Daily Digest

Daily Digest 4/28 - Bernanke Defends Fed, Japan Auto Industry Still Stalled Post-Quake, A Look At World Hunger

Thursday, April 28, 2011, 9:48 AM
  • 5 Burlco Towns Opting To Exceed Tax Cap Brace For Vote
  • Bernanke Defends Fed’s Role in Running Economy
  • For A Few Dollars More
  • QE3 or not QE3? That is the Question
  • A Japanese Plant Struggles to Produce a Critical Auto Part
  • Japan Quake Still Reverberating Through Auto Industry
  • More Than 1 Billion People Are Hungry In The World
  • Of Mines And Men
  • Chernobyl, 25 Years Later

Follow our steps to prepare for a world after peak oil, such as how to store & filter water


5 Burlco Towns Opting To Exceed Tax Cap Brace For Vote (June C.)

Mount Holly residents will decide whether they want a $207 tax increase, on average, or the loss of more than one-third of the police force and other cutbacks.

"People are saying we have to find a way to pass this or our safety will be in jeopardy . . . but there are also people who are saying, I'm having a hard enough time paying my bills now," said Paul Bracy, a longtime resident and a retired social worker and teacher.

Bernanke Defends Fed’s Role in Running Economy (jdargis)

The central bank, so careful for so long to cultivate a sense that it was above politics, will now hold regular news conferences just like so many others in Washington, hoping to improve its image and build support for its policies.

Mr. Bernanke’s message Wednesday was that the Fed was doing all it could to spur growth and increase employment without causing inflation to rise. He said that inflation must take precedence over employment because inflation would result in job losses.

For A Few Dollars More (JimQ)

Whenever I direct any blame for our economic woes towards the Baby Boom generation they react as expected. They blame the GI Generation for creating the welfare state. They declare that Generation X and the Millenials are just as greedy and self centered as the Boomers. Boomers are great at blaming, ridiculing and acting pompously, while taking no responsibility for their actions and more importantly their inaction. This generation cannot avoid their responsibility for the state of affairs. They like to take credit for their stand against the Vietnam War and their protests against the man during the 1960s. They don’t like to take credit for turning into materialistic, greedy, selfish, short-term focused bastards. When a generation of 76 million people decides to go in a particular direction, the country will go in that direction.

QE3 or not QE3? That is the Question (Ilene)

The Chinese are not the only ones just saying no to America. 3M (MMM), for the first time in the company’s 109-year history, will place most of its capital spending ($1.1Bn) OUTSIDE THE US. How does the cheap dollar build jobs or encourage manufacturing in the US? It does not – that’s a lie you are being told. Like the rest of the top 1%, 3M is moving their operations out of the US step by step, PLANNING to cut US manufacturing from 65% of their output to 55% and, already, 70% of their sales come from overseas. This year “is the first time the company is now having more than 50 percent of its capital deployed internationally,” Chief Financial Officer David Meline said on a conference call. “As we see the recovery in demand, we are adding capacity and where we’re adding it is internationally, close to where the growth is.”

A Japanese Plant Struggles to Produce a Critical Auto Part (jdargis)

Since the March 11 earthquake, the lack of chips from this plant is a big reason automobile production has slowed to half its normal rate in Japan, and is at a crawl in some factories in the United States and elsewhere.

And plant officials here on Wednesday acknowledged that this critical link in the supply chain would be restored only gradually, despite the round-the-clock efforts of an army of workers to repair the cracked walls, collapsed ceilings and out-of-kilter equipment caused by the quake.

Japan Quake Still Reverberating Through Auto Industry (jdargis)

Ford Motor Co., which Tuesday posted $2.6 billion in quarterly profit, said it was considering ways to ramp up production to fill the gap caused by fewer Japanese vehicles coming to the U.S. market.

Ford is studying whether it can get the components needed to make more cars, said Alan Mulally, the automaker's chief executive.

More Than 1 Billion People Are Hungry In The World (jdargis)

This debate cannot be solved in the abstract. To find out whether there are in fact poverty traps, and, if so, where they are and how to help the poor get out of them, we need to better understand the concrete problems they face. Some aid programs help more than others, but which ones? Finding out required us to step out of the office and look more carefully at the world.


Of Mines And Men (jdargis)

A from-the-ground report on how the tapping of Angola’s natural resources has kept the country a killing field, and made it one of the world’s most glaringly inefficient kleptocracies.


Chernobyl, 25 Years Later (jdargis)

In the early morning of April 26th 1986, an explosion at the plant released a radioactive cloud that spread over large swathes of Europe and western Russia. It has been difficult to gauge the human impact of the accident. Millions of people were exposed to radiation, and 350,000 were permanently evacuated from their homes. In 2006 the Chernobyl Forum, comprising a number of UN agencies, estimated that 9,300 people in Belarus, Russia and Ukraine would die from cancer as a result of exposure to radiation, but others have said that number is far too low.

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Illinois faces $8 bln backlog of bills-comptroller


"(Reuters) - Illinois is on track to end fiscal 2011 with $8 billion in unpaid bills and other obligations, the state comptroller said on Wednesday.

