Sunday, July 24, 2011

notes on the week ended July 23rd

last week, we left the debate on raising the debt ceiling with negotiations breaking up in anger and the congresscritters in the House planning to go off on their own & pass a "cut, cap, & balance act", which rather than addressing the debt ceiling directly, attempted to go around it by stopping government spending in the 3 ways described in the title of the act…as it was passed, it didnt target specific programs, it just specified a cut for the coming fiscal year, then a 20% of GDP spending cap going forward, with a balanced budget amendment which would have insanely caused fiscal policy to be as cyclical as the general economy...the house was as far as it got, as the senate voted it down, advancing instead a bi-partisan proposal hatched by six senators, aka "the gang of six", which built a 3.7 trillion dollar deficit cutting package around the framework of obama's deficit commission, better known as the simpson-bowles "catfood commission" which i discussed & dismissed out of hand when it was first released last november, only to be surprised to see elements of it included in the year end continuing resolution in december...that's the kind of year its been; recommendations for legislation which i first perceive as too atrocious to go anywhere end up in the budget the next month....

at any rate, it was the "gang of six" budget plan, which was immediately embraced by obama, which garnered the most attention this past week; what it would do is immediately reduce the future cost of living adjustments to social security recipients by switching to the "chained-CPI" method i explained two weeks ago; it also reduces the top marginal income tax rate for the rich and for corporations from 35 percent to as low as 23 percent and they say it makes up the lost revenue by closing loopholes & reducing tax deductions, including such tax expenditures as the home mortgage interest deduction; it also cuts medicare by around $500 billion over the ten year plan, $300B of which would come out of pay for doctors....most of the rest appears to come from other discretionary programs, as it doesnt mention any cuts to the defense budget, the big red piece of the pie in the above graph... so it almost appeared for a few days that this big package was a done deal, until boehner came out of a house conference with reservations; apparently it didnt go far enough for the tea party; so obama went back into negotiations with boehner, now not only willing to dismantle parts of the safety net, but apparently also offering to throw one or both of his signature accomplishments under the bus to get a deal: some administration watchers believe he's going to sacrifice parts of the Dodd-Frank financial reform law because tim geithner's op-ed in the WSJ defending Dodd-Frank on wednesday was penned because he was losing the internal administration debate to bankster friendly comptroller of the currency John Walsh, who's been a vocal critic of financial regulation...obviously, such regulation adds nothing to the deficits, but allowing it to be part of the negotiations is indicative of how easily obama is willing to surrender anything to tea-party demands; as it turned out, the talks broke up friday anyway, because after obama gave boehner everything he wanted, boehner then also insisted the individual mandate portion of the healthcare reform act be repealed too...so the week ended with both obama & boehner blaming each other for the collapse of talks, & Reid cancelling further weekend senate meetings...

by way of quickly summarizing some of the economic news this week: housing starts in june surprised to the upside, at 629,000 units, 14.6% above the seasonably adjusted may level of starts; even so, the US is on track for a record low number of completed units this year, probably not a bad thing with bloated home inventories; sales of existing homes, however, were weaker than expected, down .8%, largely due to a record number of contract cancellations...investigations by both reuters and AP revealed that even after banks swore off fraudulent foreclosures and robosigned paperwork, the practice continues & is widespread; they're still using the imaginary "linda green, vice president" signature on affidavits in at least three states even after the practice was exposed on CBS 60 minutes...meanwhile, the 50 states attorney generals are moving to give the banksters immunity from prosecution if they promise not to do it again, pay a small fine, & contribute to their next campaigns...meanwhile, minnesota enters its third week of shutdown, with parks, museums & public restrooms closed, highways going unrepaired, various licences unavailable, and sales of alcoholic beverages on hold...i should also mention that weekly new claims for unemployment came in at 418,000, up 10K from last week, notable because it's the 15th consecutive week that new job losses have been over 400,000, a threshold widely seen as indicative of a weakening job market and portending higher unemployment numbers in the later monthly reports...

