Daily Digest

Daily Digest - February 10

Wednesday, February 10, 2010, 10:48 AM
  • U.S. Postal Service Logs $297 Million Quarterly Loss
  • N.J.’s Christie Said to Plan Freezing Some School Aid
  • Brazil to Sanction U.S. on Goods, Intellectual Rights
  • Greek Strikes Challenge Papandreou’s Bid to Stop Fiscal Crisis
  • Alberta Deficit to Widen to C$4.75 Billion Before Surplus Seen
  • GMAC Issues $2 Billion of Senior Unsecured Notes
  • US Banks Have $176 Billion Exposure To Weak Euro Countries
  • Retirees’ Medical And Dental Bills Take A $51.8 Billion Bite In California
  • Washington State Tourism Spending Drops By $1.2 Billion in 2009
  • Georgia Tax Revenue Goes Cold In January
  • Asia to Pay Higher Yields at Government Debt Auctions
  • Defaults on FHA Loans Surpass 9%
  • Private Colleges Looking To Rein In Financial Aid
  • Moody's Warns Greece: Deviate, and Risk Downgrade
  • Dubai selling off the Queen Elizabeth 2?
  • Burglars Making Numerous Bathroom Stops On UC Berkeley Campus
  • Job Openings Plunged By One-Quarter Last Year
  • Bankruptcy Bloodbath May Hit Muni Bond Owners Next: Joe Mysak
  • Nev. Medicaid cuts could lead to diaper rationing
  • No Exit in Sight for U.S. As Fannie, Freddie Flail
  • Villaraigosa Tells L.A. Council That Layoffs Are Only Way To Avoid 'Financial Tailspin'

Economy

U.S. Postal Service Logs $297 Million Quarterly Loss

“Unfortunately, economic drivers that significantly affect mail volumes, such as continuing high unemployment levels and lower investments, appear to be lagging general economic recovery and last quarter’s growth in GDP,” Chief Financial Officer Joseph Corbett said in the statement. “This situation, coupled with the growth in electronic alternatives to mail, creates a very challenging environment.”

N.J.’s Christie Said to Plan Freezing Some School Aid

The $3.5 billion in school funds comprise the largest state account that can be accessed this late in the fiscal year, said Assemblyman Joseph Malone, a Republican who sits on the budget committee. ‘Catastrophic’ Problem “This isn’t rocket science,” Malone said in an interview. “We’re dealing with actual green dollar bills. Where else is it going to come from? Given the catastrophic nature of the problem right now, this is what we’re going to have to do.”

Brazil to Sanction U.S. on Goods, Intellectual Rights

The WTO ruled in August that Brazil has the right to impose $294.7 million annually in sanctions against the U.S. because of subsidies paid to American cotton farmers, the second highest amount ever permitted by the Geneva-based trade arbiter. Brazil says that amount has since grown as U.S. payments to cotton farmers exceed a specific cap. Cozendey said Brazil can impose up to $830 million in sanctions, including $560 million on goods and the rest on intellectual property rights and services.

Greek Strikes Challenge Papandreou’s Bid to Stop Fiscal Crisis

Prime Minister George Papandreou’s drive to get Greece’s ballooning budget under control will be challenged in the streets today as striking labor unions shut down schools, hospitals and flights....Protests against Papandreou’s plans to freeze wages and reduce benefits come after European Union leaders, set to meet at a summit in Brussels tomorrow, signaled they may aid the country if progress in cutting the deficit is made. Bonds have slumped in Greece and in the euro area’s southern edge as investors examine budget shortfalls across the 16-nation bloc.

Alberta Deficit to Widen to C$4.75 Billion Before Surplus Seen

The Canadian province of Alberta, home to the largest oil reserves outside the Middle East, said its deficit will widen 31 percent next year as government spending rises and revenue remains little changed.

GMAC Issues $2 Billion of Senior Unsecured Notes

GMAC Inc., the auto and home lender controlled by the U.S. government, sold $2 billion of bonds in its first sale of debt not backed by the government in more than two years. The 8.3 percent senior unsecured notes due in 2015 priced to yield 8.5 percent, or 619.8 basis points more than similar- maturity Treasuries, according to data compiled by Bloomberg.

