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Daily Digest 1/30 - Detroit Edges Closer to Bankruptcy, Can Boomers Ever Retire?
Wednesday, January 30, 2013, 12:18 PM
Economy
Catalonia asks Spain for further 9bn euros bailout
The move comes just a month after Catalonia's new leaders pledged to hold a referendum on independence.
Catalonia is prosperous and accounts for around a fifth of Spain's GDP, but faces debt repayments totalling 13.6bn euros this year alone.
The regional government said it would spend 7.7bn euros to pay down debt and the rest on meeting deficit reduction targets set by the Spanish government.
Ford worldwide pension deficit jumps to $18.7 billion
Ford Motor Co.'s pension deficit widened in 2012 by 21 percent and the Dearborn automaker vowed Tuesday to boost contributions to its under-funded pensions by $5 billion in 2013.
Despite the fact that Ford pumped $3.4 billion into its worldwide pension plans in 2012 — over the $1.1 billion it infused in 2011 — the automaker's pension plans underfunding widened.
Pa. budget chief says pension reforms essential
The public's contributions to the state's two major public pension funds is expected to increase from $1.5 billion in the fiscal year that ends in June to nearly $3 billion in 2014-15 and more than $5 billion by 2019-20. The money comes out of a state budget that is less than $27.7 billion this year.
Pimco to DoubleLine Leveraging as Yields Retreat: Credit Markets
Junk-bond yields have fallen so far that the world’s biggest debt investors are turning to borrowed money to juice returns, a practice that magnified losses during the worst financial crisis since the Great Depression...Leverage is staging a comeback for investors that oversee more than $2 trillion as speculative-grade yields reach record lows daily with the Federal Reserve holding benchmark interest rates at about zero percent for a fifth year.
With the average Baby Boomer a half-million dollars short on retirement savings, the prospects for actually retiring look slim. So what do we do about it?
Baby Boomers, forget about retirement. We'll be working for the rest of our lives.
OK, that may be an exaggeration, but not by much.
U.S. Mint Silver-Coin Sales Surge After Temporary Suspension
Global holdings of the metal in exchange-traded funds rose to an all-time high of 19,699 metric tons on Jan. 18.
“The demand for precious physical metal is surging as the continued global quantitative easing is leading to currency devaluation,” Jeffrey Sica, who helps oversee more than $1 billion as president of SICA Wealth Management, said in a telephone interview from Morristown, New Jersey. “People are realizing this is one of the best asset-classes to hold.”
Dairy farmers say price raises help, but not enough
California dairy farmers will earn a higher price for their milk starting next month as a result of a hearing decision made by the California Department of Food and Agriculture, but producers said the new prices are still not high enough to overcome soaring feed costs and other financial woes.
FICO Labs: U.S. Student Loan Delinquencies Climbing Fast, Showing No Signs of Slowing
The delinquency rate today on student loans that were originated from 2005-2007 is 12.4 percent. The comparable figure for student loans that were originated from 2010-2012 is 15.1 percent, representing an increase in the delinquency rate by nearly 22 percent.
While the delinquency rate is climbing, the average amount of student loan debt is increasing even faster. In 2005, the average U.S. student loan debt was $17,233. By 2012, it had ballooned to more than $27,253 - an increase of 58 percent in seven years.
Stamp Prices Rise As USPS Looks For Financial Footing
The agency is losing $25 million per day, it defaulted on $11.1 billion in Treasury payments, and it’s exhausted its borrowing authority.
Agency officials hope a penny more per stamp — and jumping into the packaging business full force — will help lead the Postal Service to financial stability.
Stuck in Reverse, Detroit Edges Closer to Bankruptcy
Signs of decline are everywhere - in a rising crime rate, streets without lights and block after block of abandoned buildings. The murder rate of one per 1,719 people last year was more than 11 times the rate in New York City. The jobless rate is above 18 percent, more than twice rate for the country as a whole.
Gold & Silver
Click to read the Gold & Silver Digest: 1/29/13
Provided daily by the Peak Prosperity Gold & Silver Group
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9 Comments
Wed, Jan 30, 2013 - 12:46pm
#1
China’s banking regulator warns of dangerous pileup of bad loans
Wed, Jan 30, 2013 - 1:24pm
#2
re detroit
The automakers have little to say publicly about the crisis. Most of their operations in Michigan are now outside Detroit, and getting any top executive to even discuss the possibility of a city bankruptcy was almost impossible at the auto show. “I don’t want to get into the politics,” said GM CEO Dan Akerson, while Chrysler CEO Sergio Marchionne said: “I don’t see what the consequences would be for us.”
