Daily Digest

Daily Digest 8/31 - Evans Backs "Imminent" QE3, Medicaid's $500M Hole, San Diegans On Food Stamps Rises 89%

Wednesday, August 31, 2011, 10:42 AM
  • Fed’s Evans backs more easing
  • Some Fed officials sought more economic stimulus
  • QE3 is Imminent According to Fed Minutes
  • U.S. Consumer Confidence Falls to Two-Year Low
  • As Irene’s Costs Rise, FEMA’s Funds Run Dry: Who Pays for Disaster Relief?
  • National Bank of Greece Posts EU1.31 Billion Loss on Bonds
  • Medicaid's Half A Billion Dollar Hole
  • Greek Bailout Talks Face Hurdles
  • Jefferson County faces 111 lawsuits of more than $1 billion
  • Bank of Italy warns on growth as bond sale falters
  • Euro-Area Ratings Still Face Downward Pressure
  • More people losing property for late tax payments
  • San Diegans on food stamps rises by 89%
  • More Tennesseans Relying On Food Stamps
  • At 65 percent, Nevada leads nation in sale of foreclosed homes
  • U.S. Postal Service woes put worker injury fund at risk
  • Fitch says China yuan debt downgrade likely
  • Students Start the School Year with Less Money, Higher Tuition
  • Pressure on Pa. capital to develop a recovery plan

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Economy

Fed’s Evans backs more easing

Evans said the next step for the FOMC would be to communicate more clearly with markets about why rates will stay lower for longer. For instance, the FOMC could say that short-term interest rates will remain at zero until the unemployment rate falls into a range of 7.0-7.5%, Evans said. The unemployment rate now stands at 9.1%. Or the FOMC could tell markets that it would tolerate higher inflation close to a 3% rate for a period of time. This would end whispers of premature tightening that can tend to short-circuit the Fed’s easing stance, he said.

Some Fed officials sought more economic stimulus

Minutes of the Aug. 9 discussions show that Fed officials discussed a range of actions, including another round of Treasury bond purchases. Some Fed officials said a weaker economy called for such a step. Fed officials in the end opted to keep rates low until at least mid-2013. They also added a second day to their September meeting. That raised speculation that the Fed would announce some further action after that meeting. Three Fed members opposed any steps for fear they could ignite inflation.

QE3 is Imminent According to Fed Minutes

The dollar resumed its slide against all of the major currencies following the release of the August FOMC minutes. The pessimistic tone of the minutes made it clear that policymakers are warming to the idea of more QE. The Fed had actually decided to extend the September meeting from 1 day to 2 days when they last met but Bernanke chose to share that information at Jackson Hole - talk about managing expectations! Considering that a few members sought stronger action and central bank officials openly discussed different ways to stimulate the economy, most Fed officials want more stimulus, but just need more time to weigh the cost and benefits of each policy tool.

U.S. Consumer Confidence Falls to Two-Year Low

The Conference Board’s index slumped to 44.5, the weakest since April 2009, from a revised 59.2 reading in July, figures from the New York-based private research group showed today. It was the biggest point drop since October 2008. Economists predicted the August gauge would fall to 52, according to the median forecast in a Bloomberg News survey.

An unemployment rate above 9 percent, a downgrade of the country’s top credit rating, partisan squabbling over the budget deficit and a volatile stock market weighed on sentiment. Increased pessimism may make households less apt to open their wallets, a hurdle for the economy and retailers such as Gap Inc. (GPS)

As Irene’s Costs Rise, FEMA’s Funds Run Dry: Who Pays for Disaster Relief? (Video)

On Monday, the director of FEMA said the Federal Disaster Relief Fund has less than $800 million, meaning the agency can only pay for emergency repairs vs. rebuilding roads, schools and other damaged buildings, CNN reports. That's bad news considering hurricane season is just getting started and we've already suffered a big one.

National Bank of Greece Posts EU1.31 Billion Loss on Bonds

National Bank of Greece SA, the country’s biggest bank, reported a first-half loss after writing down its holdings of Greek government bonds. The net loss was 1.31 billion euros ($1.89 billion), compared with a profit in the year earlier period of 146 million euros, according to a faxed statement from the Athens-based lender today. National wrote down the value of its bonds by 1.645 billion euros, according to the statement.

Medicaid's Half A Billion Dollar Hole (Georgia)

The department that funds Medicaid needs hundreds of millions of dollars to fill its budget this year and next. The shortfall is no surprise to budget writers. Scott Frederking with the Department of Community Health says much of the half a billion dollar hole came from using Medicaid money to pay for other programs, including a shortfall in the state employees’ health insurance.

"So this was essentially borrowing some dollars out of Medicaid to fill some gaps in the state budget and I believe it was understood that these dollars would be replaced when legislators came back to town to fill the amended budget," says Frederking.

Greek Bailout Talks Face Hurdles

Austrian Finance Minister Maria Fekter said Tuesday a dispute over Finland's demand for collateral to participate in Greece's €109 billion ($158.17 billion) bailout won't be resolved before a finance ministers' meeting next month. Meanwhile, Germany delayed by a week a crucial parliamentary vote on changes to the euro zone's rescue fund. The developments are the latest signs that progress in resolving challenges to the latest Greek aid package will be slow.

Jefferson County faces 111 lawsuits of more than $1 billion

Commissioners are preparing a general fund budget that is more than $100 million smaller than the $312 million budget originally approved for the current fiscal year because of the losses of the job tax and other revenue. Commissioner Jimmie Stephens, who is chairing the two-day hearings, recommended Monday that the commission set aside enough money for the county's legal budget, which could increase by $1 million a month if the commission decides to file a Chapter 9 bankruptcy that is under consideration.

