Daily Digest

Daily Digest - December 30

Wednesday, December 30, 2009, 11:01 AM
  • Hong Kong can play role in promoting RMB internationalization: SAR chief
  • US Housing Market Recovery Damped By Still-Rising Delinquencies
  • Kentucky Budget Shortfall Could Exceed $1.5 Billion
  • Treasury plans to inject around $3.5 billion into GMAC (Posted by joemanc)
  • New York's DiNapoli says state's cash to hit all-time low
  • US credit card charge-offs rise in November
  • Jackson Health's finances continue to deteriorate
  • China Minmetals to expand country's nonferrous metals industry
  • Build America Bond Subsidy Shift May Fuel $130 Billion in Sales
  • Nobody Gets Fired Except Governors in Recessions
  • California Watch: Will California Default on Bond Debt in 2010?
  • Pennsylvania tax revenue down more than $2 billion
  • Maryland home assessments to fall an average 19.7%
  • Qwest to save about $220 million by cutting retiree death benefits
  • Taxpayers may be picking up the tab for pensions (Florida)

Economy

Hong Kong can play role in promoting RMB internationalization: SAR chief

Hong Kong could exert its advantages as an international financial center to promote the RMB into becoming a regional or even international currency, said Donald Tsang Yam-Kuen, chief executive of Hong Kong Special Administrative Region (SAR) Tuesday. Hong Kong has been playing the role as a "testing field" in the RMB's internationalization, Tsang said when he delivered a speech at the Beijing-based Chinese Academy of Governance.

US Housing Market Recovery Damped By Still-Rising Delinquencies

Investors appeared to take a report on flat U.S. home prices in stride Tuesday, but still-rising mortgage delinquencies signal more foreclosures, damping hopes that the housing market is recovering. "Delinquencies are a precursor to foreclosures," said Cameron Findlay, chief economist at LendingTree.com, in an interview Tuesday.

Kentucky Budget Shortfall Could Exceed $1.5 Billion

Kentucky could be facing a budget shortfall of more than $1.5 billion over the next two years because of the economic recession, Gov. Steve Beshear said Tuesday. "We face a challenge much greater than many had anticipated," Beshear said at a Capitol news conference. "Obviously, this is going to require, more than ever before, a cooperative, bipartisan working relationship between the legislature and the governor's office if we are going to continue to move this state forward." The Democratic governor didn't rule out the possibility of furloughs or layoffs among the state's nearly 34,000 employees.

Treasury plans to inject around $3.5 billion into GMAC (Posted by joemanc)

The Treasury Department plans to announce as early Wednesday afternoon that it will give GMAC Inc. around $3.5 billion in additional capital, sources told The Detroit News. Detroit-based GMAC and the Treasury Department have been in talks for months to finalize the amount of money the company would receive. The Treasury Department said earlier this year it would invest up to $5.6 billion more in GMAC -- on top of $13.4 billion GMAC has received over the last year.

New York's DiNapoli says state's cash to hit all-time low

Comptroller Thomas DiNapoli said in a statement that the state "is literally down to petty cash" as it faces a $1.3 billion Medicaid payment and $2.2 billion in property tax relief and school aid payments on Wednesday. Those payments could push the state's closing cash balance into negative territory for the first time in at least 15 years, depending on how much revenue the state takes in on Wednesday, according to Jennifer Freeman, a spokeswoman for DiNapoli. As of Tuesday, New York had only an estimated $3.2 billion of cash on hand.

US credit card charge-offs rise in November

Credit card charge-offs rose by about one-half percentage point in November to 10.56 percent, and is likely to continue to rise to a peak of between 12 percent and 13 percent in mid-2010, Moody's said in a statement. Delinquencies, which measure the proportion of accounts for which a monthly payment is more than 30 days late, also increased to 6.2 percent in November, though early-stage delinquencies fell to 1.6 percent for the month, Moody's said.

Jackson Health's finances continue to deteriorate

As of Oct. 31, Miami-Dade's public hospital system had 20.8 days of cash to pay its bills, including payroll and keeping the lights on. Its governing body, the Public Health Trust, has set 20 days as the lowest Jackson should go. ``When it gets below 20 days, that's when I declare an emergency,'' said Frank Barrett, chief financial officer. He said he's already talking to county administrators on getting an advance for payroll if the system runs out of cash. ``They're aware of my cash-flow situation,'' Barrett said in a telephone interview Tuesday. ``They're not going to let me miss payroll'' for the 12,200 employees who work in the system. The projections for next year are far grimmer.

China Minmetals to expand country's nonferrous metals industry

"During the following three or five years, HNG will take the lead in the antimony and tungsten industry and become the world's largest rare earth supplier," Zhou Zhongshu, CEO of China Minmetals, said Monday. HNG owns the world's largest bismuth and tungsten reserves. It is also the world's largest antimony products supplier. China Minmetals, the country's largest alumina importer and distributor, is the world's leading operator for antimony products.

Build America Bond Subsidy Shift May Fuel $130 Billion in Sales

Sales of Build America Bonds, the fastest-growing part of the U.S. municipal debt market, may double to $130 billion in 2010 as states and cities rush to borrow before Congress can change federal subsidies.

Nobody Gets Fired Except Governors in Recessions

Any expectation that state and local governments would use the worst fiscal crisis since the Great Depression to reduce their biggest expenditures is proving to be wishful thinking.... Reducing headcount would help narrow budget deficits. It would also reduce public-pension liabilities, which analysts say threaten state and local credit ratings and even, at the local level, solvency.

California Watch: Will California Default on Bond Debt in 2010?

