TOP STORIES:
More U.S. cities set to enter default danger zone - (www.reuters.com) America's swelling ranks of fallen municipal borrowers have been blamed in the past year on 'what-were-they-thinking' causes, be it a Taj Mahal sewer system in Alabama or an overpriced trash incinerator in Pennsylvania's capital city of Harrisburg. But the next series of major cities and counties in danger of defaulting on their debt can hardly point to one single decision for their malaise. Whether it be Detroit, Miami or Providence, Rhode Island, their problems have a lot more to do with financial policies that put them on course to live well beyond their means. Municipal defaults have shot up since 2007 and are on pace for another high year in 2012, according to Richard Lehmann, publisher of the Distressed Securities Newsletter. Many failures will be due to local politicians' willingness to give unionized local government workers lucrative pensions and health care benefits when times were good. For others, the housing bust was enough to destroy their real estate tax base. They almost all share the failure to prepare for a rainy day.
Moms: I can't afford to work - (money.cnn.com) Ken note: Of course we know where this debate is going. The liberals now want us to bail out their underwater homes, pay for their child care, allow them to pay no federal income taxes, etc.
After factoring in the rising cost of child care, the daily commute and other work-related expenses, a growing number of mothers are figuring out that having a job just doesn't pay. "It comes down to a cost analysis and I have several clients that have taken the route of quitting," said Anna Behnam, a financial advisor at Ameriprise Financial in Rockville, Md. "Factor in taxes, transportation costs, clothing and lunch -- what is the true net that you bring home after salary?" Over the past few years, the debate over which lifestyle is more financially feasible -- working and paying for child care versus staying at home -- has come up more often among Behnam's clients than ever before. For most working parents, child care is by far the greatest expense. In 2010, the cost of putting two children in child care exceeded median annual rent payments in every state, according to a report by Child Care Aware of America.
Spain’s Surging Bad Loans Cast New Doubts on Bank Cleanup Plan - (www.bloomberg.com) Spain’s surging bad loans are spurring doubt on whether the government can persuade investors that it can clean up the country’s banks without further damaging public finances. Non-performing loans as a proportion of total lending jumped to 8.16 percent in February, the highest level since 1994, from less than 1 percent in 2007, according to Bank of Spain data published today. The ratio rose from 7.91 percent in January as 3.8 billion euros of loans soured in February, a 110 percent increase from the same month a year ago. That takes the total credit in the economy that the regulator lists as “doubtful” to 143.8 billion euros. Defaults are rising and credit is shrinking at a record pace as 24 percent unemployment corrodes the quality of loans built up in the country’s credit boom and saps the appetite of banks to make new ones. Doubts about the extent of Spain’s non- performing loans problem is hurting bank stocks and driving up the government’s borrowing costs on investor concern that the expense of propping up ailing lenders may add to the debt burden.
First Solar Latest Casualty in Renewable Energy Shakeout - (www.bloomberg.com) First Solar Inc. (FSLR)’s decision to fire 30 percent of its staff and reduce production shows that even the biggest solar panel makers aren’t immune from the shakeout that’s bankrupted at least eight companies on two continents in the past year. The largest thin-film solar producer said yesterday it will cut 2,000 jobs by the end of the year at a cost of as much as $370 million. It marks the biggest staff reduction for the industry since bankrupt Solyndra LLC, backed by U.S. government loans, dismissed its 1,100 employees on Aug. 31. Solar manufacturers, which expanded rapidly to meet double- digit demand growth in the past decade, are struggling with subsidy cuts in Europe and plunging natural-gas prices that make renewable energy less competitive. The largest producers in China say their profits will slump this year as shipments grow. “Oversupply has become a problem for the entire industry,” said Ben Schuman, an analyst at Pacific Crest Securities LLC in Portland, Oregon. “China’s manufacturers have not demonstrated rational behavior.”
"Not if, but when" for Spanish bailout, experts believe - (www.reuters.com) Economic experts watching Spain don't know how much money will be needed or precisely when, but some are near certain that Madrid will eventually seek a multi-billion euro bailout for its banks, and perhaps even for the state itself. Prime Minister Mariano Rajoy has repeatedly said Spain doesn't need or want an international bailout, and the European Union, which along with the IMF has already rescued Greece, Ireland and Portugal, also dismisses such talk. But economists believe that Spanish banks will have to turn to the euro zone's rescue fund, the European Financial Stability Facility (EFSF), for help in covering losses caused by a property market crash which has yet to end.
No comments:
Post a Comment