US Banks Have $176 Billion Exposure To Weak Euro Countries

The largest U.S. banks have a total exposure of $176 billion to four weak European countries whose debt problems have sent shudders through global financial markets in recent days. According to a report by Barclays Capital, 73 large U.S. banks have exposure of $82 billion to Ireland, $68 billion to Spain, $18 billion to Greece and $8 billion to Portugal.

Retirees’ Medical And Dental Bills Take A $51.8 Billion Bite In California

California is going to have to pay a $51.8 billion bill for health and dental benefits for state retirees, says state Controller John Chiang in a report to the Legislature Tuesday.... The current pay-as-you-go policy results in an actuarial unfunded obligation of $51.8 billion, which represents the total present value of future retiree health benefits earned as of June 30, 2009, by current state retirees and employees. Based on this unfunded obligation, California has an annual OPEB cost of $3.9 billion for 2009-2010 – or the amount the state would need to pay toward funding these benefits. In the 2009-2010 Budget Act, the state only provided $1.3 billion for retirees’ health and dental benefits.

Washington State Tourism Spending Drops By $1.2 Billion in 2009

Tourists to Washington state spent $1.2 billion less in 2009 than a year earlier, state officials said Tuesday. Last year, travelers to Washington spent $14.17 billion compared with $15.38 billion in 2008 and $14.86 billion in 2007, according to figures released by the Department of Commerce and Washington State Tourism. They said the spending drop is “reflective of national trends.”

Georgia Tax Revenue Goes Cold In January

Georgia’s income tax revenue fell about $137 million in January, the Georgia Department of Revenue reported Tuesday. Georgia took in $1.44 billion in various tax collections last month, down 8.7 percent from January 2009.

Asia to Pay Higher Yields at Government Debt Auctions

Asian developing nations will need to pay the highest yields in at least a month to borrow $3 billion through bond sales this week as central banks prepare to raise interest rates, Allianz Investment Management Ltd. and CIMB- Principal Asset Management Bhd. said. Local-currency government bonds handed investors losses in the past three weeks as policy makers from South Korea to Malaysia and India signaled borrowing costs cannot remain at record-low levels. Money managers are also paring holdings because of the risk of contagion from the collapse of investor confidence in European sovereign debt, according to Allianz.

Defaults on FHA Loans Surpass 9%

Even with improvements beginning to peek through the debris of the housing crisis, mortgage defaults continue to rise at an incredible rate, and the story is no different for the federal government’s mortgage insurance agency. The latest numbers from the Federal Housing Administration (FHA) show that the percentage of loans it backs that are at least 90 days past due hit 9.12 percent at the end of 2009. That figure is up from 6.82 percent one year earlier – a 34 percent increase.

Private Colleges Looking To Rein In Financial Aid

In the last year, the nation's private colleges have laid off staff, shelved construction projects, slashed sports teams and turned down thermostats to cut costs. But student financial aid has kept flowing. Now the weak economy is forcing some institutions to limit their generosity after many of them doubled or even tripled financial aid over the last decade to attract more applicants and reduce student debt.

Moody's Warns Greece: Deviate, and Risk Downgrade

In an interview, Pierre Cailleteau, managing director of Moody's Global Sovereign Risk Group, mapped out two scenarios for Greece. The more likely path, he said, would see the government deviate from its plan to stabilize finances, which would prompt Moody's to cut Greece's rating again. It last downgraded Greece to A2 with a negative outlook from A1 in December.

Dubai selling off the Queen Elizabeth 2?

Dubai is reportedly preparing to sell a host of assets, including one of the world's best known cruise ships, as the emirate's investment arm looks to restructure a mountain of debt. The Queen Elizabeth II, or QE2, is rumored to be one of the assets that Dubai's state-run private equity firm, Istithmar World, is planning to sell. An Istithmar spokesman did not respond to requests for comment on Tuesday.

Burglars Making Numerous Bathroom Stops On UC Berkeley Campus

Those needing to use a bathroom on the UC Berkeley campus may find themselves having to hold it, thanks to a rash of thievery striking the campus plumbing. Burglars have been bringing tools into bathrooms at buildings across the campus and removing brass flushing hardware from the toilets, effectively dismantling more than three dozen commodes to date, campus police Chief Mitch Celaya said Monday......The criminals' motivation, she added, is to sell the brass parts as scrap or to other kinds of metal dealers.