A prime example of the utter disdain of the corporate elites whose companies were built on the backs of the very people they are now crapping on. This is beyond disgust!!! These guys better be ordering armoured cars at the auto show. Detroit is a smouldering powder-keg.
Jan
Wed, Jan 30, 2013 - 4:05pm
#3
westcoastjan wrote:
A prime
A prime example of the utter disdain of the corporate elites whose companies were built on the backs of the very people they are now crapping on. This is beyond disgust!!! These guys better be ordering armoured cars at the auto show. Detroit is a smouldering powder-keg.
Jan
I'll agree with the powder keg comment, but disagree with the rest. While everybody has been focusing on other areas of the country and their budget problems, State of MI has been trying to bail wire and duct tape Detroit together. Sheer levels of mis management have continued to drive D-Town deeper and deeper into the hole. The latest example, state is offering to lease Belle Isle, which should be the jewel of the entire community, fix it up and run it for the city. The "park" costs the city something like 8 million per year. State will take on that costs, throw even more into it, and it will not cost the city a dime, and yet they still think it's a bad deal. Public corporations do not want to get involved with a govt as disfunctional as Detroit, nor should they. I heard on the radio a woman speaking out against the park idea, "I'm ashamed to be white".
I've always said that MI and especially Detroit is the Canary in the mine. That is becoming more and more apparent. Detroit bankruptcy will be very very ugly. IMO, state is doing everything they can to avoid the inevitable, because they don't want to deal with the outcome.
I hope I'm wrong, but don't believe I am.
Wed, Jan 30, 2013 - 6:00pm
#4
I also hope you are not wrong
Hi phecksel,
You are obviously well connected to the situation and your points are good. It seems there is across the board incompetence when it comes to civic/municipal/state (or provincial) administration, with where I live being no exception. We are definitely not Detroit/MI, but do have strong headwinds coming at us, and most of the people at the helm are woefully inept and highly unlikely to make the decisions that need to be made. So as you say, the ol' duct tape tricks are used as much as possible. Governments have never been known to run things with an eye for the bottom line and/or good cost control mechanisms (what's that?!?), so there are no surprises, really, to any of this.
Somehow though I just cannot but think that for all the corporate tax breaks given to them over the years, many businesses could stand to have a bit thicker ties to their communities. You know, that thing called being a good corporate citizen...not too many of them around anymore.
Even though this situation is not resource development, it still smacks of the rape and pillage mentality, with no apolgies. As with the Romans, their greed will be their downfall.
Jan
Wed, Jan 30, 2013 - 6:45pm
#5
As with the Romans, their greed will be their downfall
I dont agree. I think that "greed" made the Roman Empire great, as greedy people worked selfishly like selfish pigs to have private property and ownership of things they wanted. lovy dovy feelings and kum ba ya hand holding did not build the Roman Empire.
Rome fell due to corruption. Only those with connections to politicians made money, cheaters were rewarded and greedy selfish people who worked hard to improve their lives were screwed by a central government.
the "rape and pillage mentality" description more accurately describes the mentality of the state towards its productive individuals
who is John Galt?
Wed, Jan 30, 2013 - 7:08pm
#6
I hear ya...
but disagree, for corruption is an end result of greed. Corruption implies "a willingness to act dishonestly in return for money or personal gain" (oxford dictionary). The greed has to exist for the corruption to arise.
I am not well read on Ayn Rand but understand your point. She was also famous for saying "Money is the barometer of a society’s virtue." I wish we could print "virtue" the way we print money. Then I would be more than happy to let the printing presses run freely.
Jan
Wed, Jan 30, 2013 - 7:25pm
#7
"Money is the barometer of a society’s virtue."
This is also true. The barometer now says that all virtue is mediated/controlled by the banksters and their particular level of greed, unchecked by a corrupt government that itself is ruled by those banksters. (the barometer also reveals that virtue is controlled by a financial pipeline between the bankers and the centrol government) No disagreement there. Its a barometer, a measuring stick. No need to create devils and angels. Yardsticks and barometers are a useful tool to understand and notions of greed and evil merely obsfucate. Religious beliefs of good and evil are not required and in fact get in the way. that is my point.
Thu, Jan 31, 2013 - 4:15am
#8
Michigan road bills propose higher gas tax, vehicle fees
Thu, Jan 31, 2013 - 10:56am
#9
Sax,
Our RINO Gov has not met
Sax,
Our RINO Gov has not met a tax increase he didn't like.
the corruption and incompetence in Detroit is of epic magnitude. The stuff that has come out of individual council members mouths is incredible. Bottom line, the city is still structured with old time structure and about twice as many employees as the population would suggested is needed..Property values have drastically fallen, while municipal wages are going up. Businesses won't invest in the community because of safety concerns... it's a perfect storm.
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