"After years of hand-wringing about the state's finances and deficit spending, here we are looking to end yet another fiscal year in the red," said Comptroller Judy Baar Topinka in a statement.

The $8 billion owed to school districts, hospitals, and social service agencies, as well as for state employee health insurance and to cover $850 million in corporate tax refunds, would match the amount of unpaid obligations the state had at the end of fiscal 2010, according to the comptroller.

Deferring payment of bills incurred in fiscal 2011 into fiscal 2012, which begins on July 1, would help perpetuate Illinois' structural budget gap despite a big income tax rate increase enacted earlier this year.

Illinois' widening structural deficit, huge unfunded pension liability, inability to pay bills on time, cascading bond ratings, and its propensity to borrow its way out of financial problems have made the state a top concern in the $2.9 trillion U.S. municipal bond market."

"The rating agency, which cut New Jersey by one notch to Aa3 from Aa2, also cited the Garden State's $31 billion public pension shortfall -- a $37 billion issue that forced downgrades across the country in recent months. Issuers prize high credit ratings because they allow them to borrow money more cheaply.

"To voters, it means the fiscal house is not in order, and the question will be who to blame," said Lee Miringoff, Director of Marist Institute for Public Opinion.

Later on Wednesday, Fitch Ratings revised New Jersey's credit outlook to negative from stable, citing "mounting budgetary pressure" and a significant unfunded pension liability. Fitch currently rates New Jersey GOs AA."

  • Other news, headlines and opinion:

Spain's Local Elections May Expose Wider Deficits in Risk for Bond Markets

Greeks Say Economic Situation Has Worsened, Poll Indicates

Senate leader: SC can't sustain Medicaid spending

Mayor: Cleveland must cut up to 400 jobs by end of May due to reduced state aid

LA Mayor Villaraigosa orders more furloughs after workers reject deal ($460 million deficit)

Don't count on $85 million revenue, Detroit City Council is told

Fed raises inflation forecast above goal (Click on the FT link from Google search)

Japan Tourists Shun Hawaii as Golden Week Travel Falls on Quake

U.S. Airline Surcharges Set Record at $420 as Oil Prices Climb

Economy in U.S. Grew 1.8% in First Quarter, Less Than Forecast and Economic growth slows, inflation surges

Housing Crisis Continues to Batter Nation's Homeownership Rate

Gold strikes record as dollar wilts

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Monsanto Will Soon Be

Monsanto Will Soon Be Allowed To Police Itself http://www.fastcompany.com/1749695/monsanto-now-allowed-to-police-itself
Monsanto, enemy of organic farmers and anti-GMO advocates alike, will likely be allowed to conduct its own environmental studies as part of a two-year USDA experiment. But there is no good that can possibly come of an experiment where the company behind nearly every genetically modified crop in our daily diets is allowed to decide whether its products are causing any environmental harm. And Monsanto isn't the only biotech company that will be permitted to police itself.

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  Russia bans petrol exports


Russia bans petrol exports amid shortages


Government official said the ban would apply for the month of May alone and only cover high octane petrol (gasoline) sold at the highest prices.

But Putin also ordered an immediate boost in export duties and a cut in local excise taxes aimed at keeping most future petrol sales of all types within Russia.




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McDonald’s hires 62,000 people/had 1 million applications



"McDonald’s and its franchisees hired 62,000 people in the U.S. after receiving more than one million applications, the Oak Brook, Illinois-based company said today in an e-mailed statement. Previously, it said it planned to hire 50,000."


Thanks to zerohedge for catching that one. Read what they had to say here.

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The End of QEII: It’s Time

The End of QEII: It’s Time to Make the Donuts http://www.pimco.com/EN/Insights/Pages/The-End-of-QEII-It%E2%80%99s-Time...
Crescenzi: We expect the end of quantitative easing by the Fed to lead to higher yields & lower values for Treasuries.

India's silver recycling to curb import growth http://in.reuters.com/article/2011/04/27/idINIndia-56596020110427
Soaring silver prices are driving Indians to recycle jewellery into bars as an easier, more reliable way to invest, a trend that will limit imports of the metal in the world's fourth largest consumer.

Dollar Skids to New Three-Year Lows http://online.wsj.com/article/SB10001424052748704463804576290660981248594.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond  (Google News)
Investors wasted no time in sending the dollar to new three-year lows after the Federal Reserve gave them little reason to support it.

Wal-Mart: Our shoppers are 'running out of money' http://money.cnn.com/2011/04/27/news/companies/walmart_ceo_consumers_und...
Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.
Lately, they're "running out of money" at a faster clip, he said.

James Turk - The Waterfall Decline in the US Dollar Has Begun http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/28_Ja...
Roger Conrad--How Bernanke will affect the energy market (audio) http://www.financialsense.com/financial-sense-newshour
Jim Sinclair's In the News Today http://jsmineset.com/2011/04/28/in-the-news-today-849/
Old Gold Fundamentals Are 'Passé' – Peter Munk, Barrick Gold (Ed Steer's Gold and Silver Daily) http://www.caseyresearch.com/gsd/edition/old-gold-fundamentals-are-pass-...

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