Daily Digest

Daily Digest 12/22 - Greece's Debt Ratings, Cuts in Education Funding, Tax Hikes in Russia

Wednesday, December 22, 2010, 12:00 PM
  • Greece's Debt Ratings Put On Watch by Fitch for Possible Downgrade to Junk
  • Employers Seek To Avoid Higher State Taxes On Jobless Benefits
  • $305 On Gas This Month - Bah! Humbug!
  • Municipal Bond Sales Hit Record In 2010
  • EU's Rehn Vows To Contain Debt "Forest Fire"
  • Mayors Issue Annual Report on Hunger, Homelessness in 27 Major Cities
  • Maryland Considering Cuts To Education Funding
  • Miami-Dade Mayor Faces Recall After Property Tax Raised to Balance Budget
  • Prison Budget Cuts (Washington)
  • Parking Meter Hike Set for January (NY)
  • Russia Will Need to Hike Tax, VAT Most Likely
  • Prostitution Arrests Plunge Amid Sacramento County Budget Cuts
  • Colorado's Assessed Property Values Projected To Drop For The First Time Since The Late 1980S
  • Hay Springs Schools will move to 4-day week (Nebraska)

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Economy





Greece's Debt Ratings Put On Watch by Fitch for Possible Downgrade to Junk

Greece may have its credit rating cut to non-investment grade by Fitch Ratings within six weeks after a review of the nation’s “fiscal sustainability.” 
The assessment will focus on government measures to lower the budget deficit, the economic outlook and the “political will and capacity of the Greek state” to push through austerity measures, the company said in a statement today. Greece is rated BBB- at Fitch, its lowest investment-grade rating. 
Fitch said it expects the review to be completed in January and there is a “heightened probability” of a downgrade. 

Employers Seek To Avoid Higher State Taxes On Jobless Benefits

As U.S. employers brace for higher state unemployment insurance taxes next year, business groups are urging Congress to delay interest penalties on $42 billion states have borrowed to continue paying jobless benefits during the recession.
Thirty states and the Virgin Islands have exhausted their unemployment insurance trust fund reserves and are using U.S. treasury funds to maintain benefit checks for millions of workers who lost jobs through no fault of their own.
So far, only Maryland, New Hampshire, South Dakota and Tennessee have paid back their loans in full, according to the National Conference of State Legislatures. California, with an unemployment rate of 12.4 percent, leads all borrowers with more than $9.1 billion owed. Hard-hit Michigan is a distant second and owes more than $3.8 billion. 
A provision of the stimulus bill waived interest on the loans for the past two years, but that respite expires on Dec. 31 and interest begins accruing on the outstanding loans in 2011.

$305 On Gas This Month - Bah! Humbug!

Holiday shoppers will need to bump up their budget for one purchase this year, and they can't even put it under the tree: gasoline. The price of fuel is up 13.6% from last December and 76% higher from December 2008, according to a new study from the Oil Price Information Service. Nationwide, drivers spent $305 on gasoline in December.


Municipal Bond Sales Hit Record In 2010

States and local municipalities sold more debt in 2010 than any prior year, boosted in large part by sales of taxable Build America Bonds before the program expires at the end of this month. Sales of municipal bonds rose to $424.8 billion this year, topping the prior record of $424.2 billion set in 2007, Thomson Reuters said Tuesday. Nearly a third of the sales -- $116.3 billion -- were BABs, a federally-subsidized form of taxable muni bonds that issuers have liked. In 2009, municipal bond sales totaled $406.8 billion.

EU's Rehn Vows To Contain Debt "Forest Fire"

Olli Rehn, the EU's economic and monetary affairs commissioner, told Reuters Insider Television in an interview on Tuesday that the European debt crisis was akin to a "forest fire," and said the EU was determined to contain the fire.....On the chance of the EU expanding the size of its fund used to bail out euro zone countries, the European Financial Stability Facility (EFSF), Rehn hinted discussions were still ongoing.
"My principle is that it's always better to prepare first before you announce something public," he said.

