Lunchtime Links

December 2, 2009

Fears grow about overheated U.S. debt market (Sender, FT) Dividend recaps (see yesterday’s post) aren’t the only controversial debt deals coming back to marketm, so are PIK toggles and Covenant Lite loans. Like option ARM and liar loan mortgages these would qualigy as Ponzi units of finance under Minksy’s framework.


Nov consumer bankruptcy filings drop 18% versus October (ABI) They were up 12% compared to last year, but a month over month decline is still good news…

Questions for Bernanke (Cunningrealist, ht Scott F)

The real elephant in the room (Welsh, Big Picture)

Rome seeks to wipe out taxi scams (Jones, Reuters)

Quote of the day….John Williams at Shadow Stats published his Hyperinflation Special Report today. It’s a subscribers only piece, but here’s the overview:

A Great Collapse. The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.

Woof. I know of no one more pessimistic. He says “government and Fed actions have narrowed hyperinflationary Great Depression timing to next five years.”

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Question #7’s a nice shot at the welfare queens of Wall Street (who should be paid on the general schedule)…7. Via the FDIC, the American public now explicitly guarantees the bonds of Wall Street firms where bonuses are surging and individual employees can be paid millions of dollars a year. What is your opinion on the morality of this guarantee?

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