That Didn't Last Long.


What was the over/under on the GOP holding to its pledge to abstain from legislative "earmarks?" If you had "less than four days," you won!

Addendum: Earmark ban goes down in flames.

The Ace of Spades.


The collapse of Ireland's ruling political party is detailed concisely here. Read the whole thing.

Another Year of BABs?


Federal subsidies for state and municipal bonds are made possible by a program called Build American Bonds, which is schedule to end at the end of this year. Faced with the imminent implosion of the municipal bond market, Senate Republicans are signaling that they will vote to extend the BAB program for another year. But House Republicans aren't yet sending the same signal. Bond vigilantes take note.

The Demography of American Politics.

The US Census data will become available soon, but a first glance reveals a country whose demography promises more polarized politics. Read the whole thing.

Contagion, Revisited.


Only months after congratulating itself on a narrow escape, the eurozone is again hurtling back toward contagious defaults. Its fumbling approach to the explosive instability of the Irish banking system leaves little hope that the other ticking bombs with which Europe’s economies are riddled are going to be disarmed in time.

Ireland’s basic problem is that it now has to choose between its own sovereign solvency and the solvency of its banks. Other European countries – in and out of the eurozone – may soon face the same choice. In such a world, keeping banks afloat with public capital risks sinking the sovereign – and with it, the whole banking system.


From the FT.

P.S.: More here.

What Keeps You Up At Night?


Leading economic policy-makers are concerned about a "trigger" event which sets in motion a series of events that might well lead to a financial crisis similar to the one that nearly caused the global economy to implode in the autumn of 2008. The trigger event then was the collapse of Lehman Brothers. The trigger event that some very serious people are worried about now is a Congressional vote on raising the debt ceiling.

Said ceiling will be reached sometime in April of 2011. At that point, the US will either have to raise the debt ceiling to remain current on its outstanding obligations or it will have to cease (most) governmental operations for some period of time until it is able to come up with a way to meet those obligations.

There are any number of new arrivals in Washington, DC who are adamantly opposed to raising the debt ceiling. The newly-elected Speaker of the House is asking them not to draw this particular line in the sand. Clarity on this issue would be most helpful, sooner rather than later. Don't hold your breath.

A Different Kind of Storm


What does the muni meltdown mean for insurance companies like Chubb and Travelers? It means trouble.