Mayors Issue Annual Report on Hunger, Homelessness in 27 Major Cities

Every city surveyed reported that requests for emergency food assistance increased by an average of 24 percent across the cities over the past year. Among those requesting emergency food service, 56 percent were families and 30 percent were employed. When asked to report on the three main causes of hunger, respondents cited unemployment, housing costs and low wages.

Maryland Considering Cuts To Education Funding

Gov. Martin O'Malley is considering a 5 percent across-the-board cut in state aid for public education.State Budget Secretary T. Eloise Foster has proposed the cut, which the governor's office says would save more than $200 million. Maryland is facing a $1.3 billion budget shortfall in the upcoming fiscal year.

Miami-Dade Mayor Faces Recall After Property Tax Raised to Balance Budget

Miami-Dade joins Omaha, Nebraska and Chattanooga, Tennessee in mayoral recall attempts after proposed levy increases. The increase in the property-tax rate follows a 22 percent slump in the county’s taxable-property values from 2007 to 2010, according to documents provided by the property appraisers’ office. The county closed budget gaps of $1 billion in the past four years as revenue declined, Alvarez said.

Prison Budget Cuts (Washington)

KEPR is digging deeper into the budget cuts proposed for Washington State. $55 Million is expected to be slashed from the Department of Corrections. Tough times call for tough measures. Right now, Governor Chris Gregoire wants to cut $42 million from spending on prisons and inmate health care over the next couple years.


Parking Meter Hike Set for January (NY)

First, it was a subway fare hike. Then it was an increase in tolls for the city's bridges and tunnels. Now comes word that starting Jan. 3, motorists looking for a parking space along retail strips from Northern to Bell Boulevard will also soon feel the pinch.
Citing a tightening budget outlook, the city Department of Transportation will raise parking meter rates across the five boroughs. Instead of getting 20 minutes for every 25 cents, motorists will only get 15 minutes..."The city is making it impossible for people to live, work and have a life in the city of New York," Halloran said. "At some point, we have to say enough is enough and stop taxing the citizens."


Russia Will Need to Hike Tax, VAT Most Likely

Russia's rising budget spending — likely to be exacerbated by 2011-12 elections — will make tax hikes unavoidable, with value added tax likely to be raised first, Deputy Finance Minister Sergei Shatalov said in an interview. 
Russia delayed some tax hikes during the crisis of 2008-09, as the government kept spending high in a bid to drag the economy out of recession, plunging its finances into the red after a decade of budget surpluses. 
But with the economy now back on track, the social security levy is set to rise from Jan. 1 despite protests from business, and, according to Shatalov, further tax increases will follow.

Prostitution Arrests Plunge Amid Sacramento County Budget Cuts

Prostitution-related arrests have fallen almost 50 percent in Sacramento County since 2008, according to a Bee analysis of arrest data. With budgets tight, police and sheriff's officials have redeployed resources to crimes deemed higher priority; local authorities this year have made, on average, less than one prostitution-related arrest a day.

Colorado's Assessed Property Values Projected To Drop For The First Time Since The Late 1980S

Assessed property values in Colorado are expected to fall for the first time since the late 1980s.
The latest forecast from legislative economists projects that overall assessed property values will drop 5.3 percent this year. Assessed values are expected to dip another 6.9 percent next year.

Hay Springs Schools will move to 4-day week (Nebraska)

One local school will make a drastic change in its school calendar next year to help combat budget issues.The Hay Springs school board voted unanimously last week to move to a four-day school week for the 2011-12 academic year. Superintendent Steve Pummel said the switch will save the district money and should have attendance and academic benefits as well.“None of us (school districts) are rich,” Pummel said. “We cannot go to our taxpayers and say we need to increase property taxes. We need to do some things at home first.”State aid to education will fall drastically over the next two years as stimulus funds run out, and districts across the state are preparing for 10-20 percent in cuts. 


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."

15 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

"Russia scrapped a sale of ruble bonds for the second time this month as the prospect of rising interest rates sent yields to the highest in at least four months and threatened plans to double borrowing next year.

The Finance Ministry yesterday canceled its last sale of so-called OFZs for 2010, an auction initially scheduled for Dec. 1 and delayed until today, citing “unfavorable market conditions” in a statement on its web site. The government pulled a sale of OFZs due 2016 last week after yields reached 7.78 percent, the highest since the debt began trading Aug. 5, prices on Bloomberg show."

