Daily Digest 9/5 - Asian Exports Crumble, France's Jobless Rate Reaches 10%

Economy

Spanish jobless queue grows in August

Spain's jobless queue grew to 4.63 million people in August, the government said yesterday, grim news for an economy suffering nearly 25 per cent unemployment.
Snapping a run of four monthly declines, the number of job seekers in August climbed by 38,179, or 0.83 per cent, from July, the Labour Ministry said in a statement.

"Although it's true that an increase in unemployment is bad news it should be stressed that it is the weakest increase for August, traditionally a bad month for employment, since 2006," Labour Minister Engracia Hidalgo said in a statement.

Greece faces longer recession if cuts not delayed: study

KEPE noted that in order to maintain an IMF target of debt-to-output ratio of 120 percent by 2020, Greece also needs lower the interest paid on its outstanding debt.

And a planned recapitalisation of Greek banks would also have to be financed directly through EU rescue funds -- a method likely to be applied in Spain -- so as not to further burden the Greek public debt, the study argues.
Rejecting any fiscal adjustment extension, international creditors have been demanding that Athens catch up with time lost earlier this year when back-to-back elections were held, placing the reform drive on standstill.
The Greek cuts package was originally to have been adopted in June, and a privatisation push calculated to earn 19 billion euros by 2015 is also behind schedule.

Greece’s Debt Not Sustainable Without Interventions, KEPE Says

Such interventions include spreading out an 11.6 billion- euro ($14.6 billion) package of spending cuts, currently being finalized by the government, over four years instead of two, a reduction in the country’s interest rates and a “realistic” state asset-sales program, KEPE said. Without these changes the debt in 2020 could be as high as 151 percent of GDP, the center said.

Spain to inject bonds, not cash, into Bankia

Spain's bank rescue fund, known as FROB, will inject government bonds, not cash, into troubled Bankia to recapitalize the nationalized lender as it awaits European bailout funds.
Last week, FROB announced it would inject capital immediately which was described an "advance on European aid" although the agency declined to divulge the amount.

DCFS cuts may force more kids into foster care (Illinois)

Without that assistance, called intact family services, the state's only alternative often was to place those at-risk kids in foster care — a traumatic, life-changing moment for most children and a significant expense to the state. The Illinois Department of Children and Family Services in recent years has done all it can to avoid that step, but a steep budget cut has forced the agency to slash such assistance.

Asian exports crumble (Ambrose Evans-Pritchard)

Exports from Asia, the world's manufacturing hub, are often regarded as a bellwether for the health of the global economy. We estimate that the year-on-year growth rate of Asia's aggregate exports turned negative in July for the first time since the global financial crisis

Global crisis moves East as China suffers rapid downturn (Ambrose Evans-Pritchard)

“It just keeps getting worse,” said Alistair Thornton and Xianfang Ren from IHS Global Insight. “The government has underestimated the pace of the slowdown and is behind the curve.”
The HSBC/Markit manufacturing index for China fell to 47.6 in August, the lowest since the onset of Great Recession in late 2008. Inventories are rising. The index for new export orders fell to the lowest since March 2009. “Beijing must step up policy easing to stabilise growth,” said Hongbin Qu from HSBC.

Depression, Suicides Rise as Euro Debt Crisis Intensifies

Europe is approaching a crisis as the region’s debt crisis and austerity measures increase the rates of depression, suicide and psychological problems – just as governments cut healthcare spending by up to 50 percent, according to campaigners, policy makers and health organizations.

UN food agencies urge action to avoid food crisis

The three U.N. food agencies urged governments Tuesday to take quick action to curb rising prices of corn, wheat and soybeans and avoid a repeat of the 2007-2008 food crises.
The sharp rise in food prices in recent months threatens to make life even more difficult for tens of millions of people, particularly in poor countries, the heads of the U.N. World Food Program, Food and Agriculture Organization and International Fund for Agriculture Development warned.

N.J. food pantries are depleted

Kathleen DiChiara, president of the Community Food Bank of New Jersey, says many people on their summer vacations don't think about the poor and the hungry.
She says food supplies are down now while the demand is increasing.
"It's not letting up," DiChiara said. "If there's a recovery the people that we're seeing are not experiencing it."

A federal lifeline shrinks as the Pinellas breadline grows (Florida)

A year ago, the food bank at Religious Community Services got 2.3 million pounds of government food for needy people in the area stretching from St. Petersburg to Tarpon Springs.
The allotment has plummeted this year, sending Pinellas County food banks, soup kitchens and food pantries scrambling to line up additional resources, dipping into reserves and, in at least one instance, closing until shelves can be refilled.
There's more bad news.

Food-stamp use reaches record high in US

According to the report, in June, 46.7 million people used food-stamps. That’s an increase of 0.4 percent from May and Bloomberg.com reports that’s 3.3 percent higher than a year earlier. Food-stamp has more than doubled in the past four years and is the USDA’s biggest expense, Bloomberg reported.

Locals Prepare for Spiking Food Prices

South Orange and Maplewood residents are preparing for the predicted rise in food prices. The spike, which could see food prices rise as much as 10 percent, according to analysts, has a number of locals looking to stockpile now to save later.

Youth unemployment rate to rise globally - ILO

Unemployment among young people is likely to rise globally as the euro crisis hits emerging economies and more discouraged jobless youth drop out of the labour force altogether, the International Labour Organization says.

The ILO said jobless rates among people under 25 worldwide are expected to inch up to 12.9% by 2017, up some 0.2% points from forecasts for this year, but youth in developing countries will be worst affected.

France's jobless rate reaches 10%

The number of French unemployed has broken through the 3 million barrier for the first time since 1999, the country’s leaders say.

Greek unions predict jobless rate will hit 29pc in 2013

GREECE'S largest labour union has warned that the country's unemployment will reach 29 per cent in 2013 if the government carries out more planned austerity measures, expected to exceed 11.5 billion euros ($A14.14 billion) for 2012-13.

Debt is a 4-letter word as more students say no to college loans

Debt is scaring some South Florida students: More are saying "no thanks" to taking out college loans.
Broward College, in fact, is seeing a 40 percent drop in federally subsidized loans taken out this fall – after students go through a mandatory debt management workshop and hear about what faces them once they start making payments.

Swiss Economy Plunges Due to Pressure from European Crisis

Quite unexpectedly the Swiss economy plunged in 2nd quarter as the European crisis caught up with a nation that had relatively become immune to the woes faced by its neighbours, which further justifies the cap of central bank on the stronger franc. The 0.1% shrink duplicates the emerging evidence seen in a nation like Sweden, one of the euro outsiders whose currency attracted unwelcome strength in recent times that the problems in Europe are now even hurting the nations that were resilient for all these time.

Central-Bank Gold Buying Seen Reaching 493 Tons in 2012 by GFMS

Central banks will increase gold purchases to 493 metric tons this year as they keep expanding reserves to diversify from the dollar and guard against a potential gain in inflation, Thomson Reuters GFMS said.

Eurozone demands six-day week for Greece

Greece's eurozone creditors are demanding that the government in Athens introduce a six-day working week as part of the stiff terms for the country's second bailout.

The demand is contained in a leaked letter from the "troika" of the country's lenders, the European commission, European Central Bank, and International Monetary Fund. In the letter, the officials policing Greece's compliance with the austerity package imposed in return for the bailout insist on radical labour market reforms, from minimum wages to overtime limits to flexible working hours, that are likely to worsen the standoff between the government and organised labour in Greece.

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