Daily Digest

Daily Digest 4/27 - Meat Prices Going Ever Higher, Russian Gas Crisis Looms, NY Budget Is All Pain, No Gain

Wednesday, April 27, 2011, 9:42 AM
  • Rising costs may mean an end to the era of cheap goods from China
  • Soaring food prices to raise Asian poverty: report
  • P&G raising some prices for retailers
  • Kimberly-Clark to raise prices to offset costs
  • Meat prices seen going even higher
  • Delta Air Lines to raise ticket prices after $318 million 1Q loss
  • US Airways lost $114M in 1Q on bigger fuel bill
  • German Nuclear Exit May Boost Power Prices 30%, BDI Group Says
  • Gasoline crisis looms in Russia as international prices rise
  • 3rd Coca-Cola's Profit Up As Revenue Climbs 40%
  • Kroger Affirms Forecast, Sees Grocery Prices Hikes
  • Peanut-Butter Price Jump in Store for U.S., Goldman Says: Chart of the Day
  • Public Pensions, Once Off Limits, Face Budget Cuts
  • Budget cuts shut down alien-hunting telescopes
  • S.D. schools plan for doomsday budget
  • Budget will be all pain, no gain: Mike
  • Geithner: Debt-Ceiling Debate Is 'Irresponsible'
  • Spain seeks to reassure as borrowing costs rise
  • Thieves target truck tailgates for the steel
  • Nest egg is missing for N.J. public worker retirees

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Rising costs may mean an end to the era of cheap goods from China

The era of super-cheap Made-in-China goods may be over, as rising costs push the country's export prices to new highs. Prices in February soared 11 percent from a year ago, surpassing the peak during the boom days before the global financial crisis, latest data showed.

Chinese goods are expected to get even more expensive this year, with some companies reportedly forecasting at least a 10 percent hike.All this has even set some Chinese officials warning that the country's days as the world's lowest-cost factory are drawing to an end.

Soaring food prices to raise Asian poverty: report

World food prices that surged 30 per cent in the first two months of the year threaten to push millions of Asians into extreme poverty and cut economic growth, the Asian Development Bank said Tuesday.

The surging prices translated into domestic food inflation of 10 per cent on average in many Asian economies, which could drive 64 million people into poverty, the bank said in a report.

P&G raising some prices for retailers

Shoppers could soon see higher prices for Pampers diapers, Charmin toilet paper and Bounty paper towels. Procter & Gamble Co. said Monday it raised U.S. list prices for those products because of rising costs for pulp, oil and gas.

The Cincinnati-based consumer products maker informed retailers of increases last week. Retailers will decide how much of those price increases to pass along to shoppers. P&G said list prices for Pampers are up 7 percent on average, Pampers wipes up 3 percent, and Charmin and Bounty products up 5 percent. P&G said Luvs, its lower-priced diaper brand, remains unchanged.

Kimberly-Clark to raise prices to offset costs

The maker of Kleenex tissues and Huggies diapers reported net income of $372 million, or 86 cents per diluted share, compared with $411 million, or 92 cents per diluted share, for the first quarter of 2010. Excluding nonrecurring items, the company said it earned $1.09 per share.

Net sales for the quarter were $5.03 billion, a 4 percent increase from $4.84 billion in the first quarter of the previous year. The cost of making the products the company sells, however, increased 12 percent to $3.6 billion.

Meat prices seen going even higher

In a revised forecast Monday, the U.S. Agricultural Department indicated that consumers will see higher price tags on a package of ground beef or steak at the supermarket. Retail prices have been surging the last nine months as animal supplies shrink, exports grow and feed-grain costs soar.

Overall, the USDA said meat prices will climb 6% to 7% this year over 2010, up from its March 25 forecast for a 4.5% to 5.5% increase.

Delta Air Lines to raise ticket prices after $318 million 1Q loss

In an ominous sign for summer travelers, Delta Air Lines told investors today it lost $318 million in the first quarter and will help its bottom line by cutting capacity and raising ticket prices.

Delta blamed rising fuel prices for the loss. Fuel costs were up 30% for the quarter.

US Airways lost $114M in 1Q on bigger fuel bill

US Airways Group Inc. says its first-quarter loss more than doubled to $114 million as fuel prices rose sharply. US Airways and other airlines have been raising fares to try to keep up with fuel prices. US Airways' traffic rose 4 percent in the quarter. Higher fares and demand helped push revenue up 11.7 percent to $2.96 billion.

Fuel costs jumped by $200 million, a 37 percent increase from a year earlier.