july 23 records

i dont have to tell if you're anywhere east of the rockies that we've had a hellova heatwave this past week, and since i've watched it since it began last sunday i thought i'd put it in perspective; as far as heat goes, most of the northern cities that have experienced three digit temperatures can expect such temperatures once in 7 years, so it's not that unusual in that respect; what has made this heat unique was the humidity, which resulted from the ample moisture available from earlier flooding & saturated ground; thus the "heat index" topped 120F in several north central states, and even hit 131F in one location in iowa, a dangerous level typical only of the dead sea in the mideast & not usually seen in the US...saturday i did a screen capture of the records for the preceding 7 days; the small adjacent map should enlarge to full size if you click on it, but what you’ll have to take my word for is that of the 2701 records, 2018 were set overnight as high minimums (the yellow dots)…i dont have time to capture, crop, & reload the latest picture, but the link for the interactive 24/7 is here, and you’ll see that including yesterday’s records, 3188 new US high temperatures have been set in the past week...

intransigence from germany & the ECB in europe ealy in the week, which had driven yields on greek debt to near 40% and that of both ireland & portugal over 20%, gave way to an agreement on thursday which seemed to relieve the markets, but it didnt impress most analysts who've followed the developments in europe closely; if you want a play-by-play of the rest of the week in europe, its all documented on my blog...what im going to include here is a chart of ten year bond spreads for the primary european countries for the past year & a half, sourced from bloomberg by bill @ calculated risk, wherein he adds arrows at the point each major bailout had been agreed to…the point that's useful to note is that each agreement results in a period of calm before the bond market panic resumes and takes european borrowing costs to ever higher levels…(the chart should open in a new window if you click it)


the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me

Sunday, July 17, 2011

notes on the week ended July 16th

bpc debt ceiling table

its getting closer to the Aug 2 date that the US can no longer pay its bills without going over the artificial debt limit, and ive yet to see anything that looked like a serious solution in sight in the news about the daily meetings...on wednesday, for instance, obama was said to have stormed out of a meeting after having been interrupted mid-sentence three times by eric cantor's ranting, and instead of meeting with republicans on friday, he held a press conference to make his case in public...as of saturday, the house republicans were planning to vote next week to link a debt limit increase to an unworkable balanced budget amendment, so they're still spinning their wheels in their own ditch as well...meanwhile, Moody"s put the US on credit review for a possible downgrade, and as that potential downgrade would affect billions in municipal debt including MBS secured by the US or a GSE, 7000 municipal debt ratings were also put on review...S&P then warned that any missed government payment, not just interest on the debt, would also trigger a downgrade from them...as i've got the play by play of the debt ceiling related events in over 50 links to articles on my blog, i'll dispense with retelling all of that here, and instead give a few pictures of the predicament having both legislated budgeted spending and a debt ceiling has put us in...

this adjacent table was from a 38pp debt limit analysis (PDF) from the bipartisan policy center, which i believe is the rivlin-domenici group; it estimates what would happen in to government programs in august should the debt ceiling not be raised; estimating receipts of $172.4B, the government could cover interest, social security, medicare, medicaid & unemployment benefits, and not much else (i know obama was on TV saying social security checks would not be mailed on august 3, but it seems unlikely anyone is going to intervene & deliberately shut down the SS computers)

US Spending Breakdown.png

the second example of the problem we'd face is similar, a pie graph worked up by libertarian blogger megan mcardle @ the atlantic, in which she is attempting to convince her right wing followers that stonewalling the debt ceiling vote is a non-starter...if you click the graph to the left, you'll see she pays interest & pensions, military payroll, VA benefits, social security, medicare & medicaid (in green) and then runs out of money for military operations & the rest of the budget in red...and as she points out, you cant just stop running the prisons, leave the troops in iraq & afghanistan unsupplied, stop IRS operations & refunds, and leave the border checkpoints unmanned...

