Daily Digest

Daily Digest 6/24 - Saab Stops Paying Employees, A Lesson From Starving Billionaires, Oil Dives On Plan To Release Reserves

Friday, June 24, 2011, 9:45 AM
  • Sweden's Saab Cant Pay Its Wages
  • Put A Fork In It: Saab Stops Paying Employees
  • Suit Goes After Fannie And Freddie
  • Black Swans From New Normal
  • A Lesson from Starving Billionaires
  • Chinese 1- And 2-Week SHIBOR Rates Surge Over 9%, Highest Since 2007
  • Biggest Banks May Get Boost From Basel
  • 12 Things That The Mainstream Media Is Being Strangely Quiet About Right Now
  • Oil Dives To 4 Month Low As Emergency Stocks Unleashed
  • Oil Tumbles On Plan To Release Int'l Reserves

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Economy

Sweden's Saab Cant Pay Its Wages (Phil H.)

Union IF Metall said it now is gathering its members pay slips that haven't been honored in order to prepare requests for payment that will be sent to Saab Automobile. When Saab Automobile receives the requests, likely sometime next week, it will have a week to pay the claims.

"If it does not have the money at that point, there is only one thing left to do," said Berko Davidovic, lawyer at IF Metall.

Put A Fork In It: Saab Stops Paying Employees (Johnny Oxygen)

Not meeting payroll means production, essentially shut down since April 6, can't restart any time soon restart because what supplier would deliver parts now without cash up front.

The company insists the latest news does not mean it will file for bankruptcy. Spokesman Eric Geers told the AP: "We're saying that we don't have funding to pay out salaries, but we're working day and night to find a solution. We're assuming we'll find a solution."

Suit Goes After Fannie And Freddie (Phil H.)

Oakland County is hoping to recover more than $1.5 million in real estate transfer taxes that mortgage giants Fannie Mae and Freddie Mac haven't paid over the years.

In a lawsuit filed Monday in U.S. District Court, the county said the companies didn't pay the tax -- which is less than 1% of a property's sale price -- because they claim to be government entities, a notion the county disputes.

Black Swans From New Normal (hucklejohn)

The reality is that nothing has been fixed, nor attempted in solution. The grotesque insolvency of banks, households, and government is the marquee message. Without continued monetization, the system would collapse rapidly and disorderly. However, with continued monetization, with a QE chapter by another name or conducted behind the same curtains, the system will collapse in a gradual and orderly manner. The USFed has no more credibility. The announcement on Wednesday that the New York Fed refused to provide details on stolen Iraqi Reconstruction Funds is the latest blatant syndicate action that screams criminality. Witness the early stage of another uniformly applied global Gold bull market breakout.

A Lesson from Starving Billionaires (adam)

Fiat currencies have no intrinsic value. Unlike real money, fiat paper currencies cannot hold their value over long periods of time. It is a fact of life that all fiat currencies have expiration dates. They all end at their intrinsic values of nothingness.

Chinese 1- And 2-Week SHIBOR Rates Surge Over 9%, Highest Since 2007 (pinecarr)

And while the developed world wonders whether or not Greece will default (it will), the real news continues to come from the new "White Knight" and IMF replacement, China, which according to the China Securities Journal is about to see an unprecedented surge in inflation, making life for the schizophrenic PBoC (on one hand handing out liquidity, on the other reeling it back in with rate hikes), untenable. Market News reports: "The Chinese central bank will need to raise interest rates in the near future if it is to tackle inflation pressure, despite the potential hit to economic growth, the official China Securities Journal said in an unsigned, front-page editorial Thursday. The newspaper said the central bank will move in the near future because the monetary conditions that are driving inflation are still in place, while negative rates are driving money out of the banking system, and putting those funds outside of the scope of reserve requirement adjustments. "

Biggest Banks May Get Boost From Basel (pinecarr)

The Basel Committee on Banking Supervision meets in the Swiss city today to discuss how much extra capital the world’s largest and most systemically important banks will be forced to hold to avert another financial crisis. About 25 banks may have to hold more than the 7 percent core Tier 1 capital required by the Basel rules, according to Morgan Stanley analysts. While the plans may force lenders such as Deutsche Bank AG (DBK) and Bank of America Corp. (BAC) to hold more capital, they may conversely make it cheaper for them to borrow as the lenders will have an implicit state guarantee as being too big to fail, analysts and lawyers said.

