Get Embarrassed

California has foolishly extended its Homebuyer Tax Credit. You would expect a state in the middle of a budget crisis not to waste money like this, but then again this is California.

More on Greece

The former chief economist at the IMF just eviscerated the IMF and EU for kicking the Greek can down the road. The more things change, the more they stay the same.

The Bear Case

This is the best argument for a double-dip recession: Declining tax revenues for states and municipalities will lead to downsizing at both levels. Coupled with another fall in house prices and corresponding dip in PCE, we could easily lose another few % points of GDP. I certainly hope this isn't the case, but I wouldn't be surprised to see it.