Economic News Articles Tracked Daily in The Great Recession Blog, Week of 07/22/2012
This week’s collection of economic news articles strongly reinforces my predictions earlier in the year that Iran will not back down from its nuclear program and that an Iran war will play a significant economic role in 2012 (with both the economic impacts of rising oil costs and the cost of war being added to the U.S. debt).
Will Syria and Iran become a nucleus of evil?
Syria crept into the Iranium equation last week, becoming a new element in the economic threat that engulfs Middle-Eastern oil. Syria is Iran’s primary ally in the region. The U.S. and Israel are concerend that the collapse of the Assad regime (now thought of as virtually guaranteed) will leave a political vacuum in the rubble of war with no one in charge of Syria’s considerable stockpile of weapons of mass destruction.
Many of the economic news articles I posted last week (the week of 07/22) were about Iran. The New York Times and some other publications suggested the U.S. and/or Israel may be planning to directly attack Syria to prevent the spread of those weapons into terrorist or Iranian hands. (Is there a difference?) To counter that threat, Syria vowed it will use the weapons first if it is attacked by either the U.S. or Israel but will not use them if it is not attacked. To back up its words, it appears to have deployed many of those weapons in order to make that threat actionable.
This hugely complicates the situation with Iran. If the U.S. attacks Syria, will Iran’s less than rational leaders end negotiations over their nuclear ambitions as a form or retaliation? An even greater question is whether Iran will get involved in aiding its ally, hoping to have a stronger hand in a war that is coming its way anyhow. Iran could see a tactical advantage in timing the war it is bringing down on itself to coincide with Syria’s unleashing of chemical weapons against Israel and/or against the U.S. military.
The articles I posted among last week’s economic news articles indicated that Iran’s strategy in the Persian Gulf is to overwhelm one or two U.S. carriers with so many small fast-attack boats, mini submarines, and missiles that the shear number exceeds the aircraft carrier’s ability to defend itself. Add to this the confusion of a barrage of chemical missiles going from Syria into Israel, and you have a complicated conflagration that could result in one or two of the United State’s largest ships being sunk.
While the sinking of U.S. ships would not be a final victory for Iran, images of the mightiest U.S. ships in flames as they sink into the Gulf would be a huge symbolic victory for Iran that could happen in a one-day blitz. The resulting global economic chaos would be Iran’s revenge against the world for the economic chaos brought against it by “arrogant,” “evil” nations of the world that are hated by Iran’s religious leaders.
The U.S. might be tied up so much in defending itself for a day, that its ability to defend Israel that day would be lessened, giving Iran and Syria the opportunity to bring the kind of destruction to Israel that Iran’s leaders have promised over and over for several years. That could mobilize Islamic Fundamentalists everywhere to celebrate and join the fray.
For now, of course, it is in Syria’s best interest not to get in a conflict with the U.S. It’s primary goal is to save its regime. But, if the U.S. does actively go after its weapons, it has said it will use them, rather than lose them. I doubt that is saber rattling on the part of Assad’s regime, as they have nothing left to lose if the U.S. starts attacking them. It is only a question, as it became with Saddam Hussein, of whether they will be able to get their forces to fight the U.S. or to launch such weapons.
I’m not suggesting that Iran will take such a big risk either, but I think you can see how the Syrian situation hugely complicates the conflict with Iran. That’s what I’m really trying to point out here — is just the variety of complicating factors that have joined the problem, making it an even bigger mess.
If the U.S. attacks Syria, as some of my posted economic news articles say it might, and Syria makes good on its word to launch its chemical weapons, Iran could decide to enter the conflict in defense of its ally because that would present Iran’s own strongest opportunity for doing damage to the U.S. … if it believes a war with the U.S. has become inevitable anyway. Enjoin the battle — while a desperate friend (Assad) is there to help with all the weapons at his disposal — as a mini axis of nations against Israel and the U.S. Hope that images of sinking U.S. ships embolden other Islamic Fundamentalists in the region to join your cause.
Because Turkey has been supplying weapons to the Syrian rebels, it fears a reprisal from Assad. Since Assad’s regime is moving its WMD to the borders, Turkey is moving weapons to its border with Syria, too. Saudi Arabia has also been supplying weapons and other support to the Syrian rebels. The U.S. has been supplying communications equipment and intelligence, so the possibilities for outbreaks of fire throughout the Middle East are growing, should the Assad regime seek retaliation before falling.
