Tag Archives: Bailout Fail

California Crashing

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“California’s July sales tax revenue crashed. Revenue from the tax was down 33.5% from the budget approved in late June, reports State Controller John Chaing.  According to Breitbart, even more ominously, the state’s $9.6 billion cash deficit that was rolled over from the June 30th fiscal year has catapulted to $18 billion last month.  The state has avoided default by temporarily borrowing from state trust funds, but those accounts will soon need their cash back to continue operating. Today California quickly began trying to sell $10 billion in municipal bonds to fund the record $28 billion they need to keep the lights on.”

http://www.economicpolicyjournal.com/2012/08/california-crashing.html

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Greek island authorities denounce attack on tax police

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“Local authorities on the Greek island of Hydra have denounced an attack by a local crowd on tax police after they detained a restaurant owner who did not provide receipts to clients and intended to transport the restaurant owner to Athens. They were set upon by a local crowd, which also attacked the boat’s crew.  The police, along with the restaurant owner, had to retreat to the island’s police station, which was besieged until riot police arrived Saturday morning. Locals cut off the station’s electricity and water supplies.”

http://www.sacbee.com/2012/08/19/4738996/island-authorities-denounce-attack.html

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Labor Dept. Attempts to Stop Layoffs by Giving $100 Million to States to Subsidize Payrolls

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“The Labor Department announced on Monday that it will be awarding almost $100 million in grant funding to states to prevent layoffs by allowing businesses to pay employees as part-time workers and the federal government will pick up the tab for the cost of a full-time paycheck.  The ‘work-sharing’ program was passed as part of a Republican-led bill in the House, H.R. 3630.”

http://cnsnews.com/news/article/labor-dept-attempts-stop-layoffs-giving-100-million-states-subsidize-payrolls

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Laffer: The Real ‘Stimulus’ Record

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Policy makers in Washington and other capitals around the world are debating whether to implement another round of stimulus spending to combat high unemployment and sputtering growth rates. But before they leap, they should take a good hard look at how that worked the first time around.  It worked miserably, as indicated by the table nearby, which shows increases in government spending from 2007 to 2009 and subsequent changes in GDP growth rates. Of the 34 OECD nations, those with the largest spending spurts from 2007 to 2009 saw the least growth in GDP rates before and after the stimulus.”

http://online.wsj.com/article/SB10000872396390444873204577537244225685010.html

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U.S. Postal Service loses $5.2 billion, warns of low cash

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“The U.S. Postal Service’s net loss widened to $5.2 billion during the April through June period, and the cash-strapped agency warned on Thursday that without help from the U.S. Congress it will face low cash and be unable to borrow money this fall.  The mail agency defaulted last week on a legally required $5.5 billion payment for future retiree health benefits, and its inspector general said the Postal Service could face a $100 million cash shortfall in mid-October.  Officials called on Congress to pass postal legislation that would overhaul the mail agency’s business model and offer some relief from its dire financial situation.”

http://news.yahoo.com/u-postal-loses-5-2-billion-warns-low-144822348–sector.html

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Japan’s poverty gap has politicians calling for rise in minimum wage

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“A majority of Japan’s population once considered themselves middle class, with income inequality lower than in other industrialized nations and almost full employment. Now, the ranks of those being left at the bottom of the world’s third-largest economy are swelling. The Health, Labor and Welfare Ministry announced last month that a record 2.1 million people are now receiving benefits and other financial assistance.  The JCP campaigns for a minimum wage of 1,000 yen ($12.80) an hour, paid for by tax increases for high earners and big business.”  [After 20 years of Zero-Interest-Rate Policy; America next…]

http://www.csmonitor.com/World/Asia-Pacific/2012/0814/Japan-s-poverty-gap-has-politicians-calling-for-rise-in-minimum-wage

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Deutsche Bank’s Layoff Statement: Lower Compensation To Come

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“Deutsche Bank announced that it would lay off 1,900 people — 1,500 of whom would be in the investment banking sector (read the release here).  They put out a press release to explain these job cuts (they said government capital requirements were forcing them to search for cash).”

http://www.businessinsider.com/compensation-at-deutsche-bank-2012-7

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World shipping crisis threatens German dominance as Greeks win long game

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“Germany is the superpower of container shipping, controlling almost 40pc of the world market. The Germans also misread the cycle and have been struggling to cope with a legacy of debt and a glut of ships. Now everything is going wrong at once.  They are not alone. Britain’s oldest shipowner, Stephenson Clark, dating back to 1730, went into liquidation last week, closing the final chapter of Britain’s coal trade and the industrial revolution.  The odd twist is that Greek shippers are the ones quietly snapping up bargains from distressed German companies, with Hypovereinsbank providing 100pc financing, a privilege denied to German shippers.”

http://www.telegraph.co.uk/finance/newsbysector/transport/9473476/World-shipping-crisis-threatens-German-dominance-as-Greeks-win-long-game.html

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Payday loan: Greece raises €4bn at debt auction to help government avoid cash crunch

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“The extraordinarily large sale was held ahead of the redemption of a €3.2bn bond held by the ECB which expires on August 20. it will also help the country pay salaries and pensions while it awaits the next instalment of its EU-IMF bailout package.  Greece has been shut out of the long-term debt markets since 2010 and has regularly issued short-term debt, but previous placements had not been as high as Tuesday’s.  In need of cash to pay salaries and pensions, the government hopes that a solution can be found at the European level regarding the redemption of the ECB bond.”

http://www.telegraph.co.uk/finance/financialcrisis/9474761/Debt-crisis-Greece-raises-4bn-at-debt-auction-to-help-government-avoid-cash-crunch.html

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After the Storm

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“If we look at the economic collapses of the past, (inclusive of their possible knock-on effects, such as hyperinflation and destruction of the currency), from the fall of the Roman Empire to Weimar Germany, to Argentina and Zimbabwe – take your pick – the pattern is extremely similar.  So, let’s have a look at that pattern and ask ourselves if the present situation might not play out much the same, even in order. The reason? Details change in history, but human nature remains the same. The same knee-jerk reactions by people will repeat themselves over and over.”

http://www.internationalman.com/global-perspectives/after-the-storm-the-11-stages-of-the-crash

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