Another chart of the day: Greek bank deposits collapse

The chart below via Reuters’ Scott Barber is what an economic depression looks like. It covers Greek bank deposits from 1998 to present

Hitler and Mussolini rose to prominence as a result of pro-cyclical government economic policy

In 1921, the US, a creditor nation, was fighting boom time inflation and turned to ‘austerity’ to defeat it. Europe on the other hand was seeing a debt-laden deflationary episode after the Great War. This episode has historical lessons for today’s leaders

Spain is the New Greece

Spain has become the new Greece. Actually, in many respects Spain is now worse than Greece. The Spanish unemployment rate is already so high and unlike Athens, Madrid has made no headway in reducing its public debt levels (whereas the Greeks are close to running a primary fiscal surplus at which point they could leave and turn the problem back on to Brussels). Moreover, Spain has a huge private debt burden that is twice that of Greece

Chart of the Day: Economic Depression in the Euro Zone Periphery

“The chart also shows that the current economic situation is much weaker in several euro-area periphery countries. The recession in Greece has yet to end, and real GDP is now more than 17 percent below its prior peak. While a recovery recently appeared to be under way in Ireland, real growth is still 12 percent below peak. Portugal’s economic contraction during 2008-09 was less severe than that for the euro area. However, Portugal’s recovery faltered in mid-2010, and the economy has been contracting since then. Spain also experienced a milder recession than the euro area, but its recovery began later and has been progressing at a slower pace, leaving it around 4 percent below peak.”

Death of pensioner sparks protests in Greece: Video

“The anger that prompted Christoulas to take his own life in Syntagma Square in view of the Greek parliament is shared by much of the middle-class and low-income Greeks who have carried a disproportionate burden of the stringent tax increases, and pay and pension cuts meted out in the name of putting Greece on an economically sustainable path.”

Shiller: Real Chance of Japan-like Housing Slump in US

Shiller says the shift toward renting and city living could mean “that we will never in our lifetime see a rebound in these prices in the suburbs.” Watch the video

The euro zone is not ready politically for a default

On Tuesday night, I spoke to Amanda Lang and Kevin O’Leary about Greece. The question was whether they were going to default and leave the euro zone. My response is that the euro zone is not ready politically for a default and so I think some sort of bailout deal is likely over the short term.

Over the longer term, I see nationalism leading to a Greek exit from the euro zone if the present austerity path continues

Greece’s extreme parties are gaining support

My takeaway here is that people are desperate and they are willing to support any party that has a solution to their economic plight, irrespective of whether that party is considered extreme

Greece: On Pace for the Worst Recession in Modern History

The financial situation in Greece is deteriorating at a remarkable clip

The Job Guarantee, Kleptocracy and Blogging

A post about the job guarantee idea in the context of a historic economic crisis

Herbert Hoover: White House Statement on Federal Expenditures, June 1931

The following is a statement issued by Herbert Hoover’s White House on 2 June 1931 regarding the federal budget deficit for the year. I have highlighted the parts most relevant to today’s situation

News Links: Central Banks Take Joint Action

Financial news links for 30 November