Daily Digest - November 11
- Energy agency warns of falling investment
- S&P Cut Ratings on Record 26,387 Home Loan Bonds Last Quarter
- Senator: 131,000 homeless vets a 'disgrace'
- Homelessness Soars In Milwaukee Area--Area Shelters Full
- Fitch Says U.K. Rating Most at Risk Among Top-Rated...(then warns about U.S. AAA Rating)
- Bill Gross on CNBC...China and Japan lose 13% on U.S. Treasuries (at 4:30 on Video)
- Banks face increase in funding costs
- Fed: GMAC to receive more bailout money
- Harvard Profs: This Crisis Is Not Over
- Crisis mode declared on deficit (New York)
- Schwarzenegger: This year's budget gap may hit $7 billion
- Ambac Financial points to possible chapter 11
- Aging boomers strain pension funds (Florida)
- Growth in Iowa's unfunded pension liabilities
- World Bank: yuan to become alternative reserve currency
The agency estimates that $1.1 trillion needs to be invested annually from now until 2030, for a total of $26 trillion, just to meet energy demand on current growth trends. Should governments adopt plans to limit greenhouse gas concentrations in the atmosphere to 450 parts per million of CO2 equivalent, an additional $10.5 trillion needs to be invested over that time period, the IEA said.
Standard & Poor’s cut ratings on a record 26,387 U.S. residential mortgage-backed securities in the third quarter. The figure was more than double the previous quarter’s 10,459 downgrades, the New York-based ratings company said today in a statement. No bonds were upgraded last quarter, S&P said.
The VA has concluded that 260,000 veterans are homeless over the course of a typical year, he added. An estimated one in four homeless men or women served in the military. The increasing number of servicemen and women returning from Iraq and Afghanistan, combined with the economic downturn, Menendez noted, has contributed to a recent spike in the number of homeless families with veterans. "The federal government ... is not doing nearly enough when so many new veterans are falling through the cracks," he said. "The current system of dealing with their needs is being overwhelmed."
"Every time you call them, they're all full already," Neal said."It's full. Every shelter is full," said Nancy Szudzik, the director of the Salvation Army's Emergency Lodge.The Salvation Army's Emergency Lodge is one of the few shelters equipped to care for homeless families."That's the fastest growing population, the families. That's the fastest growing population for homelessness, is families now," Szudzik said."Are you turning people away?" WISN 12 News reporter Kent Wainscott asked. "Unfortunately, all the time," said Bernie Juno, shelter director of Waukesha's Hebron House.
The U.S.’s rating also might be at risk of a review if its fiscal position does not stabilize in the next couple of years, Riley was reported by Reuters as saying in a television interview.
Gross notes that over the last year alone the depreciating dollar means that every single Treasury purchased by China, Japan etc with a 1 to 2 % yield has essentially generated a negative 13 to 14% return. Yes, NEGATIVE 13 to 14% return
Banks around the world face increases in funding costs that could cut profits and hit their customers as they look to refinance $7,000bn-plus in short-term debt expiring in the next three years with longer-dated bonds, according to research released on Tuesday. Institutions seeking to reduce their reliance on short-term paper will have to pay up because interest rates are likely to rise and governments will stop supporting the financial system, the study by the credit rating agency Moody’s concludes." "Moody’s estimates that a lender wanting to refinance a short-term government-guaranteed bond with 10-year paper could see costs rise nearly 7 percentage points
GMAC, a crucial player in the U.S. auto industry, has been unable to raise the $11.5 billion regulators said it needed after stress test results were announced in May. The Fed says the finance company is expected to close the gap with more money from the $700 billion financial bailout. GMAC, already the recipient of $12.5 billion in taxpayer infusions, is negotiating with regulators over how much more it will receive
The global economic crisis is not over, said Harvard University professors Kenneth Rogoff and Niall Ferguson, challenging the G20 group of wealthy countries' assumptions that the world is on the road to recovery. Public spending in the form of bailouts and stimulus packages will create a debt burden for the world's governments, the two professors told Bloomberg. “The financial crisis may eventually morph into a government-debt crisis,” says Rogoff, former chief economist at the International Monetary Fund.
"State is "running out of money,' governor says in plea for cuts" ""Some say the deficit is not even as deep as we have described it. Some say the revenues are coming back, and others say Wall Street will bail us out. I suggest to you that that is wishful thinking, my colleagues," Paterson said. "And we do not have time to engage in it." As soon as the $132 billion budget was created in April, fiscal critics were warning that it was built on overly rosy revenue projections and inflation-busting spending levels. Monday, Paterson joined in, warning lawmakers against making spending promises that cannot be kept or resorting to "phony solutions" for the deficit.
Gov. Arnold Schwarzenegger estimated Monday that California's budget will fall out of balance by $5 billion to $7 billion this fiscal year, on top of a $7.4 billion gap already projected for 2010-11. If true, state leaders would confront at least a $12.4 billion to $14.4 billion problem when Schwarzenegger releases his budget in January. California currently has an $84.6 billion general fund budget
Ambac reported that, should the OCI decide to initiate delinquency proceedings in order to protect the interests of its policyholders, an event of default could occur with respect to Ambac’s debt (that is, the holding company debt), which would in turn accelerate principal totaling $1.64 billion, as well as terminate credit default swap contracts insured by Ambac Assurance. This in turn could liquidiate mark-to-market claims for underlying exposures in swaps totalling approximately $23 billion, the company said
Now, Florida is headed for an even grayer future in the Baby Boomer retirement era, state economists and demographers predict. The consequences: worker shortages and severe strains on public pensions and government services. By 2030, more than one in four state residents will be 65 or older – or 26 percent, compared to 17 percent today, the University of Florida Bureau for Business and Economic Research says
Because of higher usage as well as recent market losses, the program faces $4.9 billion of unfunded liability, up from $2.7 billion a year ago. That amount, like a house loan, is amortized over a 30-year period. The increase in liability has caused major concern among IPERS officials. While current retirements are not in jeopardy, the program faces major shortfalls in 20 or so years if the revenue equation isn't balanced now, they told the legislative Public Retirement Systems Committee Monday
World Bank President Robert Zoellick said on Wednesday that the U.S. dollar's role as a reserve currency was "relatively secure", but the Chinese yuan will provide an alternative over time. "Over the next 10-15 years, you will firstly see renminbi to be internationalised and provide an alternative," he said at a World Bank conference in Singapore. Zoellick also said the U.S. should not be complacent about the dollar.