Daily Digest

Daily Digest 5/11 - Foreclosures Crush Home Prices, U.S. Colleges Raising Tuitions, Businesses Pass Along Rising Price Of Gas

Wednesday, May 11, 2011, 9:41 AM
  • Wendy's/Arby's Mulls Price Increases
  • Foreclosures Crush Home Prices
  • Breakfast and lunch prices will increase 5 and 10 cents at Fredericksburg City Schools next year
  • Tuition at NDSU to rise 8.8%
  • Greeks bailout audited as eurozone debt storm rages
  • UBS’s Magnus Says EU Leaders Need to Restructure Greek Debt Soon
  • Cal State weighs 32% tuition increase
  • CU Regents approve projected tuition increase
  • Central Contra Costa sewer rates to rise
  • Used Car Prices Hit Record High In April
  • Feed Costs Eating Into Profitability
  • Leaviss: QE3 Would Cause Dollar To Collapse
  • Dozens Of States Eye Jobless-Borrowing Sting
  • Survey: 85% of New College Grads Move Back in with Mom and Dad
  • Ireland to Impose Levy on Pension Funds to Finance Jobs Plan
  • Spanish search in vain for an end to recession
  • Riverside County's homeless numbers up dramatically, new tally shows
  • USPS posts $2.2 bln loss, warns of Sept insolvency
  • Up to $49 billion unpaid by uninsured for hospitalizations
  • Businesses Pass Along The Price Of Fuel
  • As Gas Prices Climb, Sales of Bikes and Scooters Surge
  • Gas Prices Increase Amtrak Ridership
  • Tepco Estimates Yen 1 Trillion Extra Costs For Fossil Fuel

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Economy

Wendy's/Arby's mulls price increases

The third-biggest U.S. fast-food restaurant operator depends on fresh beef at Wendy's and roast beef at Arby's. It now expects beef costs to rise 20 percent this year, compared with its previous call for an increase of 10 to 15 percent, Chief Financial Officer Stephen Hare said on a conference call with analysts on Tuesday. It also sees overall commodity costs -- including beef, bacon, fryer oil, dairy and distribution costs -- rising 5 percent to 6 percent, compared with a previous estimate of 2 percent to 3 percent.

Wendy's/Arby's plans to use selective price increases and the promotion of more profitable items to help offset those higher costs, Hare said.

Foreclosures Crush Home Prices

The median home price has now slumped 30% from its 2006 high of $227,100, and prices have fallen nearly 7% so far this year. "We're seeing prices dropping faster than they did in 2010," said Pat Newport, an analyst with IHS Global Insight. "That's troubling. Falling home prices precipitated the recession and are slowing the recovery."

NAR blamed much of the latest price drop on sales of foreclosed properties. These "distressed" property sales accounted for 39% of the market, up from 36% from a year earlier.

Breakfast and lunch prices will increase 5 and 10 cents at Fredericksburg City Schools next year. (Virginia)

The Fredericksburg City School Board voted to raise prices 5 and 10 cents at last night’s meeting.

The prices are being raised to meet the Child Nutrition Reauthorization Act, signed by President Barack Obama in December. Many of the cost increases are in response to higher fuel prices, said David Baker, chief financial officer for Fredericksburg City Public Schools.

Tuition at NDSU to rise 8.8 percent

Student tuition costs at North Dakota State University will jump 8.8 percent this fall, an increase that the school's president and student leaders argued was necessary to stop the potential elimination of academic programs.

Greeks bailout audited as eurozone debt storm rages

Experts from the European Union, International Monetary Fund and European Central Bank (ECB) began an audit of finances and reforms in Greece to determine if it merits a critical new slice of funding from a bailout package agreed last year. This was just as a top ECB official warned that debt default or restructuring would hit the entire eurozone.

A restructuring would put Greece's banking system "on its knees," Lorenzo Bini Smaghi told the Italian daily La Stampa. Smaghi, who sits on the ECB executive board, warned of "the contagion that a Greek disaster would inflict on the rest of the eurozone."

UBS’s Magnus Says EU Leaders Need to Restructure Greek Debt Soon

“The sooner it happens the better,” Magnus said in an interview on Bloomberg Television’s “On the Move” with Francine Lacqua. “It is incumbent on Europe to basically draw a line somewhere, to say enough is enough, we’ve basically got to deal with this in a traditional debt-restructuring manner.” ...The yield on Greek 10-year bonds stood at 15.3 percent at 11:21 a.m. in Athens today, twice the level of a year ago when Greece accepted an international bailout, indicating investors are betting Greece won’t be able to return to markets as planned.

