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The bloggers at bloggers at UMKC’s economics blog have been making the case that California’s IOUs are a currency.  Randy Wray’s entry last Monday was particularly provocative because he suggests a movement to loosen national government power is supporting similar moves in other jurisdictions. Wray writes:
Some commentators have argued that the proposed California "warrants" are [...]

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Back in April, I mentioned a story about BTA, a bank in Kazakhstan that had been nationalized by the state in February.  The interesting bit about the story was that interested parties from abroad (including Morgan Stanley) had significant Credit Default Swap contracts (CDS) written against losses in the banks bonds.  In essence, foreign investors [...]

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Reuters is reporting that the ratings agencies are about to get into some serious legal problems.  You see,during the bubble years, the ratings agencies gave a gold-standard AAA rating to what now seems to be dubious investment vehicles.  Now, investors are angry and they are starting to sue.
Calpers, the biggest U.S. public pension fund, has [...]

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This past weekend I saw the film Food Inc, which I recommend highly to anyone looking to see how deregulation has affected industries other than finance.  While the subject of Food Inc was how the industrialization of food policy in the U.S. has had unintended negative consequences, I couldn’t help but draw connections to the [...]

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‘Stoned wallabies make crop circles’ – BBC News
"Australian wallabies are eating opium poppies and creating crop circles as they hop around "as high as a kite", a government official has said."

Is an Ugly Baby Harder to Love? – Time
A small new study suggests we\’re wired to appreciate beautiful babies more than unattractive ones, but does [...]

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The crucifixion of Latvia – Ambrose Evans-Pritchard, Telegraph“Contrary to revisionist talk, Argentina was not a basket case. Its imbalances were no worse than those of the Baltics, Balkans, Spain, or Greece, and arguably better. It ran a trade surplus in 1999 and 2000 until dollar revaluation against Brazil and Europe crushed exports. The economy shrank [...]

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Today vs. the 1980-82 Recession – Menzie Chin
“While the job losses, foreclosures, stock declines and other casualties of the current recession have been very painful, substantially more bad economic news is needed to make this recession worse than the downturns of 1980-’82, at least in G.D.P. terms.”

May Sales: How Retailers Fared – Real Time Economics
Staatshilfe [...]

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I was on the BBC yesterday talking autos and my commentary was almost entirely political.  So, as we await the likely General Motors bankruptcy, I think it bears discussing how political this process has been and will continue to be.
General Motors is a monster company employing a quarter million people worldwide.  It sells $150 billion [...]

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This is a very good explanatory piece from CNBC on how counterparty credit risk makes the credit default swap market a financial weapon of mass destruction.  Note they are not talking about eliminating the CDS market, but merely regulating and standardizing it to prevent a potentially catastrophic domino effect.

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You may have noticed that the news cycle has turned down: U.K. manufacturing down, bank stocks down, Chinese inflation and exports down. All of this points to the underlying weakness in the global economy.
I should also point out that a nasty outcome at GM would seriously hamper a recovery.

BBC NEWS – Record fall in [...]