News
Market Watch | Bank stress tests weren’t that testing
After a weekend of number-crunching, analysts began to offer their own assessments of Europe’s bank stress tests Monday, with many identifying a much bigger capital shortfall than the official results.
CNN: Money | Boosting oil production with bacteria
After a well is drilled its natural pressure gradually subsides, eventually making it too costly to pump out the remaining crude. Although a well may seem dry, up to two-thirds of its oil remains underground.
CNBC | Global Consumer Confidence at Lowest Since Late 2009
Global consumer confidence fell in the second quarter to its lowest level in a year and a half as an uncertain economic outlook, a deepening euro zone debt crisis and rising inflation made people more cautious, a survey showed on Sunday.
Fox Business | U.S. Downgrade Would Ripple Into Every Home
After all, who can really comprehend the numbers involved? A national debt that stands at $14.5 trillion. A $14.3 trillion debt limit that apparently needs to be increased. A projected $1.4 trillion federal deficit for 2011.
But the ripple effect from such a downgrade would be widespread and potentially severe, impacting everything from local municipalities and the neighborhood bank to home mortgages and student loans.
National Journal | World Bank's Zoellick Criticizes U.S. over Trade Policy
World Bank President Robert Zoellick on Monday criticized the United States, among a number of major trading nations, for “dumbing down” on Doha trade talks.
National Journal | House Passes $31 Billion Energy-Water Bill
The legislation would provide $30.6 billion -- $5.9 billion below President Obama’s request, and $1 billion below current levels -- to fund the Energy Department, including the National Nuclear Security Administration and the Army Corps of Engineers, the Bureau of Reclamation, the Nuclear Regulatory Commission, and regional water and power authorities. The cuts would bring the bill's total cost close to fiscal 2006 levels.
USA Today | S&P warns it may downgrade Fannie, Freddie credit
Standard & Poor's warned mortgage giants Fannie Mae and Freddie Mac on Friday that they may lose their top credit ratings if lawmakers don't raise the U.S. government's borrowing limit in time to avoid a default.
Econ Comments
Washington Post | What we can learn from Latvia’s economic recovery
What distinguished Latvia’s experience from our own is that, once people recognized the gravity of the crisis, they came together to support the necessary, if harsh, policies to stop the free-fall and restore stability.
Market Watch | Business economists see softer U.S. growth
Business economists have scaled back projections for U.S. growth this year, citing slower company sales and global uncertainty, a quarterly survey found.
Barron's | A Diminished Forecast for GDP Growth
Economists expect real GDP growth to reaccelerate in coming quarters, but have cut their growth forecast to 3.2% from a prior 3.5%.
Blogs
Cato @ Liberty | Two Pictures that Perfectly Capture the Rise and Fall of the Welfare State
To be more specific, if more than 50 percent of the population is dependent on government, it becomes difficult for taxpayers to form a majority coalition to fix the mess. This may explain why Greek politicians have resisted significant reforms, even though the nation faces a fiscal death spiral.
Café Hayek | Fletcher’s Zero-Sum Presumptions Shove Him Into Unmistakable Error
There is no reason to conclude that the net worth of Americans is reduced by any amount. It is not a “fact” that an increase in FDI in the U.S. increases the net wealth of the foreign investor by some $$ amount and decreases that of some American by the same $$ amount. Any number of examples might suffice to show why Fletcher is utterly off-base to make such an assertion.
NRO: The Corner | From Asset-Backed-Security Bubble to Sovereign-Debt Bubble
The financial crisis had a lot to do with triple-A ratings being slapped on to subprime securities which didn’t warrant them, we know that. The report says between 1990 and 2006 ABS accounted for 64 per cent of the total growth in the amount of AAA-rated fixed income, compared with 27 per cent attributable to the growth in public debt, 2 per cent to corporate and 8 per cent to other products.
Calculated Risk | Schedule for Week of July 17th
Three key housing reports will be released this week: July homebuilder confidence on Monday, June housing starts on Tuesday, and June existing home sales on Wednesday.
Source | A Decline In U.S. Startups Through the Eyes of Bruce Bartlett
To make simple what already is, the nature of startup companies means they account for a great deal of innovation that improves our lives, all the while creating jobs and great wealth. Sadly, company formation today is at the lowest point since the BLS began measuring it.
Source | Unofficial Problem Bank list declines to 995 Institutions
List with 11 removals and two additions. The net result of the changes leave the list at 995 institutions with assets of $416.2 billion, down from 1,004 institutions and assets of $418.8 billion last week.
Econlog | Narrating the Financial Crisis
The original narrative of the financial crisis was that the run on the shadow banking system caused risk spreads to rise tremendously. Remember all the talk about using the TED spread (Treasury vs. Eurodollar) as the "thermometer" showing the "fever" from which the financial system was suffering?
Think Markets | Resource Allocation Distortions in the Great Recession: Empirical Evidence
The recent annual report of the Bank for International Settlements (BIS) has focused attention on the sectoral imbalances in the previous boom that resulted in the Great Recession. This is a refreshing change from the excessively aggregative analyses of the Keynesian-stimulus crowd.
Reports
RCM: Wells Fargo | Weekly Economic & Financial Commentary
Retail sales came in slightly higher than expected in June as higher sales at automobile dealers offset reduced spending at gasoline stations. With household budgets stretched thin, discretionary spending in most major categories remained weak.
