TOP STORIES:
The
Next Big Economic Crisis Is About To Cause Huge Cuts In Federal Highway Funding
- (www.businessinsider.com) In a letter Tuesday, Transportation
Secretary Anthony Foxx warned the Obama administration will begin delaying
reimbursements to states for infrastructure projects on Aug. 1 if Congress
cannot come up with a solution to replenish the diminishing
Highway Trust Fund. This move could create problems for highway and
road construction profits at the height of the summer travel season. Foxx's
letter, which was directed to state transportation officials, said checks
to states will only be sent twice a month and will only be partial
reimbursements. States typically receive "same day"
reimbursements for many construction projects. The Department of Transportation
is undertaking the new procedures to keep a positive balance in the Highway
Trust Fund, in which the department expects a shortfall beginning sometime in
August. The fund is financed through gasoline taxes, which have not been
raised in decades and currently provide inadequate revenue. Both parties in
Congress disagree on how to solve the problem. In his letter, Foxx said states
will experience cuts in federal funding until Congress finds a long-term
solution to the crisis.
China
Admits First Official Local-Government Loan Default - (www.zerohedge.com) There has been a growing number of
defaults since China first broke its non-payment cherry earlier this year.
Names like Chaori Solar have "promised" to pay back the money they
owe, only to falter on that promise mere months after a temporary reprieve.
Wide-scale panic has for now been avoided by liquidity provision to banks (not
shadow-banks) and mini-stimulus which many assumed was targeted at keeping the
state-owned enterprises (SOEs) alive no matter what. That 'hope' all changed
this weekend... As Bloomberg reports, Qilu Bank's annual report shows that
Licheng district urban construction development company has not paid its loan
interest..."To the best of our knowledge, this is the first official
disclosure of a LGFV default on a bank loan."
French manufacturing shrinks in June at fastest rate in six months: PMI - (www.reuters.com) French manufacturing activity shrank at the fastest rate in six months in June as firms cut production for the first time in five months and new orders dropped at the quickest rate this year, a survey showed on Tuesday. In its monthly snapshot of activity in the long-struggling sector, data compiler Markit said its final purchasing managers' index fell to 48.2 in June from 49.6 in May. That was slightly higher than a preliminary reading of 47.8 but still short of the 50-point line dividing expansions in activity from contractions. Weakening demand from clients both at home and abroad, including China, contracting operating margins and a return to falling output volumes contributed to what Markit said was the "steepest pace of manufacturing job shedding" since the end of 2013. "France's manufacturing sector is back in reverse gear and weakness looks set to persist through the summer," said Markit senior economist Tim Moore.
Putin
Says US Blackmailed France Over Warship With BNP Fine - (www.businessweek.com) President Vladimir Putin accused the U.S. of
seeking to blackmail France into scrapping a contract to sell Mistral warships
to Russia by offering to cut a record $8.97 billion fine against BNP Paribas
SA. (BNP) “We know about the pressure which our U.S. partners are applying on
France not to supply the Mistrals to Russia,” Putin told Russian diplomats in
Moscow today. “And we even know they hinted that if the French don’t deliver
the Mistrals, they would quietly get rid of the sanctions against the bank, or
at least minimize them,” he said without naming BNP Paribas. “What is that if
not blackmail?” Putin said. With the European Union considering expanding
sanctions against Russia, Ukraine ended a 10-day cease-fire yesterday,
rejecting pressure from Putin to extend it. Ukraine has renewed an offensive
against fighters in the east that its U.S. and EU allies say are backed by
Russia. Putin has blamed the crisis on foreign interference, after failing to
halt closer integration between Ukraine and the EU.
Florida's
Scott Dogged by Recovery of Unemployment Checks - (www.bloomberg.com) With $5 in her savings account, Jessica O’Quinn
was facing foreclosure when Florida’s bill collectors came calling. They
demanded $1,600. The state said O’Quinn, a former property manager, collected
unemployment checks even after she began a new job waiting tables at an Orlando-area
bar. She sued Florida for violating bankruptcy laws that protect filers. “I
kept telling them, ‘I filed bankruptcy on this, I filed bankruptcy on this,’”
said O’Quinn, 34, who settled with the state in 2012. “Apparently they didn’t
believe me.” More than 10 U.S. states have reduced unemployment benefits since
2011, and Republican Governor Rick Scott has made Florida’s program
the least generous and one of the most aggressive in clawing back money. The
issue has become a stumbling block for Scott, 61, who’s seeking re-election.
Putin
vows to defend Russian interests as Ukraine violence again escalates - (www.washingtonpost.com)
Sunnis, Kurds abandon Iraq parliament after no replacement for Maliki named - (www.reuters.com)
Sunnis, Kurds abandon Iraq parliament after no replacement for Maliki named - (www.reuters.com)
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