“The problem is that the more intense the cycle gets the bigger the contagion effect can be on other peripherals and on other sovereigns, including Spain,” Magnus said.

Cal State weighs 32 percent tuition increase

If it must cut $1 billion from next year’s budget instead of the mere $500 million it has already planned for, trustees of the California State University system may have to increase tuition by 32 percent among other steps, CSU says Tuesday. For full time undergraduates, that would mean an additional $1,566 or a total of $6,450 tuition fee per year.

The possible increase is contingent because any tuition fee increase depends on whether the state imposes further budget cuts, and the amount of those reductions, CSU says. In addition to tuition fees, campuses charge various fees that average $950 per year.

CU Regents approve projected tuition increase (Colorado)

Concerns about tuition rates at UCCS have been refueled this semester as the University of Colorado Board of Regents recently announced there would be yet another increase in undergraduate tuition costs. Beginning in the Fall of 2011, UCCS undergrad students will pay an additional $450 dollars per year in overall tuition costs....The Board of regents felt the increase was necessary because of the nearly 30 percent recent reduction of state funding over the past three years.

Central Contra Costa sewer rates to rise

For a single-family house, Concord's rate will rise from $306 to $326 per year. In the sanitary district, the rate will rise from $311 to $341. Commercial rates and increases may differ depending on the business.....In the sanitary district, the rate increase is needed to pay for sewer maintenance, treatment plant upgrades and higher pension and employee benefit costs, according to a district staff report.

Used Car Prices Hit Record High In April

Prices for used cars hit a record high in April and are expected to climb even higher. It seems car production cutbacks in this recession are making used vehicles a hot commodity. High gas prices are slowing down the market for new cars. Owners are hanging on to their old ones, so fewer trade-ins are making it to these used car lots.

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Feed Costs Eating Into Profitability

According to the U.S. Department of Agriculture’s ag prices report released in late April, corn prices hit an all-time record high of $6.40 per bushel, up 87 cents from March. That put the cost of feed per hundred pounds of milk at $10.71 on a national average, the highest level ever seen.

Leaviss: QE3 Would Cause Dollar To Collapse

The manager also believes the US will inevitably see its credit rating downgraded and is at risk of default, making the economy look more like a ‘banana republic' than a Western nation.

He said people were surprised when S&P recently downgraded the US' credit rating outlook to negative, but added the country’s level of debt to GDP is “baked into the cake.” He said: “With the level of debt to GDP, there is nothing that can be done, it is inevitable the US will be downgraded.

Dozens Of States Eye Jobless-Borrowing Sting

Like Florida, where about 1 million people are out of work, dozens of fiscally pressed states such as California, Illinois, Ohio, Wisconsin and the Carolinas may be hit with federal penalties in 2011 if their governments do not fully repay loans taken to pay unemployment benefits.

States such as New Jersey, Georgia, Minnesota and Kentucky have taken short-term loans totaling more than $48 billion to bolster their tapped-out unemployment insurance funds.

Survey: 85% of New College Grads Move Back in with Mom and Dad

Surprise, surprise: Thanks to a high unemployment rate for new grads, many of those with diplomas fresh off the press are making a return to Mom and Dad's place. In fact, according to a poll conducted by consulting firm Twentysomething Inc., some 85% of graduates will soon remember what Mom's cooking tastes like.

Ireland to Impose Levy on Pension Funds to Finance Jobs Plan

Ireland’s government will impose a temporary levy on domestic private pension savings to fund a jobs plan aimed at cutting unemployment and aiding the economic recovery. The government plans to apply an annual 0.6 percent charge over four years on pension assets, excluding funds providing benefits to non-resident employers and members, Finance Minister Michael Noonan said in Dublin today. The move should generate 470 million euros ($675 million) a year, he said.

Spanish search in vain for an end to recession

The steady erosion of employment has required Spaniards to make some drastic choices, with emigration one of them.

An estimated 1.7m already live abroad and in the first quarter of 2011, emigration rose by 30%. Some professions are keener to leave than others. No less than 74% of Spanish architects, according to one union survey, are trying to work abroad. The one million empty houses left from the construction boom are a reminder of why their services are no longer required.

Riverside County's homeless numbers up dramatically, new tally shows

The number of people in Riverside County who are homeless on any given day has increased an estimated 84% in the last two years, officials said Monday. A countywide tally Jan. 24 found 6,203 people living in emergency shelters, transitional housing or places not fit for human habitation, such as sidewalks, cars and abandoned buildings. The last count in 2009 put the figure at 3,366.

