The great interest rate ripp off part 2

[interestrateripoff]

http://www.telegraph.co.uk/news/newstopics/politics/8302479/Ed-Miliband-young-have-it-harder-than-parents.html

 

The next generation will become the first to be less well-off than their parents, Ed Miliband will say today.

 

The Labour leader will make the claim as he pitches for support from what he believes is a young generation singled out by the Coalition to bear the brunt of spending cuts and reduced public services.

 

The Conservatives will respond by saying that Labour's economic legacy forced them into the cuts. David Cameron has also repeatedly highlighted Labour's failure to increase social mobility. But Mr Miliband will claim that the Coalition's cuts risk causing "inter-generational discrimination" and that there is a "real fear" that the next generation will be less prosperous than the last.

 

"We may not have given it a name in the way that Americans talk about the 'American Dream' but it is there nevertheless," he will say in a speech in Newcastle upon Tyne.

 

"It is defined by the promise that each generation will pass on to the next a life of greater opportunity, prosperity and happiness. But there is now a real and legitimate fear that the British promise will be broken and the next generation will have fewer opportunities and find it harder to get on than the last.”

 

Mr Miliband will point to policies such as the scrapping of the educational maintenance allowance in England for poorer 16 to 19 year-olds, which gave them money while studying.

 

A Labour source said: “Ed believes that this government is choosing weak, soft targets. They know that teenagers don’t vote and therefore taking away money from these people is the line of least resistance. Ed sees it as his job to stand up for these people.”

 

Mr Miliband will say: “We have always been about a society where the promise of Britain can go beyond the most affluent — that lower and middle income families can guarantee a better future for the kids.”

 

Critics will seize upon his refusal to blame Tony Blair and Gordon Brown for the failure to improve social mobility.

 

Perhaps someone needs ask Ed why all these cuts are needed, which party racked up the most debt ever to leave the young to pay it off for the rest of their lives, and then we get musing over why they are going to be worse off.

[interestrateripoff]

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8302111/Fed-chief-Ben-Bernanke-denies-US-policy-behind-record-global-food-prices.html

 

Mr Bernanke said that the rapid growth of developing economies was behind the increase in food prices, rather than the Fed’s decision to embark on a second, $600bn (£371bn) round of printing money. “Clearly what’s happening is not a dollar effect, it’s a growth effect,” Mr Bernanke said in a rare question and answer session with journalists at the National Press Club in Washington on Thursday.

 

The United Nations Food and Agriculture Organization (UN FAO) has warned that high prices, already above levels in 2008 which sparked riots, were likely to rise further.

 

The FAO measures food prices from an index made up of a basket of key commodities such as wheat, milk, oil and sugar, and is widely watched by economists and politicians around the world as the first indicator of whether prices will end up higher on shop shelves.

 

The index hit averaged 230.7 points in January, up from 223.1 points in December and 206 in November. The index highlights how food prices, which throughout most of the last two decades have been stable, have taken off in alarming fashion in the past three years. In 2000, the index stood at 90 and did not break through 100 until 2004.

 

Surging food prices have come back into the spotlight after they helped fuel protests that toppled Tunisia's president in January. Food inflation has also been among the root causes of protests in Egypt and Jordan, raising speculation other nations in the region would hoard grain stocks to reassure their populations.

 

........

 

“It’s entirely unfair to attribute excess demand issues in emering markets to US monetary policy,” Mr Bernanke said.

 

The Fed chairman also urged Congress not to use the fact that the US government will technically have to raise its legal debt limit as a “bargaining chip” in the debate over how to cut America’s budget deficit.

 

The government is projected to hit the current debt limit of $14.29 trillion in May, and Congress will be required to vote to extend it. Republicans and some Democrats are threatening to vote against it without immediate cuts in government spending.

 

“I would very much urge Congress not to focus on the debt limit as the bargaining chip in this situation,” Mr Bernanke said. “We need to be very careful not to create any impression that the US won’t pay its creditors.”

 

Mr Bernanke also added that he is optimistic that the rate of job growth will accelerate over the next couple of quarters.

 

Bernanke is excellent at denial, like all central bankers nothing is their fault. Flooding the world with cheap US dollars is clearly not the cause of food going up.

 

I'm surprised he didn't also claim it has nothing to do with the big Wall Street banks placing huge bets on food prices to generate big returns.

 

Got to love his opinion that the US isn't going to screw it's creditors.

[interestrateripoff]

Breaking news

 

• Barclays CEO may get 9 mln stg bonus - Sky News - Reuters
  
• NY Mets owners hit with $300 mln Madoff lawsuit - Reuters
  
• Fortune Brands profit beats; separation on track - Reuters
  
• Fortune Brands profit beats; separation on track - Reuters
  
• Sanofi may announce Genzyme deal before Wednesday-sources - Reuters
  
• Outgunned by Wall St, U.S. SEC warns of fraud - Reuters
  
• Aetna sees 2011 ahead of Street, boosts dividend - Reuters
  
• Paris, Berlin launch EU competitiveness pact - Reuters
  
• US STOCKS-Wall Street little changed after jobs report - Reuters
  

 

 

 

• US employment figures disappoint
   
  US payrolls rose by 36,000 in January, well below expectations of 145,000, but the unemployment rate fell to the lowest level since April 2009
  21 comments
  
• HMV shares jump on talk of possible break up by Russian shareholder
   
  Market forces: HMV's Russian oligarch shareholder might be looking at breaking up the retailer, according to reports
  3 comments
  
  • A life in books: Tim Waterstone
    

  [*] Individual insolvencies hit record high

   

  Bankruptcies fall to six-year low, but individual voluntary arrangements and debt relief orders push more people into the red

  21 comments

  [*] House prices 'fell by 2.4% in 2010'

   

  Halifax says house prices rose by 0.8% in January, but the three-month figure shows a decline of 0.7%

  55 comments

  [*] LVMH boss toasts 'vintage year' as champagne and handbag sales soar

   

  LVMH, the world's largest luxury goods group, made record revenues last year as customers snapped up its leather handbags and champagnes

  11 comments

  • John Lewis sales drop for second week
    

 

 

• Chancellor crowdsources budget
   
  George Osborne opens 'online portal' where the public can submit ideas for the March 23 budget
  93 comments
  
  • Clegg: We need to get growth basics right
    
  • Fears of rate rise after services rebound
    
  • Bank may hike rates, deputy governor warns
    
  • Heather Stewart: Recovery may be sickly at best
    
  • IFS: Budget giveaway not an option
    

  [*] New car sales down nearly 12% on 2010

   

  New car sales in Britain fell by nearly 12% last month, compared with January 2010

  23 comments

  [*] Virgin Atlantic calls off BAA fees strike

   

  Airline 'reluctantly' abandons strike over Heathrow snow disruption, claiming airport operator threatened to impound aircraft if did not pay

  3 comments

  • EasyJet passes 50m passenger milestone
    

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  • Nils Pratley: The bloodletting has only just begun
    

  [*] Shell's search for profits widens

[interestrateripoff]

Oil spill compensation claims could soar over lawyer's links to BP

 

Stephen Foley: Judge's ruling could mean thousands will head straight to court.