some of the more senior republicans, who've been willing to let the theatrics play out up until now, are trying to weasel their way out of the impasse without losing face; the one proposal that has got the most press has come from senate minority leader mitch mcconnell...instead of congress voting on the debt limit each time it would come up, the mcconnell debt limit proposal would allow the president to raise the debt limit, and give congress the power to overrule him with a two-thirds majority in both houses...every time the president raised the debt limit by $700 billion, he would have to submit a plan to cut spending by more than $700B; congress would vote on that package, likely disapprove of it, then the president would have to veto their resolution of disapproval, and unless they overruled his veto, it would take effect...notice what this would do: it make the president responsible for both raising the debt and cutting a number of possibly popular programs, and since it would take 3 such $700 billion debt increase/ spending cut tranches to get through next year, it would give the republicans a campaign issue right up until the next election...even so, many of the house tea party caucus oppose this proposal, as they  dont want to give up their direct chokehold on government operations that the debt ceiling gives them...

   there werent many important headline economic reports out this week, so i'll just briefly mentioned them...seasonally adjusted retail sales in june were up 0.1% over may, and flat without autos; lower gas prices kept the total down...continuing a trend i noticed during the holidays, the big same store sales increases were concentrated in the luxury chains like nieman marcus, limited, and saks, while the discount & dollar stores where the poorest shop lagged...also in june, industrial production increased 0.2% and capacity utilization was unchanged at 76.7%,....the reported US trade deficit widened for May to the widest gap in three years, "exceeding all forecasts of 73 economists surveyed by Bloomberg", who apparently didnt figure in the high cost of imported oil...RealtyTrac released a report that foreclosures were down 29% for the first half of the year over the same period last year, apparently because banks are having trouble proving they own the notes on homes under the laws of some states; and "ForeclosureRadar" produced a study showing that the more thats owned on a house, the longer the owner can live in it without paying on the mortgage without threat of foreclosure...& both goldman sachs & macroadvisors downgraded their forecasts for the second quarter growth to below 1.5%...after last week's dismal employment report, there have been a lot of anecdotal stories in the press wherein someone tells how unemployment has affected their life & their family...with over 14 million unemployed, if ten such stories are published every day, 365 days a year, it would take over 38 centuries to have all their stories told...

as most of you know, ive been watching & documenting the deterioration in europe for some time, certainly not completely comprehending the complexities of it, but understanding what i can from the news and the tone of it....my sense of what's happened this past week is that it's spiraling out of control; the reporting has become frantic and the debt situation, based on the cost of the PIIGS to borrow, became worse each day...the week started with a concession from the european leaders that greece would likely default, after their budget deficit widened 28% in the first six months in spite of (or because of) the imposed austerity...then irish debt was downgraded to junk by moody's, borrowing costs for portugal & ireland began rising again, & italian debt was said to be under speculative attack...sarkozy wanted an emergency summit but merkel declined & visited africa instead, which seemed to make thing worse, & by friday borrowing costs for all five troubled countries had hit records....the risk with italy now also in trouble is immense; they have to roll over €69bn in debt by september with their interest rates now over 6%, & they have the world's third largest bond market, after the US & japan, making them too big for anyone to save...

the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me

Monday, July 11, 2011

notes on the week ended July 9th

State and Local Government Payrolls Are Shrinking

there is nothing good that can said about the dismal June employment report from the BLS on friday; there wasnt even a snowstorm or tornado outbreak to blame it on this past month...maybe we should just focus on the two private unemployment reports out earlier in the week; TrimTabs, an investment research firm which analyzes the Treasury's daily income tax deposits; reported the economy added 171,000 jobs in June; then ADP, which surveys only the private sector, reported an increase of 157,000 jobs from May to June....those two positive reports set everyone up to be crushed by the government report which came out friday; even oil prices had regained the level they were at previous to the release from the strategic reserve in hopes of a strong report, but the optimism all reversed when the unemployment report showed a statistically insignificant gain of only 18,000 jobs and a higher unemployment rate at 9.2%, which would have been even higher if a quarter million job seekers hadnt given up entirely last month; the labor force participation rate dropped to a 25 year low of 64.1%... in addition, may's dismal report of only 54K jobs gained was revised downward to 25K, and 15K was knocked off the previously reported april figure... breaking the establishment report down further, private payrolls were up 57,000, offset by a loss of 39K government jobs, of which nearly 13K were schoolteachers...indeed, private job creation during this recession has been in line with previous recessions; what has made this one measurably worse has been the loss of 577,000 state & local jobs since the start of the "recovery"…

