Daily Digest

Daily Digest - January 26

Tuesday, January 26, 2010, 11:57 AM
  • Bill Gates Warns Of Dystopian Future
  • Ford to Begin Hiring at New Lower Wages
  • Over 100 Debt, Price, Hype and Asset Bubbles Ready to Burst in 2010
  • 'Yo!' Planet Money Raps
  • Huawei Points Way Into India
  • Geithner On Move Your Money: Not A Good Idea

Environment

Bill Gates Warns Of Dystopian Future

Bill Gates said he fears Earth might become a post-industrial wasteland plagued by heat, chronic food and energy shortages, and rampant disease unless governments and private organizations invest more time and money solving what the Microsoft chairman believes are the world's most pressing problems.

Economy

Ford to Begin Hiring at New Lower Wages (Ben Johnson)

Ford Motor Co. will announce Tuesday it is adding a second shift at its Chicago assembly plant, creating 1,200 jobs and enabling the company for the first time to hire some new union workers at significantly reduced wages. The contracts that Ford, General Motors Co. and Chrysler Group LLC signed in 2007 allow the auto makers to fill jobs vacated by older workers who leave or retire with new hires earning a little more than $14 an hour on average—about half what current workers received when they started. Newer workers also get reduced benefits.

Over 100 Debt, Price, Hype and Asset Bubbles Ready to Burst in 2010 (Walter Derzko)

While the US housing and gold bubbles have gotten the bulk of media attention, here are over 100  bubbles from the Decade of Speculation or today's Bubble Economy. It challenges the long held assumption by mainstream economists that you can't have a  back to back financial calamity . A financial crisis has to be punctuated by growth and recovery. Maybe not this time.

'Yo!' Planet Money Raps (BrockH/affert)

Can a rap video about economics really be cool? Pop superstar Ke$ha thinks so.

Huawei Points Way Into India (pinecarr)

In an apparent attempt to overcome deeply embedded suspicion and concern, Chinese telecommunication giant Huawei has pledged to expand its operations in Bangalore, the Silicon valley of India. Such a bold expansion from Huawei, which already has a leg up in the Indian telecommunications market but is believed to have ties with the Chinese People’s Liberation Army (PLA), could be a welcome development for other Chinese state-owned companies wanting to do business in India but which have been under the scanner of Indian security agencies.

Geithner On Move Your Money: Not A Good Idea (Ben Johnson)

Treasury Secretary Timothy Geithner does not think that Move Your Money is a good idea. Geithner addressed the campaign against too-big-to-fail banks during a recent interview with Politico. While Geithner said he understood the anger against bailed out banks and said that it was fair for bank customers to expect more, he did not explain why he thought that it was a bad idea.

Please send article submissions to: [email protected]

16 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4163
Re: Daily Digest - January 26

"Jan. 25 (Bloomberg) -- New Jersey, the third-most indebted U.S. state, faces a $2 billion budget gap in the current fiscal year, the Office of Legislative Services said. The figure is double the estimate of former Governor Jon Corzine. "

"Jan. 25 (Bloomberg) -- New York City faces $1.3 billion in cuts and would have about 19,000 fewer city employees under the state budget that New York Governor David Paterson proposed for next fiscal year, Mayor Michael Bloomberg said. "

...................2A) NYC may lay off 19,000 workers if state cuts aid

"NEW YORK, Jan 25 (Reuters) - New York City will have to lay off more than 10,000 public workers, in addition to 8,500 teachers, if the state legislature approves the $1.3 billion of cuts the governor proposed in his deficit-closing budget, Mayor Michael Bloomberg said on Monday."

"WASHINGTON – The latest congressional budget estimates due Tuesday predict a $1.35 trillion deficit for this year, a top Capitol Hill aide says.

The Congressional Budget Office figures confirm the massive problem facing President Barack Obama and his Democratic allies just days before his Feb. 1 budget submission. The White House says Obama will propose a three-year freeze on domestic agency budgets, though the savings would barely make a dent.

The deficit would slide to $480 billion by 2015, CBO says, but only if tax cuts on income, investments and large estates are allowed to expire at the end of this year. Most budget experts see deficits as far higher once tax cuts and other policies are factored in."

"AlixPartners said it found in another study that 600 major companies in the UK, France, Germany and Italy are facing $569 billion of debt that will be up for refinancing this year as well.