 

• Petrol bosses attack Cameron on duty as Shell profits hit $18.6bn
  
• New car sales plummet by 11.5% new
  
• Insolvency figures tipped to hit record high
  
• Service sector revels in thaw to bounce back
  
• Rebel shareholders oust the chairman at F&C
  
• New CBI chief calls for more support for banks
  
• US recovery could take years, warns Bernanke
  

 

David Prosser: Pushing the pills may be the world's most risky business

 

 

Outlook Just who would be chief executive of a major pharmaceuticals business? Andrew Witty, the man in the hot seat at GlaxoSmithKline, may cut a confident public figure, co-opted by the Prime Minister on to an advisory panel of business's great and good, but he also has to spend a disproportionate amount of time looking over his shoulder. For Mr Witty runs a leading company in an industry that is right in the sights of regulators worldwide.

 

 

• David Prosser: Breaking news: bankers show restraint
  
• David Prosser: Mixed message lets Opec off the hook
  
• Bankers’ pay is crazy. Footballers’ pay is not
  
• David Prosser: The Chancellor boxed himself in: now it is too late for a Plan B
  
• David Prosser: Has the economy done better than we think?
  

 

Brendan Barber: The union man who won't use a megaphone

 

The TUC general secretary tells James Moore why softly-softly tactics are needed as the Coalition wields the axe

 

 

• BP at the crossroads: Dudley sets future path
  
• The Business on: Ian Penrose, Chief executive, Sportech
  
• A perfect partnership between the geeks and suits
  
• The banks must be broken apart
  
• The China syndrome: Year of the rabbit
  

[interestrateripoff]

• U.S. payrolls barely grow, jobless rate plummets 5:23pm GMT
  
• Paris, Berlin launch EU competitiveness pact 7:30pm GMT
  
• Irish opposition party warns Europe on banks 7:03pm GMT
  
• Every bonus has a silver lining - for UK taxman 5:15pm GMT
  

 

Financials lift FTSE as investors stay positive

 

LONDON (Reuters) - Strength from financial stocks and miners lifted the top share index by Friday's close, as investors stayed relatively optimistic and focussed on the positive aspects of mixed U.S. employment data.

 

Barclays CEO may get £9 million bonus - report

 

LONDON (Reuters) - Barclays Plc could pay its chief executive a bonus worth more than 9 million pounds for 2010, Sky News reported on Friday, a move that could fuel a bitter row with the public and politicians over high pay for bankers.

7:19pm GMT

 

Investors looking beyond Egypt

 

LONDON (Reuters) - Financial market wobbles caused by turmoil in the Middle East have done little to stop investors positioning themselves for a further rally in stocks and other riskier assets as economic growth accelerates around the world.

2:41pm GMT

 

Virgin Atlantic to pay overdue airport fees to BAA

 

LONDON (Reuters) - Virgin Atlantic said it would pay to BAA fees it had withheld over the part closure of London's Heathrow airport late last year after the airport operator said it would take legal action to recover the cash.

UK 2:46pm GMT

 

Rosneft: No talks to buy out TNK-BP partners

 

denied it was in talks to buy out the Russian partners in TNK-BP in a deal that would, on paper, create the world's top listed oil group with output of 3 million barrels per day.

5:50pm GMT

 

Grainger buys Invista's UK MoD houses

 

LONDON (Reuters) - Britain's largest quoted housing landlord Grainger said it bought a portfolio of 317 properties that houses senior Ministry of Defence personnel from troubled Invista Real Estate.

[interestrateripoff]

http://market-ticker.org/akcs-www?post=179152

 

Wow.... if you remember on the ADP and Claims numbers, I said I was expecting +100k.

 

That was way off - we really got +36k.

 

The unemployment rate fell by 0.4 percentage point to 9.0 percent in January, while nonfarm payroll employment changed little (+36,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in manufacturing and in retail trade but was down in construction and in transportation and warehousing. Employment in most other major industries changed little over the month.

Youch.

 

There's no love in here. Worse, the benchmark revisions are out, and they show about 300,000 supposedly-reported jobs that didn't really happen. No, really? How come that number seems to always be in this direction? That is, why is it that the BLS always seems to over-report reality in the establishment survey?

 

That inconvenient truth, incidentally, is why I always use the household numbers. They're at least a real survey without BS "adjustments" applied and while they're subject to sampling error at least they're not intentionally distorted.

 

This officially sucks.

 

On a month-by-month basis the number of actual employed people dropped by more than 1.5 million! That's a huge decrease and what's worse, the trend is awful, being unbroken now since the first of last year.

 

Remember, we need about +150,000 in actual employment just to keep up with new entrants into the workforce. We instead lost ten times that number of actual employed.

 

The monthly numbers are noisy in this regard, but there's simply no way to argue "strength" in these numbers, irrespective of how much cheerleading you'd like to do.

 

Not-in-labor force numbers are still rising, but the annualized change is now negative. That's a positive. Mildly. Unfortunately it's not turning into actual jobs, it's turning into people looking for work and not finding it.

 

The employment rate posted a new low for the recessionary period - 57.6%, falling below the 57.8% registered in January of 2010.

 

There has been no improvement - at all - in the employment picture, and in fact the employed rate, as a percentage of the non-institutionalized population, is now the worst it has been since the economic downturn began.

 

Recovery my ass.

 

Dennigers take on the strong US employment numbers.....

[interestrateripoff]

4 February 2011 Last updated at 18:41

 

Personal insolvencies at new high

 

A record number of people were declared insolvent in England and Wales in 2010 despite a fall in the last three months.

 

• Record number of Scottish firms insolvent
  
• In depth: Your debts
  

 

BA raises fuel surcharge by £12

 

British Airways says it will increase its fuel surcharge on long-haul flights for the second time in three months.

 

 

Egypt woes 'costing $310m a day'

 

Egypt's uprising is costing the country at least $310m a day as factories close and tourists avoid the country, Credit Agricole says.

