Daily Digest 7/18 - Spain Debt Costs Fall, More Seeking Food Stamp Aid
Spain's economy minister said Europe's debt markets were not functioning properly and investors outside the euro zone had no confidence in the euro project. "There are no (debt) operations between nations in the monetary union and practically the only demand for Italian debt comes from Italians," Luis de Guindos was quoted as saying in Spanish newspaper La Vanguardia. "A similar thing is happening in France and Spain." Analysts agree there is little more Spain can do besides the reform work and austerity measures it is already committed to.
The head of a party in Greece's new coalition government says the country's recession makes it "almost impossible" for it to achieve the $14.1 billion in cuts over the next two years demanded by its rescue creditors. Socialist party leader and former Finance Minister Evangelos Venizelos made the comment in a radio interview Tuesday, a day before he is to meet conservative Prime Minister Antonis Samaras to discuss the cuts.
The Irish government Tuesday said it has found over €2.25 billion ($2.76 billion) to salvage a number of delayed road, school and health-care construction projects, which it hopes will create jobs without increasing the debt burden of the troubled economy.
King Juan Carlos and Crown Prince Felipe are cutting their yearly salaries by about 7 percent – to about (EURO)272,000 ($334,043.20) and (EURO)131,000 ($160,881.10) respectively – in line with the new austerity package, the Royal Palace said. The royal family has about (EURO)8.3 million budgeted for it this year, down 2 percent from 2011.
Greece is seeking a bridge loan to cover an upcoming bond redemption next month, according to Dow Jones Newswires on Tuesday. The roughly 3.1 billion euro bond, worth roughly $3.79 billion, matures on Aug. 20, and is held entirely by the European Central Bank. Dow Jones added that euro-zone officials have indicated that Greece would be prevented from defaulting on the payment.
ECB funding to Greek banks rose by 11.64 billion euros ($14.25 billion) i n June f rom April, the previous comparable month, while emergency liquidity assistance from the Greek central bank also increased, by 2.7 billion euros over the same period, data from Greece's central bank showed on Tuesday. ECB lending to Greek banks rose to 73.66 billion euros at the end of J une from 62.02 billion in April, the Bank of Greece said.
More than 3,000 lots flooded by Hurricane Katrina and bought with federal money in an emergency bailout sit idle across this city — a multimillion-dollar drain on federal, state and city coffers that lends itself to no easy solution. An Associated Press examination of the properties sold to the government by homeowners abandoning New Orleans after the catastrophic 2005 flood has found that about $86 million has been spent on handling a total of 5,100 abandoned parcels. And there’s no end in sight to maintenance costs for perhaps most of the 3,100 properties that remain unsold.
“The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” warned the two chairmen of the task force, Richard Ravitch, the former lieutenant governor of New York, and Paul A. Volcker, the former chairman of the Federal Reserve.
New York state stands to be one of the hardest hit when the majority of $900 billion in federal budget cuts takes effect in 2013. A new report to be released tomorrow says that New York could lose 29,000 defense jobs next year, and more than 41,000 other non-defense jobs, as part of anticipated budget cuts from the Budget Control Act of 2011. The act, signed into law on Aug. 2, 2011, concluded the debt ceiling debate by forcing Congress to cut $917 billion over 10 years, with only about $25 billion coming from 2012’s budget.
Illinois began its new budget year staring at a huge stack of old bills. State Comptroller Judy Baar Topinka said Monday that Illinois had between $7.5 billion and $8 billion worth of old bills still left to pay when the new fiscal year began this month. That's slightly better than the total for the two previous years, when Illinois started out with about $8.5 billion in overdue bills.
Portugal can still reach its 2012 budget targets but the risk of failure has grown significantly, officials from the European Commission and International Monetary Fund said on Tuesday. The goal of reducing Portugal's public debt to 4.5 percent of gross domestic product this year is achievable but might be hampered by a large drop in tax revenues in the slowing economy, the European Union's executive arm said.
CSU trustees will also be asked to consider a 9 percent tuition and fees increase for out-of-state and international students. Prop 30's taxes were written into last month's state budget deal, along with an automatic $250 million cut to the CSU budget should those taxes be rejected by voters. The University of California system would also lose $250 million. California's community college system would lose $338.6 million.
The lights are out in a growing number of Camden, N.J. city parks. Officials are finding that metal thieves have taken copper wires used to electrify the parks. Officials also say school buildings have been stripped of air conditioning units by scavengers. Last year, the fire department of the cash strapped city had to pump water from a river several blocks away from a huge warehouse blaze because hydrants had been stripped. Selling scrap metal and wires is a major source of income for the homeless and others.
Italian PM Mario Monti says the region of Sicily is close to defaulting on its debts, and he is seeking confirmation that the governor will resign. In a statement, Mr Monti said there were "grave concerns" that the island would default following a growing financial crisis. He said he had written to Raffaele Lombardo asking him to confirm his stated intention to quit this month.
