Daily Digest

Daily Digest 5/25 - White House Far From Debt Limit Deal, List Of 'Problem Banks' Growing, Greek Unions Threaten Strike

Wednesday, May 25, 2011, 9:47 AM
  • White House: 'Weeks' until deal on debt limit
  • WA budget deal includes cuts for teacher salaries
  • World Bank to lend US$6B to Egypt and Tunisia
  • FDIC says list of ‘problem banks’ is still growing
  • Timeline: Greece seeks new tranche from 110 billion euro loan
  • Homelessness Jumps 25% In Houston
  • Third of Contra Costa County inspectors to be laid off
  • Fed's Duke Paints Grim Picture For U.S. Consumers
  • Smucker Boosts Coffee Prices For Fourth Time In Past Year
  • Juncker Strongly Against Full Restructuring of Greece’s Debt
  • European debt turmoil could weigh on U.S.-Fed's Bullard
  • Greek CDS Deals Come Under Scrutiny
  • NZ dangerously in debt: top businessman
  • Greek unions threaten strikes against latest debt action
  • Projected 5 to 8% increase in student fees at UMass draws criticism
  • Ball State seeks tuition hikes above suggested level
  • Greek economic crisis highlights EU divisions
  • State Auditor Says Pittsburgh Pension Plan 'Severely' Underfunded
  • San Francisco Mayor Ed Lee proposes pension-reform measure
  • San Jose Mayor Proposes Fiscal Reform Package
  • China’s Utilities Cut Energy Production, Defying Beijing
  • Power sector’s woes set to grow due to coal shortage (India)

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

Economy

White House: 'Weeks' until deal on debt limit

On the eve of another round of deficit reduction talks, the White House budget director said he envisions “quite a few weeks of conversation” between congressional leaders and Vice President Joe Biden until an agreement can be reached.

WA budget deal includes cuts for teacher salaries

A tentative agreement to fill Washington state's $5 billion budget shortfall includes cuts to teacher salaries.

Details of the $32 billion spending plan released Tuesday include a 1.9 percent cut for teacher pay and a 3 percent cut for other K-12 employees. Those changes will save the state $179 million over the next two years. Lawmakers are also moving to suspend voter-approved cost-of-living adjustments for education employees, saving another $300 million.

World Bank to lend US$6B to Egypt and Tunisia

World Bank President Robert Zoellick on Tuesday unveiled US$6 billion in fresh funding for Tunisia and Egypt ahead of a meeting of Group of Eight industrial powers in France starting on Thursday.

Zoellick said a Group of Eight meeting in Deauville, France, this week will discuss transitions sweeping the Middle East and North Africa, and ensure that financing for Egypt and Tunisia leads to reforms that ensure all-inclusive growth and create jobs.

FDIC says list of ‘problem banks’ is still growing

The number of “problem banks” in the United States grew to 888 in the first quarter, up from 884 in the previous quarter, the Federal Deposit Insurance Corp. (FDIC) reported today.

Banks on the FDIC’s problem list - those which have low capital levels - have grown in number in the aftermath of the Great Recession. The banks on the FDIC’s troubled list are not disclosed by name.

Timeline: Greece seeks new tranche from 110 billion euro loan

Greek Prime Minister George Papandreou sought but failed to get consensus from opposition leaders on Tuesday on a new set of austerity measures aimed at averting default. Monday, Greece unveiled a series of privatizations, part of a goal to raise 50 billion euros ($71 billion) by 2015 to pay down its debt mountain as Greece tries to secure the next tranche of a 110 billion euros EU/IMF bailout.

Homelessness Jumps 25% In Houston

Coalition CEO Connie Boyd told the Houston Chronicle that the increase in homeless numbers is partly due to the recession. Boyd said Monday that the Texas economy has fared relatively well, but sometimes when people moved to the Houston area to find jobs it didn't work out.

The group's Jan. 31 census found 8,538 homeless people, compared with 6,819 in 2010. The count affects how much social services agencies seek in government help.

Third of Contra Costa County inspectors to be laid off

Roughly a third of all the Contra Costa County building inspectors will be laid off June 1. The county says there's simply not enough revenue to support those jobs, but the inspectors don't think that's true... Contra Costa County building inspectors warn residents could have to deal with a lot more neglected, trashy-looking properties if 14 union inspectors and two non-union managers are laid off as planned next week.

Fed's Duke Paints Grim Picture For U.S. Consumers

"Family incomes have not kept pace with rising costs and many families, particularly those with low-to-moderate incomes, are actually facing the decision between buying gas to drive long distances to work and paying their mortgage," Duke said.

Smucker Boosts Coffee Prices For Fourth Time In Past Year

J.M. Smucker Co. (SJM) increased the list price for most of its coffee products by an average 11%, its fourth rise in about a year.

