Daily Digest

Daily Digest 1/4 - No 2nd Bailout Or Euro For Greece, Revenue Fall Prompts Debt Spike, Welfare Lines Overflow

Wednesday, January 4, 2012, 11:45 AM
  • Greece: No Second Bailout, No Euro
  • Hungary Borrowing Costs Jump to 2009 High; Bond Risk at Record
  • Extra nuclear safety to cost up to 10 bln euros: EDF
  • Revenue fall prompts debt spike
  • Tensions not seen easing much as banks hoard cash
  • Another year older and deeper in debt
  • T Proposing 43 Percent Fare Hikes
  • Troika warns of more tax hikes and welfare cuts
  • Italian lawmakers’ $14,000 monthly salary outpaces EU colleagues, is target of reform
  • Sears Distressed as Investors Reject Closings
  • Nigerians enraged as fuel prices suddenly double
  • End of ethanol subsidy will raise the price of gas
  • Welfare Lines Overflow
  • Circle of Concern Food Pantry Sees 13% Increase in 2011
  • Charlotte homeless shelter expecting record numbers
  • Homeless have been sleeping on clinic’s porch for months
  • New York Marathon Raises Entry Fee, Citing Police Costs
  • Happy cha-ching New Year
  • N.J.'s elderly population to surge
  • National Debt passes $15.2 Trillion
  • Customers will see higher electric bills
  • Parking meter rates increase downtown, Broad Ripple
  • Bailout concerns mounting for federal housing agency
  • Tehran ‘pursuing nuclear weapons'

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Economy

Greece: No Second Bailout, No Euro

Greece's government warned Tuesday that the debt-crippled country will have to ditch the euro if it fails to finalize the details of its second, euro130 billion ($169 billion) international bailout and that more austerity measures may need to be implemented.

A key component of the package, which was agreed last October, is that Greece has to persuade its private creditors like banks and investment firms to take a steep hit on the value of their holdings of Greek debt. Greece has the highest debt burden relative to the size of its economy in the whole of the 17-nation eurozone and the writedown will help get it down to more manageable, though still high, levels.

Hungary Borrowing Costs Jump to 2009 High; Bond Risk at Record

Hungary sold three-month Treasury bills at the highest yield since 2009 at its first debt auction after passing laws that diminished the country’s chance of obtaining international financial aid. The cost of contracts to protect the nation’s debt climbed to a record.

The government raised 45 billion forint ($190 million), the full amount planned, according to data from the Debt Management Agency published on Bloomberg. The average yield increased to 7.67 percent, the highest for three-month notes since August 2009, climbing from 7.43 percent at the last sale a week ago.

Extra nuclear safety to cost up to 10 bln euros: EDF

Recommendations by France's nuclear watchdog agency to beef up safety at plants will cost the state-owned electricity provider EDF up to 10 billion euros (13 billion dollars), a senior executive told AFP on Tuesday.

Revenue fall prompts debt spike (Australia)

THE Victorian and South Australian governments will add $1.5 billion more in debt this financial year than planned when they crafted their budgets six months ago. Victoria, South Australia and NSW have all released mid-year budget updates revealing collapsing revenues that put forecast surpluses in severe doubt, reports The Australian Financial Review.

In the wake of those announcements, Victoria and South Australia have indicated to debt markets that they will substantially boost their borrowings this financial year.

Tensions not seen easing much as banks hoard cash

The euro zone banking system starts the new year awash with record levels of liquidity but few signs that institutions are prepared to lend to each other, leaving money markets frozen.

Most of the near half trillion euros of three-year funds borrowed from the European Central Bank in the last week of 2011 have made their way back to the ECB's overnight deposit account.

Another year older and deeper in debt (Video)

It has been calculated the world’s top economies have 5.8 trillion euros worth of borrowings they will have to pay back in 2012.

That is the Group of Seven leading economic nations, plus the so called BRICs — the biggest emerging countries Brazil, Russia, India and China. Most of those countries will have to pay higher rates of interest to borrow more.

