Important News - Oct. 05

1) (PENNSYLVANIA) Harrisburg should file for bankruptcy?

2) Goldman Sachs Stands To Receive $1 Billion Payment, If CIT Files For Bankruptcy

3) Oil May Pass $100 on ‘Loose’ Policy, Merrill Says

“Oil may jump above $100 next year as emerging market demand rises and “loose” monetary policy weakens the U.S. dollar, Bank of America Corp.’s Merrill Lynch unit said.”

4) European Banks Need to Raise $78 Billion, JPMorgan Estimates

5) ICN News (Video) (click on “more info” to see her links)

#1 Did 60 million mortgages become unforeclosable?

#2 Faber on shadow housing inventory

#3 FHA reserves drop below requirement

#4 Delinquencies at record pace

#5 Moody’s Some home prices won’t rebound until 2030

#11 Feds loan $500m for Al Gore backed electric car start up

#12 FDIC to borrow form banks

6) Jim Sinclair we are in a Hyperinflation Era (1)

Jim Sinclair we are in a Hyperinflation Era (2)

Jim Sinclair we are in a Hyperinflation Era (3)

7) Waves of new fund cuts imperil US nursing homes

8) Taxpayers are stuck with public pension increases

“Contra Costa’s county administrator has said that in the next four years pension costs will rise from 34 percent of payroll to 50 percent. So for every $100,000 paid out in salary, the county will have to set aside an additional $50,000 for pension benefits.

At the state level, the chief actuary of the California Public Employees’ Retirement System has warned that pension costs for police and firefighters could rise from 27 percent of payroll to “unsustainable” levels of 40 to 50 percent.”

9) Economic downturn drains pension funds for public employees (Kansas)

10) (Cincinnati) City’s pension woes deepen

“To keep pace with projected expenses, the city’s $26.4 million contribution to the pension fund this year would need to rise to $84 million in 2010 - a scenario that council members and other city leaders concede is unrealistic.

With the city facing a 2010 budget deficit estimated at $51.5 million, a shortfall that City Manager Milton Dohoney Jr. has warned is all but certain to force layoffs and worker furloughs, council likely will find it difficult to allocate much more to the pension fund than it did this year.

“There’s no way the city is going to be able to make a contribution of $84 million to the retirement fund,” Councilwoman Roxanne Qualls said. “That’s stating the obvious.”"

11) The state financial picture illuminated by David Coates was grim. (Vermont)

“The bottom line of what Coates, a retired partner from international accounting firm KPMG’s Burlington office and member of the Vermont Business Roundtable, told the audience gathered at College of St. Joseph Tuesday night was that the state’s unfunded obligations to debt service, education funding, retirement plans and other post-employment benefits place it on an unsustainable path.

For instance, the state currently is facing down a combined unfunded liability of $466 million for its state employee and teacher pensions. Its responsibility for other post-employment benefits — namely health-care plans — for the same group of workers is even worse: As of June 30, that figure approached $1.6 billion.”

12) California borrows another $4.5 Billion

13) Report on Bailouts Says Treasury Misled Public

“WASHINGTON — The inspector general who oversees the government’s bailout of the banking system is criticizing the Treasury Department for some misleading public statements last fall and raising the possibility that it had unfairly disbursed money to the biggest banks.”

13A) Study: Bernanke, Paulson misled public on bailouts

14) Slumping revenue may trigger more state cuts, layoffs (Mass.)

15) City’s housing voucher surplus about to be depleted

“Governor Deval Patrick announced this morning that September revenues came in $243 million below expectations, a shortfall that may trigger more state cutbacks and layoffs.

The slumping revenue came after several tax hikes and will force state officials over the next two weeks to downgrade revenue estimates for the remainder of the fiscal year.”

16) New York Income Tax Revenue Falls 36% in Year, Paterson Says

17) Prepaid College Savings Plans Might Not Cover All Costs

“In the last two decades, more than a million families around the country have invested in state funds that pledged to cover the cost of attending their state’s public colleges and universities, regardless of how much tuition increased.

But in the last year, the stock market slump and rising college costs have combined to drive all but two of the nation’s 18 such funds, known as prepaid college savings plans, into the red, jeopardizing those pledges.”

18) Retirement system needs more money

“The Retirement Systems of Alabama says the public education health insurance plan will need $282 million, cuts in benefits, significant increases in member contributions, or a combination of all three next fiscal year, to stay even.”

19) $78 billion in Treasury auctions this week

20) States worry about strain on Medicaid as uninsured numbers rise

“Medicaid covered about 42.6 million people in 2008, up 7.6% from

39.6 million in 2007, according to the Census Bureau. Some estimates put the number of people on Medicaid nationwide today at 60 million.”

(Lots more info in the link above)

21) States Resist Medicaid Growth

Governors Fear For Their Budgets”

“”huge unfunded mandate” likely to result in state tax increases.”

22) Martin Weiss – Three Government Reports Point to Fiscal Doomsday…

23) China Banking Regulator: Sep New Yuan Loans CNY300B-CNY400B

“Earlier during the seminar, he responded to a question on whether the yuan could become an international reserve currency by saying, “it’s far too early to mention [that] the yuan can be an international reserve currency.”

But he said the existing reserve currency, the U.S. dollar, needs to be managed more responsibly”

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