 

• 'Day of departure' rally in Cairo
  
• Egypt 'hijacked Vodafone network'
  

 

 

 

• US joblessness falls in January
   
  Unemployment falls in January to 9% but the number of new jobs created falls well short of expectations.
  
• Williams stock flotation agreed
   
  Former Formula 1 world champions Williams are to go ahead with a flotation on the German stock market in the coming months.
  
• House prices 'up 0.8%' in January
   
  UK house prices rose by 0.8% in January compared with the previous month, according to figures from the Halifax.
  
• One in five workers 'fears sack'
  
• German rules urged for eurozone
  
• Clegg: We do have plan for growth
  
• LVMH sees record revenues in 2010
  
• CBI chief says 'no bank break-up'
  
• Car sales fall 11.5% in January
  
• VAT 'loophole' to go under review
  
• Bad debts rule hits Banco Popular
  
• Volvo struggles with trucks surge
  
• Builders serve £120m writ on bank
  
• Rosneft posts 64% rise in profit
  

[interestrateripoff]

US denies policies behind record food prices

 

US Federal Reserve chairman dismisses idea the central bank’s policies are to blame for the rise in global food prices to a record high that helped trigger political unrest in Egypt.

Global food prices hit high

 

 

 

 

Trichet retreats on rates as commodities spike

 

European Central Bank has taken a strategic gamble that the current surge in food and commodity prices is not a repeat of the inflation virus of the 1970s and will subside without the need for a monetary squeeze.

London close to overtaking New York as world's oil capital

 

 

 

US unemployment blamed on weather

 

Wall Street failed to get too blue about disappointing US unemployment numbers on Friday, as the snow storms that lashed large parts of the country for much of January were blamed.

US jobs: market reaction

 

 

Canada's jobs headache is one the US wants

 

 

 

Rebel ousts F&C chairman but has no plan

 

Edward Bramson, the man who ousted the chairman of F&C Asset Management in a rare boardroom coup, has revealed that he has no idea what he will do with the company.

 

JPMorgan 'ignored Bernard Madoff red flags'

 

One of JP Morgan Chase’s London operations ignored a series of red flags over fraudster Bernard Madoff, according to a series of allegations made against the bank in a lawsuit.

 

New car sales drop sharply in Jan

 

New car registrations fell for a seventh consecutive month with a sharp drop in January as the Society of Motor Manufacturers and Traders warned it expected 2011 to be a difficult year.

Top 10 best selling cars in January

 

 

 

Russian investor Mamut eyes HMV break-up

 

 

 

 

Rate rise fears as UK services bounce back

 

 

 

 

Surprise rebound in house prices

 

 

 

 

Google receives 75,000 CVs in one week

[interestrateripoff]

In a Snowy January, Job Numbers Fail to Take Off

 

By MOTOKO RICH 55 minutes ago

 

 

The reported job growth of 36,000 jobs was well below forecasts, though some economists blamed the weather.

 

• Economix: Leonhardt and Norris React | Comparing Recoveries
  
• Wall Street Slips After Latest Jobs Report
  
• Video: Weather Clouds Jobs Report
  

 

 

 

Justin Sullivan/Getty Images

 

A “Job Hunters Boot Camp” was held last month in Burlingame, Calif., tailored for people who have been out of work for at least six months

 

 

 

 

 

 

JPMorgan Hid Doubts on Madoff, Documents Suggest

 

By DIANA B. HENRIQUES

 

Newly unsealed court documents show that bank executives were suspicious of Bernard Madoff’s accounts and steered clients away from him but did not alert regulators.

Suit Says Mets Owners Ignored Warnings on Madoff

 

By RICHARD SANDOMIR 36 minutes ago

 

The owners “consciously disregarded” signs of fraud, according to a suit on behalf of Bernard Madoff’s victims.

 

• Text of the Complaint (pdf)
  
• Post a Comment | Read (59)
  

As Germany Booms, It Faces a Shortage of Workers

 

By JUDY DEMPSEY 10 minutes ago

 

An aging population and inflation-fighting measures that have kept wages low are making it difficult for companies to find workers.

 

LVMH Sees Sales and Profits Jump

 

By LIZ ALDERMAN 15 minutes ago

 

Consumers sipped Dom Perignon Champagne, donned Hublot watches and sported Louis Vuitton handbags in record numbers last year, especially in Asia.

 

• As Revenue Rises, Hermès To Pay Extra Dividend
  
• Video: LVMH Reports Record Sales
  

 

E.U. Leaders Seek Common Energy Negotiations

 

By JAMES KANTER 1:00 PM ET

 

A proposal, due in June, would give the European Commission authority to participate in negotiating with energy exporters like Russia in an effort to improve prices and security of supplies.

 

Bits Blog

 

Verizon Sells Out of iPhone 4 Preorders

 

By JENNA WORTHAM 35 minutes ago

 

Verizon said it sold out its preorder stock of the iPhone for current Verizon customers in less than a day.

 

Merkel, in Reversal, Urges Rescue of Euro

 

By STEPHEN CASTLE

 

Angela Merkel, the German chancellor, and the French president, Nicolas Sarkozy, will present new ideas on Friday to save the euro and integrate euro zone economies.

 

Financial District Adapts as Banks Leave

 

By CHARLES V. BAGLI 11:10 AM ET

 

A part of the city once dominated by the financial industry has become more diverse in the past decade.

 

DealBook

 

Equity Deals Rebounding With I.P.O.’s

 

By PETER LATTMAN

 

A flurry of developments on Thursday underscores just how much the private equity business has emerged from the financial crisis in a position of strength.

[interestrateripoff]

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103?currentPage=all

 

When I flew to Dublin in early November, the Irish government was busy helping the Irish people come to terms with their loss. It had been two years since a handful of Irish politicians and bankers decided to guarantee all the debts of the country’s biggest banks, but the people were only now getting their minds around what that meant for them. The numbers were breathtaking. A single bank, Anglo Irish, which, two years before, the Irish government had claimed was merely suffering from a “liquidity problem,” faced losses of up to 34 billion euros. To get some sense of how “34 billion euros” sounds to Irish ears, an American thinking in dollars needs to multiply it by roughly one hundred: $3.4 trillion. And that was for a single bank. As the sum total of loans made by Anglo Irish, most of it to Irish property developers, was only 72 billion euros, the bank had lost nearly half of every dollar it invested.

 

More at the link.

[interestrateripoff]

http://www.nytimes.com/2011/02/07/business/07king.html?_r=1&ref=business

 

A central banker need not be loved, but at the least he should command respect — and in Britain these days Mervyn King cannot count on either.

