Greeted by hundreds of thousands of euphoric young Catholics gathered in the city to celebrate World Youth Day the Pontiff chose to highlight the difficulties facing young people in his first address of the four-day visit.

“Many young people look worriedly to the future, as they search for work, or because they have lost their job or because the one they have is precarious or uncertain,” he said in a speech delivered in Spanish.

He arrived in recession-hit Spain ”“ where unemployment is 20 per cent rising to above 40 per cent in the under 25s ”“ with a thinly veiled attack on financial institutions.

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It’s a question that can cause tension and tears in a circle of home-school moms in a Bible Belt church fellowship hall.

It’s a question that can have the same jarring impact in a circle of feminist mothers in a Manhattan coffee shop.

Here it is: Will you buy your daughter a Barbie doll? Other questions follow in the wake of this one, linked to clothes, self-esteem, cellphones, makeup, reality TV shows and the entire commercialized princess culture.

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A mosque dispute in this Atlanta suburb is shining a spotlight on an antidiscrimination law increasingly pitting the Department of Justice against zoning officials across the country.

Lilburn’s city council plans to vote Tuesday whether to allow construction of a 20,000-square-foot Muslim worship center between a large Baptist church and a Hindu temple on a busy thoroughfare also lined with gas stations and strip malls.

The city council rejected zoning applications in 2009 and again last year for the center amid stiff opposition from some residents, who say the large mosque would bring too much traffic and noise and encroach on the neighborhood behind it.

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Check it out it allows you to move the cursor over any country and see the data–a great tool.

Like earthquakes, financial crises seem to be accompanied by aftershocks, like the one we’ve been living through this week. They can feel every bit as bad as the crisis itself. But economic history and academic research suggest they can set the stage for a sustainable recovery ”” and eventual sharp stock market gains.

The events of the last few weeks ”” gridlock in Washington, brinksmanship over raising the debt ceiling, Standard & Poor’s downgrade of long-term Treasuries, renewed fears about European debt and a dizzying plunge in the stock market ”” bear an intriguing resemblance to some of the events of 1937-38, the so-called recession within the Depression, with a major caveat: it was a lot worse back then. The Dow Jones industrial average dropped 49 percent from its peak in 1937. Manufacturing output fell by 37 percent, a steeper decline than in 1929-33. Unemployment, which had been slowly declining, to 14 percent from 25 percent, surged to 19 percent. Price declines led to deflation.

“The parallels to what is happening now are very strong,” Robert McElvaine, author of “The Great Depression: America, 1929-1941” and a professor of history at Millsaps College, said this week. Then as now, policy makers were struggling with how and when to turn off the fiscal stimulus and monetary easing that had been used to combat the initial crisis.

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Lin Hersh, a 61-year-old small-business owner in Bearsville, N.Y., about two hours north of New York City, called up her stock broker two weeks ago and gave the order to sell everything.

She dumped nearly all of her individual equities and her stock mutual funds, moving almost completely into cash. Ms. Hersh is haunted by the market plunge of 2008, when her $432,000 in savings dwindled to $150,000.

“What I’ve got left after the last downturn is about a third of what I started out with and I’m not in the mood to play anymore,” she said. Pointing to the weak American economy and concerns about Europe, Ms. Hersh said she would most likely steer clear of stocks through the end of this year.

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“The short-sale ban really smacks of desperation,” said Kenneth S. Rogoff, a professor of economics at Harvard. “That’s their plan for solving the euro debt crisis? I mean, this isn’t going to buy them much time.”

The crisis in Europe, Mr. Rogoff said, goes far beyond falling stock prices and has more to do with the state of banks there, including banks in Italy and France. He said the sovereign debt problems were an extension of the stress on the system created by the banking crisis.

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A college degree once looked to be the path to prosperity. In an article for TechCrunch, Sarah Lacy writes, “Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe.”

But the jobs that made higher education pay off during the inflationary boom, kicked into high gear by Nixon waving goodbye to the last shreds of a gold standard, came primarily from government and finance.

In 1990, 6.4 million people worked for federal, state, and local governments. By 2010, that number had grown almost 6 times ”” to 38.3 million ”” with many of these jobs being white-collar….

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Bank of America would have us believe the goodwill by itself was more valuable than what the market says the entire company is now worth. Investors don’t buy that. They see a company that needs to raise fresh capital, judging by the discount to book value, in spite of the company’s claims it doesn’t need to. The more the stock price falls, the more shares Bank of America would need to issue to appease the markets, leading to fears of even more share dilution.