German Nuclear Exit May Boost Power Prices 30%, BDI Group Says

Germany’s plan to accelerate its exit from nuclear power generation may raise electricity prices by as much as 30 percent, the BDI German industry lobby said. The permanent halt of eight reactors and the closure of the remaining plants by 2018 could boost wholesale power prices to 70 euros ($102) a megawatt-hour that year, according to a study commissioned by the BDI and published April 24 on its website.

Gasoline crisis looms in Russia as international prices rise

Many Russian regions are running short of gasoline and diesel fuel, with the situation threatening to deteriorate soon into a complete drought in some areas as oil companies cash in on higher fuel prices abroad, the Russian Fuel Union warned on Tuesday.

"If the situation persists, many regions may be left without fuel altogether in the next few days," said RFU President Evgeny Arkusha, whose organization represents fuel retailers. The situation is at its worst in the St Petersburg, Voronezh, Novosibirsk and Altai regions as well as the Sakhalin island, he said.

3rd Coca-Cola's Profit Up As Revenue Climbs 40%

Coke's North American prices were between 1% and 2% higher in the first quarter, and the company now expects to raise prices 3% to 4% for the year to protect itself from rising costs.

"We will be looking at every opportunity--every opportunity -in North America to generate a higher price," Coke Chairman and Chief Executive Muhtar Kent said on a conference call with analysts. "Our brand strength will allow us to generate the higher price increase."

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Kroger Affirms Forecast, Sees Grocery Prices Hikes

Kroger Co. says grocery prices are rising slightly, and it is passing along those hikes, but it may benefit from fuel prices going up because the discounts it offers on gasoline could attract more shoppers.

Peanut-Butter Price Jump in Store for U.S., Goldman Says: Chart of the Day

Peanut butter may soon reach its highest price in more than a quarter century on U.S. supermarket shelves as manufacturers pass along cost increases, according to Judy E. Hong, a Goldman Sachs Group Inc. analyst.

The CHART OF THE DAY shows the monthly average retail price of creamy peanut butter since 1984, as compiled by the Commerce Department. The arrow depicts the 20 percent increase that’s necessary to offset higher costs for peanuts, sweetener and plastic jars, cited by Hong in a report two days ago.

Public Pensions, Once Off Limits, Face Budget Cuts

Conventional wisdom and the laws and constitutions of many states have long held that the pensions being earned by current government workers are untouchable. But as the fiscal crisis has lingered, officials in strapped states from California to Illinois have begun to take a second look, to see whether there might be loopholes allowing them to cut the pension benefits of current employees. Now the move in Detroit — made possible, lawyers said, because Michigan’s constitutional protections are weaker — could spur other places to try to follow suit.

Budget cuts shut down alien-hunting telescopes

A collection of radio telescopes dedicated solely to listening out for extraterrestrial life has been put into "hibernation" because of a lack of funds....The ATA is located in the Hat Creek Radio Observatory, so it also gets cash from the National Science Foundation and the state of California, but both of these monetary sources have shrunk considerably over recent months.

S.D. schools plan for doomsday budget

The San Diego Unified School District is already poised to take a $114 million hit in cuts and layoffs next year to cope with the state’s relentless fiscal crisis.

Tuesday, Kowba will discuss what he calls a doomsday budget, a spending plan that includes up to $50 million in additional cuts to next year's $1.04 billion budget.

Budget will be all pain, no gain: Mike (New York)

The mayor laid the blame on Albany and Washington, which he asserted had left the city with about $3 billion less in aid than it needs and was counting on.

He suggested that demonstrators planning a massive rally on Wall Street May 12 to protest his budgets cuts would be better suited directing their anger at the state and federal governments. "New York City has to balance its budget by law," he said. "We will go ahead and do that, you can rest assured. And it will be very painful because we have a lot less money, which means a lot fewer people."

Geithner: Debt-Ceiling Debate Is 'Irresponsible'

The U.S. has "unsustainable" budget deficits and the country faces no alternative but to cut, Mr. Geithner said to an audience at the Council on Foreign Relations. Political consensus has come around to this view, the Treasury secretary said, and despite some discussion to the contrary, politicians will agree to raise the debt cap, he said. The debate on whether or not to increase the debt limit is "ridiculous" and "irresponsible," Mr. Geithner said...The Treasury is steadfastly committed to a strong dollar, Mr. Geithner said. The U.S. will never debase its currency under his watch, he said.

This "fundamental confidence" in the U.S. depends "a lot," Mr. Geithner said, on the Federal Reserve's controlling of inflation, something he said he was confident the Fed would do.

