Daily Digest

Daily Digest 1/12 - Food Prices to Soar, Portugal Debt Woes Grow, Restaurants Could Be Food Stamp Option

Wednesday, January 12, 2011, 11:00 AM
  • US EIA Jan Outlook: Sees Oil Prices At $99 By End-2012
  • Governor To Disconnect 48,000 Cellphones In Hands Of State Workers (California)
  • Food Prices To Soar
  • Christie Calls for New Jersey Pension Overhaul, Education Cuts
  • Fiscal Challenges Deepen For Md. Lawmakers
  • Japanese Pledge Eases Tension In European Markets
  • Newark Losing Police Horses Due To Budget Woes
  • Atlantic City Casino Revenue Falls To $3.57bn In 2010
  • Villaraigosa Threatens Layoffs And Furloughs (Los Angeles)
  • Portugal Debt Woes Grow As Economy Now Seen Shrinking In 2011
  • Texas’s Perry Faces Record Budget Gap on Revenue Drop
  • Restaurants Could Be Food Stamp Option For Some (San Diego)

Our 'What Should I Do?' guide offers tips for how to stay healthy in an emergency.

Economy

US EIA Jan Outlook: Sees Oil Prices At $99 By End-2012

EIA expects a continued tightening of world oil markets over the next 2 years. World oil consumption grows by an annual average of 1.5 million barrels per day (bbl/d) through 2012 while the growth in supply from non-Organization of the Petroleum Exporting Countries (non-OPEC) countries averages less than 0.1 million bbl/d each year. Consequently, EIA expects the market will rely on both inventories and significant increases in production of crude oil and non-crude liquids in OPEC member countries to meet world demand growth.

Governor To Disconnect 48,000 Cellphones In Hands Of State Workers (California)

Alarmed at discovering that the state pays for 96,000 cellphones, Gov. Jerry Brown issued an executive order Monday seeking to cut in half the number of devices being billed to taxpayers. Requiring 48,000 cellphones to be turned in by June 1 will save the state about $20 million a year. “It is difficult for me to believe that 40% of all state employees must be equipped with taxpayer-funded cellphones,” Brown said. “Some state employees, including department and agency executives who are required to be in touch 24 hours a day and seven days a week, may need cellphones, but the current number of phones out there is astounding.”

Food Prices To Soar

Food will become much more expensive in the next decade thanks to a burgeoning middle class around the world, according to a new consumer report from Deloitte Touche Tohmatsu. “Greater consumption leads to a greater strain on resources,” says the Consumer 2020 report, presented this week at the National Retail Federation in New York. “Without sustainable consumption, it will become increasingly difficult to meet the collective expectations and aspirations of the world’s new consumers.”....Last year, U.S. wheat futures prices jumped 47%, corn climbed above 50% and soybeans rose 34%. In addition to bad weather, increased Asian demand is fuelling the spike; it is predicted China will buy 60% of the global trade in soybeans in 2011-2012 twice what it purchased of the commodity just four years ago.

Christie Calls for New Jersey Pension Overhaul, Education Cuts

Christie may face a deficit next year equivalent to more than a third of his current $29.4 billion budget, the nonpartisan Office of Legislative Services projected in July. This fiscal year, which ends June 30, he closed a record $10.7 billion gap by slashing school and municipal aid and skipping a $3 billion pension payment. Pension Gap New Jersey’s pension-funding gap increased $8.05 billion, or 18 percent, this year to $53.9 billion, from $45.8 billion as of June 2009. Christie, in a Jan. 4 interview, said the deficit would have grown even if he made the recommended payment. He said his ability to make a partial payment of $512 million next fiscal year will depend on the state’s financial condition.