T Proposing 43 Percent Fare Hikes (Boston)

The Massachusetts Bay Transportation Authority on Tuesday proposed fare hikes as high as 43 percent, as well as service reductions, in an effort to close a projected $161 million budget gap for the 2013 fiscal year.

Troika warns of more tax hikes and welfare cuts (Ireland)

Irish people will be forced to carry an even heavier financial burden in the years ahead. Officials from the EU Commission and International Monetary Fund (IMF) believe the Cabinet will be unable to keep election promises not to adjust tax bands and credits in the 2013 Budget.

A team of officials from the international troika monitoring Ireland's adherence to its bailout promises will arrive in Ireland next week to scrutinise the Government's fiscal performance.

Italian lawmakers’ $14,000 monthly salary outpaces EU colleagues, is target of reform

A government-mandated report has confirmed what many Italians long suspected: The €11,000 ($14,300) that Italian lawmakers earn each month far outpaces what their peers in some of Europe’s largest economies get.

Italy’s bloated public sector and the privileges of its political elite have come under fire as the country battles its debt crisis with tax hikes, labor market and pension reforms that are hurting ordinary Italians.

Sears Distressed as Investors Reject Closings

Sears Holdings Corp.'s bonds have crossed into distressed territory as its plan to close as many as 120 locations may fail to stem more than four years of declining sales and prevent it from using up cash as profitability wanes.

The extra yield investors demand to hold Sears' debt instead of Treasuries has breached the 10 percentage-point level traders consider as distressed, double the spread at the end of 2010.

Nigerians enraged as fuel prices suddenly double

The end of the fuel subsidy program was announced on Sunday, during a long holiday weekend. Since then, prices have doubled to about 0.80 euros a litre, in a country where most people live on less than 2 euros a day. This increase has already begun to send food prices spiralling.

End of ethanol subsidy will raise the price of gas

Gasoline could cost 4.5 cents a gallon more starting as early as this week, and it's not because of rising oil prices. It's because Congress declined to renew the 30-year-old federal subsidy for ethanol, letting it expire Sunday.

Welfare Lines Overflow (New York)

Growing numbers of New Yorkers seeking food stamps have created an unwelcome spillover effect at some of New York City's job centers: overcrowding that in some cases has grown so severe, benefits were jeopardized.

HRA spokeswoman Connie Ress blamed the overflow crowds on rising numbers of people seeking food stamps. The number of New Yorkers getting the benefit has increased by 200,000 in the past two years, jumping to 1.8 million from 1.6 million in late 2009. At the same time, the agency has consolidated some facilities, Ms. Ress said.

Circle of Concern Food Pantry Sees 13% Increase in 2011 (St. Louis)

Circle of Concern Food Pantry has been serving those in need since 1967, but never has the need been so great. Glenn Koenen tells KMOX in 2011, Circle of Concern fed 13-percent more people then in 2010. The exact number, 25, 161 people were served last year. Many families that use to be middle-class, supported Koenen’s food pantry, now they need the help. Koenen says as people’s unemployment and resources run out, they are turning to Circle of Concern. He says many of those people feel as though they have lost their middle-class standing and will never be able to bounce back.

Charlotte homeless shelter expecting record numbers (Video)

As the temperature plunges, Charlotte's Men's Shelter will not turn away anyone, no matter how many show up.

Homeless have been sleeping on clinic’s porch for months (Baltimore)

Advocates believe that the official counts underestimate the problem and that, over the course of a year, 40,000 people will experience homelessness in Baltimore. “There are people sleeping outside all over the city,” Lindamood said, describing the shift in the kinds of people seeking shelter and services these days.

“The traditional shelter client was a single man. Now you’re seeing mom and dad and two kids sleeping on a bench,” he said. “You have people who’ve never been at a shelter before. They’re coming in wide-eyed.”

New York Marathon Raises Entry Fee, Citing Police Costs

Running the New York City Marathon is a great way to lose weight. It is also going to leave your wallet a little lighter this year. Largely because the New York Police Department has begun charging event organizers to recoup its costs, entry fees for the November race jumped about $60, or 24 to 39 percent, depending on the entrant.