Job Openings Plunged By One-Quarter Last Year

Finding a job got much tougher last year, as the number of available openings fell by nearly one quarter. At the same time, the unemployed population soared by more than one-third, leaving more laid-off workers competing for fewer jobs. All told, there were 6.1 unemployed workers in December, on average, for every available position, according to Labor Department data released Tuesday. That's a sharp increase from 3.4 jobless workers per opening in December of 2008, and much worse than the 1.7 unemployed people per opening in December 2007, when the recession began.

Bankruptcy Bloodbath May Hit Muni Bond Owners Next: Joe Mysak

The biggest financial crisis since the Great Depression is squeezing municipalities across the country. Since Vallejo, California, successfully petitioned for bankruptcy protection in May 2008, California’s towns, Detroit’s schools and Pennsylvania’s capital city of Harrisburg have all talked about Chapter 9.... Local governments have been reluctant to reduce headcount during the recession. Since employment peaked at 115.6 million in December 2007, businesses have cut 8.5 million jobs, a 7.4 percent reduction. Local governments, by contrast, continued adding employees through September 2008, to a high of 14.6 million and have since fired 141,000 workers, or 0.96 percent, according to the U.S. Bureau of Labor Statistics.

Nev. Medicaid cuts could lead to diaper rationing

Nevada officials on Tuesday outlined drastic cuts to the state's Medicaid program that include plans to ration adult diapers, eliminate denture and hearing-aid programs, and force personal care assistants to buy their own disposable gloves. State lawmakers learned of the cuts at a committee hearing in which health officials said adult day care programs, vision services and outpatient programs for people with brain trauma would also be cut to slash $109 million from Medicaid costs. The grim proposals brought criticism and rebuke from lawmakers of both parties over Gov. Jim Gibbons' comments that Nevada can no longer pay for "bloated government services."

No Exit in Sight for U.S. As Fannie, Freddie Flail

When Charles E. Haldeman Jr. became Freddie Mac's chief executive officer in August, the ailing housing-finance giant had already consumed $51 billion of government money to stay afloat. It's likely to need even more. Freddie's federal overseers nevertheless have instructed Mr. Haldeman to focus on something that isn't likely to make the bleak balance sheet look any better: carrying out the Obama administration plan to allow defaulted borrowers to hang onto their homes.

Villaraigosa Tells L.A. Council That Layoffs Are Only Way To Avoid 'Financial Tailspin'

“There just aren’t unlimited options here,” Villaraigosa told the council. “I have profound respect for the difficulty of the decisions you have to make, but I want to say this. We can’t continue to say no to everything. We can’t say no to layoffs, no to furloughs, no to department eliminations. ... The fact is we can’t sustain this business model.” Villaraigosa acknowledged that if the city became insolvent -- unable to pay its bills -- he could be held personally liable.

16 Comments

saxplayer00o1's picture
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Re: Daily Digest - February 10

"The continuing economic woes in Europe and the United States are cultivating a spirit of regionalism in China, Japan and South Korea, so much so that the three East Asian nations can and should upgrade themselves to become the world's economic center, according to some experts."

"LONDON (Dow Jones)--The cost of insuring German sovereign debt against default rose slightly Wednesday while peripheral euro-zone sovereign credit default swap spreads fell, as markets continued to anticipate support for Greece from Germany and its European Union neighbours.

Germany's five-year sovereign CDS spreads were slightly wider at 47.5 basis points mid-morning, from 47 basis points at Tuesday's close, according to data provider CMA.

Greek, Spanish, and Portuguese sovereign CDS spreads have tightened dramatically this week on expectations that support for Greece will be announced at Thursday's summit of EU leaders. "

"The total amount of Korea's debts by the central and regional governments and state-owned corporations rose W114 trillion or 23 percent year-on to W610 trillion as of the end of September last year (US$1=W1,164). The government says the increase is necessary to stimulate the economy, but what is frightening is the rapid pace of increase. When debts by state-owned financial institutions such as the national housing and deposit insurance funds are included, the total amount rises to W700 trillion. That is close to 70 percent of Korea's GDP."