 

Mr. King, the donnish governor of the Bank of England, has been accused of presiding over the worst stagflation — a dreaded combination of stagnant economic activity and rising inflation — happening in any major developed economy. He has been condemned for flouting the bank’s independence by publicly supporting the British government’s deficit-cutting strategy.

 

As for the issue on which he may have most closely staked his reputation — that Britain’s large banks must increase capital levels well beyond international standards — he so far has been ignored.

 

Doubts over Mr. King’s inflation strategy come as European leaders are working to devise a unified strategy for dealing with sovereign debt woes in the region. Germany and France are pressing for concrete steps to harmonize fiscal spending by focusing on tax and pension issues, while weaker nations are struggling to bring down their deficits.

 

But with inflationary pressure picking up everywhere, the main topic of debate is expected to be how much longer the European Central Bank, like its counterpart in Britain, can resist the pressure to raise interest rates.

 

Not long ago, central bankers in the United States, the European Union and fast-growing emerging countries like Turkey and Brazil were being hailed. They were seen as having salvaged their economies by flooding their banking systems with enough money to help prevent a depression.

 

But now many of them are confronting the prospect that their powers are on the wane, as inflation begins to creep up and as growth in advanced industrial countries is hampered by high levels of government debt.

 

For a group accustomed to being influential — the Federal Reserve’s Ben S. Bernanke and Jean-Claude Trichet of the European Central Bank are facing challenges similar to Mr. King’s, if less acute — such diminution can come as a rude awakening. In a speech last month, Mr. King acknowledged his limited ability to combat the high levels of unemployment and increased inflation bedeviling Britain.

 

With food and energy prices increasing and the weakness of the British pound making imports more expensive, he said, monetary policy could not “alter the fact that, one way or another, the squeeze in living standards is the inevitable price to pay for the financial crisis and the subsequent rebalancing of the world and U.K. economies.”

 

It sounded a bit like the last cry of the “incredible shrinking central banker.”

 

“It was a defensive speech, and there is a degree of frustration in the forces that are beyond his control,” said DeAnne S. Julius, the chairman of Chatham House, a research and analysis organization in London, and a former member of the Bank of England’s monetary policy committee.

 

More at the link.

 

An interesting article, it would appear that the worlds central powers have the power to prevent a recession/depression but can't solve the problems of inflation / unemployment. You can't take the credit for "stopping" a depression and then not take responsibility for the inflation/unemployment you've helped generate by your own negligent actions.

 

King is in this mess partly because of the policy followed in 2003 where a consumer boom was actively pursued to avoid a recession in the last decade. You can't take credit for the perceived policy actions which are see in the "short term" as positive if in the long term they produce negative results.

[interestrateripoff]

http://www.thestar.co.uk/news/local/pulic_transport_jobs_to_be_axed_and_child_fares_to_go_up_1_3050771

 

Public transport bosses in South Yorkshire have announced a “small number” of redundancies - and a 25 per cent increase in the cost of child fares.

 

South Yorkshire Passenger Transport Executive said it had lost a number of jobs through people leaving or retiring which were not being replaced and more redundancies were necessary.

 

The announcement was made as South Yorkshire Integrated Transport Authority and Sheffield, Barnsley, Doncaster and Rotherham councillors who run SYPTE voted to raise child concessionary bus fares from 40p to 50p.

 

The SYITA meeting also passed a recommendation for further 10p rises in April 2012 and April 2013.

 

............

 

SYITA chairman Coun Mick Jameson said: “We are all under pressure to find savings. But we would say to people this is the first increase for many years. If child bus fares had gone up with inflation in those eight years they would be 60p rather than 40p.”

 

So essentially prices will now be in line with "what they should have cost".

 

Fantastic news.

 

I'm just relieved it's all contained.

[interestrateripoff]

http://economix.blogs.nytimes.com/2011/02/04/comparing-recoveries-job-changes-3/

 

Source: Bureau of Labor Statistics. Chart by Amanda Cox. Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.

The United States added 36,000 jobs on net in January, the Labor Department said today. The growth was again disappointingly slow, but many economists are unsure how to interpret the latest number because January snowstorms most likely played a big role in depressing employment.

The industries that were probably most affected by the snowstorms were construction, which lost 32,000 jobs on net, and transportation and warehousing, which lost 38,000 jobs.

 

The recovery in full.

[interestrateripoff]

itineraries

 

Support Grows for Tiered Risk System at Airports

 

By SUSAN STELLIN 1:22 PM ET

 

 

Proposals to change security checkpoints include using known information about travelers to apply different screening techniques.

 

 

 

Daniel Rosenbaum for The New York Times

 

Transportation Safety Administration employees demonstrated the new body scanner software at Reagan National Airport last week.

 

 

 

 

 

 

Betting on News, AOL Is Buying The Huffington Post

 

By JEREMY W. PETERS and VERNE G. KOPYTOFF

 

The deal would give AOL a major presence in journalism, demonstrating the company’s intention to rely more heavily on online advertising.

 

• Times Topics: The Huffington Post | AOL | Arianna Huffington
  
• DealBook: Who Will Profit From AOL’s Deal for Huffington Post?
  
• .refer .inlinePlayer .refer { font-size: 1em; } The Takeaway With David Carr
   
  
• Post a Comment | Read (237)
  

 

The Caucus

 

Obama Urges Business Leaders to Hire and Invest

 

By MICHAEL D. SHEAR 5 minutes ago

 

Speaking to the U.S. Chamber of Commerce on Monday, President Obama urged American businesses to let loose trillions of dollars held in reserves.

 

DealBook

 

Offshore Drillers Set $7 Billion Deal

 

By DEALBOOK

 

The merger of Ensco and Pride International will create the second-biggest offshore drilling company in the world.

 

DealBook

 

Danaher to Buy Beckman Coulter for $5.8 Billion

 

By MICHAEL J. DE LA MERCED

 

Danaher has agreed to buy Beckman Coulter, a maker of diagnostic research equipment for biomedical companies, for about $5.8 billion in cash - beating out two private equity consortiums.

 

DealBook

 

Santander Offers $5.8 Billion for Polish Bank

 

By CHRIS V. NICHOLSON

 

Banco Santander says it is offering 16.6 billion zloty for Bank Zachodni WBK of Poland, until now controlled by Allied Irish Banks.

 

Earnings and Acquisitions Send Wall Street Higher

 

By THE ASSOCIATED PRESS 31 minutes ago

 

Several major companies reported earnings that topped expectations. AOL shares slipped after the company announced that it had acquired The Huffington Post for $315 million.

