Tag Archives: debt

Business/Economics, International

What Economic Recovery? Germany says no more bailout money for Italy

Der Spiegel is reporting that German government officials doubt any more bailout money can save Italy, even if the current European Financial Stability Fund was tripled in size.

German officials have consistently said government finance reforms must come through spending cuts, and tax reform, not taking on more loans.

Currently the European Financial Stability Fund has $627 billion (440 billion Euros), and Germany says even if that was somehow tripled it wouldn’t be enough to save Italy.

Earlier in the week the European Central Bank started buying more government bonds from smaller European countries, but refused to buy any bonds from Italy and Spain (an indication that the bank has little confidence in those countries paying them back).

 

 

Business/Economics, U.S.

What Economic Recovery? Proof the housing market hasn’t fallen enough: Big Banks bulldozing smalltown America

“Things that were unthinkable are now becoming thinkable.”-James W. Hughes, School of Planning and Public Policy at Rutgers University

If you want proof that the housing market still hasn’t hit bottom, just look at what Bank of America is doing, they’re bulldozing all those homes they foreclosed on.  Why? “There is way too much supply, the best thing we can do to stabilize the market is to get the garbage off.”-Gus Frangos, Cuyahoga County Land Re-utilization Corp of Cleveland

It’s not just BoA, but the other big banks that foreclosed (sometimes unjustifiably) on hundreds of thousands of homes across the U.S. are doing the same thing.

Essentially the big mortgage lenders shot themselves in the foot.  Now there is way too many homes on the market, compared to the decreasing number of qualified home buyers.

BoA is planning on bulldozing 100 homes in Cleveland, Ohio.  BoA is even giving away homes to local authorities: “No one needs these homes, no one is going to buy them. Bank of America is not going to be able to cover its losses, so it might as well give them away and get a little write-off and some nice public relations.”-Christopher Thornberg, Los Angeles office of Beacon Economics LLC

So far they’ve off loaded around 100 homes in Detroit, Michigan and 150 in Chicago, Illinois.

Even big cities are bulldozing their own.  Detroit Mayor, Dave Bing, proposed bulldozing one quarter of the entire city’s houses, and empty buildings, over the next three years.

Fukushima

Government Incompetence: Rice becomes the new Gold in Japan, add another notch to the tightening famine belt

Now that it’s become clear that most of Japan’s upcoming rice harvests are most likely to be contaminated with cesium, Japanese are holding onto last years rice like it was gold.

Japanese retailers are reporting that bags of last year’s rice are flying off the shelves, because consumers don’t think there will be any rice available from this year’s harvests.

The Agriculture, Forestry and Fisheries Ministry says it’s working to ensure the safety of this year’s rice harvests.  But so far the government has a real bad track record of proving their incompetence regarding nuclear contamination.

Lack of rice in Japan, yet another notch in the tightening belt of the global food crisis.

Business/Economics, International, U.S.

U.S. Debt: The Big Three countries U.S. taxpayers are beholded to, U.S. government bonds drop in rank

Most people know that China is the largest foreign holder of U.S. debt.  Japan is the second biggest, and the United Kingdom (Britain) is the third.

According to the most recent information, China holds a little more than $1 trillion in U.S. government debt (bonds), Japan holds $912 billion and the U.K. holds $346 billion.  Those bonds are held not only by foreign governments, but by private banks and corporations.

Standard & Poor’s downgrade means that U.S. government bonds are now ranked 2nd place.  Germany, United Kingdom and France still hold their triple A 1st place ranks.  Interestingly the Federal Reserve Bank (not a government agency) says the drop in ranking will not change how they handle U.S. bonds.

The problem is that foreign banks will surely change how they handle U.S. bonds.

The majority of U.S. government debt is still held within the United States, by banks, corporations, individuals and taxpayers via the U.S. Treasury.

 

 

Business/Economics, U.S.

S & P’s says Debt Limit Deal not enough, downgrades the United States anyway, U.S. officials cry foul

Standard & Poor’s downgraded the U.S. from a triple A credit rating to double A plus.  They cited three main reasons.

Reason one is that the GDP to debt ratio is too high for triple A.  They estimate the U.S. has a 74-79% debt to GDP ratio.  Some European countries have higher debt ratios, but S & P’s says those countries have implemented plans that give them a better chance at getting their debt under control (why do you think there’s so much rioting going on over there).  S & P’s says there are no signs the U.S. can get its debt undercontrol.

This brings us the the second reason for the downgrade: The Debt Limit Deal won’t bring down the debt.  The Debt Limit Deal aims to cut government spending by $2.1 trillion over ten years.  Standard & Poor’s says that doesn’t even come close.  They claim at least $4 trillion needs to be cut, and they say $4 trillion would be just a “down payment” against U.S. debt.  Obviously the elected officials in Washington DC still don’t realize the seriousness of the situation.

