Late Night News:
By Daniel at 10 December, 2009, 10:31 pm
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““There is a significant likelihood we will not be repaid from our investments in AIG, GM and Chrysler,” Geithner said.
The Government Accountability Office yesterday said that U.S. taxpayers will lose $30.4 billion from the auto-industry bailout, down from a prior estimate of $43.7 billion. The GAO report predicted a similar loss of $30.4 billion in AIG, down from a previous estimate of $31.5 billion.”
“”Even in an era where pension plans have performed poorly and under-funding by state governments is commonplace, Puerto Rico’s $12 billion funding gap is exceptional,” said Kip McDaniel, editor-in-chief of ai5000. As of 2007, he noted, Puerto Rico had $2.9 billion in assets against $14.6 billion in liabilities - a gap that the commonwealth is intently attempting to bridge.”
“Director sounding alarm on state’s school pensions
Thursday, December 10, 2009
By Eleanor Chute, Pittsburgh Post-Gazette
Jeff Clay has been criss-crossing the state this year with a message.
A big problem is looming in the state pension system that is going to hit taxpayers hard, and officials can’t keep pushing it off, said Mr. Clay, executive director of the Pennsylvania School Employees’ Retirement System.
The day of reckoning is coming.
Tomorrow the PSERS board will vote to increase the 2010-11 employer contribution rate by as much as 75 percent.
The worst is yet to come, as the rate may grow by as much as 700 percent over today’s rate during the next five years.
The state pays about 55 percent of the employer contribution and school districts pay the rest.
Currently, the employer contribution rate is 4.78 percent, including 0.78 percent for retiree health care, and the rest for pension.
The newest estimates will be released at tomorrow’s meeting, but they are not expected to be far different from the most recently available estimates.
Those estimates show a dramatic spike from the current rate of 4.78 percent to:
• 8.4 percent in 2010-11
• 10.7 percent in 2011-12
• 29.55 percent in 2012-13
• 32.45 percent in 2013-14
• 33.95 percent in 2014-15
“There is no silver bullet to solve this,” Mr. Clay said.”
“A state task force on Wednesday recommended higher payroll taxes for employers and lower unemployment compensation payouts starting in 2012 to shore up the state’s insolvent unemployment trust fund.”
“Since January Kentucky has borrowed $537 million from the federal government to pay unemployment benefits, and it is expected to continue borrowing until the employment situation improves.”
- 5) Lots of good info at Nathan’s Economic Edge again today. Here are a couple items he covers
“And I hope that everyone is paying attention to what is going on at Citi Bank. They took your money and lent $8 Billion of it to Dubai. Strange, but the U.A.E. was one of the largest investors in Citi and bought a large stake in Citi which they are now selling. Two entities that need the cash, both want it. And at the same time Citi is being pressured to pay back the TARP. Could there be more to these events? How about the fact that the speculation is all of a sudden is coming out of oil. Are messages being sent? I don’t know the game, but I am paying attention.
The media is touting that foreclosures are slowing because there was an 8% month over month decline in foreclosure filings, the 4th monthly drop in a row. Ahhh, hello, McFly? Foreclosures are UP 20% over this time last year, and we are dead in the middle of the trough with massive Option-Arm resets coming up.”
“NEW YORK (TheStreet) — The excitement of Black Friday quickly died out, it was revealed today, as sales for the week after the Thanksgiving holiday fell 1.3%. ”
“As November same-store sales disappointed, decreasing 0.3% overall, well below the 3% to 4% gain the ICSC forecast, investors are holding their breath for last-minute shoppers. ”
“Rather than foreclosing on defaulted mortgages in neighborhoods devastated by the economy, lenders are abandoning them because the cost of proceeding with foreclosure is greater than their value, Federal Reserve Governor Elizabeth A. Duke said yesterday.
Anecdotal evidence suggests that these “toxic titles” have placed significant numbers of properties in a difficult state of legal limbo, she said.
The increased rates of foreclosures and the related economic downturn have hastened a cycle of decreasing property values. Declines in state and local property and sales tax revenues result in even more vacant homes and deteriorating neighborhoods.
“Many community organizations and homeowners have been frustrated by the difficulties of working with mortgage lenders and servicers, and these problems are even more exaggerated in weaker market cities. In the most devastated neighborhoods, some lenders do not even complete the foreclosure process or record the outcome of foreclosure sales because the cost of foreclosing exceeds the value of the property,” she said.”
- 8) Treasury: housing aid to push TARP losses up (to $141 billion)
“In a financial report on the program that accompanied a watchdog agency audit on Wednesday, the Treasury had said the program had estimated losses related to loans, equity investments and asset guarantees of $41.4 billion in its first year of operation.
“As additional funds are disbursed, particularly for the housing initiative, the total cost of TARP is likely to rise,” the Treasury said in a statement on Thursday. The administration has estimated the program, which it has extended to October of next year, will ultimately lose $141 billion.”
…………………“The economy is now growing and growth seems to be gradually strengthening,” Treasury Secretary Timothy Geithner said in a Bloomberg Television interview last week.
- saxplayer00o1
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