Daily Digest 1/11 - Oil Rises Above $113, LV Homeless Told To Leave Encampment, Melting Gold To Reduce National Debt?
- Fed handed $76.9 billion to Treasury in 2011
- Significant chance of Italy downgrade: Fitch
- Greece disability list sparks welfare benefits row
- Greek Bank Deposits Fell 2% in November After October Plunge
- Polish Yield Spread Doubles in 750 Million-Euro Bond Sale
- Greeks Brace for More Pain as Debt Rescue Talks End: Euro Credit
- Mafia Is Italy's Largest Business, Biggest Banker
- ECB upped bond purchases last week to $1.4 billion
- UniCredit Plunge Seen Deterring EU Banks From Stock Sales
- Melting Gold Coins To Reduce National Debt
- Bailed-out Portugal’s painful recession will worsen this year, central bank says
- Oil rises above $113 on Iran tension
- Illinois Seen Paying Quadruple 10-Year Average Rate: Muni Credit
- 1.5 million people seek debt help (UK)
- Spain premier says regions to bust deficit goal: interview
- Rise in homeless children in Ireland seeking help
- Occupants told to leave Las Vegas homeless encampment
- Iowa National Guard Cuts Tuition Assistance 40%
- Williams says Fed must use all tools, joblessness a "calamity"
- Iran rial slides, 'dollar' text messages appear blocked
- Outlook 2012: Menu prices will rise
- Investigating Red Light Cameras
- War watch 2012: Welcome to a very edgy world
- Unemployment in EU at "historically high level"
The Federal Reserve transferred $76.9 billion in earnings to the U.S. Treasury during 2011, the central bank announced Tuesday. The transfer is slightly less than the record $79.3 billion transferred in 2010. The Fed said it earned $83.6 billion in interest income from its massive portfolio of securities, which includes Treasury debt and mortgage securities. The Fed has been buying assets as part of a quantitative-easing program, an unconventional monetary policy designed to lower long-term interest rates and boost economic growth. The transfers in the past two years are about twice the pre-quantitative-easing levels. Under Fed policy, residual Fed earnings are distributed to Treasury after covering expenses.
Fitch Ratings agency said Tuesday that there is a “significant chance” that Italy will have its credit rating downgraded because there is no credible financial firewall in Europe.
Speaking at a conference in London, Fitch’s Head of Global Sovereign Ratings David Riley said the agency will review Italy’s credit rating at the end of this month. Fitch in December placed Italy on a negative rating watch with a “heightened probability of downgrade in the near term,” along with fellow euro-zone countries Belgium, Spain, Slovenia, Ireland and Cyprus.
A Greek government plan to categorise paedophiles and pyromaniacs as "disabled" has alarmed disability groups, who fear it could undermine their state benefits.....A blind and unemployed person in Greece is entitled to 700 euros (£580; $896) a month in disability benefit, and a blind person in a job gets 360 euros, according to Mr Vardakastanis, who is blind himself.
Greek bank deposits by businesses and households fell 2 percent in November as the then Premier George Papandreou announced and then ditched a referendum on international aid, putting the country’s euro-area membership into question.
Deposits dropped to 172.9 billion euros ($220.9 billion) in November from 176.4 billion euros the previous month, according to a statement released by the Bank of Greece on its website today. Deposits have declined 36.7 billion euros, or 18 percent, since December 2010.
Poland faces higher borrowing costs to sell more of its euro-denominated bonds due March 2017 as Europe’s debt crisis pushes up yields.
The sale of 3.75-percent notes will total 750 million euros ($958 million) and be priced at 237 basis points more than the benchmark mid-swap rate, according to a banker involved in the deal who declined to be identified because the information isn’t public. The government sold 1.25 billion euros of the same bonds in March 2010 at a yield 100 basis points above mid-swaps.
Concern that spending cuts needed to secure the funding will hamper growth sent the yield on Greek two-year notes to a record 184.6 percent today.
A report released today by an Italian employers association states that organized crime is the biggest business in Italy generating an annual turnover of 140 billion Euros (over $204 billion.)
The report by Confesercenti described the various different mafia clans with roots in different regions of the country as the "biggest bank" in the country with 65 billion euros ($83 billion) in liquidity.
The European Central Bank increased its purchases of government bonds last week to euro1.1 billion ($1.4 billion) as part of its efforts to fight the eurozone debt crisis. The purchases reported Monday were up from euro462 million the week before. The ECB's purchases in the secondary market are designed to hold down the borrowing costs that Spain and Italy face in bond markets. However, Italian yields remain elevated at 7.1 percent.
A 45 percent drop in UniCredit SpA shares over four days after Italy's biggest bank announced a rights offer may deter European lenders from asking investors for help to meet requirements that they replenish capital.
"Every bank will be trying to avoid doing a rights issue even more now," said Peter Braendle, a fund manager at Swisscanto Asset Management in Zurich. "The decline is really amazing. It doesn't send a good signal."
