News Links: Are Americans really shopping until they drop?

One glance at the numbers for the first big weekend of holiday shopping and you might think Americans are flush with cash and spending it freely. But a deeper look at the data reveals it would be wrong to suggest that conspicuous consumption is back in any way.

Never before has America, the world’s biggest consumer, been so weak for so long. Until US households make greater progress in reducing excessive debt loads and rebuilding personal savings – a process that could take many more years if it continues at its recent snail-like pace – a balance-sheet-constrained US economy will remain hobbled by exceedingly slow growth. A comparable outcome is likely in Europe. Even under the now seemingly heroic assumption that the eurozone will survive, the outlook for the European economy is bleak. It is difficult to see how Asia can remain an oasis of prosperity in such a tough global climate. Yet denial is deep, and momentum is seductive. After all, Asia has been on such a roll in recent years that far too many believe that the region can shrug off almost anything that the rest of the world dishes out.

The crisis unfolding in the eurozone is a chance for radical and profound action. There is a growing consensus that the stability, indeed the viability, of the monetary union demands change to European Union treaties. Europe’s leaders should seize this opportunity to put in place a permanent structure for eurozone governance.

Berlin and Paris may have agreed to a ceasefire on their very public spat over European Central Bank intervention to stem the sovereign debt crisis, but France is still hoping that concerted efforts by eurozone leaders on entrenching fiscal reforms will lead to a "Christmas present" of action by the ECB. The aim now is to create conditions in which the bank, acting within its current monetary policy mandate – and less constrained by overt political pressure – can take additional moves to counter the relentless market pressure on sovereign bonds.

Increasingly compelled to shoulder the burden of saving the eurozone, Germany has named the price its neighbour states must pay to be rescued. German officials want to impose a system of economic surveillance on members of the currency bloc, who would be forced to surrender autonomous control of their domestic budgets to a regional authority. Berlin aims to outline proposals for fiscal integration before a European Union summit on Dec. 9, increasingly seen by investors as the last chance to avert a collapse of the currency.

When the Greek parliament named Andreas Georgiou president of the country’s new Hellenic Statistical Authority, he seemed like the perfect person to revamp the country’s much maligned statistics agency. But now, just over a year into his post, Mr. Georgiou is at the centre of a bizarre series of criminal investigations. The probes focus on allegations he and the agency, known as Elstat, betrayed the country’s national interest by cooking Greece’s debt figures in order to justify government austerity measures and to satisfy European Union officials.

Italian borrowing costs hit euro lifetime peaks at a debt auction on Tuesday as investors demand ever higher premiums to keep funding the country, in a sign that the sovereign debt crisis is nearing make-or-break point.

While listening to an NPR story about police using tear gas and rubber bullets to break up a demonstration, I was actually surprised when it turned out the newscaster was talking about Tahrir Square — I had assumed it was about another brutal response to a peaceful protest here at home.

"A decline in the ability of Congressional staffs to provide independent research can be traced to Newt Gingrich’s tenure as speaker, and his recent call to abolish the Congressional Budget Office has the same aim, an economist writes."

Japan’s jobless rate surged by more than the predictions of 29 economists, adding pressure on the central bank to expand stimulus as Europe’s debt crisis deepens and gains by the yen impede the nation’s recovery. The unemployment rate increased to 4.5 percent in October from 4.1 percent in September, the statistics bureau said today in Tokyo. That exceeded analysts’ median estimate of 4.2 percent and was the highest level in three months.

Rakoff’s job is to determine whether the ruling is "whether the proposed Consent Judgment … is fair, reasonable, adequate, and in the public interest." Since Citi admits to essentially nothing, he has no factual foundation for determining the adequacy of the settlement.

the IMF is already a well-known (and much hated) institution obsessed with imposing austerity on the countries they ‘assist’. This means that they have plenty of experience ruining economies… er… promoting ‘expansionary fiscal consolidations’. With all this experience the IMF will be in a prime position to ignore all the evidence coming out of the Eurozone and continue the drive to force the periphery into depression. Hoorah!

Not a perfect match, but enough to suggest the idea of substantial decoupling looks like more myth than reality, especially in the face of a severe recession.  Could this be why US Treasury yields held steady today even as equities roared forward?   Bottom Line:  Don’t take US resilience for granted this time around – Europe is getting ugly, and it is far too late to prevent severe recession.  The best policymakers can hope for at this point is too avoid a depression.

The health and welfare ministry announced on Nov. 9 that the number of people on welfare receiving livelihood assistance known as seikatsu hogo (literally livelihood protection) reached 2,050,495 nationwide as of July 2011, topping the monthly average record of 2,046,646 marked in fiscal 1951, when Japan was in the midst of postwar social and economic confusion. Behind this is an increase in the number of elderly people and prolonging economic stagnation.

Soviet dictator Josef Stalin’s daughter, whose defection to the West during the Cold War embarrassed the ruling communists and made her a best-selling author, has died. She was 85. Lana Peters – who was known internationally by her previous name, Svetlana Alliluyeva – died of colon cancer Nov. 22 in Wisconsin, where she lived off and on after becoming a U.S. citizen, Richland County Coroner Mary Turner said Monday.

Scott Pelley brings "60 Minutes" cameras back to central Florida to document another form of family homelessness: kids and their parents forced to live in cars.

Facebook Inc. is inching closer to an initial public offering that it hopes will value the company at more than $100 billion, according to people familiar with the matter. The social networking firm is now targeting a time frame of April to June 2012 for an initial public offering, said people familiar with the matter.

He is the unashamedly privileged chancellor who convinced the country of the need for austerity cuts. But with his poll ratings sinking and the public-sector in revolt, is George Osborne’s credit running out?

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing. The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Unemployment will reach 18.5pc in Greece, 22.9pc in Spain, 14.1pc in Ireland, 13.8pc in Portugal. Yet Iceland stands out, with 2.4pc growth and unemployment tumbling to 6.1. Well, well.

A German regional court has opened the door to an investor law suit against credit rating agency Standard & Poor’s over its assessment of Lehman Brothers securities before the collapse of the U.S. investment bank.