Can California Declare Bankruptcy?: Christopher Beam, Slate.

Exxon Lowers Bar, Buys Assets Once Seen Unattractive: Edward Klump, Bloomberg.com.

Requiem for a Dying City: Damien Perrotin, Energy Bulletin.

What’s Wrong with Venture Capital?: James Surowiecki, MIT Technology Review.

Losses Wipe Out Equity of Mexico’s Pemex: Robert Campbell, Reuters.

California Job Losses Grow: George Avolis, Contra Costa Times.

-Gregor

Photo: Cincinnati, Ohio 1975 by Lytha Scott Eiler, from The EPA DOCUMERICA Project.

My time in Boston gave me a chance to update my economic tour, taken last Summer in the shopping districts of Harvard Square and Newbury Street. I was also able to get a sense of car and train traffic, activity at malls, and even some nightlife. In addition, the Clean Energy workshop I attended in Cambridge, and the conversations I had at the Energy Showcase gave me a sense of mood, surrounded as I was by students, investors, venture capitalists, and company representatives. First, me start off by reporting…(this article continues for subscribers through the membership gateway, on the right side of this page)…{+}

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The 2010 Census: roundtable with Williams, Frey, Jost, Sparks, Dianne Rhem WAMU Radio.

China’s Forgotten Admiral: Nick Baker on Zheng He, BBC World Service Documentary.

Coal in the Heartland: Coal in the Heartland – Jeff Biggers on Clean Coal and Coal Policy, Democracy Now Radio.

Environment and the Economy: series on migration and immigration – Merson and Oram, Smart Talk -Radio New Zealand National.

Earthquakes in the 21st Century: roundtable with Whitcomb, Beach, Blanpied, Dianne Rhem WAMU Radio.

-Gregor

Painting: Zheng He.

Of greater note has been the volatility in UK Gilts. In a brief exchange with one of my contacts, we both expressed surprise that observers don’t pay more attention to the British Pound and UK Gilts…(this article continues for subscribers through the membership gateway, on the right side of this page)…{+}

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Drought Threatens Syria Economy as Refugees Flee Parched Farms: Daniel Williams, Bloomberg.com.

Bad weather and uncertainty hit construction sector recovery: Phillip Inman, Guardian.co.uk.

U.K. Teeters on the Brink of Its Own Greek Debt Tragedy: Landon Thomas Jr., The New York Times.

A Game of Tag Breaks Out Between London’s Graffiti Elite: Gabriele Steinhauser, Wall Street Journal Europe.

The Economist’s New Clothes: Adam Curtis, BBC Blogs.

Don’t go wobbly on us now, Ben Bernanke: Ambrose Evans-Pritchard, Telegraph.co.uk.

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-Gregor

Still, I’m left wondering more generally why anyone, including Mr. Buffet, thought a recovery in US housing was either already underway, or coming along in 12 months time. There is certainly nothing in the data to suggest any recovery is underway. (And that’s an understatement). But should it really come as a surprise? Fannie Mae continues to bleed. There is no wage growth either in nominal or real terms. And even the FHA, which admittedly goosed the low-end for about 9 months last year, may now turn out to have created little more than a new class of mortgage defaulters, as they were “helped” into low priced homes with 5% downpayments. Perhaps they call them The 2009 Vintage of defaulters.

Meanwhile, the big states like California, Illinois, Florida, and New York are all getting into position to do their part for the “housing recovery.” They are about to release government workers back into the private sector.Yes, in cities from Chicago to Los Angeles a run of 24 months of falling tax revenues has finally met head-on with a state’s inability to print money. For those of you who tune in to my Sunday night MacroTwits show, you will know that I’ve felt for some time that tensions would eventually arise between the growing ranks of the unemployed, and the protected, pensioned, high-salaried workers of cities, counties, and states. It can’t help that the unemployed are still paying a schedule of state and local taxes and fees, while they watch services deteriorate or disappear altogether. I was pleased therefore to see Joe Mysak at Bloomberg/Business Week latch on to this emerging story last week. | see: Banker Bonus Anger is Shifting to Government Workers.

Given the aforementioned, I think it’s not really necessary that I re-hash the recent data on new home sales, existing home sales, foreclosures, rising vacancy rates, falling rents, and the growth of shadow inventory. Nor, do I need to cite the FED’s intention to stop buying MBS towards the end of March, the coming wave of mortgage rate re-sets starting up again later this year, or that mortgage rates ticked back above 5.00% again. Instead, I want to show you a chart…(this article continues for subscribers through the membership gateway, on the right side of this page)…{+}

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I did not have to wonder for long. The surprise hike in the FED’s Discount Rate now looks nothing more than the brief flare of a technical operation. The meat of the matter, the major thrust of the FED’s intentions, were revealed this week when Janet Yellen hinted that QE of MBS could be put back on at any time. And, when Bernanke testified in his Humphrey-Hawkins appearance that the FED would need to keep rates very low, for a long time. It should also not be forgotten, in addition,  that even on the day of the FED’s surprise discount rate hike at least one FED governor made remarks that evening to broadcast the FED’s intention to keep rates low.

Because further clarity on FED policy has come at the same time as news releases on the economy, I think it bears mentioning again that housing…(this article continues for subscribers through the membership gateway, on the right side of this page)…{+}

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The New Poor – Million of Unemployed Face Years Without Jobs: Peter S. Goodman, The New York Times.

The Long-Term Employment Bust: David Goldman, First Things.

America’s Wind Energy Triples in New Estimate: Alexis Madrigal, WIRED.

The Third Industrial Revolution: Jeremy Rifkin, The New Scientist.

Be Lucky – It’s An Easy Skill to Learn: Richard Wiseman, Bloomberg.com.

Soccer and Energy Policy: Chris Nelder, GetRealList.com.

-Gregor

Photo: Energy Miracles?