The increase in the county’s chronically homeless population was even more significant: from 969 people in 2009 to 2,515 in 2011, a 160% jump.

USPS posts $2.2 bln loss, warns of Sept insolvency

The U.S. Postal Service posted a $2.2 billion net loss in its second quarter and said it might be unable to pay its debts by September.

The agency, which has been battling falling mail volumes and competition from FedEx (FDX.N) and United Parcel Service (UPS.N), said it expects to hit its borrowing limit by the Sept. 30 end of the fiscal year, and will have to default on payments to the federal government unless Congress intervenes.

Up to $49 billion unpaid by uninsured for hospitalizations

"This report shows that even higher-income, uninsured families are struggling to meet the high costs of health care," Sherry Glied, assistant secretary for planning and evaluation at Health and Human Services, said in a statement. "No family should bear the burden of being one illness or accident away from bankruptcy." Researchers also found that most uninsured people have "virtually no" savings and that about a third have no financial assets.

Energy

Businesses Pass Along The Price Of Fuel

Businesses of all sorts — from shippers to dry cleaners — are tacking on or raising surcharges to offset their high fuel costs, hitting consumers already squeezed between surging gas and food prices, and slow-growing wages.

Over the past several weeks, UPS and FedEx, which have longstanding surcharges that track fuel prices, have increased these fees for ground shipping to 8.5 percent from 6.5 percent. At Gentle Giant Moving Co. of Somerville, officials estimate the fuel surcharge, a flat fee charged per truck per day, adds about $32 per day to the average move.

As Gas Prices Climb, Sales of Bikes and Scooters Surge

With more people complaining about what it costs to fill up their tanks, people are increasingly looking for transportation options. Sales of gas powered scooters, are up nearly 50 percent nationwide compared to a year ago, and bicycles are up nine percent according to those who track the industry.

Gas Prices Increase Amtrak Ridership

Amtrak ridership increased in April to be the best April on record and extends the national passenger railroad's streak to 18 consecutive months of year-over-year ridership growth.

Ridership for April 2011 was nearly 2.7 million passengers, which represents an increase of 9.9 percent over April 2010 and keeps America's Railroad on track to set a new annual ridership record.

Tepco Estimates Yen 1 Trillion Extra Costs For Fossil Fuel

Japan's Tokyo Electric Power company estimates its extra costs for fossil fuels in the 2011-12 financial year will be about Yen 1 trillion ($12.5 billion) as its dependency on thermal power generation has increased while fuel prices have also risen, company president Masataka Shimizu said Tuesday. The company has increased its thermal power generation using fossil fuels -- coal, crude, fuel oil and LNG -- after the March 11 earthquake, which automatically shut its Fukushima-1 (Daiichi) and Fukushima-2 (Daini) nuclear power plants in the northeast.

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8 Comments

saxplayer00o1's picture
saxplayer00o1
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truenorth's picture
truenorth
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saxplayer00o1's picture
saxplayer00o1
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YTD interest payments at $139 billion, up from $123 last year

"The U.S. will hit its borrowing limit on May 16, according to the Treasury Department, but the government can stave off a potential default until Aug. 2 through special accounting maneuvers.

The Treasury’s monthly budget statement also showed that the U.S. payed nearly $23 billion in interest payments on the national debt.

For the year to date, the Treasury has paid $139 billion in interest payments, up from $123 billion for the same period in the prior fiscal year/ "

 

 

MarkM's picture
MarkM
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saxplayer00o1 wrote: For the
saxplayer00o1 wrote:

For the year to date, the Treasury has paid $139 billion in interest payments, up from $123 billion for the same period in the prior fiscal year/ " 

13% increase? That doesn't sound good.

Is this an expected rate of increase?

Wendy S. Delmater's picture
Wendy S. Delmater
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VeganDB12's picture
VeganDB12
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Tepco: Fukushima Fuel Rods Are Fully Exposed

" Tokyo Electric Power Co. said fuel rods are fully exposed in the No. 1 reactor at its stricken Fukushima Dai-Ichi nuclear plant, setting back the utility’s plan to resolve the crisis."...

..."It’s unlikely the situation has worsened with the discovery the rods are exposed because they’ve probably been out of the water since shortly after the crisis started, Narabayashi said."....

 

http://www.bloomberg.com/news/2011-05-12/japan-suffers-setback-at-fukush...

kenneth's picture
kenneth
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Riverside jobs

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