Daily Digest

Daily Digest 3/30 - The Cancerous U.S. Dollar, State Budgets Show More Cuts, Vacant Homes Reach Record Number

Wednesday, March 30, 2011, 10:40 AM
  • The U.S. Dollar Has Cancer
  • Portugal to Revise Figures in 2010 Budget
  • Bloomberg: State Budget Means More NYC Cuts
  • U.S. Property Taxes Fall by Most Since Housing Market Crash
  • Vacant Homes In South Florida Nearly Double Over Past 10 Years
  • Nevada's Boom Ends In Record Number Of Empty Homes
  • In Sacramento, Lots of Empty Homes
  • Brazil's Lula to Portugal: Don't Take Bailout
  • Japan Tax Increase Unavoidable After Quake-Given Debt Load, Lawmakers Say
  • Madera County Zeroes In On Fiscal Emergency
  • Ireland Draws Down Over 20% Of Bailout In Q1
  • Gas Prices Fuel Big Rise In Spending
  • Food Prices Rising, Few Items Immune

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Economy

The U.S. Dollar Has Cancer (adam)

Historically this has happened throughout pockets of the world. Weimar Germany and recently Zimbabwe are two obvious examples, but in these particular currency crisis, the US dollar was a way out. This upcoming monetary crisis will be different.

Portugal to Revise Figures in 2010 Budget

Portugal's statistics agency said it plans to make "accounting changes" in a report to be submitted to the European Union's statistics agency by week's end, a revision that could indicate a wider 2010 budget deficit and which would further undermine the credibility of the country's embattled government.

The country's statistics office has been reviewing its 2010 accounts after the EU's Eurostat agency observed that Portugal hadn't included a €2 billion ($2.8 billion) cash injection into Banco Portugues de Negocios.

Bloomberg: State Budget Means More NYC Cuts

“The agreement restores tens of millions of dollars in additional education aid, millions to keep senior centers open, and millions to protect the homeless,” said Vlasto, who also argued that increased city revenue and a $300 million city reserve put the city in a good position. City officials say they’ve already used projected tax revenue to close anticipated budget gaps, and the reserve is required by law and can’t be used to fund programs. A $2 billion reserve to pay for retiree health care has already been drained too far, city budget director Mark Page has said. “You cannot go into a year on the verge of bankruptcy,” Bloomberg said.

U.S. Property Taxes Fall by Most Since Housing Market Crash

U.S. state and local property-tax collections dropped in the last three months of 2010 by the most since home prices peaked more than four years ago, slowing the overall growth in government revenue.

Real-estate-tax collections, a main source of income for cities, slid $5.3 billion, or 2.9 percent, from a year earlier to $177.1 billion, the Census Bureau reported today. The drop exceeded a 2.5 percent decline in the first quarter of 2010, the data show.

Vacant Homes In South Florida Nearly Double Over Past 10 Years

The number of vacant homes in Broward and Palm Beach counties nearly doubled during the past decade, as the devastating housing collapse led to record foreclosures.

Nevada's Boom Ends In Record Number Of Empty Homes

The Ackerly’s home is now among a swelling number of abandoned houses in Nevada. There were 167,564 empty houses in the state last year, according to newly released U.S. Census data, more than double the number in 2000. The number of vacant homes represents about one out of every seven houses across Nevada.

In Sacramento, Lots of Empty Homes

Daniel Robinson has lived in Oak Park for 10 years and has seen the changes first hand. ”Property sales were going up,” he said, “Now all of a sudden you see there’s a lot more vacancies and less activity.” In fact Oak Park’s vacancy rate goes anywhere from 12.5% to almost 50% in some neighborhoods.

Brazil's Lula to Portugal: Don't Take Bailout

But Silva said even though Portugal is on the verge of financial collapse it should refuse assistance from the European bailout fund and the International Monetary Fund because that would only increase austerity measures and reduce growth. Portugal has already enacted pay cuts and tax hikes that have triggered a wave of strikes, including a Lisbon subway strike Tuesday, and lowered living standards.

"The IMF won't resolve Portugal's problem, like it didn't solve Brazil's," Silva said during a trip to Portugal. "Whenever the IMF tried to take care of countries' debts, it created more problems than solutions."

Japan Tax Increase Unavoidable After Quake-Given Debt Load, Lawmakers Say

The government estimates that rebuilding the northeastern area after the March 11 quake could cost as much as 25 trillion yen ($306 billion). The magnitude-9.0 temblor and an ensuing tsunami have left more than 27,000 people dead or missing.

Nakatsuka has suggested a two-percentage point increase in the sales tax rate, currently at 5 percent, to secure about 5 trillion yen a year.

Madera County Zeroes In On Fiscal Emergency (California)

Faced with ongoing money shortages, Madera County supervisors will discuss declaring a fiscal emergency for the third straight year.

Supervisors will decide whether to make the declaration effective July 1, the start of the new budget year, said Eric Fleming, the county administrative officer. In the past year, the county's property taxes -- its major source of revenue -- have stopped falling, but they are equal to last year, when revenues hit bottom, he said.