The food company, which also makes jams, jellies and Jif brand peanut butter, said the move is driven by sustained increases in green coffee costs. It disclosed similar price increases in February, August and last May. The increase applies to such brands as Folgers, Dunkin' Donuts and Millstone.

Juncker Strongly Against Full Restructuring of Greece’s Debt

Jean-Claude Juncker, who heads the group of euro-area finance ministers, said he is strongly against a full restructuring of Greece’s debt.... Juncker wouldn’t comment on possible further steps to help Greece. The country may be allowed to lengthen the repayment terms of its loans if all criteria are met, he said.

“We are waiting of the assessment of the so-called troika and if this is a positive one then we can move to further steps but it’s too early to tell you what kind of next steps can be taken,” he said. “We are strongly committed to defend the stability in the euro area. We have to face a public debt problem of three of our member states and we will deal with this matter in the course of June.”

European debt turmoil could weigh on U.S.-Fed's Bullard

Turmoil over sovereign debt problems in Europe could weigh on the U.S. economic recovery, St. Louis Federal Reserve President James Bullard said on Monday.

"I am concerned about the situation in Europe," Bullard told reporters after a speech. "Prolonged financial market turmoil could be a negative for the U.S."

Greek CDS Deals Come Under Scrutiny

The cost of insurance against a Greek sovereign default, as measured in the price of credit-default swaps written on the country's debt, hit a fresh all-time high of close to 15% Tuesday. Bond markets continue to see no alternative to a restructuring of the country's huge debt.

But if Greece does restructure, a determination to keep speculators who bet against the country's creditworthiness from collecting could mean that the protection bought is worthless, some analysts say.

NZ dangerously in debt: top businessman

He told the group the economy was seriously weakened because of poor Government policies during the past 10 years, which allowed the housing boom to run unchecked, large incentives to invest in rental housing and a lack of response to the declining tradeable goods sector. As a result New Zealand's net foreign liabilities, which included private and public debt and foreign investment, was similar to that of Greece and Ireland. If the country continued to borrow and spend the market would come to a "sudden stop", he said.

"It's [New Zealand's] citizens are eating its breeding stock and next season's seed – it's dangerously in debt but still borrowing heavily," he said.

Greek unions threaten strikes against latest debt action

"This policy must stop now," the country's second-biggest union Adedy said in a statement, announcing plans for a general strike in June. "These measures will bring down the living standards of small and medium classes by over 20 percent," said the union that represents civil servants.

The main Greek union GSEE, which claims a million private-sector members, also intends to mobilise against the new austerity drive adopted by the government in order to clinch a vital slice of funds from the EU and the IMF. "Our response will come in the street," said Stathis Anestis, a senior GSEE member.

Projected 5 to 8% increase in student fees at UMass draws criticism

University officials say the fee increase is needed to close a $54.5 million budget gap next fiscal year. The shortfall is a result of declining state and federal money, coupled with a projected $16.7 million in negotiated pay increases that are not being funding by the state in fiscal 2012.

Ball State seeks tuition hikes above suggested level

Despite the recommendation of the Indiana Commission for Higher Education (ICHE), Ball State University on Monday proposed to raise student tuition and fees 3.9 percent for the 2011-12 academic year, and 4.9 percent for 2012-13.

Greek economic crisis highlights EU divisions

Greece's economic crisis highlighted Tuesday growing divisions at the highest levels in Europe over the rights and wrongs of a risky Greek debt re-scheduling or wider restructuring involving the banks.

Markets fear that any debt restructuring -- which the ratings agencies have said they will treat as an outright default -- will increase the pressure on Italy and Spain, the eurozone's third and fourth-largest economies, just one year after a 110-billion-euro Greek bailout was supposed to stop the rot.

State Auditor Says Pittsburgh Pension Plan 'Severely' Underfunded

According to a news release from Wagner's office, 71 pension plans in Pennsylvania are considered severely underfunded, meaning they are less than 50 percent funded. The anticipated infusion of parking tax revenues would boost Pittsburgh’s pension plans to just a fraction over 50 percent, at best, Wagner said.

San Francisco Mayor Ed Lee proposes pension-reform measure

Despite months of negotiations with labor groups to work out the proposed ballot language, Lee's office didn't know late Monday how far the measure will reduce the city's pension and health-care costs. This year, the city is paying 14 percent of salaries - $357 million - to pensions and is expected to be on the hook for $800 million in pension costs in 2014. The city's total budget is $6.6 billion.

The city also owes $4.36 billion in health benefits to retirees and city employees, but has put aside almost nothing for it.

