Business

Paris -- Here's another great post from my friend and co-author Fred Feldkamp that talks about why credit spreads are crucial to understanding our economic prospects. His comment also illustrates how the SEC handed the large banks a monopoly on short-term finance in 1998 by amending Rule 2a-7 and made the 2008 financial crisis inevitable.  Few significant players in "corporate finance land" are willing to take on the bank monopoly/monopsony over short-term funding for fear of being cut off.

We have seen this pattern before. In August, the first thing to tumble was Yuan FX rates, then money market rates exploded, and then the stock market tumbled. While it is a little premature, today's sudden plunge in Chinese stocks (as the afternoon session opens) following last week's spike in money market rates following the previous week's non-stop weakness in the Yuan does have a concerning smell of deja vu all over again.

Submitted by David Haggith via The Great Recession blog,

It’s a good question to ask on the days after Christmas, when we have all used our credit cards to buy gifts for others. In spite of this seasonal gift buying, I think there has never been a more selfish generation.

What is so selfish about this generation?

Submitted by John Rubino via DollarCollapse.com,

Along with the currencies of most other commodity-exporting countries, the Canadian dollar has been in near-freefall lately.

With recent JPY strength not helping, last week ended on a down-note for Japan as its jobless rate ticked up from 3.1% to 3.3% (the biggest rise since January) and Household spending collapsed. However, as the last week of the year begins, things have not improved as a double whammy of awfulness just hit the shores of Abe's nation with retail sales (worst since the tsunami) and industrial production ugly and missing across the board. We are sure, of course, that just one more dose of faith-based QE will fix this.