Meanwhile, Iran is enriching Uranium faster than ever before. The U.S. is sending top-level diplomats to Israel faster than ever before, particularly its top military brass — as if the Obama Administration realizes talks are failing and is preparing for other action. Both the U.S. and Israel are talking about having never worked more closely before as if other action is being rapidly planned out. More U.S. ships are moving into the gulf. Everything seems to be rushing from cold war to hot war through the Straight of Hormuz.
Other economic news articles I posted last week said that those close to Netanyahu claim he wants war before the U.S. presidential elections. His own governing coalition in the Knesset is falling apart and hangs on a thread of one vote — hardly a governing majority. This has increased pressure for an election in Israel soon. So, Prime Minister Netanyahu may want to get through this conflict with Iran while he’s still in office because he believes it has to be done and trusts no one else to get it done quickly enough and because such a conflict will assure his re-election if successful. He is a man of great action.
As war is heating up, the economy is cooling down. The rest of these economic news articles point to a downturn over the summer as factories cool off, as the climate heats up in a record drought that will certainly raise prices, as employment remains stuck in the doldrums, and as the euro crisis starts heating up again.
In other words, the most important factor in Obama’s campaign for a second term as U.S. president is a running tide that has turned against the president. As I indicated in my most recent prediction about the prospect of an Iran war before the presidential election, a bad economy will mean Obama needs a major interruption in the political debate because bad economies always turn against the incumbent president … except when the U.S. is at war. The U.S. does not often depose its leaders in the middle of a major conflict … even in times of economic depression.
I should qualify the last paragrpah by saying that a U.S.-Iran war before the U.S. elections was a conditional prediction in which I said, “IF the economy continues to turn against Obama, then we will have an Iran war before the elections versus after.” While Obama might not be one to start a war just to save his political career, he is rapidly losing some of the restraining factors that dissuade him from an Iran war. The idea that a war will upset the fragile economic “recovery” and the idea that war will, therefore, reduce Obama’s chances of re-election clatter to the ground. Everything turns like a tide in the other direction as soon as the hopes of economic recovery have failed.
In short, the likelihood of war in the Middle East breaking out before the U.S. elections is growing … and is growing more dangerous. Each week seems to be increasing the likelihood of conflict and of a wider conflict.
Recap of economic news articles on The Great Recession Blog last week
(Economic news articles for the current week are posted in the right sidebar each day.)
China syndrome — following economic news of the Great Recession to the Great Wall
07/22 China’s tight job market defies economic downturn Workers fear for their jobs everywhere except in the place investors are most concerned about – China. Despite six quarters of slowing growth, China has more job vacancies it’s had in a decade, giving workers the luxury of job-hopping.
07/26 Homeward bound? Manufacturers mull return from China Rising labor costs and cheaper US energy drive some companies back. Michigan-based Whirlpool made big news when it pulled out of America five years ago. Now it has brought back production of its KitchenAid hand mixers. Costs in China are rising quickly.
Economic indicators and stock market responses in economic news articles of the week
07/22 Global Economy In Worst Shape Since 2009 Six of the 17 countries that use the euro currency are in recession. The U.S. economy is struggling again. And the economic superstars of the developing world — China, India and Brazil — are in no position to come to the rescue. They’re slowing, too.
07/22 No Good News Expected in This Week’s Global Data None of the big nations will look worthy of a place on the Olympic podium if forecasts for a raft of economic data due this week from the eurozone, the United States and Britain prove accurate. Even China, the growth champion, is huffing and puffing.
07/22 US poverty on track to rise to highest since 1960s Liberal and Conservative think tanks agree: the ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.
07/23 McDonald’s Showing Signs of Tear From Economy McDonald’s Corp., which has thrived by emphasizing affordability, is showing signs of stress from the volatile global economy. McD reported net income fell 4% in the 2nd quarter as a result of budget-conscious consumers in hard-hit regions of the world.
07/23 McDonald’s to drop prices in India by as much as 15% as sales growth plummets McDonald’s, the world’s largest fast-food chain, will cut prices of more than half the items in its menu in India by up to 15% to arrest a slide in its growth and push expansion, a top official said.
