Daily Digest

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Daily Digest 12/12 - The Trillion Dollar Student Debt Trap, 22% Of Irish Population Living In Jobless Households

Wednesday, December 12, 2012, 11:25 AM


Spain to Provide Regions Up to $30 Billion of Funding for 2013

Spain will lend as much as 23 billion euros ($30 billion) next year to regional governments that can’t sell debt on their own, adding to the Treasury’s borrowing needs.

Budget cuts could close as many as four Ohio prisons

Up to four state prisons and a prison camp could be closed if cuts in the upcoming state budget hit 10 percent, Ohio's prison director has told the governor.

In an Oct. 1 budget assessment sent to Republican Gov. John Kasich's budget director, Ohio Department of Rehabilitation and Correction Director Gary Mohr said the number of facilities — including three large facilities and one housing a special population — to be closed will depend on how deep the budget cuts turn out to be.

Gold bugs scoop up American Eagle coins

The surge in demand came immediately after the U.S. election and was "heavy with retail investors," said Chris Blasi, president of Neptune Global Holdings, a boutique precious metals firm in Wilmington, Del.

"After the election, investors felt that the gridlock in Washington and the policies that were supportive to gold were not going to change," he said. "There's also a degree of fear and uncertainty about what lies ahead for the economy, and that's where gold steps in as a safe haven."

US student loans: The trillion dollar debt trap

'Trip through hell' Ms McDevitt is not alone. Student debt is a one trillion dollar headache for the US economy - and it is only getting worse.

As the cost of a university education soars, default rates are on the rise. Some estimates say that more than five million borrowers in the US have defaulted on their student loans. Almost 375,000 people defaulted in the latest year alone, the US Department of Education says. And those borrowers can face dire consequences.

Corporate Pensions on Pace to Hit Year-end Deficit Record

Companies in the Standard & Poor’s 1500-stock index will likely post a record end-of-year pension deficit for 2012, according to Mercer, a benefits consulting firm. The gap between their pension-fund assets and liabilities stood at $607.4 billion at the end of last month, an improvement from $619.1 billion at the end of October.

U.S. EIA raises forecast for oil demand growth in 2013

Global oil demand growth will be higher next year than was previously expected, the U.S. Energy Information Administration said in a monthly report on Tuesday.

The EIA raised its forecast for 2013 global oil demand growth by 70,000 barrels per day (bpd) to 960,000 bpd in its Short-Term Energy Outlook.

22% Of Irish Population Living In Jobless Households

The report finds that the percentage of people in jobless households increased very rapidly after the start of the recession, from 15 per cent in 2007 to 22 per cent in 2010. The percentage in Ireland is now double the average across Europe.

Unemployment Benefits Hang on 'Fiscal Cliff' Deal

The CBO estimates that unemployment insurance benefits totaled $94 billion in fiscal year 2012, while the unemployment rate averaged 8.3%. For comparison, it paid out just $33 billion in fiscal year 2007, when the rate was 4.5%

Japan in recession, BoJ eyes stimulus

Last month, Tokyo approved $10.7bn (€6.67bn) of spending, more than double a package announced in October. But polls suggest it will not be enough for PM Yoshihiko Noda and his Democratic party to avoid defeat at the elections on 16 December.

Japan's main opposition party has promised to spend heavily on public works and push the Bank of Japan to launch measures to boost growth if it wins.Recent polls suggest the party will win a solid majority and return to power for the first time since 2009.

Health care law surprise: $63 per-person fee for three years

Medical plans are facing an unexpected new fee. It's to help cover people with pre-existing conditions under President Obama's health care overhaul.

The $63-per-head fee -- buried in a recent regulation -- will hit health plans serving an estimated 190 million Americans, mostly workers and their families. It's payable starting in 2014.

Employers are not happy. The cost of compliance works out to tens of millions of dollars for the largest companies, maybe a few hundred for small firms. Most of that will get passed on to workers.

Muni Pension-Bond Sales May Increase Default Risk, Moody’s Says

Illinois has borrowed $17.2 billion since 2003 for pension benefits, according to Moody’s. The state’s worst-funded retirement system has only 43.4 percent of assets needed to cover its obligations, according to data compiled by Bloomberg. Moody’s downgraded Illinois in January, citing its “severe pension under-funding.”

Illinois Governor Pat Quinn said yesterday that the battle to control employee pension costs “is our fiscal cliff and we need to deal with it” or ratings companies would lower the state’s grade again.

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War is Upon Us

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