"We're moving from a crisis to a horror story," said Purdue University agronomist Tony Vyn. "I see an increasing number of fields that will produce zero grain." The drought scorching the US Midwest is the worst since 1956, the National Oceanic and Atmospheric Administration said in a report posted on its website on Monday. Drought is affecting 55 percent of the land mass in the lower 48 states.
More older Texans apparently struggling to make ends meet have been turning to food stamps. The Houston Chronicle reported Monday that the state’s fastest-growing group receiving food stamps is those ages 60 to 64. That age range getting food assistance has reached nearly 85,000 this month, compared to about 41,000 in 2007.
Federal Reserve Chairman Ben S. Bernanke said progress in reducing unemployment is likely to be “frustratingly slow” and repeated the Fed is ready to take further action to boost the recovery, while refraining from discussing specific steps.
“I've heard (of hay prices) delivered from $200 to $250 per ton,” said Dean Strong, owner of the Belle Fourche Livestock Auction. “Last year you could get it delivered for $75 to $95 per ton.”
The numbers of citations given through use of Des Moines’ mobile speed cameras in June set a new record for the cameras for 2012. Between the city’s five mobile speed cameras, a total of 742 citations were issued. Previously, the month of May held the record for the cameras, with 604 citations issued.......The net revenue for the City of Des Moines from the citations will be $124,934.
A new government report is painting a grim snapshot of the drought's effects on farms across Kansas. Kansas Agricultural Statistics Service reported Monday that more than half of the state's corn crop is in poor to very poor condition. Soybean and sorghum crops are faring only slightly better with more than 40 percent of both those Kansas crops also in poor to very poor condition. The misery extends beyond the field crops as livestock producers struggle with dried up pastures and shrinking hay and stock water supplies.
The number of Spaniards leaving the recession-wracked country was up 44 percent in the first six months of 2012 compared with the same period last year, the National Statistics Institute said Tuesday. Current estimates show 40,625 Spaniards emigrated between January and the end of June, compared with 28,162 last year, the institute said. Another 228,890 foreigners who had been living in Spain left the country during the six-month period.
Italy's central bank Tuesday lowered its outlook for the country's economic growth, saying gross domestic product is expected to shrink by 2% in 2012. In its latest 'Economic Bulletin', the Bank of Italy--whose forecasts previously placed GDP contraction at around 1.5% --said weak internal demand will negatively affect economic activity, as austerity measures reduce the available income of families.
Cherry Hill has issued more than 17,500 citations and collected some $1 million in fines since cameras started operating at the intersection of Route 70 and Springdale Road in May 2011. Glassboro, which wrote more than 7,000 tickets last year, would lose about $500,000 annually if its camera-controlled intersection were to be taken away. Stratford, which averages about 350 tickets per month, would lose about $300,000 a year. Figures from Monroe were not available.
Florell was referring to his review of the thousands of citations issued during the first six months traffic signal cameras were operational in St. Petersburg. Vehicles going straight through a red light were clocked at 145, 157, 170, and even 215 miles per hour. Right turns on red allegedly occurred at speeds of up to 96 miles per hour. "Clearly, something is wrong if we're getting this many clearly physically impossible errors coming out of the system," the self-described technologist declared.
US state governments are in desperate need of reform to solve structural challenges that extend well beyond the cyclical woes of the financial crisis and the recession, including $4tn in unfunded pension and healthcare liabilities, according to a new report. A high-profile taskforce chaired by Paul Volcker, the former chairman of the Federal Reserve, and Richard Ravitch, former lieutenant-governor of New York, warned that deep, long-term budgetary problems are threatening the ability of US states to meet their obligations to retirees, creditors and citizens who rely on local governments for education, public infrastructure, healthcare and safety.
A report published today by S&P Dow Jones Indices reveals record Pension and OPEB underfunding for the S&P 500 companies. Data for fiscal 2011 shows that S&P 500 defined pensions reached an underfunding status of $354.7 billion in 2011, an increase of over $100 billion from the end of 2010 and surpassing the record $308.4 billion underfunding level set in 2008. OPEB underfunded levels increased to $223.4 billion in 2011 from $210.1 billion at the end of 2010. Combined, the amount of assets that S&P 500 companies set aside to fund pensions and OPEB amounted to $1.38 trillion, covering $1.96 trillion in obligations with the resulting underfunding equating to $578 billion, or a 70.5% overall funding rate.
Long lunch breaks are becoming a luxury for Spaniards who have found themselves working longer hours and with less money to spend. Many Spaniards start work at around 9am and stay until after 8pm. The long hours are in part to allow for a long lunch break, and many Spanish restaurants offer three-course set price menus between 2pm and 5pm to cater for office workers on their breaks. But as more workers opt for shop-bought sandwiches or packed lunches over whiling away the afternoon in restaurants, owners are being forced to rethink their menus and pricing.
Sicily is not on the verge of an imminent default, although it is not in good financial health, international rating agency Fitch told Reuters shortly after Prime Minister Mario Monti expressed concern at the Italian region's possible default.
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