- 1) Japan mulls monetisation of public debt and yen devaluation (Telegraph...Ambrose Evans-Pritchard)
"Japan’s ruling party has called for drastic monetary easing to devalue the yen by 30pc and halt the slide into deflation, putting it on a collision course with the Bank of Japan.
A draft by 130 lawmakers from premier Yukio Hatoyama’s Democratic Party of Japan said the country needs a radical shift towards growth policies, calling for an inflation target above 2pc. The exchange rate should be steered to ¥120 against the dollar, from the current ¥90.
Shizuka Kamei, financial affairs minister, said the central bank must monetise government debt to support the market for state bonds and prevent deflation becoming deeply lodged in the economy. "
"BEIJING, April 14 (Xinhua) -- Yu Yongding, president of the China Society for World Economics, said China should stop further piling up greenbacks massively so as to build a more balanced economy.
The losses incurred in financial transactions between China and the U.S. could be trivial compared with the capital losses China may suffer in the future, Wednesday's China Daily quoted Yu as saying.
China has parked its savings in the U.S. treasures while U.S. fiscal debt ratio has been surging. A very big question for China is: When it needs to redeem its treasuries, can America honor its debt obligations?
Yu suggested that China was the biggest victim of the post-Bretton Woods international monetary system, a system of the dollar standard under which everything hinges on the integrity of the American government and the Fed who had let down those who had trust in them.
In response to U.S. economist Paul Krugman's calling on the U.S. government to take on China in recent months. Yu said that Krugman was a respected economist, but his campaign was not only counter-productive in terms of solving the China-U.S. trade dispute but also based on flawed economics."
"April 14 (Bloomberg) -- Companies in the U.S. will struggle to refinance a $2 trillion “wall of debt” maturing over the next five years as banks grapple with lending restrictions of their own, according to Standard & Poor’s."
.................3A) S&P: Corporate Borrowers May Struggle To Refinance Debts
"In a teleconference, John Bilardello, global head of S&P's corporate sector ratings, said there is a "wall of debt" coming due over the next five years. That includes around $2 trillion of corporate debt from the United States between 2010-2014, $1.5 trillion from Europe in that same period and $600 billion from Asia between 2010-2012.
This year "certainly looks like a window of opportunity for corporates around the world to access money," Bilardello said.
"The question is how long will that (window) last beyond 2010 and 2011," he continued. "If recession or double-dip recession around the world comes back, (or) if the financial system isn't strong enough to facilitate the refinancing, then we could be facing a shutdown again of liquidity markets, which would impact corporates." "
"TAIPEI (Dow Jones)--Chinese banks' fast lending growth poses a "very high risk" of loans going sour and asset quality deteriorating in the medium term, Fitch Ratings' senior director for financial institutions, Jonathan Lee, said Wednesday.
"There's an asset bubble in China and some day (the loans) may turn into non-performing loans," Lee said at a media briefing in Taipei.
The Chinese government encouraged banks to lend to local enterprises last year to boost growth amid the global economic downturn. New loans in China rose 32% last year, Fitch said, adding new loans are likely to rise 20%, or CNY8 trillion, this year.
"Hidden sales and re-packaging of loans remains sizeable and distorts credit growth and credit exposure figures. Consequently, some banks are carrying more credit risk than balance sheets indicate," Fitch said."
........................4A) China's March Property Prices Jump a Record 11.7%
"April 14 (Bloomberg) -- China’s property prices rose at a record pace in March, indicating government efforts to stem gains aren’t working and more drastic measures may be needed amid concern of a bubble in the nation’s housing market."
"April 14 (Bloomberg) -- Greek government bonds dropped as some of the world's biggest investors said the European Union's 45 billion-euro ($61 billion) rescue plan for the nation fails to make the securities attractive."
..............5A) EU May Lend Greece More Than $120 Billion, Handelsblatt Says
..............5B) German Bunds Fall Before $20 Billion of Euro-Region Debt Sales
"Euro-region governments will sell 99 billion euros of bonds this month, according to ING Groep NV."
.............5C) Greece hit by new debt doubts, string of strikes
..............5D) Soros Says Risk of Greek 'Death Spiral' Remains
"Millionaires fleeing state tax cause 82 percent of income drop
Montgomery County, Maryland's richest county, is facing a budget shortfall of nearly $1 billion as high-income residents flee the state's millionaires tax.
Budget officials told the County Council on Tuesday that Montgomery must once again write down its projected income tax revenues, this time by $44 million for this fiscal year and $100 million for next fiscal year, which starts in July.