Ireland Draws Down Over 20% Of Bailout In Q1

Ireland drew down just over 20 percent of its 85 billion euro ($120 billion) EU-IMF bailout in the first three months of the year, the country's financial regulator said in a note published on its website on Tuesday.

Ireland asked for the emergency loans last November after it was frozen out of debt markets and has so far drawn down a total of 18.4 billion euros.

Energy

Gas Prices Fuel Big Rise In Spending

U.S. consumer spending rose last month at the fastest pace in four months, according to the federal government.

A big portion of the increase went to cover rising gasoline prices, which has economists worried that if energy costs continue to climb, consumers will have less money to spend on other items.

Environment

Food Prices Rising, Few Items Immune (Tucson)

It seems we are paying more for just about everything these days. First it was the pain at the pump and now, more than ever, we are paying more for food. Last month, shoppers saw the greatest jump at their grocery stores in four decades.

The reasons for the hike ranges from cold winter weather, which put a damper on many fruit and vegetable crops, to high gas prices, which increased shipping costs. Whatever the cause, expect to pay more on almost anything you buy at the store.

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."

11 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2652
plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
Obama speaks on Energy Security

http://www.zerohedge.com/article/watch-obama-discuss-americas-energy-security-live

Wonder if he'll mention Thorium ? *sigh*

Hopium - half life 180 days, decays by Goldman capture into Sameoldium...

Rob Z's picture
Rob Z
Status: Bronze Member (Offline)
Joined: Nov 30 2008
Posts: 49
Muni-Bonds

Thanks for the Muni-Bond Link.... my financial advisor is pushing these lately and I have no clue what to think.

green_achers's picture
green_achers
Status: Silver Member (Offline)
Joined: Jan 3 2009
Posts: 203
Optimisium?

plato1965 wrote:

Wonder if he'll mention Thorium ? *sigh*

Or some other techno-fantasy.

Gord.Barker's picture
Gord.Barker
Status: Member (Offline)
Joined: Mar 2 2009
Posts: 13
Muni-Bonds

Time to think about getting a new financial advisor

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1840
Research

Rob Z wrote:

Thanks for the Muni-Bond Link.... my financial advisor is pushing these lately and I have no clue what to think.

I would research individual offerings, as the article says. For some investors, a few municipal bonds ARE good deals right now.

Poet

bobn's picture
bobn
Status: Member (Offline)
Joined: Aug 30 2008
Posts: 3
So true

plato1965 wrote:

Hopium - half life 180 days, decays by Goldman capture into Sameoldium...

So funny, but so true.  Some actual regulation and prosecutions were the only actual hope I had from a Dem administration (I already knew that 0bama was a screwup).  But even this, they couldn't manage.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
creative policy making...

http://www.sltrib.com/sltrib/home/51530406-76/oil-obama-energy-gas.html.csp

Obama wants to cut oil import by a third by ´25

By RICHARD S. DUNHAM

Houston Chronicle
First published Mar 30 2011 08:51AM

Washington o President Obama, facing a persistent spike in gasoline prices and continuing political instability in oil-producing regions overseas, sought to reassure the nation Wednesday that he has a comprehensive plan to reduce American reliance on imported energy.

Speaking to students at Georgetown University in Washington, the president sought to focus America´s attention on what he called "a new goal" for U.S. energy policy - reducing oil imports by one-third by 2025.

Wow......  so Obama's new policy is Peak Oil?  Imports will naturally collapse to zero, and he gets all the credit for thinking about it first...?

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
more creative policy making....

http://theage.drive.com.au/motor-news/ban-petrol-and-diesel-cars-eu-20110331-1ch3l.html

Ban petrol and diesel cars: EU
Jez Spinks
The Age
March 31, 2011 - 11:53AM

European Commission proposes banning "conventionally fuelled" cars from the urban environment within 40 years.

Petrol and diesel cars should be banned from cities by 2050, according to the European Commission.

The European Union´s executive body has made the proposal as part of a new transport plan released this week.

Yeah right......  and who exactly will still be driving "conventionally fuelled car" in 40 years?  Or ANY car for that matter?

plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
ding ding..

With both of those last two stories I'm reminded of the fairground rides you go on when you're a toddler, complete with steering wheels and bells to ring,

you know which way the rails are taking you, but it's fun to pretend you're the driver, so you yank the wheel, and ring the bell...

When I see "a target to reduce C02 by 25% in 4 years.." 

I mentally decode it as: "we estimate that in 4 years, we'll have 25% less oil at a price we can afford... "

britinbe's picture
britinbe
Status: Gold Member (Offline)
Joined: Dec 28 2008
Posts: 381
ding ding

plato1965 wrote:

With both of those last two stories I'm reminded of the fairground rides you go on when you're a toddler, complete with steering wheels and bells to ring,

you know which way the rails are taking you, but it's fun to pretend you're the driver, so you yank the wheel, and ring the bell...

When I see "a target to reduce C02 by 25% in 4 years.." 

I mentally decode it as: "we estimate that in 4 years, we'll have 25% less oil at a price we can afford... "

Like it!  I sums up things nicely

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