"(Reuters) - The U.S. government fell deeper into the red in fiscal 2010 with net liabilities swelling more than $2 trillion as commitments on government debt and federal benefits rose, a U.S. Treasury report showed on Tuesday.

The Financial Report of the United States, which applies corporate-style accrual accounting methods to Washington, showed the government's liabilities exceeded assets by $13.473 trillion. That compared with a $11.456 trillion gap a year earlier."

"The federal balance sheet liabilities do not include long-term projections for social programs such as Medicare, Medicaid and Social Security, but these showed a positive improvement.

The report said the present value of future net expenditures for those now eligible to participate in these programs over the next 75 years declined to $43.058 trillion from $52.145 trillion a year ago -- a change attributed to the enactment of health-care reform legislation aimed at boosting coverage and limiting long-term cost growth."

"Europe’s spreading sovereign debt crisis is making it tougher for Spain to pay electricity bills, and that’s infecting corporate bonds beyond its borders."

"“The contagion between corporate and sovereign is already happening,” said Tom Sartain, a fund manager at London-based Schroders Plc, who oversees $245 billion of assets. “The instability of the sovereign is filtering through.”

Spain’s plan to sell government-guaranteed bonds to reimburse power companies for regulatory subsidies was derailed in November when the yield premium on Spain’s 10-year debt over German bunds surged to a euro-era high. The government must sell 192 billion euros of debt next year to finance maturing securities and cover the deficit, complicating efforts to market the additional bonds to repay the power companies."

"Governors nationwide are taking a scalpel to Medicaid, the jointly run state and federal health-care program for 48 million poor Americans, half of whom are children. The single biggest expense for states, Medicaid consumes about 22 percent of their total $1.6 trillion in expenditures, more than what is allocated to elementary and secondary education, according to a National Governors Association report.

With federal stimulus funds to help states pay higher Medicaid costs running out June 30, “we’re heading for a cliff in July,” said Brian Sigritz, director of state fiscal studies at the National Association of State Budget Officers in Washington.

Medicaid enrollment has jumped 13.6 percent since the recession began in 2007, according to the Henry J. Kaiser Family Foundation based in Menlo Park, California. The 2009 federal stimulus bill and a supplemental appropriation this year allocated a total of $103 billion for Medicaid. With that funding ending, state health-care expenditures may climb as much as 25 percent in fiscal 2012, according to a Kaiser report. "

 

  • Other news, headlines and opinion:

 

ECB Will Lend European Banks $197 Billion to Meet Liquidity Over Year-End

Trader Holds $3 Billion of Copper in London

China ready to buy 4-5 bln euros of Portugal debt-paper

Bloomberg Sues ECB to Force Disclosure of How Greece's Swaps Hid Deficit

EU to Sell as Many as Eight Bonds for Ireland in 2011

Irelands house prices plunge further as crisis deepens

Higher US Airfares Loom as Crude Climbs Toward $100 a Barrel

Belgian finance minister warns of threat

Greeks go on strike before austerity budget vote

Fears grow of euro-style debt crisis in US states

IMF completes 403.3-tonne gold sale

Westchester County Favors Bonds Over IOUs to Make New York Pension Payment

Ireland May Ask Court to Approve Immediate Allied Irish Capital Infusion

Banks Best Basel as Global Regulators Dilute or Postpone New Capital Rules

2010: Our Listeners Questions Answered, Part III (McAlvany audio....listen starting at 23 minutes)

 

 

Mikey1052's picture
Mikey1052
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Posts: 41
Re: Daily Digest 12/22 - US crude supply drop...

Oil rises above $90 amid US crude supply drop...

The American Petroleum Institute said late Tuesday that crude inventories fell 5.8 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast a drop of 2.4 million barrels. Inventories of gasoline decreased 2.9 million barrels and distillates rose slightly, the API said.

http://finance.yahoo.com/news/Oil-rises-above-90-amid-US-apf-147596024.html?x=0&.v=5

 

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osb272646
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Trader Holds $3 Billion of Copper in London

Is this a sign that the commodities markets are in a bubble?