...........................3A) Debt spirals at state-run corporations (Korea)

"TOKYO (Dow Jones)--Outstanding government bonds and borrowings of the Japanese government totaled Y871.5104 trillion at the end of December, renewing a record high, Japan's Ministry of Finance data showed Wednesday.

That was a Y6.9878 trillion increase from end-September and a Y25.0134 trillion rise from the end of the previous fiscal year, according to the data. "

"NEW YORK, Feb 10 (Reuters) - U.S. mortgage applications dipped last week, reflecting reduced demand for home purchase loans even as rates on 30-year loans fell to their lowest since December, data from an industry group showed on Wednesday.

A continuation of lackluster demand for home purchase loans would not bode well for the U.S. housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention."

"China could overtake the United States as the world’s biggest grocery market within five years, according to market research organization IGD."

"Britain's economy is now in a comparable state to the 1970s when the country had to be bailed out by the International Monetary Fund, one of the world’s biggest investment banks has warned. "

""Debt levels have gone down for two reasons," said IndexCreditCards.com founder Adam Jusko. "Number one, consumers are simply spending less because of the overall economy, so fewer new charges are ending up on credit cards. Number two, credit card issuers have been actively shedding customers, especially those seen as higher risk, because of the higher number of defaults they've had to endure recently. Combine less spending with fewer cards in consumers' hands, and it's no surprise that debt levels are decreasing." "

"Pennsylvania's capital city, Harrisburg, won't have enough money to meet a $2 million bond payment due on March 1 and could default as early as that date, City Controller Daniel C. Miller said.

"I don't know where that money's going to come from," Mr. Miller said, adding that the city "needs to explore Chapter 9 (bankruptcy) fully because that's our best option." "

..................9A) Harrisburg, Pennsylvania Capital, Has Rating Lowered by Moody’s

"Feb. 10 (Bloomberg) -- Harrisburg, the capital of Pennsylvania, has been downgraded to five levels below investment grade by Moody’s Investors Service, as the city considers bankruptcy in the face of $68 million in debt service payments this year.

Moody’s lowered its grading on Harrisburg’s general obligation bonds to B2 yesterday, from Ba2, and retained a negative outlook on the city of 47,000, according to John Cline, a Moody’s vice president for ratings communications in New York. He declined to discuss reasons for the downgrade in an e-mail today. "

"US trade deficit surges to $40.18 billion in December, much larger than expected"

" At the same time Toyota is dealing with a huge recall, it is about to shutter a major auto plant. In just a few weeks, all this activity will grind to a halt; 4700 jobs will disappear, and so will California's only auto assembly plant, and a unique joint operating agreement between General Motors and Toyota will officially be dead."

"The global default rate for all rated companies nearly tripled last year to 5.4%, according to Moody's Investors Service, as a record 261 corporate issuers defaulted on a combined $328.9 billion of debt, a dollar-amount increase of 17%. "

"Moody's said Greece could face the risk of a "multi-notch downward rating migration" if the debt-stricken nation's public finances remained unsustainable.

"If the implementation falls just short of the execution promised by the Greek authorities, then we may adjust the rating to A3 in the coming months," it said. "However, if only partial implementation is achieved, then we may downgrade Greece's rating to Baa1.""

"Minnesota had the outlook on $4.2 billion of debt changed to negative by Moody's Investors Service, which cited financial weakness from lower-than-expected revenue.

Moody's maintained the state's Aa1 general obligation rating, its second-highest. All but about $100 million of Minnesota's 2010-11 fiscal-year deficit of $1.2 billion stemmed from lower-than-anticipated revenue collections, the New York-based ratings service said in a release. The state's cash reserves are expected to fall this year to $150 million from $350 million, Moody's said.

"Minnesota's vulnerability to further downward revenue revisions given the uncertainty surrounding the timing and the strength of the economic recovery is increased by the drop-off in federal stimulus," Moody's wrote.

