California Teachers Fear `Amputations’ as Brown Seeks to Cut $28 Billion – California teachers and school administrators asked Governor-elect Jerry Brown to increase taxes and refrain from cutting their budgets at a forum he convened on closing projected deficits of $28.1 billion. The two-hour meeting, attended by more than 300 people, illustrated the dilemma Brown may face as he tries to close the largest state budget gap in the nation. The 72-year-old Democrat takes office Jan. 3. The governor-elect benefited from tens of thousands of dollars in donations from state teacher unions in his battle to defeat billionaire businesswoman Meg Whitman. The 120,000-member California Federation of Teachers plans to lobby Brown to extend $8 billion in temporary taxes to help limit budget cuts, said Fred Glass, a spokesman. Last week, Brown said the state faces budget deficits of $28.1 billion over the next 18 months.
Slovak Remark Renews Eurozone Breakup Talk – Last in, first out, when it comes to the euro? That’s the question getting attention in Slovakia, the newest member of Europe’s common currency, after the speaker of its parliament said that the country should be ready to abandon the euro if the continent’s widening debt crisis keeps spreading. The comments marked a turn from recent speculation centering on the possibility that one of the eurozone’s larger economies might get fed up with the euro. But while a smaller member might see reasons to leave amid the threat of a debt meltdown, any departure would be extremely disruptive — first and foremost to the country heading for the exit, as well as the currency bloc. "The market perception now is the eurozone not going to break up," : "We can safely say that if a country left the euro, it would be economically disruptive" — no matter what the member’s size.
Portuguese Borrowing Costs Rise at Year’s Last Bill Auction (Bloomberg) — Portugal’s borrowing costs rose at a sale of 500 million euros ($666 million) of 3-month bills today as Moody’s Investors Service put neighboring Spain’s debt rating on review, increasing pressure on peripheral euro-area nations. The securities due March 18 were issued today at an average yield of 3.403 percent, the country’s debt management agency said. That compares with an average yield of 1.818 percent at a previous sale of 3-month bills on Nov. 3. "
Spain Aa1 Rating Put on Review by Moody’s on Eve of Bond Sale — Spain’s credit rating may be cut from Aa1, Moody’s Investors Service said, as the government prepares its final bond sale of the year tomorrow amid concern it may follow Greece and Ireland in seeking a bailout.Spain has to raise 170 billion euros ($226 billion) next year, while refinancing needs for its regions total 30 billion euros and for banks around 90 billion euros, Moody’s estimates. “Spain’s substantial funding requirements, not only for the sovereign but also for the regional governments and the banks, make the country susceptible to further episodes of funding stress,”
Eurozone Debt Crisis Spreads To Belgium On Rising Political Risk – Europe’s debt woes have moved closer to the core of monetary union after Standard & Poor’s threatened to downgrade Belgium over the failure of Flemings and Walloons to form a government. The yield spread on Belgian 10-year bonds has ballooned to 102 basis points over German Bunds, raising fears of a funding squeeze next year. S&P said the country needs to refinance debt equal to 11pc of GDP next year, leaving it "exposed to rising real interest rates". "It’s ugly for our reputation," said Jean Deboutte, head of Belgium’s debt office. "This is bearable but the premiums are mounting little by little."
One Company Holds at Least 90% of London Metal Exchange Copper Stockpiles – One unidentified company holds 90 percent or more of copper stockpiles in warehouses monitored by the London Metal Exchange, the latest bourse data shows.. The figure includes stockpile holdings and open positions for the next three trading days. Each warrant represents one lot of metal, equal to 25 metric tons. The fee to borrow copper for next-day delivery, also known as the tom-next spread, jumped to a premium of as much as $13 today, the most since July 2009. It was last at a discount of 50 cents. LME rules oblige holders of dominant positions to lend metal at fixed rates. “The dominant long is even longer than they were previously, and it’s having an impact,” “It’s forcing short-term rates to borrow metal to go higher.”
China To Raise Tariffs On Certain Rare Earth Exports In 2011 (Xinhua) — China will raise export tariffs on certain rare earths in 2011, said a statement on the website of the Ministry of Finance (MOF) Tuesday. From Jan. 1, 2011, China will adjust tariff rates on certain exports and imports and the changes have been approved by the State Council, or the Cabinet. The statement, however, did not specify what types of rare earth products would be included in the readjustment. China will levy relatively lower yearly temporary imports tariffs on about 600 resources-related products, basic raw materials and key parts in 2011 to boost energy-saving and environmental protection, it said.
Text of FOMC Statement – Here is the full text of the statement released by the Federal Open Market Committee on Tuesday.
State Unemployment Insurance Tax To Go Up For Nearly All Businesses – The state’s 2011 unemployment insurance tax rates are out, and it’s going to be an expensive year for many Illinois companies. More than nine in 10 businesses will see their per-employee unemployment tax rates rise, according to Illinois Department of Employment Security spokesman Greg Rivara, with only 8.8 percent of employers seeing a decrease in their rate. Nearly one out of five — 17.9 percent — companies will have the maximum tax rate….Although the rates are going up this year, they’re not being raised nearly enough to deal with the $2.2 billion loan to the state unemployment fund from the federal government. Interest charges start accumulating on the loan next year
Food Pantry Demand Skyrockets – Record-setting demand will result in nearly 1.3 million pounds of food being distributed this year through the Greater Dover-New Philadelphia Food Pantry. The pantry also is changing its distribution days to accommodate the Christmas and New Year’s holidays. Through Dec. 11, the pantry distributed a net total of 1,257,818 pounds of food, compared to 706,129 pounds during the same period in 2009.During the first week of November, 469 families were served. In the following weeks the totals rose to 487 and a record 559 families before dipping to 549. Finley said statistics show 3.2 people per family.
Expensive Spanish, Belgian Auctions Suggest Tough Tenders Ahead – Spain and Belgium were forced to pay sharply higher yields at separate Treasury bill auctions Tuesday, painting a bleak picture for debt sales from Spain and Portugal later this week. Investors are closely watching government debt tenders in Spain and Portugal amid fears that spiralling borrowing costs could eventually lock out both countries from the market, prompting them to seek external help. Government officials from both countries have expressed confidence that such a situation won’t arise but given the current backdrop, investors aren’t likely to drop their guard. Spain sold EUR2.513 billion of 12-month and 18-month T-bills, comfortably within the EUR2 billion to EUR3 billion target range, but the average yield on the 12-month T-bills rose 46% to 3.449% from 2.363% at the previous auction, Nov. 16, while for the 18-month T-bills, it increased almost 40% to 3.721% from 2.664%.