The same story is playing out in Europe, driven by the sovereign-debt crisis. The 32 companies in the Euro Stoxx Banks Index yesterday had a stock-market value of 313.2 billion euros ($444 billion) and a combined book value of 620.5 billion euros. France’s Credit Agricole SA (ACA), the index’s third-largest bank by assets, trades for just 34 percent of book.

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The market has effectively downgraded French debt already. The spread between 10-year French government bonds and German bunds has widened to 0.85 percentage point this week, three times wider than a year ago. Some of this is down to concern about France’s own credit quality: France’s debt to GDP ratio is forecast to hit nearly 90% in 2013, the highest among remaining triple-A rated countries. Last year, France ran a budget deficit of 7%; only Spain, Portugal, Greece and Ireland among euro-zone countries were higher.

True, Paris has a plan””a crucial difference between France and the recently downgraded U.S., according to Standard & Poor’s. The government has pledged to cut the deficit to 4.6% of gross domestic product next year and 3% in 2013 even if growth falters. But its forecasts are based on an optimistic assumption of annual GDP growth of at least 2% for the next three years; French taxes are already high so if growth falls short the bulk of any further fiscal tightening will need to be via politically tricky spending cuts.

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In the two months since North Carolina’s legislature laid off most of its prison chaplains, Betty Brown, director of prison chaplaincy services, has been crisscrossing the state searching for volunteers who can attend to the religious needs of Native American, Wiccan and Rastafarian prisoners.

State legislators had assumed volunteer ministries would jump in and help prisoners meet the ritual and devotional needs of their faiths. But so far, that hasn’t happened.

“It’s been tough locating volunteers for those faith groups,” said Brown, whose department lost 26 full-time prison chaplains as part of an effort to close a $2.6 billion state budget gap.

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Kathryn Meadowcroft said she knows what it’s like to live in a homeless shelter, and now she is worried that she might have to return there next month.

Three years ago she was able to move out of the shelter after several months and into an attractive, one-bedroom unit in Seven Farms Apartments, a low-income complex, on Daniel Island.
Her move was made possible because of a little-known federal subsidy that Lowcountry housing advocates tapped to help more local residents find a decent home.

However, on Aug. 31, the program — known as the Tenant Based Rental Assistance Program — will expire because of budget cuts.

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Americans’ economic confidence plunged to -53 in the week ending Aug. 7, a level not seen since the recession days of March 2009. This deterioration coincided with the final wrangling over the U.S. debt ceiling and Standard and Poor’s downgrade of the United States’ debt rating. Economic confidence is now far worse than the -43 of two weeks ago and the -34 of a month ago.

Read it all and take a look at those graphs.

If the experience of previous ECB interventions is anything to go by it is only a matter of time until we see larger-scale ECB operations, potentially accompanied by a European Financial Stability Facility (and later European Stability Mechanism) bailout. This is how it happened in the cases of Ireland and Portugal. ECB measures have always been announced as ways to prevent further, more costly rescue packages. The strategy never worked because in the end we got both. It won’t work this time, either.

It is remarkable how far the ECB has now moved from its initial Bundesbank-like philosophy of independence and monetary stability. These were not just soap-box oratories but supposedly law. The EU Treaty defines the ECB’s role very clearly: “The primary objective of the European System of Central Banks [the ECB and eurozone central banks] shall be to maintain price stability.” And the ECB “shall be independent in the exercise of its powers and in the management of its finances. Union institutions, bodies, offices and agencies and the governments of the Member States shall respect that independence.” If only!

Maybe the ECB somehow manages to conform to the letter of the law. It certainly doesn’t to its spirit….

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From here:

Lord God, we live in disturbing days:
across the world,
prices rise,
debts increase,
markets are in turmoil,
jobs are taken away,
and fragile security is under threat.
Loving God, meet us in our fear and hear our prayer:
be a tower of strength amidst the shifting sands,
and a light in the darkness;
help us receive your gift of peace,
and fix our hearts where true joys are to be found,
in Jesus Christ our Lord. Amen.

The Federal Reserve on Tuesday sharply downgraded its outlook for the American economy and took the extraordinary step of signaling that it would hold short-term interest rates at exceptionally low levels “at least through mid-2013.”

The move marks the first time that the U.S. central bank has pegged a specific timetable to a pledge on its benchmark interest rate, the federal funds rate, which has been near zero since late-2008.

But the decision came with three dissenting votes from Fed committee members, reflecting concerns about the threat of runaway inflation down the road.

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From here:

Popular personal finance personality Dave Ramsey summed it up eloquently and simply: “If the US Government ”‹was a family, they would be making $58,000 a year, they spend $75,000 a year and are $327,000 in credit card debt. They are currently proposing big spending cuts to reduce their spending to $72,000 a year.”

Alan Haley has a further discussion of this here.

