Daily Digest 6/6 - Grim Long-Term U.S. Debt Picture, Soaring Deductibles New Normal, Students Pay Credit Card Rates On Loans
- ECB To Hold The Line As Euro Crisis Deepens
- CBO paints grim long-term debt picture for US
- Global slump alert as world money contracts
- Tuition Increases At Oregon Universities
- Soaring deductibles are the new normal for Fortune 500
- Students pay rates as high as credit cards on loans
- Japan Lawmakers Push to Curb Central Bank
- Payless paydays for Scranton near as borrowing halted
- Portuguese Builders on ’Verge of Collapse,’ Industry Group Says
- Angry customers confront water district at meeting
- Euro slumps on Spain warning, G7 fails to raise hopes
- Alarm grows in Russia as ruble continues to lose
nvestors are hoping ECB president Mario Draghi will signal that some sort of rescue effort is in the works, when the central bank holds its monthly meeting in Frankfurt Wednesday.
ECB officials will be meeting amid a deepening banking crisis in Spain and ahead of a pivotal election in Greece that could determine whether the nation remains in the eurozone.
The US debt will exceed the size of the nation's economy in 25 years if the federal government doesn't chart a "sustainable fiscal course," the Congressional Budget Office warned in a new estimate on Tuesday.
In its 2012 long-term budget outlook, the nonpartisan CBO said that extending current tax rates and rising health care costs would push the debt to almost 200 percent of gross domestic product in 2037. That is under the CBO's scenario that maintains current policies.
Growth of the world money supply has dropped to the lowest level since the financial crisis of 2008-2009, heralding a severe economic slowdown later this year unless authorites rapidly take action.
The combination of increased tuition and decreased fees put SOU's overall increase at a more reasonable 4.2%; meaning, on average, an extra 306 dollars for all of next year. OIT sees 5.3% overall increase leading to an extra $419 a year. 5.1% is what Oregon State students face - bumping tuition up $394 - and Oregon sees a 5.9% increase, meaning Ducks will shell out and extra $521 next school year.
Nearly a fifth of the firms responding to the survey, conducted by Towers and the National Business Group on Health, a nonprofit alliance of large companies, said high-deductible coverage would be the only option in 2013. Half of all workers with employer-sponsored health plans — including those working for the government — could be on high-deductible insurance within a decade, according to a new paper from Rand Corp.
JPMorgan Chase & Co. (JPM) charges Mirella Tovar as much as 10.25 percent annual interest on her student loans, a rate as high as a credit card. The 24-year-old aspiring graphic designer, the first in her family to go to college, is among millions of former students paying off high-interest loans to private lenders, among them JPMorgan, SLM Corp. (SLM) and Discover Financial Services. In a good month, Tovar earns $730 as a part-time hostess in a pizza parlor, and most of that money goes toward her debt of $98,000.
A growing number of lawmakers are pushing for greater control over the Bank of Japan, just 14 years after the central bank first won its independence, as a strong yen and runaway deficits darken Japan's economic prospects. The moves come as politicians across the spectrum, and many economists, complain that the BOJ isn't acting aggressively enough to combat the country's persistent deflation, while mammoth borrowing limits the scope of fiscal policy to boost growth. Critics say it could lead to a sharp increase in central-bank purchases of government bonds, possibly triggering a European-style rout on Japan's sovereign debt.
City of Scranton employees face payless paydays as early as two weeks from now unless the city is able to borrow $16.5 million, funding the city council jeopardized by refusing to make a city parking authority bond payment, Mayor Chris Doherty said Monday.
Mr. Doherty said the money represents 13 paydays, the equivalent of about half a year of pay for employees, in a year when the city has already struggled four or five times to meet payroll. The city already has enough money to make payroll this Friday, but not yet enough for the next payday, June 22, the mayor said. The city has had to rely on advances of state money or state loans to cover the four or five earlier payrolls, he said. He expects tax collections will "probably get us into July sometime," but not through the summer unless money is borrowed.
Portugal’s construction sector is on the “verge of collapse” and in need of an emergency program to help restructure debt, the country’s biggest industry group said.
The construction industry owes banks about 25 billion euros ($31 billion) and insolvency risks are rising as banks cut back on loans, Ricardo Pedrosa Gomes, president of the Public Works and Construction Association said in an e-mailed statement today. The industry needs an emergency program to promote investment and to help cut and restructure debt, according to the statement.
Small business owners and non-profit leaders showed up at a 9 a.m. meeting at the Clark County Government Center to tell the water district that they simply can not afford the huge increase in their water bills. Some customers are seeing increases of almost 300%.
The euro fell on Tuesday as Spain's treasury minister said high borrowing costs were closing the country off to credit markets and investors received scant comfort from an emergency conference call of Group of Seven finance chiefs.
The euro, which rallied the previous day on euro zone optimism, fell broadly after the G7 ministers did not unveil concrete actions to address problems in Spain and Greece. That disappointed investors hoping for measures. "None of these meetings have produced anything meaningful, and with debt burdens piling up across the globe, I remain highly doubtful that anything substantive will be implemented, and anything that falls short of fiscal union in Europe will allow the crisis to proliferate," said Christopher Vecchio, currency analyst at DailyFX in New York.
The Russian ruble yesterday extended the previous week's losses to reach new three year lows as alarm grew over the effects of the euro zone crisis and the falling oil price on the currency.
Prime Minister Dmitry Medvedev on Saturday ordered the central bank to step up interventions as authorities worried that a sharp depreciation could harm economic stability that is the cornerstone of President Vladimir Putin's rule. The pressure on the ruble, the most serious since it came under sustained attack by speculators in the 2008-2009 financial crisis, has been sparked largely by investors fleeing to safe havens due to the euro zone crisis.
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