Daily Digest

Daily Digest 3/26 - Pension Burden For Local Entities, Anger At Goldman Simmers, Japan Down To One Nuclear Reactor

Monday, March 26, 2012, 10:47 AM
  • Monroe County taxpayers' pension tab for 2013: $173 million
  • Pension burden for local entitities
  • Fitch: U.S. Student Loan ABS Resistant to Default Rates
  • E-Mail to Corzine Said Transfer Was Not Customer Money
  • Anger at Goldman Still Simmers
  • U.S. and Turkey to Step Up ‘Nonlethal’ Aid to Rebels in Syria
  • Japan Down To One Nuclear Reactor
  • Several Reasons Why Gasoline Prices are so High

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Economy

Monroe County taxpayers' pension tab for 2013: $173 million (New York) (Saxplayer00o1)

Pension costs for local governments and agencies in New York are expected to skyrocket 59 percent in 2013 compared to last year as officials warn that recent reforms will provide no immediate relief to the mounting expense.

Pension burden for local entitities (New York) (Saxplayer00o1)

More than 3,400 entities provide public pensions in New York state, and data obtained from the Comptroller's Office shows a staggering increase in their current and future cost for retirees. Everything from the local library to major medical centers are being whacked by the rising pension costs. The database below shows all of the entities in each county that pick up the tab for taxpayer-funded pensions -- and how the costs are soaring. Costs for 2011 and 2012 are based on annual invoices from February of that year. Costs for 2012 are projections.

Fitch: U.S. Student Loan ABS Resistant to Default Rates (Saxplayer00o1)

The Federal Reserve Bank of New York recently reported that as many as 27% of all student loan borrowers are more than 30 days past due. Recent estimates mark outstanding student loans at $900 billion- $1 trillion. Fitch believes that the recent increase in past-due and defaulted student loans presents a risk to investors in private student loan ABS, but not those in ABS trusts backed by FFELP loans. Several macroeconomic factors are putting pressure on student loan borrowers. The main ones are unemployment and underemployment. The Bureau of Labor Statistics estimates the current unemployment rate for people 20 to 24 years old at nearly 14% and for those 25 to 34 years old, 8.7%. Underemployment is difficult to measure for these demographics, but it is likely having a negative impact.

E-Mail to Corzine Said Transfer Was Not Customer Money (jdargis)

But the e-mail, a copy of which was reviewed by The New York Times, did not capture the full story behind the wire, which turned out to contain customer money. MF Global employees in Chicago had first transferred $200 million from a customer account to the firm’s house account, people briefed on the matter said. Once it was in the firm’s coffers, the people said, Chicago employees then promptly transferred $175 million of the money to the MF Global account at JPMorgan in London — the account that was overdrawn.

Anger at Goldman Still Simmers (jdargis)

Copper River relied on Goldman to handle its negative bets, known as short sales, in compliance with securities laws. These regulations require that before a short sale can be made, the shares must be borrowed; Mr. Cohodes said his fund had paid Goldman approximately $100 million to borrow shares over many years.

U.S. and Turkey to Step Up ‘Nonlethal’ Aid to Rebels in Syria (jdargis)

In another sign of Turkey’s soured relations with Syria, the Turkish Foreign Ministry on Monday formally announced the withdrawal of Turkish diplomats from Damascus, the Syrian capital, and closure of its embassy there. Turkey, once one of Syria’s friendliest neighbors, had raised the possibility in recent weeks that it would close the embassy. It joins a number of other nations, including the United States, members of the European Union and the Arab League, to have taken similar steps that deepen the diplomatic isolation of President Bashar al-Assad.

Energy

Japan Down To One Nuclear Reactor (guardia)

The vast utility's entire stock of 17 reactors are now idle, including three units that suffered a meltdown when the tsunami hit Fukushima, as Japan warily eyes a spike in electricity demand over the hot and humid summer. Only one of Japan's 54 units – in northernmost Hokkaido – is still working, and that is scheduled to be shut down for maintenance work in May.

Several Reasons Why Gasoline Prices are so High (James S.)

Prices are also whipsawed by uncertainty over potential supply disruptions, due to drilling accidents and warfare in Nigeria; disputes in Syria, Yemen and Israeli-Palestinian territories; erroneous reports of a pipeline explosion in Saudi Arabia; concern about attacks on Middle East oil pipelines and processing centres; and new Western sanctions on Iran over its nuclear program and the mullahs’ threats to close the Straits of Hormuz.

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."

6 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2771
Bernanke Says Accommodative Policy Needed to Cut Joblessness

Just a couple headlines:

Bernanke Says Accommodative Policy Needed to Cut Joblessness

Study: Healdsburg city pensions not sustainable

phecksel's picture
phecksel
Status: Silver Member (Offline)
Joined: May 24 2010
Posts: 157
saxplayer00o1 wrote:Bernanke

QE-III is coming soon to your neighborhood Federal Reserve.

thatchmo's picture
thatchmo
Status: Gold Member (Offline)
Joined: Dec 14 2008
Posts: 266
saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2771
As gas prices top $4, Sonoma County fuel thefts grow

As gas prices top $4, Sonoma County fuel thefts grow

Bill Hicks's picture
Bill Hicks
Status: Bronze Member (Offline)
Joined: Jul 3 2011
Posts: 34
Feds Consider Closing 60 Court Facilities In 29 States

http://billhicksisdead.blogspot.com/2012/03/austerity-porn-feds-consider-closing-60_26.html

The article:

The federal government is considering closing dozens of courtrooms across the country, many located in small, rural communities, as part of an effort to cut costs.
 
The Associated Press obtained documents showing that 60 federal court facilities in 29 states could be on the chopping block. Most of the courtrooms are in buildings that house other federal agencies including in post offices and many are located in remote areas. Critics say closing them could make it more difficult for people to get to court proceedings.

And my reaction:

...the budget for the federal courts has been FROZEN, not cut. What that tells you is there is increasing cost pressure. What's more, that increasing cost pressure is likely due largely to increased energy costs as the salaries for federal employees have essentially also been frozen the past two years. 
 
So what is going to happen when the federal government DOES finally have to start wielding the budgetary axe as the reality of our out-of-control deficit spending hits home? I don't think it really strains the imagination.
Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2502
Dr Martenson and Max

Dr Chris Martenson discusses Japan as the first major economy to find the Limits to Growth with Max Keiser.

If you have a short attention span like me it will pay you to revisit the salient points.

Max's comment about the end of the Bull run for Bonds is a little too esoteric for me.

I had better watch it again.

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