ECB Balance Sheet Grew 5.2% In 2010 To EUR2.004 Trillion At Year End – The balance sheet of the European Central Bank and its 16 national central banks expanded by 5.2% last year to stand at EUR2.004 trillion by the end of the year, according to the bank’s consolidated financial statements, released Wednesday. The figures summarize a year in which the euro zone’s sovereign debt crisis repeatedly frustrated the bank’s efforts to unwind the emergency measures it had used to stem the financial crisis in 2008 and 2009. Some observers had expected the ECB to go back to rationing its liquidity in 2010, but first the Greek then the Irish debt crises forced it to keep to abandon the "exit" from its non-conventional support measures, notably its policy of "fixed-rate, full allotment" at its regular lending operations. Under this system, banks can essentially borrow as much as they want against the required collateral, thus ensuring that even banks which are basically insolvent wouldn’t collapse and cause a wave of bank defaults in the European financial system.
Earth’s Population to Reach 7 Billion in 2011 – A clock is ticking. Sometime late this year, the United Nations Population Division predicts that with about five babies born every second, the world will have 7 billion people. Seven billion. It was fewer than 1 billion in 1800, 3 billion in 1960, and 6 billion as recently 1999. The number keeps growing. The planet does not. Thomas Malthus famously predicted in 1798 that at some point, it would all be too much: starvation and disease would kill people more quickly than we can replace them. "With the population still growing by about 80 million each year, it’s hard not to be alarmed," writes Robert Kunzig, the author of National Geographic magazine’s January cover story, "7 Billion." "Right now on Earth, water tables are falling, soil is eroding, glaciers are melting, and fish stocks are vanishing. Close to a billion people go hungry each day."
Foreclosures May Be Undone by Massachusetts Ruling on Mortgage Transfers – Massachusetts’s highest court is poised to rule on whether foreclosures in the state should be undone because securitization-industry practices violate real- estate law governing how mortgages may be transferred. The fight between homeowners and banks before the Supreme Judicial Court in Boston turns on whether a mortgage can be transferred without naming the recipient, a common securitization practice. Also at issue is whether the right to a mortgage follows the promissory note it secures when the note is sold, as the industry argues. A victory for the homeowners may invalidate some foreclosures and force loan originators to buy back mortgages wrongly transferred into loan pools. Such a ruling may also be cited in other state courts handling litigation related to the foreclosure crisis.
Illinois income taxes could go up – — An increase in state income taxes could be imminent Thursday if lawmakers in Springfield agree on a hike. State lawmakers have not committed to exact percentages yet. They gave an indication that they would know more specifics later Thursday following talks. "There is so many different variables, I don’t know whether it’s permanent, whether it’s temporary, but that’s what we have got to talk about," With the state under pressure to plug the estimated $15 billion deficit, an income tax hike is an attractive proposition. It is an option that Governor Pat Quinn pushed for last year, but because of the November elections, lawmakers kept it on the back burner until now, during the lame-duck session.
City of Flint’s annual audit shows nearly $17 million deficit — The city of Flint’s annual audit showed the city ended the 2010 fiscal year with a nearly $17 million deficit. The finding was revealed tonight at the audit presentation given to Flint City Council members. The audit showed the city is spending less than it has in previous years, but it’s also taking in less revenue because of decreased property taxes, state aid, income taxes and fees. The city spent $64.74 million out of its general operating fund in the 2010 fiscal year that ended June 30, but it only took in $60.23 million. That shortfall — along with smaller deficits in the parks and recreation fund, building fund and garbage fund — combined with last year’s $10.1 million deficit to add up to the nearly $17 million deficit, officials said.
Detroit School System May Use GM-Style Restructuring – The Detroit Public Schools, which considered bankruptcy protection last year, may try a General Motors-style restructuring that would divide the district to deal with a $327 million deficit, said Robert Bobb, the district’s emergency financial manager. Splitting the district in two, with one half unburdened by debt, is among three options that Bobb said he will give state officials by Jan. 10. The others are getting the state to issue bonds to fill budget holes and creating ranks of charter schools as New Orleans did after Hurricane Katrina. Bankruptcy isn’t an option, he said in an interview in Bloomberg’s Detroit bureau. Cleaving the district “gets us out of the larger deficit and gives the district a chance to start over,”
What Are Tech Companies Saving For? – Why won’t technology companies spend money? What are they saving for, exactly? An interesting phenomenon has taken hold in tech companies, with the bulk of such companies saving for a rainy day, one that never comes. Their cash balances continue to climb, even as the growth rate in their core markets tails off. Check the following figure from JP Morgan today: What’s going to happen? Things that can’t go on, won’t, so it will end. The question is, how.