07/23 Relative Growth Powers US Asset Demand Because U.S. economic growth of 1.4% exceeds much of the world, it is offsetting the lack of action from lawmakers in bolstering demand for dollar-denominated assets. That small growth looks safer than bonds from the Eurozone, which is suffering a 0.5% contraction.
07/24 Wall Street falls as Europe hits earnings; Apple falls Wall Street stocks fell on Tuesday, hit by signs the euro zone crisis is worsening and evidence that Europe’s slowdown is hurting U.S. companies, including bellwether UPS. Apple also reported disappointing results as did United Parcel Service.
07/25 US new home sales tumble, but upward trend intact New home sales tumble 8.4% in June — the largest drop in more than a year! This came on the back of a decline in used home sales, too. [And that’s in the middle of summer! You decide if the “upward trend” is still intact. Maybe developers ARE clueless.]
07/26 Exxon and Shell Earnings Disappoint Exxon Mobil and Royal Dutch Shell, the biggest oil companies in North America and Europe, reported disappointing earnings on Thursday, attributing the results largely to lower global energy prices resulting from weakening economies.
07/26 Jobless claims fall, manufacturing orders rise Better-than-expected economic reports in the U.S. lifted spirits on Wall Street. New jobless claims fell sharply, and the Commerce Dept. reported new orders for durable goods rose at a healthy rate; but reduced layoffs not mean increased in hiring.
07/26 US economy looks weaker, business confidence dims Businesses placed fewer orders for most long-lasting manufactured goods in June, suggesting many are losing confidence in the slumping U.S. economy. The housing recovery also lost momentum last month as fewer Americans signed contracts to buy homes.
07/27 Dismal Economic News Causes Stocks to Soar Stocks surged on Friday, driving the S&P 500 to its highest close since May 3 as hopes increased that the Federal Reserve and the European Central Bank may provide further stimulus. Taken together, the S&P 500′s two-day move was its biggest since December.
07/27 Dow Closes Above 13000; First Time Since May 7 The Dow’s move was the fifth triple-digit move in six trading sessions, but the gains underscored how dependent financial markets have become on the willingness of policy makers to step in to support the global economy with measures like QE3.
07/27 Economy Slowed Further In Second Quarter The economy grew at a sluggish 1.5 percent annual rate in the second quarter, the Bureau of Economic Analysis reported this morning, down from a 2 percent pace in the first quarter. “Positive growth,” says chairman of president’s Council of Economic Advisors.
07/27 U.S. Economy Slowed to a Tepid 1.5% Rate of Growth The United States economy has lost the momentum it appeared to be building earlier this year, as government statistics showed it expanded by a mere 1.5 percent annual rate in the second quarter, making the U.S. more vulnerable to trouble in Europe.
07/29 Japan Industrial Output Falls As Korea Confidence Sinks Japan’s industrial production unexpectedly declined, and South Korean manufacturers’ confidence dropped to a three-year low. Production fell 0.1% in June from May. The median estimate of 29 economists surveyed by Bloomberg was a 1.5% gain.
Economic predictions / forecasts that made economic news headlines
07/22 Comstock Partners: ‘Overwhelming’ Evidence of Recession Ahead Retail sales have fallen for three months. Monthly jobs reports have consistently failed to meet expectations. The manufacturing sector is slumping. Consumer confidence is down and home sales are off, despite some improvements seen in that sector.
07/23 Earnings Show Recession May Be ‘Fast Approaching’ Estimates for the 3rd and 4th quarters have dropped to levels not seen since the 2008 financial crisis — an ominous recession sign for a flailing economy. “A lot of economists and analysts … have had their blinders on for quite some time.”
07/24 ANALYSIS-US drought to cause food price spike but not inflation Americans will face higher food prices at the supermarket because of a drought this summer, but the increase will not have a lasting impact on inflation or the Federal Reserve’s thinking on monetary policy.
07/22 We’re Not Even Close to a Real Recovery While the risk of a disorderly crisis in the eurozone is well recognized, consensus has been that the U.S. economy was on the verge of a robust and self-sustaining recovery that would restore above-potential growth. That turned out to be wrong.
07/26 Caterpillar Joins Economic Optimists: ‘Doesn’t Feel Like 2008’ Caterpillar Inc., among the first companies to ring warning bells about the recession in 2007, isn’t subscribing to the pessimism of investors such as Bill Gross even while moderating its growth projections, saying the U.S. economy will grow 2% this year.
