After the United States started its ‘Guns and Butter’ exercise under President Johnson and eventually de-linked from gold in 1971, its economy has become ever more leverage- and debt-propelled. Interestingly, the result has been a diminishing marginal return for each new dollar of debt.

Lean Times in a Town of Billionaires – Deal Book
UK economic growth slows sharply – BBC News
Ottawa rejects Air Canada layoff waiver request – Financial Post
Eurozone mortgage lending at record low – FT
Japan inflation accelerates – FT
Investors fear worst from UK bank results – FT
WaMu reveals $10bn capital buffer – FT
Mild slide in sales of [...]

1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California were taken over by the FDIC on Friday. They always wait until Friday night to do their business. This marks the first FDIC closure action since the FDIC closed the much bigger IndyMac.
Bad loans to developers and home [...]

I received a note from U.S. Airways in my inbox today asking me to contact my Congressman to stop those evil speculators from causing oil prices to rise. Last time I checked, U.S. Airways is an airline, not a consumer advocacy group.

Dear U.S. Airways customer,
Several weeks ago, [...]

Ron Paul sounds off on the housing bill that was just passed. This bill has more problems associated with it than any bill we have seen enacted to counteract the economic downturn. The moral hazard, the lack of congressional oversight, and the lack of transparency are all breathtaking. Congress has abdicated its responsibility [...]

Housing: US, UK and SpainBright spots in the housing nightmare – MSNU.S. Mortgage Rates Soar on Inflation Fears – Housing WireU.S. Existing Home Sales Continue Freefall – Housing WireOversupply killing U.S. lender giants and house prices – Irish IndependentUK Major mortgage lenders cut interest rates TelegraphWhat to do if you’re trapped in [...]

The lawsuits are piling up. America is a very litigious country and when things go wrong people sue. That’s one reason one should realistically expect the courts to be clogged with all manner of suits on bond insurance, auction rate securities, CDOs, predatory lending, and on and on. The latest in this [...]

The day is almost over for the market (thank goodness) and it seems that financal service investors are in panic mode again. The market is down over 250 points and some shares in financial services are down over 15%. What gives?
As we may soon find out, non-market based economic solutions, like the infamous SEC [...]

The U.S. House of Representatives has passed the housing bailout bill helping troubled mortgage borrowers, but also giving the U.S. Treasury Department a blank check to support Fannie Mae and Freddie Mac. The New York Times describes it this way:
Representative Barney Frank, Democrat of Massachusetts and a primary author of the legislation, [...]

The headline says it all. The U.K. has fallen into its economic downturn with much greater speed than the U.S. Retail sales were down in June3.9% after a rise of 3.6% in May.
U.K. retail sales dropped in June by the most since at least 1986 as accelerating inflation and the slowdown in economic growth [...]