"Lawmakers are looking for anything they can do as the recession has put a huge hole in their budget," Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., told Market News International. "The economic recovery in California will be a slow next year before getting better in 2011 Kyser cautioned that the threat of the state defaulting on its billions of dollars in bond debut has become a distinct possibility. " "He also warned that if the state defaults it would "freeze the market immediately for any government debt coming out of California." Bill Watkins, executive director the Center for Economic Research and Forecasting at California Lutheran University in Thousand Oaks, Calif., agreed and urged state officials to begin discussions with the Obama administration and the Federal Reserve in case California defaults on its debt. "In my opinion, California is now more likely to default than it is to not default," Watkins wrote in an economic forecast released Dec. 16. "

Pennsylvania tax revenue down more than $2 billion

Pennsylvania state tax revenue fell in comparison to last year, largely due to its residents earning and spending less, according to third-quarter data released Tuesday by the U.S. Census Bureau. The Quarterly Summary of State and Local Tax Revenue reported Pennsylvania had third-quarter tax revenue of $6.64 billion, down 6 percent from $7.09 billion in the third quarter of 2008. Year-to-date, Pennsylvania tax revenue totaled $23.08 billion in 2009, down 9 percent from $25.24 billion in 2008.

Md. home assessments to fall an average 19.7%

"I've never witnessed anything like it. It's unprecedented," said Sullivan, who has worked in the state's assessment agency since the mid-1960s. Many homeowners will not see corresponding declines in their tax bills come July 1, however, officials warned, unless local governments reduce the tax rate, which is unlikely because they need the revenue.

Qwest to save about $220 million by cutting retiree death benefits

Retirees filed a lawsuit in 2005 to prevent Qwest from dropping the coverage but lost on appeal last summer. Qwest began notifying retirees Monday that the benefit will be eliminated effective March 1. "This is a significant take-away," said Nelson Phelps, 70, an Aurora, Colo., resident who retired in 1990. "If I died today, my wife would receive $117,000. If I die March 2, she would receive nothing from that."

Taxpayers may be picking up the tab for pensions (Florida)

Getting a pension? For many retirees in private and public service, they never contributed a dime for it, but taxpayers may end up on the hook paying for it. Florida's Retirement System, for example, is in trouble today since it's only 88 percent funded. One woman I spoke to recently, with no pension, says she'll probably have to work forever, "unless something comes up like I win the Lotto." When General Motors declared bankruptcy many of it's retirees went into the Private Benefit Guaranty Corporation, a Federal agency. WDBO Consumer Warrior Clark Howard says first comes the shock, "they will take a big cut in their pension benefits from the government payments."

3 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Re: Daily Digest - December 30

""The government is in massive, massive debt and at some point it is going to have to be paid back and if we don't pay it back, down the road there is going to be some real problems," he said.

There is even a risk of hyper-inflation because of the money-printing policies and the underlying strength of the economy is just not there, according to Blum."

"PARIS, Dec 30 (AFP) -- France's public debt soared to a record high level in the third quarter in response to anti-crisis stimulus spending and now amounts to about 75.8 percent of gross domestic product, the INSEE statistics agency said Wednesday.

The third quarter debt ratio was up by 1.9 points from the second quarter and well in excess of the 60 percent stipulated in the Maastricht Treaty that established the financial basis of the eurozone.

The French government has predicted that the ratio will reach 77.9 percent by the end of 2009 and 84 percent in 2010."

"The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the U.S. Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36% of the government's marketable debt - about $1.6 trillion will mature in the next 12 months.

That leaves the government in the same undesirable position as a lot of people who took out adjustable rate mortgages (ARMs) - forced to refinance short-term debt at higher interest rates for the long term.

"The government is on teaser rates," Robert Bixby, executive director of The Concord Coalition, a nonpartisan group that advocates lower deficits, told The Times. "We're taking out a huge mortgage right now, but we won't feel the pain until later.""

"Davidson County taxpayers could be on the hook for $2.65 billion in unfunded retirement benefits for Metro employees in the coming decades — a problem many state and local governments are facing, according to a report released by the nation's comptroller."

"A new study by economists at the New York Federal Reserve suggests that “effective” homeownership rates have fallen as much as 25 to 45 percent below actual homeownership rates in metropolitan markets that have been hit hardest by falling property values.

Nationally, homeownership peaked at 69 percent in the third quarter of 2006, but the official homeownership rate “will experience significant downward pressure” in the coming years, according to the staff report as dramatic increases in negative equity reduce incentives to own rather than rent."

brjohnson789's picture
brjohnson789
Status: Bronze Member (Offline)
Joined: Aug 27 2008
Posts: 52
Re: Daily Digest - December 30

I had trouble with the 'Nobody gets fired...' link, this one may work better for some people http://www.bloomberg.com/apps/news?pid=20601039&sid=a_uabvfu9CAk

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
GATA Sues Fed, Demands Disclosure Of Gold Market Intervention

GATA Sues Fed, Demands Disclosure Of Gold Market Intervention Records

Our friends at GATA have had enough of the Fed's, and other Central Banks' alleged (and with so much circumstantial evidence presented both at Zero Hedge and elsewhere, that in this case "alleged" is just a term only a lawyer could love) manipulation of gold prices, and have taken Bernanke's monetization, manipulation and money making unlimited liability company to task ("M4 ULLC"). We are overjoyed that yet another entity has followed in the footsteps of our dear late friend Mark Pittman in taking on the one organization that represents all that is irreconcilably broken with the current economic and financial system. We wish GATA much success, and hope that ever more wronged counterparties will seek remedies from the Fed's consistent and blatant wealth transfer from America's Middle Class to the uber-wealthy, Wall Street-originating oligarchy.

I thought many here would appreciate this. Can we start a class action suit against the Fed? Tongue out

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