other stats from the report continued the dismal litany; the broader measure, U6, which includes those working part time who want full time work, increased from 15.8% to 16.2%, and the employed to population ratio dropped to 58.2%... the average workweek was also cut by a tenth of an hour, and the average hourly earnings fell a penny to $19.41 (i dont know how that average is computed; it may well be inflated by a handful of people taking home 7 figure incomes, while the lions share of workers are barely making the minimum)

nonetheless, with most americans carrying a large mortgage, credit card &/or student loan debt, household balance sheets will continue to be under pressure with negative wage gains, which are even worse adjusted for inflation...we need rising wage raises across the board to get out of this balance sheet recession…lower wages such as we are seeing just digs a deeper debt hole for everyone...

something i've often mentioned in writing about these unemployment reports is that we need something on the order of 125,000 new jobs each month just to keep up with the net increases in the workforce as young people are added, & i've often tried to put that into perspective by explaining how many years it would take at a given rate for the economy to get back to full employment; but i've never felt my explanations were adequate...so i was pleased to see that david beckworth put together the adjacent chart that shows just that...what it shows is a target trendline wherein job growth would keep up with population growth, our current unemployment dip, and how many years it would take for us to reach full employment if the economy would start generating 200K, 300K, or 400K jobs per month (click to enlarge); you can see that even with good job growth of 200,000 per month it would take until 2023 to reach full employment, and even if the economy added 400,000 jobs a month, it would still take 3 years to employ everyone who would typically want to work full time...our average per month so far this year has been 126,000, so net on 6 months we've just been treading water...

all of which makes the ongoing negotiations between the tea party in the whitehouse and the tea party in congress on how much to cut from government programs even more perverse; how everyone can be talking contractionary fiscal policy in the midst of the most protracted period of high unemployment since the depression defies logic...you may have heard that obama has doubled down on the tea party demand that $2 trillion be cut from government spending over 10 years and that he now wants $4 trillion in cuts, including huge cuts to social security and medicare of which we have few details; there are some who think it was some kind of theater on obama's part, trying to paint the extremists into a corner; but i've seen nothing to suggest he doesnt believe the whole tea party anti-deficit line himself; he voted against raising the ceiling when he was in congress, all his economic advisors who wanted a larger stimulus have left the white house, & even joe biden's economic advisor jared bernstein has turned to blogging for more stimulus, which tells me he wasnt being heard when he was on the inside either...

one of the proposals for cutting government expenses which has surfaced & gotten some press is a change in the way COLA (the cost of living adjustment) is computed for social security and government employee's pay...it would change the government’s way of measuring inflation adjustments from the often quoted CPI (consumer price index) to a more obscure index called the chained consumer price index; according to the wall street journal, this change would save $300 billion in entitlement payments over ten years; the way this index is computed is that it assumes that as the normal items which a social security recipient purchases get more expensive, they will substitute a cheaper item in response...to quote an example from the BLS FAQ factsheet on this method: "If the price of pork increases while the price of beef does not, consumers might shift away from pork to beef." -- get it? and we can assume if the beef becomes too expensive, the index will be adjusted the next year for the price of the catfood seniors will be expected to switch to instead, and when gas gets too expensive, the old folks will most likely walk...

i dont know where this country is heading, but i have a sense that this country is being overtaken by a cultural revolution similar to what retarded china's growth for ten years during theirs...& it seems we're gonna lose a decade or two, just like china did during their cultural revolution, and by the time we come to our senses, the rest of the world will have passed us by...

