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  • Planet Money: 'Europe's Worst Cast Scenario'

    The Wall Street Journal reports that European stocks "plunged" today, "as investors worried the world's largest economy may be heading for a recession." This news reminds us that the US is not alone in its struggle to restart significant economic growth. And the problems in Europe continue to have their own dire consequences. On the latest Planet Money podcast, Columbia finance professor David Beim laid out some possible worst-case scenarios for the Eurozone and Europe: So the end of the Euro, riots, bank runs? How likely are these scenarios? What do you see as the worst-case scenario? What do you see as the most likely scenario for Europe?

  • WSJ's Guerrera: 2011 Crisis not a Repeat of 2008

    Is the current economic bleakness reminding you of 2008? If it is, you are not alone. But the Wall Street Journal 's Francesco Guerrera warns not to get caught up in that thinking. "This time is different," he says. For starters, the root cause of the problems today come from a different place: The older one spread from the bottom up. It began among over-optimistic home buyers, rose through the Wall Street securitization machine, with more than a little help from credit-rating firms, and ended up infecting the global economy. It was the financial sector's breakdown that caused the recession. The current predicament, by contrast, is a top-down affair. Governments around the world, unable to stimulate their economies and get their houses in order, have gradually lost the trust of the business and financial communities. That, in turn, has caused a sharp reduction in private sector spending and investing, causing a vicious circle that leads to high unemployment and sluggish growth. Markets and banks, in this case, are victims, not perpetrators. Read Why This Crisis Differs From the 2008 Version here .

  • One Small Business's Expansion Efforts Blocked By the Credit Crunch

    Thomas Harrison wants to double his company's size in the next five years. If he were able to do so, he could at 20 new jobs. And Ypsilanti, Michigan--where Harrison's Michigan Ladder Company is based--needs those jobs. But Harrison's expansion plans are at the mercy of the banks. And banks are reluctant to open up new credit as they themselves try to recover from a series of loan defaults with the collapse of the housing market. The Wall Street Journal 's Mark Whitehouse describes Harrison's situation in what serves as a helpful case study for the struggles of small businesses across the country. And ultimately Whitehouse's article and accompanying multimedia features lay out the problem for job creation today--no credit, no expansion, no new jobs: For a recovery to take hold, hundreds of thousands of small businesses must find the confidence to expand and create jobs. But when they get to that point, the local banks they depend on—worried about borrowers' financial strength, scrutinized by regulators and slammed by souring real-estate loans—might not be willing or able to provide the credit they need. While big companies have been able to borrow in bond markets, smaller companies rely mainly on bank credit, which has been shrinking. In 2009, total lending by U.S. banks fell 7.4%, the steepest drop since 1942. In all, the credit pulled out of the economy by banks since the downfall of Lehman Brothers in September 2008 amounts to about $700 billion, more than double the amount so far distributed under President Barack Obama's $787 billion stimulus program. Read Loan Squeeze Thwarts Small-Business Revival here . And meet Harrison, CEO of 108-year-old American Ladder Company, in this Wall Street Journal video:

  • WSJ Interactive Map Tracks Bank Failures

    The FDIC closed 9 banks in one day last Friday, including California National Bank of Los Angeles, which had 68 branches throughout the city. CalNational and the 8 other banks, which were also in Illinois, Arizona, and Texas, were all divisions of the Chicago-based bank holding company FBOP Corp, according to the Associated Press . 115 banks have been closed so far this year, and 140 since last November. One of the best tools we've found to track the bank closings comes from the Wall Street Journal online team. Click here to use an interactive version of the below map, on which you can see where the closing have hit, and get details about each bank. (H/t to Barry Ritholtz for the reminder about this interactive map).