• Please scroll down and notice #9 and #10.
• 1) Ten most troubled states in the U.S.(Could cost 900,000 jobs)

“The 10 most troubled states are: Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.”

“In a separate study released Wednesday, the Center on Budget and Policy Priorities found that states will likely have to make steep cuts in their fiscal 2011 budgets, which start next July 1 in most states. That’s because the critical federal stimulus dollars will run out by the end of 2010.

These cuts could take nearly a percentage point off the national gross domestic product and cost the nation 900,000 jobs, the study found.”

(More details on each state in the link above, but little mention of the unfunded pensions)

• 2)  US Backs Strong Dollar, APEC Remains To Be Convinced (Wall Street Journal)

“SINGAPORE (Dow Jones)–The U.S. reiterated its support for a strong dollar Thursday, but its Pacific Rim trading partners remained skeptical, calling on Washington to stabilize its sliding currency.

Finance ministers from the Asia-Pacific Economic Cooperation forum congratulated themselves for aggressive stimulus measures that have brought the global economy back from the abyss and vowed to keep the emphasis on ensuring a durable recovery.”

(The link above is giving some problems, so try this if it doesn’t work)

• 3) IMF economists review reserve currency alternatives

“A multi-currency system could emerge with time even if there were few precedents and the most likely contenders were the euro in the first instance and later on the yen and yuan, the paper says.

“Such a system would impose policy discipline on reserve issuers, as concerns about the value of one currency could lead to a shift towards the others,” it says.

“The ‘exorbitant privilege’ currently enjoyed by the United States would be spread across a few more countries’ currency areas,” it says.”

• 4) Dollar knocked by China renminbi hints (Financial Times)

“The People’s Bank of China said foreign exchange policy would take into account “capital flows and major currency movements”, a pointed reference to the large speculative inflows of capital that China is receiving and US dollar weakness.”

• 5) Brazilian airline TAM SA gains from dollar denominated debt

“”The company attributed its net profit to the reduction of operational expenses and to the appreciation of the local currency versus the U.S. dollar, which reduced its debt-service costs.

TAM’s operational expenses totaled BRL2.3 billion in the third quarter, down from BRL2.72 billion in the year-ago period.

In the third quarter, the company posted a finance gain of BRL406.3 million, reversing from an expense of BRL1.16 billion.

As the larger part of TAM’s debt is denominated in U.S. dollars, when the local currency appreciates, it sees a gain in its debt service costs. The company ended the third quarter with a total debt of BRL6.79 billion, with 83% denominated in dollars.

So far this year, the Brazilian real appreciated by around 35% against the dollar.”"

…..5A) Pertamina Eyes $1.1b Bond Sale in April

“PT Pertamina plans to issue $1 billion in dollar-denominated debt and Rp 1 trillion ($106 million) in rupiah bonds in April”

….5B) Kazakhstan and Russia

“Kazakhstan, which last issued a bond aimed at international investors in 2000, plans to issue about $500m in dollar-denominated securities early next year.”

“Russia has signalled it plans to raise up to $18bn in dollar denominated securities in the first quarter of next year.”

(See “Russia Prepares To Short $18 Billion USD“)

…..5C) Petroleos de Venezuela

“The comments come after officials last month said President Hugo Chavez had approved such a sale by CVG, which unleashed talk that a possible dollar-denominated bond sale would be forthcoming.

Another government-run entity, oil firm Petroleos de Venezuela, or PdVSA, just completed its own dollar-denominated debt sale, successfully placing more than $3 billion with investors.”

• 6) Home-Purchase Index in U.S. Plunges to Lowest Level Since 2000

“Nov. 12 (Bloomberg) — Mortgage applications to purchase homes in the U.S. plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit.”

• 7) How demand for oil will change by 2030 (Sent in by Ed Archer)

“But the thirst for oil will balloon in Asia—and in India and China in particular—where demand is predicted to rise by as much as 400% compared with 2008.”

