The contagion of the European Union and banking debt – 20 European Banks have liabilities above 50 percent of their home country GDP. Why an EU FDIC is highly unlikely in the short-term.
The crisis in Europe is boiling over yet again. The central connecting factor of all of this is too much debt relative to production. Debt in itself is not a bad thing. If you borrow modestly for a home and have sufficient income to cover your mortgage payment then this might actually be beneficial. When [...]
The burden of unsupportable debt. US debt-to-GDP growing at a pace rivaling certain European nations – The dramatic problems of peak debt in 2012.
What makes this global financial crisis unique is that it is based on unsustainable levels of debt. In historical cases you would have sovereign nations defaulting on their debts but these were more isolated and clustered, not global issues. Today virtually every large crisis that is hitting is occurring because of peak debt situations. No [...]
Starting life in the negative net worth column. What the Fed does not want you to know about American net worth figures.
The reports on American wealth from the Federal Reserve and U.S. Census did not get the press they deserved. You would think that an overall decline of 40 percent for household net worth would get the attention of the press but that might throw a wrench into the consumption machine that they are promoting. Up [...]
Financial panic button for younger Americans – The sandwich generation saw a 59 percent decline to their net worth as they deal with college aged students living at home and elderly parents.
Unfortunately more data pointing to the deterioration of the middle class came out this week regarding net worth figures. One of the more ominous data points regarded the sandwich generation of those taking care of college aged kids and parents. The net worth figures this time released by the US Census coincide with the information [...]
The broken tassel of American higher education – College debt defaults bring up questions about repayment structure. Is college even worth the current costs?
As hundreds of thousands of young American enter the employment market with newly minted degrees, the clock begins to tick on those heavy student loans. The majority of student loans do not enter repayment until six months after graduation. Yet we are facing tectonic shifts in higher education. The cost of going to college, seemingly [...]
The global addiction of central banking stimulus – Contagion spreads to Spain as 10-year edges to 7 percent. Life in a perpetual quantitative easing world.
Financial markets around the world are now desperately dependent on central bank stimulus. The US recovery is largely dependent on the Federal Reserve funneling loans into the system via the quantitative easing process and other archaic forms of money development. It is interesting how the Greek stock market rallied this week merely on the notion [...]
How to lose 40 percent of your net worth in 3 years – Americans see their net worth collapse during the recession. Federal Reserve survey highlights a case of austerity for the masses and social welfare for the politically connected.
Working and middle class families already feel the burden of a more limited financial middle in our economy. What was once taken for granted such as affordable quality college education, homes with moderate mortgages, and healthcare costs that didn’t put families on the verge of bankruptcy are now largely harder to come by. The Federal [...]
The banking shell game sponsored by your bailout dollars – how banks lure working and middle class Americans into losing hard earned money. $29.5 billion in overdraft fees charged last year.
Banks really have a wonderful structure in place at least when it comes to US banking. The Federal Reserve and US Treasury have given an open ended response in terms of bailing out the banking system should any additional financial crisis should arise. Even at the moment no real changes have occurred and this is [...]
The dark financial clouds engulfing Europe. CBO projects massive deficits yet Treasury Bills move lower on global mattress bet.
The Congressional Budget Office released national debt projections showing the US Federal debt will surge to over 200 percent of GDP in the next two decades. Or maybe it will go under 100 percent. It is an interesting wide range projection. You only have a few options to remedy the situation and for the moment [...]
The day the credit markets awake from a slumber – $1 trillion in consumer debt currently delinquent. Student debt continues to grow adding fuel to the higher education bubble.
With much of the attention being diverted to the cascading financial crisis in Europe something was missed in the United States. The incredibly important quarterly consumer credit report released by the Federal Reserve highlighted some disturbing trends. The first overall point is that the American consumer continues to deleverage. Yet with a system built on [...]