Daily Digest

Daily Digest - February 27

Saturday, February 27, 2010, 10:57 AM
  • Q4 Report: 11.3 Million U.S. Properties with Negative Equity
  • Rising DEQ caseload draws concern
  • Nuclear industry official: U.S. lagging
  • Bigger is better?
  • Oil to Hit $100 in US Driving Season: Analyst 
  • Report says Wyoming formation could hold 50 years of CO2 


Q4 Report: 11.3 Million U.S. Properties with Negative Equity (Ben Johnson)

First American CoreLogic reported today that more than 11.3 million, or 24 percent, of all residential properties with mortgages, were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near‐negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.

Rising DEQ caseload draws concern (mooselick7)

Presented with declining revenue, Wyoming lawmakers are determined to hold the line on spending during this budget session. But the state’s own energy ambitions force legislators to contemplate something that goes against their current fiscal instincts: increasing regulatory budgets.

Is Ben Bernanke The Second Coming Of Rudolf von Havenstein? (Davos)

Hopefully, once the true span of the Great Depression v2 is grasped, once all extend and pretend measures are exhausted, modern society will do away with economists once and for all.


Nuclear industry official: U.S. lagging (mooselick7)

With 104 nuclear reactors, the United States still has the largest nuclear energy industry in the world. But many in the industry say the U.S. may lose that status quickly.

Bigger is better? (mooselick7)

The developer of a proposed wind farm on White Mountain has scaled back the probable number of wind turbines in favor of a larger turbine size for the project.

Oil to Hit $100 in US Driving Season: Analyst (mooselick7)

A recovering economy and tightening supply from oil refiners will push the price of crude up to $100 a barrel as the US driving season gets into full swing, John Kilduff, co-CIO of Round Earth Capital, told CNBC Tuesday.

Report says Wyoming formation could hold 50 years of CO2 (mooselick7)

An underground formation east of Rock Springs in southwest Wyoming could hold enough carbon dioxide to enable two large coal-fired power plants to meet clean-coal standards for 50 years, according to a new report by the Wyoming State Geological Survey.

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Re: Daily Digest - February 27

"Dominique Strauss-Kahn, the head of the International Monetary Fund, suggested Friday the organization might one day be called on to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar.

"That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now," he said in a speech on the future mandate of the 186-nation Washington-based lending organization."

"Kenneth Rogoff spoke with CNBC today about the threat of sovereign debt crises today.

The Key Points:

When countries hit gross government debt as 90-100% of GDP, problems are bound to arise.

If countries go too long with stimulus it can leave them in a debt trap and with prolonged slow growth.

The U.S. has been in 'default' before -- when it went off the gold standard -- and there is no reason why it won't have problems again.

Banking crises inevitably lead to sovereign debt crises as governments take on the debt."

"The federal government fell further into the red in 2009, with its financial position hitting a deficit of $11.46 trillion.

That figure is 12.3 percent higher than the previous year, according to a new report issued by the Treasury Department on Friday.

The annual report shows that the government's big entitlement programs such as Social Security and Medicare are facing a deficit over the next 75 years of $45.88 trillion, an increase in that deficit of $2.9 trillion in just one year.

The $11.46 trillion deficit in the government's net financial position in 2009 represents an increase of $1.25 trillion over 2008. The position reflects the government's assets, such as cash, property and investments, minus liabilities, such as the federal debt held by the public.

The new figures are included in the "2009 Financial Report of the United States Government." For more than a decade, Congress has required the executive branch to produce the report to provide a more accurate picture of the government's liabilities. It uses the accrual method of accounting rather than the cash system used in reporting the federal government's annual budget deficits."

"Feb. 26 (Bloomberg) -- California, facing a deficit that could force it to issue IOUs, may raise more than $2 billion from the sale of 11 office properties that would be the biggest commercial real estate deal in the state government’s history.

Almost 7.3 million square feet of office space in Los Angeles, San Francisco, Oakland, Sacramento and Santa Rosa may draw bids from investors worldwide, the state Department of General Services said today in a statement. Proceeds will be used to retire more than $1 billion in bond debt and add at least $660 million to the state’s general fund, according to the agency. The state would lease back space from the new owners."

..............................4A) Thomas D. Elias: State building sale looking worse and worse

"Put all the putative savings together and they don't even approach the rent the state would be committed to pay.

That's why Bill Leonard, a former Republican state legislator now serving on the tax-collecting state Board of Equalization, says the deal would simply engender "another form of state debt, leaseback contracts instead of bonds.""

"Parkinson and the Republican-controlled Legislature must keep the current budget in balance and eliminate a budget shortfall for fiscal 2011, which begins July 1. The 2011 gap is projected at $416 million, but that figure will rise next week after legislative researchers consider Friday’s report.

“This obviously is a game-changer,” O’Neal said. “These numbers are grim enough that we will have to make adjustments.”

The state expected to collect $266 million in taxes in February and took in $195 million, a difference of 27 percent."

"NEW YORK (AP) -- Regulators have shut down banks in Washington and Nevada, marking the 21st and 22nd failures this year of federally insured banks."

