The strongest and toughest creature out there, and maybe the smartest one, that no one has been able to subdue yet, the inexplicable American consumer has hit a wall. It showed up in a prosaic but ugly 8-K filing by Visa—a staggering and sudden shift that pundits tried to explain away somehow by referring to recent changes in debit card regulations. I mean, come on.
Monthly Archives: May 2012
Bracing for a Euro Crash and Creating A Housing Bubble: The Swiss Caught in a Vice
by Wolf Richter • • Comments Off on Bracing for a Euro Crash and Creating A Housing Bubble: The Swiss Caught in a Vice
As developments in the Eurozone veered from bad to awful, with Greece on the brink and Spain getting closer, Switzerland, a speck with 7.9 million people surrounded by turmoil, is bracing itself, according to the President of the Swiss National Bank and long-time euro-skeptic Thomas Jordan, for the collapse of the euro. In the process, it’s creating a housing bubble with potentially horrendous consequences.
The President of the Bundesbank Lashes Out
by Wolf Richter • • Comments Off on The President of the Bundesbank Lashes Out
Jens Weidmann, President of the German Bundesbank, ventured into a veritable lion’s den with an interview in Le Monde, largest liberal daily in France, supporter of President François Hollande and his “growth” policies. And there, he lashed out at Hollande, the ECB, Greece, at everything that smelled of a transfer union, at Paul Krugman even.
Germany Walks Away From Greece
by Contributor • • Comments Off on Germany Walks Away From Greece
Greece’s exit from the Eurozone has reached critical mass and is now a routine topic at all levels of government. While heads of state still hue to the line that Greece should stay, out of the other side of the mouth comes but—now that the focus is on Spain, the one problem the Eurozone can’t digest. And after Spain is Italy, which is beyond bailout. And now word is out in Germany that Greece is a “failed state.”
The Natural Gas Massacre Gets Bloodier
by Wolf Richter • • Comments Off on The Natural Gas Massacre Gets Bloodier
The plight of natural gas driller Chesapeake Energy could almost make you feel sorry for CEO McClendon. He lost his chairmanship after his conflicted entanglements and an in-house hedge fund had seeped out. The company announced it may run out of cash next year. Fitch, in downgrading Chesapeake, estimated that the shortfall this year would reach $10 billion…. All due to the low price of natural gas and the ugly economics of fracking.
“Nuclear-free Japan:” Figment of the Imagination
by Wolf Richter • • 4 Comments
Nuclear power is galvanizing Japan, stirring up public discussions and outright dissent with demonstrations and all, a rare occurrence in Japan. It has divided the country in two: those who want nuclear power generation to resume so that a stranglehold can be lifted from the economy, and those who want a “nuclear-free” Japan. But there is no quick way out, even if everyone wanted it.
The Confiscation Conundrum in Europe
by Wolf Richter • • Comments Off on The Confiscation Conundrum in Europe
No one likes paying taxes. You’d think. And it’s not just income taxes but a slew of other taxes. In San Francisco, we already have an 8.5% sales tax—but propositions to increase the state portion are worming their way onto the November ballot. And if it passes, it’s our own @#%& fault. In Japan, efforts to raise the national consumption tax have led to a groundswell of opposition and a nasty political fight. But what the heck happened in Europe?
Ganging Up On Germany at the G-8
by Wolf Richter • • Comments Off on Ganging Up On Germany at the G-8
They’d wanted to “blockupy” Frankfurt, Germany’s money capital, for four days with concerts, marches, and speeches to protest against the power of banks and austerity policies. But the city issued a blanket prohibition—highly controversial in a democratic nation. And on Saturday, when demonstrations were allowed, they became the background to the G-8 meeting at Camp David: a three-pronged attack on reason—with President’s Obama’s reelection at stake.
Horrific Moments of Greece’s Year 2011, in Video
by Wolf Richter • • 2 Comments
Greece suffered in 2011. The economy tanked. Unemployment jumped. The government, up to the gills in debt and cut off from the capital markets, went begging, and in return had to implement painful economic reforms. With their livelihood threatened, people demonstrated, and strikes paralyzed Athens, and street battles were fought with batons, teargas, and Molotov cocktails—horrific absurdities captured in an awesome and shocking video.
Rumors, Denials, and Visions of Chaos in the Eurozone
by Wolf Richter • • 2 Comments
While the G-8 leaders are schmoozing with President Obama during their slumber party at Camp David, and while the NATO summit, protests, and rallies are wreaking havoc on the streets in Chicago, Europe is re-descending into rumor hell—where good rumors, as we found out last summer and fall, are head fakes that cause huge rallies in the markets, and where bad rumors, though passionately denied by all sides, turn out to be true.