Daily Digest

Daily Digest 4/25 - Backlog Grows As States Tread Water, Italy Aims To Curb Tax Evasion, RI Pension Cuts Set Chilling Precedent

Wednesday, April 25, 2012, 10:43 AM
  • Spain presents toughest austerity budget since Franco era
  • Medicaid plan would shift $250 million tab to private insurers
  • Illinois Taxpayers Penalized by Unpaid-Bill Backlog: Muni Credit
  • Backlog Grows As States Treads Water
  • Postal Service closings? System faces cash crunch. Again.
  • China's Tax Revenue Growth Hits Three-year Low
  • Dutch crisis deepens as opposition rejects austerity
  • Greek Central Banker Warns Of Greek Euro Exit
  • Bank of Ireland Says Mortgage Arrears Increase This Year
  • Italy aims to curb evasion with €1000 cash limit
  • Detroit Rec Centers On The Chopping Block?
  • Rhode Island Pension Cuts Set Chilling Precedents
  • Illinois might let schools charge for bus service
  • Flint emergency manager unveils budget with fee hikes, public safety layoffs
  • Illinois mulling introduction of state-park admission fees
  • Greek families forage abroad to stay afloat in crisis
  • Debt Collector Is Faulted for Tough Tactics in Hospitals
  • U.S. Lost AAA on Danger of Liquidity Crisis: S&P
  • Detroit fire plan allows vacant buildings to burn
  • Child poverty growing 14 percent in New Jersey
  • China's rare earth policy backs Apple into a corner
  • Medicare trustee report hangs on uncertain assumptions
  • Chart: Pension shortfall in Providence tops $1B at state’s rate

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Economy

Spain presents toughest austerity budget since Franco era

Concerns over Spain’s ability to control the deficit have had a negative impact on the markets and pushed up the country’s borrowing rates, aggravating the debt problem. The fact that Spain has tipped back into recession only makes matters worse, as income from taxes is likely to fall, with expenses for welfare set to rise.

Medicaid plan would shift $250 million tab to private insurers (Illinois)

The Quinn administration's proposal to force health insurance companies to shoulder a greater share of the cost for treating severely sick children might save the state $250 million a year, but it likely will drive up premiums on policyholders.

Illinois Taxpayers Penalized by Unpaid-Bill Backlog: Muni Credit

Illinois residents, whose income taxes rose by a record last year to help close a budget deficit, are paying the price again for the state’s fiscal mismanagement. With its pile of unpaid bills growing about 30 percent this year, the weakest pension-funding ratio among states and falling federal aid, Illinois and its municipalities are paying a penalty above AAA debt that’s twice their five-year average.

BACKLOG GROWS AS STATE TREADS WATER (judy baar topinka, Comptroller...Illinois)

the backlog of unpaid bills from the General Funds in the Comptroller’s office (ioC) stood at $5.57 billion at the end of this quarter – an increase of $1.304 billion from the end of the second quarter. While part of that growth can be attributed to dollars owed for pension payments (which the state borrowed to make in previous years), the majority represents what is due to vendors.

Postal Service closings? System faces cash crunch. Again.

It will run out of money in August if Congress doesn't act. Even if lawmakers come up with temporary fixes, the long-term outlook is stark. In the Internet Age, regular mail service can't continue as is.....Since 2006, its peak year of mail delivery, the USPS has already cut operating expenses, consolidated nearly a third of its processing locations, frozen salaries, and shrunk its workforce by 140,000. There are now fewer postal workers than at any time since 1965.

Despite these cost-cutting moves, revenues have fallen even faster: down more than 12 percent -- a whopping $9 billion -- since 2007. The USPS's debt has tripled, and its finances are sketchy. "Declines in mail volume have brought the U.S. Postal Service (USPS) to the brink of financial insolvency," the US Government Accountability Office warned in a November report.

China's Tax Revenue Growth Hits Three-year Low

Growth of China's tax revenues logged the slowest pace in three years in the first quarter of 2012 as a result of the country's cooling economy, official data showed Tuesday. Tax revenues rose 10.3 percent year-on-year to 2.5858 trillion yuan (410.4 billion U.S. dollars) in the first quarter, the Ministry of Finance said in a statement posted on its website. The growth rate marked the slowest pace in three years, pulling back 22.1 percentage points from the same period last year, the ministry said.

Dutch crisis deepens as opposition rejects austerity

The biggest Dutch opposition parties refused on Tuesday to back austerity cuts needed to meet EU budget targets after the government fell, deepening the crisis in a nation probably facing a long period of uncertainty until elections.