• White House Aims to Cut Deficit With TARP Cash

“WASHINGTON — The Obama administration, under pressure to show it is serious about tackling the budget deficit, is seizing on an unusual target to showcase fiscal responsibility: the $700 billion financial rescue.

The administration wants to keep some of the unspent funds available for emergencies, but is considering setting aside a chunk for debt reduction, according to people familiar with the matter.”

…….8A) Government Poised To Bail Itself Out (Blog Posted by Jon Shazar)

“The federal government may be the next too-big-to-fail institution to accept federal bailout money.

The Obama administration, struggling to keep the federal budget deficit from spiraling out of control, could accept up to $210 billion in TARP funds in a bid to cut its debt.”

• 9) FDIC Orders Banks to Prepay $45 Billion to Rebuild Deposit Fund

“Nov. 12 (Bloomberg) — U.S. lenders will prepay three years of premiums to replenish the government’s deposit insurance fund drained by the fastest pace of bank failures in 17 years, the Federal Deposit Insurance Corp. decided today.”

“The FDIC had set aside $32 billion for 2009 failures expected through June 30, and estimates bank failures through 2013 will cost $100 billion.

The FDIC is required to rebuild the fund, used to pay depositors as much as $250,000 per account in a failure, when the balance divided by insured deposits falls below 1.15 percent. The ratio as of June 30 was 0.22 percent.”

• 10) FHA’s cash reserves have dropped well below amount required by law, audit shows

“The reserve fund, which holds excess cash beyond what the agency needs to cover future losses on its outstanding loans, had an estimated value of $3.6 billion as of Sept. 30, an sharp drop from the $15.82 billion that last year’s audit projected it would have by this time.

The $3.6 billion value represents 0.53 percent of the mortgages insured by FHA, well below the 2 percent ratio required by law and the 3 percent ratio maintained by the fund at the same time last year.”

……..10A) For other headlines on the FHA  reserves please click here)

• 11) Report: Commercial property values to plunge (”Bloodbath”)

“Commercial real estate — including shopping centers, office buildings and industrial property — will hit a low point in 2010 not seen since the Great Depression, according to a national survey of real estate executives.

Values and rents will plunge, and vacancies and defaults will soar across all types of commercial property before the market rebounds slowly, according to the survey and forecast compiled by the Urban Land Institute and PricewaterhouseCoopers LLC.

“2010 looks like an unavoidable bloodbath for a multitude of borrowers, investors and lenders,” the report said. “The shake-out period may extend several years as even some conservative owners with well-underwritten loans from the early 2000s see their equity destroyed.”"

• 12) A crisis of unprecedented proportions is approaching” in the U.S. commercial real-estate market

““A crisis of unprecedented proportions is approaching” in the U.S. commercial real-estate market, according to Randall Zisler, chief executive officer of Zisler Capital Partners LLC.”

“Property prices have fallen by 30 percent to 50 percent from their peaks, Zisler estimated yesterday in a report. The plunge has wiped out the equity in most real-estate deals that relied on debt financing since 2005, he wrote.

Zisler, whose firm focuses on real-estate investment, estimated that building owners will default on $500 billion to $750 billion of mortgage debt. This equals as much as 54 percent of the $1.4 trillion in loans that will come due in four years, by his count.

“Much of the debt is likely worth about 50 percent of par, or less,” the report said. Many banks will end up insolvent as they reduce the value of their holdings, he wrote, adding that regional and community lenders are especially vulnerable.”

• 13) U.S. State Revenue Decline Will Go On, Governor’s Report Says (Through 2012)

“Nov. 12 (Bloomberg) — U.S. states, which are closing $250 billion of budget deficits, will be forced to grapple with diminished revenue until at least 2012, a survey of fiscal officials found.

The only thing that kept states from “draconian” spending cuts has been $135 billion of funding under President Barack Obama’s economic stimulus package, according to a report from the National Governors Associations and the National Association of State Budget Officers. Revenue fell 7.5 percent in fiscal 2009, forcing states to close budget gaps of $72.7 billion.

