Daily Digest

Daily Digest 12/21 - States Brace For Jobless Prog Loss, 7,000 Jailed For Not Paying Fines, Homelessness A Problem In Schools

Wednesday, December 21, 2011, 10:48 AM
  • States brace for loss of extended jobless program
  • Irish rescue program ‘fragile,’ IMF says
  • ECB Invites Euro-Area Banks to Place Orders for Three-Year Cash
  • Moody's says euro crisis danger to UK top-debt grade
  • Finnish govt sees possible recession
  • Outcry as 7,000 jailed this year for not paying fines
  • Hundreds lose 911 service after thieves make off with copper phone lines
  • Europe debt crisis poses risk to U.S. banks: Fed paper
  • Investors Endure Another Disappointing Year
  • Polish Core Inflation Quickens to Fastest in Almost 10 Years
  • Canada Faces Two-Decade High Inflation With Carney on Sidelines
  • Homelessness a problem for many schools
  • UConn trustees OK 17-percent hike in school costs
  • Colleges pay presidents millions while raising tuition
  • Ohio electric bills rise 33 pct. over 5 years
  • Colo. students shoulder bigger share of public college cost
  • French Regulator Head: Keeping AAA Would Be Miracle
  • Food maker General Mills 2nd-quarter net income drops on increased costs and some charges
  • UK rail fares to increase by 5.9% from January
  • Rising coal costs to hit India power projects, says Fitch
  • Vacant Homes Pose Problems
  • Greek debt talks hit trouble as hedge fund walks out
  • Americans Shedding Debt, Led By Mortgages

Our 'What Should I Do?' guide has steps to cook, see & stay warm in times of power outage

Economy

States brace for loss of extended jobless program

The cost of the program has been falling as millions of workers have fallen off the rolls. Many of those workers stopped collecting because they found a job. Others, still jobless, have exhausted all 99 weeks of extended benefits and are now without a paycheck. Since the recession ended, the number of people collecting emergency benefits has fallen steadily, from a peak of 12 million to a just under seven million. But during that period, the unemployment rate fell by just 0.6 percent.

“Although the job market improved slightly, it seems the proportion of people finding jobs compared with the number of claimants exhausting benefits is relatively low,” the economists said.

Irish rescue program ‘fragile,’ IMF says

Ireland’s lauded rescue program is at risk of falling off track as a slowing European economy cuts into the country’s exports and sparks concern about the nation’s banking system, the International Monetary Fund reported Tuesday.

While praising Irish officials for meeting budget targets and reviving the Irish economy, the fund said that the country’s program is nevertheless in a “fragile” state. The slowdown in the rest of Europe, particularly in key trading partners such as the United Kingdom, means that economic growth for next year will fall to just 1 percent, half of what was estimated

ECB Invites Euro-Area Banks to Place Orders for Three-Year Cash

The European Central Bank invited euro-area banks to place orders for its first tranche of unlimited three-year loans, an attempt to keep credit flowing to the 17-nation economy during the sovereign debt crisis.

The Frankfurt-based ECB will lend banks as much cash as they want against eligible collateral for 1,134 days at the average of its benchmark rate over the period of the loan. Economists expect banks to ask for 293 billion euros ($383 billion), according to the median of 14 forecasts in a Bloomberg News survey. Bids must be submitted by 9:30 a.m. tomorrow, with results announced around 11:15 a.m. The loans start on Dec. 22.

Moody's says euro crisis danger to UK top-debt grade

The continuing crisis in the euro zone is also posing a threat to Britain's top debt rating as further shocks to the country's economy could derail the government's efforts to balance the budget, ratings agency Moody's said on Tuesday.

Finnish govt sees possible recession

Finland could hit recession early next year, the Finance Ministry said Tuesday, as it slashed forecasts for economic growth in 2012 to 0.4 percent from an earlier predicted 1.8 percent.

Outcry as 7,000 jailed this year for not paying fines (Ireland)

ALMOST 7,000 people have been jailed this year for failing to pay fines -- the highest figure in years.

It comes despite the introduction of new laws aimed at preventing the jailing of fine defaulters. The 6,969 jailed this year represent a 500pc increase on the numbers fined in 2007, with calls being made today on the Justice Minister to show "greater flexibility".

Hundreds lose 911 service after thieves make off with copper phone lines

The wire theft left parts of Douglas, Curry, and Coos County without phone service. Century Link owns the phone line. They were alerted to the problem at eight o'clock Sunday night after their fiber optic cable began bouncing information back. They say they traced the problem to a portion of the line just outside of Tenmile.

