Daily Digest

Daily Digest 12/24 - Debt Crisis Threatens American Cities, Banks Best Basel, Gas Demand Decline

Friday, December 24, 2010, 11:00 AM
  • $2tn Debt Crisis Threatens To Bring Down 100 US Cities
  • Pensions Push Taxes Higher
  • Pimco Says 'Untenable' Policies Will Lead To Eurozone Break-Up
  • US Takes Greek Path
  • Is JP Morgan Shifting Its Silver And Gold Shorts To Non-US Domiciled, And Thus Unregulatable, Banks?
  • Banks Best Basel as Regulators Dilute or Delay Capital Rules
  • Gold Prices And Output To Go Higher In 2011, PwC
  • U.S. Demand For Gas At Start Of Long-Term Decline

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Economy

$2tn Debt Crisis Threatens To Bring Down 100 US Cities (solidswede)



Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery. "Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney told the CBS 60 Minutes programme on Sunday night. "There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults."

Pensions Push Taxes Higher (CMartenson - Follows above; squeezing the taxpayers)



Cities across the nation are raising property taxes, largely citing rising pension and health-care costs for their employees and retirees.

In Pennsylvania, the township of Upper Moreland is bumping up property taxes for residents by 13.6% in 2011. Next door the city of Philadelphia this year increased the tax 9.9%. In New York, Saratoga Springs will collect 4.4% more in property taxes in 2011; Troy will increase taxes by 1.9%.

Pimco Says 'Untenable' Policies Will Lead To Eurozone Break-Up (pinecarr)



Andrew Bosomworth, head of Pimco's portfolio management in Europe, said current policies are untenable in the absence of fiscal union and will lead to a break-up of the euro. "Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments," he told German newspaper Die Welt. He said these countries could rejoin EMU "after an appropriate debt restructuring", adding that devaluation would let them export their way back to health.

US Takes Greek Path (pinecarr)



With dollar interest rates generally declining and Chinese and other foreign investors happily piling in to fund budget deficits of $1.3-$1.4 trillion, this had appeared a purely theoretical problem. However, with commercial and industrial loans (including small business, but also including the relatively active leveraged buyout sector) declining by 25% to $1.22 trillion in the two years since 2008, the problem has been a real one.

Is JP Morgan Shifting Its Silver And Gold Shorts To Non-US Domiciled, And Thus Unregulatable, Banks? (jamie davis)



Going through recent bullion bank shorting information, Adrian Douglas has stumbled across a nugget that may explain the sudden willingness of JPM to admit to the FT, via proxies as obviously the bank would never expose itself to even remote market manipulation claims, that it has collapsed its silver short. The reason: even as US bank silver (and gold) shorts by US banks have been gradually declining, those positions established by non-US bank, and thus entities not under the CFTC's control, have seen their silver shorts surge, increasing by orders of magnitude over the past several months. Is there a stealthy transfer of precious metals market manipulation taking place, one that exonerates the domestic, and therefore regulatable, suspects, while making foreign banks carry the burden of suppressing silver and gold prices?

Banks Best Basel as Regulators Dilute or Delay Capital Rules (solidswede)



What’s not in the documents published by the Basel Committee on Banking Supervision, and the escape hatches that are, may have more impact on how financial institutions will operate following a global credit crisis that led to $1.8 trillion in bank losses and writedowns. The committee’s most significant achievement, members say, an agreement to increase the amount of capital banks need to hold, won’t go into full effect for eight years. Other measures that regulators had hoped would prevent future crises -- liquidity standards, a capital surcharge on the biggest lenders and a global resolution mechanism for failing firms -- were postponed, allowing banks to escape the toughest rules that would force them to change the way they do business.

Gold Prices And Output To Go Higher In 2011, PwC (stephen wood)



"Given the high demand for gold, it will be interesting to see if companies that have located marginal deposits of gold will kick-start their production and move faster than they would under normal circumstances," says John Gravelle, Canadian mining leader, PwC. The survey found 70% of gold producers plan on using their additional cash influx to look for new projects or expand existing ones to replace or replenish reserves. The top three strategies are brownfield exploration (78%), greenfield exploration (54%), and mergers and acquisitions (37%).

Energy

U.S. Demand For Gas At Start Of Long-Term Decline (sammy)



The country's thirst for gasoline is shrinking as cars and trucks become more fuel-efficient, the government mandates the use of more ethanol and people drive less. "A combination of demographic change and policy change means the heady days of gasoline growing in the U.S. are over," said Daniel Yergin, chairman of IHS Cambridge Energy Research Associates and author of a Pulitzer Prize-winning history of the oil industry.

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."

6 Comments

rjs's picture
rjs
Status: Gold Member (Offline)
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Posts: 445
Re: Daily Digest 12/24 - Debt Crisis Threatens American ...

Hunger and homelessness stalk U.S. cities - With the Great Recession continuing to take a toll on America's middle class, it should come as no surprise that homelessness and hunger remain tough problems for America's cities, as the annual report by the U.S. Conference of Mayors points out. In the 2010 Hunger and Homelessness Survey, 27 large and medium sized cities throughout the nation were studied and the report found that homelessness increased by 2 percent across surveyed cities and family homelessness increased by 9 percent. According to the mayors' conference, every city surveyed reported that requests for emergency food assistance increased by an average of 24 percent 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.

