Daily Digest

Daily Digest 6/21 - Small Banks Turn To U.S. Fund For TARP Debts, Hurdle In Way For Loan To Greece, Our Oceans At Risk

Tuesday, June 21, 2011, 9:44 AM
  • Small Banks Turn To U.S. Fund To Repay TARP Aid
  • How the Euro Became Europe's Greatest Threat
  • Greece Prepares To Sell Off State Assets To Get Loans
  • If Greece Defaults, What Happens to Portugal and Ireland—and Spain?
  • New Hurdle Is Placed for Loan to Greece
  • Man Turns to Crime for Prison Health Care
  • Kenya Shilling at 17-Year Low on Inflation
  • Multiple Ocean Stresses Threaten “Globally Significant” Marine Extinction

Learn how to protect your wealth against the Three E forces using our 'What Should I Do?' guide

Economy

Small Banks Turn To U.S. Fund To Repay TARP Aid (David B.)

TARP was widely tarred as a bailout for greedy banks, but the $30 billion small business lending program does not carry the same baggage. The new program would let many TARP recipients sharply reduce dividend payments to the government, while no longer facing strict restrictions on executive compensation.

How the Euro Became Europe's Greatest Threat (James_Knight_Chaucer, Regina F.)

In the past 14 months, politicians in the euro-zone nations have adopted one bailout package after the next, convening for hectic summit meetings, wrangling over lazy compromises and building up risks of gigantic dimensions.

For just as long, they have been avoiding an important conclusion, namely that things cannot continue this way. The old euro no longer exists in its intended form, and the European Monetary Union isn't working. We need a Plan B.

Greece Prepares To Sell Off State Assets To Get Loans (jdargis)

Greece has to raise 50 billion euros ($71 billion) through privatization by 2015, Eurogroup members said. It also has to push through tough budget-cutting measures, they said, despite widespread protests in the country that forced a government reshuffle last week.

If Greece Defaults, What Happens to Portugal and Ireland—and Spain? (pinecarr)

Last year, Greece got a bailout—so this year (wouldn’t you know it), they want another.

But it’s looking like France, Germany, Holland and the UK are all balking at the reality of having to save the Greek’s hide once again.

New Hurdle Is Placed for Loan to Greece (jdargis)

Those measures — which include tax increases, wage cuts and the privatization of about $70 billion in state assets — have met howling popular resistance. Power company workers started rolling blackouts on Monday and unions called a 48-hour general strike for next week after protests last week, some of them violent.

Man Turns to Crime for Prison Health Care (jdargis)

As if conjured up by a presidential speechwriter to star in an anecdote about America’s dysfunctional health insurance system, James Verone, an unemployed 59-year-old with a bad back, a sore foot and an undiagnosed growth on his chest, limped into a bank in Gastonia, N.C., this month and handed the teller a note, explaining that this was an unarmed robbery, but she’d better turn over $1 and call the cops. That, he figured, would be enough to get himself arrested and sent to prison for a few years, where he could take advantage of the free medical care.

Kenya Shilling at 17-Year Low on Inflation (pinecarr)

Kenya’s shilling is plummeting to its weakest level in 17 years and government borrowing costs are the highest since 2002 as a fourfold surge in inflation shakes investor confidence in East Africa’s largest economy.

Environment

Multiple Ocean Stresses Threaten “Globally Significant” Marine Extinction (Johan V.)

The preliminary report arises from the first ever interdisciplinary international workshop to consider the cumulative impact of all stressors affecting the ocean. Considering the latest research across all areas of marine science, the workshop examined the combined effects of pollution, acidification, ocean warming, over-­‐ fishing and hypoxia (deoxygenation).

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."

11 Comments

saxplayer00o1's picture
saxplayer00o1
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Posts: 4066
Change in China Hits US Purse

"For more than a decade starting in the early 1990s, U.S. inflation declined as low-wage workers in China and other developing nations joined the global economy and produced a tide of cheap goods that washed onto U.S. shores.

The trend made American consumers feel better off and, by restraining the upward crawl of consumer prices, helped enable the Federal Reserve to fuel the U.S. economy with low interest rates.

That epoch appears to be over. Prices of imported goods are climbing, becoming a source of inflationary pressure. A wide variety of common products made abroad, from shoes to auto parts to jewelry, are landing on U.S. docks with higher price tags.

U.S. import prices, excluding oil, rose 8% over the past two years, a historic shift from their downward drift for two decades. The increase is bigger still when including oil, which is up on global demand and Mideast turmoil."