NewsSource 16 has been told that someone climbed a telephone pole and cut the cable, making off with an estimated six hundred feet of copper cable. In the process they damaged a fiber optic line, the only outside connection Tenmile and Camas Valley have to the outside world, including 911.

Europe debt crisis poses risk to U.S. banks: Fed paper

The European debt crisis puts U.S. banks at risk of financial contagion, and a "disorderly outcome" threatens the ongoing U.S. economic recovery, the San Francisco Federal Reserve Bank said in a research note on Monday.

"U.S. banks have mostly shed their direct exposure to European sovereign debt," Leduc wrote in the regional bank's latest FedViews publication. "But they remain subject to the risk that European trading counterparties might not be able to meet their obligations." In addition, if the European bank crisis is not contained, banks could face a deepening liquidity crunch.

Investors Endure Another Disappointing Year

For Americans saving for retirement, 2011 was another lackluster year, filled with lots of risks but few rewards.

Savers who tried to avoid risks by putting money into federally insured savings accounts earned almost no interest. The money just sat there, even as inflation ate away at its value, with consumer prices rising nearly 3.5 percent this year. And for those who invested in a broad array of U.S. stocks, the results were — at best — mixed.

Polish Core Inflation Quickens to Fastest in Almost 10 Years

Poland’s core inflation accelerated to the fastest pace since April 2002, complicating central bank efforts to promote economic growth as a weaker zloty stokes price growth. Core inflation, which excludes volatile food and fuel prices, rose 3 percent from a year earlier in November, compared with 2.8 percent the previous month, the central bank said today, matching the 3 percent median estimate of 26 economists surveyed by Bloomberg.

Canada Faces Two-Decade High Inflation With Carney on Sidelines

The cost of living for Canadians is set to grow at the fastest pace since 1991 this year as concerns about the global recovery keep Bank of Canada Governor Mark Carney from raising borrowing costs.

The annual rate of consumer price inflation has averaged 3 percent over the first 11 months of this year, according to data released today by Statistics Canada. Without a dramatic drop in December, average full-year inflation will surpass the two- decade high of 2.8 percent recorded in 2003 to become the fastest since Canada adopted inflation targets two decades ago.

Homelessness a problem for many schools (Michigan)

The number of Michigan students without a permanent address has risen dramatically as families lose homes through foreclosure and other strife, a newspaper reported Sunday. More than 31,000 students were considered homeless during the 2010-11 school year, compared to 7,500 during the 2007-08 year, the Detroit Free Press reported, citing statistics from the Michigan Department of Education.

UConn trustees OK 17-percent hike in school costs

University of Connecticut trustees voted without dissent Monday to approve an increase in tuition and other student costs totaling 17 percent, which will be phased in over four years starting next fall under a plan to hire more faculty.

The measure approved on a voice vote is designed to raise about $50 million by increasing tuition and other fees by between 6 percent and 6.8 percent annually, from the current level of $10, 670 for an in-state student to $11,902 next year and $13,130 in the 2016 fiscal year. Room and board also will increase by 3 percent each year.

Colleges pay presidents millions while raising tuition

Quinnipiac University, located in Hamden, Conn., is in the same boat. Its president, John Lahey, made $1.2 million in 2009, including base pay of $760,706, according to tax documents. Meanwhile, the college raised tuition and fees nearly 5% that year, and more than 5% each year after. Students now pay $36,130 a year to attend. Emory University, in Atlanta, and Houston-based Rice University also paid their presidents more than $1 million in 2009 while raising tuition nearly 5%. Both schools have also hiked tuition during the past two years.

As student loan debt continues to grow and students storm campuses across the country to protest the surging cost of tuition, college presidents' big paychecks are adding fuel to the fire, said Sara Hebel, a senior editor at the Chronicle of Higher Education, which recently published its annual survey of CEO compensation among private colleges.

Ohio electric bills rise 33 pct. over 5 years

Ohio electric rates, relatively steady in the past, have jumped by one-third over five years, a newspaper reported Tuesday based on its analysis of federal data. Power companies said recent price increases reflected higher fuel and other costs.