San Jose Mayor Proposes Fiscal Reform Package

San Jose is facing a $115 million budget gap, unprecedented cuts to core city services and the loss of 600 jobs in the fiscal year that starts July 1, 2011. That's on top of closing a $118.5 million shortfall and eliminating 800 jobs last July. The city's proposed budget would layoff hundreds of workers, including more than 100 police officers.

San Jose has billions of dollars in unfunded liabilities for retirement benefits, driving up the City's annual retirement costs from $63 million in 2000 to $250 million in 2011. By 2016, these costs are projected to reach $400 million and could jump to $650 million if actuarial assumptions are adjusted to reflect modern conditions.

Energy

China’s Utilities Cut Energy Production, Defying Beijing

It is a power struggle that is causing a power shortage — one that has begun to slow China’s mighty economic growth engine. Balking at the high price of coal that fuels much of China’s electricity grid, the nation’s state-owned utility companies are defying government economic planners by deliberately reducing the amount of electricity they produce.

The power companies say they face financial ruin if the government continues to tightly limit the prices they can charge customers, even as strong demand is sending coal prices to record levels.

Power sector’s woes set to grow due to coal shortage (India)

The summer is getting hot and the power crisis threatens to get hotter. The power ministry has said that only 25,000 MW or barely half the needed capacity will be added to the generation capacity, the same as last year because of coal shortage.

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."

5 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4064
saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4064
“Looks like someone is worried about Irish losses,”

 

"The euro pared losses against the dollar Wednesday, after one clearing house raised its margin requirement on Irish debt.

On Wednesday, LCH.Clearnet Group said it raised its margin requirements for Irish government bonds to 65% from 55% in response to the yield differential of 10-year Irish government debt against a AAA benchmark.

“Looks like someone is worried about Irish losses,” said Kathy Lien, director of currency research at Global Forex Trading, in an email. Lien explained that the extra margin on Irish bonds will require purchasing more euros. "

 

............................Note: Click on the link. The rest is worth reading.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Black swans, white swans and Red China.

Many Americans are already concerned about China's growing economic challenge to the United States. Indeed, the challenge itself is hardly news anymore. But a new book, Red Alert by Stephen Leeb, argues that Americans have radically misunderstood just what this challenge consists of.

Easy to read piece in the Huffington Post. 

http://www.huffingtonpost.com/ian-fletcher/how-china-plans-to-leapfr_b_866576.html?utm_source=DailyBrief&utm_campaign=052511&utm_medium=email&utm_content=BlogEntry&utm_term=Daily%20Brief

Well, well. It seems the decolonisation of Africa has been for naught. The west stepped out and China moved in. Bravo, you moronic Hippies.

The West had better be praying that this little demonstration of excess heat is the real deal, or learn to Kow Tow.

http://en.wikipedia.org/wiki/Energy_Catalyzer

The Chinese are going to put a strangle hold on the raw products needed for green energy. They have a hundred year plan.

Eventually I anticipate they will Colonise  L1 and L2. Thereby locking you out of the infinite bounties of the cosmos.

http://en.wikipedia.org/wiki/Gerard_O%27Neill

 

And judging from the defeatist reaction to that statement from the Americans, I imagine that they will only have the Russians, Indians and Brazilians as competition.

(The underlying assumption of this piece is that Nationalism will still be a valid concept in the future, which I seriously doubt due to the speed of Meme exchange on the internet.)

 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
the infinite bounties of the cosmos

The infinite bounties of the cosmos?  Are you serious Arthur?  Last time I looked the cosmos was.....  empty!

Mike

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
r u serious? you betcha.

Unfortunately I am serious Mike.

Since Adam was a boy our survival tactic has been to move into virgin territory when we had exhausted our rescources. Those who were unable to do so ended up as cannibals and lesser humans.

Space is empty. There is a vast realestate up there. Many times the Earths population could be accommodated at L3 alone. The energy resources from 24 hour sunlight are considerable.

Fortunately for us the moon presents only one face to the Earth and has a weak enough gravity for linear accelerators to launch material 24/7 at L3 and L4. And it has water.

A key to the exercise is robotics. I see that half a Robot has been delivered to the Space Station. The other half is to go up later.

The biggest problem we have is the dominant nature of our left hemisphere which is unable to build models of reality that are not supplied by our right (Gestaldt) hemisphere. In other words it can only become "Obvious" once it is experienced. But we cannot build it unless we have a model for it in our Left hemisphere! Catch 22.

Think of the Jumbo Jet. It is preposterous to anyone who has not experienced it, and work-a-day to anyone who has.

It is for this reason that the Space program was cancelled by Congress. They saw it as preposterous. It is only when something more preposterous, such as canabilism enters the Gestaldt that we will make progress.

Do I expect casuaties? In our Millions. But the alternative is casualties in our Billions.

Sometimes the choices are not between good and evil but between Evil and Worse evil.

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