Prime Minister Mark Rutte, whose minority government collapsed on Monday, must now turn to a clutch of tiny parties for help if he is to have any chance of forcing his plan for 14 to 16 billion euros in budget cuts through parliament.

Greek Central Banker Warns Of Greek Euro Exit

Greece's central bank governor Tuesday warned the country's politicians that any deviation from strict austerity targets after May 6 general elections would risk forcing the country out of the 17-member euro currency bloc, even as the central bank signaled that the economy would contract by worse-than-expected 5% this year.

In an unusually blunt warning that cut through much of the lofty rhetoric coming from candidates, George Provopoulos said Greece faced a stark and historic choice between overhauling its economy as a member of the currency bloc, or turning back the clock on decades of economic development and eventual exit from the euro.

Bank of Ireland Says Mortgage Arrears Increase This Year

“We do not expect the arrears trend to moderate before the end of 2012 at the earliest and we maintain elevated impairment expectations into 2013,” said Karl Goggin, an analyst with Dublin-based NCB Stockbrokers, who has a buy rating and 18-cent price target on the shares. “We continue to expect a far higher impairment charge in 2012 of 2.7 billion euros and we do not see any improvement in arrears trends.”

Italy aims to curb evasion with €1000 cash limit

Italian Prime Minister Mario Monti's technocrat government has introduced a €1,000 euro ceiling for all cash transactions.It's an effort to curb under-the-counter payments in a country where dentists, masons and plumbers often offer discounts for bills settled in cash.

Tax evasion in Italy is worth an estimated €120 billion euro a year.

Detroit Rec Centers On The Chopping Block?

City Council President Charles Pugh said every department will feel the pain. Detroit’s City Clerk says a proposed 25 percent cut to her department would prevent her from running the November general election.

Rhode Island Pension Cuts Set Chilling Precedents

If you thought retiring would help you avoid the ruination of living standards brought on by the economic crisis, Rhode Island’s pension overhaul just proved you wrong.

The changes to the pension system passed last November affect every public employee—current, retired, or prospective. The retirement age rose from 62 to 67 for new hires, and somewhere in between for current employees.

The overhaul moves all public employees into a “hybrid” system, combining a defined benefit plan with a 401k-style plan, thus shifting risk for bad investments onto workers. And it freezes cost-of-living adjustments for all retirees and retirees-to-be for 19 years, sending their standard of living tumbling.

Illinois might let schools charge for bus service

School buses might be the next target of state officials who are trying to stretch every dollar as Illinois' budget crisis drags on.

State education officials are looking at ways to make the most of the limited amount of money available to pay for student transportation. One proposal would change the way Illinois distributes that money, and another would let schools charge for bus service. A proposal could be introduced as early as this week, a spokesman for the State Board of Education said Monday. It would have to be approved by legislators before it could take effect.

Flint emergency manager unveils budget with fee hikes, public safety layoffs

With the city facing a projected $25 million deficit next year, Brown unveiled a financial plan for the city Monday that includes fee hikes as well as steep cuts to personnel in the form of layoffs and compensation cuts. The budget includes 19 fewer police officers, 31 firefighter layoffs and closing up to two fire stations.

Brown also plans to ask the state's permission to borrow up to $20 million to cover past deficits, he said.

Illinois mulling introduction of state-park admission fees

With the state deeply in debt, lawmakers in Springfield are mulling a proposal to charge admission fees for the first time to the state’s hundreds of recreational properties. The money, proponents say, would be used to close a $750 million backlog in park maintenance and repairs due to years of shrinking budgets.

Greek families forage abroad to stay afloat in crisis

About 600,000 jobs in debt-riddled Greece have disappeared since 2008 and economic output has shrunk by around 20 percent. So far, more than a fifth of all Greeks are unemployed, creating an army of jobseekers spreading out across the European Union and beyond.

Debt Collector Is Faulted for Tough Tactics in Hospitals

As a growing number of hospitals struggle under a glut of unpaid bills, they are turning to companies like Accretive. To win promised savings, all hospitals have to do is turn over the management of their front-line staffing — ranging from patient registration to scheduling and billing — and their back-office collection activities. Accretive says it has such arrangements with some of the country’s largest hospital systems to help reduce their costs.

Indistinguishable from medical staff members, Accretive employees register patients, take down sensitive health information and champion aggressive bill collection goals with incentives like gift cards for staff members, the company records show.

U.S. Lost AAA on Danger of Liquidity Crisis: S&P

The U.S. lost its top credit grade in August because of the imminent danger of a “real liquidity crisis,” and Standard & Poor’s made no errors in its analysis, said Moritz Kraemer, managing director of sovereign ratings.