The state's average residential price for power increased 33 percent between 2005 and 2010, representing a change from earlier decades when rates remained fairly stable, The Dayton Daily News reported Tuesday

Colo. students shoulder bigger share of public college cost

As state lawmakers contemplate another round of budget cuts for higher education, officials say the students are picking up a bigger portion of the cost than ever. A decade ago, the state picked up more than two-thirds of the cost of providing public college courses.

Today, the students pay two-thirds, and the state picks up one-third. Some officials fear the state's share may eventually become zero.

French Regulator Head: Keeping AAA Would Be Miracle

The head of France's stock market regulator Tuesday warned of far-reaching repercussions if France loses its triple-A credit rating but held out little hope

Food maker General Mills 2nd-quarter net income drops on increased costs and some charges

General Mills, which makes foods such as Cheerios cereal, Nature Valley granola and Hamburger Helper, remains one of the most popular food brands in grocery stores. But like most of its peers, it has struggled with higher costs for everything from ingredients to labor. The company forecast inflation cost increases of 10 percent to 11 percent for the year and has raised its prices to offset that pressure.

UK rail fares to increase by 5.9% from January

Passenger groups and green campaigners reacted with outrage after train operators announced above-inflation fare increases of 5.9% in 2012 that added to the twin pressures of higher prices and stagnant wages bearing down on millions of Britons.

The rise in fares add to a slew of statistics that point to a further squeeze on living standards next year amid high fuel costs, rising unemployment and a UK economy close to a double-dip recession, with the gap between wages and prices at its widest point since the early 1980s.

Rising coal costs to hit India power projects, says Fitch

The rising cost of imported coal, coupled with a weakening rupee, could force some Indian power projects to default on their debt obligations, ratings agency Fitch said on Tuesday.

Fitch estimated that the average cost of generation could rise to 4.41 rupees (8 cents) per kilowatt hour for projects relying entirely on imported coal, from the current average of 2.29 rupees, if current trends continue. Coal accounts for 55 percent of India's power generation capacity of 182,344 megawatts.

Vacant Homes Pose Problems (Las Vegas)

Nancy Espinoza has lived in her home for 10 years. She lives just down the block from the abandoned home that caught fire over the weekend.

"This one has been vacant for three or four years now and full of people coming in and out every single day, different people, there's broken windows and they throw bottles," said Espinoza.

She says the foreclosure crisis has forced her and her neighbors to watch the potential crime magnets. "It is our responsibility because we got kids. I can't trust my kids to be in the backyard because you never know who's next door to you."

Greek debt talks hit trouble as hedge fund walks out

Talks over restructuring part of Greece's massive public debt ran into trouble on Tuesday as one fund walked away from negotiations, fuelling growing doubts about whether a deal that is crucial to a new bailout agreement can be reached this year.

Vega Asset Management, a Madrid-based fund, resigned from the steering committee representing private creditors negotiating a voluntary restructuring of Greek government bonds, two sources familiar with the situation said.

Americans Shedding Debt, Led By Mortgages

Consumers just aren't borrowing like they used to. According to the Federal Reserve, total household debt is falling—albeit slowly—a sign that Americans are chipping away at debt racked up during the boom years.

But don't cheer just yet. Although consumers shaved off nearly $40 billion from the collective debt tab in the third quarter of 2011, they still owe more than $13 trillion dollars leftover from the borrowing binge, which includes everything from credit cards to auto loans to mortgages.

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."

13 Comments

saxplayer00o1's picture
saxplayer00o1
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Tall's picture
Tall
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Posts: 564
Russia oil spills wreak devastation

Environmentalists estimate at least 1 percent of Russia's annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world's largest oil producer, responsible for 13 percent of global output.

Oil spills in Russia are less dramatic than disasters in the Gulf of Mexico or the North Sea, more the result of a drip-drip of leaked crude than a sudden explosion. But they're more numerous than in any other oil-producing nation including insurgency-hit Nigeria, and combined they spill far more than anywhere else in the world, scientists say.

http://www.boston.com/business/articles/2011/12/17/ap_enterprise_russia_oil_spills_wreak_devastation/

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Tall
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Study - Nigerian children died from families’ gold mining

Large numbers of infants and toddlers have died from lead poisoning in Nigerian villages where their parents process gold ore inside their family compounds, according to a report published Tuesday by an international team of researchers. In two Nigerian communities, 118 children under the age of 5 died in a single year – 25 percent of the children in that age group. For the first time, the researchers uncovered strong evidence that points to lead poisoning as the likely cause for nearly all of those deaths. “To our knowledge, this is the first documentation of an outbreak of childhood lead poisoning associated with artisanal gold mining,” the team, led by lead experts from the U.S. Centers for Disease Control and Prevention, wrote.

