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Harrisburg Mayor Hopes Religious Fast Will Make Budget Deficit Go Away - (www.businessinsider.com) Harrisburg Mayor Linda Thompson and the city's religious leaders wrapped up a three-day fast and prayer campaign today to help "fix" Harrisburg's daunting fiscal woes. Amid the fast, the Harrisburg City Council passed a resolution asking the mayor to prepare documents to file for Chapter 9 municipal bankruptcy protection. Thompson said she hoped the fast would help the city and its officials find common ground to revive Harrisburg's fiscal health. She has often been at odds with City Council, and has resisted several calls for her resignation. “Things that are above and beyond my control, I need God,” Thompson told WHTM, the local ABC affiliate. “I depend on Him for guidance. Spiritual guidance. That’s why it’s really no struggle for me to join this fast and prayer.” Thompson told Reuters that she opposes the bankruptcy option approved by the Council. She added that the state "has to respect the publicly elected officials in this city.
Meet The 10 Highest Paid Correctional Officers In New York - (www.businessinsider.com) Even while class size in schools inches up, MTA service deteriorates, and states and local governments continue to lay off workers, some public employees are somehow able to bring home a handsome pay package from the state. Lawmakers have pointed out that the Department of Correctional Service Corrections officers' salaries aren't usually high, but the devil is in the details. Corrections officers start at just $36,420. After 12 months, that goes up to $43,867, and they enjoy a performance-based raise each year. This is close New York's average annual pay of $46,664. So how do 206 of these officers make more than $100,000? Usually due to under staffing and absences due to injury, there are many opportunities for overtime. In fact, in FY 2008-2009, DOCS spent $87 million on overtime costs. That's one fifth of all the overtime costs that the state paid for, according to a State Senate investigation. The Senate Task Force on Government Efficiency determined that DOCS could streamline their operation and save the State at least $15 million. “The Department of Correctional Services has the worst track record in the state when it comes to agency spending on overtime pay. During tough fiscal times, the state cannot afford to write any more blank checks," said Senator Jeff Klein, the chairman of the Task Force.
Off-Balance-Sheet Loans Double, Boosting Bank Default Risk: China Credit - (www.bloomberg.com) Chinese banks helped arrange 320 billion yuan ($49.5 billion) of loans between companies in the first quarter that weren’t recorded in the lenders’ balance sheets, raising the risk on their bonds to a two-year high. While global financial regulators are requiring more transparency and the People’s Bank of China restricts credit to cool inflation, lenders have increased the off-balance sheet loans by 110 percent, central bank data show. Credit-default swaps on Bank of China Ltd. are on course for their biggest monthly rise since October 2008 and are the most expensive since May 2009, according to data compiled by Bloomberg. The so-called entrusted loans are kept off balance sheets because the bank acts as the middleman, with no direct credit risk. The financial institution is still vulnerable should the final borrower trigger a chain of defaults. Companies are charging firms interest of as much as 21 percent, three times higher than the benchmark one-year lending rate of 6.31 percent, stock exchange filings show.
As Greece Ponders Default, Lessons From Argentina - (www.nytimes.com) A decade ago, as Argentina slid toward financial collapse, banks barricaded themselves behind sheet metal to keep out protesters demanding access to their life savings. “Thieves!” some yelled, banging hammers. It was a low moment for Argentina as it abandoned an experiment to peg the peso to the dollar, froze bank accounts and defaulted on $100 billion in mostly foreign debt. Today, the sheet metal is gone. But the debilitating effects of Argentina’s 2001 default and currency devaluation still linger. And now, as Greece edges toward a possible default, the Argentine lessons could be instructive. For one thing, a decade later, Argentina has still not been able to re-enter the global credit market.
Fed balance sheet hits another record size - (www.reuters.com) The Federal Reserve's balance sheet expanded to a record size in the latest week, as the central bank bought more bonds in an effort to support the economy, Fed data released on Thursday showed. The purchase was part of its $600 billion program, dubbed QE2, aimed at stimulating investment and economic activity. The balance sheet -- a broad gauge of Fed lending to the financial system -- swelled to $2.841 trillion in the week ended June 22 from $2.811 trillion the prior week. The central bank's holding of U.S. government securities grew to $1.602 trillion on Wednesday from last week's $1.576 trillion total. The central bank has said it will complete QE2 at the end of June, but will continue to reinvest proceeds from agency bonds and mortgage-backed securities as they mature.
OTHER STORIES:
Italian Banks Plunge on Ratings Review - (www.bloomberg.com)
BOE Says Debt Crisis Is Biggest U.K. Financial-Stability Threat - (www.bloomberg.com)
Moody’s warns on Italian banks - (www.ft.com)
Greek crisis puts future of CDS in doubt - (www.ft.com)
EU Vows to Rescue Greece in Exchange for Cuts - (www.bloomberg.com)
Draghi Appointed to Succeed Trichet as ECB President - (www.bloomberg.com)
Indian economy starts to slow down - (www.washingtonpost.com)
China Inflation ‘Firmly Under Control’: Wen - (www.bloomberg.com)
State Lawmakers Race to Close Budget Gaps Coast to Coast as Deadlines Loom - (www.bloomberg.com)
Exclusive: Deutsche's firing of top trader sparks probe - (www.reuters.com)
Hotel Buyers Inflate Property Prices as Values Outpace U.S. Lodging Demand - (www.bloomberg.com)
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