Economists use a measure of money supply called 'velocity' that can tell us a lot about the health of the economy. Velocity up the economy is probably in good shape, velocity down the economy is probably not in good shape. Right now velocity is falling. Money's not working.

More charts that underline the near term risk to the economy. The risk of short term debt to banks. A longish discussion of Paul Volker's thinking about US financial reform. Myths about homelessness. And Ian Buruma tries to navigate a normal conversation about Israel.

Velocity measures the speed with which money travels around the economy between lenders and borrowers (it is the ratio of economic transactions to the supply of money). Right now the velocity of money in the US is falling because the greatly expanded US money base is stuck in the banks.

A Comstock special report.

[The Fed] ... it has failed to increase the money supply or velocity (the ratio of economic transactions to the money supply).  Thus, while the banks now have the ability to make new loans, not enough qualified borrowers are interested in borrowing money, and banks are not willing to  loan money to anyone that is not a prime borrower.   http://comstockfunds.com/(X(1)S(phdstz45bxeekz451mmnw245))/default.aspx?act=Newsletter.aspx&category=SpecialReport&newsletterid=1534&menugroup=Home&AspxAutoDetectCookieSupport=1

Charting the current pessimism.

Three months ago, everyone was jubilant: The economy was headed for a v-shaped recovery, job growth was kicking in, and consumers were about to start spending, spending, spending again. http://www.businessinsider.com/a-quick-primer-on-why-everyone-thinks-the-economy-is-headed-into-the-toilet-again-2010-7

Jobs.

China.

Lending

Hard to make an optimistic case for Europe.

Is pessimism about the eurozone overdone, as Jean-Claude Trichet, president of the European Central Bank, argued last week? http://www.ft.com/cms/s/0/833134c6-8d14-11df-bad7-00144feab49a.html

One emerging problem is the need for banks to roll over short term funding. Put it on the pile.

The sovereign debt crisis would seem to create worry enough for European banks, but there is another gathering threat that has not garnered as much notice: the trillions of dollars in short-term borrowing that institutions around the world must repay or roll over in the next two years. http://www.nytimes.com/2010/07/12/business/global/12refinance.html?_r=1&hpw

Paul Volker's 'B' on US financial reform.

JUST before the Fourth of July weekend, Paul A. Volcker packed his fishing gear and set off for his annual outing to the Canadian wilds to cast for Atlantic salmon.  http://www.nytimes.com/2010/07/11/business/11volcker.html?_r=1

When will Bernanke man the helicopters?

Back in 2002, a professor turned Federal Reserve official by the name of Ben Bernanke gave a widely quoted speech titled “Deflation: Making Sure ‘It’ Doesn’t Happen Here.”  http://www.nytimes.com/2010/07/12/opinion/12krugman.html?ref=global

The solution to homelessness? More homes. 

Five apparent myths debunked because homelessness is mostly a short term problem, most homeless people are not mentally ill, almost half of homeless people work, shelters don't work homes do, and homelessness can be solved.

Last month, the Obama administration released a plan designed to end homelessness in 10 years. The goal reflects new optimism among academics and advocates that homelessness is not an intractable feature of urban life, as it has sometimes seemed, but a problem that can be solved.  http://www.washingtonpost.com/wp-dyn/content/article/2010/07/09/AR2010070902357.html?wprss=rss_opinions

Becoming literate about nuclear power.

We are entering a new era when nuclear energy is seen as part of the solution to growing energy needs, a solution required to bring about development in a climate-friendly manner.  http://timesofindia.indiatimes.com/Home-Opinion-Edit-Page/Towards-A-Nuclear-Future/articleshow/6148573.cms

Related.

THE Philippines may turn to nuclear energy to solve power shortages in the impoverished nation, President Benigno Aquino said on Monday.  http://www.straitstimes.com/BreakingNews/SEAsia/Story/STIStory_552565.html

Ian Buruma tries to navigate a normal conversation about Israel. Mazel tov.

Israel’s decision in May to drop commandos onto a flotilla of pro-Palestinian activists was brutal.  http://www.theglobeandmail.com/news/opinions/is-israel-a-normal-country/article1635159/

PS. If you have not seen Green Zone (stars Matt Damon; Paul Greengrass director) it was recently released on video. A little Hollywood truth to power. Where was Michael Ignatieff?

Very much worth seeing.

http://movies.nytimes.com/2010/03/12/movies/12green.html