The Hollowing Out of America | The Nation: " . . . And yet the pit exists. It goes by the name of “austerity.” However, it didn’t just appear in time for the last election season or the lame-duck session of Congress to follow. It was dug more than a generation ago, and has been getting wider and deeper ever since. Millions of people have long made it their home. “Debtpocalypse” is merely the latest installment in a tragic, forty-year story of the dispossession of American working people. Think of it as the archeology of decline, or a tale of two worlds. As a long generation of austerity politics hollowed out the heartland, the quants and traders and financial wizards of Wall Street gobbled up ever more of the nation's resources. It was another Great Migration—instead of people, though, trillions of dollars were being sucked out of industrial America and turned into “financial instruments” and new, exotic forms of wealth. If blue-collar Americans were the particular victims here, then high finance is what consumed them. Now, it promises to consume the rest of us. . . ."
Morgan Stanley’s Doom Scenario: Major Recession in 2013 - US Business News - CNBC: "Morgan Stanley isn’t alone in warning about a recession next year. Noted bear, Nouriel Roubini warned on Monday that certain key developments would exacerbate the downside risks to global growth in 2013. “Until now, the recessionary fiscal drag has been concentrated in the euro zone periphery and the U.K.. But now it is permeating the euro zone’s core,” Roubini wrote. “And in the U.S., even if President Barack Obama and the Republicans in Congress agree on a budget plan that avoids the looming “fiscal cliff,” spending cuts and tax increases will invariably lead to some drag on growth in 2013 – at least 1 percent of GDP.” (Read More: Faber Prepare for Massive Market Meltdown) Roubini said the rally in global markets that begun in July was now running out of steam as global growth slows and valuations look stretched."
Bernanke's Easy Money Death Spiral | The Economy | Minyanville's Wall Street: "Last week, I argued from a lender’s perspective that contrary to Bernanke’s assertion, QE was impeding the extension of credit by raising interest rate risk. This week, I argued from the CEO perspective that QE is impeding capital investment by raising cost of capital volatility risk. Despite compelling evidence that monetary policy is inhibiting the capital allocation process, Bernanke continues to argue as he did last week for further accommodation. The irony is that, if I am correct, the more easy money we get, and the longer it will take to build a sustainable recovery, which will forever prevent Bernanke from ever normalizing interest rates. We are just stuck in this never-ending easy money death spiral that only the market can end. And that probably doesn’t end well."
Gaming US Fiscal Reform by Mohamed A. El-Erian - Project Syndicate: "Hobbled by the self-inflicted wounds of the debt-ceiling debacle in the summer of 2011 – which undermined economic growth and job creation, and further damaged Americans’ confidence in their political system – the US Congress and President Barack Obama’s administration recognized the need for a measured and rational approach to fiscal reform. To increase the likelihood of this, they agreed on immediate spending cuts and tax increases that would automatically kick in (the “fiscal cliff”) if agreement on a comprehensive set of fiscal reforms eluded them."
Why the fiscal cliff will be averted - FT.com: " . . . A successful agreement would embody three principles; it will be large enough to stabilise the debt to gross domestic product ratio, meaning about $4.5tn in savings over 10 years; it will include a balance of spending cuts and revenue raising measures; and it will be divided into two phases because, with just four weeks left, there isn’t time to legislate the entire package. The negotiators already know the main elements of an agreement. Spending cuts should exceed the amount of new revenues. That should not be hard because $2tn of cuts are already agreed; $1.2tn in reduced discretionary spending was enacted last year and an additional $800bn will be realised by ending the Iraq and Afghanistan deployments. But it is also time to restrain entitlement spending, which has been soaring. Steps such as means testing Medicare, modernising cost of living adjustment formulas and others could save another $600bn. When the resultant interest savings are added in, total spending is reduced by $3.2tn over 10 years. . . . "
Analysis: Beige book an economic tale of 2 storms: "Federal Reserve's new beige book is to be transported into the world of Charles Dickens: The economy, it seems, is a tale of two storms. One is Superstorm Sandy. It huffed and puffed and blew the growth back downward in parts of the country during the October through mid-November period covered by the central bank's report. The other, more serious storm. is coming from Washington. And it could hit if Congress and the Obama administration fail to make a deal to spread out the tax increases and spending cuts set to take effect Jan. 1."
Which country has the best quality of life? - Telegraph: "The Economist Intelligence Unit looked at GDP, life expectancy, political freedom, job security, climate and gender equality to compile a list of 80 countries ranked by their general quality of life. It also considered economic forecasts for 2030, the year that a baby born now would reach adulthood. Switzerland, one of the world's richest countries, topped the list and was named the best place to be born. Half of the top 10 were European countries, but only one, the Netherlands, was in the eurozone. Falling at the very bottom of the list were the Ukraine, Kenya and Nigeria. The UK came in 27th place, just behind France and one place ahead of the Czech Republic and Spain in joint 28th position. The US was in joint 16th place with Germany. In compiling the list the group said it: “earnestly attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead.”"
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