Sort of reminds me of the Hunt Brothers with their silver move in '79-'80. 

Or oil in 2008, when the US storage facilites were full to overflowing with $140 oil and ships were circling in the ocean and serving as offshore storage.

Appears to me that these commodity run-ups are speculator driven, not demand driven. 

Or do the speculators know something we don't.  If so, why only one taking such a huge position?  Why not a bunch of these speculators taking delivery now in anticipation of a price run-up?  I would feel more comfortable if 5 players held the $3 billion of physical copper, not just one player.

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Jager06
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Re: Trader Holds $3 Billion of Copper in London

It looks like someone is trying to buy the whole world doesnt it?

I wonder if corporate/ bank power has over stepped terminally...

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idoctor
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

In a Sign of Foreclosure Flaws, Suits Claim Break-Ins by Banks

http://www.cnbc.com/id/40778407

 TRUCKEE, Calif. — When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks.

Justin Sullivan | Getty Images

When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.

The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.

In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.

“Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.

Identifying the number of homeowners who were locked out illegally is difficult. But banks and their representatives insist that situations like Ms. Ash’s represent just a tiny percentage of foreclosures.

Many of the incidents that have become public appear to have been caused by confusion over whether a house is abandoned, in which case a bank may have the right to break in and make sure the property is secure.

Some of the cases appear to be mistakes involving homeowners who were up to date on their mortgage — or had paid off their home — but who still became targets of a bank.

In Texas, for example, Bank of America had the locks changed and the electricity shut off last year at Alan Schroit’s second home in Galveston, according to court papers. Mr. Schroit, who had paid off the house, had stored 75 pounds of salmon and halibut in his refrigerator and freezer, caught during a recent Alaskan fishing vacation.

“Lacking power, the freezer’s contents melted, spoiled and reeking melt water spread through the property and leaked through the flooring into joists and lower areas,” the lawsuit says. The case was settled for an undisclosed amount.

More common are cases like Ms. Ash’s, in which a homeowner was behind on payments, perhaps trying to work out a modification, when bank crews changed the locks.

In Florida, contractors working for Chase Bank used a screwdriver to enter Debra Fischer’s house in Punta Gorda and helped themselves to a laptop, an iPod, a cordless drill, six bottles of wine and a frosty beer, left half-empty on the counter, according to assertions in a lawsuit filed in August. Ms. Fisher was facing foreclosure, but Chase had not yet obtained a court order, her lawyer says.

The break-in was discovered when a Canadian couple renting the house returned from the beach.

Chase officials said such behavior by its contractors, if determined to be true, would be considered unacceptable and corrective action would be taken.

Banks and their contractors insist that the number of mistakes is minuscule given the hundreds of thousands of new foreclosure cases filed each month. Bank of America, for instance, says it works with third-party contractors to inspect and maintain more than one million properties each month and has enhanced its controls in the last year to prevent mistakes.

Alan Jaffa, chief executive of Safeguard Properties, which inspects and maintains foreclosed properties for mortgage servicers, acknowledged that a handful of mistakes had been made. In most instances, he said, his company provided a valuable service that protected properties and neighborhoods.

“There is a stigma that we go in, kick the door in and throw grandma out head first and board up the windows,” Mr. Jaffa said. “We are doing a lot of good out there.”

But Alan M. White, a consumer law expert at Valparaiso University in Indiana, says: “Volume is not an excuse for violating someone’s rights.”

A clause in most mortgages allows banks that service the loan to enter a home and secure it if it is in default, meaning if the mortgage payment is 45 to 60 days late, and if the house has been abandoned, authorities said.

Banks do so to protect the property from vandalism or damage for which the bank could be liable.

bandvbandv's picture
bandvbandv
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

s-510 bill passes in congress waiting for Obama's approval. Unreal

http://vinceseconomicblog.wordpress.com/2010/12/22/congress-sticks-it-to...

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rjs
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Re: Trader Holds $3 Billion of Copper in London
Jager06 wrote:

It looks like someone is trying to buy the whole world doesnt it?