http://www.environmentalhealthnews.org/ehs/news/2011/nigerian-children-die-from-lead-poisoning

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rjs
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re: GSEs Held $2 Trillion in Subprime Loans

re: GSEs Held $2 Trillion in Subprime Loans at Height of Financial Crisis

"according to Edward Pinto of the American Enterprise Institute"

NYTimes answering that:

An Inconvenient Truth -  Over at the conservative American Enterprise Institute, two resident scholars, Peter Wallison and Edward Pinto, have concocted what has since become a Republican meme: namely, that Fannie Mae and Freddie Mac were ground zero for the entire crisis, leading the private sector off the cliff with their affordable housing mandates and massive subprime holdings.  The truth is the opposite: Fannie and Freddie got into subprime mortgages, with great trepidation, only in 2005 and 2006, and only because they were losing so much market share to Wall Street. Among other things, the Wallison-Pinto case relies on inflated data — Pinto classifies just about anything that is not a 30-year-fixed mortgage as “subprime.” The reality is that Fannie and Freddie followed the private sector off the cliff instead of the other way around.

there was also a study on the housing bubble from the NY Fed a couple weeks ago, entitled “Real Estate Investors, the Leverage Cycle, and the Housing Crisis", a long 52 page PDF including graphics; there was also a shorter summary of it on the NY Fed blog, titled “Flip This House”: Investor Speculation and the Housing Bubble; in it they document the considerable leverage being used by investors in housing as prices rose through the middle of the decade, and the subsequent cascading defaults by those investors as housing prices collapsed...the number of multiple mortgagees got as high as 35% nationally, and nearly 45% in the bubble states in 2006; far more than could be accounted for by the handful of people who may have purchased a second vacation home; in fact almost 20% of mortgages originating in the bubble states were from borrowers with 3 or more home loans on their credit reports...

 

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Poet
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WSJ: The GOP's Payroll Tax Fiasco

Wall Street Journal slammed the House Republicans today on the payroll tax cuts issue...

The GOP's Payroll Tax Fiasco (December 21, 2011)
"GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest. The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play... Senate Republicans say Mr. Boehner had signed off on the two-month extension, but House Members revolted over the weekend and so the Speaker flipped within 24 hours. "
http://online.wsj.com/article/SB1000142405297020479110457711057386706470...

Main task isn't jobs, or the economy, or tax cuts, apparently. Main task is making sure Obama isn't re-elected?

Poet

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Poet
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Read This In Barron's: Cost of Iraq and Afghan Wars...

An incidental side note in an regular column in Barron's about recent market activity.

"...the combined wars in Iraq and Afghanistan will carry, according to estimates gathered from knowledgeable sources by Market Watch, an eventual price tag of $4 trillion to $6 trillion. Wars have an exceedingly long tail. The cost for Vietnam vets didn't peak until three or four decades after we pulled out."
- Alan Abelson in Barron's, December 19, 2011

Source: http://online.barrons.com/article/up_and_down_wall_street.html

$4 to $6 trillion dollars. That's more debt on the way, folks!

Poet

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saxplayer00o1
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Italian banks tap 116 billion euros of ECB loans

"More than a dozen Italian banks, including top lenders UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), tapped 116 billion euros ($143.52 billion) of new three-year loans offered by the European Central Bank, nearly a quarter of the total, three sources with direct knowledge of the matter told Reuters.

The ECB's first ever offer of three-year loans on Wednesday drew demand for a massive 489 billion euros from 523 banks, raising hopes a credit crunch can be avoided and that the money could be used to buy Italian and Spanish bonds.

"It's a 116 billion euros," one senior banking source told Reuters. Two other sources confirmed that amount.

The Italian figure includes 40.4 billion euros of state-backed bank bonds which were used as collateral for the loans. But banks could also offer other types of collateral for the ECB loans, such as government bonds for example."

 

 

The Daily History of the Debt Results

Historical returns from 12/15/2011 through 12/20/2011

The data for the total public debt outstanding is published each business day. If there is no debt value for the date(s) you requested, the value for the preceding business day will be displayed.