The revised outlook, from stable, signals that the state's rating will be cut if financial performance doesn't im-prove. Lower ratings lead to higher borrowing costs as investors seek more yield to compensate for higher risk. "

"Moody's Investors Services on Tuesday downgraded several Illinois universities amid the ongoing delays in the state giving money to public universities.

Illinois, like many states, finds itself in a budgetary hole amid a continued decline in tax revenue. States have been holding back on various payments. For example, Southern Illinois University has gotten just 28% of the appropriation approved for the year ending June 30.

"Moody's remains concerned regarding further delays in payments of the current year's appropriation payments and the ability of the university to sustain operations without consistent funded operating support from the state," the ratings agency said about Southern Illinois. It saw its rating cut two notches to A3, or four steps above junk territory.

Colleges and universities had been immune from the ratings downgrades that hundreds of companies and some states have seen during the recession.

Also downgraded were Western Illinois, Eastern Illinois, Northern Illinois and Illinois State. All five of those downgraded remain on watch for further cuts. "

  • 16) A few other City/State headlines

Paterson proposes new taxes to trim deficit (New York)

City deficit balloons again (Pasadena)

Memphis city government may slash 500 jobs to fill budget gap

County faces grim budget (San Mateo)

Detroit council to weigh plan that cuts worker benefits

Public employees feeling blindsided by Newsom's layoff scheme (SF)

Budgets strained as governments deal with historic winter (Annapolis)

El Paso County Projected To Face $11.5 Million Deficit

Ill. universities make plea for state money

Proposed budget would tax candy, caskets, coal (PA)

Alberta going for broke with spending hikes and record $4.7B budget deficit (Canada)

Wash. Senate starts clearing way for tax hikes

"Feb. 10 (Bloomberg) -- The Czech Republic sold 2.9 billion koruna ($154 million) more of its 15-year bonds, half the planned amount, as concerns about sovereign debt and the country’s ability to control its budget deficit drove up yields."

"The entities are affiliates of Lembi Group's CitiApartments Inc, the largest apartment owner in San Francisco. The four entities collectively own 16 residential properties, which were collateral for a $132.4 million loan.

The four entities that filed for bankruptcy are Hermann Street DE LLC, LRL Citi Properties I DE LLC, Sutter Associates DE LLC and Trophy Properties I DE LLC.

In court papers, Hermann Street said it filed for bankruptcy after CW Capital Asset Management LLC, which is a special servicer for part of the loan, was unwilling to agree to an extension on acceptable terms that would have allowed the company to refinance.

In January, a media report said that the closely held Lembi Group was trying to renegotiate about $1 billion in debt to save dozens of buildings in its portfolio and had handed over 51 buildings to one of its lenders because of bad loans."

"China has ordered managers of its vast currency reserves to withdraw from risky dollar assets and retreat to core debt guaranteed by the US government, a clear sign that Beijing is battening down the hatches for fresh trouble on global markets. "

"The exact break-down of China's holdings are a state secret but it is understood that SAFE bought large amounts of corporate debt as well as municipal and state bonds during the boom years of 2006 and 2007. Any move to liquidate holding of California debt at this crucial juncture could have serious implications"

"David Bloom, head of currencies at HSBC, said the explosive dollar rally over the last six weeks has been the reversal of the dollar carry trade. "It has been short, sharp, and vicious. People borrowed in US dollars to invest in places like Brazil, Turkey, and New Zealand and now it is unwinding."

"We don't think the dollar rally is going to last much beyond the first quarter because we're in a new world of rotating sovereign crises where politics matters again. It's Greece right now but it could be the UK next, and then US which has yet to take any steps at all to tackle it fiscal deficit," he said. "

............................19A) Nathan's Economic Edge comment on the above news

"How will these moves impact the U.S.? I think you are likely to see the cost of imports begin to rise and it’s obvious that our free spending days are over in regards to financing endless deficits."

.............................19B) CNBC video reports the news about China (Zerohedge put up the video here ...start at 10 minutes 30 seconds)

............................19C) Repost from yesterday's Reuters news

"BEIJING (Reuters) - Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan."

January2010_Quarterly_Report_to_Congress_SIGTARP.pdf 

"The role of Federal government in financing housing has grown so dramatically since the outset of the housing crisis that the government now no longer simply supports the mortgage market.  It has taken on so much of the risk involved in financing housing that it has become the market, with the taxpayer shouldering the risk that had once been borne by the private investor.

