Debt talks in Greece fell apart on Friday. European markets took it in the face on Monday, down 5%ish overall. (There's a bit of bounceback in early morning trading today, as I type; we'll see whether it sustains itself.) Greek bonds are trading at default rates now. IMF people are talking openly about expectations of a default within the next 12 months.
German voters are weighing in on the bank bailout series, and not approving. Gold is spiking.
Zero Hedge has a laundry list of reasons to panic. One of those reasons is if the Greek debt talks collapse. Aheh.
And on Wait Wait Don't Tell Me this weekend, Austan Goolsbee - until recently an economist at the White House - said, and I quote, "you wouldn't want to be European at this moment, they are screwed." Refreshing candour? It's sad that all the best news sources are comedy shows.
Here's an article on the Fed's secret bank bailouts, and remember all those desperately-underwater mortgages and mortgage backed securities swapped to Freddie Mac / Fannie Mae at face value? The properties themselves are about to be sold back to investment houses below market value, for a nice double-dip. TheStreet reports:
You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs(GS_) and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.Now, in somewhat better news, there is finally some action against some of the fraud, in the form of a variety of lawsuits against various banks over mortgage fraud. (Also here.) What should be happening is criminal charges, and what will probably happen is settlement without admission of wrongdoing, which will be just another notch in the "cost of doing business" pistol grip. As The Street says, Goldman Sachs has nothing to fear.
In the process, these investors will instantaneously become the largest improved real estate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.
Even that little bit of action is prompting fierce condemnation, with MarketWatch calling it a "self-inflicted wound" on the economy. No, the mass fraud was the wound.
That said, Bank of America is raising capital and selling off non-core investments like there's no tomorrow. Very important insiders think they need a lot of cash. Now.
Meanwhile, mass document forgery continues unabated. This is black-letter-law illegal, of course. It gets reported a lot as "paperwork snafus;" that's a lie. It's fraud.
Credit default swap costs are soaring in China. Remember those? Foo.
And, of course, the jobs report was terrible. There's no good news to dig out of it. Worse, the previous two months were revised down - like usual, but worse - so the signs of recovery in employment? Eh, not so much.
Unrelated to any of this, MIT has an interesting project going on measuring inflation, called the Billion Prices Project.
European markets are bouncing around all over the place right now. Italy's down hard after the (mostly symbolic) President said "yeah, we're screwed" over the weekend. It's not freefall, but it's ugly. French and German markets are now down after spiking up in opening trades. FTSE still up but gyrating pretty well. No telling how this is going to fall out in the short term. Good luck, everybody.