All of this comes before what some turnaround experts call the "wall of debt maturities" from late 2011 through 2014, which could lengthen the line for refinancing. Many companies have also "rescheduled" their debt obligations this year, pushing them out to 2012 and beyond as lenders have been willing to amend and extend loans in recent months.

"My suspicion would be in the latter part of the year there will be a much tougher credit environment," Fitzsimmons added."

"Top Senate Democrats have drafted an $82.5 billion "jobs" plan that would help small businesses, boost spending on road construction and mass transit, and give local governments money to retain teachers.

The draft document proposes $20 billion for a job creation tax credit and $12.5 billion to retrofit homes and businesses to make them more energy efficient. It has not been publicly released but a summary was obtained by The Associated Press."

"Worries about the heavy debts of a number of countries have gotten so extreme in some places that investors are betting that some businesses in those nations are more creditworthy than the nations themselves.

Five-year credit-default-swap contracts that protect $1 million of debt of Spanish banks, such as Banco Santander SA, cost about $10,500 annually; but it costs about $12,000 to buy similar protection for Spain's debt itself. Above, a Banco Santander branch in Madrid,

The investors are making the bets using credit-default swaps, which pay off when a bond defaults."

"The anomaly reflects nervousness about all the debt racked up by various nations, as well as relative optimism about some top-rated companies with healthy balance sheets."

"The California Public Employees' Retirement System officially has lost a $500-million stake in the biggest deal ever in the U.S. for a single piece of residential property.

The owners of Stuyvesant Town and Peter Cooper Village, a complex of 56 buildings with 11,000 rental units near the East River in Manahattan, have agreed to turn the property over to creditors after defaulting on $4.4 billion in debt."

"Jan. 26 (Bloomberg) -- Verizon Communications Inc., the second-largest U.S. phone company, plans to cut more than 10,000 jobs at its fixed-line unit this year after posting fourth- quarter sales that missed analysts’ estimates. "

"Now, another priority that is extremely important and I've talked about that also in my State of the State, is pension reform. No single issue threatens the fiscal health of this state more than our exploding pension obligations. Over the last 10 years our pension costs have gone up by 2,000 percent, from $150 million a year to $3 billion a year. There were certain assumptions made in 1999 of what will happen to our economy and what will happen to our revenues or to the stock market, predicting 28,000 stock market. Well, now we are, since 2009, we are somewhere between 7,000 and 10,500 or so, so the predictions are totally off. That means hundreds of billions of dollars of unfunded liabilities and it means that our $3 billion that we are spending now, or funding now, will go up to $10 billion, $12 billion."

  • 10) S&P cuts Japan outlook to ‘negative’ (Posted earlier by Farmer Brown here)

(Reposting, since this could turn into a major news item. Here's the report from Bloomberg)

"S&P yesterday lowered the outlook on Japan’s AA sovereign credit rating to “negative” because of diminishing “flexibility” to cope with the world’s largest public debt and concern about the lack of a plan to rein in budget deficits."

"Jan. 26 (Bloomberg) -- Governments seeking to stabilize Afghanistan are planning a $500 million program to lure Taliban fighters back into civilian society, German Chancellor Angela Merkel said. "

.............11A) Taliban 'buy out' fund to cost hundreds of millions

"LONDON // An international fund amounting to hundreds of millions of dollars will be established this week in a bid to buy off Taliban leaders in Afghanistan.

An outline for the strategy, which will be principally funded by the US, Japan and Britain, was reported to have been drafted at a meeting in Abu Dhabi two weeks ago of top-level diplomats from 20 countries.

The announcement of the establishment of the Peace and Reintegration Trust Fund, which will seek to “split the Taliban” by luring into mainstream politics any leaders not connected to, or ready to break their links with, al Qa’eda is due to be announced at the end of Thursday’s summit on Afghanistan in London."

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Growing Movement To Disband Police Departments

A new post from Mish 

Growing Movement To Disband Police Departments 

http://globaleconomicanalysis.blogspot.com/2010/01/growing-movement-to-disband-police.html

jrf29's picture
jrf29
Status: Gold Member (Offline)
Joined: Apr 18 2008
Posts: 453
Re: Growing Movement To Disband Police Departments

Interesting.  In Massachusetts, county sheriffs have no criminal law enforcement functions, and almost all the county governments have voted themselves out of existence (in New England the "town" is the main unit of government - there is no such thing as "unincorporated space" between towns), which leaves only the state police. 

