Daily Digest

Daily Digest 4/4 - Spain Warns Of Soaring Debt, China's Rare-Earth Monopoly, IMF Chief Asks U.S. For More Cash

Wednesday, April 4, 2012, 10:37 AM
  • Spanish unemployment hits record high, adds to deficit woes
  • Spain warns of soaring debt
  • Greece's debt-to-GDP to rise to 170% - Fitch
  • Irish Fiscal Panel:May Need More Cuts To Reach Target
  • Italy minister rules out further austerity measures
  • Georgetown: Gas prices eat into nonprofits' funding
  • Home Prices Seen Dropping 10% in U.S. on Foreclosures: Mortgages
  • EU Official: Portugal Could Do Ireland Style Bond Swap
  • Portugal’s unemployment rate expected to have reached record level of 15 pct in February
  • Pictures: China's Rare-Earth Minerals Monopoly
  • IMF chief calls on US for more cash
  • National Debt clock at almost $50,000 per citizen

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Economy

Spanish unemployment hits record high, adds to deficit woes

The number of workers registered as without work climbed by 0.82 percent from the previous month to reach 4.75 million, the highest figure since the current statistical series began in 1996, the labour ministry said.

The rise -- the eighth monthly increase in registered unemployed -- comes as Spain heads back into recession with the economy expected by the government to contract by 1.7 percent this year after expanding 0.7 percent in 2011. It makes it harder for the government to meet its goal of bringing the public deficit down to 5.3 percent of output this year and to within a EU-limit of 3.0 percent next year as it causes spending on jobless benefits to rise.

Spain warns of soaring debt

Budget Minister Cristobal Montoro said borrowings of 186.1 billion euros ($A239 billion) this year will take the debt-to-GDP ratio to 79.8 per cent from 68.5 per cent in 2011, well above the EU 60 per cent limit.

"Spain is a critical situation. That is what we're trying to address," he told a news conference after delivering the conservative government's cost-cutting budget for 2012 to parliament.

Greece's debt-to-GDP to rise to 170% - Fitch

Greece needs to stay on course with structural and fiscal reforms to bring down debt in order to stay in the euro zone, Fitch Ratings said Tuesday, and stated that continued membership depends on the "effectiveness in laying the foundations for a sustained economic recovery."

Irish Fiscal Panel:May Need More Cuts To Reach Target

Ireland's Fiscal Advisory Council Tuesday said a slower-than-expected growth outlook may oblige the Irish coalition government to bring in EUR400 million more in tax increases and spending cuts to meet a key 2012 budget deficit target required by its bailout lenders.

Ireland is in its second year of a program with the European Union and the International Monetary Fund that needs the government to reduce a budget deficit of about 10% of gross domestic product in 2011 to 8.6% this year. To reach that target, the government announced EUR3.8 billion in austerity measures in December. But slower-than-expected economic growth may require an additional EUR400 million in adjustments for 2012, the fiscal council said.

Italy minister rules out further austerity measures

The Financial Times quoted a confidential European Commission report on Tuesday which suggested that Rome's deficit reduction targets could be at risk from recession and high interest rates and that further consolidation measures might be needed.

GEORGETOWN: Gas prices eat into nonprofits' funding

Rising gas prices are siphoning money the Food Bank of Delaware would rather spend to feed a record number of low-income families, at-risk kids and impoverished seniors. “We definitely feel the impact,” spokeswoman Kim Kostes said. Every added $1 pumped into its trucks and vans could provide four nutritious meals, she said. Gas in Delaware hit an average of $3.82 per gallon Sunday, and is expected to soon top $4 a gallon.

Home Prices Seen Dropping 10% in U.S. on Foreclosures: Mortgages

As many as 1.25 million of America's least cared for homes are headed for auction after a year-long probe into foreclosure practices kept them off the market.

Sales of repossessed properties probably will rise 25 percent this year from 1 million in 2011, according to Moody's Analytics Inc. Prices for the homes could drop as much as 10 percent because they deteriorated as they were held in reserve during investigations by state officials resolved in February, according to RealtyTrac Inc.

EU Official: Portugal Could Do Ireland Style Bond Swap

It is the first time the European Commission hints at a debt reprofiling for Portugal. Weiss's comment comes right after the European Central Bank Vice President and Portuguese native Vitor Constancio openly mentioned the prospect of a second bailout for the country.

