REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.

A Different Perspective on U.S. Debt

After stumbling upon the U.S. Government Debt website and fiddling with their charting tools a bit, a chart that I’ve never seen before appeared – a very long-term picture of public U.S. debt relative to GDP going back to 1792. Back in the old days, the only time the nation would rack up debt was when they were at war and then they’d pay it down

All that changed not long after the last vestiges of a gold standard were abandoned in the 1970s and it’s been a three-decade long climb up debt mountain ever since. Moreover, since the graphic above includes only public debt, the picture is significantly worse when including intergovernmental liabilities such as social security (see comment below).







Monday Morning Links

MUST READS
Greeks clean up after riots against austerity – AP
Germany’s Carthaginian terms for Greece – Telegraph
Greece Bailout Now Faces European Finance Chiefs – Bloomberg
OECD flags signs of broader upturn in economic outlook – Reuters
Economists Warn of Long-Term Perils in Rescue of Europe’s Banks – NY Times
Foreclosures to Climb Before Bank Deal Helps U.S. Housing Market – Businessweek
Some States Using Mortgage Deal Funds To Close Budget Gaps – HuffPost
Toronto Bubble Risk Topping New York in Condos – Bloomberg
Mortgage problems? Turn your house into a billboard – Reuters
Why not abolish the Fed and return to the gold standard? – EconBrowser
Charting the Federal Reserve’s Assets – 1915 to 2012 – Gresham’s Law
On Meredith Whitney, Munis and Leaks – Bruce Krasting

MARKETS/INVESTING
Oil prices rise after Greek austerity deal – AFP
Gold climbs as Greek austerity deal lifts euro – Reuters
2011 market losers may be 2012 winners – USA Today
Is The New Abnormal On Its Last Legs? – Capital Spectator
Bond Buyers Bet U.S. Debt Yields Stay Low – Bloomberg
U.S. gasoline price rises to $3.51/gallon-survey – Reuters
Conflict between Iran, West could raise gold prices – Commodity Online
Why Warren Buffett still doesn’t like investing in gold – Mineweb
Surging gold loans in India come under scrutiny – Mineweb
Gold breaks on cue — is rebound coming? – MarketWatch

ECONOMY/WORLD/HOUSING/BANKING
Cyclical Changes in Business Conditions – Mises
White House: ‘Not Time for Austerity’ – Reuters
Bernanke’s Labor Pessimism at Odds With U.S. Growth – Bloomberg
The spectre of deflation rises as inflation falls – Telegraph
Japan economy contracts annualized 2.3% in Q4 of 2011 – xinhuanet
Draghi $158B Free Lunch Boosts Bank Profits – Bloomberg
Two-thirds of mortgages in Ireland in negative equity – Independent
Private Homebuilders: Dead Men Walking – CNBC
O.C. home price at 34-month low – O.C. Register
Banks benefit from foreclosure settlement – O.C. Housing News
Should we break up the large banks? – Marginal Revolution
It’s Worse Than You Think – Fed Watch

 

Greeks Accept Austerity, Athens Burns

The Greek Parliament approved more austerity measures required to facilitate the next round of $170 billion in bailout money from their EU/ECB/IMF overlords as citizens set buildings on fire and battled some of the 4,000 riot police deployed in Athens.

Bond holders will take haircuts of 70 percent on the money they foolishly lent to the Greek government and, for the time being at least, a messy Greek debt default has been averted.

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Bozeman Among NatGeo Top 25 Ski Towns

The police report offerings have been unimpressive lately (though there was a report last week of a search for a women clad only in a hat  wandering around late at night in freezing temperatures) so, instead, after a fresh six inches of snow over the last 24 hours, this Saturday we’ll have a look at this National Geographic story that picked Bozeman, Montana as one of the 25 best ski towns in the world.

We’re #4 after Zermatt, Switzerland in a series that, apparently, is in no particular order.

Best For: Diehard skiers who wear their duct tape with pride (and beginners who look forward to doing the same someday)

The adventure capital of the Northern Rockies, Bozeman is an old Montana university town of cowboys and ski bums, pickups and unleashed dogs, and two of the premier ski hills in America. More of a working town than a traditional “ski town,” here overpriced lodges and fine dining are the exception, though there are a few high-end options and classically trained chefs. But being Bozeman, there’s nowhere you can’t wear blue jeans.

