• 1) Moody’s Says Greece May Be Cut If Fiscal Plan Missed

"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."

• 3) Bernanke: Unsustainable Debt Could Hurt Dollar, Interest Rates

"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. "

• 4) Factory orders, jobless claims show continued weakness

"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."

• 6) Crime rates soar in SB County

"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."

• 7) Public college tuitions spike 15%, even 30%

"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."

• 10) Vaughn Realty Files For Bankruptcy

"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. "

• 12) Atlanta's unfunded liabilities growing at 21% per year (graph)

(Scroll to page 12)

(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)

Ill. Gov. Quinn considers $2B in budget cuts

Squeezed by ballooning pension costs, charters cut programs

Nomura Plans First Public Sale of U.S. Dollar Bonds

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3TmzkTL.8NQ&pos=7

“Nomura’s aim is to raise awareness overseas,” said Yasuhiro Matsumoto, an analyst at Shinsei Securities Co. in Tokyo. “They’ll be able to finance in Japan cheaper, but publicity is more important as they need to catch up with Goldman Sachs or Morgan Stanley.”

• 1) California Assembly Backs Bill to Guard Cash After Bond Delayed

Feb. 25 (Bloomberg) -- California’s Assembly passed a bill allowing the state to delay payments to programs including schools to avoid running out of cash, a move aimed at boosting confidence in bonds sold by the most-populous U.S. state.

The passage comes a day after Treasurer Bill Lockyer told lawmakers the bill was needed to send a signal to investors that California is taking steps to adequately manage its cash as it faces budget deficits through June 2011. Lockyer postponed a $2 billion bond sale that was initially scheduled for next week.

• 2) New York Faces Cash Squeeze in March, Budget Chief Megna Says

"Feb. 25 (Bloomberg) -- New York faces a cash squeeze in March and expects to delay $1.4 billion of payments, almost twice as much as it temporarily withheld two months ago, state budget director Robert Megna said.

New York, the third most populous U.S. state, held back $750 million of payments to schools and local governments when its general fund ended December with a record deficit of $577 million. The state paid bills that month by borrowing from other accounts.

Delays in March will be needed “to continue orderly operation of government,” Megna said today at a hearing in Albany. Postponements may affect income tax refunds as well as payments to schools and not-for-profit organizations, he said. The state hires outside agencies to provide services, such as aid to the blind or mentally ill, on behalf of the state.

New York faces a $1.4 billion deficit during the remainder of the year that ends March 31, according to budget documents. The figure increased from $500 million estimated in January as income tax revenue fell short of projections and spending on Medicaid health services for the poor were more than expected. "

• 3) Obama May Prohibit Home-Loan Foreclosures Without HAMP Review

"Feb. 25 (Bloomberg) -- The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.

“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”

She confirmed the authenticity of the document, which hasn’t been made public. "

• 4) Iceland Walks Out of Icesave Talks With U.K., Dutch

"Feb. 25 (Bloomberg) -- Iceland walked out of talks with the U.K. and Netherlands on how to settle foreign claims, after both sides failed to reach an agreement on the terms of a loan the north Atlantic nation needs to cover depositor losses."

........................4A) Fears grow of Icelandic default

"The breakdown in the talks dashed hopes of avoiding a March 6 referendum in Iceland, in which an original repayment deal is expected to be resoundingly rejected. A no vote would plunge Iceland into fresh turmoil, threatening the survival of the government and its flow of international financial support."

• 5) N.J.’s Christie Proposes Jobless Aid Cut to Close Gap

"Feb. 25 (Bloomberg) -- New Jersey Governor Chris Christie proposed cutting benefits to the state’s more than 400,000 out- of-work residents to blunt a rise in business taxes that may be triggered by a shrinking unemployment trust fund.

Christie, 47, seeks to reduce the maximum weekly payment by $50 as joblessness stands at a 33-year high of 10.1 percent. Businesses may face tax increases averaging 52 percent if lawmakers don’t support the plan, Christie said. "

"Emergency Issue’

The governor said he also plans to call on the federal government to continue helping states so they can avoid payroll tax increases. Twenty-eight states have insolvent unemployment funds and are receiving federal loans; that number may reach 40 by the end of this year, Christie said."