“Last summer, the U.S. government got extremely close to a real liquidity crisis because the Washington establishment could not agree on the way forward that would have been required to raise the debt ceiling,” Kraemer told lawmakers on the U.K. Parliament’s Treasury Committee today in London.

Detroit fire plan allows vacant buildings to burn

"We are in no way looking to 'let the city' burn, this is about saving lives and money," Austin said. "My department is strapped, the budget is strapped, and it's time to look at a new way of doing things."

Austin said about 40 to 60 percent of the fires in Detroit are in vacant structures.

Child poverty growing 14 percent in New Jersey

The latest "Kids Count" report shows more children in New Jersey are living in families that are struggling to make ends meet.

The annual survey by Advocates for Children of New Jersey finds about a third of the young people in the Garden State live in households that earn too little to meet their basic needs. Executive director Cecila Zalkind says that's 14 percent higher than five years ago.

China's rare earth policy backs Apple into a corner

As the report suggests, manufacturing the device at or closer to the source of these rare minerals would circumvent China’s increasingly tight export quotas and cut costs pretty significantly.

The problem of supply and demand with these seemingly vital components is only going to get worse, with China – which has a global market share of around 97 per cent – cutting back on the mining of rare minerals apparently due to environmental reasons.

Medicare trustee report hangs on uncertain assumptions

Medicare, the U.S. healthcare program for the elderly, should be able to stave off insolvency for the next 12 years, depending on a number of financial and political assumptions that may prove unrealistic, officials and other experts said on Monday....But the outlook is based on assumptions that may be unlikely, including a scheduled 31 percent pay cut for doctors in 2013, which Congress is almost certain to override. The forecast also assumes that a deficit-reduction agreement to slash Medicare spending by 2 percent a year can be sustained over the coming decade and that the U.S. Supreme Court will not overturn President Barack Obama's healthcare reform law in June.

Chart: Pension shortfall in Providence tops $1B at state’s rate

If Providence lowered that forecast to 7.5%, as the state did last year, its liability would balloon to slightly more than $1 billion, according to estimates the city’s actuarial firm, Buck Consultants, gave to the law department on Feb. 23. Here’s how Providence’s pension balance sheet looks using four different rate of return forecasts:

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7 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Online)
Joined: Jul 30 2009
Posts: 2581
thc0655's picture
thc0655
Status: Platinum Member (Offline)
Joined: Apr 27 2010
Posts: 531
Don't forget MF Global

This is our financial future, future headlines, future economic collapses.  Fraud, cover-ups and cronyism is destroying us.

http://jessescrossroadscafe.blogspot.com/2012/04/mf-global-untold-story-...

Follow the link.  It's disturbing, but we are forewarned.

yoshhash's picture
yoshhash
Status: Martenson Brigade Member (Offline)
Joined: Sep 20 2008
Posts: 271
pbs doing an apparently decent doc on banking crisis

http://www.pbs.org/wgbh/pages/frontline/money-power-wall-street/

i say apparently because i haven't seen it yet, caught wind of it off reddit.com, hearing rave reviews

Time2help's picture
Time2help
Status: Gold Member (Online)
Joined: Jun 9 2011
Posts: 376
I wonder how the mainstream

I wonder how the mainstream media is going to talk through a quad-dip recession.  I'm visualizing a bowling ball, headed down a flight of wooden stairs...

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
thc0655 wrote:  This is our

thc0655 wrote:

This is our financial future, future headlines, future economic collapses.  Fraud, cover-ups and cronyism is destroying us.

http://jessescrossroadscafe.blogspot.com/2012/04/mf-global-untold-story-...

Follow the link.  It's disturbing, but we are forewarned.

For the public, MF Global is already off their radar screen.  For many (if not most), it was never even on their radar screen.  The apathy is suffocating.  For the longest time, I liked to think there was hope but I finally acknowledged that we've been so programmed into ignorance, apathy, passivity, misdirection, confusion, conformity, etc. that we are terminal as a Constitutionally abiding, God fearing (i.e. revering and respecting) nation.  RIP America as we transition into Amerika.   

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
yoshhash I watched the first

yoshhash I watched the first part....really sick IMHO...scary times

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2302
Knitting needles.

How to to pull a heist in broad daylight.

You have got to get the dirt on the powers that be. The low down. The juicy morsel.

If there is no action on these cases then we are missing some pretty lacivious scandal. Right at the top.

Buy shares in popcorn, peanuts and Knitting needles.

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