Daily Digest

Daily Digest - April 10

Saturday, April 10, 2010, 9:45 AM
  • State Seeks Bids To Privatize Veterans Homes
  • Pray For Inflation -- It's Our Only Hope
  • Krugman Strikes Again
  • LTCM General Counsel On Debt Denial: "There Is Little Time To Avoid Catastrophe And Almost No Exit", Suggests Gold Price Of $5,500

Economy

State Seeks Bids To Privatize Veterans Homes (Steve and Beth M.)

“All the state is doing is soliciting bids. That does not mean anything is going to come of it. There are a lot of variables to it,” said Hays.

Jim Buterbaugh, of Winfield, who serves on the Kansas Commission for Veterans Affairs, said he is apprehensive about the potential privatization. He did not speak on behalf of other commissioners, he said, but seeking the bids was not the idea of any member of the commission.

Pray For Inflation -- It's Our Only Hope (SolidSwede)

So inflation is an important tool in getting us out of this mess. It's painful and unfair--those who have been responsible and saved money will pay the price for those who borrowed money, racked up huge debts, and spent more than they could afford. But it's what the Fed is (quietly) aiming for.

Krugman Strikes Again (SolidSwede)

In today's column, Krugman analyzes the Greek debt crisis, arguing that the best solution for Athens would be to simply inflate away its debt burden with printing press money. Krugman laments that this sensible option is being foreclosed by the monetary priggishness of the German heavyweights in the European Union, who are 'foolishly' seeking to prevent inflation and impose fiscal discipline.

LTCM General Counsel On Debt Denial: "There Is Little Time To Avoid Catastrophe And Almost No Exit", Suggests Gold Price Of $5,500 (pinecarr)

Recently we posted a terrific interview of Kathryn Welling with LTCM's former General Counsel, James Rickards. The lawyer turned economist, who is now a director of Omnis, posts the following stunner on the implications of the endless sovereign debt glut and the Keynsen abortion that every developed economy has undertaken.

As the man who survived (and, well, created) the original market "systemic" event, Rickards should certainly be heard by all those who believe the government can sustain the latest, and by all measures, last iteration of the global reflation Ponzi. Not surprisingly, Rickards is the latest to jump on the fiat alternative bandwagon, seeing gold at $5,500 as a fair price for the precious metal.”

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7 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - April 10

"April 9 (Bloomberg) -- India’s 10-year bonds fell the most since August after the government sold the securities at a higher yield than estimated by investors, spurring speculation demand is weakening.

“Bonds have fallen significantly because the cut-off yield on the 10-year bond came in higher than the market expected,” said Srinivasa Raghavan, head of fixed-income trading at IDBI Gilts in Mumbai. “That’s reinforcing the concern that interest rates are going to rise in the near term.”"

"Fitch Ratings cut its rating for Greece to the lowest investment-grade rating and said the outlook remained negative, adding to the pressure on the country to find a solution to its financial problems."

"Fitch cited the recent jump in Greek debt yields in its downgrade of the country by two notches to triple-B-minus, from triple-B-plus."

....................2A) Fitch downgrades Greece to within one notch of 'junk'

"April 9 (Bloomberg) -- Pennsylvania’s turnpike commission would lose $145.7 million if it had to terminate its interest- rate swaps, said state Auditor General Jack Wagner, who seeks to stop public entities from using such investment agreements.

The commission has more than $2.23 billion in debt tied to 26 swaps, Wagner said in a statement today. The cost to cancel them amounts to almost three months of toll revenue, he said.

“Swaps are tantamount to gambling with taxpayer money,” Wagner said in the release. “They have no place in the public sector.”

Swaps are derivatives in which borrowers exchange interest payments on a set amount of debt with the goal of locking in a fixed rate on a related set of variable-rate bonds.

Hundreds of municipalaties entered such swaps in the early 2000s as a strategy to lower borrowing costs. When lending rates fell to record lows two years ago in the worst credit crisis since the Great Depression, public borrowers across the U.S., including Harvard University and New Jersey’s Transportation Trust Fund, paid hundreds of millions of dollars to terminate or amend the deals. "

"ALBANY - The state's money problems are bad now and about to get a lot worse.

Even with Gov. Paterson's recent moves to delay school aid, withhold raises from public employees and freeze payments to road contractors, the state's cash crunch will leave it about $1 billion short in June, state Budget Director Robert Megna said yesterday.

"Our cash flow problems are unprecedented," he said.

