Daily Digest

Daily Digest - October 21

Wednesday, October 21, 2009, 9:45 AM
  • FOCUS: Dollar Decline Draws International Protest (Wall Street Journal)
  • CSU officials ponder privatization to boost revenue
  • French official says U.S. trying to inflate away debt
  • U.S. Commercial Property Values Fall 3% in August
  • BOK mulling reserve diversification
  • IMF ponders tool to discourage reserves build-up
  • Stumbo: School funds could reduce state deficit
  • Weak dollar woes send euro leaders to China
  • States Losing Battle of the Budgets Amid Swelling 2010 Deficits
  • New Issue-Citigroup sells $5 bln in two parts

Economy

FOCUS: Dollar Decline Draws International Protest (Wall Street Journal)

This could end up being viewed as the week when dollar weakness became too much for the rest of the world to bear, setting the scene for tense encounters at the upcoming meeting of finance ministers from the world's 20 largest economies. Brazil has now imposed a tax on some foreign-exchange inflows.

CSU officials ponder privatization to boost revenue(Posted by suesullivan)

As state funding cuts loom in 2011, leaders of the Colorado State University system have started considering an option unheard of in all but a handful of states: converting to a part-public, part-private structure in which students pay more for costlier degrees. If implemented, the change could mean CSU's $4,800 annual in-state tuition jumps to about $13,500 for liberal-arts programs and as much as $20,000 for engineering degrees at the Fort Collins campus.

French official says U.S. trying to inflate away debt

The United States is pumping out liquidity to try to inflate away its debt, leading to the depreciation of the U.S. dollar, Henri Guaino, a top advisor to French President Nicolas Sarkozy said on Tuesday

U.S. Commercial Property Values Fall 3% in August

'Commercial real estate prices are forecast to fall additional 17 percent through the fourth quarter of next year, Goldman Sachs Group Inc. said in a Sept. 30 report, citing scarce credit, rising vacancy rates and the risk of forced sales. Late payments on commercial mortgages jumped sevenfold in September from a year earlier, as installments on $22.4 billion of mortgages were at least 60 days late, Credit Suisse analysts reported Oct. 12. The delinquency rate of commercial mortgage payments bundled into bonds rose to 3.64 percent in September from 0.54 a year earlier, Moody’s said Oct. 13.

BOK mulling reserve diversification

The weakness of the U.S. dollar has many policymakers in Asia's reserve-rich countries studying ways to reduce the portion of dollar assets in their funds, central bank officials and analysts said yesterday. They said Korea, whose foreign exchange reserves stand at $254.2 billion, was no exception. They said the Bank of Korea is mulling reducing the proportion of dollar-denominated assets in reserves, which currently stands at 64.5 percent of the total fund

IMF ponders tool to discourage reserves build-up

The International Monetary Fund is considering creating a new programme to discourage member countries from building up currency reserves, John Lipsky, the IMF’s first deputy managing director, said on Monday. “We are exploring the possibility of improving our existing facilities or adding other insurance-like facilities that would give our members greater confidence that they don’t need to self insure by building up reserves,” Lipsky told reporters at a conference in Mexico

Stumbo: School funds could reduce state deficit

Kentucky lawmakers might consider dipping into local school districts' contingency funds to help balance the 2010-12 state budget, according to House Speaker Greg Stumbo. Stumbo, a Prestonsburg Democrat, told The Courier-Journal in an interview that he has discussed the issue with Gov. Steve Beshear, who did not indicate his position. "We do have a bunch of money that the schools have saved in their budgets, their 'Rainy Day' funds," Stumbo said. "And there's a pretty good sum of money there which will help us get through."

Weak dollar woes send euro leaders to China

The men who run the euro single currency are so 'worried' by the weakness of the dollar that they are seeking an alliance with China to rein in Washington, their top man has said. 'We spent quite a long time discussing exchange rates, it's a problem which has us worried,' Luxembourg Prime Minister and Eurogroup chief Jean-Claude Juncker said after a meeting of finance ministers last night.

States Losing Battle of the Budgets Amid Swelling 2010 Deficits

Budget deficits totaling $16 billion have opened in 26 states since their fiscal years began on July 1, forcing governments that began the year in the hole to confront record funding gaps, a study finds.

New Issue-Citigroup sells $5 bln in two parts

Citigroup Funding Inc and Citibank NA on Tuesday sold $5 billion of notes in a two-part debt sale, said IFR, a Thomson Reuters service. Guaranteed by the Federal Deposit Insurance Corporation under the Temporary Liguidity Guarantee Program. The total amount now outstanding on the reopening tranche is $5.0 billion.

15 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - October 21

"U.S. high-tech goods exports were up by $2.3 billion, or one percent in 2008,

for a total of $223 billion. Yet TechAmerica Foundation's supplemental

quarterly breakdown reveals that high-tech exports had begun to decline in the

4th quarter, and continued in the first half of 2009. High-tech exports were

down eight percent in Q4 2008 compared to Q4 2007. The drop steepened with a

22 percent decline in Q1 2009 and a 23 percent decline in Q2 2009 compared to

their respective quarters in 2008. This tracks closely with the overall

decline in U.S. merchandise exports in the first half of 2009.

High tech was the single largest merchandise export sector in the United

States in 2008, representing 17 percent of all U.S. exports to the world."

"SAN DIEGO — The threat of layoffs, bigger classes and deep cuts to popular programs are once again looming over San Diego's public schools.

The San Diego school board held the first in what will be a series of workshops yesterday designed to map out a budget strategy for next year.

It's early, but the situation already looks grim.

“The range of possibilities go from bad to catastrophic,” said Monica Henestroza, government relations director for the San Diego Unified School District.

A list of unexpected expenses are projected to put the district $16.6 million in the red this academic year. Next year, cuts from $119 million to $175 million to the $1.2 billion operating budget are forecast, financial planners warned the board."

"the number of bankruptcies in the state hit 70,799 from January to September of this year. That marks a 48 percent rise in bankruptcy filings in the state whencompared to the same period of time in 2008"

"City's future: building or bankruptcy?

Talk about a city at a crossroads.

Two groups of San Diego leaders will gather tomorrow to discuss incongruous approaches to the city's future: building three grand civic projects and filing for municipal bankruptcy."

"Already facing a $258 million budget gap for next year, Los Angeles Unified School District now has to begin grappling with an additional $221 million in potential cuts, officials said Tuesday.'

"SigTARP Neil Barofsky, overseer of the $700 billion TARP program, says the cost to taxpayers will be a lot greater than the government is letting on.

NEW YORK (CNNMoney.com) -- The $700 billion bailout will ultimately cost taxpayers billions of dollars, but the government stands to lose much more than the money it's pouring into companies." (video)

"Municipal issuers want to sell $17.7 billion in fixed-rate bonds during the next 30 days, 45 percent more than the 12-month average, according to an index compiled from planned offerings on Bloomberg calendars."

  • 10) Fitch:

Losses To Increase For U.S. CMBS This Year And Next

  • "With commercial mortgage-backed securities (CMBS) servicers needing more time to resolve delinquent loans combined with market value declines, loss severities are expected to rise markedly for U.S. CMBS next year and well into 2010, according to Fitch Ratings in its latest annual U.S. CMBS loss study."
  • 11) Three headlines posted at DSNews:

Banks Report Gains on 'Toxic' Assets as Valuation Remains Cloudy

  • Bank Analyst Sees

Fannie, Freddie Shares as Worthless,

  • Fraud

Taints First-Time Homebuyer Tax Credit, as Extension Gains Ground (read 2nd paragraph)

  • 12) FOCUS:

Dollar Decline Draws International Protest (Wall Street Journal)

"LONDON (Dow Jones)--This could end up being viewed as the week when dollar weakness became too much for the rest of the world to bear, setting the scene for tense encounters at the upcoming meeting of finance ministers from the world's 20 largest economies.

Brazil has now imposed a tax on some foreign-exchange inflows. The Bank of Canada has cranked up its negative tone on the strength of the Canadian dollar. And a whole slew of European officials have practically begged the U.S. to step in and boost the buck.

This chorus of pain marks a rise in international pressure on the U.S. to live up to its oft-quoted "strong-dollar policy," after central banks in South Korea, Taiwan, the Philippines, Thailand, Indonesia and Hong Kong all stepped in to weaken their currencies against the greenback earlier this month.

Now, the G20 meeting scheduled for Nov. 6-7 in Scotland will offer a perfect forum for such concerns over dollar weakness to be aired. "I think there will be fireworks at the G20," said Stephen Jen, a well-respected currencies investor at hedge fund BlueGold Capital Management in London.

"The G20 has such diverse membership" that disagreement over how to handle the dollar's decline is very likely, he added.

When measured against a basket of currencies from the U.S.'s trading partners, the dollar is now only around 7% above its lowest point since 1971. The greenback has recently hit some notable lows against a range of currencies, with the euro briefly nudging $1.50 Wednesday.

