Daily Digest

Daily Digest 9/8 - Food Pantries Feeling The Pinch, Strikes Continue in France and UK, Pensions Under Assault

Wednesday, September 8, 2010, 9:51 AM
  • Strikes in France, London Foreshadow More Protests
  • Hungary’s Budget Gap Widened in August on Revenue Lag
  • Louisiana Agencies Weighing 35% Budget Cut Possibility
  • A Pensions Timebomb In Europe (Video)
  • Gold Settles at Record High Amid Economic Fears
  • Food Pantries Are Feeling The Pinch
  • Visitors To Pay U.S. Tourism Promotion Fee
  • Greek Debt Deals Hidden From EU Probed as 400% Yield Gap Shows Bond Doubts
  • Alabama's Jefferson County To Get Receiver: Judge
  • Republican’s Backing Aids $30bn Stimulus Bill
  • CT Governor Offers Plan To Rein In Pension Liabilities
  • Christie Begins Assault On N.J. Pensions And Benefits

Economy

Strikes in France, London Foreshadow More Protests

French strikers disrupted trains and planes, hospitals and mail delivery Tuesday amid massive street protests over plans to raise the retirement age. Across the English Channel, London subway workers unhappy with staff cuts walked off the job.

The protests look like the prelude to a season of strikes in Europe, from Spain to the Czech Republic, as heavily indebted governments cut costs and chip away at some cherished but costly benefits that underpin the European good life — a scaling-back process that has gained urgency with Greece's euro110 billion ($140 billion) bailout

Hungary’s Budget Gap Widened in August on Revenue Lag

Hungary, which is seeking to increase its budget deficit target for next year, had a gap equivalent to 124 percent of the full-year goal in the January- August period.

The shortfall totaled 1.08 trillion forint ($4.8 billion) for the first eight months, the Budapest-based Economy Ministry said in a statement today. The budget recorded a deficit of 83.9 billion forint in August.

Louisiana Agencies Weighing 35% Budget Cut Possibility

Every department of state government is reviewing revenues and expenditures to draw up new budgets with an eye on possibly having to deal with 35 percent less money than they have now....The difference this time, though, is that $1.56 billion in federal stimulus funds that are spread throughout state government disappear June 30, 2011. Added to an anticipated drop in state revenues, the Joint Legislative Committee on the Budget cautioned state agencies in August they are looking at a $1.6 billion shortfall -- about 20 percent of the current year's budget.

A Pensions Timebomb In Europe (Video)

To avoid setting off what has been described as a pensions timebomb, Europeans face having to work longer and harder before they can retire. The EU warns that the ratio of pensioners to workers in Europe will double in the next 50 years, with two active workers for every retiree.

Gold Settles at Record High Amid Economic Fears

Gold prices settled at a record high Tuesday following renewed worries about European banks and the global economy.

Gold for December delivery added $8.20 to settle at $1,259.30 an ounce after reaching $1,261.60 earlier in the day. Its record high settlement price was $1,258.30 an ounce, although it has reached an intraday high of $1,266.50 an ounce. Both occurred in late June.

Food Pantries Are Feeling The Pinch (Los Angeles)

Thousands of people turn to the Lutheran Social Services Community Care Center in Van Nuys for help putting food on the table.

Last week, a sign went up on the door: "We're sorry but we ran out of food." With demand for assistance continuing to rise, officials at many Los Angeles County food pantries say they have had to reduce what they offer or turn away people in need.

Visitors To Pay U.S. Tourism Promotion Fee

Planning a trip to the United States? Tuesday is the last day for citizens of some countries to dodge a new travel fee.

Starting Wednesday, travelers from 36 nations will be required to pay $14 to register through the Electronic System for Travel Authorization, or ESTA, required for travelers using the Visa Waiver Program. Four of the $14 will cover ESTA operating costs, and $10 will go toward promoting the United States as a tourist destination.

Greek Debt Deals Hidden From EU Probed as 400% Yield Gap Shows Bond Doubts

Investors still don’t trust Greece. They demand yields more than five times that of Germany to hold 10-year Greek debt - a sign that buyers fear the country will have to reorganize its borrowing. “I think restructuring will be a necessary part of them pulling out of the predicament they are in,” Andrew Bosomworth, Munich-based head of portfolio management at Pacific Investment Management Co., which oversees the world’s largest bond fund.

Alabama's Jefferson County To Get Receiver: Judge

An Alabama judge said on Tuesday he would appoint a receiver to oversee the sewer system revenues of debt-ridden Jefferson County, in a setback for county authorities.

The Bank of New York Mellon, trustee for the county's creditor banks, won its request for the appointment of a receiver empowered to raise sewer revenues to repay more of the county's $3.2 billion debt....Jefferson County, which is home to the state's largest city, Birmingham, is fighting to stave off what would be the largest municipal bankruptcy in U.S. history.