 

A Crisis of Faith in Britain’s Central Banker

 

By LANDON THOMAS Jr. and JULIA WERDIGIER

 

Mervyn King has been condemned for the economy, but it is worse for him that his boldest proposal is being ignored.

 

Al Jazeera Hopes Reports From Egypt Open Doors in U.S.

 

By BRIAN STELTER

 

Al Jazeera hopes its English-language coverage of protests in Egypt and Tunisia will help it gain access to an American cable television audience.

 

• Times Topics: Al Jazeera
  

 

Disney Looking Into Cradle for Customers

 

By BROOKS BARNES

 

Disney Baby seeks to introduce mothers and newborns to products while they are in the hospital.

 

• Times Topics: Walt Disney Company
  
• Post a Comment | Read (78)
  

 

 

More in Business

 

 

• EBay Says Big Growth Is Not Over
  
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Is Poverty Up or Not?

 

By NANCY FOLBRE 8:18 AM ET

 

Poverty — and prosperity — can be hard to measure precisely, leaving unclear how many Americans fare, an economist writes.

[interestrateripoff]

Breaking news

 

• UPDATE 1-Big US banks face delayed bonuses; a global move - Reuters
  
• Bridgestone is tops in Super Bowl advertising buzz - Reuters
  
• Bridgestone is tops in Super Bowl advertising buzz - Reuters
  
• Euro flat versus dollar but losses seen likely - Reuters
  
• In U.S. job market, young fight for full-time work - Reuters
  
• AOL to buy The Huffington Post for $315 million - Reuters
  
• Italian ministers to quiz Fiat chief on U.S. plans - Reuters
  
• Italian ministers to quiz Fiat chief on U.S. plans - Reuters
  
• US STOCKS-Wall Street extends gains on M&A, earnings - Reuters
  

 

 

 

• Huffington Post sold to AOL
   
  Huffington Post founder Arianna Huffington sells her site to AOL for $315m
  128 comments
  
  • The beginning of the end? by Jemima Kiss
    
  • AOL buys Huffington Post: timeline
    
  • Huffington Post sale: who gets the $315m?
    
  • Arianna Huffington: profile
    
  • Huffington Post mortem or AOL reborn?
    

  [*] Value of global pension funds hits record high at £16tn, study shows

   

  Strong year for assets but experts pointed out that the global asset/liability ratio is still well down from its 1998 level

  [*] Barlow Clowes case closed after 23 years

   

  The Treasury has recovered £120m of £153m it paid out in compensation after one of most notorious frauds in City history

  [*] Pretty and colourful: what women bring to the DB boardroom, says Ackermann

   

  Josef Ackermann, DB's chief, has kicked up a storm with offhand remarks about women making boards 'prettier and more colourful'

 

 

• Salad slaves
   
  Who really provides our vegetables
   
  Video: Costa del Sol is famous for its beaches but just behind them is a hidden world of industrial greenhouses where African migrants work in harsh conditions
  
  
• Fine and City ban for insider trader
   
  A financier has been banned from working in the City and fined £150,000 after trading shares in Eicom
   
  
  • Couple who amassed a fortune from insider trading
    

  [*] St Modwen back in the black

   

  Property group makes first profit since 2007 as it unveils details of Longbridge redevelopment

  [*] More business news

  [*] Tobacco tax rise prompts smuggling wave

  40 comments

  [*] Reorientate UK exports 'to Bric markets'

  19 comments

  [*] Foreign railways eye west coast franchise

[interestrateripoff]

http://www.moneyweek.com/news-and-charts/economics/into-the-red-with-brown.aspx

 

Into the red with Brown

 

By James Ferguson Dec 12, 2005

Not so long ago, most commentators were impressed with Gordon Brown’s handling of the economy. Now, the economy is struggling. Just how much of this is down to Brown? And will it do irreparable damage to his leadership bid?

Is Gordon Brown’s party nearly over? It’s beginning to look like it. His current “mood music” isn’t good, says Gary Duncan in The Times. Only a year ago, most commentators still appeared to be impressed with his management of the economy, but today when they think of Gordon Brown, they think of “grim Seventies-style images of oil shocks, soaring inflation, faltering growth and that period’s failed chancellorships”. Worse, it rather looks as though Brown is going to have to continue to sleep in the bed he has made so badly. At the beginning of this week, he was clearly hoping to take over from Tony Blair sooner rather than later, yet Blair’s speech this week was anything but one of resignation – instead, it was flamboyant, forward-looking and followed by a comment from Cherie Blair that her husband’s departure from Downing Street was “a long way in the future”. So it seems that for the next few years at least there’ll be no handing the poisoned chalice of the UK economy on to anyone else, something that will surely come as a grave disappointment to the chancellor.

Still, that doesn’t mean Brown can’t find an external factor or two to blame for the UK’s current difficulties. Having just been forced to say that things are already looking rather less rosy than he had previously claimed, and that his target of 3%-3.5% GDP growth in 2005 is far too high (the IMF is anticipating a rate of just 1.9%, meaning the UK is likely to grow less than Japan this year), he is claiming that it’s just not his fault. The chancellor should be eating a “large helping of humble pie”, says The Guardian, but instead he is passing the buck to oil and a sluggish Europe: he is doing what all politicians do when things go wrong – saying that “it is due to global forces”. But that isn’t quite true. It may be the case that oil prices have been hitting all-time highs, but only in nominal terms: the price still isn’t nearly as high as it was in the 1970s, once you adjust for inflation. Higher oil prices may not be helping the consumer slowdown, but they are not the core cause: falling house prices and debt overload have much, much more to do with current conditions. Indeed, anyone tempted to believe Brown’s protestations should note that economic danger signs have been obvious for a long time. Oil can hardly be to blame for the fact that, since 1999, Brown has watched over a “bigger deterioration in the underlying budget deficit” than has been seen in any other leading industrial country, says Robert Chote, director of the Institute of Fiscal Studies, in The Guardian. Unemployment also started to rise before the big leap in oil prices (it’s now risen for seven months in a row), as did inflation. At the same time, productivity is stagnant, public-sector spending has exploded, house prices (the biggest driver of consumption in the UK) are at best flat and consumer debt is still at record highs. It isn’t a pretty picture.