Spain seeks to reassure as borrowing costs rise

Spain sought to reassure investors on Tuesday that it is on track to meet its budget targets after its short-term borrowing costs jumped by around half a percentage point at a debt auction.

Thieves target truck tailgates for the steel

The rising cost of metal has some thieves targeting a heavy piece of steel. They're snagging tailgates off pickups in just seconds.

Josh Griffin sells pickups to online buyers and then ships them across the country. Four of the trucks on his lot have been hit.

Nest egg is missing for N.J. public worker retirees

New Jersey has promised $66.7 billion in medical benefits to future and current retirees, but has not set aside a single penny to pay for it, according to the study, which looked at 2009 financial data from all states.

New Jersey’s unfunded liability — the gap between what is owed and what’s been saved — is higher than the nation’s most populated states of California ($66.5 billion), New York ($56.2 billion) and Texas ($53.8 billion).

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saxplayer00o1's picture
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Posts: 4282
Moody's: US Municipal Sector To See Toughest Year Since 2008

"Moody's Investors Service said it expects 2011 will be the toughest year for U.S. state and local governments since the economic downturn began in 2008, as states cope with weak revenue growth, significant spending obligations and the loss of federal stimulus funding."

"Home prices are falling in most major U.S. cities, and at least 10 major markets are at their lowest point since the housing bubble burst.

The Standard & Poor's/Case-Shiller 20-city index shows price declines in 19 cities from February to January. A record number of foreclosures are forcing down home prices in most metro areas, and prices are expected to keep falling through this year."

  • Other news, headlines and opinion:

Greek, Portuguese Yields Reach Records Amid El-Erian 'Lost Decade' Warning

S&P cuts Japan outlook as rebuilding may hit US$600b

Phoenix Underwater Mortgages Show Housing's Threat to Recovery

Japan's Autos Face $36 Billion Sales Hit

Portugal PM Says Bailout Talks On Track For May Deadline

Illinois RTA Decries Shell Game

Skyrocketing feed prices impact dairies

City officials chafe under Michigan emergency takeover

San Jose officers, others facing possible layoffs ($115 million deficit)

Costa Mesa stares down huge pension debt

Deficit may push Riverside County District Attorney's Office to sever task force ties

Radiation Readings in Fukushima Reactor Rise to Highest Since Crisis Began

Housing Values: The Perfect Storm

rjs's picture
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Posts: 445
For the Servicers: Is It
For the Servicers: Is It Better to Rob Peter or Paul? - The U.S. mortgage servicing industry is in deep doo-doo. To foreclose on a mortgage, you must own the note and the mortgage. That's a lot of paperwork to keep track of, especially when you're trying to package as many mortgage loans into as many securitizations as you can before the market dries up. If we have learned nothing else in the past four years, it is a lot to ask Wall Street to make sure they get things right when there is money to be made. Because of lost, sloppy, and perhaps nonexistent paperwork, banks who purport to have the right to foreclose often cannot prove they own the note and mortgage.

Things are starting to hit the fan -- we can't say exactly what is hitting the fan because this is a family blog (except for here, here, and especially here). In defending itself, the mortgage industry is taking yet another reflexive, knee-jerk position that seems to me to be against their long-term interest.

A typical fact pattern might play out like this. Bank forecloses on Peter. At the foreclosure sale, Paul buys the property. Bank cannot prove it owned the mortgage and note at the time of the foreclosure sale, meaning it had as much right to foreclose as any other stranger to the property. That is to say, it had no right to foreclose.
At this point, Bank either owes Peter or Paul. It owes Peter for fraudulently obtaining a judgment of foreclosure against him and dispossessing him of his home. Or, if we overturn the foreclosure sale, it owes Paul for conveying an invalid title (more accurately, it would owe the sheriff who should have to return Paul's money). If I had to choose between owing a homeowner for dispossessing the person of her home or owing a disappointed investor for conveying an invalid title at a foreclosure sale, I would rather owe the disappointed investor. It is going to be cheaper.

Poet's picture
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The Proper Mindset For Hard Times

Now this is inspiration. We should all aspire to be like the honey badger.



es2's picture
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WSJ: Silver Rush Spreads to

WSJ: Silver Rush Spreads to Stock Market http://finance.yahoo.com/banking-budgeting/article/112618/silver-rush-st...
Trading got so heated during the past two days that shares traded in the iShares Silver Trust, the biggest exchange-traded fund tracking the price of silver, topped that of the SPDR S&P 500 ETF, usually one of the most actively traded securities in the world.


SagerXX's picture
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Posts: 2266
Egad! PMs going completely APE!

