Daily Digest 2/22 - Unemployment Payouts Drop, Greek Bailout Vote Uncertain, Americans Driving Old Cars Longer Than Ever
- Unemployment payouts drop $40 million a day
- Trade deficits may undercut Japan's ability to service a massive debt load far bigger than Greece's
- Greek bailout vote uncertain as legislators await details
- Greek bondholders set for 74 percent loss
- EU to Move to Suspend Funds to Hungary, EU Official Says
- Texas remains $4.1 billion short on its budget
- Bailout May Prolong Greek Recession: Capital Economics
- Zimbabwe's new fees will cripple mines: industry
- Study: Americans driving old cars longer than ever
- One in four Americans have more debt than savings
- Spain’s debt load to double since start of crisis, EU forecasts
- Food pantry demand doubles
- Special Report: Homeless Students
- Soaring Gas Prices Fuel Concerns Among City Drivers
- NEWS10 WATCHDOG: Red light cameras generate conflicting views
- Study finds $135.7B in local pension liabilities
Fewer laid-off workers are filing for benefits – 569,066 last December compared with 767,618 in December 2009. And thousands of other long-term unemployed – 638,000 at last count – have exhausted the maximum 99 weeks of benefits and are no longer on California's unemployment rolls.
Japan’s status as an export superpower has taken a pummeling lately. First came news last month that the country had posted a $32 billion trade deficit for all of 2011, the first time that’s happened since 1980.
Then, on Feb. 20, Tokyo announced a record shortfall for January of $18.5 billion, citing a strong yen that’s depressing exports and rising prices for energy imports. Japan may well record another yearly trade deficit in 2012. Now economists are worried that the nation’s current account could turn negative, raising questions about Japan’s ability to handle its $10 trillion-plus government debt load. That burden is equivalent to about 220 percent of Japan’s total annual economic output, the highest debt-to-gross domestic product ratio in the world.
Germany's While both Merkel‘s own Christian Democratic political bloc and their coalition allies, the Free Democratic Party (FDP), praised the package, rebels could stage a revolt. However critics of the bailout said Tuesday it was too soon to say how they would vote.
Frank Schaeffler, a legislator who organized a revolt last year in the FDP, cast doubt on the deal, saying it would be short-lived. "Behind the scenes, the Greek drama is actually far more horrific than the general public realizes," he told the daily Neue Osnabruecker Zeitung.
Hedge funds in particular are positioning to profit from the plan to slash Greece's debt pile, with many of them having piled into bonds while at the same time buying credit default swaps, which pay out if a lender defaults. Holders of these swaps will be hoping Greece forces any bondholders into the deal who do not take part voluntarily through so-called Collective Action Clauses (CACs). Deploying the CACs would almost certainly trigger a CDS pay-out, as initial fears among policymakers that this could trigger a Lehman Brothers-style market collapse have now waned.
The European Commission will adopt a proposal tomorrow to suspend infrastructure-development subsidies to Hungary after the country failed to curb its deficit in a sustainable way, a European official said.
Since coming to power in 2010, Orban has effectively nationalized $14 billion of private pension funds and levied extraordinary taxes on energy, financial, retail and telecommunication companies to plug budget holes from tax cuts that failed to boost economic growth.
The chairman of the Legislative Budget Board John O'Brien told lawmakers Tuesday that they did not appropriate enough to cover state expenses for Medicaid and other programs. The state is short more than $4.1 billion in the current budget.
The latest rescue deal signed by the Eurozone governments on Tuesday will only prolong the Greek recession and leave the country's membership of the euro-zone on the edge, Jennifer McKeown, a senior European economist at Capital Economics said.
In return for the EUR 130 billion bailout money, Greece has pledged to put money aside in a so-called escrow account to prioritize debt repayments and promised to co-operate with the increased monitoring of its reform efforts by the troika, both humiliating losses of its independence, the economist noted.
