Europe is the lead story of the 2010 Crisis Yearbook. It holds the promise of radical legal innovation in financial crisis management: it may yet become the birthplace of the first-ever sovereign bankruptcy regime, and the first-ever initiative to standardize sovereign bond contracts issued under the domestic laws of different states. But for now, Europe is mired in CACology.
In housing disaster regions like South Florida or Vegas, that nonsense excuse at least has a basis in fact. The reality is the mass volume of foreclosures act to reveal the flaws in the banks processing systems. If they engage in small illegalities in New Hampshire, for instance, its doubtful anyone would notice.
What will happen to the US economy in 2011? If you’re referring to profits of big corporations and Wall Street, next year is likely to be a good one. But if you’re referring to average American workers, far from good.
Most experienced watchers of the eurozone are expecting another serious crisis to break out in early 2011. This projected crisis is tied to the rollover funding needs of weaker eurozone governments, i.e., debts falling due in March through May, and therefore seems much more predictable than what happened to Greece or Ireland in 2010. The investment bankers who fell over themselves to lend to these countries on the way up, now lead the way in talking up the prospects for a serious crisis.
Some people use the end of December as an opportunity for a retrospective on the year. But I decided to take a look back at the last three years, by way of updating some comparisons I made in April 2009 between the Great Recession and the average characteristics of other postwar recessions.
Next week starts the new Congress, and with it the Tea Party conservatives. What’s their strategy? What will they rally around?
They’ll grouse endlessly about government spending but I don’t think they’ll use any particular spending bill to mobilize and energize their grass roots. The big bucks are in Social Security, Medicare, and defense, which are too popular. And their support for a permanent extension of the Bush tax cuts will make a mockery of any argument about taming the deficit.
The recent suicides by over 60 poor borrowers in the Indian state of Andhra Pradesh have brought the operations of microfinance institutions (MFIs) under public scrutiny. It is well documented by both print and electronic media that these debt-driven suicides were due to coercive methods of loan recovery used by commercial MFIs. The commercial MFIs operate as profit-making non-banking financial corporations (NBFCs) in India.
These are things I’m keeping an eye on, or trying to find out more about. That isn’t a prediction that any of them will blow up, nor that nothing else will, just a round-up of the bees in my bonnet. If you’ve been following Naked Capitalism you are up to speed on most of this.