No amount of jaw-jawing from the ECB (or from the G-7, which yesterday put out an odd statement calling the rise in euro-zone bond yields not “warranted”) can make investors buy Italian debt. Mr. Trichet continues to act as if the markets are having an attack of the vapors, from which they’ll recover presently. But no rational person or institution is going to start buying sovereign debt from heavily indebted, stagnant, deficit-running countries as if the past 15 months had never happened. The lamp has been rubbed, the genie has escaped, and no amount of un-rubbing will put him back in the lamp.

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Standard and Poor’s, the agency responsible for Friday’s downgrade, merely confirmed what anyone with their eyes open for the past decade or two already knew: The U.S. has a huge and growing debt problem that it is resolutely unwilling to solve.

Not unable. Just unwilling.

Not just politicians, but anyone who buys into their divisive, fanciful rhetoric.

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Stressed on the job? Add rude co-workers to the list of headaches.

“Workplace incivility” is on the rise, researchers said Sunday at the American Psychological Association annual meeting.
The academics define workplace incivility as “a form of organizational deviance”¦ characterized by low-intensity behaviors that violate respectful workplace norms, appearing vague as to intent to harm.”
Translation: rudeness, insults and plain old bad manners.

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Amateur footage appears to show a gang of youths charging at police in south-east London

Rioting has spread across London on a third night of violence, with unrest flaring in other English cities.

An extra 1,700 police officers were deployed in London, where shops were looted and buildings were set alight.

Birmingham, Liverpool, Nottingham and Bristol also saw violence.

Read it all and BBC has a live website here.

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Whatever one thinks of the credit-rating agencies””and we aren’t admirers””it serves no good purpose to shoot the fiscal messengers. Friday’s downgrade by Standard & Poor’s of U.S. long-term debt to AA+ from AAA will be the first of many such humiliations if Washington doesn’t change its economic and fiscal policies.

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The downgrade of the United States long-term debt to AA+ from AAA has global implications, said Alessandro Giansanti, a credit market strategist at ING in Amsterdam.

“We can see that this may force the U.S. to move more aggressively to cut spending,” he said, something that could drive the already weak economy into recession and weigh on the economies of all of its trading partners. “That’s the main driver” of the stock market declines, he said.

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Listen to it all if you so desire.

Local government officials are struggling to gauge the impact of the Standard & Poor’s unprecedented downgrade of federal credit even as Washington watches global reaction to its latest financial setback.

Will the ratings agency downgrade counties and states? Will the federal government’s predicament cost local taxpayers? And can local governments have better credit than the federal government?

“We are in uncharted territory,” Prince William County Board Chairman Corey A. Stewart (R) said. “No one knows what the ultimate long-term ramifications are. .”‰.”‰. But we know they’re going to be significant.”

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A half-hearted approach by the EBC will achieve little. Even full-blown “shock and awe” will only buy time. That’s because the real instability stems from fears euro-zone governments will impose losses on those holding individual country bonds if debts prove unsustainable. Those fears are mounting as the growth outlook deteriorates. Italy’s announcement of new austerity measures Friday may help address concerns over the deficit but could actually worsen the short-term challenge of growth.

That’s why the second part of the crisis resolution requires a vast expansion of the euro zone’s bailout facilities and most likely a move by European countries to guarantee European Financial Stability Facility’s bonds, effectively turning them into genuine euro-zone bonds.

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Bradley Alford, a money manager in Atlanta, just hit the panic button.

No, really. Mr. Alford just hit the key on his computer that initiates the Wall Street equivalent of the nuclear option: Sell everything.
He was acting on orders from two wealthy clients who became so alarmed by the troubled outlook that they simply wanted out. Over the last 10 days or so, they asked him to sell all of their stocks and invest in a mutual fund he oversees that is somewhat insulated against a potential market collapse.

“I have never, ever done it before,” says Mr. Alford, who is the chairman of Alpha Capital Management and has been managing money for 22 years. “This was unprecedented.”

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Nigerian financial regulators nationalized three banks Friday night in the course of an ever-widening probe of corruption allegations and mismanagement of fiscal institutions in the oil-rich nation.

Authorities took over Afribank PLC, Bank PHB and Spring Bank PLC after markets closed in Africa’s most populous nation, quickly renaming the institutions Mainstreet Bank Ltd., Keystone Bank Ltd. and Enterprise Bank Ltd., the country’s finance ministry said.

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[Boston University’s Laurence] Kotlikoff explains that America’s “unofficial” payment obligations ”” like Social Security, Medicare and Medicaid benefits ”” jack up the debt figure substantially.

“If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.”

We don’t hear more about this enormous number, Kotlikoff says, because politicians have chosen their language carefully to keep most of the problem off the books.

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