"FAIRHOPE, Ala. — The United States Postal Service is finding it necessary to cut back like the rest of us. Changes in the way people communicate, including short notes sent via e-mail, online social networking and instant messaging, along with the use of advanced electronic bill-paying services, are causing a sharp drop in the demand for what is now commonly referred to as snail mail.

Among the expenses on the chopping block are three downtown drop boxes. Scheduled to be removed March 17 are antique postal boxes mounted on posts at 335 Fairhope Ave. and 32 S. Section St., along with a snorkel box at Fairhope City Hall, 161 N. Section St."

"On Friday, the California Medical Association said that it is calling on Congress in order to "act immediately" to try and stop deep Medicare cuts are that are scheduled to take effect from Monday, stressing that 21% cuts to doctors' reimbursement in the Federal program might end up hampering "senior citizens' access to care and force physicians to contemplate turning away patients or dropping out of the program altogether".

The Congress, however, is adjourned for the weekend, so an immediate response is highly unlikely. Although the House of Representatives has passed the bill to block these cuts, the US Senate has not. "

.................................8A) Doctors' Medicare refunds to drop 20 percent Monday

"As economic conditions deteriorated and unemployment rose from 5.5 percent in June 2008 to 9.5 percent in June 2009, national Medicaid enrollment grew at a rate not seen since the early days of program implementation in the late 1960s, according to a June 2009 data snapshot on Medicaid enrollment recently released from Oakland, Calif.-based Kaiser Permanente.

According to Kaiser Permanente, monthly Medicaid enrollment in June 2009 rose by 3.29 million, a 7.5 percent increase over June 2008. The program expanded to cover 46.8 million Americans in June 2009, many of whom turned to Medicaid as their only source of health coverage as they lost jobs and income during the economic downturn, Kaiser Permanente stated."

"Jamie Dimon, chairman of JP Morgan Chase, has warned American investors should be more worried about the risk of default of the state of California than of Greece's current debt woes.

Mr Dimon told investors at the Wall Street bank's annual meeting that "there could be contagion" if a state the size of California, the biggest of the United States, had problems making debt repayments. "Greece itself would not be an issue for this company, nor would any other country," said Mr Dimon. "We don't really foresee the European Union coming apart." The senior banker said that JP Morgan Chase and other US rivals are largely immune from the European debt crisis, as the risks have largely been hedged.

California however poses more of a risk, given the state's $20bn (£13.1bn) budget deficit, which Governor Arnold Schwarzenegger is desperately trying to reduce."

"The national inventory of existing homes is larger now than it has been since the run-up of sales since thousands of first-time buyers rushed to the closing table last fall to qualify for the $8,000 tax credit, according to the January existing homes sales report released today by the National Association of Realtors.

Some 3,265.000 existing homes are now on the market, a 7.8 months supply. The national inventory increased 8.3 percent in January. The months supply has not been as high since September. "

"Despite being months behind, many strapped residents are hanging on to their homes, essentially living rent-free. Pressure on banks to modify loans and a glut of inventory are driving the trend."

"Throughout the country, people continue to default on their home loans -- but lenders have backed off on forced evictions, allowing many to remain in their homes, essentially rent-free.

Several factors are driving the trend, industry experts say, including government pressure on banks to modify loans and keep people in their homes.

And with a glut of inventory in places like Southern California's Inland Empire, Nevada and Arizona, lenders are loath to depress housing prices further by dumping more properties into a weak market.

Finally, allowing borrowers to stay in their homes helps protect the bank's investment as it negotiates with the homeowners, said Gary Kirshner, a spokesman for Chase bank, a major lender.

"If the person's in the property, there's less chance for vandalism, and they're probably maintaining the house," he said."

 Fannie to US: We need another $15.3 billion (after $74.4 billion loss in 2009)

Retail vacancy rate in Tampa Bay shopping centers grows to 10.5 percent

Presidential approval poll matches lowest ever for Obama

Federal budget deficit rises to $39.4-billion (Canada)

France, Germany to help Greece raise money: report

Iceland faces cash squeeze after Icesave talks fail

Realtors see no commercial real estate recovery before 2011

Lloyds suffers a £24bn hit on bad debts (UK)

City foresees $42m budget shortfall (Boston)

Portland condo defaults on loan despite filling up with renters (rent per square foot is too low)

More Than 100 Springfield City Workers Cut

Roefaro plans 11% property tax hike -- and a sales tax increase (NY)

NJ property taxes climb 70 percent in 11 years, remain highest in US

Hospital Employees Get 45 Days on Life Support (Miami...2,000 layoffs possible)

Senate will seek yearlong extension of unemployment benefits on Monday

More Calls For Governor Paterson To Resign (NY...former mayor calls him "road kill")

Lenders shy back as Greece makes €5bn cash call

Bad news just keeps getting worse for Port Authority (Pittsburgh..pension losses, fuel costs, health care...)

Judge: Livingston's water rate hikes unconstitutional

Feds plan 5% to 30% water allotment to San Joaquin farms

Fury as state-owned RBS creates 100 millionaires

George Soros set to Profit from Euro's Demise (Questionable credibility on this one, posting anyway)

 Net Euro Speculative Positions Hit All Time Record Of -71,623 (Zerohedge)

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