Daily Digest 7/11 - Food Pantries Running Empty, 1 In 5 Alabama Residents Getting Food Stamps
Italy said on Tuesday it may want to tap euro zone aid to ease its borrowing costs as finance ministers struggled to convince markets they are getting a grip on the bloc's debt crisis, which a top European Central Banker said could escalate. Prime Minister Mario Monti, who is under intense market pressure to shape up his economy and avoid being drawn into the center of the debt crisis, said Italy could be interested in tapping the euro zone's rescue fund for bond support. "It would be hazardous to say that Italy would never use (this mechanism)," he said after a meeting of European finance ministers in Brussels. "Italy may be interested."
The bearer of the euro’s second-biggest debt “has embarked on an ambitious agenda to secure sustainability and promote growth,” the Washington-based lender said today in a report on Italy. “Despite these strong efforts, Italy remains vulnerable to contagion from the euro area crisis, with spillover consequences for the region and globally.”
If you have been receiving unemployment benefits, you could be asked to pay some of it back. The government overpaid $14 billion in benefits last year. That's 11 percent of all the unemployment checks sent out last year, and now they want it back.
The budget gap narrowed to 12.31 billion euros ($15.1 billion) from 13.13 billion in the same period last year. But the country's deep recession caused net government revenue to stagnate at 21.8 billion euros, 987 million euros lower than an interim target set out under the country's bailout plan, the ministry added.
Sales in the European Union will probably fall to 12.2 million vehicles this year, the lowest level since 1995 and 21 percent below the 2007 peak, according to European auto industry group ACEA. A recovery to pre-crisis levels in the region isn’t likely until after the end of the decade, according to consulting company AlixPartners.
Expectations that Prime Minister Pedro Passos Coelho will have to announce more ways to meet budget deficit targets have increased in recent weeks, after official figures showed the government is spending more than expected on benefits to the unemployed and receiving less in taxes. Economists say that's a symptom of wage cuts and raised taxes coming on top of higher energy and transport bills. Portuguese unemployment has risen above any forecast, to 15.2%.
Chronically weak stock markets and record low bond yields have pushed company pension deficits in the United States and Britain sharply higher, adding to the burden of retirees living longer than ever before, reports said on Tuesday. In the United States the aggregate deficit of S&P 1500 companies grew $59 billion in the first half of the year to $543 billion, consultancy Mercer said.
Corporate America is sitting on total liabilities of $2.09 trillion against total assets of $1.55 trillion, Mercer added.
The scorching temperatures have triggered drought conditions in key corn-producing states, and the price of corn affects everything from meat to eggs. The U.S. Department of Agriculture projected the Midwestern drought will push food prices up by at least 3 percent across the country. "This will have a decimating effect," said Sandy Vary, who owns the Bel-Garden Bi-Rite Supermarket on Belair Road in Baltimore. She said price spikes on crops such as wheat, corn and soybeans will trigger increases on everything from meat to milk and bread. She said she expects the biggest hit to come in the butcher's department.
In Madison County, 35 percent of food stamp recipients are under age 11. Workers at the Department of Human Resources in Madison County said most applicants are working, but it's not making enough to live on and feed their families.
The economy and gas prices are two big reasons for the additional applications.
While electricity has been restored to the majority of central Ohioans after recent power outages -- food banks are struggling to keep up with demand.
The pantry at Last Call Outreach Ministries has been a destination for many Licking County residents, after massive blackouts ruined the contents of thousands of refrigerators.
This summer, food pantries across the United States and here in Texoma are in desperate need of donations. Both the Grayson County Shelter and Salvation Army have already seen dozens of families asking for food.....Major Helene Wildish of the Salvation Army said, with kids out of school for the summer, parents now have to serve three meals a day instead of one or two and the summer's only half over.
Grayson County Shelter executive director, Ashley Earls, said they have run out of food to give to those in need."I'm very very sad because it's very difficult to see a mom come in and say 'I really need food for my child' and we have to say 'we just don't have it to give,'" she said.
Spain’s jobless rate will continue to rise to include more than a quarter of the workforce before it peaks early next year, the Organization for Economic Cooperation and Development said. The unemployment rate will climb to 25.4 percent in the first quarter of 2013 from 24.6 percent in May, the Paris-based OECD said today in a report.
Only a few weeks after extending until year-end a program that sells short-dated bonds to buy long-dated securities (market participants call this effort Operation Twist), expectations have been rising in recent days that the Fed will have to do even more to respond to a deteriorating economic environment. The next step as many economists see it is for the Fed to again grow its $2.9 trillion balance sheet with more bond buying. The June jobs report, with its very modest job gains and stagnant unemployment rate, was the catalyst for the changing monetary policy outlook.
Around 24,000 government employees in Italy are due to lose their jobs because of spending cuts worth 26 billion euros ($32 billion). Around 11,000 of the workers are employed in government ministries and public bodies not related to economic functions, while the other 13,000 work for local administrations, according to a technical report of the Italian government's spending review.
Italy's public debt was 120% of GDP in 2011 and is likely to hit 126.4% of GDP, according to the IMF's article IV staff report on Italy, which was released on Tuesday.
Investors holding any equity or hybrid capital instruments issued by Spanish banks that might need a euro-zone bailout could see their investments wiped out completely under the draft terms of a deal hammered out overnight in Europe, according to documents seen by Dow Jones Newswires.
"Banks receiving State aid will contribute to the cost of restructuring as much as possible with their own resources," says the draft, which formulates the basic principles of the 100 billion-euro ($123 billion) assistance package aimed at recapitalizing Spain's stricken banks.
The text, which is a draft memorandum of understanding between Spain and the euro zone, spells out that the current owners of any banks that receive aid, as well as holders of "hybrid" debt that has certain characteristics in common with equity, will be the first to have their investments written off completely.
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