What’s Ahead for the Economy and Politics in 2010

Aus Robert Reich’s Blog. Robert Reich was the nation’s 22nd Secretary of Labor and is a professor at the University of California at Berkeley. He is for sure one of the best observers of – at least – American politics and society (hfk)

Just about everything you’ll hear coming out of Washington starting now is really about November’s mid-term election. The gravitational pull of the midterms was already apparent last year, as Republicans marched in perfect lockstep to vote against whatever the President and Dems proposed (Republicans always have authoritarian discipline on their side, which is why they’re Republicans) but you haven’t seen anything yet.

The Dems have enough votes to enact health care — the hurdle Bill Clinton failed to jump, contributing to the Republican takeover in 1994 — but when it’s enacted, expect the spin machines on both sides to be at full throttle. And because health care legislation won’t be implemented for another three or four years (depending whether the House or Senate versions prevail), Americans won’t be able to test the veracity of these wildly divergent claims. So don’t count on health reform to help Dems next November — nor harm them, either.

Eastern Europe: How High Could NPLs Rise?

Analysis of financial health indicators shows that Eastern European banks are generally well-capitalized. In recent years, the share of non-performing loans (NPLs) in total loans ranged between 2% and 4% in most new member states. Nevertheless, NPLs are now spiking in most CEE countries, amid economic downturns and falling property prices. Most analysts do not expect NPLs to peak until mid-2010 at the earliest.

Warum die Bankenkrise eine Krise der Geldordnung ist

Vortrag am ZEITGEIST Tag von Nicolas Hofer. Auf Google Video.

Sehr informativ zu Fragen der Geldschöpfung.

Nicolas Hofer ist Student der Wirtschaftsinformatik mit einem Schwerpunkt Banken und Finanzierung an der Universität Mannheim. Ende 2006 musste er erschrocken feststellen, dass er trotz dieses Studiums von der Ökonomie, besonders aber vom Geld an sich, keine Ahnung hatte. Heute, nach über zweijährigem Selbststudium, sieht er sich als universell interessierten Generalisten mit Spezialwissen im Finanzbereich und möchte nicht nur selbst weiter dazulernen, sondern erworbenes Wissen teilen, um so gemeinsam Stück für Stück zu einem besseren Verständnis des Geldwesens kommen zu können

Is Austria Set To Join The Honourable Company of PIIGs?

Edward Hugh, Global ‘Economy Matters

Dec 16, 2009 8:52PM

Hypo Alpe Adria bank, the Austrian arm of the Bavarian bank Bayern LB, was nationalized on Monday for the symbolic price of three euros. This unexpected action brought to the world’s attention something which has been obvious to some of us for a very long time: namely that all is not well with Austria’s banking system, and it is not well for one very simple reason - over-exposure to Central and East European Markets. Of course, when some of us first started pointing the problem out, we were roundly rebuked from all quarters, what a ridiculous idea! Izabella Kaminska had a reasonable review of how the arguments were being marshalled back in January here, while Paul Krugman attracted the wrath of all Austria back in April by, as this blogger puts it, stating the obvious. 

Thoughts on the Statistical Recovery

John Mauldin, 12. Dec. 09.

In the ’50s through the early ’80s, recessions were typified by large layoffs at manufacturing businesses, as they had built up too much inventory. Businesses had increased capacity and often borrowed a little too much. Rising prices in the ’70s, along with extremely high interest-rate costs, led to the two severe recessions of the early ’80s, which Paul Volcker had to essentially force into existence, in order to begin the process of wringing inflation out of the economy.

But, and this is important, as the economy improved, inventories were eventually worked through and employees were brought back to work. Things returned to normal. The economy would once again grow at a robust rate. Then, in the last two recessions, in the early ’90s and early ’00s, it took longer for employment to rise. A great part of this was because the manufacturing sector of national employment was becoming an ever smaller part of the economic pie. We were, and still are, turning into an economy driven by services.

The President’s Job’s Initiative Doesn’t Measure Up

Dienstag, 08. Dezember 2009, 18:16:54 | noreply@blogger.com (Robert Reich)

Barack Obama is trying once again for balance. On the one hand, he wants enough government spending to offset the timid spending of consumers and businesses. Otherwise, the jobs and wage recession could drag on for years. On the other hand, he doesn’t want to set off more alarm bells about the budget deficit. Otherwise, conservative Democrats might join forces with Republicans to block heath care. So what does he do? A little bit more stimulus spending, but stimulus spending that doesn’t look like more stimulus because it’s not really adding to the deficit. It’s coming out of savings from money already authorized to be spent on the bank bailout. Hmmm?

Staatsverschuldung

Quelle: Credit Suisse. Dank an Dr. Richter

A Conversation with John Mauldin

With Damien Hoffman www.wallstcheatsheet.com.

John Mauldin coined the incredibly popular phrase, „Muddle Through Economy.“ If the next few years continue to drag along as we rebuild from the greatest credit bubble in history, then John’s term may become the catch phrase used by every financial journalist and economist in the land.

John is a passionate traveler with business partners all over the world. He also puts out a free newsletter to over one million people worldwide. This reach of friends and travels give John an excellent macro view of the world economy. Further, his multidisciplinary interests offer some unique insights into economics and human behavior.

On the Sovereign Debt Crisis and the Debt Servicing Cost Mentality

Edward Harrison | Dec 1, 2009

Given the spate of articles in the business press about this country or that country facing a potential debt crisis, I wanted to write a bit about sovereign debt crises.

In my view, economic stimulus has been warranted in order stabilize the financial system and prevent economic collapse. However, the price of that stimulus is unsustainably high increases in government debt — in a world in which private sector debt is already critically high. I see the sovereign debt problem as critical, especially in Europe. The sooner we abandon a debt servicing cost mentality, the more likely we are to face up to this challenge.

Iceland’s Banks: Reprivatization after Recapitalization

In December 2009, the creditors of Kaupthing Bank took over 87% of Arion Banki, which was created from the remainders of Kaupthing. In October, Glitnir’s creditors took over 95% of share capital in Islandsbanki (formerly Glitnir). Iceland has now reprivatized two of the three banks it took over in the autumn 2008, and only Landesbanki remains in government’s hands. (WSJ, 12/01/09; Islandsbanki, 12/02/09)