there was quite a bit of discussion about a somewhat off the wall proposal to deal with the debt ceiling impasse by ron paul, that was picked up & advanced by dean baker, and generally supported by the liberal blogosphere: paul noted that of the $14.3 trillion in debt the treasury owes, $1.6 trillion of it has been purchased by the Fed during its two quantitative easing programs; the interest on that debt is paid to the Fed, who then turns around and remits its profits back to the treasury; since that's literally money the government owes to itself, mr. paul proposed that congress instruct the Fed to destroy those bonds, thereby reducing our debt by that amount..of course, after the economy began to recover, this would leave the Fed with no assets to sell to absorb the excess reserves it had created thru easing, which could be inflationary; dean baker suggested that as an alternative option, the Fed could raise the reserve requirements for banks, & by forcing them to hold more, which would achieve the same effect...

it seems that as soon as one can describe a plan for saving greece and salvaging the european union, the plans fall apart...last week the greeks agreed to impose severe austerity, give up most of their sovereignty, and sell most of their country off to the highest bidder (including 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece's national lottery), but on monday SP ruled that the french debt restructuring plan would still be considered a default...since the whole point of all the negotiations leading up to the plan was to avoid such a credit rating ruling, which would prohibit the ECB from buying greek debt, the question became will the plans be changed or will the central bank rules...there's now talk of calling it a "temporary default" as a sleight of hand workaround...while that was being discussed, Moody's downgraded portugal's debt to junk status, and fears of contagion spread to italy, whose interest rates across the board hit new highs, along with those of portugal & ireland...with european officials blaming the credit rating agencies, euro chairman juncker now wants a european agency, which presumably would produce more favorable ratings...and as borrowing costs for the PIIGS are rising faster than i can list them, it occurs to me i just can embed this table of links to bloomberg's timely updating of european bond interest rates, so you can see all the updated hockey stick graphs for each country for yourselves...

 

Greece 2 Year
5 Year
10 Year
Portugal
2 Year
5 Year
10 Year
Ireland
2 Year
5 Year
10 Year
Italy
2 Year
5 Year
10 Year

Spain

2 Year

5 Year

10 Year

Belgium
2 Year
5 Year
10 Year
France
2 Year
5 Year
10 Year

Germany

2 Year

5 Year

10 Year

the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me

Monday, July 4, 2011

notes on the week ended July 2nd

Real House Prices the popular Case-Shiller home price index was released this week, and depending on where you may have first seen the news, you may have heard that home prices in fell 4% in april from a year ago, or that home prices were up for the 1st time in 8 months, or home prices fell by most in 17 months, or that home prices dropped less than expected; so let me try to clear up that confusion; first of all, case shiller, as well as most home price indices, are not seasonally adjusted, so typically the spring months do show more gains, and winter more losses, so the 3 month price index ending april was up 0.7% over march prices, but it was still 3.9% below where last april's index stood...that 3.9% YoY drop was indeed the worst YoY drop in 17 months, but nonetheless, even an unadjusted gain was better than most had expected... calculated risk reports a seasonally adjusted case-shiller, and he has the 10 city index up slightly, & the 20 city index down slightly, both on the order of 0.1%...remember, march prices were the lowest since 2002, and average prices are still down 31.8% from the peak...the CoreLogic index home price index for the 3 months ending May was also released this week; this front weighted index used by the Fed showed a 0.8% increase, similar to case shiller...these home prices, of course, are nominal, and not adjusted for inflation; as i've pointed out previously, houses are a depreciating asset, and eventually deteriorate; so it's useful to look at home prices in real terms, adjusted for inflation...bill mcbride @ calculated risk does just that and produces the adjacent chart of home prices with that adjustment; it shows case shiller national prices are back to 1999 levels, the case shiller 20 are back to sept 2000, and corelogic back to january 2000 (click to enlarge)