You don’t come here for the restaurants, you come to ski the two wild Montana mountains. Bridger Bowl is the storied, scruffy little brother, a condo-free, nonprofit ski area 20 minutes out of town and where some of America’s original extreme skiers—Scot Schmidt, Tom Jungst, and Doug Coombs—cut their teeth and began preaching the steep skiing gospel. Hardcore skiers flock here for The Ridge, hiking terrain with a murderer’s row of hairball chutes, and the new Schlasman’s Lift accessing expert-only, backcountry-style terrain (avalanche transceivers required for both).

An hour’s drive south of town in the majestic Madison Range, Big Sky Resort is the brash, lusty big brother, a gigantic ski area that offers joint lift tickets with the adjacent Moonlight Basin to create one of the largest ski areas in America. The tram to the vaulting, exposed 11,166-foot summit of Lone Peak opens up a Euro-style world of high-alpine, big-mountain skiing. Beginners and intermediates will find plenty of terrain at both, with Big Sky the deluxe option and the smaller Bridger a no-frills, low-cost choice. Yellowstone National Park, a 60-minute drive away, features back-of-beyond cross-country skiing and wildlife watching.

We spend a fair amount of time at Bridger Bowl where season passes are unbelievably affordable. The Bozeman Daily Chronicle ran this story the other day on having achieved this honor and Whitefish, Montana in the northwest corner of the state was also selected.

Consumer Sentiment Stops Rising

For the first time in six months, the Reuters/University of Michigan consumer sentiment index stopped rising, falling from 75.0 in January to 72.5 in the first of two readings for February. This follows a decline in the consumer confidence index last week, the first time that the other major gauge of the American mood has declined since last fall.

The current conditions component within the sentiment survey dropped from a lofty 84.2 in January to 79.6 in February while the expectations component fell from 69.1 to 68.0.

Recall that, while these readings are a great improvement from the lows seen last summer as elected officials were debating a debt ceiling increase, they remain levels more often associated with recessions than recoveries as depicted in this graphic from the St. Louis Fed. In fact, during the 2001 recession, consumer sentiment never fell below 80.

Rising optimism about an improving labor market was more than offset by higher gasoline prices (and perhaps the hangover of holiday credit card bills coming due), though higher prices at the pump didn’t show up in the inflation expectations survey as the one-year outlook for the rise in consumer prices fell from 3.2 percent to 3.1 percent while the five-year view of inflation rose two tenths of a percent to 2.9 percent.

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Friday Morning Links: Mortgage Deal Edition

Here are those mortgage deal links I mentioned in the Friday Morning Links post a couple hours ago. It was another one of those days when, in the process of collecting news stories for the links post, there was a virtual avalanche of reporting and opinions on what the Justice Department hath wrought with this deal.

A ‘deadbeat’ bailout – NY Sun
The Mortgage Deal: A Reality Check – NPR
Mortgage deal: What the critics say – CNN/Money
U.S. banks agree to $25 billion in homeowner help – Reuters
Settlement launches foreclosure reckoning – Washington Post
Why the Foreclosure Deal May Not Be So Hot After All – Taibblog
Why Millions Won’t Get Help From Big Mortgage Settlement – ProPublica
Top Twelve Reasons Why You Should Hate the Mortgage Settlement – Naked Capitalism
Foreclosure Settlement Falls Short, Still Worth the Wait: View – Bloomberg
Is The Foreclosure Settlement A Shadow Bailout For Broke California – Zero Hedge
What the foreclosure settlement means for you – CNN/Money
Mortgage Settlement and Negative Equity – Calculated Risk
Robo-Deal Is All About Lowering Mortgage Principal – CNBC
Banks Not Off Hook With $25B Mortgage Agreement – Bloomberg
Mortgage Plan Gives Billions to Homeowners, but With Exceptions – NY Times
Florida Homeowners Find Little to Cheer in Deal With ‘Gangsters’ – Bloomberg
Mortgage Deal Props Up California House of Cards – Bloomberg
Cramer: This Mortgage Settlement Is Huge – The Street
Foreclosure Deal to Spur U.S. Home Seizures – Bloomberg
The Mortgage Settlement Is Fine – DealBreaker

I’d be lying if I said I’d read all of these (or more than a couple for that matter), but I intend to take a look here this morning. Just based on the headlines, it would appear that the deal is getting a mixed reaction.

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