Daily Digest

Daily Digest - April 19

Monday, April 19, 2010, 9:57 AM
  • Is This Why The SEC Announced The Goldman Fraud Charges Friday Morning?
  • Cash-Strapped States Turn to Sin Taxes
  • Workers, No Suitable Work
  • Recession Is Ending? Some Americans Don't Buy It
  • Saint-Etienne Swaps Explode As Financial Weapons Ambush Europe
  • China Lends Venezuela $20 Billion, Secures Oil Supply
  • Natural Gas Boom Gets Put On Hold
  • The Coming Famine: Risks And Solutions For Global Food Security

Economy

Is This Why The SEC Announced The Goldman Fraud Charges Friday Morning? (Ben Johnson)

The timing of big announcements is often chosen with the aim of maximizing coverage (or minimizing it, in the case of bad news), or with the aim of pushing other stories out of the headlines. What other stories might the SEC have wanted pushed out of the headlines yesterday? Perhaps another one about the agency's past incompetence and, possibly, corruption.

Cash-Strapped States Turn to Sin Taxes (jdargis)

Since January 2009, 22 states have increased their tobacco taxes, and now South Carolina, which has held its cigarette tax at 7 cents a pack for more than three decades, may follow. In Nevada, the State Senate has discussed expanding, and taxing, legalized prostitution. Proposals for soda and candy taxes are also percolating in places like New York, Colorado and Washington State. In California, advocates of marijuana legalization are pointing to the tax revenue that will be generated.

And 25 states have expanded or considered expanding their sanctioned gambling operations.

Workers, No Suitable Work (Andrew)

If unemployment declines without a significant increase in the number of job vacancies, then the labour market is becoming more efficient: Workers are finding new jobs from the stable vacancy pool more quickly and remaining unemployed for a shorter time. Conversely, if the number of job vacancies increases while unemployment remains constant, the unemployed may lack the skills needed for the new jobs that are being created. That means there has been an increase in so-called structural unemployment -- people who cannot easily fit into the actual economy.

Recession Is Ending? Some Americans Don't Buy It (joemanc)

She's seen the headlines. The recession is ending! Unemployment is stabilizing! From Wall Street to Washington, the message comes: America, the worst is over. Let the spending begin. But in places like Twinsburg — where for so many the misery goes on, unabated — people aren't buying the rhetoric. If brighter days are ahead, they say, they're still awaiting the dawn. "Who are they trying to kid?" Bittner says. "Are they trying to make you think it's better so you'll go out and spend?"

Saint-Etienne Swaps Explode As Financial Weapons Ambush Europe (Christian W.)

Saint-Etienne is one of thousands of public authorities across Europe that tried to shave borrowing expenses by accepting derivatives deals whose risks they couldn’t measure. They may be liable for billions of euros, according to the Bank of Italy and consulting and law firms in France and Germany.

Energy

China Lends Venezuela $20 Billion, Secures Oil Supply (Christian W.)

“We agreed on a huge, long-term financing plan,” Chavez said on state television on April 17. “This is a larger scope, a super heavy fund. China needs energy security and we’re here to provide them with all the oil they need.”

Natural Gas Boom Gets Put On Hold (Christian W.)

What is clear is that the EIA's methodology for determining supply numbers has fallen woefully behind what is actually happening in the field. Unless you're using and tallying operator numbers—there are many hundreds of them—there is no way to know how much shale gas the U.S. has been producing since 2005 and is producing at present. Of course, if you're in the Hyperbole Business, actual data doesn't matter one way or another.

Environment

The Coming Famine: Risks And Solutions For Global Food Security (Christian W.)

The world food production system today faces critical constraints. Not just one or two, but a whole constellation of them, playing into one another – and serious ones.

Please send article submissions to: [email protected]

6 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4064
Re: Daily Digest - April 19

"CHINA has promised to lend $US20 billion ($21.6) to Venezuela, President Hugo Chavez said over the weekend, underscoring the Asian giant's push to deepen ties with oil-rich nations in the developing world.

The credit - which Mr Chavez said ranks among China's biggest foreign loans ever - shows the growing importance of oil in China's energy mix, and the lengths that the fast-growing nation is willing to go to secure it.

Once a net oil exporter, China is now the world's third biggest oil importer.

Mr Chavez, an outspoken US adversary in Latin America, has long grumbled that the US remains the biggest buyer of Venezuelan crude. The loan is a boost to his efforts to diversify sales of the major oil exporter away from US refineries."

"However, with the Icelandic volcanic ash cloud blocking much of European air space, that trip has now been pushed back to Wednesday, dragging out the rescue-approval process for Greece still further.

In response, the cost of insuring Greek sovereign debt against default using credit default swaps rose significantly, showing that investors now see a higher risk of a debt default.

Greek five-year CDS were quoted at around 4.63 percentage points Monday morning, from 4.38 percentage points Friday, according to CMA DataVision.

That means the annual cost of insuring $10 million of Greek sovereign debt for five years has risen to $463,000--not far from its all time peak of $470,000 seen earlier this month--from $438,000 Friday.

The risk that the Greek debt crisis could imminently spill over to other indebted euro-zone nations is becoming an increasingly weighty concern across financial markets.

One trader noted that Portugal's annual five-year debt insurance costs had risen suddenly to around $205,000--a $14,500 increase. Spain's cost had risen by $8,000 to around $155,000.