Fiscal Challenges Deepen For Md. Lawmakers

Maryland’s $1.6 billion shortfall for the next fiscal year is presenting an increasingly difficult challenge for Gov. Martin O’Malley and lawmakers after four years of tough budget conditions. The Maryland General Assembly’s 90-day session begins Wednesday. O’Malley, who was re-elected in November, says the new budget is the most difficult he has ever put together. He says he’s balancing the budget entirely with cuts, and plans to submit his proposal to lawmakers later this month. While the state has contended with bigger shortfalls under O’Malley, the state does not have federal stimulus money this time to help soften the blow.

Japanese Pledge Eases Tension In European Markets

Japan's pledge to support Europe's bailout efforts helped ease the pressure on markets Tuesday ahead of a Portuguese bond auction that may show whether the highly indebted nation needs a bailout soon. The news from Japan gave investors much-needed relief as they face a string of crucial European government debt sales. Portugal plans a bond auction of a little over euro1.2 billion ($1.55 billion) Wednesday, followed by bigger issues Thursday from Spain and Italy. Earlier short-term bill auctions from Greece and Italy went through fairly smoothly..... Minister Yoshihiko Noda announced Tuesday that his country is "considering buying more than 20 percent of bonds" issued by Europe's bailout fund to pay for Ireland's rescue.

Newark Losing Police Horses Due To Budget Woes

The Newark, N.J., police department is disbanding its 120-year-old mounted unit this month, sending its 18 crime-fighting steeds to pasture or other cities' mean streets. "Because of monetary issues we have to do what we have to do," Det. Josephine Santaniello, a police spokeswoman, said on Tuesday. The mounted unit's 16 police officers are being reassigned to squad cars and foot patrol in Newark, which consistently ranks among the 30 most dangerous cities in America, according to CQ Press, which tracks crime statistics.

Atlantic City Casino Revenue Falls To $3.57bn In 2010

Since hitting a $5.2 billion peak in 2006, Atlantic City’s casinos have continued four years of steady decline to reach $3.57 billion of revenue in 2010. Although last year’s 9.6% fall was below the record 13% drop in 2009, the dismal situation has left Atlantic City’s casinos struggling to survive, with 6 of the 11 casinos having had to restructure their debt or declare bankruptcy during the economic crisis. If that wasn’t bad enough, there would seem to be little hope for improvement just yet with casino consulting firm Spectrum Gaming Group predicting more bad news for the year ahead. As Spectrum explains: “Our projection of $3.1 billion in gaming revenue for Atlantic City in 2011 is down 40.8 percent, or a staggering $2.13 billion, from its historical peak year of 2006.”

Villaraigosa Threatens Layoffs And Furloughs (Los Angeles)

The city is trying to cope with a $62million shortfall in this year's budget and prepare for another $348 million deficit next year. It will bring to more than $1 billion the amount cut from the budget in the past four years.... As the council reviewed the various options to reduce budgets of individual departments, Councilman Bill Rosendahl asked for a report on how many city workers are paid more than $200,000 a year. He also asked if those making more than that amount would agree to a voluntary pay cut. City Council members are paid $178,000 a year.

Portugal Debt Woes Grow As Economy Now Seen Shrinking In 2011

Portugal’s prime minister Jose Socrates insists his country doesn’t need a bailout and is cutting its debt faster than promised. However, his comments fall on deaf ears as the country's central bank now expects the country to fall back into recession next year. In its latest quarterly update, the Banco de Portugal says it thinks the economy will shrink 1.3% in 2011 as the far-reaching spending cuts announced by the government begin to take their toll. In the previous bulletin it said the economy would not grow this year.

Texas’s Perry Faces Record Budget Gap on Revenue Drop

The second-most-populous U.S. state planned to spend about $86 billion in the two years through August, including more than $6 billion in federal economic-stimulus money that is winding down, Combs said. With a growing population, Texas will need about $99 billion to keep services at current levels, which suggests a $27 billion funding gap, Dick Lavine, a senior analyst with the Center for Public Policy Priorities in Austin.