However, perhaps worst of all for Brown’s reputation is that it now looks as though it will be impossible for him to meet his so-called golden rule on borrowing. In order to gain the trust of the British people – and in an attempt to reassure them that the Labour Party was reliable on the economy – Brown created a ‘golden rule’ back in 1997, which stated that he would only borrow to invest (in infrastructure and the like) over the course of an economic cycle. This means that falling growth is really bad news for Brown – all his spending plans are based on his growth predictions and on how much tax will be raised as a result of them. If growth doesn’t hit its targets (which it won’t), then neither will the tax take – making it more likely he’ll break his own rules. Having already moved the goal posts by changing the beginning and end dates of the cycle and changing the meaning of ‘invest’, lower growth means that “tax rises now look inevitable”, says Trevor Kavanagh in The Sun.

This state of affairs is going to be irritating enough for the electorate, but of more immediate concern to most of us is probably the matter of where on earth all the money Brown has already spent has gone. The public sector has seen a massive inflow of cash, but you’d have to ask a lot of people in order to find someone who thought any services had improved as a result. There have been a lot of new jobs created (940,000 since 1997), but very few seem to be for new teachers, doctors and policemen. Indeed, to the external eye, the most useful role all this hiring has had has not been to improve public services, but to stop unemployment rising too fast: private-sector employment peaked in mid-2003 and with the manufacturing and retail sectors both in trouble (manufacturing is officially in recession), that isn’t going to change any time soon.

The economic trouble all around the UK means that “the pained calls for lower UK interest rates are getting shriller”, says Lex in the FT. This week, the head of retailer Next said “significant” rate cuts were needed for growth to return to the high street, for example. But can this really happen? We think probably not. Alongside falling consumer spending, there are also inflationary pressures on the UK economy. At 2.4%, the Consumer Price Index (CPI) is currently at its highest level since 1997 and well above the Bank of England’s Government-set target of 2%.

The fact is that “the Chancellor’s eight-year run of luck at the Treasury may be running out”, says Kavanagh. The UK has benefited from cheap Chinese imports, which have helped keep a lid on inflation. Now Europe is imposing quotas on China, the yuan has been revalued upwards and oil prices are hitting transport and production costs, China can’t keep saving our skin with cheap underwear. This leaves the Bank of England with a dilemma over which direction interest rates should move to achieve the inflation target of 2%. And “while he may have handed control of interest rates to the Bank, Brown would be unlikely to escape all blame in the eyes of the voters”, says Chote. If interest rates do end up having to rise in the face of inflation, then things can only get worse for the UK economy. The property market, which is already seeing price falls, will tumble further. Consumers will then cut back spending more than they have already; retailers will be hit again and the vicious circle will continue.

So where does this leave Brown? With the economy collapsing on his watch (second-quarter GDP numbers out this Wednesday showed that the economy grew at a mere 1.5% annual rate, the lowest for 12 years), he must want to move into Number 10 as quickly as he possibly can. But Blair is showing no signs of shifting – the new deal is apparently that Blair will move on in about three years’ time. Brown may object to this – but if he does, the Blairites are said to be planning to put up another contestant to stand against him. However, if he doesn’t start trying to find a way to take power earlier, he may find that, in three years’ time, his reputation has slipped so far that for Labour to keep winning elections an alternative candidate will have to be found anyway.

Has Brown led us from a virtuous cycle to an ever-more vicious one

 

Gordon Brown inherited a robust economy, low inflation, budget surpluses and the longest period of sustained global growth the world has ever seen – and yet according to him, he was almost single-handedly responsible for the good times. So it’s rather salutary that now he is having to lower his growth forecasts, from as much as 3.5% to nearer half that, he says it is not his fault. Good times, it would seem, are due to Gordon’s skills, but bad news is due to “global forces”.

It is true that Brown’s personal intervention sustained the economy’s growth last year. When everyone else thought that growth would slow, Brown knew he was going to throw huge amounts of money at the public sector and single-handedly boost employment. As a consequence, the economy did grow the 3.2% he had always forecast. However, private-sector employment fell and, without Brown’s huge spend, public-sector employment wouldn’t have grown either. Direct public spending wasn’t the only way the chancellor conspired to boost the economy in the short term. He needed a compliant Bank of England to set artificially low interest rates to keep credit-fuelled consumption booming. Unfortunately, the first thing he’d done as chancellor was give the Monetary Policy Committee its independence, hence, on the face of it, depoliticising interest-rate decisions. Still, to even this out all he had to do was politicise the inflation measure the MPC was instructed to track. When the RPIX went above target in late 2003, Brown just switched the measure to be followed to the new CPI, which was well below target.

 

 

More at the link.

[interestrateripoff]

http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-bias-in-the-banks-inflation-strategy-risks-losing-public-backing-it-needs-2206511.html

 

"The anchoring of inflation expectations has been central to the stability enjoyed by the UK economy over the past decade. . .Inflation expectations have been anchored because the MPC has responded to events that have pushed the outlook for inflation away from target and households, businesses and financial markets have understood and anticipated our responses." – Mervyn King, Governor of the Bank of England, "The MPC Ten Years On", May 2007

 

"Even if we had known a year ago that 2010 would bring further increases in food, energy and other import prices, as well as a rise in VAT, it would not have been sensible to pretend that a tightening of monetary policy to offset those upward pressures on CPI inflation was consistent with aiming to keep inflation at the target in the medium term." – Mervyn King, speech at the Civic Centre, Newcastle, January 2011

 

Contained within these two quotes from the Governor of the Bank of England is the key question which members of the Bank's Monetary Policy Committee now have to grapple with. At what point does a deviation of inflation from the underlying target – for whatever initial reason – threaten the medium-term outlook for inflation and inflation expectations?

 

After all, inflation is a long way away from where the Bank expected it to be two years ago. Back then, the Bank thought there was a very high probability, based on market expectations for the future level of interest rates, that inflation would by now be below 1.5 per cent. Yet, as Mr King suggested in his Newcastle speech, there's every chance that inflation in the coming months will be between 4 and 5 per cent. As errors go, that's a pretty big one, particularly given that the pace of economic growth has been a lot more sluggish than the Bank projected at the beginning of 2009.

 

Mr King expects inflation to come back down again over the medium term. Signs of a pick-up in inflationary expectations have, to date, been relatively modest and – as Mr King rightly points out – the pace of monetary expansion has been remarkably limp, suggesting that a credit- constrained economy won't be able to generate high inflation for ever. Yet there can be no doubt that the split between growth and inflation has deteriorated rapidly in recent months. Ultimately, money supply growth says more about pace of increase in the value of GDP. The split between volume and price might either improve or, as we've seen recently, deteriorate.