"Contagion is becoming a real concern," Evolution Securities' fixed-income analysts said in a note Monday. "Further signs of investors losing confidence in the more vulnerable euro-zone countries could spill over into higher bund yields as the worry that others will also require bailing out becomes a more important factor," they said. "

...................2A) Greek borrowing rate rises to 7.621%

"PARIS — The interest rate which Greece has to offer to borrow money for 10 years rose to 7.621 percent on international bond markets on Monday, above a level which Athens has already called untenable."

"MADRID, April 19 (Reuters) - Spanish banks' bad loans rose by nearly 2 billion euros ($2.80 billion) to a fourteen-year high in February as crisis-hit borrowers struggled to service debts, data from the Bank of Spain showed on Monday."

"All Farhad Mansourian needs to do his job at the Marin County Civic Center is $1 billion.

That's how much the county's top public works official says is needed to bring county buildings, roads, bridges, culverts, flood control levees and pump stations and other public facilities up to snuff."

"The county's $1 billion public works maintenance shortfall "is mainly due to the fact that revenue sources to fund projects cannot keep up with the pace of deterioration of the facilities and increasing labor and material costs," Mansourian said.

He outlined an expensive picture framed by the exponential cost increases associated with deferring maintenance, rather than proceeding immediately with restoration measures. Challenges include aging facilities, soaring construction costs and a web of regulatory requirements, to name a few."

.....................4A) Spending Freeze Deals Another Blow to Ailing Roads and Bridges (New York)

"Recent studies show that New York's roads and bridges are falling into a state of disrepair and putting drivers in danger. State funds from gas, motor vehicle and highway taxes that are designated for road maintenance and rehabilitation have been raided over and over again to fill budget gaps. As a result, with each passing year roads and bridges overseen by the state become more worn and increasingly costly to repair. Rather than making the big expenditures needed to completely rehabilitate an ailing bridge, the state spends just enough money to keep the bridges and roads passable. Meanwhile cars and trucks jam old roads and bridges that were not designed for current levels of traffic, exacerbating traffic problems and leading to delays and accidents. "

"Sonoma County has stopped collecting trash illegally dumped alongside roads, a decision officials say is necessary to save money amid a massive budget shortfall.

For Elledge, a maintenance supervisor at Summerfield Waldorf School west of Santa Rosa, the change will require him to haul away trash left on Willowside Road adjacent to the 20-acre campus, adding to his job duties and the school’s financial expenses.

The most recent haul included a washer and dryer, scrap metal, stuffed animals and bug zappers."

"The public entity that manages retirement benefits for public employees in California bought more than 2,000 acres of land in Mountain House at the height of the real estate boom and is losing hundreds of millions of dollars on its investment."

  • Other news stories and headlines:

Ash cloud will 'lead to corporate failures' among airlines, warns Neptune boss

Goldman May Face UK, German Inquiries After Suit and FSA begins investigation into Goldman fraud claims (UK)

Buffett loses $1bn after Goldman charge

State's red ink may keep utility fee alive (Connecticut)

Pimco's Kashkari Says U.S. Fiscal Situation May Deteriorate

Malaysia faces rising debt burden without reform, warns World Bank

SD City Attorney Calls Bankruptcy Speculation 'Silly'

Immigration reform could lead to biometric Social Security card

Toledo-area schools on edge over status of funding ("3 pots of federal stimulus cash to dry up in 2012")

Month of Unrest Hits Thailand's Economy

Kansan's picture
Kansan
Status: Member (Offline)
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Posts: 1
Hugo Chavez moves to diversify sale of Venezuelan oil away from

I just can't understand. The USA is at war  a hemishere away over oil, and China is securing oil sipplies a hemishere away. I wonder what kind of entanglements the USA created in the past, that us use so involved in the Middle East now. What kind of world we have if the USA treated our neighbors in South America better? In the event I can't see made in the USA in the products I need to buy I'd rather see see made made in a Soth American Country, instead of made in China, Pakistan or other places halfway around the world.

 

britinbe's picture
britinbe
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Posts: 381
Re: Daily Digest - April 19

The coming famine is an interesting one.  I fits with some of the articles around water I have read recently as well

printfaster's picture
printfaster
Status: Bronze Member (Offline)
Joined: Sep 30 2009
Posts: 52
Re: Daily Digest - April 19

On China placing $20B worth of dibs on Venezuelan oil:  And in response US oil pirces go down?  Yeah sure.

What is really happening is that pump prices are getting near the 2008 peaks, and for the first time since the gas shortage of 1975 I drove into a gas station that ran out of gas.

Something is happening, and we don't know what it is.

 

spinone's picture
spinone
Status: Bronze Member (Offline)
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Posts: 49
Re: Daily Digest - April 19

We know what it is, we are just afraid to admit it.

Oil has peaked.

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Hugo Chavez moves to diversify sale of Venezuelan oil ...
Kansan wrote:

I just can't understand. The USA is at war  a hemishere away over oil, and China is securing oil sipplies a hemishere away. I wonder what kind of entanglements the USA created in the past, that us use so involved in the Middle East now. What kind of world we have if the USA treated our neighbors in South America better? In the event I can't see made in the USA in the products I need to buy I'd rather see see made made in a Soth American Country, instead of made in China, Pakistan or other places halfway around the world.

The Middle East has more "easy oil" left... well, it all depends on how much the wars cost doesn't it?

Samuel

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