I wonder if corporate/ bank power has over stepped terminally...

zero hedge says its JPMorgan:

A Single Trader, JP Morgan, Holds 90% Of LME Copper - When a week ago we reported that JP Morgan has denied it owned more than 90% of the copper positions on the LME, we suggested that this could very well mean that Blythe Master's firm could just as easily control 89.999% of the copper and still not misrepresent the truth per that non-commital press release. Turns out our unbridled cynicism was spot on as usual. The Wall Street Journal has just reported that in the copper market "a single trader has reported it owns 80% to 90% of the copper sitting in London Metal Exchange warehouses, equal to about half of the world's exchange-registered copper stockpile and worth about $3 billion." Oh and yes, while JP Morgan technically is not singled out, we will be delighted to issue a retraction the second JP Morgan approaches us with a refutation that it is not the trader in question. And while we are at it, we also will repeat our claim that it was indeed JP Morgan that reduced its massive silver position, as per the recent FT article: as above we will immediately issue a retraction and apologize should JPM's legal department contact us that we are wrong on this. Somehow we don't think that will be an issue.
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Tycer
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Re: S-510
bandvbandv wrote:

s-510 bill passes in congress waiting for Obama's approval. Unreal

http://vinceseconomicblog.wordpress.com/2010/12/22/congress-sticks-it-to...

I believe it passed with the complete Tester-Hagan Amendment which helps small farmers.

maaa's picture
maaa
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

Dear idoctor,

Thank you for posting on the topic of that bank's wacky mortgages! Your posts prompted us to investigate a mortgage we had with them, and in order to make sure we will have no issues, we just paid it off.

Meanwhile, here is something to pass along our cheerful mood...

Happy Holidays from Mary Kay

http://www.aufrance.com/music

http://personalsecurityzone.com

rjs's picture
rjs
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Posts: 445
Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

America's Childlike Desire to Avoid Making Trade-Offs - We want everything and we want it now, and we don't want to sacrifice anything to get it. Our solution is pathetically childlike: just borrow trillions of dollars every year to buy what we want, so no adult trade-offs are ever required. Just buy our energy from somewhere else so we don't have to make any sacrifices or balance competing demands...We want abundant, cheap energy, and we want someone else to supply it to us so we don't have to make any difficult trade-offs. We want all our entitlements and we also don't want higher taxes. Isn't this the acme of childish fantasy? When pressed about energy, we want to hide behind fantasies of fusion, or algae-based fuels, or some other technology which has been "10 years away" for the past 30 years or which is 20 years away from scaling up to industrial production, if ever. Our ignorance of the actual science is breathtaking, but we refuse to consider the possibility that breeder reactors and algae-based fuels may not pan out. At some point, probably within the next 5-6 years, the oil exporters will stop shipping their hydrocarbons to us in sufficient quantities to meet our demands, and bond buyers will stop trading their capital for absurdly low rates of return on U.S. Treasury bonds. Once it costs $1 trillion just to pay the interest on existing (and rapidly ballooning) debt, then we won't be able to borrow enough to fund the Empire and the Savior State and the interest. Trade-off time will finally be forced upon us.

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Montana Native
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Re: Trader Holds $3 Billion of Copper in London
osb272646 wrote:

Is this a sign that the commodities markets are in a bubble?

Sort of reminds me of the Hunt Brothers with their silver move in '79-'80. 

Or oil in 2008, when the US storage facilites were full to overflowing with $140 oil and ships were circling in the ocean and serving as offshore storage.

Appears to me that these commodity run-ups are speculator driven, not demand driven. 

Or do the speculators know something we don't.  If so, why only one taking such a huge position?  Why not a bunch of these speculators taking delivery now in anticipation of a price run-up?  I would feel more comfortable if 5 players held the $3 billion of physical copper, not just one player.

Put simply, they arent printing any commodities ;)

idoctor's picture
idoctor
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

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Doug
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

idoctor

Thanks for the Celente clip.  He really puts it out there in terms everyone can relate to.

Doug

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

For 12/23 News:

"The Treasury will sell $99 billion of two-, five- and seven-year notes next week for a third straight month amid prospects for a rising budget deficit, according to the Federal Reserve’s primary dealers.