But even here, in some of the hill towns, there have been rumblings about disbanding police departments and going back to the old constabulary system.  Of course, it's not just the police departments: the same thing applies to paid fire companies and town ambulance services. 

Tycer's picture
Tycer
Status: Platinum Member (Offline)
Joined: Apr 26 2009
Posts: 610
Re:CalPERS loses $500 million on New York apartment deal.

IIRC, Stuyvesant Town and Peter Cooper Village has been another victim of the PE firm BlackRock Realty. I'll bet this was another "creative loan" reset just like the W Hotel in Union Square.

PE firm KKR is the second largest civilian employer behind WalMart.

Private Equity loan resets make me very nervous with regard to unemployment numbers skyrocketing.

Great Two Beers With Steve podcast on PE HERE

One1776's picture
One1776
Status: Bronze Member (Offline)
Joined: Jan 24 2009
Posts: 52
Ron Paul Tears Paul Kanjorski Apart!!

Ron Paul vs Paul Kanjorski on Bernanke reappointment January 25, 2010. Several times Kanjorski states there has not been any crisis, even as far back as 1913. Is he crazy?? Go Ron!!!!!

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
I wish they'd make up thir bloody minds...

Debt-heavy Australia facing long, slow road to recovery

Australians are being warned to expect rising interest rates and a slow economic recovery as the country heads out of the global economic crisis.

IMF expects bumper Australian growth Photo

The IMF says the Australian economy will grow faster than it initially expected this year.

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Re: Daily Digest - January 26

LoL

We get the same thing from CNBC sometimes twice a day.

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - January 26

Yes Kanjorskl is suffering from several layers of dementia.

Bob Prechter spoke today at the end of the market on CNBC. The market soon dropped for what ever reason.

Must watch IMHO.

http://www.cnbc.com/id/15840232?video=1396408105&play=1

goes211's picture
goes211
Status: Diamond Member (Offline)
Joined: Aug 18 2008
Posts: 1114
Re: Daily Digest - January 26

'Yo!' Planet Money Raps

That might be the funniest thing I have seen in quite some time!

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1444
Re: Daily Digest - January 26

How does Kanjorski get re-elected?!?!?  My Goodness!  How absolutely pathetic he is as a representative of the people.  What district does he represent!!!???  Ugh!YellFoot in mouthMoney mouth

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - January 26

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - January 26


 

sdyue's picture
sdyue
Status: Member (Offline)
Joined: Jul 23 2009
Posts: 3
Re: Daily Digest - January 26

wages... prices... costs... taxes... currencies...

is there someway we can unify into a more practical 'single' unit of measure where one can better gauge 'value' of the things we make, consume, etc?

is there a way to translate it so it is in terms of humanpower-timevalues, like 'man-hours'...

people-minutes, people-seconds, per unit of product, per duration of service, etc???

this way, no one can hide over inflated value in the all to easy to manipulate 'abstract' multitudinous currencies we use today?

i figure the only reason why it is not done is because there are those who stand to benefit from keeping us in the dark...

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - January 26

Tuesday, January 26, 2010

Gov. Arnold Schwarzenegger said Monday that the state could save $1 billion by building and operating prisons in Mexico to house undocumented felons who are currently imprisoned in California.
 

The governor floated the idea during an appearance at the Sacramento Press Club in response to a question about controlling state spending. His speech came on the same day that changes in prisoner parole and credits for time served took effect.

 

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Re: Daily Digest - January 26

Yikes!

The idea that this is even being considered is scary.

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - January 26
sdyue wrote:

wages... prices... costs... taxes... currencies...

is there someway we can unify into a more practical 'single' unit of measure where one can better gauge 'value' of the things we make, consume, etc?

is there a way to translate it so it is in terms of humanpower-timevalues, like 'man-hours'...

people-minutes, people-seconds, per unit of product, per duration of service, etc???

this way, no one can hide over inflated value in the all to easy to manipulate 'abstract' multitudinous currencies we use today?

i figure the only reason why it is not done is because there are those who stand to benefit from keeping us in the dark...

Relate it to an ounce of gold. Over time it becomes easy to see that the dollar is worth 2 cents, that we pay taxes from Jan 1 to Sept. 1.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments