Daily Digest

Daily Digest - June 11

Friday, June 11, 2010, 10:54 AM
  • EU investigates Greek-style budget fraud in Bulgaria
  • Debt Spreading 'Like a Cancer': Black Swan Author
  • Extend And Pretend - A Guide To The Road Ahead
  • New York State Government Shutdown Would Have Statewide Impact
  • Poor New York State May Issue IOUs Like California
  • China’s Hunger Fuels Exports in Remote Russia
  • Oil Drilling In The Arctic: Facing A Freeze
  • Efforts to Limit the Flow of Spill News

Economy

EU investigates Greek-style budget fraud in Bulgaria (Sarfarazali A.)

In a just a few weeks time, Bulgaria revised its budget from balanced to a deficit of 3.8% of GDP. Sound familiar? It should. Dramatic revisions in budget deficits is what started the ball rolling in Greece.

Inquiring minds note that the EU has launched a Greek-style budget fraud investigation in Bulgaria.

Debt Spreading 'Like a Cancer': Black Swan Author (SolidSwede)

"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said.

"Banks balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved," he added.

Extend And Pretend - A Guide To The Road Ahead (Erik T.)

HISTORICAL FACT: A Financial Crisis is almost always followed by an Economic Crisis which is subsequently followed by a Political Crisis.

New York State Government Shutdown Would Have Statewide Impact (pinecarr)

A shutdown would likely mean a fraction of the number of troopers patrolling highways and investigating crimes, delayed tax refunds, suspension of lottery games and closed unemployment offices just when the state is hovering around its highest unemployment rate in decades.

Poor New York State May Issue IOUs Like California (pinecarr)

Cash-poor New York state might have to pay its bills with IOUs next week to avoid the "anarchy in the streets" that could result from a government shutdown, Governor David Paterson said on Thursday.

Energy

China’s Hunger Fuels Exports in Remote Russia (jdargis)

“I’m standing on a billion tons of iron ore,” Mr. Ryabov said he told the Chinese visitors. They were impressed, he recalled. “They said, ‘Hurry up; we’re ready.’"

Oil Drilling In The Arctic: Facing A Freeze (jdargis)

For a time it looked as though the Arctic would be the next frontier for Western oil firms, which have only limited access to the most promising prospects in sunnier climes. The retreat of the polar ice cap is making the region easier to work in, and there is thought to be lots of oil and gas to tap. But Canada is not the only country now thinking twice: America, Norway and even Russia are all contemplating tighter rules for drilling./p>

Environment

Efforts to Limit the Flow of Spill News (jdargis)

A pilot wanted to take a photographer from The Times-Picayune of New Orleans to snap photographs of the oil slicks blackening the water. The response from a BP contractor who answered the phone late last month at the command center was swift and absolute: Permission denied.

Please send article submissions to: [email protected]

13 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4166
CM...Requesting total debt update if you have it (New Fed data)

 

For use at 12:00 p.m., eastern time

Thursday

June 10, 2010

FEDERAL RESERVE statistical release

 "At the end of the first quarter of 2010, the

level of domestic nonfinancial debt outstanding was

$35.0 trillion; household debt was $13.5 trillion,

nonfinancial business debt was $10.9 trillion, and total

government debt was $10.5 trillion."

 ==============

More data 

ABC News

 

 

"New Jersey’s property-tax bills averaged $7,281 per household last year, according to the state Department of Community Affairs. The levy has climbed 72 percent since they averaged $4,239 in 1999.

Over The Limit

Robbinsville is among 26 communities to seek approvals this year for property-tax increases in excess of the current cap of 4 percent that was put into place through legislation in 2007 by former Governor Jon Corzine, according to Local Finance Board records."

 

"June 11 (Bloomberg) -- The risk of owning Europe’s corporate bonds is the highest on record relative to U.S. company debt as investors lose confidence lawmakers and central bankers can tame the region’s worsening fiscal crisis.

Yields on investment-grade bonds in euros rose to a 10- month high of 239 basis points, or 2.39 percentage points, more than government debt, according to Barclays Capital index data. That’s 43 basis points more than the spread for U.S. company notes, near the record 44 basis points reached May 27. European bond spreads were below those on dollar debt as recently as February, the indexes show. "

“The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said today at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”

"“When the financial markets started losing confidence in the credibility of sovereign debt, Greece and the euro have taken center stage, but the effects are liable to be felt worldwide,” Soros said. "

"A $1 trillion aid package from the European Union and International Monetary Fund may delay a Greek default and give Spain, Italy and possibly Portugal time to get their finances in shape, averting a wider contagion, analysts said. Greece’s debt burden is likely to prove unsustainable, said Thomas Mayer, Deutsche Bank AG’s London-based chief economist.

“Deficit reduction alone doesn’t solve the debt issue,” Mayer said in a telephone interview. He estimates Greece’s debt will rise to 150 percent of gross domestic product following the country’s austerity program, from 120 percent. “Hardly anyone I know believes they can carry it out and still not restructure. This is basically the expectation across all asset classes.”"

"THE European Central Bank will provide unlimited liquidity to banks until the end of this year and press on with its policy of buying euro government bonds -- because eurozone credit markets are still not functioning properly.

"It's appropriate to continue to do what we've decided" on purchases of sovereign and corporate bonds, ECB president Jean-Claude Trichet said in Frankfurt yesterday.

"We have a money market which is not functioning perfectly."

The ECB is buying debt from Ireland and other countries and pumping unlimited funds into the banking system as part of a strategy by European policy makers to stop the euro region from breaking apart."

"TOKYO — Japan's new Prime Minister Naoto Kan on Friday pledged a fiscal policy overhaul to reduce the country's massive public debt mountain, warning of a Greece-style meltdown.

"Our country's outstanding public debt is huge," the centre-left leader said in his first policy address since taking office Tuesday. "Our public finances have become the worst of any developed country."

After decades of stimulus spending and feeble tax receipts, Japan's public debt is now nearly double its gross domestic product, forcing the government to issue ever more bonds to pay for hefty outlays.

"It is difficult to continue our fiscal policies by heavily relying on the issuance of government bonds," said Kan, the former finance minister.

"Like the confusion in the eurozone triggered by Greece, there is a risk of collapse if we leave the increase of the public debt untouched and then lose the trust of the bond markets.""

...................6A) Japan PM warns of eventual default if debt not fixed

"June 10 (Bloomberg) -- Italy’s greater resilience to the sovereign-debt crisis than nations like Greece and Portugal is “eroding and fragile,” and the nation must step up fiscal reforms, Unicredit SpA said."

"California's troubled, giant public pension fund is preparing to seek another $700 million from the state and school districts, after postponing a decision last month because of concerns about the state's massive budget deficit."

"The United States is a decade away from being Greece if it fails to get on the path of fiscal responsibility, former US Comptroller of the Currency David Walker told CNBC Thursday.

“When you look at the debt held by the public—federal, state and local—we’re already worse off in the United States than Spain,” said Walker, now president and CEO of the Peter G. Peterson Foundation. “We’re worse than Ireland. We’re two years away from being Portugal and 10 years ago from being Greece.”

Walker said even though investment in the dollar is now a rush-to-safety move, it’s a temporary situation. “We have more rope because we have 64 percent of the world’s global reserve currency. That gives us more time. It doesn’t mean that we’re exempt from the rules of prudent finance.”"

"Moody's Investors Service said delinquencies on loans in U.S. commercial mortgage backed securities increased further in May as the agency also boosted its year-end estimate of where the rate will be.

Last month's half-point jump--to 7.5% from 7%--follows two months of abating rates of growth.

Meanwhile, Moody's now projects the CMBS delinquency rate will range from 9% to 11% at the end of 2010, compared with its previous outlook of 8% to 9%. Sustained joblessness in the U.S. and possible fallout from sovereign-debt problems in Europe spurred Moody's to take the more-negative view."

  • Other news and headlines:

Currency Controls Mount in Asia as Euro Hurts Exports

BP Oil Disaster Threatens Mississippi Delta Goods and Services Worth Far More Than BP's Value

China's natural gas consumption to triple in 2010: PetroChina

Treasury Is Set to Sell $54 Billion of Bills (On Monday)

More East Africa borrowing raise eyebrows

Finland is the first Euro-zone economy to re-enter recession

Oil Spill May Cost $4.3 Billion in Gulf Shore Property Values

Pensacola closes marina as oil breaches bay

BP credit-default swaps widen to junk territory

Cash-strapped Yonkers cutting trash pickups to just one a day, layoffs in works too

Brazil Corporate Bond Issuance Posts Worst Drought in 14 Months

Commercial loans taking a dive 

In Two Years, University Debt Nearly Doubles (Cornell)

UCLA leaders plan on how to handle $200 million shortfall

Loan Market Slump Forces Companies to Hold Off Debt Refinancing

 

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - June 11

V's picture
V
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Re: Daily Digest - June 11

Okay now scratch one more article from the Bill of Rights. You remember part of that out dated antiquated document some radicals thought would serve to help ensure the freedom of the people of this country. It seemed like a good idea at the time.

Freedom of the Press is now officially dead. Second Amendment is definitely next.

V

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4166
Re: Daily Digest - June 11

"Dale Rosenthal, a former strategist for Long Term Capital Management, the hedge fund known for its epic collapse in 1998, and a proprietary trader for Morgan Stanley, has seen his share of financial complexities.

But when shown a seven-page list of derivatives positions held by the Illinois Teachers Retirement System as of March 31, obtained by Medill News Service through a Freedom of Information Act request, the University of Illinois-Chicago assistant professor of finance expressed disbelief.

“If you were to have faxed me this balance sheet and asked me to guess who it belonged to, I would have guessed, Citadel, Magnetar or even a proprietary trading desk at a bank,” Rosenthal said.

The fact that the sheet doesn’t belong to one of those high-flying hedge funds, but to the $33.72 billion pension fund that serves more than 355,000 full-time, part-time and substitute public school teachers and administrators working outside the city of Chicago, is perplexing to those interviewed for this story.

How bad is it? After losing $4.4 billion on investments in fiscal year 2009, and 5 percent on investments in fiscal 2008, the teachers’ pension is now underfunded by $44.5 billion, or 60.9 percent, according to the Commission on Government Forecasting and Accountability’s March 2010 report. By comparison, only 20.3 percent of the Chicago Teachers’ Pension Fund is unfunded.

For the quarter ended March 31, according to derivatives experts who studied TRS’ financial documents, the fund lost some $515 million on its derivatives portfolio. "

"Banks repossessed a record number of homes last month, an ominous sign for a real estate market that has seen demand slide substantially in recent weeks.

Nearly 94,000 properties were repossessed by lenders in May, an increase of 1 percent from April and 44 percent from a year earlier, according to RealtyTrac's most recent U.S. Foreclosure Market Report. "We are going through the eye of the storm," says Patrick Newport, an economist at IHS Global Insight. "Banks are taking over properties at a record rate right now.""

 

Continental Airlines has a $1.5 billion underfunded pension plan

US Economist Fears Greek Debt Default in August

 

......................David Levy in this Tech Ticker video shows the total debt to GDP graph at 2 minutes 35 seconds. I can't say anything that will prepare you for the nonsense (I'm sure you will think of better words) that he has to say in this video.

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Re: Daily Digest - June 11

I am no longer unsure about the certainly of the coming economic and political-stability collapse. In fact, based on all the readings of the news articles across the Web and on this site, I am quite sure of it.

Unfortunately, this knowledge makes me feel even more helpless than before. Knowing the future but not (currently) having a way to prepare meaningfully for it - without the finances to prepare, without friends or family members who share my concerns - is a difficult predicament to be in.

I have a lot of thinking to do.

Poet

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 6 2009
Posts: 595
Re: Daily Digest - June 11

Poet,

I have a thought.  Join a church.  Events of today are right out of Revelation.  Church members share your concerns and many are preparing.  A fellow member down the street is putting in a windmill (and tank) to pump water.  He has a large orchard and garden.  He has prepared a second home on the property for his nephew.  We share garden produce.  I find this behavior common.

Poet, this is intended to help - no offense is intended.

Nate

 

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - June 11

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - June 11

Robert Prechter http://www.cnbc.com/id/15840232/?video=1518715487&play=1

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2247
Re: Daily Digest - June 11

Poet-

   Another approach may be to become a part of a different kind of not-for-profit group that helps others.  E.g., maybe an organization like Heifer International, that provides families with the means to produce more food and teaches them how to become self reliant might be an option.  You could learn skills that will be of value to you, and become part of a community/group working towards a goal consistent with those of the people on this site, at the same time.  And do good for others as well.  That is just one idea.  I bet there are other groups with goals consistent with this site, who take on people to both learn/apply  the associated skills and work to support the group.

   In addition, there are people on the other side of the spectrum than you who have a good paying job/$, but do not have the time to prepare.  Is there a skill you have or could learn that would make offering to join forces with someone like that (even if down the line) a win-win for both of you?  I have thought about this before, as I can see where that could be something that happens within my family: some of us are still employed, some are barely hanging on $-wise.  I have thought that maybe if any of my family needs to move in with us (assuming we keep our jobs!), they could help the rest of prepare, as what I don't have is enough time and energy after working fulltime plus being a parent.

   Or maybe you could get very proactive about seeking an apprenticeship with someone with a skill that will be of value, such as designing and implementing alternative energy solutions for others, becoming a master gardener and then passing on the knowledge/skills you acquire.  I'm sure there are many other such possibilities.

   Don't let your fear of what may be coming crowd-out your ability to think creatively about how to get to a different/better situation, and the hope taking such a path can give you.  I know, easier said than done!!

  Best of luck, Poet! 

  pinecarr

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - June 11

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Re: Daily Digest - June 11

Nate: I accept your words in the most respectful manner. My reply is that church and religion are not an option nor would I like to consider them an option at this time.

Pinecarr: Thank you. Unfortunately I will be having very little time as time goes by. My wife will soon be leaving her job and I will be sole breadwinner and busy father and busy recuperating from injury in the hours outside of work.

Thank you for the kind thoughts, however. Much appreciated.

Poet

DavidC's picture
DavidC
Status: Silver Member (Offline)
Joined: Sep 29 2008
Posts: 243
Re: Daily Digest - June 11

The Nancy Pelosi clip was interesting - it looks as though Gerald Celente's forecast of civil unrest starting is already being borne out.

DavidC

V's picture
V
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Re: Daily Digest - June 11

I wonder if there were any Iraqis there throwing shoes. Or maybe a few Americans throwing copies of the Constitution.

V

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