The U.S. had scaled back auction sizes after earlier expanding debt sales to finance annual budget deficits exceeding $1 trillion. It sold $118 billion in two-, five- and seven-year debt at each of six monthly sales of the three maturities from November 2009 through April. The $858 billion bill President Barack Obama signed Dec. 17 extending tax cuts for two years spurred speculation federal borrowing will need to increase.

“The Treasury had been cutting issue sizes, but there is no room to cut further given that the budget will be higher than it would have been a few months ago before the tax legislation,” said Suvrat Prakash, an interest-rate strategist in New York at BNP Paribas SA, which as a primary dealer is required to bid at Treasury auctions. “It’s going to be very hard for them to cut amounts any time soon.” "

"PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen."

"Dec. 16 (Bloomberg) -- Arnold Schwarzenegger swore after his first month as California governor that he'd rip up the state's credit cards. Instead, the Republican former action- movie hero pushed through at least $52 billion of borrowing.

Debt of the world's eighth-largest economy almost tripled in Schwarzenegger's seven years, to $91 billion on June 30 from $34 billion in 2003, state Treasury figures show. Californians owed $2,362 per person last year, up from $977 before he went to work. Under Schwarzenegger, the state's workforce grew 9.9 percent to 348,213, according to his finance office.

When Democrat Jerry Brown takes over the biggest U.S. municipal borrower on Jan. 3, he'll inherit interest and principal payments that consume 7.1 percent of general-fund spending, twice what greeted Schwarzenegger. That will rise to 10 percent in 2012, leaving less for services and to tackle a budget deficit that may reach $28 billion in 18 months."

"Even as Cincinnati City Council grappled with plans to erase a $54 million budget deficit, two meetings Wednesday at the opposite end of Downtown began shaping the next major financial challenge - one involving sums with considerably more zeroes - that will confront council in 2011.

Both meetings - one at the Hamilton County Courthouse, the other at City Hall - dealt with the financially troubled Cincinnati Retirement System, and the outcomes in each will have much to say about how, even whether, the city can dig out of a projected $1 billion-plus long-term pension hole."

"With retirees' basic pensions protected by law, City Hall views spiraling health costs as the one major existing expense that could be trimmed to help stabilize the $2 billion city pension fund, which experts warn could become insolvent within 20 years unless major changes are made."

"Philadelphia School District officials are staring down a gap of $430 million or more in next year's budget, and the deficit could surpass the half-billion mark under worst-case scenarios, according to officials briefed on the district's finances. "

  • Other news, headlines and opinion:

Text: Fitch Downgrades Hungary to BBB-; Outlook Negative

New Jersey to Issue $2 Billion of Debt to Terminate Interest-Rate Swaps

Debt Struggles Set to Deepen for Peripheral Europe: Euro Credit

Unemployment sets record in Washington and State's jobless benefit tallies set record in 2010

Senate Approves $725 Billion Defense Spending Bill

`Grotesque' Basel Rules May Kill Danish Bonds

Asia's baby shortage sets demographic timebomb ticking

Dubai May Sell More Assets as $20 Billion in Debt Comes Due in Next Year

Ireland Takes Control of Allied Irish, Fourth Bank in Two Years

Economists See Slower Housing Recovery

16 U.S. Cities That Could Face Bankruptcy in 2011

msnrochny's picture
msnrochny
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Re: Daily Digest 12/22 - Greece's Debt Ratings, Cuts in ...

As Chris has suggested in the past, Natural Gas may be the Silver-like investment on the Energy side.  Its price has languished compared to Oil.  This article suggests another reason why demand for Natural Gas may increase as Oil prices rise, and perhaps could close the pricing gap between Natural Gas and Oil.

I think Chris's comments about the flow rate of Natural Gas wells and how long a well produces a consistent and reliable flow of gas is something this article fails to ponder relative to their process being a real alternative to gasoline, but when things get costly on the Oil side, it will probably not matter to investors who are looking for an opportunity to make money off the turmoil of expensive oil. 

These approaches will be tried, and then we will see if NG wells can provide any kind of steady offset to diminished oil production.  It is telling that the article mentions that once the liquidification of NG is complete, the fuel is only 62% as potent as its original form.

http://www.nytimes.com/2010/12/24/business/energy-environment/24fuel.html?hp

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