"Some sort of crisis is looking inevitable," said Neil Mellor, a currencies analyst at The Bank of New York Mellon in London. "You can't continue down this road without something giving way, and it's clear that the U.S. is not going to do anything to put meat on the bones of its strong-dollar policy.""

---------------------------------------------------------------------------------------------

.....Thank you for adding #12 to the Daily Digest on short notice....

........What they will be saying later If the G20 and other countries continue to love the dollar

JAG's picture
JAG
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Zen Lessons In Market Analysis

From John Mauldin's Outside The Box: Zen Lessons in Market Analysis

It sure does seem like a lot of people have been jumping on Dr. M's Zen bandwagon lately. This market is a Koan.

idoctor's picture
idoctor
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Re: Daily Digest - October 21

fujisan's picture
fujisan
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Re: Daily Digest - October 21

Goldman Sachs’s Griffiths Says Inequality Helps All (Update1) - Bloomberg.com

Oct. 21 (Bloomberg) -- A Goldman Sachs International adviser defended compensation in the finance industry as his company plans a near-record year for pay, saying the spending will help boost the economy.

...

Indecent exposure is the deliberate exposure by a person of a portion or portions of his or her own body billions under circumstances where such an exposure is likely to be seen as contrary to the local commonly accepted standards of decency... Money mouth

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dcm
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Re: Daily Digest - October 21

dig your "flashy" comments Fujisan

 

Colorado: 1st state to Lower its Minimum Wage
 
Colorado will become the first state to reduce its minimum wage because of a falling cost of living [?!] Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up. But because Colorado's provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938
 
http://globaleconomicanalysis.blogspot.com/2009/10/colorado-minimum-wage-poised-to-drop.html
 
Is your gold really there?
 
Continuing doubts are being expressed that all the gold claimed to be held by Central Banks and others may not be there, or title is being held by several parties as the statistics just don't appear to add up.
 
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=90927&sn=Detail
 
 
The Consumer Confidence Index Dresses Down for Halloween
 
The Conference Board Consumer Confidence Index™, which had improved moderately in September, fell to an all-time low in October. The Index now stands at 38.0 (1985=100), down from 61.4 in September. The Present Situation Index decreased to 41.9 from 61.1 last month. The Expectations Index declined to 35.5 from 61.5 in September.
The Consumer Confidence Survey™ is based on a representative sample of 5,000 U.S. households
 
http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3507

Buy & Sell Local Produce in your Area
 
Do you grow your own fruits or vegetables, but harvest more produce than you, your family, friends and co-workers can eat? One can register to post free classified ads to sell, trade or give away your surplus backyard produce. Individuals and food pantries can also register to post wanted classifieds. 
 
http://www.thefarmersgarden.com/default.php

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gregroberts
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Re: Daily Digest - October 21

SagerXX's picture
SagerXX
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Re: Zen Lessons In Market Analysis
JAG wrote:

This market is a Koan.

It's certainly giving me a big pain in my haiku.

Viva anyways! -- Sager

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mono
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Re: Daily Digest - October 21

regarding the dramatic dollar decline, I can´t help thinking Bernanke is hoping it will go unnoticed. That´s how bad i think that lot is! If it would´nt be so serious, it would be a real laugh.

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Firean
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Re: Daily Digest - October 21. Dollar decline.

Brazil wishes to raise interest rates yet to do so would create further, and  undesirable, strengthen to the Real , imposing the tax today weakens the Real ( albeit minimally yet immediate) , only to allow rate rises in the near future . A clever slight of hand ?

Subprime JD's picture
Subprime JD
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Posts: 562
Re: Daily Digest - October 21

Fall of the Republic comes out today.

Prisonplanet.com

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Damnthematrix
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Gerald Celente newsletter

This is well worth reading.....

http://www.informationclearinghouse.info/article23767.htm

idoctor's picture
idoctor
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Posts: 1731
Re: Daily Digest - October 21

Nice read Damnthematrix thanks!

ao's picture
ao
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Posts: 2220
Re: Gerald Celente newsletter
Damnthematrix wrote:

This is well worth reading.....

http://www.informationclearinghouse.info/article23767.htm

Superb ... a must read!  Thanks DTM.

JAG's picture
JAG
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Posts: 2492
Re: Daily Digest - October 21

www.dollarbashing.com

Cloudfire's picture
Cloudfire
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Posts: 1813
Re: Gerald Celente newsletter
ao wrote:
Damnthematrix wrote:

This is well worth reading.....

http://www.informationclearinghouse.info/article23767.htm

Superb ... a must read!  Thanks DTM.

Absolutely excellent, and dead on . . . . Thank you, indeed, DTM . . .

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