"Greece has been hit by rolling blackouts as employees at the main power company began 48-hour rolling strikes to protest the company's privatisation, part of austerity plans needed to avoid a national debt default."

"Greece's central-government budget deficit widened in the first five months of the year as the country's recession hit tax revenue.

The shortfall, which excludes outlays by state-owned institutions and companies, increased to 10.3 billion euros ($14.7 billion) from 9.1 billion euros a year earlier, final data released today by the Athens-based Finance Ministry showed.

Greece has failed to reduce its budget deficit, which in 2009 was the biggest in the history of the euro region, as much as required under the terms of a 110 billion-euro bailout from the European Union and International Monetary Fund last year."

"Public employees held rallies across the state Monday to protest Gov. Andrew Cuomo's plans to move forward with 9,800 layoffs starting next month.

The governor has said the layoffs will begin July 15 unless unions agree to $450 million in concessions. Many union contracts expired April 1, but the sides have yet to agree on new ones. Layoff notices are expected to start going out Friday."

"All 10,000 Detroit Public Schools employees are getting layoff notices as the financially troubled district faces continued budget problems.

District spokesman Steve Wasko tells the Detroit Free Press for a story published Friday that the move will allow "maximum flexibility for staffing."

Roy Roberts, the district's state-appointed emergency financial manager, is working to trim a $327 million budget deficit.

The layoffs are effective July 29, the last day of summer school, and were expected. In April, the district said 5,500 teachers would get layoff notices.

It isn't known how many will be recalled. The 2011-12 school year starts Sept. 6."

"The risk of a downgrade to the credit rating of the United States has increased due to a lack of political consensus on how to employ the country's balance sheet flexibility, Standard and Poors' said on Tuesday.

"Theoretically, there's a lot of flexibility on the fiscal and the monetary side: you have a central bank that can expand its balance sheet, and that's a real boon," Moritz Kraemer, head of sovereign credit ratings for Europe at Standard & Poor's, said on Tuesday.

"But the problem is this flexibility needs to be employed and for that you need political consensus. That's not very visible right now. "

"Sales of existing single-family homes and condos fell 3.8% in May to a seasonally adjusted annual rate of 4.81 million, the National Association of Realtors reported Tuesday. This is the lowest level since November. The decline was in line with forecasts. Economists surveyed by MarketWatch expected sales to fall to 4.80 million units in May, based on a sharp 12% drop in pending home sales in April. Existing home sales fell a revised 1.8% in April to 5.0 million units, down from the initial estimate of a 0.8% fall to 5.05 million units. The median price of homes sold was down 4.6% in May from last year at $166,500. Inventories of existing homes for sale fell 1.0% to 3.72 million units in May, representing a 9.3 months' supply, up from 9.0 months in April."

  • Other news, headlines and opinion:

PBOC issues more commemorative coins to meet soaring demands

Greek PM faces confidence vote, fights to avert default

Fitch sees risk of Greece, US debt defaults

UK Resists Role in New Greek Bailouts

Japan disaster recovery confronts funding dilemma

Iraq sees $13.7 bln budget deficit in 2012-finmin

Spain, Greece See T-Bill Yields Rise

$1 Billion in Homeowner Aid Offered

Greece Debt Crisis Pushes Danish Euro Opposition

German banks' exposure to Greece up to 20 bln -assoc

Jefferson County cities, school districts may see tax revenue delayed

Moody's may downgrade Italy state-controlled groups

Cincinnati's projected deficit rises again

Florida Teachers Sue State In Pension Dispute

Brazilians Buy Miami Condos at Bargain Prices

New Jersey police leaders say they warned state about pension system

North Miami Beach considers declaring “financial urgency”

