Must-Know News - Feb. 03

• 1) Jim Rogers: Federal Reserve is worsening the depression (Video)

“On CNBC’s “Squawk Box” this week, Rogers was asked about his reaction to the move in the market and the Federal Reserve adding $230 billion and the DOW Jones moving 400 points. Rogers responded, shaking his head, that the Fed is not good for the United States or 300 million Americans, “This Ben Bernanke goes from bad to worse.”

Rogers added that the Fed is pouring huge amounts of money into the system, printing vast amounts of money and causing inflation, the dollar is going to continue to go down and cause an even worse recession, “The central bank is now going into the landlord business, they’re going to have all these mortgages the central bank owns. What’s Bernanke going to do? Get into his helicopter and fly around the world to collect rents from bad loans? This is getting absurd.” ”

• 2) S&P: Many Asian countries facing fiscal challenges

“HONG KONG, Feb 3 - Ratings agency Standard & Poor’s said on Wednesday a number of Asian countries face fiscal challenges this year and their ratings may come under pressure unless measures were taken to rectify them.

The credit rating agency identified Japan, India, Sri Lanka, Taiwan and to some extent, Vietnam and Malaysia among the leading candidates with fiscal problems as they had relatively higher government debt to GDP ratios.

“Their ratings may come under pressure unless policymakers overcome structural fiscal issues and take tough measures in consolidating finances in the medium term while not stifling economic growth,” S&P said in a note.

Japan’s outstanding debt to GDP ratio is expected to hit 200 percent this year and S&P said it faced a number of daunting challenges, including deflation, an aging population and a high government debt burden.”

• 3) China produces 313.98 tons of gold in 2009

“The association said the top ten gold companies mined 148.55 tonnes of gold for 47.31% of China’s total production.

It also was the third consecutive year for China to rank first in global gold production. ”

• 4) Stanford Tops Harvard as College Donations Fall Most Since ’69

“Feb. 3 (Bloomberg) — Donations to U.S. colleges and universities fell by 12 percent, the most in at least four decades, as a result of the recession, the Council for Aid to Education said.

Contributions totaled $27.9 billion in the year ended June 30, down from $31.6 billion the year before, according to the report released today. The survey used data from 1,027 colleges.

The nationwide drop in donation revenue, the largest since at least 1969, hurt colleges already suffering from investment losses and pressure to moderate tuition increases, said Ann E. Kaplan, the survey director. Companies, foundations and alumni had less capacity to give, she said. ”

• 5) Hotels’ Distress Lead CMBS Delinquencies To Record Level

“NEW YORK -(Dow Jones)- Hotels, which for more than a year have been struggling with a drastic drop in bookings, now lead all other classes of commercial real estate in delinquencies, data provider Trepp said Tuesday.

Payments on loans to hotel properties that were 30 days late or more hit a high of 15.32% in January. That matches Fitch Ratings’ estimates that nearly 15% of the $51 billion in hotel loans that are securitized into commercial mortgage bonds will turn delinquent over the course of this year.”

• 6) Connecticut’s Rell Eyes $1.3 Billion of Bonds to Close Deficit

“Feb. 3 (Bloomberg) — Connecticut may raise as much as $1.3 billion by selling bonds backed by assets such as electric-bill surcharges or lottery revenue, according to a proposal Governor Jodi Rell plans to release today.

The governor, a Republican who declined to seek re-election this November, will unveil the bond plan as part of her annual state of the state address, according to a person familiar with the proposal. The state would use the money to help close a deficit in the budget year beginning July 1 that the Center on Budget Policies and Priorities estimates at $4.7 billion. ”

• 7) State revenue deficit continues to grow (Pennsylvania)

“State revenues in January once again came in below budget projections and Pennsylvania is now running at a $374 million shortfall for the 2009-10 fiscal year, according to the Department of Revenue.”

• 8) Movie Gallery files bankruptcy, to shut many stores

“NEW YORK (Reuters) - Movie Gallery Inc, the operator of Hollywood Video stores, has filed for Chapter 11 bankruptcy and plans to close a “significant number” of its roughly 2,600 stores in the United States and Canada.”