07/27 When Even Pessimism About the Economy May Be Too Optimistic In a recent Wall Street Journal survey, forecasters put the chances of a recession in the next 12 months at a reassuringly low 21%. But economists rarely foresee recessions. In August 2007, they put recession odds at 28%.
Euro crisis updates as the Great Recession goes viral
07/22 ECB’s Draghi says euro not in danger The European Central Bank’s president says Eurozone in no danger of breakup despite analysts’ worse-case scenarios. “They don’t recognize the political capital our leaders have invested in this union and Europeans’ support.”
07/22 Greece is in a ‘Great Depression’: PM Antonis Samaras Greece wants its lenders to give it two more years, but its lenders opposed the idea because it implies even bigger financial aid. German magazine “Der Spiegel” reported that the IMF may not take part in any additional financing for Greece.
07/23 ‘Acropolis Adieu, You’ve Got to Go!’ The IMF and major creditors including Germany have refused to offer further aid to Greece. The country where the euro crisis began may have to declare bankruptcy. “At last someone is speaking the truth…. No new loans, no new guarantees.”
07/23 Euro, world stocks slide on Spanish fears, Spanish interest soars Investors sold off assets and fled to the perceived safety of U.S., British and German debt and the U.S. dollar over concerns about the plight of Spain, bringing U.S. treasuries to their lowest since the 1800′s while Spanish bonds hit 7.5%.
07/23 Spain and Italy ban short selling Securities regulators in Spain and Italy both instituted short-selling bans Monday as financial markets tumbled to limit the downward pressure on stock markets by preventing investors from betting against shares of certain companies.
07/23 Spain’s borrowing rates hit record as crisis grows Yields on Spain’s 10-year bond spiked 0.22 percentage points to 7.45%. That’s the highest level since the euro began in 1999. Spain could end up locked out of international financial markets and be forced to seek a rescue, like Greece, Ireland and Portugal.
07/23 Wall Street slides on Spain, Greece fears “The problem is bigger and more intractable than what happened in (the financial crisis) in ’08, It was a wipeout in the overseas markets. We are going to echo that [here in the U.S.] as confidence gets sucked out.”
07/24 Greece recession will deepen, says Greek PM Greece will suffer a much deeper recession than thought this year, said Prime Minister Antonis Samaras, who expects the economy to shrink by 7% — greater than the 5% forecast by the crisis-hit country’s central bank.
07/24 Moody’s Cuts Outlook on Germany, Two Others Moody’s said Germany, the Netherlands and Luxembourg may have to increase support for indebted euro zone states such as Spain and Italy, citing an increased chance of Greece leaving the euro zone, which would set off financial shocks.
07/24 Spain feels debt heat, Greece way off bailout terms Spain paid the second highest yield on short-term debt since the birth of the euro, while Greece remains a powder keg. If Athens were to default or exit the euro zone, the knock-on effects could push Spain and even Italy over the edge.
07/25 British GDP figures to confirm worst double-dip recession in 50 years Britain’s longest double-dip recession in over 50 years will be confirmed with GDP forecast to have shrunk by 0.2% between April and June — its 3rd straight quarter of contraction and worse than the oil-embargo double-dip recession of the ’70s.
07/25 German business confidence ‘at lowest since March 2010’ The Ifo think tank’s index dropped two points in June, citing a “significant deterioration” in the manufacturing business climate.vIt was the third month in a row the Ifo registered a fall in sentiment. German growth is expected to slow to zero.
07/25 UK recession deepens with 0.7% fall in GDP The contraction was much bigger than expected and follows a 0.3% drop in the first three months of the year.
07/26 European Central Bank vows to protect the euro, stocks soar in Europe and US Stocks soared in the U.S. and Europe Thursday after the ECB president vowed to “do whatever it takes” to keep the monetary union intact. The Dow jumped 172 points. Stock indexes surged 6 percent in Spain and Italy, and Spanish bonds plunged half a point.
07/27 Germany, France Back Pledge to Save Euro The leaders of Germany and France threw their weight behind European Central Bank President Mario Draghi’s pledge to protect the euro with decisive action, delivering a crucial political endorsement for the ECB’s use of its printing press to buy beleaguered nations’ bonds.
