TOP
STORIES:
Public Workers Face Continued Layoffs, Hurting the Recovery
- (www.nytimes.com) Companies have been slowly
adding workers for more than two years. But pink slips are still going out in a
crucial area: government. In California, the governor is threatening to
eliminate 15,000 state jobs. When school begins in Cleveland this fall, more
than 500 teachers probably will be out of work. And in Trenton — which has
already cut a third of its police force, hundreds of school district employees
and at least 150 other public workers — the only way the city will forestall
the loss of 60 more firefighters is if a federal grant comes through. Government
payrolls grew in the early part of the recovery, largely because of federal
stimulus measures. But since its postrecession peak in April 2009 (not counting
temporary Census hiring), the public sector has shrunk by 657,000 jobs. The
losses appeared to be tapering off earlier this year, but have accelerated for
the last three months, creating the single biggest drag on the recovery in many
areas.
LCH Raises Margin Costs For Trading Spanish Bonds Amid Crisis
- (www.bloomberg.com) LCH Clearnet Ltd., Europe’s
biggest clearing house, raised the extra deposit it takes from clients to trade
most Spanish government bonds as concern mounts that euro-area leaders are
failing to tame the debt crisis. The margin needed for Spanish securities due
in 10 years to 15 years will be increased to 14.7 percent from 13.6 percent,
according to a statement on LCH Clearnet’s website yesterday,
which was confirmed by Rachael Harper, a spokeswoman for the company. The rate
was also boosted on all Spanish debt due from zero months through seven years. Spain
became the fourth member of the 17-nation bloc to seek a bailout since the
financial turmoil began almost three years ago when it asked for aid to rescue
its lenders on June 9. That helped send the yield on the 10-year bond to a euro-
lifetime high of 7.29 percent two days ago. “The LCH margin increase is part
and parcel of a process where every institution involved in a given trade tries
to protect itself, thereby accelerating the speed with which Spanish bonds
fall,” said Sebastien Galy, a senior foreign- exchange
strategist at Societe Generale SA in New
York.
Wiggle Room Emerges in Greece’s Bailout Deal - (www.nytimes.com) LCH Clearnet Ltd., Europe’s
biggest clearing house, raised the extra deposit it takes from clients to trade
most Spanish government bonds as concern mounts that euro-area leaders are
failing to tame the debt crisis. The margin needed for Spanish securities due
in 10 years to 15 years will be increased to 14.7 percent from 13.6 percent,
according to a statement on LCH Clearnet’s website yesterday,
which was confirmed by Rachael Harper, a spokeswoman for the company. The rate
was also boosted on all Spanish debt due from zero months through seven years. Spain
became the fourth member of the 17-nation bloc to seek a bailout since the
financial turmoil began almost three years ago when it asked for aid to rescue
its lenders on June 9. That helped send the yield on the 10-year bond to a euro-
lifetime high of 7.29 percent two days ago.
Italy wants euro rescue funds to buy its debt - (www.reuters.com) Italy put forward a proposal
at a G20 summit in Mexico on Tuesday for the euro zone's rescue funds to start
buying the debt of distressed European countries, and the idea is expected to
be discussed at a meeting of leaders in Rome on Friday. The Italian proposal
foresees using the EU's rescue funds, known as the EFSF and the ESM, to buy
bonds of countries such as Spain and Italy in the secondary market to help
bring down bond yields and lower refinancing costs. Both facilities have the
power to buy sovereign debt, but so far only the European Central Bank (ECB)
has been active in purchasing the bonds of stricken euro zone countries,
snapping up over 210 billion euros worth of debt since launching the programme
in May 2010.
The
'Skyscraper Index' Is Warning That The Global Economy Could Soon Collapse -
(www.businessinsider.com) We've discussed about how
skyscraper construction can be used to predict imminent doom for the global economy.
Originally conceived of by Barclays, the idea is that
there's correlation between construction of the next world's tallest
building and an impending financial crisis. From the Empire State Building in
1930 to the Burj Khalifa in 2007, it's unfortunately but eerily accurate. Now, as Azizonomics points out, China is
announcing it wants to build the tallest building in the world:
a 220-story "car-free city" in the inland town of Changsha.
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