KeNo's Housing and Economic Portal: Sunday October 30 Housing and Economic stories

Saturday, October 29, 2011

Sunday October 30 Housing and Economic stories

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TOP STORIES:

Portugal Plans Deeper Cuts in Moment of ‘National Emergency’ - (www.bloomberg.com) Portugal plans to deepen budget cuts next year as it faces a moment of “national emergency,” Prime Minister Pedro Passos Coelho said. “Next year the adjustment will have to be much deeper,” Passos Coelho said last night in a speech broadcast by television station RTP following a cabinet meeting to discuss the 2012 budget proposal. To meet its budget goals, Portugal has to do more than it initially planned, he said. The overrun in carrying out the 2011 budget, relative to the financial aid program’s forecast, exceeds 3 billion euros ($4.1 billion), the prime minister said. Passos Coelho is cutting spending and raising taxes to meet the terms of a 78 billion-euro aid plan from the European Union and theInternational Monetary Fund. The government has already announced a one-time income-tax surcharge to help cover the budget shortfall this year.

Texas Faces Billions in Water Costs as Drought Imperils Economy - (www.bloomberg.com) Allan Ritter pushed a bill to make 25 million Texans pay an extra $3.25 a year to help provide water for decades. Then, with a record drought devastating farms and ranches, the state representative’s party leaders waded in. “We couldn’t get the votes,” said the Republican from Nederland who heads the Natural Resources Committee in the House of Representatives. Lawmakers who run the chamber sought to oblige Governor Rick Perry’s pledge not to boost taxes instead. “You couldn’t get the votes in the House to raise revenue for anything last session,” Ritter said. Since 1996, when lawmakers mandated statewide water planning, Texans haven’t agreed on how to pay for needed work. This year, as crops withered and cattle went to early slaughter, pressure rose for action to protect the economy and sustain a surging population. Perry called on citizens to pray for rain six months after the drought began. On Nov. 8, voters will decide on letting the state carry as much as $6 billion in water-related debt.

Greece’s Bondholders Brace for Bigger Losses to Solve Crisis: Euro Credit - (www.bloomberg.com) Greek bondholders are preparing to lose as much as 60 percent of their investments as European leaders try to impose a solution that reduces the nation’s debt burden by enough to end the debt crisis. “Everyone is coming to the conclusion that a much deeper restructuring is needed to make Greece in any way sustainable,” said Emiel van den Heiligenberg, chief investment officer of global balanced solutions at BNP Investment Partners in London, which oversees about $742 billion. “If the stock of debt doesn’t diminish, then the problems are going to be bigger and bigger and Greece will require rescue package after rescue package.”

Lehman Catastrophic Moment Invoked as EU Seeks Crisis Solution- (www.bloomberg.com) “Cascading default, bank runs and catastrophic risk” lie ahead for the world economy unless Europe resolves its festering debt crisis, Timothy F. Geithner told global finance chiefs on the morning of Sept. 24. The U.S. Treasury secretary spoke from experience and lessons learned. Three years ago, he was president of the Federal Reserve Bank of New York and working to shore up a financial system in the chaos following the collapse of Lehman Brothers Holdings Inc. (LEHMQ) His warning last month at a meeting of the International Monetary Fund in Washington was the third in three weekends after he jetted to conferences in France and Poland to appeal directly to Europe’s policy makers for action. After New York-based Lehman filed for bankruptcy on Sept. 15, 2008, financial institutions lost or wrote off almost $1 trillion; the Standard & Poor’s 500 Index fell 40 percent in six months; and the world slumped into the deepest recession since World War II.