Zimbabwe's new mine licence fees and resource rentals will significantly raise the cost of mining and threaten the sector's viability, with as much as 60 percent of mining revenues going to the government, an industry body said on Monday.
The southern African country hiked pre-exploration fees for most minerals by as much as 8,000 percent in January, with registration charges for platinum and diamond claims going up to $2.5 million and $5 million, respectively, in a move it says is meant to curb the speculative holding of mine titles.
Americans are keeping new and used vehicles longer because of better quality, concern about debt and economic uncertainty, according to a report released today by research firm R.L. Polk.Based on data collected in the third quarter of 2011, new vehicle owners kept them an average of 71.4 months, or nearly six years, the longest in the eight years Polk has done the survey, and nearly two years longer than the average life of ownership in 2003.
Many U.S. consumers are so deep in a financial hole that even as the economy begins to turn around they can’t quite dig themselves out. A survey by Bankrate.com released Tuesday found that 25 percent Americans have more credit card debt than they have in emergency savings, and that spells trouble if an emergency situation actually hits.
SPAIN’S debt load is set to double from where it was when Europe’s sovereign debt crisis began, eroding the economic advantages that distinguished it from the region’s periphery and helped shield it from Greek contagion, according to the EU. Finance chiefs met in Brussels yesterday in the latest effort to save Greece from default.
Spain went into the crisis with public debt of 40 percent of its gross domestic product (GDP), compared with an average ratio of 70 percent in the euro zone. The EU forecasts Spain’s debt will have almost doubled by next year, while Moody’s Investors Service said the country was losing one of its “key relative credit strengths”.
"We were feeding 2,500 people a month last year, and now we are feeding over 5,000 people per month," said Fred Steinbach, board chairman of the Jewish Family and Children's Service, which runs the food pantry. "We didn't have room to run the facility efficiently." The pantry serves the St. Louis region, but in recent years more clients are coming in from areas such as Ladue, Chesterfield and Creve Coeur. Other food pantries in the region have also seen spikes in demand from people in affluent suburbs.
"We have people picking up food at the pantry this year who donated last year," Steinbach said. "What we are hearing is people have mortgages that they can't unload and a house that they can't sell, and their families still need to eat."
According to Dotty Wilinksi, case manager at the City Rescue Mission women's shelter, almost 30% of their residents are students. She says that number is on the rise because many who are unable to find employment are choosing to go back to school to improve their chances of getting a job. However, without current employment, many who are trying to get a degree face another problem. As the cost of education continues to rise, paying for school can be a challenge.
Drivers in the city and across the nation are being hit with record high prices at the pump. Gas prices are the highest ever for this time of year and experts say they will only continue to rise. The national average for a gallon of regular hit $3.57, up more than a quarter since January 1. Prices in New York are even higher. The current average in the city is $3.96, up 15 percent from a year ago.
One Gulf station off the Long Island Expressway in Queens had drivers paying $4.59 for a gallon of regular, while another Gulf in Forest Hills was much lower at $3.89.
There are 22 red light cameras in Sacramento County. If a driver is caught on camera running a red light or making a right hand turn without coming to a complete stop, they'll receive a ticket for $470. In 2011 red light cameras in Sacramento County generated about 10 thousand tickets and brought in nearly $5 million. WHERE DID THE MONEY GO:-The state: $1.2 million-Sacramento County: $1.9 million-City of Sacramento: $111,000-Other cities in Sacramento County: Remaining $1.4 million
A Stanford University think tank says two dozen local governments in California face a combined $135.7 billion in unfunded pension liabilities. The Stanford Institute for Economic Policy Research released a study Tuesday about 24 local government pension systems. They include Los Angeles, San Diego, San Francisco and cities and counties that do not participate in the state's pension fund.
The study comes at a time when Gov. Jerry Brown seeks to bring public-sector retirement benefits more in line with those in the private sector. It found that pension spending has grown 11.4 percent a year since 1999, making it the fastest-growing cost for local governments.
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