07/28 History suggests euro’s obituaries are premature After “Grexit” and “Spanic”, is it finally time to get ready for “Eurover”? The euro certainly seems in danger of market-driven disintegration.
07/29 ECB President On Offensive As He Must Now Live Up to Game-Changer Role Berlin, Paris and Rome have already endorsed Draghi’s approach, saying they will do what’s needed to protect the euro. Draghi must now deliver or face a renewed selloff on bond markets, where interest and yields have soared.
Federal Reserve actions tracked in economic new articles
07/24 Fed Leaning Closer to New Stimulus if No Growth Seen A growing number of Federal Reserve officials have concluded that the central bank needs to expand its stimulus campaign unless the nation’s economy soon shows signs of improvement, including job growth. Bernanke said QE3 under discussion.
07/26 House passes Ron Paul’s Fed audit measure In a move that serves as a capstone to Rep. Ron Paul’s career, the House on Wednesday voted to have Congress‘ chief investigators conduct a full audit of the Federal Reserve’s shrouded decision-making process. Bernanke opposes the “nightmare.”
The Iranium Reaction as it makes and shakes the news
07/22 U.S. Refocuses on Plans to Forcibly Topple Syrian Government The Obama administration has abandoned hope of a diplomatic settlement in Syria. Instead, it is increasing aid to rebels and redoubling efforts to rally a coalition to forcibly bring down the government of President Bashar al-Assad, American officials say.
07/22 Video: Netanyahu ‘rock solid’ about Iran-Hezbollah terror connection Netanyahu speaks on Hizbullah terror, Iranian connections to those terror acts, containment of Syrian chemical weapons, and avoids comments on the American elections.
07/23 “We will strike Tel Aviv if Israel attacks,” senior Iranian cleric vows Tehran will attack Tel Aviv if Israel shows aggression against the Islamic Republic, a senior Iranian cleric said, according to the semi-official Fars news agency. “If Israel makes a mistake, we will attack the heart of Tel Aviv from Tehran.”
07/23 Iranian Parliamentarian Stresses Iran’s Capabilities to Push Back Oil Sanctions with Hormuz Blockade “In order to study the bill on the blockading of the Strait of Hormuz better and more precisely, [several Iranian officials] will be invited to the parliament and their views and proposals will be used.” The bill takes its next step in July.
07/23 Syrian civil war boosts Israeli-US defense ties Israeli-US intelligence and defense ties have reached new heights due to the uprising in Syria and fears about the country’s chemical weapons. “We are working very closely together and there is very close coordination,” one official said.
07/24 Israel issues tough warning over Syria weapons cache With the Assad regime looking close to collapse, Israel has stepped up its warnings to Syria, stressing military action if any of Syria’s chemical weapons end up in the hands of Hezbollah, fearing that more than they fear what regime replaces Assad.
07/24 Mofaz hints at Netanyahu plan to attack Iran Israel’s Iranian-born opposition leader, Shaul Mofaz, who until last week served as deputy prime minister to Benjamin Netanyahu, gave a broad hint on Monday that the prime minister intends to launch a military strike against Iran.
07/24 Syria says will use chemical weapons if attacked This is Syria’s first-ever acknowledgement that it possesses WMD. It has already begun moving its WMD to its borders while saying it will not use them in the civil war against its own civilians. They are to keep others out of the fray.
07/24 Turkey sends missile batteries to Syria border Turkey sent batteries of ground-to-air missiles to the border with Syria on Sunday, media reports said, boosting its firepower as rebels in Syria seized several border posts.
07/25 Syria: West ‘could deploy 300,000 troops following regime collapse’ Preparation is proceeding in Western capitals in case Syria collapses. “Western political leaders may have no appetite for deeper intervention. But as history has shown, we do not always choose which wars to fight – sometimes wars choose us.”
07/26 Iran ‘Thunderstruck’ by AC/DC computer virus A cyberspace security expert says he received a series of emails from an Iranian nuclear scientist complaining that computers at two plants bizarrely began playing a heavy metal anthem over the weekend.
07/26 Iran: Nuclear Negotiators Meet; No Progress Reported Iran and “the group of six” met in Istanbul on Tuesday in an effort to narrow differences. There was no indication whether another meeting might be held. The six had said, after the last meeting, that they questioned the value of another meeting.