Smith believes if the government would take all of the gold coins out of circulation and melt them into bars, the U.S. would be able to pay off the national debt. He says the gold coins are not doing anybody good just sitting around so the government should take action...."One troy ounce--depending on who you sell it to--goes for $600 to $800. And our government is sitting on billions of those gold coins," he said. "Why don't you have our government melt it down?"
Smith says he just hopes the American people don't flood the market before the government can melt the coins. That would mean less money per ounce of gold for each coin, and he says he believes it is more important for the government to reduce our deficit than for people to get a little extra cash off old jewelry.
Portugal’s recession will deepen this year under the weight of austerity measures meant to reduce public debt, the bailed-out country’s central bank predicted Tuesday. Portugal is trying to free itself from a huge debt burden that forced it to ask for a €78 billion ($100 billion) financial rescue package last year to avoid bankruptcy.
The central bank said in a report it expects the economy to contract 3.1 percent this year. Last October, it forecast a 2.2 percent contraction in 2012.
Iran has begun enriching uranium deep inside a mountain and has sentenced an American to death for spying, angering the West and undermining expectations that diplomacy could avert further sanctions or even war.
Illinois faces borrowing costs more than quadruple its 10-year average in a sale of $800 million of bonds after it became the lowest-rated U.S. state because of unpaid bills and the worst-funded pension system.
Illinois state and local general-obligation bonds yielded 182 basis points more than top-rated debt yesterday, according to data compiled by Bloomberg. That's more than four times the 10-year average of 43 basis points and about triple the 66 points over five years. A basis point is 0.01 percentage point.
Some 1.54 million people sought help with excessive borrowing in 2011, compared with 1.4 million the previous year, the study by the Money Advice Trust has shown... Joanna Elson OBE, chief executive of the Money Advice Trust, said: "2011 was a tough financial year for many families across the UK; unfortunately more people are likely to struggle in 2012.
Spain's Prime Minister Mariano Rajoy warned in an interview Tuesday that the powerful, debt-laden regions had vastly overshot their budget targets for 2011.
The regional governments' budget deficits would be equal to 2.7 of gross domestic product in 2011 -- more than double the 1.3-percent target, the premier said. Rajoy said the regions, still reeling from the 2008 property bubble implosion, were to blame for 15 billion euros ($19 billion) out of the 20 billion euros ($26 billion) in national budget slippage in 2011.
The charity's founder, Sr. Stanislaus Kennedy, said many of those accessing services are the "new poor", people who did well during the boom years, but have since lost their jobs and houses.
Tents and other makeshift shelters line the boundaries of the empty lot at the edge of Las Vegas's homeless corridor, where people gather to be near shelters that serve free meals. The number of people living on the streets in and around the area more than tripled since 2009, according to a January 2011 homeless count.
"That is what I signed up for. It's in my contract actually," said Duckett. This summer Duckett returned from 9 months in Afghanistan, and he's currently studying business at Morningside College. He just found out about the tuition assistance cut two weeks after it was announced.
The Federal Reserve will do all it can to support a "notably weak" U.S. economic recovery and bring down unemployment from its "shockingly" high level, a top Fed official said on Tuesday.
If inflation falls as expected, San Francisco Fed President John Williams told reporters after a speech in Vancouver, Wash., there is a "strong argument for going to, I think, purchasing more mortgage backed securities down the road." Williams also warned of the potential threat from Europe's ongoing debt crisis, which he said leaders are working to address. "But, if they fail, all bets are off."
Iran's currency has slid 20 percent against the dollar in the last week despite central bank intervention, and Iranians concerned about the economy said on Tuesday attempts to send text messages using the word "dollar" appeared to be blocked.
The central bank reportedly pumped $200 million dollars into the market last Wednesday after new and much tougher U.S. sanctions prompted nervous Iranians to change rials into hard currency, accelerating a rise in the price of dollars on the open market.
Restaurant operators will increase menu prices this year, mostly between 1 percent and 3 percent, according to an exclusive survey by Nation's Restaurant News.
Facing a second straight year of rising commodity costs, many restaurant chains have said they will be forced to pass higher prices for food items to the consumer through menu price hikes.
Are red light cameras more about safety or the fines that go with them?
Welcome to an edgy world where a single incident at an energy “chokepoint” could set a region aflame, provoking bloody encounters, boosting oil prices, and putting the global economy at risk. With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch -- the Geo-Energy Era -- in which disputes over vital resources will dominate world affairs. In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world.
Unemployment in the 27-member European Union has now "reached a historically high level" at 9.8 percent, the European Commission announced here on Tuesday. Unemployment has affected most groups, but especially hard hit are the young, the low-skilled and migrants.
Poverty is also on the rise in many EU countries. Young adults, children and single parents are particularly at risk, said the EU's executive body in a statement.
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