Roubini Issues Warning on Spain, New MIT Billion Prices Project Data, Jim Grant Worries About 4-5% Inflation, and Oregon Legislature Thinks Wasting Taxpayer Dollars is a Joke

Though confirming what most know already, it's always nice to have your suspicions backed by someone who is as connected as Nouriel Roubini.  From Bloomberg yesterday:

Spain, the currency bloc’s fourth-largest economy, is trying to restructure its savings banks after a property-market slump left many with surging bad loans. Twelve lenders need to raise as much as 15.2 billion euros to meet new minimum capital standards set by the government.
“When Greece failed, they said Portugal is different,” Roubini said. “Now they say Spain is different. I am not sure Spain is different.”

“Spain is a country too big to fail but also too big to be saved,” Roubini said. There’s a “risk” of contagion spreading to Spain, and “that would be negative for financial markets and the global economy.”

And now Spain's Labour Minister is warning of record high unemployment if the labor force keeps rising:

April 16 (Reuters) - MADRID, April 16 (Reuters) - The number of Spaniards out of work could reach a record high of 5 million if the active workforce continues to rise, Labour Minister Valeriano Gomez said in an interview published on Saturday in Expansion.

Spanish unemployment is more than double the European Union average at 20.3 percent and has risen by around 2.5 million to 4.7 million since the beginning of the economic crisis in the first quarter of 2008.

5 million people out of work won't stand for another bailout of French and German banks.  Look for protests whenever, if ever, the day comes.

MIT's Billion Prices Project has new data out today showing inflation is not slowing down.  Via EPJ:

Thanks again to Robert Wenzel, the Atlanta Fed has data out on two new indexes entitled the "flexible CPI" and the "sticky CPI."  From EPJ:

The Sticky Price Index tracks prices that change slowly. In March, the index rose at a 1.5% annual rate.

But the Flexible CPI Index, i.e. the index of prices that move quickest is going through the roof.  For March, this index rose, on an annualized basis by 21.1%. In February, it rose on annualized basis at 17.5%.

As recently as June 2010, the rate over the previous 12 months was 1.77%. The 12-month rate ending in March is at 6.43%.

Here is a link to an interview with Jim Grant of Grant's Interest Rate Observer of WealthTrack.  Some highlights:

These are monetary events that have never before been seen, and indeed, never before imagined...The Fed's policies are certainly great for one class of society: the speculative classes.... We have socialized risk, we have privatized gains, much to the relief of Greenwich, CT where our zillionaires live, and the unconscionable and indefensible fallout of this is that savers get zero on their savings balances, and the speculative classes get to borrow in wholesale markets at zero and get to make their zillions all over again... The Chairman is whistling by the graveyard in this manner of 2% inflation rate being harmless."

"there will be a lot of suddenly - 4 or 5% let us say...So much of our speculative apparatus is powered on these zero percent interest rates... Think how hard it is to hold back a cash reserve in this economy... Your stupid neighbor who is watching this program is making a lot fo money in the stock market: how hard is it not to participate? You can't do it... But 4% inflation would mean that the party is over... Everything would fall out of bed... Gold and silver would right themselves, because they are money that would come into their own at the end of the cycle of disillusionment but for a time there would be terrific chaos in investment markets."

For some weekly humor, here is a joke the Oregon House of Representatives decided to play while in session

Because it's so hilarious wasting tax payer money on reciting cheesy 80's pop songs...