07/26 Iran’s Ahmadinejad boasts of adding 1,000 centrifuges during talks While Khamenei said, “They … say they need to … tighten sanctions to force Iranian authorities to reconsider their calculations, but … the facts leads us … to avoid reconsidering our calculations …to move on our intended path with greater confidence.”
07/27 After delays, massive US bunker-buster ready for action In the face of possible military intervention in Syria and a strike against Iran, the United States has announced that its largest bunker-buster missile (MOP) capable of penetrating underground facilities is operational and ready for use if needed.
07/27 Former top Israel Defense Forces officials worry that Netanyahu is bent on an Iran strike It looks like P.M. Netanyahu and Defense Minister Barak are set on an Iran strike, but some of Israel’s former defense top brass agree that, right now, an attack would do more harm than good.
07/27 US fears major Iranian threat in Persian Gulf According to the Post, officials claimed that the new systems, many of which were developed with foreign assistance, are giving Iran’s commanders new confidence that they could quickly damage or destroy US ships if hostilities erupt.
07/28 As Assad teeters, Israel prepares for battle to secure chemical weapons As Syria’s regime teeters on the brink of collapse, Israel Defense Force soldiers have been put on standby and are ready to move if need be. Fears center around the prospect of Hezbollah getting Syrian chemical weapons as the Assad’s regime collapses.
07/27 Obama signs Israel security bill ahead of Romney visit President Barack Obama signed a measure on Friday to strengthen U.S.-Israeli military ties. He also used the White House bill-signing ceremony to announce he was releasing $70 million in approved funding for Israel’s short-range rocket shield, “Iron Dome.
Articles of Justice during the Great Recession
07/22 Prosecutors, regulators close to making Libor arrests U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to people familiar with a sweeping investigation into the rate-rigging scandal.
07/24 Libor fixing to become criminal offence, EU proposes Manipulating benchmark rates, such as Libor and Euribor, will be added to insider dealing as criminal offences, a European commission said in a statement.
07/25 How big could the Libor scandal get and what was involved? Barclays claims they had to inflate reports because everyone did. Because the most extreme bank reports are factored out of Libor, it takes several banks to affect the rate. Loans affected by Libor rigging total more than the GDP of the planet.
U.S. banking / financial crisis as it shapes the economic news of our times
07/22 Wall Street Seeks Patience After Worst 1st Half Since ’08 Wall Street’s five biggest banks are still asking investors to be patient. They blamed their decline on low interest, a drop in trading, deal-making driven by concerns about European government finances, and slowing growth in the U.S. and China.
07/25 Calls to split up big banks are growing Big banks haven’t created as much value for shareholders as once thought. “Whatever economies the megabanks achieve from their size are more than offset by the challenges in managing trillion-dollar institutions.
07/25 Sandy Weill, Champion of Big Bank Mergers, Says Break Up Big Banks “What we should probably do is … split up investment banking from banking … have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail.” He essentially called for the return of the Pre-Reagan Glass–Steagall Act.
07/26 Splitting big banks: Why J.P. Morgan should go first J.P. Morgan should be the first bank to split says former Citigroup chair. In another tumultuous week, the veracity of J.P.’s statements is seriously questioned, as investigation broadened to looking at participation in rigging Libor.
07/29 30 Banks can no longer be ‘too big to fail’, says Sanford I Weill Weill, the creator of the largest financial conglomerate in the world, suggests that Citigroup and others should be broken up. What was most eye-catching, though, was Weill’s claim that his original conglomeration model “was right for that time.”
U.S. government moves (and blunders) in news articles about the economy
07/23 House leaders wary of farm, postal bill showdowns Not on the schedule are a farm bill, important to farmers coping with a drought, and a Postal Service bill dealing with post office closings and the scaling back of mail delivery. Congress would rather a recess.
07/24 Another year, another stopgap bill instead of real budget Congress is heading into the final stretch of its summer work period having passed NONE of its annual spending bills. With the next budget year just 70 days away, a tit-for-tat means it’s unlikely any bills will reach the president’s desk.
07/24 Federal Government’s Debt Exceeds $1T for 5th Straight Fiscal Year Prior to the Great Recession, the U.S. government never increased its debt by as much as $1 trillion per year. From fiscal 2008 onward, however, the federal government has increased its debt by at least $1 trillion each and every fiscal year.