lender processing services also reported homes in foreclosure and delinquent for May this week; the total number of mortgages not being paid on is still close to 1 in 8, although at 12.07%, its down a tick from the last report; 4.11% of homes are still in foreclosure, and some have been there for a long time: 34% of the loans in the foreclosure process have not made a payment in over 2 years, & another 35% of them have not made a payment in over a year...the backlog is worse in the judicial foreclosure states; last week a new york times reporter extrapolated the number of houses in default and foreclosure and the rate that they're being seized and found that in NY state, it would take 62 years to clear the backlog; in new jersey, it would take 49 years to foreclose on all those outstanding, & in florida, massachusetts & illinois, it'd take over 10 years...

since i highlighted the overly optimistic growth forecasts by the Fed last week, i ought to at least make mention of what kind of growth rates the IMF sees for the US; for 2011, they see 2.5 percent; 2012: 2.7 percent; 2013: 2.7 percent; 2014: 2.9 percent; 2015: 2.9 percent; & 2016: 2.8 percent;  they also forecast no improvement in unemployment for us over that six year span; the caveat i'll attach to that forecast myself is that growth rates seldom stay in such a narrow range for such a long period; so it would seem sometime in the next six years we'll either see an improvement, or regression...tim duy points out that the current expansion is nearly the average length of a post war expansion already, typically, we'd have just 2 more months of good times before the next recession hits...

  despite the fact that obama himself joined the debt ceiling talks, i still dont see any sign that progress is being made; they couldnt even agree to a time to have the principals continue talks over the weekend...all i see are warnings from those outside the negotiations as to how bad it can get if an agreement is not reached by august, or even july 22, to allow for time to convert any agreement into legislation by Aug 2...the bond market is still nonchalant, but looking at numbers i still see gridlock; the tea party faction of 103 will refuse to sign anything without a 50% cut this year, unworkable spending caps, & a balanced budget amendment; the democrats are insisting on revenues being included in any package, something boenher says no republicans will agree to...and any attempt to prioritize already legislated spending without default is likely to be chaotic...reagan economic advisor bruce bartlett is advising that the debt ceiling itself is unconstitutional; as the 14th amendment reads: "The validity of the public debt of the United States, authorized by law... shall not be questioned,", and the president should order the treasury to meet its obligations, debt ceiling notwithstanding, which some speculate would lead to his impeachment...so shutdown or not, summer could get messy...and speaking of shutdown, minnesota was unable to come to a budget agreement by the mandatory june 30 date, and started shutting down state offices & parks thursday, with 23,000 nonessential workers there already furloughed...no talks are scheduled next week...

it is turning out to be a bad year for nuclear facilities...this week conditions at both of the flood threatened nuclear power plants on the missouri river deteriorated, and a monster wildfire caused the evacuation of the los alamos national laboratory (the site of the WW2 manhatten project) & threatened stored & abandoned radioactive materials...first, last sunday afternoon, an 8 foot high 2000 foot berm protecting the ft calhoun nuke plant near omaha from flooding collapsed when it was accidentally torn & deflated...yep, torn, as the floodwall protecting the nuclear plant was not much more that a water-filled poly inner-tube...my first reaction, maybe 3 weeks back, when i heard that the fort calhoun nuclear power plant was being protected by an inflatable 2000 foot poly berm can only be described as "WTF?" but after thinking about it for a minute, i figured, hell, this is a highly regulated nuclear power plant, these guys are paid well & they must know what they're doing, and that poly berm must be a lot tougher than it was described...as it turned out however, my first reaction was right on the money, because last sunday a heavy equipment operator nicked it and the whole 2000 foot wall deflated... subsequently, the building housing the main electrical transformers was flooded and the cooling pumps were switched to run on backup diesel generators (this plant has been described by the media as in "cold-shutdown" but that doesnt mean it's cold; a number of the fuel rods were withdrawn & the plant stopped generating enough heat to generate electricity, but the unit still must be cooled, which means the pumps must be kept running)...ironically, last sunday, the same day that the innertube levee failed, the NYTimes ran an article as to how the omaha public power district had fought the NRC tooth & nail and had finally, over the last year, installed such defenses as the innertube & steel walls to protect it against a 1014 foot flood; flood waters are now at 1007, and presumably without the berm, the plant's vitals are only protected to 1010...since the plants buildings are virtually sandbagged islands in the missouri river (when the NRC director toured the plant, he wore a lifejacket), even keeping them supplied with fuel has become a logistical problem; midweek, spilled gasoline caught fire & one worker was badly burned, and lifeflighted to a hopsital in lincoln...