Restaurants Could Be Food Stamp Option For Some (San Diego)

A slice of the county's food stamp recipients soon may be able to redeem their benefits at area restaurants should a proposal supported by San Diego County Supervisors Bill Horn and Ron Roberts and initiated by a local restaurant association gain favor Tuesday. The number of people receiving food stamps countywide has spiked by 79 percent in two years to 210,000, according November 2010 figures provided by the county.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

8 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4060
Re: Daily Digest 1/12 - Food Prices to Soar, Portugal Debt ...

"Illinois had $64 billion in pension assets to pay estimated liabilities of $126.4 billion to 723,000 retirees and beneficiaries, according to bond documents in June. Senate President John Cullerton said the higher income tax will eliminate the need to borrow for next year’s pension payments.

The bond and tax measures were intended to help close a $13 billion budget deficit. Business leaders warned that a failure to adequately fund pensions would leave the retirement plans out of money to pay promised benefits before 2020."

"Evergreen Solar Inc. will eliminate 800 jobs in Massachusetts and shut its new factory at the former military base in Devens, just two years after it opened the massive facility to great fanfare and with about $58 million in taxpayer subsidies."

"The Oakland Police Department will confront an old problem in the New Year: how to staff an under-strength department in a city with a $32 million budget deficit. As of December 2010, OPD had 656 officers, 54 fewer than the authorized 723 officers, and well under the thousand officers Police Chief Anthony Batts says he needs to properly police Oakland. That number is expected to shrink even further following the City Council’s statement that the city only has money to pay for 637 officers in 2011."

"PATERSON – Mayor Jeffery Jones proposes laying off 150 police officers, demoting 51 others and shaving three hours off the work week in an attempt to close an unprecedented $54 million deficit.

“This is not a smoke-and-mirrors situation where we tell you the sky is falling. It has fallen,” Jones said at a special meeting of the City Council on Tuesday evening.

Residents would face a rise of nearly 50 percent in the municipal tax rate if no cuts are made, leading to much public angst over the city’s proposed $251 million spending package."

"The Detroit Public Schools' emergency financial manager has submitted a sweeping plan that would close half of the district’s existing schools, increase high school class sizes to 62 and consolidate administration under the city or the countywide education agency.

Robert Bobb's plan to wipe out a $327 million deficit, submitted to the Michigan Department of Education on Monday, also calls for layoffs soon -- the elimination of at least 249 positions this school year on the heels of a teacher shortage.

The new plan would put DPS in the black by 2014 and assumes the district will lose another 20,000 students by 2013 – down to 58,570 from about 175,000 in 1999. "

"Anyone who bought property before the boom and has held onto it has some idea how Clark County leaders feel as they go about building a budget for the upcoming fiscal year: A key piece of their portfolio — property tax revenue — is worth far less than it was 12 months ago.

Property tax revenue, which makes up a third of the county’s general fund, is expected to fall to 2006 levels at best. County officials are estimating a $75 million drop, a significant portion of the county’s $1.1 billion budget."

Property

 

  • Other news:

Thousands of families to lose welfare benefits in Los Angeles

Illinois lawmakers pass massive tax hikes

Chicago's Downgraded Bond Rating Means Trouble for O'Hare Modernization

Sovereign default remains top 2011 risk for WEF

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4060
Re: Daily Digest 1/12 - Food Prices to Soar, Portugal Debt ...

"(Reuters) - Home prices fell for the 53rd consecutive month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.

Home prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company said in a report on Monday. Prices fell 0.8 percent over the month."

portals's picture
portals
Status: Member (Offline)
Joined: Apr 20 2009
Posts: 22
Thousands of families to lose welfare benefits in Los Angeles

While this article applies to an area that is limited to Los Angeles, it could, very well, be the first round in a group of actions that could be taken in every State shortly if it goes through.