In January Ireland successfully completed the swap of a bond worth EUR3.53 billion that matured in 2014 with one maturing a year later and agreed to pay a higher interest to finalize the transaction that would give it more time to make the payment. At the time, the Irish bond swap was seen as a market-friendly solution to ease resumption of market access. Weiss hinted that Portugal could struggle to convince the market of its creditworthiness in 2013, when the bailout runs out and the country is supposed to start borrowing in the free market again.

Portugal’s unemployment rate expected to have reached record level of 15 pct in February

The percentage of the active population in Portugal with no employment is expected to have reached a record level of 15 percent in February, according to figures published in Luxembourg by Eurostat, the statistics body of the European Union. Based on figures from the National Statistics Institute and the centres of Portugal’s Institute for Employment and Professional Training (IEFP), Eurostat said that February was the seventh consecutive month in which unemployment increased.

Pictures: China's Rare-Earth Minerals Monopoly (National Geographic)

At mines like this one in Jiangxi Province, China produces 95 percent of the world's rare-earth minerals, a key resource for the future of energy. With tongue-twisting names like dysprosium, yttrium, and neodymium, these 17 metals are found in products ranging from cell phones and computers to medical devices and jet engines. They play an important role in the coatings, magnets, and phosphors used in green technology, such as photovoltaic thin film panels, fluorescent lighting, wind turbines, and electric vehicles.

IMF chief calls on US for more cash

Speaking in the US capital, Lagarde said the 187-nation International Monetary Fund needed more firepower to tackle financial crises raging around the globe, arguing it was in the US interest to pitch in and help Europe. "Americans might ask themselves: why should what happens in the rest of the world concern us? Don't we have our own problems?" she said, according to prepared remarks.

"The answer is simple: In today's world, we cannot afford the luxury of staying in our own mental backyards." "If the European economy falters, the American recovery and American jobs would be in jeopardy. So America has a large stake in how Europe fare -- and how the world fares."

National Debt clock at almost $50,000 per citizen

The estimated population of the United States is 312,519,067 so each citizen's share of this debt is

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4 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2775
Rajoy Says Spain in ‘Extreme Difficulty’ as Bond Demand Drops

Headlines:

  1. Russia’s External Debt Rises 3.7% in Q1 to $565 Bln
  2. Jefferson County Fights for Halt to Bond-Insurer Suit
  3. Rehn says Portugal may need “bridge” – report
  4. Fitch Says Lower Calpers Investment Forecast Will Squeeze Cities
  5. Rajoy Says Spain in ‘Extreme Difficulty’ as Bond Demand Drops

....................Inflation? Deflation? Or Government Theft! Interview with Russell Napier (McAlvany audio. Click on where it says "Audio MP3. Listen to the end to hear some of their comments.)

................Please also notice in the Daily Digest link above that the National Debt Clock shows that we have now passed $50,000 of debt per citizen.

Tall's picture
Tall
Status: Gold Member (Offline)
Joined: Feb 18 2010
Posts: 289
Does the U.S. really have more oil than Saudi Arabia?

People are often confused about the overall extent of U.S. oil reserves. Some claim that the U.S. has hundreds of billions or even trillions of barrels of oil waiting to be produced if bureaucrats will simply stop blocking development. In fact, in a recent debate between Republican candidates contending for Gabrielle Giffords' recently vacated House seat, one candidate declared "We have more oil in this country than in Saudi Arabia." So, I thought it might be a good idea to elaborate a bit on U.S. oil resources.

Oil production has been increasing in the U.S. for the past few years, primarily driven by expanding production from the Bakken Shale Formation in North Dakota and the Eagle Ford Shale in Texas. The oil that is being produced from these shale formations is sometimes improperly referred to as shale oil. But when some people speak of hundreds of billions or trillions of barrels of U.S. oil, they are most likely talking about the oil shale in the Green River Formation in Colorado, Utah, and Wyoming. Since the shale in North Dakota and Texas is producing oil, some have assumed that the Green River Formation and its roughly 2 trillion barrels of oil resources will be developed next because they think it is a similar type of resource. But it is not.

http://www.energybulletin.net/stories/2012-04-04/does-us-really-have-more-oil-saudi-arabia

Woodman's picture
Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1027
US oil

Yeah, what matters is the effective production rate of oil, not what is in the ground.  We're still importing about half our oil consumption, even with increased domestic production.

futuresmkt's picture
futuresmkt
Status: Member (Offline)
Joined: Aug 17 2009
Posts: 3
Western/Developed Economies

Given the statistical data and structural environment, is there any real question as to the general constructs of the end game?

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