Friday, November 9, 2012

Today's links

1--US mortgage applications down as Sandy hit Northeast -MBA, Reuters

2--Draghi runs out of options, macrobusiness

3--Growth forecasts slashed as Europe sinks deeper into crisis, WSWS

The European Commission, the executive body of the European Union, slashed its growth forecast for the eurozone Wednesday, as the sovereign debt crisis and global slump continued to weigh down the European economy.

The downward revisions point to a deepening economic crisis for Europe, including its largest economy, Germany. Economic contraction is exacerbated by brutal austerity measures being enforced throughout the continent.

The Commission said that it expects the 17-member euro area to contract by 0.4 percent in 2012, and grow by only 0.1 percent next year. This marks a worsening from its spring forecast, which estimated that the euro area would contract 0.3 percent in 2012 and expand at a rate of 1 percent next year.

For the 27-member European Union as a whole, GDP is expected to shrink 0.3 percent, then grow by 0.4 percent in 2013. The expected economic contraction in 2012 follows two years of low growth: of 1.9 percent and 1.5 percent in 2010 and 2011, respectively.

The new figures come a week after the EU’s statistics agency announced that unemployment in the eurozone rose to a record level of 11.6 percent in September, up from 11.5 percent in August...

The solution of the ruling class to the crisis is to escalate the offensive against the working class. At his press conference in Frankfurt Wednesday, Draghi gloated about the “progress” that has been made throughout Europe in slashing social spending. “Fiscal consolidation that has taken place all over the euro zone is amazing,” he said. “Compare the situation today with what it was even a year ago … There has been substantial progress.”

The “progress” referred to by Draghi is the fact that European governments have slashed hundreds of billions of dollars in social spending, wrecking the economy of Greece, throwing millions into poverty, and contributing to a recession in Europe.

Calls for sharper austerity are coming from all sides. In its yearly report on the French economy, the International Monetary Fund called for the country to adopt “a comprehensive programme of structural reforms” similar to the massive cuts to social spending implemented by Italy and Spain

4--Canada Housing Starts Declined a Second Month in October, Bloomberg

5--Some positive news for US housing, sober look

6--The coming debt battle---Citing a phony "crisis," the GOP wants to gut Medicare, Medicaid and Social Security. Democrats can't let them, James Galbraith, Salon

7--The Scariest Jobs Chart, Private-Sector Edition, The Atlantic

8--Obama champions “grand bargain” to slash entitlement programs, WSWS

With the US elections out of the way, the corporate and political establishment is getting down to the business of slashing federally guaranteed health care and retiree benefits, while implementing even greater tax cuts for big business and the wealthy.

An atmosphere of crisis is being stoked with the approach of the December 31 “fiscal cliff” to prepare public opinion to accept extremely unpopular measures, including trillions of dollars in spending cuts and an historic attack on Medicare, Medicaid and Social Security...

Obama signaled his priorities in his victory speech early Wednesday morning, in which he placed a bipartisan deal for “deficit reduction” and “reforming our tax code” at the top of his agenda. The president is scheduled for a White House address on the subject today....

Exit polls showed only one in ten voters said reducing the deficit should be the next administration’s priority. A survey conducted by the AFL-CIO union federation found, by a 64 to 17 percent margin, that voters want to protect Social Security and Medicare benefits and address the deficit by increasing taxes on the rich, rather than cutting entitlements.
But the Obama administration’s policies are not determined by the will of the people—as the AFL-CIO and various liberal and ‘left’ supporters of Obama claim—but by the corporate and financial elite, which controls the entire political system.

Well before the November 6 election, representatives of both parties agreed to the basic framework of some $4 trillion in budget reductions over the next 10 years. This was outlined by the National Commission on Fiscal Responsibility and Reform, a bipartisan panel appointed by Obama, which is co-chaired by former Bill Clinton chief of Staff Erskine Bowles and former Wyoming Republican Senator Alan Simpson....

Bowles has been cited in the media as a possible choice to replace Treasury Secretary Timothy Geithner in Obama’s second term cabinet. Also cited as a prime candidate for the Treasury job is Jacob Lew, Obama’s current White House chief of staff and former budget director. According to the New York Times, “Mr. Lew has experience in such bargaining dating to his work as a senior advisor to Congressional Democrats 30 years ago in bipartisan talks with President Ronald Reagan.”

Lew served as senior advisor to then-Democratic Speaker of the House Tip O’Neill who authored a bipartisan deal in 1983 with the Reagan administration undermining Social Security protections. The deal, reached after a campaign predicting the imminent financial collapse of the federal pension program, raised regressive payroll taxes and the retirement age two years, to 67.

For their part, top corporate CEOs and business leaders have signaled their support for the Obama administration in its negotiations with the Republicans

9--17% of FHA loans delinquent in September, bailout coming, oc housing news



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