*The founder and Chairman of Tiger Management, Julian Robertson, warned that the U.S. faces a financial "armageddon" if China and Japan stop buying U.S. debt or start selling off the bonds they already own. He advised that the U.S. should "quit spending, start saving, and scale backward."
I think hes probably right but how politically feasible is that? What politician would be willing to publicly promote austerity measures in the U.S. and could still manage to win elected office? Ron Paul maybe? Unfortunately that still seems like a long shot if we're talking about the Presidency.
Read more: US May Face 'Armageddon' If China, Japan Don't Buy Debt
*Citigroup is thinking about closing some of its branches across the country. Apparently Citibank has previously announced plans to close its consumer finance division (news to me). Citigroup's plans for revitalizing itself include figuring out how to collect more deposits and improving customer service. Ingenious, I'm sure it only took an army of consultants a lot of time and money to come to that radical conclusion.
Read more: Citigroup Said to Consider Shrinking Branch Network (Update 1)
*A research firm in Spain is predicting that the Spanish economy will continue to conract for the next three years. They state that the economy is likely to eventually lose 11% of GDP compared to its peak in this decade. Unemployment will peak at 25%. In other words, it is entering a full-fledged Depression. One analyst claims it will take a 10% reduction in salaries to make the Spanish economy better able to compete globally, but the trade unions and current government will fight to prevent any declines. Despite all this, the government continues to claim that the recession will be milder in Spain than in the rest of Europe.
Ambrose Evans-Pritchard blames Spain's membership in the European Monetary Union for having a big role in creating the crisis. Membership in the EMU automatically cut interest rates in half. If this recession/crisis continues, or gets more severe, I expect more cracks to appear in the European Union.
Read more: Spain tips into depression