The unfolding crisis in Europe has focused policymakers’ attention on fiscal austerity and bailouts. We believe that this neglects a major dimension of the new political bargain – one that must be addressed if we are to deal with the severe problems facing the Eurozone and the EU. Debt sustainability can only be founded on the sustained growth of our economies. Exclusive emphasis on restoring sound public finances will not suffice. A broader political deal on economic policies and economic governance is needed to lift growth and restore confidence in the future of the Eurozone and the EU. Such a deal must include, together with better-designed measures for fiscal discipline, a decisive drive to accelerate the completion of the single market and strong investment in cross-border infrastructures.