• 6) Illinois: Another State Economic Meltdown (Jeff Nielson)

"At the moment, however, there is no U.S. state which epitomizes the economic catastrophe currently confronting most U.S. states as does Illinois. The state which Barack Obama abandoned when he was nominated by Wall Street to be the next U.S. president is confronting numerous, extremely unpopular policy options – as the only means of the state avoiding bankruptcy this year.

The dire straits through which Illinois is attempting to navigate were summed-up well at the beginning of a recent article in the Chicago Sun-Times:

“To become solvent, the state must enact the largest tax increase package in Illinois history, whack another $2 billion from already starved government programs, and wrest major financial concessions from the state's unionized workforce...”"

........................6A) Take a look at illinoisisbroke.com/

• 7) Connecticut rainy day fund empty

"HARTFORD — As rain fell outside Wednesday, state Comptroller Nancy Wyman told more than 350 business executives gathered inside the Legislative Office Building that the state's rainy day fund is empty.

"We did have a rainy-day fund," Wyman said. "We had the fund, but there's nothing in it. I'm the only one in the world that can write a check and have no money in the bank. And the attorney general is not even going after me, because it's his paycheck.""

• 8) Jefferson County sues after bank withholds county money

"A Minneapolis-based bank should be forced to turn over $27.4 million it holds in an ac­count for Jefferson County, the county contends in a lawsuit filed Wednesday in state court.

U.S. Bank refuses to release the money the county needs by Satur­day to make a tax rebate payment to the Internal Revenue Service, according to the 11-page com­plaint.

Commission President Bettye Fine Collins said Wednesday, "The county should have access to that money in order to meet our re­sponsibilities to the IRS. They need to release the $27 million so we can do that."

Jennifer Wendt, a spokeswoman for U.S. Bank, declined to say why the bank won't release the money.

Jefferson County owes the money to the U.S. Treasury for ex­cess interest earned on a total of $1.1 billion borrowed in 2004 and 2005 for school construction work.

Excess interest was generated on the borrowed money as the county waited for lawsuits against the project to be settled in court. Federal tax rules require that the excess interest be paid to the U.S. government and not used by a borrower, such as Jefferson County.

According to Wednesday's com­plaint, the county will face severe financial penalties if a $27,362,974 payment is not made to the In­ternal Revenue Service by Satur­day.

Another payment of $153,085 will be owed April 5, according to the filing.

"Failure to pay arbitrage rebate on the dates due will expose the county and its taxpayers, at a min­imum, to interest charges imposed by federal tax law," the filing states.

The interest on the money owed t­o t­he I­RS f­or t­he 2­004 w­ar-rants w­ould b­e $9­0,000 a m­onth i­f t­he c­ounty d­oesn't m­ake S­aturday's p­ayment, t­he f­iling s­tates.

"I­n a­ddition, i­f t­he c­ounty i­s d­etermined t­o h­ave f­ailed t­o p­ay r­ebate a­s a r­esult o­f 'w­illful n­eglect,' a p­enalty o­f 5­0 p­ercent o­f t­he r­ebate d­ue, i­n t­his c­ase, $1­3,700,000 c­ould b­e i­mposed o­n t­he c­ounty," t­he f­iling s­ays.

"T­he c­ounty d­oes n­ot h­ave s­ufficient f­unds o­n h­and t­o m­ake t­he r­equired r­ebate p­ayments f­rom a­ny s­ource o­ther t­han t­he f­unds h­eld b­y t­he t­rustee u­nder t­he i­ndenture," t­he f­iling s­tates."

• 9) The Nation: Unemployment's Desperate Case (NPR)

"This week will be a critical one for millions of Americans surviving on unemployment insurance (UI). With national unemployment hovering just below ten percent, UI benefits will end for one million Americans on February 28th, and for four million more, in the months that follow if Congress fails to take immediate action."

We the Icelanders don't want to pay private debt, but the UK and the Dutch are terrified that the referendum will take place the 6th of march and vote NO.

So they have offered us 2.75% + LIBOR instead of the fixed 5.5% rate and not interest on the year 2009-2010.

This is outrageous how can they offer this!  interest rate will go up for sure!

We Icelanders don't want to pay this debt, period .