Economicfarce

Today former European Comission President Romano Prodi said that the Greece crisis is “completely over.” This may be the best indicator that the Greek Crisis is only just beginning.

“For Greece, the problem is completely over,” said Prodi, who was also Italian prime minister, in an interview in Shanghai today. “I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”

In previous articles I have mentioned that one thing we can be sure of is lots of hand … Read More

Dshort has a disturbing chart showing the gross federal debt, as well as 6-year estimates.

The financial crisis that began in 2008 changed everything. Government policies to deal with the crisis have significantly altered the OMB estimates, as the two Obama budgets (2010 and 2011) dramatically illustrate. The 2010 budget (presented February 26, 2009, 11 days before the market low) included a forecast for the fiscal-year-end debt that proved to be 8.3% higher than the 2009 final number, a fact that illustrates the magnitude of uncertainty introduced by the financial crisis. The 2011 six-year forecast … Read More

A Bloomberg headline caught my eye the other day regarding Australia. BIS Shrapnel apparently feels that “Australia’s economy will accelerate over the next two years before building ‘into a boom’ amid a surge in business investment.”
Gross domestic product will rise 2.7 percent in the 12 months through June 2010, 3 percent in fiscal 2011 and 3.8 percent the following two years, the Sydney-based forecaster said today.

A surge in house construction and government investment in infrastructure such as schools and roads will help stoke economic growth, BIS Shrapnel predicts. Inflationary pressures, leading to higher interest rates, will increase in three … Read More

Standard & Poor’s released a good report yesterday on the state of the housing market and the shadow housing inventory.

The current “shadow inventory” (including all delinquent loans, not only those that are real estate owned [REO]) of troubled mortgages will likely take about 33 months?or nearly three years?to clear at the current rate of liquidations. Moreover, we believe this estimate is conservative, as we do not assume any loans that have yet to show any serious signs of distress to date will default in the future and further increase the overhang of homes. Nonetheless, we believe that in reality … Read More

This week the news about Greece, Spain, Portugal, and trouble in the Eurozone have been rampant. On Thursday and Friday many news articles hit the press about a Greece “Bailout,” yet none of the articles seemed to have any substantive quotes from EU officials, or any quotes from any EU press releases or anything.

As much as I tried to find some verifiable evidence that the EU was going to provide aid to Greece, it was not to be found. The best we got was a promise of “determined and coordinated action.” That doesn’t say much to … Read More