Daily Digest

Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending Increases, Construction Spending Low, Looking for 'Speedups'

Tuesday, February 1, 2011, 12:00 PM
  • Andrew Cuomo Launches War on ‘Permanent’ Spending Increases
  • Monday - Mubarak's Mood May Move Morning Markets
  • Muni Madness: David Walker Says "Yes" to Bankruptcies, "No" to Bailouts
  • When Will The Recession End? Part 139 Russia Admits It's Dead And Falling Apart
  • Guest Post: The Road to Madness Is Paved With $100 Bills
  • Construction Spending in U.S. Unexpectedly Fell to Decade Low
  • Steve Case: Looking for 'Speedups,' Not Just Startups

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Economy

Andrew Cuomo Launches War on ‘Permanent’ Spending Increases



Every year, spending in certain segments of the New York state budget automatically increases a set amount — regardless of need, program efficiency, or the current level of inflation. So, for example, this year's budget includes an increase in spending on education and Medicare of 13 percent — even though the state is cash-strapped and inflation is actually closer to 2 percent. In an editorial printed in several state newspapers today, Governor Andrew Cuomo calls this system a "sham," and vowed to take it on.

Monday - Mubarak's Mood May Move Morning Markets (ilene)



This is what hyperinflation looks like folks - you're not supposed to pick 4 commodities and make over 100% in 60 days on what were not even particularly risky trade ideas.  If everyone can make this kind of money, what good does it do you as it's just funny money being spit out by a broken system that will, eventually, become meaningless once that money begins to circulate again and people begin to realize just how much of it there really is flowing around (and how relatively worthless that makes it).  

Muni Madness: David Walker Says "Yes" to Bankruptcies, "No" to Bailouts (woodman)



Now that the State of the Union has been addressed, let's turn our attention to the state of the states. Huge budget shortfalls in California, New York, Texas and Illinois - not to mention Meredith Whitney's appearance on 60 Minutes - have grabbed headlines and raised fears that municipal bonds will be the next debt shoe to drop. Meanwhile, a recent report by Moody's suggests other states such as Hawaii, Mississippi, Connecticut and W. Virginia are really in the worst fiscal shape when unfunded pension obligations are taken into account, asCNN reports.

When Will The Recession End? Part 139 Russia Admits It's Dead And Falling Apart (walter)



A member of the Russian Advisory Council in the State Duma Committee for Regional Policy, Natalia Zubarevich, admitted that four large reasons will lead to the inevitable and inexorable death of the Russian Federation, as a result of which this country will cease to exist as a single entity and will be divided into independent states:   "First, the quality of life is deteriorating in the Moscow metropolitan agglomeration due to growing infrastructure and environmental problems, while the population increases. 

Guest Post: The Road to Madness Is Paved With $100 Bills (pinecarr)



Indeed, all of Bernanke’s monetary policies and actions can be traced to his one core belief: that the US Federal Reserve didn’t do enough to stave off the Great Depression. Never mind that this belief is completely inaccurate (as the data clearly shows), it is the foundation of Bernanke’s entire academic and now monetary career. It is the lone road on his mental map of the world. It doesn’t matter that the road is leading us all to disaster, for Bernanke there is simply no other course of action to take. In his mind, the Fed failed to act in the ‘30s and so he MUST act regardless of facts, data, or consequence.

Construction Spending in U.S. Unexpectedly Fell to Decade Low



Mounting foreclosures and an unemployment rate that will average more than 9 percent in 2011 indicate homebuilding may take time to rebound. Non-residential projects also will slow as budget-constrained state and local governments restrict funding for public works such as highways. “Housing will remain lackluster for at least another year,” Harm Bandholz, chief U.S. economist at UniCredit Group in New York, said before the report. “The imbalances aren’t fully corrected yet.”

Steve Case: Looking for 'Speedups,' Not Just Startups



The campaign isn’t limited to early-stage companies or specific sectors or regions. “Our focus is as much on what we think of as ‘speedups,’ not just startups, says Startup America’s chair, Steve Case, best known as co-founder of AOL and an architect of its ill-fated merger with Time Warner. “Our primary focus will be on accelerating the growth of high-growth companies. They have to be demonstrating that they’re pursuing some product or service that really has the potential to scale. With the capital or mentoring or partnerships or what have you, they can break through and go to the next level.”

