Daily Digest

Daily Digest 7/12 - Debt Contagion Threatens Italy, Why Small Business Isn't Hiring, House To Vote On Light-Bulb Repeal

Tuesday, July 12, 2011, 10:47 AM
  • Debt Contagion Threatens Italy
  • EUR Plunges After Lagarde Intimates On Greek Bankruptcy
  • European debt crisis: stock markets tumble as Italy fears mount
  • Plunge Brings Debt Crisis to Italy
  • Community College as a Bridge to New Skills
  • Why Small Business Is Not Hiring, And Won't Be Hiring
  • House to Vote on Light-Bulb Repeal
  • Americans Select Dilithium Crystals To Power Next Generation
  • In Midwest, Flutters May Be Far Fewer

Crash Course DVDThe 3-disc DVD with presenter’s pack offers helpful guidance for sharing the 3E message with your community. (NTSC or PAL)

Economy

Debt Contagion Threatens Italy (jdargis)

In recent days, Italy has become Europe’s next weak link after Greece, Ireland, Portugal and Spain, harmed in particular by a power struggle between Prime Minister Silvio Berlusconi and his finance minister, Giulio Tremonti. The dispute threatens to turn the euro zone’s third-largest economy, after Germany and France, into one of its biggest liabilities.

EUR Plunges After Lagarde Intimates On Greek Bankruptcy (pinecarr)

The EURUSD just took a big tumble following a report that Christine Lagarde, the IMF's new boss, announced that her new agency has not yet discussed Greek aid details, and made it clear that "nothing should be taken for granted on Greece." Since the only thing that is being taken for granted is that Greece will be bailed out, it is easy to see why the EURUSD just lopped off 60 pips in seconds.

European debt crisis: stock markets tumble as Italy fears mount (pinecarr)

World stock markets accelerated their falls on Tuesday as Italy struggled to avoid being sucked into the escalating European debt crisis, and Greece moved closer to default.

Plunge Brings Debt Crisis to Italy (pinecarr)

“The massive contagion from the small periphery to the big bond markets of Italy and Spain in the last four trading days has turned into the real problem,” Holger Schmieding, chief economist at Joh. Berenberg Gossler & Co. in London, said in a note to investors.

The rout in Italy underscored Europe’s inability to contain the crisis that began in Greece in October 2009 and led to subsequent bailouts in Ireland and Portugal. Finance ministers last night failed to agree on how to share with creditors the cost of a second bailout for Greece to be financed primarily by its European Union allies, including Italy.

Community College as a Bridge to New Skills (jdargis)

But in the course of the recession and its aftermath, many of those who have flocked to community college programs in health care, manufacturing, aerospace, biotechnology and other vocational subjects are those who lost their jobs during the downturn.

Why Small Business Is Not Hiring, And Won't Be Hiring (June C.)

The low job growth in the U.S. isn't a "soft patch," it's a sea of quicksand. In a nutshell, here's the situation: 2/3 or more of all job growth comes from small businesses starting up and expanding; only a third or less of new jobs come from Corporate America or government expansion.

Energy

House to Vote on Light-Bulb Repeal (jdargis)

The Republican-sponsored repeal bill, H.R. 2417, would undo part of a 2007 energy bill that passed with broad Republican support and was signed into law by former President George W. Bush. The primary author of the light bulb provision in the 2007 law was Representative Fred Upton, Republican of Michigan, now the chairman of the Energy and Commerce committee and the scourge of the Environmental Protection Agency.

Americans Select Dilithium Crystals To Power Next Generation (guardia)

In a Gallup poll released today, Americans chose dilithium crystals as the top choice of fuel to run both cars and power plants, with 84% of Americans choosing the crystals over other options including nuclear, hydrogen, corn ethanol, shale gas, and photovoltaic solar panels. Respondents indicate that dilithium crystals are popular for providing quiet, clean energy, with a proven track record including over seven-hundred twenty-six episodes in four different Star Trek television series.

Environment

In Midwest, Flutters May Be Far Fewer (jdargis)

And while that sounds like good news for the farmers, a growing number of scientists fear it is imperiling the monarch butterfly, whose spectacular migrations make it one of the most beloved of insects — “the Bambi of the insect world,” as an entomologist once put it.

