Japanese Financial System Is Beginning To Spin Wildly Out Of Control

The financial system of the third largest economy on the planet is starting to come apart at the seams, and the ripple effects are going to be felt all over the globe.  Nobody knew exactly when the Japanese financial system was going to begin to implode, but pretty much everyone knew that a day of reckoning for Japan was coming eventually.

After all, the Japanese economy has been in a slump for over a decade, Japan has a debt to GDP ratio of well over 200 percent and they are spending about 50 percent of all tax revenue on debt service.  In a desperate attempt to revitalize the economy and reduce the debt burden, the Bank of Japan decided a few months ago to start pumping massive amounts of money into the economy.

At first, it seemed to be working.  Economic activity perked up and the Japanese stock market went on a tremendous run.  Unfortunately, there is also a very significant downside to pumping your economy full of money. Read more >>

Greek unemployment rises to 23.1 percent in May

Source
Greece's statistical agency says unemployment in the crisis-struck country has risen to a startling 23.1 percent in May — up from 16.8 percent a year earlier. An agency statement Thursday said the worst affected group is young people under 25, where 54.9 percent are out of work.

A total 1.15 million people were unemployed in May 2012, compared to 1.1 million in April, or 22.6 percent of the workforce. In May 2009, months before Greece's crisis broke, unemployment was just 9.1 percent.

Greece has avoided going bankrupt by international rescue loans. In return, Athens imposed harsh austerity measures to limit runaway government overspending and improve chronically weak tax revenues.
The coalition government is now striving to identify €11.5 billion worth of cuts for 2013-14.

While housing lost 31% of its value from 2006 to 2009, property taxes went up by 27%

Something remarkable happened to property taxes in the U.S. while housing lost 31% of its value from 2006 to 2009: they went up by $100 billion (27%). Equally remarkably, as we can see from this U.S. Census Bureau data on state and local tax revenues, property taxes went up even when housing slumped in the early 1990s.

So though U.S. housing continues losing value--U.S. home prices declined in January, continuing a downward trend that began in August, with average U.S. home prices retreating to summer 2003 levels, according to the S&P Case-Shiller home-price indexes--property tax revenues continue their inexorable rise. More...

Over 1.5 million unemployed will have exhausted all resources by Christmas

Image via Wikipedia

Ilargi at TAE writes:

These days I can't seem to look at numbers anymore without asking myself what's behind them. Hey, who can? 90% of them are embellished crappahola, and we're still stuck trying to figure out what they mean if we want to know what lies ahead. Wouldn't a be nice to have a government that's transparent, and doesn't try to pull a fast one on you every chance it gets? Yeah, dream on; here goes another round of number rumbling:

The headline may claim that "initial unemployment claims dip", but in reality they have hardly moved at all through summer. As for continuing claims numbers, they are not only up, they're increasingly devoid of meaning, as increasing numbers of people fall off the far end, beyond the duration of unemployment benefits. The worst hit states, where unemployment is highest, and hence tax revenues drop most, will have to pony up the most in additional benefits, as an estimated 1.5 million people will have exhausted all resources by Christmas. For some states, this must cause nightmares already. Especially since it won't stop in 2009; not even the most rose colored forecasters see a significant improvement in jobless numbers any time soon.

If you look at the speed at which benefits are running out right now, going from almost zero to 1.5 million "clients" in just a few months, we could see millions of long-time, structurally unemployed soon. A true underclass.

Also, the discrepancy between initial claims and official job loss numbers begins to look ridiculous. A slight difference is fine, but 300% is crazy. Then again, that label applies to most US government data. Read More...