Article suggestions for the Daily Digest can be sent to dd@PeakProsperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

20 Comments

saxplayer00o1's picture
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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...
  • Headlines:

Nearly 11 Percent of US Houses Empty (CNBC)

Policymakers see dollar losing reserve currency allure

Asia Faces Overheating, `Hard Landing' Risks, IMF Says

Brazil sees 2011 debt rising by up to 14 percent

Treasury Lowers Borrowing Estimate to $237B for Q1

Texas' budget challenges could persist beyond 2011

Largest Nev. Casinos Lose $3.4B During Fiscal 2010

Oregon Legislature begins Tuesday with 1600 bills and a $3.5 billion shortfall

Belgium's short-term debt yields rise sharply

National Grid laying off 1200 US workers

Long Beach Unified prepares to send out 621 preliminary layoff notices to teachers

That Empty Feeling (Las Vegas)

SC health, welfare cuts about to go into effect

City's Budget Shortfall $40 Million, Berry Says (Albuquerque)

Outlook bleak for South County Caltrain riders ($30 million deficit)

Contra Costa County's grim budget extends through 2018

Egyptians Face Soaring Food Prices by Day, Looters at Night Amid Turmoil

Hawaii State ERS Underfunded by $7 Billion

Michigan report paints bleak financial picture

Fresno County pension payouts to soar

One in Five Mortgages Default Again After Modification

Jordan's king fires Cabinet amid protests

Construction Spending in U.S. Unexpectedly Fell to Decade Low

Fed May Be Fueling U.K., EU, Commodity-Price Inflation, RBC Says

Faster Inflation From S. Korea to China Boosts Case for Asia Rates to Rise

ECB Fails to Sterilize Bond Purchases With Deposits

Homeownership Tanks to 12 Year Low

Manufacturing sector grows in January ("prices paid jumped more than expected"...."The prices paid component rose to 81.5 from 72.5 in December")

Joblessness, rising prices could spark war within

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

Marc Faber Interview

http://vinceseconomicblog.wordpress.com/2011/02/01/marc-faber-total-coll...

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Inflows into US Equities?

I thought I heard CNBC state the other day that there was seen an inflow into the US Equities market which has been seen in a while. I didn't catch the details, but I'm hoping that Chris has a read on this and an explanation on why the us stock market is so strong.

I'm thinking its moving out of other country equitiesand into US equities. I have a belief that the US dollar will be strengthening, and I wonder if that will move money into the us stock market. But when the dollar strengthened in the past, it meant get out of equities, quick!. So I just don't get what's going on.

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National Debt jumps to $14.13 trillion

Treasury Direct Link

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
01/21/2011 9,415,228,617,099.55 4,644,908,342,366.96 14,060,136,959,466.51
01/24/2011 9,415,046,930,068.41 4,647,192,974,752.28 14,062,239,904,820.69
01/25/2011 9,415,106,119,260.54 4,652,366,015,858.11 14,067,472,135,118.65
01/26/2011 9,414,993,965,006.02 4,645,017,264,550.36 14,060,011,229,556.38
01/27/2011 9,410,276,848,548.23 4,649,132,311,130.19 14,059,409,159,678.42
01/28/2011 9,412,882,434,158.15 4,643,629,929,471.20 14,056,512,363,629.35
01/31/2011 9,485,416,860,164.29 4,645,634,195,846.55 14,131,051,056,010.84

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Nate
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Re: National Debt jumps to $14.13 trillion

Once again, thanks Saxplayer for your daily efforts here.  Don't know where you find the time to do this.

Nate

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

http://www.theaustralian.com.au/business/markets/copper-hits-record-on-cyclone-yasi-fears/story-e6frg91o-1225998438605

Copper keeps rising to record highs and cyclones don't help. Metals rise on the LME 

And locally, as i said yesterday, so much for the pineapples, bananas, mangoes, avacodoes and sugar cane.

This' picture shows almost all of the 4,330 mile Queensland tropical coastline affected by Cat4 Cyclone on its way to hit land tonight.

Cyclone Yasi

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

mrobinson wrote:
This' picture shows almost all of the 4,330 mile Queensland tropical coastline affected by Cat4 Cyclone on its way to hit land tonight.

Cyclone Yasi

It's Cat 5 this morning....  expected to be the WORST and BIGGEST cyclone in living memory.....  Hang onto your hat.