That brings us to the third reason: Government incompetence.  S & P’s says the lack of performance by elected and appointed federal government officials proves they are not taking the issue seriously: “The effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned.”-Standard & Poor’s

Of course officials at the U.S. Department of Treasury are crying foul.  They claim there are mistakes in the official S & P’s notice of the credit rating downgrade.  S & P’s says they will review it for any mistakes.

 

 

Fukushima

Government Corruption: Japanese officials “fixed” public hearings on nuclear energy with fake supporters from the utility companies

The recent announcement that three top government officials will lose their jobs, comes after weeks of blame games between the Japanese nuclear agencies and the nuclear power utility companies.  The issue is that many weeks ago it was revealed that public hearings to determine if the Japanese people wanted nuclear power, were fixed to make it look like there was strong support of nuclear power.

Initially the utility companies were blamed, because it was their employees, and subcontractors that flooded the public hearings with support for nuclear energy. Now it turns out that the utility companies were ordered to do so by the very government agencies that were supposed to be regulating them.

05 August 2011, the Minister of the Economy, Trade, and Industry Ministry, Banri Kaieda, announced an investigation into the actions of the three top officials who were effectively fired the day before.

Specifically, a third party will investigate the Nuclear and Industrial Safety Agency.  That agency was the one who set up the public hearings, and, according to several electric power companies, ordered the utilities to flood the hearings with supporters of nuclear power.  The Japanese media is calling this a case of “influence peddling” on the part of the government.

Fukushima

Corporate & Government Incompetence: Local governments demand TEPCo end the nuclear disaster now!

Not only is Tokyo Electric Popwer Company being targeted, but other nuclear plants in other parts of Japan are getting hit by demands to get outa town.

A meeting in Tokyo, of local community leaders from around Japan, demanded a quick end to the ongoing crisis at Fukushima Daiichi.  They also demanded a complete redo of Japan’s nuclear power policies.

Those local officials with nuclear power plants in their area are extremely worried, because it’s become obvious that no one can trust the plant operators, or national government agencies that are supposed to be regulating the plant operators.

Fukushima

Government Incompetence: Top Japanese nuclear officials fired!

In a hastily arranged press conference, on 04 August 2011, it was announced that the top three officials, in charge of nuclear power operations were fired.

More than four months after the nuclear disaster at Fukushima Daiichi, and with no end in sight, the Japanese government decided it was time for new blood.

Who’s being fired? Vice Minister of the Economy, Trade, and Industry Ministry, Matsunaga Kazuo.  Director General of the Nuclear and Industrial Safety Agency, Terasaka Nobuaki.  Director General of the Natural Resources and Energy Agency, Hosono Tetsuhiro.

The Nuclear and Industrial Safety Agency, and the Natural Resources and Energy Agency are controlled by the Economy, Trade, and Industry Ministry.

The announcement was made by the Minister of the Economy, Trade, and Industry Ministry, Kaieda Banri.  Along with the dismissals, there will be a major reshuffling of all personnel within the Economy, Trade, and Industry Ministry.

 

Fukushima

Government Incompetence: Japanese leaders admit their current nuclear agencies suck!

The Japanese government announced they will create a new nuclear agency, to better respond to future nuclear disasters.  This after it’s painfully obvious that the current plethora of government agencies, tasked with dealing with the Fukushima Daiichi disaster, have failed.

The latest plan to revamp nuclear regulators involves creating an agency who’s sole job is to act as first responders to any future nuclear accident.  It will be created out of the current Nuclear and Industrial Safety Agency, and placed under control of the Environment Ministry.

The Nuclear and Industrial Safety Agency would continue purely as a regulatory agency.

The new first responder agency would also be responsible for monitoring of radiation levels, and control of radioactive substances.

The current Nuclear Safety Commission would be placed under the Environment Ministry as well, and act as an adviser to the first responders.

Of course the Japanese government still has to vote on the plan, but seeing what’s happening in Japan right now, any politician who’d want things to stay the same is nuts.

Business/Economics, International, U.S.

What Economic Recovery? Japanese on welfare at record numbers, the last Japanese TV factory to shut down, Japan is the second largest foreign holder of U.S. debt

The number of households getting welfare in Japan hit a record number of 1.46 million.  That’s households, not individuals.

The Japanese Welfare Ministry say it’s a rising trend, no thanks to the never ending nuclear disaster.

To make matters worse, Japan’s only domestic television maker, Hitachi, announced they will close up shop and move their factory to Taiwan.  Of course this means more Japanese out of work.  Hitachi officials say they had to make the move in order to compete with South Korean companies.

Other big name Japanese electronics makers, like Panasonic, Sony and Toshiba, all reported big loses in the past quarter. And it can’t be blamed on the nuclear disaster.  The Japanese companies are having a hard time competing with other Asian nations.

This brings us to an important, and over looked fact: Japan is the second largest foreign holder of U.S. government debt (after China).  Japan’s main market is the United States, yet has been losing out to companies from China and South Korea.

If things get bad enough for Japan, they will be forced to off load their U.S. bonds in order to make some money for their struggling systems.  This could be why the U.S. has given Japan so much help battling the nuclear disaster at Fukushima Daiichi.