12 Things That The Mainstream Media Is Being Strangely Quiet About Right Now (byrnegreen)

TEPCO has finally admitted that this disaster has released more radioactive material into the environment than Chernobyl did. That makes Fukushima the worst nuclear disaster of all time, and it is far from over.

Massive amounts of water is being poured into the spent fuel pools in order to keep them cool. This is creating "hundreds of thousands of tons of highly radioactive sea water" that has got to go somewhere. Inevitably much of it will get into the ground and into the sea.

Oil Dives To 4 Month Low As Emergency Stocks Unleashed (woodman)

The International Energy Agency announced it would inject 60 million barrels of government-held stocks in the global market, immediately increasing world supply by some 2.5 percent for the next month and sending prices spiraling, with U.S. crude prices erasing all of the year's gains.

The move shocked traders who had been expecting the IEA to give top exporter Saudi Arabia more time to make up for the supply shortfall following OPEC's failed meeting on June 8, when other members blocked Gulf efforts to hike output.

Oil Tumbles On Plan To Release Int'l Reserves (Sky)

On Thursday benchmark West Texas Intermediate crude fell $4.39, or 4.6 percent, to settle at $91.02 per barrel on the New York Mercantile Exchange. Brent crude, used to price many international varieties, lost $6.95, or 6.1 percent, to settle at $107.26 per barrel on the ICE Futures exchange.

The IEA's action comes two weeks after the Organization of Petroleum Exporting Countries failed to agree to boost oil production. At the time, IEA said it was disappointed by OPEC's lack of response to rising oil prices.

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7 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4061
Illinois Stiffs Vendors From Mortuary to IBM as $4 Billion Debt

"In Illinois, you’re never too big or too small to get stiffed by the state, which is $4 billion behind in its bills.

International Business Machines Inc. is owed $1.1 million. Office Depot Inc. (ODP) is waiting for a $660,955 check. And the 17th Street Bar & Grill in Sparta is due $340.52. They are among at least 8,000 vendors including businesses, charities and government agencies waiting months for the state to pay up. At least 114 companies are due more than $1 million, according to documents from Illinois Comptroller Judy Baar Topinka.

While states periodically fall behind in paying Medicaid providers or, in the case of California, rely on bank loans and IOUs, the Illinois backlog has been growing for three years. It’s forcing some vendors to fire workers, cut services and, if they can, obtain loans and lines of credit to keep their businesses going while the state takes months to pay."

  • Other news, headlines and opinion: 

US House to consider balanced-budget amendment

Fed's Balance Sheet Expands To $2.860 Trillion In Latest Week and Fed balance sheet hits another record size

Off-Balance Sheet Lending Pumps Up Default Risk: China Credit

India Said to Plan Raising Fuel Cost to Cut $5.3 Billion Subsidy

Japan quake caused $210 bln in property damage

Moody's Lowers Anglo Irish, Irish Nationwide Ratings Closer To Default

Athens struggles to win backing for austerity plan

Italian bank stocks suspended after sudden drop and Italian Banks Plunge on Ratings Review

Russia May Face Debt Crisis Like Greece

Cemex Scraps $650 Million Overseas Bond Sale as Yields Soar: Mexico Credit

EU regulator hits banks with Greek bond warning

Hungarians struggling with debts in Swiss francs

Detroit Schools budget to cut $230M in expenses

Japan Yosano: sales tax hike needed to sustain public finances

State Lawmakers Racing to Close Budget Gaps Across U.S. as Deadlines Loom

Asia moves to tap oil reserves

Spain to Cut Spending 3.8% Next Year, Deepening Deficit Fight

Italian, Spanish Bonds Drop as Greek Default Concern Persists

Greek debt holders 'face 70pc haircut'

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4061
Debt ceiling...Tax hikes and herds of unicorns

 

"White House press secretary Jay Carney said the administration was confident it could reach a deal, but repeated its position that this must include revenue raising measures as well as spending cuts."