BTW, I'm ~ 1000 miles South and not expected to get anything from this but a bit of rain.

Mike

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Damnthematrix
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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...
September?  Obama thinks Mubarak can hang on 'til September?? And it's not even April 1.....
Mike
Obama tells Mubarak not to stand again: reports
http://www.abc.net.au/news/stories/2011/02/02/3127411.htm?section=justin
US president Barack Obama has told his beleaguered Egyptian counterpart, Hosni Mubarak, not to stand for re-election in upcoming September elections, the New York Times reports.
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Fed's Hoenig says QE3 "may get discussed"
  • UPDATE 1-Fed's Hoenig says QE3 "may get discussed" -MNSI

    "Feb 1 (Reuters) - The Federal Reserve could debate extending its bond-buying program beyond June if U.S. economic data proves weaker than expected, Kansas City Fed President Thomas Hoenig said.

    Another round of bond buying "may get discussed" if the numbers look "disappointing," Hoenig told Market News International in an interview published on Tuesday."

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

DTM

Good luck to you and your fellow Queenslanders, just heard on the radio from the weather channel, the area South of the Cyclone is the most destructuve as the Cyclone moves in a clockwise direction.

Keep well.

Mike

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Latest on QLD Cyclone Yasi

http://www.couriermail.com.au/news/queensland

MORE than 10,000 homes in Townsville are at risk of inundation from a massive storm surge generated by Cyclone Yasi.

Authorities are warning a large stretch of north Queensland's coast is vulnerable to a dangerous storm surge, with Yasi's landfall expected to coincide with a high tide.

Yasi, currently a category five cyclone, is expected to cross the coast between Cairns and Cardwell at 10pm tonight, Premier Anna Bligh has said.

Townsville disaster management group deputy chairman Dale Last told AAP authorities feared the surge could be 2.9 metres on top of a very high tide of about 4.1 metres, due about 9pm.

CYCLONE Yasi is shoving potentially devastating storm surges into the Queensland coast, with Cardwell facing a surge of up to 7m above the normal high tide.

Coastal areas in Townsville can expect a surge of around 3m abover the normal high tide.

The water level is expected to rise slowly over the next few hours, rather than arriving in one large wave like ina tsunami.

The Navy will send heavy lift supply ships to act as floating emergency services bases off the coast.

[Qld Premier] said the last time a cyclone of this magnitude crossed the coast was in 1918.

``This impact is likely to be more life threatening than any experienced during recent generations,'' Ms Bligh said.

``This is an event that we have no recent experience of.''

Wind gusts at the centre of the cyclone have now been recorded at 295km/h.

Premier Bligh says all measuring equipment has been wiped out from the weather measuring station on Willis Island off Australian's far north coast.

CYCLONE Yasi is certain to claim lives and destroy Queensland towns, Cassowary Coast Regional Council mayor Bill Shannon said.

As the wildly destructive cyclone smashes its way closer to towns including Innisfail and Cardwell, Mr Shannon said the effects could be "extremely devastating".

"I am very concerned about the loss of life and property," he said.

"You really can't be more concerned but my primary aim at this stage is to save lives".

More than 10,000 residents have been forced to evacuate from their homes including at Cardwell, Flying Fish Point, East Innisfail and Mission Beach.

The category 5 cyclone is expected to crush through many Far North Queensland townships including Innisfail about 10pm.

Innisfail was destroyed after Cyclone Larry hit in March 2006.

Mr Shannon said his concern was that the cyclone arrives at high tide and the surge could be as high as 4m.

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

mrobinson wrote:

DTM

Good luck to you and your fellow Queenslanders, just heard on the radio from the weather channel, the area South of the Cyclone is the most destructuve as the Cyclone moves in a clockwise direction.

Second that.  DTM, I'm keeping a good thought in my head for you and those around you.  Looks like it's going to make landfall near Cairns -- where I learned to scuba.  Which makes it more real for me.  Hold tight!

Viva -- Sager

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Re: Latest on QLD Cyclone Yasi

DTM

Take cover, i just realised what Cat 5 Cyclone definition is = Total Destruction.

(I was informed Katrina was Cat3)

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

Wow.  Australia sure has been having a rough time with the weather.  I hope all our affected Aussie readers are taking cover and will remain safe and sound.

