KeNo's Housing and Economic Portal: Saturday March 5 Housing and Economic stories

Friday, March 4, 2011

Saturday March 5 Housing and Economic stories

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TOP STORIES:

Federal, state and local debt hits post-WWII levels - (www.washingtonpost.com) The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates. But any similarity between 1946 and now ends there. The U.S. debt levels tumbled in the years after World War II, but today they are still climbing and even deep cuts in spending won't completely change that for several years. As President Obama and Republicans squabble over whose programs to cut and which taxes to raise, slow growth and a rising tide of interest payments - largely beyond their control - are making the job of fixing the budget much harder than in the past. Statehouses and governors face similar challenges.

Moody’s forecasts ‘distress’ for US muni markets - (www.ft.com) Moody’s expects defaults and distress in the $3,000bn US municipal bond markets but does not anticipate a broad “crisis of confidence”, says the credit rating agency’s chief executive. “There may be additional defaults in the municipal sector. There certainly is going to be distress in the municipal sector,” said Raymond McDaniel, chairman and chief executive of Moody’s, in an interview. “But we differentiate that from a broad-based systemic problem.” Increased scrutiny of the municipal bond markets, in which US states, cities and other public sector borrowers raise money, takes place as investors take a broader look at risks in sectors once seen as “safe”. The eurozone debt crisis emphasised that even government debts carry credit risks. Mr McDaniel said the emergence of credit problems in bond sectors “traditionally viewed as a safe haven” had potential for confidence problems – with effects for the broader system.

American Held in Pakistan Worked for CIA - (online.wsj.com) U.S. officials Monday acknowledged for the first time that former Special Forces soldier Raymond Davis, held in detention in Pakistan for killing two armed men, works for the Central Intelligence Agency, but said he was not directly involved in spying operations. U.S.officials say Mr. Davis, who has been held in the eastern city of Lahore since late January, was on a short-term contract as a protective officer, responsible for providing security to officials with the CIA and other agencies in the country. "Rumors to the contrary are simply wrong," a U.S. official said of Pakistani claims that Mr. Davis was directly involved in intelligence gathering operations. The U.S. says Mr. Davis, 36 years, shot the two men in self-defense when they tried to rob him. President Barack Obama, referring to Mr. Davis as "our diplomat", said last week that he was covered by diplomatic immunity and should be immediately released. Facing public anger over the killings, Pakistan has refused to do so.

Indiana Union Members Protest Bill - (online.wsj.com) The confrontation between unions and government officials over bargaining and organizing rights moved to Indianapolis Monday as thousands of steelworkers, auto workers and others surrounded the state capital to protest a right-to-work labor bill before the Republican-controlled House. The bill would change state law so that private-sector workers no longer are required to pay dues or belong to a union that bargains on their behalf. About 22 states, mostly across the South, have such laws. In Indiana currently, if a union bargains for a group of workers at an employer, all workers covered by the contract must belong to the union. Proponents of the bill say it would create jobs while opponents say it would drive down wages. Republicans hold a 60-40 lead in the House and need a two-thirds quorum to vote on legislation. The bill would exempt members of the construction industries. Indiana had a right-to-work law in 1957, which was repealed in 1965.

George Soros: Obama has "lost control" of the economic agenda - (www.businessinsider.com) In his interview with CNN's Fareed Zakaria, George Soros had some lamenting to do. He told Zakaria that Obama “has lost control of the [county's ecnomic] agenda” and as a result it's been left “in the hands of the Republican Party,” (via Bloomberg). Though Soros thinks the GOP will be successful in its pursuit of cutting services and denying any tax increases, he thinks those developments will be deleterious to the nation's fiscal health. The GOP's course will be “more directed at cutting services and achieving the ideological purposes of the Republicans rather than to get the economy going," he said. The billionaire also told Zakaria he thinks interest rates are going to increase and “choke off the economic recovery.”