Republican’s Backing Aids $30bn Stimulus Bill

George Voinovich, the Republican senator from Ohio, has agreed to back the long-delayed legislation at a vote due next week, according to Republicans and Democrats familiar with talks between Mr Voinovich and Harry Reid, the Democratic leader in the Senate. The bill would set up a $30bn Treasury-backed loan facility to encourage banks to lend more to small companies. It also contains more than $12bn in tax breaks for the struggling sector that, unlike large multinational companies, cannot circumvent troubled banks and tap the bond market.

CT Governor Offers Plan To Rein In Pension Liabilities

The governor of Connecticut on Tuesday unveiled a plan to reduce the state's $34 billion in unfunded pension and health care liabilities, including capping individual pensions at $100,000 per year.

Governor Jodi Rell, who will leave office next January, proposed establishing a defined contribution plan for new state workers, increasing the retirement age to 65 from 62 and the early retirement age to 60 from 55 and raising the employee contribution.

Christie Begins Assault On N.J. Pensions And Benefits

According To Private Sector Methodology. New Jersey's unfunded benefit obligation rises to $173.9 billion (assuming 3.5% discount rate instead of the current 8.25%).

This amount is equivalent to 44 percent of the state's current GDP and 328 percent of its current explicit government debt.

12 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

"After two months of moderated growth in delinquent loans backing commercial mortgage-backed securities (CMBS), the delinquency rate in August increased 21 basis points to 8.92%, according to the analytics firm Trepp.

It's an increase from the 8.71% measured in July and another new record. The August delinquency rate is more than double the 4.03% rate a year ago. Since the beginning of 2010, the delinquency rate has increased more than 200 bps.

"The August numbers may give ammunition to those who argue that the commercial real estate crisis is far from over," according to the Trepp report."

"The City of Seattle needs to find another $11 million to balance next year's operating budget.

City officials had been estimating a $56 million shortfall for 2011. But Tuesday morning, the Department of Finance told Councilmembers that the deficit had increased to $67 million. That's largely due to a big drop in how much Seattle now expects to collect from business and sales taxes.

Because of declining tax revenues, Mayor Mike McGinn had already cut $12 million from the 2010 budget. Most city departments were asked to find 3 percent in savings this year, while the police and human services branches were asked to identify 1.5 percent that could be reduced from their budgets."

"WASHINGTON (MarketWatch) -- Economists at the Royal Bank of Scotland have downgraded their world growth estimate for 2011 for a second time, moving to below 4%, a decline of roughly half a point from its first downward revision made in July. In a note, the economists cut their view on U.S. growth to below 3% from 3.6% previously, and that will also have an impact on the rest of the world, particularly Europe. The European outlook has also deteriorated "as the policy response to address the periphery is unlikely to bring about the sustained rebound in confidence policy makers hoped for." RBS estimates euro-zone growth in 2011 of 1%, down from 1.3%, and U.K. growth of 1.9%, down from 2.2%. "A slowing in trade activity is now well established: the pace of growth in world trade probably halved in the third quarter and early indications point to a further easing in the fourth quarter," they added. "Countries most reliant on exports like Germany will be hardest hit. This is a story for end of the fourth quarter/beginning of next year.""

  • Other news, headlines and opinion:

Looking Ahead to an Exit Strategy (McAlvany audio...Investing in gold)

US bailouts failing to help most Americans (RT Video)

Wall Street Firms to Cut 80000 Jobs in 18 Months, Whitney Says

China Advisors Say Dollar Waning, Call For Oversight

'Bankrupt' Western Governments Need 'Ruthanasia'

Ireland's Sovereign CDS Rise Nearly 20 Bps To 400 Bps - CMA  (fresh all-time high)

Traders jittery as bond yields soar (Ireland)

States pressed to fix local water systems

Pa. capital city's debt mounts amid political feud and Jefferson County Sewer debt at $3.2 billion and growing (Video)

Food Spending Ratio Jumps to 8-Year High (Korea)

Portugal raises $1.04 billion in bond auction but high borrowing cost reflects debt fears

'90s pension raid haunts state officials now (Connecticut)

RBS Economist Cailloux Sees More Sovereign-Debt Woes in Europe: Tom Keene

Greece's Economy Contracted 1.8% in Second Quarter

Hungarian Economic Expansion Halted in Second Quarter, Revised Data Show

Aguirre: San Diego is bankrupt

Cash-strapped Metro targets drivers' pay (Washington)

Millions stranded as Tube strike hits London

Stanislaus County's plan for 2010-11 has $40 million gap (California)

LAUSD Budget Cuts Lead To A Shorter School Year (Los Angeles)

FHA Program for Underwater Borrowers Now Underway

jhart5's picture
jhart5
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

'Bankrupt' Western Governments Need 'Ruthanasia'

Great article - Recommend that Ruth provide financial training lessons to Obama and staff, Congress, Wall Street, The US Treasury and The Federal Reserve. ASAP    J.