Best of luck DTM and be sure to provide us with a proper accounting when you can, and let us know you are safe and sound sooner than that.

I would talk about our record breaking snowfall here in the NE of the US, but it seems trivial...just endless shoveling is all (although the additional 10-18 inches we're receiving today and tomorrow is landing on a solid 2 feet from before and I can almost walk onto my roof from the snowbanks that have set up beneath them, so it's a pretty rare winter). 

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

We are west of Port Douglas. The cyclone has moved south, as we were going to evacuate this moring with our seven kids. Best to stay put now, as the only viable place to go is south - feeling trapped if we were to go north or west, espescially if it turns. Road closures??!!!

I have never seen anything like this.   http://www.bom.gov.au/products/IDQ65002.shtml

Just got invited to a local mine, to stay with small bats undergroung. We are in a remote area.

Was in Cairns yesterday as my eldest started a Diesel Fitting course, and brought him home. Never seen so many people queing for petrol(gas).

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Damnthematrix
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Re: Latest on QLD Cyclone Yasi

mrobinson wrote:

DTM

Take cover, i just realised what Cat 5 Cyclone definition is = Total Destruction.

(I was informed Katrina was Cat3)

Just to make everything quite clear, we will NOT be affected by this cyclone.  It will cross the coast over 1000 miles north of us, and even though it is absolutely HUGE... we may get just a bit of wind and rain from it.  We're lucky that right now there is a very large high over this area, and the cyclone is just bouncing off it to the N.

But the impact this will have over our already impacted economy, only time will tell, but it isn't looking god.....

Mike

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

Chris

Yes, i don't see how people can live in those snow storm conditions. I just saw this on the news tonight, amazing. I don't know why Florida isn't flooded with people in your winter season.

My sister just left (Oz) to go back to Canada, wasn't looking forward to the cold.

DTM

You must be in a thin slither of land between floods and Yasi. Very lucky. With the weather systems we are having now, you can't guarantee the outcome of any of these violent storms. Typical Queenslander though, don't worry about me, go help the others. 

Amazing stats coming out of this already.  A storm flood 7mtrs high, that’s a 3 storey building of water being carried with the storm.

I'm extremely impressed with the Queensland State Government and the community spirit with everything this month. With the preparation of an aftermath task force, including an army of tradesmen, emergency services medical supplies, essential service rebuild personal and the army itself all ready on standby to clean up and get things back to normal as quickly as possible.

Mother earth is self regulating itself, with no regard of its inhabitants.

I'll repeat my post from last night, but the theory of the beginnings of an ice age, caused by global warming, is falling into place. A group of scientists in the Antarctic is finding out that the seawater is more acidic and less saline, which means its melting. Phytoplankton is increasing the absorption of carbon, producing algae blooms. This may stop or slow the gulf stream which provides warm water to the colder regions, which stops the colder regions particulary in the Northern hemisphere from freezing. Essentially what happen to the Vikings.

Is this why the normal weather seems extreme?

Anyone know more about this?

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

Here in western NY the storm is a bust so far.  Right now its raining lightly.  We might see some melting of the two feet of snow already on the ground.  After predicting 1.5 ft last night, now they're saying we may get a few inches this afternoon.

Best to you Aussies and to those to the east of us.

Doug

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

There was an interesting Senate Budget Committee hearing yesterday with Richard Berner, Simon Johnson and David Malpass testifying.  I watched about an hour of it last night and was actually impressed with the three people testifying, and particularly with Kent Conrad, chair of the committee.  Jeff Sessions, senior Republican, was less impressive.  Don't even know why he's there.  Although peak oil never came up, the witnesses were pretty unified in urging major spending decreases on the order of what Rand Paul is pushing.  Apparently there are some in the halls of Congress who have a clue.

http://www.cspan.org/Events/Senators-Weigh-Making-Changes-to-Tax-Code-to-Strengthen-Economy/10737419300-2/

Doug

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Re: Daily Digest 2/1 - Cuomo's War on 'Permanent' Spending ...

This Diane Rehm Show yesterday on NPR on US energy policy was SCARY; the panel just talked a lot about all the great domestic reserves we have in oil shale and a 100+ year supply of natural gas in response to a caller who brought up Peak Oil.  The panel did not did not seem to address extraction rates or EROEI.

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