"Feb. 25 (Bloomberg) -- Greece’s debt rating may be cut within months unless the country meets the objectives of its plan to reduce the European Union’s largest budget deficit, Moody’s Investors Service said.
“If the deviation is significant, we may even indeed downgrade by a couple of notches,” Pierre Cailleteau, managing director of sovereign risk at Moody’s, said in an interview in Tokyo today. Standard & Poor’s said yesterday it may lower the rating by the end of March as a weak economy and political opposition threaten the country’s ability to cut the deficit. "
- 2) Sovereigns: Debt levels raise fears of further downgrades (Financial Times)
"Never before has so much government debt been raised against such an uncertain economic backdrop.
This year the Organisation for Economic Co-operation and Development forecasts $16,000bn will be raised in government bonds among its 30, mostly industrialised, member countries.
This is a sharp increase of $4,000bn in the space of just two years as governments around the world have turned to the capital markets to pay for fiscal stimulus packages and bank bail-out initiatives.
The consequences of this record amount of issuance are still playing out in the markets as countries with weak public finances are forced to pay big yield premiums to attract investors, who can afford to be more selective with the vast amount of bonds on offer."
"WASHINGTON (Dow Jones)--Federal Reserve Chairman Ben Bernanke warned Wednesday of negative consequences to the dollar and interest rates if investors lose confidence in the U.S. government's ability to bring the deficit back under control.
"There are a number of different channels through which large deficits, or unsustainable deficits, could affect the current economy," Bernanke told the House Financial Services Committee. "
"The department says first-time claims for unemployment insurance rose 22,000 to a seasonally adjusted 496,000. Analysts expected a drop to 455,000."
- 5) Duck! Watch out for falling home prices (CNN Money)
"NEW YORK (CNNMoney.com) -- Despite signs that the real estate market might be lurching forward, prices are expected to fall further this year and next.
The average home price in the United States will fall by about 6% by September 2011, according to Fiserv, a division of Moody's Economy.com. And that's after plunging more than 27% in the past three years."
"Over the last five years, crime rates in Santa Barbara County have soared, leaving law enforcement agencies and prosecutors scrambling to keep up with the onslaught.
The spike in crime is particularly intense with murders and attempted murders, which have risen 588 percent in the last decade, according to the number such cases filed by the district attorney’s office."
"County leaders are wrestling with a nearly $40 million budget deficit, a sum that threatens to knock the wind out of pretty much every county department.
If $3.9 million, the deficit in the district attorney’s office, is cut, the number of prosecutors in Santa Barbara County would drop to 34, a number so staggeringly low that Bramsen said she couldn’t recall if or when it had reached that mark.
If this comes true, Bramsen said individual case loads would explode from current record levels of 477 per attorney, to 576, a number that would leave prosecutors no choice but to pick and choose where justice was needed most, while allowing many cases to slide."
"Tuition at many public colleges and universities is skyrocketing, thanks to state budget deficits that have choked off funding for higher education.
The University of California, for instance, estimates a 30% increase in the 2010-2011 year. "California's $20 billion deficit will make it hard for the [state's] legislature to provide funding to the schools," said Patrick Lenz, UC Berkeley's budget administrator.
Next year's tuition numbers aren't final, since many states are still hashing out their budgets. But one thing is certain: Rates are going up, and the schools that will be hit the hardest are in the states that have seen the worst of the economic downturn.
For example, the Universities of Nevada, Florida, and Washington, each estimate that their tuitions will jump 10% to 15% next year."
- 8) US-Sino tensions "dangerous game," U.S. panel told (Reuters)
"* China might aggressively sell US assets if provoked
WASHINGTON, Feb 25 (Reuters) - China's belief it now has the upper hand in the global economy creates a risky dynamic that makes it urgent the United States cut its mammoth debt, a former International Monetary Fund official said on Thursday.
At issue is China's vast holdings of U.S. Treasuries and growing concerns that China could wield its position as one of the country's biggest creditors as a club against U.S. policy."
- 9) City mulls stiffing state (Sonoma, CA)
"The state appropriations of local dollars is, in turn, supposed to be spent on "Educational Revenue Augmentation." The state's taking is being challenged in court through a suit brought by the League of California Cities, which insists the appropriation of local funds is illegal. But while that suit plays out, the Sonoma City Council was under deadline pressure to decide how it was going to pay the state its redevelopment agency funds. Three options were identified, involving various combinations of borrowing from existing city and redevelopment agency funds allowed by the state.
During its Feb. 20 meeting, the council made a decision on the most palatable option payment, to which it gave grudging ascent. But then, just as it was about to adjourn, Councilmember Aug Sebastiani made a bold motion. "I would like to move," he said, "that we not pay it.""
""Just imagine if everyone did this," mused Sanders."
"ALBUQUERQUE, N.M. -- It may well be one of the state's biggest bankruptcies, if not in dollar amount, in the number of people affected.
Long-time Duke City real estate powerhouse the Vaughn Company is the latest victim of the housing bubble.
It's currently hard to get many firm answers about the Vaughn Company bankruptcy.
Long a household name in real estate, the company filed for Chapter 11 bankruptcy protection Monday that will allow it to reorganize while protected from creditors by the court.
According to bankruptcy filings, there are hundreds of creditors who are owed as much as $10 million. Many of them are local firms, but Action 7 News has learned there are hundreds of individual investors who purchased promissory notes from Vaughn as investments. Some said they've put their life savings in the notes, but they said last fall, Vaughn stopped interest payments and they can't get any answers why."
- 11) Muni Bond Flashpoint (Forbes)
"The new Great Depression is far from over, especially for municipalities.
Both high school chemistry and history students know the meaning of flashpoint. In chem lab, the flashpoint is the lowest temperature at which the vapor of a combustible liquid will ignite. To history students, flashpoint has another meaning entirely. It is the point at which mob action erupts into violence. With these concepts firmly in mind--chemical and historical--it seems to me that America's debt implosion is rapidly heading toward a flashpoint.
Greece's irresponsible debt will be papered over [saved] by the Germans and French. They have little choice. The U.S. is at the flashpoint with our weakest states, cities, school districts and communities. The largest vapor bubbles ready to explode are California, New York, New Jersey, Illinois, the New York MTA, the City of Los Angeles--the list continues. "
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(This was posted along with other news at pensiontsunami)
Headlines:
Budget "Catastrophe" Predicted for Schools (Illinois...$1 billion deficit)
Daube Says Any EU Bankruptcy, Exit Would End European Union
"Dire" NY MTA finances may mean another fare hike ($750 million of revenue lost since December)
Fitch, Moody's downgrade Kansas City's credit rating
Audit: Birmingham faces $77M budget deficit
Worst. Budget. Ever. (Sacramento)
Tax revenue drops sharply for 2 districts (Milwaukee County....down around 17%)
Tempers boil as MMWD jacks up rates (Marin Water District...after a 9.8% rate hike)
Michigan lawmakers hear debate on inmate release plan (7,500 prisoners. State deficit is $1.7 billion)
Millionaires leave Montgomery, causing budget woes (Lost $4.6 billion in revenue after starting their "millionaire tax")
Montgomery County public employees may get raises
Hawaii excise tax breaks may be cut to help ease budget deficit ($1.2 billion deficit)
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