One of very few politicians – if only – in Washington addressing what the U.S. is facing economically. Listen and take heed…

This bit of news is interesting – UBS Bank could collapse if talks with the US over tax fraud fall through.

“The actions of UBS in the United States are very problematic. Not just because they are punishable but also because they threaten all of the bank’s activities,” Eveline Widmer-Schlumpf told Le Matin Dimanche newspaper.

“The Swiss economy and the job market would suffer on a major scale if UBS fails as a result of its licence being revoked in the United States,” she said.

It sounds like the U.S. is considering pulling the ability of UBS to act as a bank within the United States due to tax fraud / tax evasion, which would trigger the bank collapse and not due to current bank solvency issues.

I find it hard to believe U.S. regulators would allow such a thing to happen, instead opting for the fine route…

Really? You think?

From Bloomberg:

Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.

“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor,” Roubini told Bloomberg Television in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “I think we are in trouble.”

Roubini said while the world’s largest economy won’t relapse into recession, unemployment will rise from the current 10 percent, posing social and political challenges.

All on needs to do is look past the headlines, do a little personal research, in order to come to the conclusion that the economic recovery is not a recovery at all.

The Wall Street Journal breaks down what industries have seen job losses, how many people the industries lost, and a few stories of people in industry – both the fortunate or unfortunate.

Well worth the read.

Just reading over some of the business news I missed the last few days, turns out the EU (Eurozone) now faces 10% unemployment as well.

Unemployment in the eurozone breached the 10 per cent mark for the first time since the introduction of the single currency over a decade ago.

As of November, there were 15.7m jobless in the bloc, the highest since the data series was first compiled in 1994.

Seeing the US unemployment numbers came in worse than expected (85K) and that included seasonally adjusted hiring, and is beginning to account for census workers, one can see just how far off the labor market is here.

With the EU facing high unemployment, the US with the same factors, the nation – if not multiple economies – are simply sitting on the edge.

This is major.

President Hugo Chavez’ decision to devalue Venezuela’s currency (by half) for the first time in nearly five years aims to stretch his government’s oil earnings further and counter a recession by increasing spending.

This is what the United States may face if the debt continues to grow out of control. What one needs to pay attention to isn’t the reasoning behind the devaluation but the general public and their reaction. Watch what happens in the shops, watch the food costs, their energy costs, watch for a state of panic…

One could expect the same here if such a thing takes place.

Zerohedge.com has a very powerful paragraph that everyone must read.

Yes, paragraph.

The US Avoided Technical Default by Three Days between Christmas and New Years, but as one pointed out, if no one has the balls to call a person/company/government on the fact that they default does it really matter that a default has happened?

Seriously, if one doesn’t think the country is on the financial brink they really need to wake up and look at the signs around them.

While going over the 12 post for 12 months I was struck by how many posts talked about/touched upon economic issues. With the holiday season wrapping up the reality we face can set in once gain. 2009 was, without a doubt,  a bad year economically. No job creation, poor retail sales, continued credit contraction and no sustainable recovery in the real estate market all point to what you needed to know: the “economic recovery” underway is a joke.

Regardless of what the government keeps saying the truth is the United States faces hard time in the coming year (or years).  John Williams of ShadowStats.com sums up our current problems:

(Right Now) In terms of the GDP, we are about halfway to depression level. If you look at retail sales, industrial production, we are already well into depressionary. If you look at things such as the housing industry, the new orders for durable goods we are in Great Depression territory. If we have hyperinflation, which I see coming not too far down the road, that would be so disruptive to our system that it would result in the cessation of many levels of normal economic commerce, and that would throw us into a great depression, and one worse than was seen in the 1930s…

I am talking something like you saw with the Weimar Republic of the 1930s. There the currency became worthless enough that people used it actually as toilet paper or wallpaper.

The problems you faced yesterday are still here today. Welcome to 2010.

This is stunning.

Now realize that you are, in effect, watching 31 Million jobs just vanish. 31 Million people who are no longer living the life they once knew…

My views on the economy are, well, pessimistic at best and apocalyptic at worst. Anyone who reads the site on a regular basis is well aware of that, so I will not continue on explaining why I hold those views.  What I do find interesting, however, is the administration cannot get send a consistent message out.

First off we have Larry Summers claiming the economy is doing well, the recession is over, and that job growth will be back by this spring.

Really?

By a technical definition, yes, the recession is over – the GDP was positive as of the last report.  This was thanks for the government spending, but if you look the economic data out (Non-manufacturing index, even some regional fed reports) you can see contraction or signs of contraction.  If that is the case how will we see job growth in a matter of months?

Anyway.

White House economic adviser Christina Romer said “Of course not. For the people on Main Street and throughout this country, they are still suffering, the unemployment rate is still 10 percent.”

And that is the key, I think.

The technical definition is positive but it due to limited and very specific factors, the people who drive the economy – the consumer – still hurt and are not spending. The very engine that drives the economy is broken and once the government spending dries up we’ll be heading back into what every economist will be able to call “a recession” once again.