“These are the worst numbers we’ve ever seen,” said Scott Pattison, executive director of the budget directors group, in a news release. “States have been forced to lay off and furlough employees, raise taxes, drain rainy day funds and sharply cut state spending.””

• 14) AOL Begins Fresh Job Cuts (1,000 to 2,000 jobs)

“Of AOL’s roughly 6,000 employees, layoff estimates range between 1,000 and as many as 2,000.”

• 15) New York facing bankruptcy in a month (Russia Today)

“NY Governor David Paterson announced to a hastily assembled joint session of legislators that the state will be bankrupt in a month’s time unless lawmakers immediately strive to close an ever widening budget gap.”

(Note: I have not seen Patterson say the word “bankruptcy”. His term was “running out of money“)

…15A) A Little more info

“The state has about $3 billion of available funds compared with $7.6 billion a year ago, he said. In December, it faces payments of $2.5 billion for property tax rebates, $1.6 billion in aid to school districts, $800 million to transportation authorities and $1 billion to local governments and organizations that provide services.”

• 16) Government pensions: The voters may weigh in (California)

“An initiative filed last week would cut pensions for new state and local government hires, but allow local voters to lift the cap.”

““The current system could result in billions of dollars in new taxes to meet the retirement obligations for public employees,” says the initiative. “Many local governments may be threatened with bankruptcy if no change is made.”

The issue of whether the current level of public pension benefits are “sustainable” has been growing, fueled by an historic stock market crash last fall that is expected to force increases in annual government pension payments to replenish retirement funds.”

• 17) Muni insurance….(Look at this disaster waiting to happen)

“In the heyday of bond insurance, seven firms carried the top credit rating of triple-A, and half of new municipal bonds carried insurance.

Now, barely 10% of new muni bonds have insurance. Only one firm, Assured Guaranty, is writing new business, and it bought a competitor. None have retained triple-A ratings; indeed, all but Assured have junk ratings.

Their downfall came after the top insurers branched out to guarantee complex mortgage securities. When the housing market tanked, insurers saw their losses grow, their ratings fall and their clients flee.

In some cases recently, muni bonds have actually suffered because they did have insurance from Ambac or its large rival, MBIA. That may intensify should there be a bankruptcy filing or restructuring, some muni bond investors say, particularly if the bond carrying the insurance is of weak credit quality to start.

“There may be further distress felt by the owners of those securities” who want to unload them, said Chris Ryon, co-portfolio manager at Thornburg Investment Management.

Still, the muni bond market has largely taken its losses. Indeed, it’s already withstood the turmoil seen with the weakest of the insurers.

One insurer, Syncora, restructured contracts with its counterparties after the New York State Insurance Department ordered it to suspend all payment of claims to meet capital requirements. Two others, FGIC and CIFG, are violating regulatory capital requirements, according to a recent report from CreditSights, but have managed to avoid being seized by regulators.”

• 18) CSU to cut admissions, cites deficit

“As demand grows to attend California State University, campuses will slash enrollment by about 40,000 students — closing the door to some freshmen and transferring community college students next fall, Chancellor Charles B. Reed said Tuesday.

Reed said CSU campuses must limit enrollment to deal with a projected $564 million budget deficit.

New cutbacks will be on top of cost-saving measures implemented this year involving enrollment reduction of nearly 10,000 students, staff furloughs, and higher student tuition and fees.”

• 19) U.S. Foreclosure Filings Surpass 300,000 for 8th Straight Month

“Nov. 12 (Bloomberg) — U.S. foreclosure filings surpassed 300,000 for an eighth straight month as unemployment made it tougher for homeowners to pay their bills, RealtyTrac Inc. said.”

• 20) Barrick shuts hedge book as world gold supply runs out (”Peak Gold”)

“Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.

“There is a strong case to be made that we are already at ‘peak gold’,” he told The Daily Telegraph at the RBC’s annual gold conference in London.”