It applies to the CALper's welfare to work program. These families do not fit into the typical stereotyped welfare recipient who doesn't want to work. They were actively searching for work, and CALper's helped them by providing daycare, and training. Many I suspect, were part of the new 99er bunch we've heard about whose unemployment insurance ran out. Here is a direct link to the CALpers program website.

http://www.cdss.ca.gov/cdssweb/pg141.htm

This is a win-win scenario for the California and Federal governments. The State government can reap a windfall expense reduction, and the Federal government's unemployment rate won't jump one millionth of one percent because these people were not counted in the first place, so their predicament of being thrown back into the mix will have no effect, except, perhaps, on the roles of the homeless in the future.

It was mentioned in the article that these people would be eligible for County Welfare aid, but California's county governments are so strapped now that they can't even manage to pay their current debts, much less this additional burden. This is a really bad situation, and it will be much worse if other states like NY undertake similar actions.

What's really strange about this article is that it did not come from an American news outlet. It came from Xinhua, a Chinese news service. Wonder why?

Hagen's picture
Hagen
Status: Member (Offline)
Joined: Jan 7 2011
Posts: 11
Re: Daily Digest 1/12 - Food Prices to Soar, Portugal Debt ...
saxplayer00o1 wrote:
  • Japanese Pledge Eases Tension In European Markets

Wtf? I might be wrong, but isn't Japan almost broke since two decades? I don't wan't to be to pessemistic but there is this little, critical guy inside me, shouting: "FAIL"

tripp's picture
tripp
Status: Member (Offline)
Joined: Nov 11 2010
Posts: 4
Re: Daily Digest 1/12 - Food Prices to Soar, Portugal Debt ...

Hungry people do crazy things...

Unrest spreads in Tunisia as protests hit capital
http://www.english.rfi.fr/node/69632

And allegedly in Morocco:

Fortunately, events like this will never happen in the US.  /sarcasm

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Give Jerry Brown Some Respect

 

People didn't think Jerry Brown could cut costs. But I remember reading stories of how, back in the 1970s, he lived in an apartment in Sacramento instead of the Governor's mansion, and drove his Plymouth to work instead of riding a chauffered limo.

Upon taking office this year, he's eliminated the "Office of the First Lady" and cut his own office's budget by 20%, has called for half the state's cell phones to be turned in, is cutting state worker pay by 10%, and is requiring all 13,000+ state vehicles' purpose and necessity be "rejustified".

And he's putting the taxation choice to voters: raise taxes or cut services deeper.

Gov. Jerry Brown's proposed state budget
We've had 10 years of gimmicks and tricks,” he said. “All of that puts us in a mess. It's not honest, and we are now going to make it transparent as possible. It is better to take our medicine now and get the state on a balanced footing.
http://documents.latimes.com/jerry-brown-proposed-budget-2010-2011/

Just to give an idea of the budget deficit: even if funding for all state prisons and state universities were cut in half, there'd still be a big huge hole in the deficit.

Poet

 

SteveW's picture
SteveW
Status: Gold Member (Offline)
Joined: Jan 21 2010
Posts: 490
Re: Daily Digest 1/12 - Food Prices to Soar, Portugal Debt ...

Evans-Pritchard of the Telegraph is one commentator who considers Portugal to be following Ireland's path to a bailout in the next few weeks. At least he has the honesty to point out that, like the other bailouts, the beneficiaries are not the countries themselves but their creditors.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100009218/the-dam-breaks-in-portugal/

Nothing solved, nothing changed, until creditors take haircuts and this is unwound. Catastophe now or total financial armageddon later.

 

Peter Smith's picture
Peter Smith
Status: Bronze Member (Offline)
Joined: Mar 28 2009
Posts: 41
Re: Daily Digest 1/12 - Food Prices to Soar, Portugal Debt ...

Absolutely correct!  The bailouts are only there to keep the interest payments flowing to the creditors while adding a greater burden onto the people thus making the entire population debt slaves!  What a clever form of slavery...no requirement to provide for but certainly an ability to benefit from the people and in perputuity if the monsters have their way.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments