What We Read Today 24 December 2013

Econintersect: Click Read more >> below graphic to see today’s list.

The top of today’s reading list answers the question:  Do traffic tickets affect your auto insurance? …….. and the tenth article explains why HELOC resets will derail the U.S. housing recovery.  The bonus article (11th) indicates the U.S. consumer may have finished unwinding debt.

• Do Traffic Tickets Affect Your Auto Insurance Rates? (Emma Fox, Daily Markets) What can you do to minimize any effect?
  

• The Next Big Bank to Fail Will Get Liquidated into… Another Big Bank (Shah Gilani, Wall Street Insights & Indictments, 16 December 2013) Shah Gilani has contributed to Global Economic Intersection, most recently The Tarnished Record of JP Morgan.

• Federal Reserve System CAUSES unpayable debt, unemployment, inflation, high interest rates (Carl Herman, Washington’s Blog) “Ellen Brown is right: it’s time to transform the Fed into a public utility.”
  

• The Cost Of Trading Stocks Has Been Tumbling For Decades (Sam Ro, Business Insider)

• North Carolina Shows How to Crush the Unemployed (Evan Soltas, Bloomberg) Stop long-term unemployment benefits and more people will get work. That was North Carolina’s plan. But reducing unemployment roles by 45,000 corresponded with a reduction in the work force of 77,000, the largest contraction the state has ever seen. Now food pantries can’t meet the demand. Look like the 1930s?

• Germany’s Coming Downgrade (Sylvester Eijffinger and Edin Mujagic, Project Syndicate)

• The US economy may never be the same after the Great Recession (Matt Phillips, Quartz, 16 December 2013)

Developed markets (DM) growth in GDP terms​ has slowed dramatically over the past decade.

• Minimum Wages, Employment and Inequality (Gary Becker, Caixin Online)

Obama has called for raising the federal minimum, but this would only serve to make economically vulnerable groups even more vulnerable.

See also Steve Hansen at GEI Analysis: Arguing Over Extending Unemployment Benefits.

• An exercise in prolonging a banking credit crunch (Wolfgang Munchau, Financial Times) See also Cliff Wachtel GEI Analysis of the EU banking union agreement.

• Why HELOC Resets Will Undermine Any Housing Recovery (Keith Jurow, Advisor Perspectives dshort.com) Keith Jurow has contributed to Global Economic Intersection. Home equity lines of credit (HELOCs) typically mature in 10 years from issuance. Jurow says:

You had better prepare for what is coming in the next four years with the HELOC resets. Almost all of these HELOCs are second liens. When the borrower defaults on an underwater property with a HELOC, the loan is not simply written down. It is written off as worthless. Some of the largest banks will regret that they handed out millions of HELOCs during the bubble years.

BONUS

• This Is The Most Important Chart Of 2013 (Matthew Boesler, Business Insider) For the first time since 2008 debt of U.S. households increased in the third quater 2013.