Bank of Italy warns on growth as bond sale falters

Italy's central bank warned on Tuesday government efforts to cut debt were at risk from weak growth as a tepid bond sale threatened to drag the euro zone's third biggest economy back to the center of the debt crisis. Ignazio Visco, deputy director-general of the Italian central bank, said growth was likely to be under one percent in 2011 and even weaker in 2012 and warned that market tensions remained high, despite government austerity measures.

Euro-Area Ratings Still Face Downward Pressure

Fitch Ratings Tuesday said the credit ratings of euro-area countries will continue to face downward pressures as further episodes of financial market volatility remain likely. "Until there is a broader economic recovery and further progress on deficit reduction, further episodes of financial market volatility appear likely and downward pressure on sovereign ratings will persist," Fitch said.

More people losing property for late tax payments (Florida)

Thousands of Tampa Bay area residents have lost property after falling behind on their mortgages and even homeowners association dues. But there's a third way people are losing homes and land: delinquent property taxes. In the first nine months of this year, the owners of more than 200 properties in Hillsborough County have lost them in "tax deed sales," where the county clerk's office sells off properties that are at least two years behind on their tax bills. That number has nearly doubled in the past three years.

San Diegans on food stamps rises by 89%

The number of San Diegans using food stamps to help supplement their income has increased by 89 percent since January 2009, according to the County’s Health and Human Services Agency. For several years the number of people using food stamps, also known as the CalFresh program, in San Diego, in comparison to other cities across the country was extremely low. In January 2009 San Diego’s food stamp program had 122,878 recipients. In July 2011, there were 232,255 food stamp recipients in San Diego almost double the number in less than two years.

More Tennesseans Relying On Food Stamps

New numbers reveal one out of six Tennesseans are on food stamps. For many, the extra help they get from the government to put food on the table still isn't enough. The cost of living has increased, and there's record unemployment in the state. Since 2008 an additional 350,000 people are now on food stamps.

In Davidson and Rutherford Counties, one out of six people are on food stamps. In Montgomery County, it's one in seven. In Putnam and Maury Counties the situation is even worse, with one out of five people on food stamps.

At 65 percent, Nevada leads nation in sale of foreclosed homes

Nevada led the nation during the second quarter with 65 percent of its homes sold as foreclosures, according to a California research firm. The nation’s percentage was 31 percent. Arizona was second with 57 percent and California was third with 51 percent.

U.S. Postal Service woes put worker injury fund at risk

A fund that compensates federal employees for work-related injuries will run out of cash in the last quarter of 2012 if the U.S. Postal Service defaults on an upcoming $1.2 billion payment, according to the Labor Department. The mail carrier, which has been losing billions of dollars each year, has more than 560,000 full-time employees and is the largest employer of workers covered by the Federal Employees' Compensation Act. The Postal Service still plans to make the payment, due in October, to the fund, USPS spokesman David Partenheimer told Reuters. But in its third quarter financial statement this month, the agency said that without relief from Congress it could not guarantee it would have enough cash.

Fitch says China yuan debt downgrade likely

China faces a "better than even chance" of a another downgrade to its local currency debt rating due to rising defaults and high inflation following a credit binge, Fitch Ratings said Tuesday. Fitch also warned Chinese policymakers would face a dilemma over how to respond to another global downturn, with rising consumer prices and bad debts preventing a repeat of the massive stimulus launched nearly three years ago.

Students Start the School Year with Less Money, Higher Tuition (Florida)

Forty-one thousand students began a new year today at Florida State University. They were greeted with a fifteen percent increase in tuition over last year, and for many, Bright Futures scholarships that are just a little dimmer. Bright Futures Scholarships no longer cover 100 percent of tuition but are a fixed amount. That’s lead a lot of recipients to start looking for work or take out loans. “It’s harder for students,” Julian Arenas, a student from Naples said. “Basically, for the people who have no support from their parents. They have to take out loans, they have to either work and spend less time in school. I think that’s one of the problems.”

Pressure on Pa. capital to develop a recovery plan

Harrisburg's City Council is preparing to vote for the second time in six weeks on a recovery plan as the city faces the possibility of running short of money.

The plans revolve around efforts to pay down $300 million in debt tied to Harrisburg's trash incinerator. Meanwhile, Gov. Tom Corbett is warning about a state takeover of Harrisburg, lawsuits against the city are seeking millions of dollars and the mayor is trying to scrounge millions to make payroll and a general obligation bond payment due in September.

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4 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4149
Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
The Double Dip two step.

The Double dip reminds me of Orlov's stepwise decent on the downslope of Peak Oil.

The Dippy Do-Da.

Double dip, Triple dip
Grab your Partner, round you go
Tipsy  dip, whoopsy  dip,
Double dip, triple trip,
Do the two-step on the floor

Me

More on the same lines.

 

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1988
loss of state jobs

I remember friends trying to talk me into state or federal work when I was a newly abandoned mother of three. They said, "You'll hardly have to work; it will pay well and the benefits are better than the public sector!" Well I had an idea, even then (23 years ago) that all this was on an unsustainable path and said no, thank you for suggesting it but just . . .no. Many of them went into government work. I wonder how they are coping with the waves of layoffs.

There is a reason that the phrase "good enough for government work" has come to mean shoddiness. One hopes it will not be a black mark on my friends' employment records (if, in this economy, they ever work again).

kenneth's picture
kenneth
Status: Member (Offline)
Joined: Sep 5 2011
Posts: 2
Montgomery Jobs

Has been created keeping in view of the IT-professionals.Montgomery Jobs This site will help you "Professionals" to quickly and efficiently locate many opportunities that exist.It's
user friendly tool to help you match your own Specifications, Qualifications and
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