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Harrisburg, Pennsylvania, Plans Default on Bond Payments - (www.bloomberg.com) Harrisburg (9661MF), Pennsylvania’s insolvent capital, says it will miss general-obligation bond payments for the first time next week as its receiver seeks approval for a plan to sell assets. The city, carrying a debt load of more than five times its general-fund budget, will miss $5.27 million in bond payments due March 15 on $51.5 million of bonds issued in 1997, according to a notice its receiver posted on the Electronic Municipal Market Access system, a database for filings by debt issuers. The default is the latest for the $3.7 trillion municipal market, which has seen the number grow while remaining rare. The rate of U.S. municipal-bond defaults doubled to 5.5 a year in 2010 and 2011, from 2.7 in the previous 39 years, Moody’s Investors Service said this week in a report. Stockton, California, last month voted to default on some of its bonds.
Ghost of Fannie Mae Haunts Canadian Housing as Exposure Worsens: Mortgages - (www.bloomberg.com) The Canadian housing agency’s vulnerability to mortgage defaults has soared nine-fold in 20 years, approaching levels reached by Fannie Mae and Freddie Mac in the U.S. at the height of the housing boom. Canada Mortgage & Housing Corp. says its finances are secure unless the country plunges into deep recession for several years. Government-owned CMHC insured C$541 billion ($546 billion) in mortgages as of Sept. 30, an amount equal to 31 percent of Canada’s annual gross domestic output, as home prices climb and construction expands. In 2006, when U.S. home prices peaked, the combined exposure of the government-backed agencies to potential defaults was slightly more than a third the size of the economy, according to Bloomberg calculations based on U.S. Federal Reserve data. Fannie and Freddie were bailed out in 2008. “If a significant number of homeowners default, CMHC would have a lot of claims they would have to pay out,” said John Andrew, real-estate professor at Queen’s University in Kingston, Ontario. Homes would “sell at greatly discounted prices as supply exceeds demand,” he said, adding “the risk of this is significant.”
Solar Panel Sales Seen Dropping First Time in Decade Feeding Glut: Energy - (www.bloomberg.com) Fewer solar panels will be installed this year as the first drop in more than a decade worsens a glut of the unsold devices that’s already slashed margins at the top five manufacturers, an analyst survey showed. Homes and businesses will put up 24.8 gigawatts of solar panels worldwide, according to the average of six forecasts compiled by Bloomberg News. That’s equal to the power of about 20 nuclear reactors and down 10 percent from the 27.7 gigawatts added last year. Installations have grown 61 percent a year on average since 1999, Bloomberg New Energy Finance estimates. The decline would be the first since Germany began offering premium rates for solar power in 2004, opening the way for mass, utility-scale installations. It will exacerbate price-cutting and a surge in inventories that last year forced Solyndra LLC into bankruptcy, prompted SunPower Corp. to seek a buyout and gutted margins at top manufacturers led by Suntech Power Holdings Co. and First Solar Inc.
Alarm sounds over Spain’s rising public debt - (www.ft.com) In the years of economic crisis since the collapse of Lehman Brothers in 2008, Spanish leaders have always been able to boast to nervous investors that Spain’s public debt burden – however bad its annual budget deficits – is smaller than Germany’s and well below the European Union average. Economists, business executives and even government officials, however, have started to sound the alarm about the rapid and unsustainable growth of the country’s public debt. The original boast remains officially true, despite scepticism about “peripheral” European economies after the Greek bailouts. The latest statistics from September 2011 show total Spanish public sector debt standing at €706bn, as measured by the EU’s deficit-control rules – a manageable 66 per cent of the country’s €1.07trn gross domestic product.
Rubin Says He Has Too Many Dollars 13 Years After Departing U.S. Treasury - (www.bloomberg.com)
China Inflation May Provide Room for Stimulus: Economy - (www.bloomberg.com)
Australia Records First Trade Deficit in 11 Months on 8% Plunge in Exports - (www.bloomberg.com)
China’s Biggest Banks Boost Jan-Feb Loans, ICBC Says - (www.bloomberg.com)
Trade Deficit in U.S. Widens to Largest Since October 2008 - (www.bloomberg.com)
Payrolls in U.S. Climb 227,000; Jobless Rate Holds at 8.3% - (www.bloomberg.com)
Wall Street workforce up in 2011, despite layoff fears: report- (www.reuters.com)
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