( Debt Held by the Public vs. Intragovernmental Holdings )

 

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
12/15/2011 10,438,188,563,266.29 4,659,909,923,522.53 15,098,098,486,788.82
12/16/2011 10,438,212,605,541.41 4,661,284,854,816.17 15,099,497,460,357.58
12/19/2011 10,438,496,162,212.83 4,665,558,505,478.65 15,104,054,667,691.48
12/20/2011 10,438,749,210,895.60 4,693,230,053,393.20 15,131,979,264,288.80
saxplayer00o1's picture
saxplayer00o1
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Fitch again warns U.S. debt burden threatens AAA rating

"NEW YORK (Reuters) - Fitch Ratings on Wednesday warned again that the United States' rising debt burden was not consistent with maintaining the country's top AAA credit rating, but said there would likely be no decision on whether to cut the rating before 2013.

Last month, Fitch changed its U.S. credit rating outlook to negative from stable, citing the failure of a special congressional committee to agree on at least $1.2 trillion in deficit-reduction measures.

"Federal debt will rise in the absence of expenditure and tax reforms that would address the challenges of rising health and social security spending as the population ages," Fitch said in a statement.

"The high and rising federal and general government debt burden is not consistent with the U.S. retaining its 'AAA' status despite its other fundamental sovereign credit strengths," the ratings agency said."

 

phecksel's picture
phecksel
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Poet wrote: Wall
Poet wrote:

Wall Street Journal slammed the House Republicans today on the payroll tax cuts issue...

T

As I heard it today, senate wanted a 2 month kick the can, and was proposing $100+ per person, where the house wanted $1,000 per person cuts. 

I am getting so tired of these unqualified nincompoops that are too busy turf fighting to even think about fixing the problem.

phecksel's picture
phecksel
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Posts: 204
rjs wrote:there was also
rjs wrote:

there was also a study on the housing bubble from the NY Fed a couple weeks ago, entitled “Real Estate Investors, the Leverage Cycle, and the Housing Crisis", a long 52 page PDF including graphics; there was also a shorter summary of it on the NY Fed blog, titled “Flip This House”: Investor Speculation and the Housing Bubble; in it they document the considerable leverage being used by investors in housing as prices rose through the middle of the decade, and the subsequent cascading defaults by those investors as housing prices collapsed...the number of multiple mortgagees got as high as 35% nationally, and nearly 45% in the bubble states in 2006; far more than could be accounted for by the handful of people who may have purchased a second vacation home; in fact almost 20% of mortgages originating in the bubble states were from borrowers with 3 or more home loans on their credit reports...

BS, unfettered BS.  I did a term paper on "bubbles" for my MBA finance class.  This stuff has been going on since late 90's.

www.jparsons.net/housingbubble/

Damnthematrix's picture
Damnthematrix
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Hungary Hit by Second Rating Downgrade

http://www.bloomberg.com/news/2011-12-21/hungary-downgraded-to-bb-by-s-p.html

Hungary Hit by Second Rating Downgrade to Junk on Premier Orban's Policies

Hungary Downgraded to BB+ From BBB- by Standard & Poor's

Hungary lost its investment-grade rating at Standard & Poor's, the second such downgrade in a month, increasing pressure on Premier Viktor Orban to obtain an International Monetary Fund backstop and reverse policies.

The country's long- and short-term foreign- and local- currency sovereign credit ratings were cut one step to BB+ from BBB-, the company said yesterday in a statement. S&P, which awarded Hungary its investment grade in 1996, assigned a negative outlook. Moody's Investors Service lowered its assessment to Ba1, the highest junk grade, on Nov. 24, while Fitch Ratings has assigned its lowest investment grade, BBB-.

The IMF and the European Union suspended talks over an aid package to Hungary, citing concerns about the government's plans for a central bank law they say may curb monetary-policy independence. Hungary will have the highest debt level and slowest economic growth among the EU's eastern members next year, the European Commission forecast on Nov. 10. IMF backing would bolster policy credibility, S&P said.

Arthur Robey's picture
Arthur Robey
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Shes back

 Lauren Lister interviews Prof Steve Keen. (Cut the good Prof some slack, he is up way past his bedtime)

http://www.youtube.com/watch?feature=player_detailpage&v=Zm9c-zmK_N8

Arthur Robey's picture
Arthur Robey
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Posts: 3936
AAA for Australia.

Others might be worried about the credit rating of their country but here in Australia we have an AAA.

Wot? Me , worry?

As I told my apprentice, if you are been given re-assurances by the powers that be that everything is hunky dory, run to the bank and withdraw everything.

You won't get a stronger signal.

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