Daily Digest 1/18 - Kraft To Cut 1,600 Jobs, UN Forecasts Drop In Global Wealth, ID Grocers Seek To Ease Food Stamp Rush
- Greece Running Out of Time as Debt Talks Stumble: Euro Credit
- Moody’s: Here are the U.S. Banks Most Exposed to Euro Crisis
- Every adult is £600 poorer after drop in living standards
- IMF, EU May Need to Spend More to Avoid East Europe Crunch
- Sacramento County budget cuts fall heavily on young workers
- Over 70,000 jobs set for the chop in Scotland
- Kraft Foods To Cut 1,600 Jobs
- India raises tax on gold, silver imports
- Rajoy Says He’ll ‘Rescue’ Regions, Stick to Spain Austerity
- UN forecasts drop in global wealth
- Bank of Canada keeps key interest rate unchanged at 1 per cent
- Gross Says Euro Debt Downgrades May Force Selling: Tom Keene
- Supervalu-Led Stores Chasing $55 Billion in Food Stamps: Retail
- Idaho grocers seek to ease food stamp rush
- Food Stamp Use Up 270 Percent, State Considers Staggering Payment Dates
- Board of Regents To Consider Tuition Increases Thursday
- Illinois college savings plan is $560 million short
- Powers recommends maximum tuition increase
- UNC-system president stands by 10-percent parameters for tuition increase proposals
- What Does One Jobless Youth Cost Taxpayers? $14,000 a Year
- Philly Taxpayers Lost $331M on Swaps: Report
- Government Cuts Pay for Next Fannie, Freddie CEOs
- One in 10 Canadians cannot afford prescription meds
- Americans cut consumption in face of record gasoline prices
- French Power Prices May Rise 30% by 2016, Energy Regulator Says
- Spanish Home Prices Decline for 13th Quarter as Economy Slowed
- Saudi Arabia targets $100 crude price
- More older Americans on job than ever
- speeding fines on the M62 rose by a shocking 1,000 per cent last year
- Half of U.S. Households Took Government Benefits in 2010
- Central Bank will take over more credit unions
- Iran: Oil embargo is "economic suicide" for EU
- U.S. Takes Steps to Avoid Debt Ceiling
- Report on Poverty Reveals Troubling Numbers
- Portugal moves into default territory
- UK taxpayer may have to pour in billions more to prop up euro as European stability fund is downgraded
Greece is running out of time to avoid becoming the first euro nation to default after talks with lenders stalled ahead of a March 20 bond payment that will cost 14.5 billion euros ($18 billion) the country doesn't have.
At any rate, Moody’s offered up this chart showing on what they said were the five U.S. banks “most exposed to the European crisis.” We thought MarketBeat readers might like it.
Living standards in Britain have plummeted by £38 billion in the last year leaving every adult more than £600 worse off, experts said today. The full scale of the squeeze on family budgets emerged as inflation finally started to fall.
High street price wars triggered a sharp drop in inflation last month. Although prices are still surging at 4.2 per cent - more than double the rate of pay increases - economists predicted more falls this year.
"Despite the fall in inflation, millions of UK families have seen their standard of living fall dramatically," said Chris Evans, chief executive of financial specialists MGM Advantage which published the analysis showing every adult on average £611 worse off than 12 months ago.
The International Monetary Fund and other lenders, who spent $42 billion to stem an eastern European banking crisis from 2009, may be forced to commit more aid to the region to cushion the effects of banks cutting assets.
The IMF, the European Bank for Reconstruction and Development, the World Bank and the European Investment Bank should “stand ready to provide external assistance and financial support to banks” in eastern Europe, the Vienna Initiative group of regulators and policy makers said in a statement after a meeting in the Austrian capital yesterday.
The fresh ideas in Sacramento County government will have to come from older workers. In just four years, the proportion of county government workers under 30 has fallen from 15 percent to 5 percent.
The culprits are layoffs based on seniority and hiring freezes. Young workers accounted for half of the net loss in county workers from 2007 to 2011. Today, the county employs about 615 workers under 30, compared to about 1,800 in 2007, according to the latest actuarial valuation from the county retirement system.
Unions warned today that more than 70,000 Scottish public-sector jobs could be lost to Con-Dem budget cuts over the next five years.
It makes Scotland the fourth-hardest hit area, with the 70,225 posts set to go accounting for 2.8 per cent of all jobs in the country. The TUC said much of this is down to job cuts at councils, schools, the NHS and the Civil Service announced by George Osborne in November, which "will have a devastating impact."
Kraft Foods announced plans Tuesday to cut roughly 1,600 jobs in North America over the next year.
New Delhi: India, the world's biggest consumer of bullion, increased import duties on gold and silver, potentially cooling demand from jewellery buyers and investors. The government began taxing gold bars and coins at an additional 2 per cent from yesterday, while silver attracts a 6 per cent levy, the finance ministry said on its website.
Prime Minister Mariano Rajoy said the central government is prepared to “rescue” Spain’s 17 cash-strapped regions and pledged to pursue austerity measures and overhaul the euro area’s fourth-largest economy.
“We are going to ask the regions to meet their 2012 deficit targets and to have spending and debt ceilings, and we are willing, if some have liquidity problems, to rescue them,” Rajoy told a joint news conference with European Union President Herman Van Rompuy in Madrid today.
The global economy will grow by only 0.5 per cent in 2012, effectively shrinking on a per capita basis, unless there is rapid action to create jobs, prevent sovereign debt distress and shore up fragile banks, a United Nations study said today. The annual UN World Economic Situation and Prospects report forecast average economic growth of 2.6 per cent in 2012 and 3.2 per cent in 2013, assuming what it said were benign conditions in a "make-or-break year" for economic recovery.
The assumptions included a 50 per cent cut in Greek sovereign debt, a minor US economic stimulus in the short term and a realisation of economic policy commitments taken by the G20 group of nations at Cannes in November.
Predicting the recession in Europe will be worse than expected only a few months ago, the Bank of Canada kept its trend-setting overnight rate at 1 per cent Tuesday. And Mark Carney, the central bank governor, noted the economic weakness in Europe and the United States means Canada will not reach its full growth potential until the second half of 2013.
“The pace of growth going forward (in Canada) is expected to be more modest than previously envisaged, largely due to the external environment,” the bank said in a statement accompanying the rate-setting decision.
Pacific Investment Management Co.'s Bill Gross said credit-rating cuts of euro-area debt may trigger some forced selling by investors who are require to hold only the highest quality securities in their portfolios.
"There are those that say the downgrades don't matter," Gross, manager of the world's biggest bond fund, said in a radio interview on "Bloomberg Surveillance" with Tom Keene and Ken Prewitt. "In fact they don't for the most part. But there are regulatory issues in the case of structures that are dependent on certain types of ratings and to the extent that various countries get downgraded, then those positions have to be reduced if only because of regulation."
Supermarkets that had been adding Starbucks Corp. cafes and olive bars to draw wealthy shoppers are now catering to a different audience: food-stamp recipients.
Stores are moving their opening hours, adding products and revamping merchandise assortments as persistent joblessness pushes more shoppers to government support in buying groceries. Distributions from the federal Supplemental Nutrition Assistance Program rose 11 percent to a record $71.8 billion in fiscal 2011, according to a U.S. Department of Agriculture report.
Idaho’s grocery stores are putting up $100,000 of their own money and asking state lawmakers to change back to multiday distribution of food stamps each month, saying the current system has forced them to throw out a million dollars’ worth of food over the past two years.
The reason: When the benefits are released on the first day of each month, the lines in stores get so long some people abandon their full carts. All the frozen food in the carts can’t be restocked and goes to waste.
The State Department of Health and Welfare reported Monday that the number of Idahoans using food stamps has sky-rocketed by 270 percent from 2007. That means about one in six people in the state need government assistance to buy food.
As of November, there were 235,000 Idahoans on food stamps, compared with 80,000 five years ago.
The Board of Regents for Higher Education will consider recommended increases in tuition and fees of about 3.8 percent for the four state universities and 3.1 percent for the community colleges.
That means in-state commuter students attending any of the four state universities — Central, Southern, Western or Eastern — would pay 3.8 percent more in tuition and fees for next year or an additional $315. In-state residential students at the four universities would pay 3.7 percent more or $676.
With the revelation that its prepaid tuition program is dreadfully underfunded, Illinois joined a long list of states that have struggled with similar plans.
College Illinois, one of two types of savings plans offered by the state, is $560 million short of its projected obligations to nearly 54,000 current and future students, according to a recent audit. The program allows parents to lock in today's tuition rates, boosting their ability to pay for college.
If the regents follow the recommendations, in-state undergraduates will pay $127 more each semester during semesters in the 2012-13 academic year and $131 more each semester during the 2013-14 year — a 2.6 percent increase each year. Out-of-state students would face a 3.6 percent tuition increase, which would mean an increase of between $560 and $642 more each semester during 2012-13 and between $580 and $665 more each semester in 2013-14. All graduate students would also pay 3.6 percent more in tuition.
UNC-CH’s tuition increase proposal, which was authored by Carney, would have raised tuition by $2,800, or 40 percent, during the next five years. At the Board of Governors meeting Thursday, Ross also said he would not support any tuition proposals that applied to more than two years.
As Carney continues to show support for higher tuition increases, a system-wide, student-led coalition is calling Ross’ 10 percent cap unconstitutional. “While this is an improvement, it is still well above the 6.5 percent state mandated cap,” states a press release from the group, called N.C. Defend Education.
With 6.7 million American youth out of work and out of school, the country faces a fiscal time bomb, according to a new report
Philadelphia and its school district have lost a combined $331 million on interest-rate derivatives known as swaps, and the city stands to lose $244 million more, the Pennsylvania Budget and Policy Center said in a report.
Losses came in the form of net interest payments and cancellation fees related to derivatives negotiated with banks that included Wells Fargo & Co., Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS), the Harrisburg-based nonprofit organization said today in the report. It examined financial audits, bond documents, and historical interest rates of variable benchmarks.
Their 2011 annual compensation, which could approach $7 million, has drawn criticism from U.S. lawmakers.
The Federal Housing Finance Agency, the regulator for the two mortgage finance firms, in consultation with the U.S. Treasury, has the final say on executive pay at the companies, which have been propped up by $169 billion in taxpayer aid.
"The findings of our study are really troubling," says one of the study's authors, Dr. Michael Law, of the Centre for Health Services and Policy Research at the University of British Columbia.
"We claim to have a universal system and we have that for hospitals and physicians. But in Canada, we can't claim to have a universal health care system if one in 10 are reporting they can't afford their prescription drugs."
Today, the U.S. average price for a gallon of regular gasoline is 28.5 cents a gallon higher than it was a year ago, according to the AAA Fuel Gauge Report. In California today, prices are 34.1 cents a gallon higher than those of last year. But if the Martin Luther King Jr.holiday is any guide, the fuel bite today won't be any worse on American wallets than it was last year.
The reason is that U.S. drivers will burn about 36 million fewer gallons of gasoline today than they did last year, when they were bought about 370 million gallons, according to the Oil Price Information Service (OPIS) in New Jersey. Today's consumption mark is even further below the pre-recession threshold of 391 million gallons a day set in January of 2008.
French state-regulated power rates charged by Electricite de France SA could jump about 30 percent by 2016, according to the energy regulator.
The increase would reflect inflation, higher wholesale rates at which EDF sells nuclear power to rivals, a subsidy for renewable energy, and transport and distribution costs, Philippe de Ladoucette, head of the Commission de Regulation de l’Energie, told a conference today in Paris.
Spanish home prices fell for the 13th quarter as the economy probably contracted and an increase in bad loans discouraged lenders from granting mortgages.
The average price of houses and apartments declined 6.8 percent in the three months through December from a year earlier, the Ministry of Public Works said today on its website. Prices dropped 1.5 percent from the previous quarter, the 15th quarterly decline.
Saudi Arabia is aiming to keep oil prices at about $100 a barrel, a third above its previous public target, in a sign that Riyadh needs higher oil revenues to sustain a big rise in public spending.
Ali Naimi, the Saudi oil minister, on Monday for the first time said the world’s largest oil producer aimed to keep oil prices at the triple-digit level.
Though the recession has thinned the ranks of other generations in the workforce, more people older than 55 are employed than ever before, according to the latest figures from the U.S. Bureau of Labor Statistics.The reasons for the surge of older workers are complex, experts said, but one of the primary economic forces behind it is the growing fear among older Americans that they lack the means to support their retirement needs.
The 50mph average speed cameras, put in place during roadworks on the busy motorway, netted 11 times more speeders than the year before.
The West Yorkshire Casualty Reduction Partnership, which manages speed cameras, revealed figures showing 11,180 speeding drivers were caught on camera on the M62 throughout the county.
A record-high 49% of the population lived in a household receiving some type of government benefit in the second quarter of 2010, according to Census data reported by the Wall Street Journal. Most of this group received so-called "means tested" benefits like food stamps, subsidized housing or Medicaid. Many are also benefiting from unemployment insurance spending, which has quadrupled since the downturn.
THE Central Bank will have to take control of several more credit unions this year as huge numbers of borrowers are unable to repay their loans. Senior financial sources told the Irish Independent last night they are convinced that a number of the lenders will not survive without intervention as they are being caught in a vicious cycle.
The crisis is worsening as increasing numbers of customers are unable to repay their loans
"Applying the scenario of sanctions on Iran's oil exports to EU members would be economic suicide for the member countries," the semiofficial Mehr news agency quoted OPEC governor Mohammad Ali Khatibi as saying.
"Regarding the economic crisis in the eurozone, imposing any sanction on Iran's oil will push European countries into a deeper crisis," Khatibi said. The European currency is already under pressure because of debt and financing problems facing some of its members.
The U.S. government Tuesday curtailed investment in a federal retirement fund as it looks to stay under the legal debt limit while awaiting a congressional vote of disapproval on lifting the ceiling.
The White House last week notified Congress that the government was close to the $15.194 trillion borrowing limit, setting in motion procedures that will likely raise the cap by $1.2 trillion later this month.
The White House notification gives Congress 15 days to try to block the increase, though President Barack Obama can veto such a measure. The political theater—the House is expected to vote Wednesday—is a result of last summer's compromise to raise the debt ceiling in stages.
Voices for Virginia's Children Executive Director John Morgan said, "There are many, many families struggling, and in fact the child poverty rate continues to rise even though the recession has officially ended."
Morgan presented a new poverty report to state lawmakers Tuesday. The report shows since the economic downturn began around 2008, 33,000 more Virginia children have fallen below the poverty line, bringing the total up to 265,000.
Portugal is trading in default territory after investors offloaded the country’s bonds this week amid rising fears of contagion. Worries are mounting that the private sector and Greece will fail to agree a restructuring package for Athens’ debt.
In a major blow to the single currency, ratings agency Standard & Poor’s stripped the £360billion European Financial Stability Facility of its triple-A status. Experts warned the new AA+ rating would make it harder for the fund to borrow money, effectively slashing its value by up to two-thirds.
The move came as the International Monetary Fund urged Europe’s leaders to tackle the debt crisis and prevent a ‘downward spiral’ that would drag the global economy into ‘catastrophe’.
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