the other plant, Cooper nuclear, is about 70 miles downriver from ft calhoun, and it was still running full power when a privately owned levee upstream was dynamited yesterday, apparently to protect private property; it caused the river to rapidly rise about 4 inches and threatened the already weak levees downriver; cooper, however, is at a higher elevation relative to the river and is not expected to be in immediate trouble...the problem that may stil arise is with the six major damn/reservoirs upriver from the plants which have been full & spilling water for several weeks; federal nuclear regulators have asked the corp of engineers for an appraisal of their condition, since there has never been this much floodwater spilled over them previous to this year; on friday, floodwater spilling was halted at the big bend dam in south dakota to check for possible erosion...

the other nuclear predicament is at los alamos; the town & the nation's preeminent nuclear weapons complex were evacuated monday when the fire was within three miles, and it was a battle against 40 MPH winds most of the week; because this facility has been in operation since 1942, and because it was known that some nuclear materials had been buried in shallow trenches off site, the EPA brought in air monitors to test for radiation; furthermore, a watchdog group warned that 30,000 barrels of low level nuclear waster were stored in fabric tents on the site, which was initially denied, until such time as NBC Nightly News ran a report on the situation, complete with photographs & video of the drums in open tents...fortunately, the fire line was held, as of saturday morning the winds had died down, but the fire is still mostly uncontained; and los alamos fire (also called the Las Conchas fire) is still expected to be the largest wildfire in new mexico history...the arizona wallow fire, which i mentioned a few weeks back, will also go down as the largest in arizona's recorded history...

while im at it, i might as well update you all on fukushima, which despite being out of the news, is still out of control and posing new problems each week; last week, an attempt to filter radioactive cesium from thousands of tons of contaminated water failed after just 5 hours; also, new contaminated hot spots were found outside of the evacution zone and subsquently the evacuation zone was expanded to 19 miles, with a mandatory evacuation order now for 15 miles around the plant; this past week, leaks were found circulating cooling pipes, as well as underground leaks into a trench outside reactor 2 leading to the pacific...also, corrosion in the racks which separate fuel rods in reactor 3's spent fuel pool was discovered, necessitating adding boric acid to the 90 tons of water in that pool

an article i was pointed to this week on working families need for childcare reminds me how much this country has changed…it alleges that more than 70 percent of american parents have difficulty finding affordable childcare...growing up in a middle class suburb the 50s, i didnt know any family that needed daycare or a nanny.…because then, only one middle class job was needed to support a large family, and all the mothers were able to stay at home to take care of the kids…

where we left greece last week was waiting for a loan from the institutional troika of the EU, the ECB & the IMF, contingent on a vote of confidence for their puppet prime minister & an approval of an austerity agreement by their parliament...and under a barrage of threats, the greek parliament caved & gave the troika what it wanted...reporters in front of the parliament building wore tear gas masks as they reported on the “success” of the austerity vote (CNBC has an article which details the greek belt-tightening)...so the loan package went through, right? not so quick; the guardian reported friday that the finance ministers cancelled their sunday meeting because they need more time - as much as two months - to put together the package...& let me clarify that this "bailout" is actually to be a $124 billion loan, at high interest rates, that the contracting greek economy will unlikely be able to pay back anyway...so what we have is essentially european taxpayers loaning greece money so they can continue paying back french & german banks, indefinitely...

the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me