 

In his 2007 speech, Mr King referred to the anchoring of inflation expectations. "Faced with changes in their costs stemming from, for example, changes in import or energy prices, businesses... can pass these cost changes forward to prices or backwards to money wages. With inflation expectations well-anchored to the target, companies have restricted the pass-through of costs to prices. The necessary adjustment of real take-home pay has taken place more through fluctuations in money wages than prices."

 

But are money wages still quite so flexible? The pass-through from import prices into consumer prices has risen significantly in recent years. Because wages haven't picked up correspondingly, the rise in consumer prices has made workers genuinely worse off. As Mr King noted in Newcastle: "As a result, in 2011 real wages are likely to be no higher than they were in 2005. One has to go back to the 1920s to find a time when real wages fell over a period of six years." (The decade in which the General Strike took place – you have been warned). Mr King regards this adjustment as "the inevitable price to pay for the financial crisis", noting that "Monetary policy can [only] affect the inflation rate at which these adjustments take place".

 

This seemingly innocuous reference to inflation is, however, a very important statement. If the public begins to recognise that the Bank can "choose" which inflation rate to select in allowing an adjustment to living standards to take place, might this then lead to uncertainty over the commitment to a particular inflation target? And if there is uncertainty, might this increase the difficulties faced by the MPC in ultimately bringing inflation back to heel?

 

Nice to see Mystic Merv wants to pick which inflation he can target....

 

As I said at the beginning of all this central bank policy is fatally flawed.

[interestrateripoff]

Fears of a double-dip recession fade as retail sales rise in January

 

Experts still expect a testing year ahead despite positive figures

 

 

• Power firms fined over connections
  
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• Google seeks to avert long EU probe
  

 

Stephen Foley: Fed chief Bernanke spells out home truths on financing the future

 

US Outlook Will someone please listen to Ben Bernanke? The Federal Reserve chairman becomes more shrill in his warnings about the US government debt crisis every time he speaks publicly.

 

 

• David Prosser: Pushing the pills may be the world's most risky business
  
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• Bankers’ pay is crazy. Footballers’ pay is not
  
• David Prosser: The Chancellor boxed himself in: now it is too late for a Plan B
  

 

Charities hit by corporate stinginess

 

Big business blames the recession for the slump in donations. Richard Northedge reports

 

 

• The Business On: Igor Sechin, Deputy Prime Minister of Russia
  
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[interestrateripoff]

• AOL to buy The Huffington Post for $315 million | 7:32pm GMT
  
• Guy Hands among bidders for Chaucer - report 5:47pm GMT
  
• Geithner pledges to work with Brazil on China 7:44pm GMT
  
• Oil driller Ensco to buy rival Pride for $7.3 billion
  

 

Miners propel FTSE higher, fresh 2011 high eyed

 

LONDON (Reuters) - Miners lifted the top share index higher on Monday, driven by record metal prices and results from Randgold.

M&S poaches Tesco's Wade-Gery for online drive

 

LONDON (Reuters) - Marks & Spencer has poached Laura Wade-Gery from supermarket group Tesco to head its internet business, underscoring new boss Marc Bolland's commitment to growing sales online.

6:34pm GMT

 

Sanofi-Genzyme takeover talks in final stretch

 

PARIS/BOSTON (Reuters) - France's Sanofi-Aventis was closing in on a roughly $20 billion (12 billion pounds) deal to buy U.S. biotech group Genzyme while pausing to take a final look at the books, sources familiar with the matter said.

1:05pm GMT

 

Shock rate rise not ruled out at Feb meeting

 

LONDON (Reuters) - The Bank of England will have to decide this week whether its first priority is to tackle soaring inflation or to support the fitful economic recovery.

3:04pm GMT

 

LSE on track for upgrade after final system test

 

LONDON (Reuters) - The London Stock Exchange cleared a final hurdle ahead of a crucial planned system upgrade, sources familiar with the situation said on Monday, three months after it delayed the switch amid suspicions of sabotage.

4:39pm GMT

 

AIM seen volatile as CMC closes out bets

 

LONDON (Reuters) - Trading on London's Alternative Investment Market (AIM) could be volatile on Friday as CMC Markets will on that day close out any AIM share bets made by its clients.

[interestrateripoff]

[/url]

 

 

Barlow Clowes scandal: taxpayers finally repaid after 23 years

 

More than 20 years after Barlow Clowes went bust, taxpayers appear to have been repaid the £153m which was distributed as ex-gratia compensation to more than 14,000 investors.

Four hard lessons from the Barlow Clowes scandal

 

 

 

 

Oil back above $100 on Egypt fears

 

Hedge funds have been piling into the oil market, betting that the price of crude will rise on fears that turmoil in Egypt could affect production and trade through the Suez Canal.

 

Emerging middle class will fuel UK growth

 

A growing market of middle-class consumers in the developing world will come to Britain’s rescue by driving demand for exports of hi-tech products and financial services, says the Ernst & Young ITEM Club.

Middle class bears the brunt of rise in inflation

 

 

 

AOL buys Huffington Post for £196m

 

Deal will bring an additional 25 million unique visitors a month and put Arianna Huffington in charge of all AOL content.

AOL buys Huffington Post: reaction

 

 

 

US backs Brazil in currency war with China

 

Timothy Geithner, the US Treasury Secretary, has voiced tacit support for Brazil in its 'currency war' with China in a sign that the two giants of the Americas will work together to tackle the issue.

 

Staff refused time off for Royal Wedding

 

Unions blast employers for refusing to treat the wedding of Prince William and Kate Middleton as a bank holiday.

 

AstraZeneca suffers zibotentan drug setback

 

 

 

 

St Modwen returns to profit, restores dividend

 

 

 

 

Pink Floyd drummer joins classic car fund

 

 

 

 

Institute of Directors lays out growth blueprint toTreasury

 

The cult of equity is dead, long live equities

 

Einstein was right - bee collapse is a risk to food security

 

Does a surge in food and oil prices mean it's time to panic?

 

Why must we make the same old policy failures on housing?

 

 

Government admits deregulation has yet to happen

 

Business groups concerned over growth as Business minister admits regulations have come in but not out

Employers have a 'duty’ to nudge staff into shape

[interestrateripoff]

7 February 2011 Last updated at 20:16

 

'Axe' public sector union rights

 

The Institute of Directors calls for an end to collective bargaining for teachers and NHS staff, in proposals the unions call a "Thatcherite fantasy".

 

• Shock contraction in UK economy
  
• CBI boss: Coalition lacks vision
  

 

AOL in $315m Huffington Post deal

 

US internet firm AOL agrees to a buyout of the Huffington Post online paper, creating a media group with 270 million users.