Bernanke May Prolong Record Stimulus

U.K. Pound Weakens Versus Euro as BOE’s Fisher Says More Stimulus Possible

India to Get Deficient Rains for Second Time in 3 Years, Spurring Prices

Corn Gains as Flooding Threatens China Harvest Amid Strengthening Demand

Corn Stocks Plunging to 1974 Low as China Adds Brazil-Sized Crop to Demand

Mortgage Mess Cripples Spring Sales Season

Analysts Don't Foresee Rise in Home Prices Until 2014

rjs's picture
rjs
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Posts: 445
anyone want to volunteer in georgia?
Georgia's Harsh Immigration Law Costs Millions in Unharvested Crops - Jay Bookman provides some unsurprising news about Georgia's illegal immigration crackdown: there are unintended, negative consequences. After enacting House Bill 87, a law designed to drive illegal immigrants out of Georgia, state officials appear shocked to discover that HB 87 is, well, driving a lot of illegal immigrants out of Georgia... Thanks to the resulting labor shortage, Georgia farmers have been forced to leave millions of dollars' worth of blueberries, onions, melons and other crops unharvested and rotting in the fields. It has also put state officials into something of a panic at the damage they've done to Georgia's largest industry... The results of that investigation have now been released. According to survey of 230 Georgia farmers conducted by Agriculture Commissioner Gary Black, farmers expect to need more than 11,000 workers at some point over the rest of the season, a number that probably underestimates the real need, since not every farmer in the state responded to the survey.
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frobn
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Posts: 184
Georgia's Harsh Immigration

Georgia's Harsh Immigration Law Costs Millions in Unharvested Crops - Jay Bookman provides some unsurprising news about Georgia's illegal immigration crackdown: there are unintended, negative consequences.

 

Look on the bright side. Now is a good time to beat the croud. It's only a matter of time till "move to cities" is reversed with a "move to the farms."

Poet's picture
Poet
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Joined: Jan 21 2009
Posts: 1891
Will Georgia's Workers Flock To Farms?
rjs wrote:
Georgia's Harsh Immigration Law Costs Millions in Unharvested Crops - Jay Bookman provides some unsurprising news about Georgia's illegal immigration crackdown: there are unintended, negative consequences. After enacting House Bill 87, a law designed to drive illegal immigrants out of Georgia, state officials appear shocked to discover that HB 87 is, well, driving a lot of illegal immigrants out of Georgia... Thanks to the resulting labor shortage, Georgia farmers have been forced to leave millions of dollars' worth of blueberries, onions, melons and other crops unharvested and rotting in the fields. It has also put state officials into something of a panic at the damage they've done to Georgia's largest industry... The results of that investigation have now been released. According to survey of 230 Georgia farmers conducted by Agriculture Commissioner Gary Black, farmers expect to need more than 11,000 workers at some point over the rest of the season, a number that probably underestimates the real need, since not every farmer in the state responded to the survey.

I read somewhere a year or so ago that Georgia has one of the highest unemployment insurance denial percentages. So you'd think that laid off workers denied unemployment benefits would be flocking to farm fields and berry bushes and melon patches to earn some income.

Then again, sendentary office workers and retail clerks who happen to be out of work don't typically try out for back-breaking manual labor gigs. Especially if they are in their 40s and 50s....

As someone who has worked in California's farm fields alongside migrant laborers in his younger days, and is now a sedentary office worker (though luckily still with a job), I can totally understand why.

Poet

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maceves
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Posts: 281
blueberries
rjs wrote:

 

Georgia's Harsh Immigration Law Costs Millions in Unharvested Crops - Jay Bookman provides some unsurprising news about Georgia's illegal immigration crackdown: there are unintended, negative consequences. After enacting House Bill 87, a law designed to drive illegal immigrants out of Georgia, state officials appear shocked to discover that HB 87 is, well, driving a lot of illegal immigrants out of Georgia... Thanks to the resulting labor shortage, Georgia farmers have been forced to leave millions of dollars' worth of blueberries, onions, melons and other crops unharvested and rotting in the fields. It has also put state officials into something of a panic at the damage they've done to Georgia's largest industry... The results of that investigation have now been released. According to survey of 230 Georgia farmers conducted by Agriculture Commissioner Gary Black, farmers expect to need more than 11,000 workers at some point over the rest of the season, a number that probably underestimates the real need, since not every farmer in the state responded to the survey.

i was wondering why we didnt have more blueberries for sale in the middle of blueberry season.  What is being sold is coming in from South Carolina.  My own blueberries are ripe now, but they are new bushes and I want more.  They should be sold every where.  

It's a hundred degrees out there!!  I bet you can't even pry teenagers off the sofa as hot as it is.  How much would they want to be paid?

Now those are vidalia onions folks, the best there is.
maceves's picture
maceves
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Posts: 281
oops

I think I quoted myself  in with rjs article....