That’s the view Neil Barofsky, the Special Inspector General for TARP, in his most recent quarterly report to Congress. Click on the link above for a copy."

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Chinese Depression: Will Its Massive Foreign Reserve Hoard Save

Chinese Depression: Will Its Massive Foreign Reserve Hoard Save the Country's Economy?

http://seekingalpha.com/article/187134-chinese-depression-will-its-massive-foreign-reserve-hoard-save-the-country-s-economy

The world is experiencing an unprecedented economic crisis resulting from a period of credit expansion and growth unlike we have ever seen before. While China may very well become the economic growth engine of the future, the present effects of deleveraging may lead China down the same depressionary spiral as the USA and Europe.

 

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Re: Daily Digest - February 10

 

Bernanke is talking exit strategy again in articles like this link, by raising the interest rate paid to banks that deposit money at the Fed.  Supposedly this tightens credit and controls potential inflation?

http://www.bloomberg.com/apps/news?pid=20601087&sid=aZr6cFPaFjmk&pos=1

Separately, Bernanke said raising the interest rate paid on funds deposited by banks at the Fed, as well as so-called reverse repurchase agreements that temporarily drain cash from the banking system, will probably be the first tools for tightening credit.

But isn't this contrary to their position this economic crisis was due to banks not loaning enough?!  Or perhaps reality is there just aren't enough credit worthy borrowers!  Seems likely simply just more talk, and possibly another way to keep funneling money to the big banks.

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Lessons to Learn from the Failure of the Continental Dollar

Lessons to Learn from the Failure of the Continental Dollar

http://news.goldseek.com/GoldSeek/1265785440.php

To stop the plunging value of the Continental dollar, Congress passed a law requiring merchants to accept the dollars equally to gold and silver, otherwise known as “real” money.  Of course, businessmen willing to accept this proposition were few and far between, as the value of the paper trading hands was losing value by the minute.  Trades in gold and silver had all but disappeared as well, mostly due to the fact that market participants were unwilling to shed their true wealth when they could just pawn off paper to the next person.

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Re: Daily Digest - February 10

Anecdotally, Our son attends a public High School here in NV.  This school opened 2 years ago as a brand new school.  Many of my sons classes are over capacity in student to teacher ratios with some class ratios at 1 to 50.  As a result of this over crowding some students are forced to share desks.  I cannot imagine what raising class sizes and cutting staff is going to look like.  No wonder NV has such a high drop out rate !  I'm surprised they even notice when a student goes missing.

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Re: Daily Digest - February 10

How can the USA ever compete in the world when wages in the public sector are like this?   Apologies if this is a duplicate posting. 

"Though highly unusual, the methods San Luis Obispo County’s two top sheriff officials have adopted to double and even triple their incomes are entirely legal.

In an interesting twist, San Luis Obispo County Under Sheriff Steve Bolts is taking home between $640,000 and $772,000 this year in retirement benefits and an hourly salary, while his boss, Sheriff Pat Hedges, takes home $340,000, according to calculations based on dates provided by Bolts."

http://globaleconomicanalysis.blogspot.com/2010/02/california-sheriff-takes-home-640000.html

 

 

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Re: Daily Digest - February 10

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7199625/Germany-backs-Greek-bail-out-as-EU-creates-economic-government.html

Germany backs Greek bail-out as EU creates 'economic government'

By Ambrose Evans-Pritchard, International Business Editor
 09 Feb 2010

Wolfgang Schäuble, Germany's finance minister, has asked officials to prepare a plan in time for a summit of EU leaders on Thursday, according to reports in the German media. The options include either a loan from EU states or some sort of institutional EU response.

The news pushed the euro to $1.38 against the dollar, the strongest one-day rally since the single currency began its nose-dive late last year. Yields on Greek 10-year bonds plummeted 36 basis points to 6.39pc in a matter of hours as speculators scrambled to exit overstretched positions, with synchronised moves for Portuguese, Spanish, and Italian bonds.