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jhart5
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

From: Nathans Economic Edge - Labor Day Weekend Funnies

rjs's picture
rjs
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

Chinese Offshore Development Blows Past U.S. - As proposed American offshore wind-farm projects creep forward — slowed by state legislative debates, due diligence and environmental impact assessments — China has leapt past the United States, installing its first offshore wind farm. Several other farms also are already under construction, and even the Chinese government’s ambitious targets seem low compared to industry dreaming. The first major offshore wind farm outside of Europe is located in the East China Sea, near Shanghai. The 102-megawatt Donghai Bridge Wind Farm began transmitting power to the national grid in July and signals a new direction for Chinese renewable energy projects and the initiation of a national policy focusing not just on wind power, but increasingly on the offshore variety.

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idoctor
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

jhart5's picture
jhart5
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

Food Fascism in the Land of the Free

Enter Senate bill S. 510 Food Safety Modernization Act, already passed in the House as HR 2749.  Some have demonized the bill as ultimate food fascism where the FDA will micromanage even small farms and co-ops to the point where it will become illegal to grow, share, trade or sell homegrown food.  While others see it as a measured way to control the health and quality of factory farms. One thing is for sure, S.510 gives more power to the corrupt FDA to regulate our food.  And there is renewed interest in the Senate to pass this bill since the recent massive egg and meat recalls due to salmonella and E. coli outbreaks.

http://vinceseconomicblog.wordpress.com/2010/09/08/food-fascism-in-the-land-of-the-free/

jhart5's picture
jhart5
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

Sorry for double post

dave s's picture
dave s
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...
jhart5 wrote:

Food Fascism in the Land of the Free

Enter Senate bill S. 510 Food Safety Modernization Act, already passed in the House as HR 2749.  Some have demonized the bill as ultimate food fascism where the FDA will micromanage even small farms and co-ops to the point where it will become illegal to grow, share, trade or sell homegrown food.  While others see it as a measured way to control the health and quality of factory farms. One thing is for sure, S.510 gives more power to the corrupt FDA to regulate our food.  And there is renewed interest in the Senate to pass this bill since the recent massive egg and meat recalls due to salmonella and E. coli outbreaks.

http://vinceseconomicblog.wordpress.com/2010/09/08/food-fascism-in-the-land-of-the-free/

I don't know who this author is, and he may be making a good point about the Senate and House bills.  But there is no way to put this nicely, so I won't bother.  Anyone who thinks the ever-elusive "free market" will result in agribusiness producing safer food than it does in the current regulatory environment is an absolute idiot.  A total nutter.  Want proof:  how willing are you to feed your baby formula made in China; how willing are you to brush your teeth with toothpaste made in China; how wiling are you to feed your pet dog food made in China?  

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junkyard71
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

most of the "organic" food on americas grocery shelfs was grown in china.  when tested much of it was positive for chemicals long banned in the west.  it's impossible to eat well in the usa and no food bill will fix anything.  with this depression just getting underway i shutter to think what ingredients might find their way into factory food as profits get squeezed. 

best advice i have is go find a local farmer and get what you can that way.  be very careful of everything else you buy.  and buying highend grocery won't help either so save your money.  our food system is as broken as our pharma/medical system and our government.

 as for the local farmer don't put this off.  there are few of us and we're very limited in what we can produce.  we're also loyal to our reqular customers and we'll be turning late comers away once our capacity is reached.

local farmer in south/central nj raising chicken/turkey - eggs (real free range) - pork - beef and - milk.  yum!

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Davos
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...
dave s wrote:

But there is no way to put this nicely, so I won't bother.  Anyone who thinks the ever-elusive "free market" will result in agribusiness producing safer food than it does in the current regulatory environment is an absolute idiot.  A total nutter.  Want proof:  how willing are you to feed your baby formula made in China; how willing are you to brush your teeth with toothpaste made in China;

Why I luv this site! A community of thinkers. Well put!

earthwise's picture
earthwise
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Posts: 846
Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...
junkyard71 wrote:

 as for the local farmer don't put this off.  there are few of us and we're very limited in what we can produce.  we're also loyal to our reqular customers and we'll be turning late comers away once our capacity is reached.

Amen to this! I'm in San Diego's north county where a local hay grower, who has been selling to the locals for fourty years, finally had surplus enough to sell to me ( a relative newcomer;  had only been here seven years at that point ) after three years of me tryin'.

pinecarr's picture
pinecarr
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Re: Daily Digest 9/8 - Food Pantries Feeling The Pinch, ...

Interesting article re Chinese Offshore wind-farms, rjs!

Saxplayer, you just plain rock!

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