Fight against hunger in LA tougher - In the past year, Los Angeles has cut its emergency food budget by half, while demand has risen 21 percent, according to a report released Tuesday.  A survey by the U.S. Conference of Mayors said two out of three major cities showed decreased emergency food supplies while demand is up an average 24 percent.  Of those across the nation asking for food aid, 56 percent were families, 19 percent seniors, 30 percent had jobs and 17 percent were homeless.  "This year's survey makes it clear that even working families are increasingly at risk for hunger and homelessness as a result of the crippled economy and rising unemployment," said Los Angeles Mayor Antonio Villaraigosa, vice president of the conference, in a statement.  Among the findings:  Hunger was caused by unemployment, followed by high housing costs, low wages, poverty and nonaccess to food stamps.  All but one of the cities expect emergency food demand to increase, with decreasing resources - especially from federal and state funds - the biggest challenge to addressing hunger.

Number Of Hungry Grows In San Francisco‎ - Hunger is on the rise in San Francisco with city officials turning away 30 percent of those asking for food assistance in 2010, according to a U.S. Conference Of Mayors study released Tuesday. According to the study on homelessness, request for food assistance climbed by 41 percent in 2010, but the local food pantries did not have enough funds or supplies to fill all the requests. While the number of food requests have increased, San Francisco officials told the mayors organization that the actual number of homeless individuals and families had remained stable during the year. According to the report, 42,160,932 pounds of food was distributed in San Francisco compared to 57,426,899 In Los Angeles, 69,325,902 in Phoenix and 77,792,101 in Chicago. That was a 16 percent increase for San Francisco over 2009.

22000 students in state reported homeless- The number of homeless students in Washington state continues to rise, with nearly 22,000 reported this past school year, up from roughly 14,000 just four years earlier. The Office of Superintendent of Public Instruction attributes the higher number to better reporting as well as the economy. But the agency also cautions that many homeless students probably weren't counted. "We still have some reporting issues," Melinda Dyer, OSPI's supervisor for the education of homeless children and youth, said in a prepared statement. Because of the stigma, she said, "some families don't tell others they are homeless." In King and Snohomish counties, 14 school districts reported increases in the number of homeless students from 2008-09 to 2009-10. Some of the biggest increases were in Darrington, Snoqualmie Valley, Northshore and Bellevue.

Mayors: Hunger, Homelessness Major Challenge  - The U.S. Conference of Mayors said hunger and homelessness continue to be major challenges facing big cities.  The group released a report on the issues in 27 U.S. cities, including Philadelphia.  It said more than half of cities expect a moderate decrease in resources for fighting hunger.  At the Greater Berks Food Bank, they said they're concerned, too.  "We really don't know where funding is going to go for the state food purchase program," said Doug Long, Greater Berks Food Bank. "Over the past three years, it's been fairly constant. In fact, I think it has slightly even decreased in the past three years, even while food banks are seeing these incredible increases in the amount of people that they're serving."  Demand at the Greater Berks Food Bank is up 25 percent this year.

Vigil marks the deaths of 101 homeless in Philadelphia - Hundreds of people gathered in Love Park Tuesday evening to remember the homeless -- and formerly homeless -- who died in Philadelphia this year. The event was part of a nationwide memorial that took place in 150 cities. Those who gathered held candles, while the names were read. "Deborah Adams, Barbara Barr, Yvonne "Blue" Basey...." One hundred and one homeless people died in the city this year. That number includes those who were formerly homeless, men such as Keith Williamson and Kevin Minor. A recent survey of the city's homeless population found 352 people living on the streets.

merry christmas...

idoctor's picture
idoctor
Status: Diamond Member (Offline)
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Posts: 1731
Re: Daily Digest 12/24 - Debt Crisis Threatens American ...

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 12/24 - Debt Crisis Threatens American ...

Here's That Must-Watch 60 Minutes Segment On The States' "Day Of Reckoning"

Read more: http://www.businessinsider.com/60-minutes-on-state-budgets-2010-12#ixzz193WTfdjj

http://www.businessinsider.com/60-minutes-on-state-budgets-2010-12

 http://www.youtube.com/watch?v=sFc563u2q74

PS Merry Christmas everybody oops..... The mall here told their employees to say Happy Holidays....& no,no,no to Merry Christmas cause that might upset someone LOL so Merry Christmas from Idoc.

 

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 12/24 - Debt Crisis Threatens American ...

vinnya's picture
vinnya
Status: Bronze Member (Offline)
Joined: Jan 5 2009
Posts: 27
Re: Daily Digest 12/24 - Debt Crisis Threatens American ...

The dollar and oil linked pretty good video

 

http://vinceseconomicblog.wordpress.com/2010/12/24/the-shocking-truth-ab...

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Re: Daily Digest 12/24 - Debt Crisis Threatens American ...
idoctor wrote:

PS Merry Christmas everybody oops..... The mall here told their employees to say Happy Holidays....& no,no,no to Merry Christmas cause that might upset someone LOL so Merry Christmas from Idoc.

I think Happy Holidays works better. It can last through all the various celebrations of all the various religious groups and people around this time of the year and - even after December 25 - can be said for New Year's Day and the Orthodox Christmas.

Why limit yourself to just one holiday? The more the merrier!

And yes, I do know your subtext.

Poet

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