Those write-downs come up on top of a $24 million income tax reduction disclosed last week for the current fiscal year, and are in addition to a nearly $800 million budget gap projected for next fiscal year.
The budget holes have threatened the county's AAA bond rating and prompted County Executive Ike Leggett to propose raising energy taxes by 67 percent, eliminating 18 bus routes and closing a public library in Noyes."
"BRUSSELS — Europe issued a stark warning on Wednesday that Portugal needs to cut its deficit this year, as finance chiefs steeled themselves for investors switching target from Greece"
"Bing has a lot riding on his first spending plan -- he campaigned on the notion that he would turn the city's fiscal crisis around by using his business sensibilities. On Tuesday, Bing also said "it is indeed now or never" if the city is going to avoid bankruptcy or state receivership."
"The number of California state workers who took their first pension check in January jumped more than 30 percent over the same month in 2009, a strong indication that the state's budget and labor turmoil is pushing a growing number of longtime employees out the door.
New statistics provided to The Bee by the California Public Employees' Retirement System also show that state retirements for the entire year increased almost 18 percent from 2008. School and local government civil service retirements for the year rose about 17 percent"
"The Buffalo Public Schools will face a "scary" $93 million budget gap within three years unless ways can be found to contain skyrocketing pension, health insurance and charter school expenses, educators warned the Common Council on Tuesday.
Some school officials also said the system will ask the city for additional aid, noting that the city's contribution to the Board of Education has not increased in a few years.
But during the meeting in Council Chambers, school officials did not specify how much additional city aid they will request when a budget is unveiled later this month.
"We'll ask for more, but we're also very cognizant of the fact that the city has their own problems, as do we," said Louis J. Petrucci, the School Board's Park District member and chairman of the board's Finance Committee. "The state, the city and the Board of Education are all in pretty dire financial straits.""
"Interim City Manager Kevin O'Rourke said Tuesday that he is considering fire station closures and the sale or privatization of municipal golf courses as the city increased its budget deficit projection to $23 million, $9 million more than before.
The estimate's increase was attributed mostly to lower revenue projections for next fiscal year, including from property taxes."
"Riverside County's budget gap for next year has grown to $131.5 million, officials said Tuesday, even as supervisors took a major step toward overcoming the shortfall.
Supervisors directed county departments to build budgets for next year that include significant cuts that could result in fewer sheriff's deputies, the closing of fire stations and reduced code-enforcement staffing.
In a special budget workshop Tuesday, supervisors asked the sheriff to cut 3 percent and directed the district attorney and the fire and probation departments to each make 5 percent reductions. All other county departments will take, on average, a nearly 20 percent hit."
"IRVINE – City leaders faced with plummeting sales tax revenue may be forced to cut back on community concerts, consolidate after-school and summer programs, delay construction of new public facilities, and dip into $14 million in reserve funds.
The Irvine City Council on Tuesday afternoon got an early look at a proposed 2010-11 fiscal year budget that estimates sales tax revenue at its lowest point in 12 years, resulting in a budget hole of at least $17 million."
"April 14 (Bloomberg) -- The U.S. military depends on China for the metals required to build smart bombs, night-vision goggles and spy radar, according to a report to Congress obtained by Bloomberg News.
China controls 97 percent of production of materials known as rare earth oxides, giving it “market power” against the U.S., the Government Accountability Office said in the report. The materials -- found in General Dynamics Corp.’s M1A2 Abrams tank and Aegis SPY-1 radar made by Lockheed Martin Corp. -- are so irreplaceable that suppliers to military equipment makers could be buying from China for years to come, the GAO said."
"(Reuters) - The mortgage chief of the United States' second largest bank was mobbed by angry borrowers on Tuesday after he invited customers to speak to him if they feared foreclosure of their homes."
"The JPMorgan Chase & Co executive was at a congressional hearing in Washington when a lawmaker asked him who mortgage borrowers could turn to if they felt his bank's employees were not helping them hold onto their homes.
"Come to me," said David Lowman, chief executive for JPMorgan Chase & Co's home mortgage business in response to the question from Massachusetts Democrat Barney Frank.
Minutes later, around 50 borrowers burst from the audience and presented Lowman with a 6-page document alleging his bank reneged on a pledge to help struggling homeowners.
The activist who organized the protest said Lowman did not want to talk and left the hearing."
- Other news and headlines:
Morgan Stanley fund may lose $5.4 billion: report (On its real estate fund)
Q&A With Jim Chanos Part I: "Greece Is A Prelude"
Singapore revaluation boosts Asian currencies
States consider taxing Internet sales to help boost revenues
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