US EIA Jan Outlook: Sees Oil Prices At $99 By End-2012 – EIA expects a continued tightening of world oil markets over the next 2 years. World oil consumption grows by an annual average of 1.5 million barrels per day (bbl/d) through 2012 while the growth in supply from non-Organization of the Petroleum Exporting Countries (non-OPEC) countries averages less than 0.1 million bbl/d each year. Consequently, EIA expects the market will rely on both inventories and significant increases in production of crude oil and non-crude liquids in OPEC member countries to meet world demand growth. While on-shore commercial oil inventories in the Organization for Economic Cooperation and Development (OECD) countries remained high last year, floating oil storage fell sharply in 2010, and EIA expects OECD oil inventories will decline over the forecast period.
Governor To Disconnect 48,000 Cellphones In Hands Of State Workers – Alarmed at discovering that the state pays for 96,000 cellphones, Gov. Jerry Brown issued an executive order Monday seeking to cut in half the number of devices being billed to taxpayers. Requiring 48,000 cellphones to be turned in by June 1 will save the state about $20 million a year. “It is difficult for me to believe that 40% of all state employees must be equipped with taxpayer-funded cellphones,” Brown said. “Some state employees, including department and agency executives who are required to be in touch 24 hours a day and seven days a week, may need cellphones, but the current number of phones out there is astounding.”
Fiscal challenges deepen For Md. lawmakers – Maryland’s $1.6 billion shortfall for the next fiscal year is presenting an increasingly difficult challenge for Gov. Martin O’Malley and lawmakers after four years of tough budget conditions. The Maryland General Assembly’s 90-day session begins Wednesday. O’Malley, who was re-elected in November, says the new budget is the most difficult he has ever put together. He says he’s balancing the budget entirely with cuts, and plans to submit his proposal to lawmakers later this month. While the state has contended with bigger shortfalls under O’Malley, the state does not have federal stimulus money this time to help soften the blow.
Christie Calls for New Jersey Pension Overhaul, Education Cuts – New Jersey Governor Chris Christie said he will strive to reduce the costs of government pensions, benefits and education as he seeks to balance the budget without raising taxes. The Republican governor told lawmakers he hopes to contribute to the state’s underfunded pension system and secure passage of his plan to overhaul the retirement plan. Christie also said he’ll seek to control growth of the highest property taxes in the U.S. Christie urged the Democratic-led Legislature to pass the remaining items in his “toolkit” of measures designed to help schools and municipalities stay within his 2 percent cap on annual property-tax increases that took effect this year. Christie may face a deficit next year equivalent to more than a third of his current $29.4 billion budget, the nonpartisan Office of Legislative Services projected in July. This fiscal year, which ends June 30, he closed a record $10.7 billion gap by slashing school and municipal aid and skipping a $3 billion pension payment. Pension Gap New Jersey’s pension-funding gap increased $8.05 billion, or 18 percent, this year to $53.9 billion, from $45.8 billion as of June 2009.
Food Prices To Soar – Food will become much more expensive in the next decade thanks to a burgeoning middle class around the world, according to a new consumer report from Deloitte Touche Tohmatsu. “Greater consumption leads to a greater strain on resources,” says the Consumer 2020 report, presented this week at the National Retail Federation in New York. “Without sustainable consumption, it will become increasingly difficult to meet the collective expectations and aspirations of the world’s new consumers.”….Last year, U.S. wheat futures prices jumped 47%, corn climbed above 50% and soybeans rose 34%. In addition to bad weather, increased Asian demand is fuelling the spike; it is predicted China will buy 60% of the global trade in soybeans in 2011-2012 twice what it purchased of the commodity just four years ago.
Global Regulators Quietly Agree to Target Credit Bubble – Part of the larger “Basel III” banking reform package, the “countercyclical capital buffer” heralds a step change in the way national banking regulators interact and is the first concrete example of “macroprudential” regulation that seeks to moderate the economic cycle. “This is very significant, because it takes the regulatory community into protecting the health of the entire system rather than just individual banks,” said Paul Tucker, deputy governor of the Bank of England, who represents the UK at Basel. The agreement, struck last month, says that if a country decides its economy is overheated – based on the ratio of credit to gross domestic product – it can require banks within its borders to hold extra capital against potential losses. Regulators in every other country would have to follow suit and impose a proportional surcharge on their own banks, based on the size of those institutions’ exposure to the bubble country.
Glock Pistol Sales Surge in Aftermath of Arizona Shootings – Greg Wolff, the owner of two Arizona gun shops, told his manager to get ready for a stampede of new customers after a Glock-wielding gunman killed six people at a Tucson shopping center on Jan. 8. Wolff was right. Instead of hurting sales, the massacre had the $499 semi-automatic pistols — popular with police, sport shooters and gangsters — flying out the doors of his Glockmeister stores in Mesa and Phoenix.
Social Security Benefits are Modest — Social Security benefits may be on the chopping block as policymakers wrestle with the nation’s long-term fiscal challenges. The co-chairs of the President’s fiscal commission, Erskine Bowles and Alan Simpson, proposed a plan to ensure Social Security’s long-term solvency that relies on benefit cuts for two-thirds of its savings over the next 75 years, A panel convened by the Bipartisan Policy Center proposed a package that relies roughly equally on benefit cuts and tax increases. The Center for American Progress has offered a plan in which tax increases on employers dominate.  In assessing Social Security proposals, policymakers need to keep five key facts in mind:
- Social Security benefits are quite modest.
- The majority of beneficiaries have little significant income from other sources.
- For most seniors, Social Security is the only income they will receive that is guaranteed to last as long as they live and to provide full inflation protection.
- Social Security benefits in the United States are low compared with other advanced countries.
- Future retirees already face lower benefits than current retirees as a result of a rising Social Security retirement age and escalating Medicare premiums.
Gingrich seeks bill allowing state bankruptcy to avert bailouts – Former House Speaker and possible GOP presidential contender Newt Gingrich is pushing for federal legislation giving financially strapped states the right to file for bankruptcy and renege on pension and other benefit promises made to state employees. Proponents of the measure — which include Americans for Tax Reform, a Washington lobby group that fights tax increases — said the legislation is desperately needed to clear the way for struggling states to slash costs before they go belly up, and should be regarded as a preemptive move that could preclude the need for massive federal bailouts. “It’s in the short-term and long-term interests of government workers and taxpayers to start those reforms now, rather than having to pick up the pieces after a crash landing,” ATR President Grover Nor-quist said in an interview.