• 9) Around 1,000 Protesters Expected At Tomorrow’s State Of The State (Michigan)

“Governor Granholm will give her final State of the State address tomorrow night at the state Capitol, and she is expected to be met by hundreds of protesters. Officials at the Capitol say they expect up to one-thousand could be on hand to protest against possible tax hikes and cuts to education funding. Several groups are planning to demonstrate the governor, and say they could get high turnout due to anger over the state’s economy and budget problems. On CNN’s “State of the Union” program Sunday, Granholm acknowledged she is not surprised by the protests. ”

• 10) Sacramento County will pay $2.7 million more on interest in bank deal

“Sacramento County’s declining credit rating is costing the county big bucks.

On Tuesday, the county learned it will be paying as much as $2.7 million more a year to Bayerische Landesbank.

The Board of Supervisors approved a new Letter of Credit with that bank, which has been backing $134 million in Pension Obligation Bonds from 1995. Because credit is tight and the economically challenged county’s credit ratings have plummeted, the interest rate Sacramento County will pay could go up almost 10-fold from about 0.21 percent to as much as 2 percent.

“Due to a lack of competition in the Letter of Credit market (and) our own credit ratings, there are very few banks out there that are even willing to talk to use about this,” said Chris Marx, the county’s debt officer.”

• 11) Unemployment Rises in 82% of Metro Areas As Jobs Remain Scarce During Recovery

The unemployment rate rose in 306 of 372 metro areas, the Labor Department said Tuesday. The rate fell in 41 and was unchanged in 25. That’s worse than November, when the rate fell in 170 areas, rose in only 154 and was unchanged in 48.

• 12) Housing Crisis Getting Uglier in 2010

Nearly 6 Million Foreclosures in Past 3 years - 3 Million More Expected in 2010 CBS News correspondent Ben Tracy report the American Dream is now a nightmare for many of the 75 million Americans who own a home. The housing report card is ugly. In the past two years, the housing market has lost an estimated $4.9 trillion dollars, as 59 million homes have declined in value. Nearly 1 in 4 homeowners — 10.7 million households nationwide — are underwater on their mortgages. They owe more than their home is now worth.

• 13) Study: Thousands of Utahns Must Choose Between Food Or Paying Rent

More than half of the quarter-million Utahns who got help from local food pantries last year had to choose between buying food and paying their rent or mortgage. And 42 percent of those receiving emergency food supplies are children, according to the most detailed survey ever completed on Utah Food Bank clients.

• 14) More People Struggling To Stay Warm, Taxing Agencies (Detroit)

State and local agencies estimate an unprecedented 150,000 metro Detroiters are at risk of having their heat shut off if they don’t receive help paying their bills. The number of people seeking state assistance so far this winter jumped 30% over last year at this time, according to the state Department of Human Services. Officials blame the rise on metro Detroit’s miserable economy that continues to cost people their jobs. Since last winter, unemployment rose 33% — to 288,000 people — for the tri-county area, according to state employment data.

• 15) Moody’s: US Rating Could Be Pressured by Deficit

Moody’s Investors Service said Tuesday that unless the U.S. government makes more moves to decrease the budget deficit or the economy improves more than anticipated, the government’s “Aaa” bond rating will eventually be put under pressure.

• 16) Schools Chancellor: State Budget Cuts Would Force 8,500 Layoffs (New York)

The city now claims the total budget gap to schools for the 2010-2011 year would be $1.2 billion under Paterson’s proposed budget. That includes a cut in state funding of more than $400 million, plus an additional $80 million expense the city has to pay because the state is now paying for mandated summer school for special education students. The city says it’s also been shortchanged because enrollment grew. And the rising labor and contractual costs contribute to another $600 million expense.

• 17) Deficit problem seems to be getting more attention in mainstream media

The federal budget deficit has long since graduated from nuisance to headache to pressing national concern. Now, however, it has become so large and persistent that it is time to start thinking of it as something else entirely: a national-security threat.

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