I figured there'd be a rally after options settlement at Comex and post-Bennie Bananas' presser today, but this is completely over the top: gold up $20+, silver up 5%...

Of course, oil also up, and the markets too. Madness!

Viva -- Sager

idoctor's picture
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(No subject)

plato1965's picture
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Posts: 615
badgers ?





 on a less significant note..


G20 investigates agencies over oil price transparency

Oil price reporting agencies Platts and Argus are under scrutiny over their governance and transparency as part of a G20 investigation into commodity speculation.



ljhaines's picture
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Posts: 35
Poetic Honey Badger...


That was good...put a smile on my face. Just wish we could put about 535 of them in Washington D.C. and go after the snakes in the capital...(just a thought).

suesullivan's picture
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Posts: 305
More Fukushima fallout -- uranium mining project mothballed

I'm happy to read this from a regional groundwater quality standpoint, but sobered by the ongoing impacts of Fukushima...



Powertech Uranium Corp. has indefinitely put on hold its proposed Centennial Project uranium mine northeast of Fort Collins partly thanks to the Japanese nuclear disaster’s impacts on the uranium industry, Powertech’s president said Wednesday.

The company plans to focus all its efforts on getting its Dewey-Burdock uranium mine permitted and producing uranium in South Dakota before moving ahead with the Centennial Project, Powertech USA President Richard Clement said.


“This is about as bad a story as you can imagine for the U.S. nuclear power industry,” said Charles Mason, True Chair of economics and finance at the University of Wyoming, who is writing a book about uranium exploration and its impacts. “It certainly is bad news.”

Johnny Oxygen's picture
Johnny Oxygen
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Posts: 1443
Badgers! We don't need no

Badgers! We don't need no stinkin' badgers!

ao's picture
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Posts: 2220
Johnny Oxygen
Johnny Oxygen wrote:

Badgers! We don't need no stinkin' badgers!

LOL.  I can't figure out which is funnier ... this or the gay guy with the bizarre badger fetish.

Ken C's picture
Ken C
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Treasure of the Sierra Madre
Johnny Oxygen wrote:

Badgers! We don't need no stinkin' badgers!

Treasure of the Sierra Madre ------ a favorite of mine.

saxplayer00o1's picture
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Posts: 4282
Industrial production falls by record 15.3% in March (Japan)

Japan data paint grim post-quake picture

es2's picture
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Posts: 68
4/20: Trying to pull

4/20: Trying to pull together http://www.economist.com/node/18586448
Africans are asking whether China is making their lunch or eating it
-He still finds business is good, perhaps even better than last time. But African attitudes have changed. His partners say he is ripping them off. Chinese goods are held up as examples of shoddy work. Politics has crept into encounters. The word “colonial” is bandied about. Children jeer and their parents whisper about street dogs disappearing into cooking pots.
-Chinese expatriates in Africa come from a rough-and-tumble, anything-goes business culture that cares little about rules and regulations. Local sensitivities are routinely ignored at home, and so abroad. Sinopec, an oil firm, has explored in a Gabonese national park. Another state oil company has created lakes of spilled crude in Sudan.
-Without the Chinese, unemployment in Newcastle would be even higher than the current 60%.
-The recent arrival of Chinese traders in the grimy alleys of Soweto market in Lusaka halved the cost of chicken. Cabbage prices dropped by 65%.

4/20: Rumble in the jungle http://www.economist.com/node/18586678
Why the Beijing regime needs to act to avert a backlash against Chinese investors in poor countries

King Workd News Blog: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/KWN_DailyWeb.html
Chris Whalen - Fed Halting Bond Purchases Equals Big Problems http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/27_Ch...
King World News interviewed the man Jim Rickards calls the best bank analyst in America, Chris Whalen of Insititutional Risk Analytics to get his comments on the Fed’s policies.

Peter Schiff - Fed’s Actions Cause Massive Gold & Silver Buying http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/27_Pe...

Against a backdrop of uncertainty in global markets, gold was one of the least volatile commodities...http://bit.ly/hiw7Ms
Market Nuggets: http://www.kitco.com/reports/KitcoNewsMarketNuggets20110427.html
Morgan Stanley: Global Oil Demand Remains Strong Despite High Prices
Commerzbank: Gold Holding Above $1,500 As Dollar Remains Weak

Woodman's picture
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Posts: 1028
Peanut butter cost up

Wow, lots of rising costs news today (except housing0; is that a coincidence or a factor in the Fed's announcement today to stop QE2 in June? Natural PB is one of my daily staples, so I'd better top of the larder!

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