European Default Concern Will Spread to U.S., Japan, Buiter Says – Fears of a sovereign default are “manifest” in Europe and will soon spread to Japan and the U.S. as governments struggle to control deficits, according to Citigroup Inc. economists led by former Bank of England policy maker Willem Buiter. “Despite the recent drama, we believe we have only seen the opening and second act, with the rest of the plot still evolving,” “There is absolutely no safe” sovereign. The warning comes after the threat of default forced Greece and Ireland to seek bailouts and as borrowing costs for Portugal this week surged at a six-month bill sale as investors speculate it will be next to seek aid. Elsewhere, U.S. lawmakers last month extended tax cuts and are now wrangling over whether to raise the nation’s debt limit, while Japan’s public debt is set to exceed twice the size of the economy this year. “The U.S. and Japan likely cannot continue to ignore the issues of fiscal sustainability,” said the Citigroup economists, who added that it’s “only a matter of time” before the U.S. government can only fund itself through debt issuance at “significantly higher interest rates.”
GOP Targets EPA Rules To Address Global Warming – House Republicans wasted no time Thursday in trying to block the Obama administration from acting to stem global warming. On their second day in power, Republican lawmakers introduced several bills that would hamstring the Environmental Protection Agency from moving forward with regulations to reduce heat-trapping pollution from factories and other sources that they say contributes to global warming. The bills are part of an effort by House Republicans to reverse what they consider job-killing policies of the administration. Poe’s measure would prohibit the EPA from using any money to implement or enforce regulations to impose a limit on global warming gases. Blackburn’s bill would change the Clean Air Act so the EPA could no longer use the law to control greenhouse gases. A 2007 Supreme Court decision said the EPA had the authority to regulate carbon dioxide and other global warming gases under the statute.
The Truth Comes Out: Paul Volcker Was Forced Out, Because The White House Is Going More "Pro Business" -Yesterday when we heard that Paul Volcker was leaving the White House we figured it was normal midterm rotation. Or perhaps, we thought, he was quitting out of frustration. But nope. The man who created the Volcker Rule, the part of Financial Reform with the sharpest teeth, is being forced out, as The White House takes on a more business-friendly stance. According to Bloomberg, Volcker was kept out of discussions to reconstitute the Economic Advisory Recovery Board. Also on the "pro business" front, Obama officially announced that Bill Daly is taking over as chief of staff.Somewhere Larry Kudlow is very, very happy.
Dead Birds Fall From Sky In Sweden, Millions Of Dead Fish Found In Maryland, Brazil, New Zealand Millions of dead fish surfaced in Maryland’s Chesapeake Bay in the U.S., Tuesday, while similar unexplained mass fish deaths occurred across the world in Brazil and New Zealand. On Wednesday, 50 birds were found dead on a street in Sweden. The news come after recents reports of mysterious massive bird and fish deaths days prior in Arkansas and Louisiana. The Baltimore Sun reports that an estimated 2 million fish were found dead in the Chesapeake Bay, mostly adult spot with some juvenile croakers in the mix, as well. Maryland Department of the Environment spokesperson Dawn Stoltzfus says "cold-water stress" is believed to be the culprit. ParanaOnline reports that 100 tons of sardines, croaker and catfish have washed up in Brazilian fishing towns since last Thursday. In New Zealand, hundreds of dead snapper fish washed up on Coromandel Peninsula beaches, many found with their eyes missing. UPDATE: Hundreds and possibly thousands of dead birds have reportedly fallen from the sky in Italy. Wildlife officials say that even more previously unreported dead birds were found in Kentucky last week.
The Congressional Budget Office’s estimate of interest payments on the U.S. federal debt, as a share of annual economic output, in the year 2020. As the Obama administration girds for a potential showdown in Congress over raising debt limits to accommodate the budget deficit, it’s helpful to get a sense of just how much that debt is costing U.S. taxpayers. It’s actually not that expensive at the moment, but it’s likely to get pretty painful over the next ten years. Thanks to the Federal Reserve’s efforts to keep interest rates extremely low, the U.S. government is currently getting a very good deal on its borrowings, according to the Congressional Budget Office. Low interest rates, however, won’t last forever — assuming the U.S. economy doesn’t succumb to long-term, Japanese-style stagnation. The CBO estimates that interest rates on 3-month bills and 10-year notes will reach 5.0% and 5.9%, respectively, by 2020. That, together with a rapidly rising debt load, would cause annual net interest payments to more than double by 2020 — to $778 billion, or a record 3.4% of GDP. That’s closer to what the government spends every year on national defense.