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."

8 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4145
Speculation on ECB buying Italian and Spanish bonds

"Italy sold 6.75 billion euros ($9.4 billion) of treasury bills in its first auction since borrowing costs began soaring amid contagion from the Greek debt crisis.

The Treasury in Rome said it sold the one-year bills, meeting its target, at an average yield of 3.67 percent. That compares with a yield of 2.147 percent when similar securities were last sold on June 10. Demand for the debt was 1.55 times the amount sold, compared with 1.71 times at the June auction.

Italy sold the bills as European policy makers meeting in Brussels today struggled to fix Greece’s finances and stop contagion from the debt crisis. The yield investors demand to hold Italian 10-year bonds instead of German bunds fell 17 basis points after the sale to 312 basis points. The yield on the 10- bond briefly topped 6 percent, the first time since 1997, before receding to 5.759 percent at 11:49 a.m. in Rome. "

"Greece’s central-government deficit widened 28 percent in the first half of the year as both revenue and spending missed targets set out in the 2011 budget plan.

The shortfall, which excludes outlays by state-owned institutions and companies, increased to 12.8 billion euros ($18 billion) from 10 billion euros a year earlier, preliminary data released today by the Athens-based Finance Ministry showed."

................2A) Euro zone shifts to accepting possible Greek default (Reuters has changed the story. Original text below)

"The euro zone acknowledged for the first time some form of Greek default may be needed to cut Athens' debts, but markets seized on the lack of a deadline for action and a lukewarm response from the IMF to heap pressure on Italy and Spain.

Dutch Finance Minister Jan Kees de Jager said on Tuesday euro zone finance ministers had effectively accepted that if they wanted to have the private sector involved in a second bailout of Greece, a selective debt default was likely, despite the European Central Bank's vehement opposition to such a move.

"We have managed to break the knot, a very difficult knot," he told reporters as he arrived for a second day of talks.

Asked about whether a selective default was now likely, he replied: "It is not excluded any more."

"Still, June revenue was $350 million less than the $1.2 billion in additional revenue on which Governor Jerry Brown and Democrats based their new budget, Chiang said. That $86 billion spending plan signed into law June 30 filled what remained of a $26 billion deficit with $12 billion in spending cuts and a forecast of an equal amount in higher tax revenue from a recovering economy."

"Italian and Spanish bonds rose on speculation the European Central Bank bought the debt of the euro region’s most-indebted nations to stabilize markets as the debt crisis worsens.

Greek 10-year yields fell the most in almost two weeks while equivalent-maturity Spanish yields retreated from a euro- era record reached earlier. Italian bonds rose, with yields below 6 percent after breaching the level for the first time since 1997."

  • Other news, headlines and opinion:

Putin says U.S. monetary policy "hooliganism" and Putin brands US as 'hooligans' for printing money

Cost To Insure US Bank Debt Soars As Slow Growth, Contagion Woes Add To Mortgage Mess

Eurozone weighs more powers for bailout fund

Britain facing a £43billion hit if the Italian economy collapses

As state eyes takeover, 5 reasons North Las Vegas is in financial trouble

Cisco may cut up to 10,000 jobs

Italy Is 2 Percentage Points From Disaster, Evolution Says

Portugal Slump to Deepen as Austerity Bites, Central Bank Says

Arizona has 10 job seekers for every opening

City to offer buyouts to 50,000 workers: Report (Toronto)

State Employees Brace for More Layoffs (Connecticut)

Budget impasse, shutdown enters 2nd week (Minnesota)

California pension proposal seeks to hike employee contributions

U.S. Trade Deficit Unexpectedly Surges on Oil

Ivory Coast Says its Unable to Make Payments on External Debt in 2011

Pakistan could "pull troops Afghan from border" if U.S. cuts aid

Geithner: We Need Debt Deal By Next Week

US lawmakers still far apart on debt agreement needed to avoid default

High-Speed Rewrite of U.S. Tax Code Wavers as Lawmakers Bicker Over Basics

Buiter Says ECB Will Revive Bond-Buying Program to Protect Italy Auctions

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4145
No August Social Security checks if no debt deal? (Obama)