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Damnthematrix
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48% of Americans Believe Another Great Depression Is Likely

48 Percent Of Americans Believe Another Great Depression Is Likely In The Next 12 Months – 19 Reasons Why They Are Not Completely Crazy

by Michael

Do you believe that the U.S. economy is steamrolling toward a depression?  If so, you are not alone.  According to a recent CNN poll, 48 percent of Americans believe that "another Great Depression" is likely within the next 12 months.  Americans have been waiting for almost three years for a "recovery" to materialize, but instead there are all kinds of signs that the economy is about to get worse yet again.  Inflation is rising but wages are not.  There are millions of Americans that would do just about anything to get a decent job.  The "misery index" is the highest it has been in almost 30 years.  All of the recent polls show that the American people are more pessimistic about the economy than at any other time in recent memory.  World financial markets are incredibly unstable right now and many analysts are expecting a repeat of 2008 (or worse).  Meanwhile, our state and local governments are drowning in debt, the federal government is drowning in debt and governments all over Europe are drowning in debt.  No, it is not crazy for 48 percent of Americans to believe that we are about to go into another Great Depression.

Just think about that statistic for a moment.  Nearly half of the country expects the economy to fall to pieces at some point over the next year.

So do I agree with them?

Yes, I certainly believe that an economic collapse is coming.  But that doesn't mean that it will necessarily happen within the next year.  The United States is in the midst of a long-term economic decline, and the next big financial crisis could potentially happen in 2011 or 2012.

Arthur Robey's picture
Arthur Robey
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Posts: 3936
Good men, Bad men and bacteria.

Well I cannot top the story about the significant extinction of the Marine ecosystem. I wont event metion that that is bad, really bad. How bad? Off the coast of spain there is an underwater fossil forrest. It was poisoned by hydrogen sulphide during a previous anoxic ocean event and washed into the sea.

The oceans have two stable states oxic, (which we know and love) and anoxic. In the anoxic state cyano-bacteria (really ancient bacteria from before we had oxygen in the atmosphere) produce hydrogen sulphide which kills everything. Imagine the oceans producing continent sized clouds of poison gas.

I have forgotten where I read  it but it might have been here.

http://www.amazon.com/Revenge-Gaia-Earths-Climate-Humanity/dp/0465041698...

On a lighter not you might want to compare Rossi's morality with the vermin that infests Wall Street. (Audio file)

Damnthematrix's picture
Damnthematrix
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Posts: 3998
Iceland Declares Independence from International Banks

Iceland Declares Independence from International Banks

By Bill Wilson

June 21, 2011 "Netright" -- – Iceland is free.  And it will remain so, so long as her people wish to remain autonomous of the foreign domination of her would-be masters — in this case, international bankers.

On April 9, the fiercely independent people of island-nation defeated a referendum that would have bailed out the UK and the Netherlands who had covered the deposits of British and Dutch investors who had lost funds in Icesave bank in 2008.

At the time of the bank’s failure, Iceland refused to cover the losses.  But the UK and Netherlands nonetheless have demanded that Iceland repay them for the “loan” as a condition for admission into the European Union.

In response, the Icelandic people have told Europe to go pound sand. The final vote was 103,207 to 69,462, or 58.9 percent to 39.7 percent.   “Taxpayers should not be responsible for paying the debts of a private institution,” said Sigriur Andersen, a spokeswoman for the Advice group that opposed the bailout.

A similar referendum in 2009 on the issue, although with harsher terms, found 93.2 percent of the Icelandic electorate rejecting a proposal to guarantee the deposits of foreign investors who had funds in the Icelandic bank. The referendum was invoked when President Olafur Ragnur Grimmson vetoed legislation the Althingi, Iceland’s parliament, had passed to pay back the British and Dutch.

Under the terms of the agreement, Iceland would have had to pay £2.35 billion to the UK, and €1.32 billion to the Netherlands by 2046 at a 3 percent interest rate.  Its rejection for the second time by Iceland is a testament to its people, who feel they should bear no responsibility for the losses of foreigners endured in the financial crisis.

That opposition to bailouts led to Iceland’s decision to allow the bank to fail in 2008.  Not that the taxpayers there could have afforded to.  As noted by Bloomberg News, at the time the crisis hit in 2008, “the banks had debts equal to 10 times Iceland’s $12 billion GDP.”

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plato1965
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Posts: 615
Allied Irish has defaulted.

Allied Irish Bank has 'defaulted'

 http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8590428/Allied-Irish-Bank-has-defaulted-says-derivatives-body.html

 "The International Swaps and Derivatives Association (ISDA) yesterday said that a "credit event" had occurred on Allied debt, meaning the bank has effectively defaulted on its debt, a situation the Irish government has gone to extreme lengths to avoid.

Credit default swaps (CDS) sold on Allied subordinated bonds and, crucially, its senior debt, have been activated by the decision of the ISDA determinations committee that decides whether a borrower has defaulted."

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