 

• Analysis: AOL's big gamble
  

 

 

 

• Computer problems hit Nationwide
   
  Customers of Nationwide have been unable to access the building society's website - the gateway to its online banking operation.
  
• Obama urges US business support
   
  US President Barack Obama says that despite disagreements the White House and American business leaders "can and must work together".
  
• Amtrak plans $13.5bn NYC tunnel
   
  US rail operator Amtrak announces plans for a $13.5bn rail project to connect New York City and New Jersey.
  
• Ensco closes on Pride for $7.3bn New
  
• Fiat chief defuses double gaffe
  
• Royal wedding setback for staff
  
• Egypt struggles to finance itself
  
• Meters 'must not deter switching'
  
• Bellway sees good start to 2011
  
• Suzuki profits rise on Asia sales
  
• Anger as Irish paper copies rival
  
• Solar power farms face cash cut
  
• Small manufacturing sees recovery
  

[interestrateripoff]

The Foolishness Of Obama And Jobs

 

This morning our Dear President intends to try to press his luck.

President

Barack Obama

will challenge American business leaders today to move their cash from the sidelines to invest in the U.S. as part of what he will call a shared burden to boost the nation’s economy.

Obama will make a case in a speech to the U.S. Chamber of Commerce, which has been among his strongest critics, that he is doing his part to improve the business climate after a free- trade agreement with South Korea, a deal to extend Bush-era tax cuts, and a State of the Union address that proposed more government support for infrastructure and “innovation.”

Uh huh. Shared burden eh?

There's a reason that businesses aren't hiring Mr. President. You should have paid attention to people like myself and the handful of others who told you that this was going to happen.

Here's the problem: Commodity price cost-push which is a direct result of your fiscal policy, which has in turn dictated monetary policy, has led companies to suffer insane input cost increases. They can either absorb them or pass them through to customers. There are no other choices; every dollar in cost has to go somewhere.

But with high unemployment, they cannot pass through those costs. The customer will not buy. Yet that inability to pass them through means they also cannot hire, because the other alternative, "eat them", hits profits.

The paradox is that without actual improvement in the employment rate there is no tax base with which to try to pay for the deficit. The employment rate has been falling since July of last year, and it now stands at the lowest level since the recession began, erasing the small upward movement from January to July of last year.

By essentially demanding that The Fed bail out the profligate spending of the government, and getting that, commodity price ramps have destroyed the ability of businesses to hire. If they take the hit on profits then the stock market will collapse as negative earnings are not conducive to high stock prices. If they don't take the hit on profits then eventually the cost-push will kill them anyway, since the entire "hopium" game has been predicated on people going back to work and the government being able to withdraw the stimulus measures. There is no evidence that the latter is going to work either.

 

More at the link.

[interestrateripoff]

Counties Engaged In Tax Fraud?

So alleges a new lawsuit...

Last spring, Morris filed suit against the Fulton County Board of Tax Assessors, alleging the county inflated values in scores of neighborhoods by using

foreclosures

seizures as comparable sales. The seizures, termed credit-bid sales, represent not money changing hands, but unpaid mortgages when a bank takes over a house. He also says appraisers are disregarding valid sales and arbitrarily setting neighborhoods' average prices.

These "credit-bid" sales are frauds. They should not be permitted in the first place, and are a big part of the [problem] that is going on with bank balance sheets.

Here's how it works:

You lose your house to foreclosure. You owe $300,000 on the house at the time, but the only reasonable comparables in your area have sold for $150,000. You either have lost your job or walked off, it doesn't really matter in this instance.

The bank puts the property up for auction. But it refuses to take less than the balance owed, because doing so causes an immediate mark-to-market on the property and hits their balance sheet. So it "bids" the entire outstanding balance - in this case, $300,000.

The bank obviously gets the house back. It shouldn't be able to bid at all, as this is not an "arms length" transaction, but the counties don't care. A bid is a bid, even if its a sham bid. The problem is that no money changes hands, because the actual holder of the note did the bidding (the proper way to do this, incidentally, is to set a reserve price and refuse to sell at less.)

The county folks have been counting this sham transaction as a "sale" for tax purposes. The banks have been counting this sham transaction for balance sheet valuation purposes. The county residents have been getting royally screwed, as the actual sales that subsequently take place are being ignored as comparables and thus the correct tax base against which property taxes are set.

 

More at the link.

[interestrateripoff]

Congress: Lie Or Get Subpoenaed!

Amazing crap here....

A congressional subcommittee that's investigating the implosion of the $3 trillion muni

bond

market wants Meredith Whitney "to come clean and explain her doomsday prediction of hundreds of billions of dollars in muni defaults over the next year,"

Charlie Gasparino reports

.

I find this incredibly amusing, given the following report:

PROVIDENCE, R.I. (AP) — Federal regulators are investigating Rhode Island's bond offerings, adding it to the list of state and municipal governments to come under scrutiny by the Securities and Exchange Commission.

This is on top of Illinois and Pennsylvania issuers.

The problem? Pension funds, among other things. A black hole that I've often commented on. Given the state Constitutional issues with these funds, and the lack of a PBGC exit capacity for the States (in present law), there's little that can be done about it at this point too.

Will it detonate all municipal debt? No. But that's not what Merideth said. She said that there would be "many" defaults and reach hundreds of billions in face value.

I can believe that, although I think she's a bit aggressive on the timing. That is, I don't think the worst of it is 2011; it just gets worse from here. So I'd say the number is accurate but she might be a bit early.

 

The pension timebomb again.

[interestrateripoff]

http://uk.finance.yahoo.com/news/Bank-King-vice-chair-new-EU-reuters_molt-2431599609.html?x=0

 

Thursday 16 December 2010 LONDON (Reuters) - Bank of England Governor Mervyn King was elected first vice chair of the new European Systemic Risk Board (ESRB) that came into force on Thursday in a move that may allay UK concerns of being overruled by Europe (news) .

The anticipated news that King, who heads the central bank in the EU's biggest financial centre, will have a key role at the ESRB will help meet criticisms that Britain was being sidelined by the bloc's new supervisory framework.

The ESRB will monitor potential credit and asset bubbles across the 27-country bloc and recommend action before markets or economies become destabilised, plugging a macro-supervisory gap highlighted by the financial crisis.

The board, which will have no binding powers, is hosted by the European Central Bank in Frankfurt and will be chaired by ECB President Jean-Claude Trichet, as expected.

 

I feel safer already.