07/24 GAO: 2011 Debt-ceiling fight cost government $1.3B The last-minute drama of August’s debt-limit fight cost the federal government at least $1.3 billion in increased borrowing costs, according to a new study from the Government Accountability Office as markets watched and responded.
07/25 When It Comes To Tax Cuts, Neither Side Is Blinking Democrats and Republicans haven’t budged in their fight over expiring tax cuts for the wealthiest Americans. Ronald Reagan’s idea that the wealthy invest their tax savings in ways that create jobs has become an article of faith for many Republicans.
07/26 40 Economists Say GOP Has Abandoned Economic Reality A survey of forty economists from across the ideological and partisan spectrum has concluded that on some of its most cherished issues, the Republican Party has simply taken leave of economic reality. This includes conservative schools.
07/26 A Climate and Energy Stalemate As Mr. Obama seeks re-election, a warming climate, more frequent droughts and wildfires, rising seas and more violent storms are near the bottom of the national agenda. Republicans are nearly unanimous in questioning whether or not global warming exists.
07/26 Wealthy left out of Bush-era tax cut renewal Senate Democrats on Wednesday passed a bill that would mean most Americans keep their tax cuts while the wealthiest lose them. While no one believes the bill will survive the Republican-dominated house, it attempts to draw a line in the sand.
07/27 Drought bill may carry mammoth farm bill into law A comparatively low-priced disaster bill for livestock producers hit by the worst drought since 1956 may be the ticket to passage for a $500 billion farm bill now in limbo in Congress.
07/27 Hill leaders may punt spending bills to next year Congressional leaders are considering punting much of the remaining budget work of Congress to next year. The appropriations bills are far behind schedule. House Speaker John Boehner supports the idea of a six-month stopgap but is undecided.
Other economic updates / miscellaneous economic news articles
07/23 A Closer Look at Middle-Class Decline For the first time since the Great Depression, middle-class families have lost ground for more than a decade. They, and the poor, have struggled particularly badly since the financial crisis led to a global recession in 2008.
07/24 Europe Heat Wave Wilting Corn Adds To U.S. Drought Heat waves in southern Europe are withering the corn crop and reducing yields in a region that accounts for 16 percent of global exports at a time when U.S. drought already drove prices to a record.
07/24 Gold bugs bank on QE3 to ride to the rescue Almost all of this year’s gains have been wiped out, with the gold price now just 1% above its end-2011 level. Gold bugs are banking on QE3, a further round of quantitative easing from the Federal Reserve, to get the price moving again.
07/24 Plains ranchers sell cattle as US drought spreads Grecian spent years meticulously breeding cows to improve the genetics in each generation, but with Kansas in one of the worst droughts seen in decades, he’s struggling to find enough grazing to feed 300 cows. He’s now reducing his herd.
07/24 Poll: Romney preferred over Obama to handle the economy Mitt Romney scores a significant advantage over President Obama when it comes to managing the economy, reducing the federal budget deficit and creating jobs, a national USA TODAY/Gallup Poll finds.
07/24 U.S. Drought Could Cause Global Unrest Twice in five years, rising food prices triggered global waves of social unrest. With drought baking U.S. crops, another round of society-straining price spikes may happen in coming months as speculators create a food bubble crisis.
07/24 U.S. drought footprints over the years and through the decades Market crashes coincide with major droughts: From 1936-1938 the Dow fell ~50%; from ’55-’7 it fell over 18%; and in ’87, 40%. (Each row of the illustration represents a decade, starting at the bottom when records began during the 1890′s.)
07/24 Where is the gold price heading? Given the economic uncertainty you’d have thought that the price of gold would be flying. It has done nothing of the sort. The gold price fell 6pc over the past month as the euro zone crisis intensified – its worst month of May fall since 1982.
07/25 Gold climbs above $1,600/oz for first time in two weeks Gold prices rose 1.3% on Wednesday to break above $1,600 an ounce for the first time since June 10, as stock markets extended gains and the euro pared losses versus the dollar.
(If you liked this collection of last week’s economic news articles along with commentary and want to be notified of others when they’re posted each week, please use this RSS feed link and subscribe. You will not get added to any email list. Also, please use the email button that accompanies each article to pass it along to friends you think might be interested. They will not get added to any email list either.)