Megna said the state is obligated to make about $8 billion in payments in June - including about $3.8 billion in mandated school aid payments - at a time when tax revenues typically lag.

Megna said several options, including delaying more payments and short-term borrowing, are being considered to deal with the shortfall."

"According to Trepp’s monthly delinquency report TreppWire, the percentage of loans 30 or more days delinquent, in foreclosure, or REO jumped 89 basis points in March to 7.61 percent — the highest monthly increase since the summer of 2009.

Fitch, a ratings company also based in New York, reported the same upward trend, saying CMBS delinquencies soared 85 basis points in March to 7.14 percent.

Both companies agreed that the data was inflated by the fact that New York City’s $3 billion Stuyvesant Town (Stuy Town) is now considered “in foreclosure.”

Even after subtracting out the Stuy Town impact, delinquencies were still up over 49 basis points in Trepp’s report. That’s more than twice the rate increase in February. "

  • 6) National debt clocks:

Real time national debt clock has it at $12.794 trillion

Treasury Direct has it at $12.826 trillion

nationaldebt

 

China posts trade deficit in March, 1st time in 6 yrs

LA finds $63M in extra cash, but deficit increases

Tipping Point for the Bond Market: Nuclear Nonproliferation. (Audio...mcalvanyweekly)

 

................Returning on Monday. Enjoy the weekend!

Davos's picture
Davos
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Re: Daily Digest - April 10
saxplayer00o1 wrote:
  • nationaldebt

 

And to this we can add in another 6.24 trillion in GSE debt for a whopping 19 trillion.

bmc's picture
bmc
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Posts: 13
Re: Daily Digest - April 10

Plus a few tens of trillions for the NPV shortfalls for entitlements.

Plus a few more trillion in unrecognized federal pension debt.

Plus a few more trillion as I imagine much of the States' debts will come under the auspices of the Federal government.

And don't we have a few more of those pesky resets coming down the line?

Conclusion? Go long PM's and green toner stocks (while trying to find time to remember to laugh at the absurd horror of it all)

 

Ben Bernanke (I mean the Household Sector) is gonna be busy.

 

"The third time's the charm..."  "This time is different..."

http://data.moneycentral.msn.com/scripts/chrtsrv.dll?symbol=%24INX&E1=0&LPR=2&C1=2&C9=0&C5=1&C5D=1&C6=1980&C7=4&C7D=10&C8=2010&D5=0&D2=0&D4=1&DD=1&width=800&height=600&CE=0&CF=1

Damnthematrix's picture
Damnthematrix
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Re: Daily Digest - April 10
Man grew drugs because of 'impending world chaos'

 

http://www.thisissouthdevon.co.uk/news/Man-grew-drugs-impending-world-chaos/article-1991425-detail/article.html

Man grew drugs because of 'impending world chaos'

Friday, April 09, 2010, 09:00

A YOUTH boxing coach grew dozens of cannabis plants at his Brixham home because he feared the world economy would collapse leading to a breakdown in society.

Stephen Jones, 46, of Monksbridge Road, said he had been stockpiling the drug in the event of riots in the street, rising oil prices and power shortages.

When police entered his house in May 2009 they found large amounts of food supplies in the hall and secret rooms which Jones had built for drug cultivation and to prepare for the impending crisis.

Jones took the stand on the latest day of his trial at Exeter Crown Court. He denies possession of cannabis with intent to supply, saying the drugs were only cultivated for his own personal use.

He told the court that he had become a firm believer in a theory advocated by a political agitator named Gerald Celenze, who has a number of followers on the internet.

Asked by defence counsel Mary McCarthy why police found so much food at his house, Jones said: "Basically what I believe is that there is a real risk there will be riots and food shortages.

"I was trying to keep it a secret, obviously.

nickbert's picture
nickbert
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Re: Daily Digest - April 10
Damnthematrix wrote:
Man grew drugs because of 'impending world chaos'

He told the court that he had become a firm believer in a theory advocated by a political agitator named Gerald Celenze, who has a number of followers on the internet.

Hey, Gerald Celente has moved from the MSM labels of 'nutjob' or 'doomer' to being promoted to 'political agitator'.  Congrats Gerald! Cool

Maybe this means he and others with similar concerns are hitting some nerves in the right places....

- Nickbert

gregroberts's picture
gregroberts
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G Edward Griffin, World without Cancer

V's picture
V
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Posts: 849
Re: Daily Digest - April 10

DTM

Great post. Maybe we should start a thread " What are you secretly doing in case of food riots and societal breakdown"

V

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