Friday, 11 February 2011

Bubble links

The latest of my occasional reading recommendations. Most of its good, and some is irritating.....

US consumers are back to their old ways; the savings rate has started to drop

For a short time, Americans seemed to be born-again savers. In the second quarter of 2009, in the depths of the Great Recession, households put away 7 percent of disposable income, compared with under 2 percent in the third quarter of 2007. Yet the savings rate is falling again, down to 5.3 percent in December.

Whatever happened to all those bad banking assets? Actually, they are still there....

(b)anks still hold plenty of the bad assets that once spooked investors: mortgage-backed securities, collateralized debt obligations and other risky instruments. Their potential impact concerns some accounting and banking observers.

In part due to those bad assets, the top 10 U.S.-owned banks had $13.8 billion in “unrealized losses” that have lasted at least a year in their investment portfolios as of Sept. 30, according to a Wall Street Journal analysis.

Dissent voices within the Fed

Two Federal Reserve Bank presidents skeptical about the Fed’s $600 billion bond-buying program said the prospect of accelerating inflation underscores the risk from a record increase in the central bank’s balance sheet.

Richmond Fed President Jeffrey Lacker said yesterday policy makers need to take “quite seriously” their commitment to review the program as the U.S. recovery quickens. The Dallas Fed’s Richard Fisher, who votes this year on the policy-setting Federal Open Market Committee, said the central bank is “pushing the envelope” with its purchases and that he’d oppose any proposal to do more.

Hollywood home goes from $1 million to $377,000. Perhaps, I could afford to live in LA.

What better way to celebrate the Oscars with a glorious foreclosure in Hollywood? For those not from Southern California the idea of Beverly Hills and Hollywood must seem like an onstage fairytale. The reality on the ground is very different.

Joseph Stiglitz Predicts Another 2 Million Foreclosures In 2011. Say it ain't so Joe.

The current U.S. housing crisis has made the country more unequal and left Americans worse off than they were 10 or 12 years ago, according to Professor Joseph Stiglitz.

Stiglitz now expects the housing situation at the root of the crisis to get worse. He expects an addition 2 million foreclosures in 2011, adding to the 7 million that have already occurred in the U.S.

..and finally, young Alice gets a nice write on on Naked Capitalism

Now let’s look at one of Krugman’s current concerns, which is food price increases. The blog Clouded Outlook (hat tip Ed Harrison) tells us how the food “inventory” data that Krugman is relying upon is woefully incomplete. is my other website. (One day, I will move there permanently.)

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