"Republicans and Democrats dug in their heels on Friday as President Barack Obama prepared to wade into a divisive debate over taxes and spending aimed at heading off a default on the U.S. government's debt.

The White House said Obama will meet separately with Senate Democratic and Republican leaders on Monday in an effort to resurrect negotiations that collapsed when Republicans walked out on Thursday over Democrats' demands for tax hikes.

"The president is willing to make tough choices but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and sacrifice while millionaires and billionaires ... are let off the hook," said White House spokesman Jay Carney aboard Air Force One.

Republicans on Friday ruled out any tax increases as part of an agreement to narrow stubborn budget deficits and raise the U.S. debt limit. The federal deficit now stands at $1.4 trillion, among the highest levels relative to the economy since World War Two.

Boehner and Republicans say any package that includes tax increases stands no chance of passing the Republican-controlled House. Senate Republicans threaten to block the measure if it includes tax increases.

"A tax hike can't pass the Congress. They might as well ask us to herd unicorns through the Senate chamber," said Don Stewart, spokesman for Senate Republican leader Mitch McConnell. "It just can't happen."

The $14.3 trillion U.S. debt ceiling must be increased before Aug. 2 or the Treasury Department will run out of money to pay the country's bills"

 

......................Both parties seem very far apart with a little over a month to go before we default.  No worry about this from me though. I'm sure that the Republicans and Democrats will put their heads together and bring down the debt in an intelligent manner.

phecksel's picture
phecksel
Status: Silver Member (Offline)
Joined: May 24 2010
Posts: 204
saxplayer00o1 wrote:"The
saxplayer00o1 wrote:

"The president is willing to make tough choices but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and sacrifice while millionaires and billionaires ... are let off the hook," said White House spokesman Jay Carney aboard Air Force One.

 

This just drips in irony

dps's picture
dps
Status: Martenson Brigade Member (Offline)
Joined: Jun 27 2008
Posts: 442
phecksel
phecksel wrote:
saxplayer00o1 wrote:

"The president is willing to make tough choices but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and sacrifice while millionaires and billionaires ... are let off the hook," said White House spokesman Jay Carney aboard Air Force One.

 

This just drips in irony

 

nice catch.  smile ... dons

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Sorry, Didn't Get The Irony
dps wrote:
phecksel wrote:
saxplayer00o1 wrote:

"The president is willing to make tough choices but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and sacrifice while millionaires and billionaires ... are let off the hook," said White House spokesman Jay Carney aboard Air Force One.

This just drips in irony

nice catch.  smile ... dons

I would say we do still need an Air Force One for our nation's President. There are too many logistical issues with flying a sitting President and associated staff and security detail on United or Delta commercial flights or even chartering. Also important given the importance of requiring secure communications with foreign powers and military personnel, launch codes for nukes, countermeasures against a shoulder-launched rocket, etc.

Carney was traveling with the President. So, ahh, I didn't get this irony, sorry.

I would say what's really dripping in irony and sadness for America is borrowing heavily to give out tax breaks and start unnecessary wars, or borrowing money to continue giving out tax breaks and continue unnecessary wars.

Poet

phecksel's picture
phecksel
Status: Silver Member (Offline)
Joined: May 24 2010
Posts: 204
Poet, I absolutely agree the

Poet,

I absolutely agree the President requires AF1...  Having said that, what percentage of trips are made for truly presidential purposes and how many are for re-election, or other political purposes?  The accounting used to charge the re-election committee or party for non presidential purposes is rediculous.  I'm not even convinced the number they get charged covers the fuel costs per hour, much less the true variable expenses of the flights.

P

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1428
SAAB

I don't quite understand SAAB's cash crunch.  When the deal ws struch between SAAB, Swedish Gov, Spyker, and GM, SAAB was suppossed to be set free with enough cash to operate for (3) years.  Well, it has only been a little over year since the spin-off to Spyker but already out of cash?  Did Obama renege on that deal too?  Anyone know?

It certainly will be a sad day if SAAB goes under as it did very innovative engineering and the Trollhattan build quality was A-1 (especially the welds).   GM did its best to ruin it but maybe capital form China can save it.  We should know in a couple months.

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