Happy cha-ching New Year (Illinois)

The hits to your pocketbook are coming from several directions, even down to the penny. That’s how much postage goes up on a first-class letter, and it’ll be 3 cents more to send a postcard.

And don’t try to drown your financial sorrows with alcohol or even water — taxes and fees are going up on those, too.

N.J.'s elderly population to surge

The Garden State population has grown to 8.8 million, and within 20 years is expected by state demographers to approach 9.4 million. Of greater consequence than the raw numbers is how much growth is expected in the elderly population, equal to more than 90 percent of the overall change.

Baby boomers, the post-World War II generation born between 1946 and 1964, account for nearly 30 percent of New Jersey’s population. As they age, they’ll push the number of residents 65 years and older from 1.15 million four years ago to more than 1.8 million by 2028, nearly 20 percent of the population.

National Debt passes $15.2 Trillion

$15,222,940,045,451.09

Customers will see higher electric bills (Oregon)

Pacific Power customers will see their their power rates go up this year. Pacific Power says its 4.4 percent rate increase is mostly due to higher coal costs. Another factor is an increase in demand.

"It goes up just like everything else," said Tom Ball as he paid his $342 power bill Monday.

Parking meter rates increase downtown, Broad Ripple (Indianapolis)

The price of parking in Indianapolis has increased. Beginning Monday, drivers wanting to park downtown along Massachusetts Avenue and in Broad Ripple will pay $1.50 an hour. That is a 50 percent increase.

At other locations in the city, meters have increased from 75 cents to $1 an hour. The increase is the second one in less than a year.

Bailout concerns mounting for federal housing agency

Concerns are growing that the Federal Housing Administration will need to be bailed out by taxpayers. The agency's latest monthly outlook report revealed a spike in serious delinquencies for FHA-insured loans, posing a further threat to the agency's already depleted cash reserves. According to the report, the percentage of loans in the FHA's portfolio with three missed payments or more rose to 9.3% in November, up from 8.4% in August.

"It's highly likely that the FHA will need a taxpayer bailout over the next three to five years," said Joseph Gyourko, a real estate professor at the University of Pennsylvania's Wharton School and author of a report entitled "Is FHA the Next Big Housing Bailout?."

Tehran ‘pursuing nuclear weapons'

France insisted yesterday that Iran is developing nuclear bombs and urged Europe to follow the US lead by slapping an embargo on its oil exports and freezing its central bank assets by next month.

The call came as Iran's military warned one of the US navy's biggest aircraft carriers to keep away from the Gulf, in an escalating showdown over Tehran's nuclear drive that could pitch into armed confrontation.

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3 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4149
kjberg2000's picture
kjberg2000
Status: Member (Offline)
Joined: Sep 23 2009
Posts: 7
End of ethanol subsidy will raise the price of gas

Gasoline could cost 4.5 cents a gallon more starting as early as this week...

Works for me. Ethanol flavored gasoline reduces my mileage by 10% so paying 4.5 cents to drive 5 extra miles in my Prius is a no brainer. We eliminate a subsidy and can go back to growing corn for food and feed.

So this week when the price goes up, there will be no more ethanol in the gas?  < /sarcasm>

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Kodak to file for bankruptcy

Kodak to file for bankruptcy: report

http://www.abc.net.au/news/2012-01-05/kodak-to-file-for-bankruptcy-report/3759196

 

Iconic photography company Eastman Kodak is preparing to file for bankruptcy in the coming weeks if efforts to sell off digital patents fall through, according to the Wall Street Journal.

The WSJ says "people familiar with the matter" have confirmed that the filmmaker is in talks with potential lenders for around $1 billion in financing to keep it afloat.

The 131-year-old company is still making last-ditch efforts to sell around 1,100 patents through a court-supervised bankruptcy auction.

A filing for bankruptcy could occur as soon as this month or early February, the source said.

Kodak spokespeople in the US could not be reached for comment this morning.

Kodak shares plunged 28 per cent on the report.

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