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Re: Daily Digest - February 10

"Dallas Federal Reserve President Richard Fisher said Wednesday said that "significant" obstacles stand in the way of overcoming the full effects of the 2008 financial crisis and the roadblocks to economic recovery. "

""Off balance sheet, there lie two massive, unfunded liabilities not accounted for in the conventional budget accounting of the federal government — most significantly, Social Security and the government obligations of current Medicare programs," he said.

Fisher added, "According to our calculations at the Dallas Fed, that unfunded debt of Social Security and Medicare combined has now reached $104 trillion — trillion with a "T" — in discounted present value. And while much attention in recent years has been devoted to Social Security, the lion's share of the total entitlement shortfall (nearly $90 trillion) actually comes from Medicare.""

 

 

Note this quote from the same guy less than two years ago: 

Richard W. Fisher May 28, 2008

"Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon"

 

Almost $5 trillion more in unfunded liabilities in less than two years according to this guy.

It might also be noted that the "national debt" on May 28, 2008 was under $9.4  trillion according to Treasury Direct.

 (Use "Find history")

 ................Up almost $8 trillion in under two years between these unfunded liabilities and the national debt.

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The Collapse Of The Euro: Joseph Stiglitz And Hugh Hendry

Gotta love watching Hendry smack reality into these two academics:

 

The Collapse Of The Euro: Insights By Joseph Stiglitz And Hugh Hendry - Two Part BBC Miniseries

http://www.zerohedge.com/article/collapse-euro-insights-joseph-stiglitz-...

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Re: Daily Digest - February 10

Ratings Agencies.

The Agencies, working for the corporations [immortals] as they do probably wont downgrade the US of A until it is a worthless gesture, however it could be worse than that.

A case in point, Greece.  Why did they downgrade Greece? Was their debt level that high?  I suggest that the downgrade started the problems with Greece, as they instantly had a much higher burdon to service the debt.  Could the downgrade have been done to CAUSE the problem, to take the strain off US$ and onto the Euro?

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Re: Daily Digest - February 10

Re: Nev. Medicaid cuts could lead to diaper rationing

You mean to tell me I have been PAYING for DIAPERS!?

Oh boy.

P.S. ...Loved yesterday's FAKE COUP video! Thank you!!! You CM posters are all GREAT!!!!

Well...

Gotta go buy more guns...

Mary Kay at PersonalSecurityZone.com

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Re: Daily Digest - February 10

Saxplayer, great articles.  The one on China getting out of risky US dollar investements, followed by Nate's commentary on the article, gave me the chills.  Feeling like 2008 all over again...

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Re: Daily Digest - February 10

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Re: Daily Digest - February 10
idoctor wrote:

Is there anyone that the Fed can't bail out? Don't answer that.

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Re: Daily Digest - February 10

http://www.cnbc.com/id/35332965/
US, Europe Will All Default On Their Debt: Marc Faber
10 Feb 2010
By: CNBC.com

The governments of every developed economy will eventually default on their sovereign debts, including the US, the UK and Western Europe, Marc Faber, editor of the Gloom, Boom & Doom report, told CNBC.

"In the developed world we have huge debt to GDP, in terms of government debt to GDP and unfunded liabilities that will come due," Faber said in a live interview via telephone. "These unfunded liabilities are so huge that eventually these governments will all have to print money before they default."
Faber said that emerging economies are much more financially sound on this basis than the developed world, with the exception of Singapore, which has a limited amount of debt and huge reserves.

His comments come amid talks of a bailout for struggling Euro zone member Greece, which needs to borrow 53 billion euros, or $73 billion, to cover its deficit and refinance debt that is coming due.

Faber added that the global stock markets — which have mostly fallen about 10 to 20 percent from their peaks — have begun a correction phase that he expects to continue.

He said he thinks the new resistance level for the S&P 500 will be 1,100, though an oversold market could cause a relief rally over the next ten days.

Still, he said he is "relatively optimistic" about stocks going up, referring to them and precious metals as two of the best safe havens.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - February 10

The Inflationary Depression

By Bob Chapman

Not only is the US bankrupt, but also so is the rest of the world. It is now only a question of when the dominos will fall.
http://www.informationclearinghouse.info/article24642.htm
Very long, but complete description of every aspect of how stuffed we are -
no solutions.

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