KeNo's Housing and Economic Portal: Sunday July 24 Housing and Economic stories

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Broke Rhode Island Town Asks Unions For Pension Cuts To Avoid Bankruptcy - (www.businessinsider.com) Teetering on the brink of insolvency, Central Falls, R.I. is asking its unions for major concessions to help the city close its $5.5 million budget shortfall and stave off municipal bankruptcy. In a letter sent to the city's police and fire unions today, Central Falls' state-appointed receiver Robert Flanders asked retirees to accept benefit cuts and healthcare contributions that would trim the city's pension payment by at least $1.75 million in benefit cuts and increased healthcare contributions. If an agreement can't be reached, the city may have to file for bankruptcy, Flanders told the Providence Journal. Central Falls, a tiny city with a population of just 19,000, faces a $4.9 million budget shortfall, and deficits are projected to grow to $25 million over the next five years. To make matters worse, the city owes $80 million in unfunded pension and benefit obligations.

Hey, Washington, I've Been Paying Into Social Security And Medicare For 48 Years--So How Much Are You Cutting From YOUR Benefits? - (www.businessinsider.com) Given the extent of our current financial problems, some government leaders at some point are going to have to break promises made to Americans by their government predecessors--predecessors who made promises they knew they couldn't keep. The politicians could make this news go down a bit easier if they imposed the consequences of some of these broken promises on themselves. Here's the text of the supposed letter to Mr. Simpson. We've edited out some adjectives and expletives. Hey Alan, let's get a few things straight...

1. As a career politician, you have been on the public tit for FIFTY YEARS.

2. I have been paying Social Security taxes for 48 YEARS (since I was 15 years old. I am now 63).

3. My Social Security payments, and those of millions of other Americans, were safely tucked away in an interest bearing account for decades until you decided to raid the account and give OUR money to a bunch of zero ambition losers in return for votes, thus bankrupting the system and turning Social Security into a Ponzi scheme that would have made Bernie Madoff proud.

4. Recently, just like Lucy & Charlie Brown, you pulled the proverbial football away from millions of American seniors nearing retirement and moved the goalposts for full retirement from age 65 to age 67. NOW, you are proposing to move the goalposts YET AGAIN.

Heavy selling hits eurozone bonds - (www.ft.com) Eurozone bond markets suffered heavy selling on Wednesday after Portugal’s downgrade to “junk” knocked investor confidence in the region and raised fears the debt crisis would intensify. The action by Moody’s, the US rating agency, sent Portuguese and Irish government bond yields to euro-era highs and led to one big European company pulling a debt deal. Shares in a number of European banks tumbled. Suki Mann, credit strategist at Société Générale, said: “The action on Portugal has put the brakes on any recovery hopes we may have had for eurozone government bonds for the moment.” The biggest move was a leap in two-year Portuguese bond yields, which have an inverse relationship with prices. Two-year yields jumped 3.8 percentage points to 16.74 per cent, one of the biggest daily moves of the year. At the same time, a debt sale by Spain’s sovereign bank restructuring fund only managed to raise just over half its target amount. Several Spanish savings banks are rushing to secure private funds to avoid a state rescue.

Italian Yields Reach Nine-Year High as Debt Crisis Spreads; Bunds Surge - (www.bloomberg.com) Italian bonds slid for the fifth straight day, driving yields to a nine-year high, as contagion from Greece’s fiscal crisis intensified in the region’s biggest government-debt market. German 10-year yields fell the most since April after U.S. employers added less than a fifth of the workers economists estimated in June. The yield on 10-year Italian securities jumped to a euro-era record over German bunds as data showed industrial production in the Mediterranean nation dropped while Italian bank stocks fell, paced by UniCredit SpA. (UCG) A European Union document said governments should be ready to help banks that fail stress tests as a last resort. Spanish, Irish and Greek bonds also fell. “If you are talking about a default in Greece where contagion spreads through Ireland, Portugal and Spain, then Italy is the next stop,” said Charles Diebel, head of market strategy at Lloyds Bank Corporate Markets in London. “Italy has an awful lot of debt.”

35% Of California Teens Can't Find Work This Summer - (www.businessinsider.com) It used to be you could get a job as a high school drop-out. Or you could hold a job while staying in school. And you could definitely find work over the summer. Not anymore. 34.6 percent of California teens who are looking for work can't find it, according to the Employment Policy Institute. Teen unemployment is equally high in Georgia; followed by Nevada at 34.3 percent; Washington at 33.2 percent; North Carolina at 32.1 percent; Idaho at 31.8 percent; and West Virginia at 30.2%. The District of Columbia is even higher at 49% teen unemployment. The national average rose from 24.2 to 24.5 percent in June.