 

Pick your link from the news search.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1325
Hopefully this will backfire.....
saxplayer00o1 wrote:
No August Social Security checks if no debt deal? (Obama)
So much for that mandatory versus discretionary spending!  I can think of quite a few places to stop spending before getting to the social security checks, but most of them would not cause near enough screaming.
More disgusted by the day as we have political theater arguing over how much more to go in debt!  Just amazing....
drbost's picture
drbost
Status: Bronze Member (Offline)
Joined: Aug 18 2010
Posts: 63
Signs that people are "getting it"!

A front-page article in the Tulsa World is ENCOURAGING!.  Several people appear to be PREPPING as suggested in CM's WSID series (altho no metion of CM directly).  And local MSM picked it up and featured it!!!  Check it out: http://www.tulsaworld.com/news/article.aspx?subjectid=11&articleid=20110712_18_A1_ULNSon423402

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3159
drbost wrote: A front-page
drbost wrote:

A front-page article in the Tulsa World is ENCOURAGING!.  Several people appear to be PREPPING as suggested in CM's WSID series (altho no metion of CM directly).  And local MSM picked it up and featured it!!!  Check it out: http://www.tulsaworld.com/news/article.aspx?subjectid=11&articleid=20110712_18_A1_ULNSon423402

Interesting, I seem to be running across more people here all the time who are interested.  It's a good sign.

Doug

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Jim Jubak's Nuanced View On Chinese Hard Landing

I think these rather measured articles by Jim Jubak provide a counter-point to the talk of a potential hard landing in China, so I thought it'd be important to share.

China confronts its next growth hurdle
"...The contrast between the country’s newly wealthy and this vast migrant underclass has fed anger at the unfairness of the system. Second, because China’s growth has produced labor shortages in many parts of eastern, export-oriented China and because Beijing has pushed growth into lagging western provinces, migrant workers have increased bargaining power. They can find work closer to home if they don’t like how they’re treated in the country’s traditional fast-growth provinces. And third, China’s increasing inflation rate has come down particularly hard on the country’s poorest residents."
http://jubakpicks.com/2011/06/21/china-confronts-its-next-growth-hurdle/

Why China will escape the dreaded hard landing–for 2011 and 2012
"In its review of the crisis the Congressional Research Service estimated that about 75% of China’s 100,000 largest state-owned companies needed bank loans to continue in business. That became a problem when as a result of the crisis China’s exports fell in 1999. Suddenly China’s banks were sitting on billions and billions of bad loans. What to do? Why not bury the bad debt? Beijing created special-purpose asset management companies that bought the bad debt–$287 billion of it - from China’s big banks. In most cases they paid book value too."
http://jubakpicks.com/2011/07/08/why-china-will-escape-the-dreaded-hard-...

China beyond 2012: Can it escape the slowdown called the middle income trap?
"Developing economies showing fast rates of growth have a tendency to slow down once they hit per capita GDP of $7,000 or about where China is now. Over 40 economies have reached that $7,000 per capita GDP level over the last 100 years or so, according to economic historian Angus Maddison. Of those, 31, or more than 75%, have shown a drop in their economic growth rate over the decade after they’re hit $7,000. ...Some economies that have reached the ranks of middle-income countries have stagnated for a decade or two. That was the fate of many of the Latin American economies that boomed in the 1960s and 1970s only to stagnate for the 1970s and 1980s."
http://jubakpicks.com/2011/07/12/china-beyond-2012-can-it-escape-the-slo...

Poet

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4145
Bernanke hints at QE3

Link to Reuters news:

http://www.reuters.com/

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Re: Bernanke hints at QE3

http://www.marketwatch.com/story/fed-weighing-further-easing-bernanke-sa...

Federal Reserve Chairman Ben Bernanke says the central bank is examining several untested means to stimulate growth if conditions deteriorate, even though the central bank believes the temporary shocks holding down economic activity will pass. The Fed at the end of June completed a plan to buy $600 billion worth of Treasury bonds in what markets have dubbed “QE2.”

Hmmmm...wonder what 'untested' is?

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