Spain faces 'total emergency' as fear grips markets

Spain is facing the gravest danger since the end of the Franco dictatorship as the country is frozen out of global capital markets and slides towards an epic showdown with Europe. 

“We’re in a situation of total emergency, the worst crisis we have ever lived through” said ex-premier Felipe Gonzalez, the country’s elder statesman.

The warning came as the yields on Spanish 10-year bonds spiked to 6.7pc, pushing the “risk premium” over German Bunds to a post-euro high of 540 basis points. The IBEX index of stocks in Madrid fell 2.6pc, the lowest since the dotcom bust in 2003.

CONTINUE:  http://www.telegraph.co.uk/finance/financialcrisis/9301270/Spain-faces-total-emergency-as-fear-grips-markets.html

 

Investors flee Spain as financial crisis spirals

Spain battled to contain fears of financial collapse Wednesday, scrambling to fund a major banking rescue as its debt risk premium rocketed to a euro-era record.

The interest rate on Spain's 10-year bonds shot to 6.703 percent -- unsustainable over the longer term -- as the nation fought to avoid being the next victim of the eurozone crisis.

When compared to safe German debt, investors in Spanish bonds were demanding an additional 5.41 percentage points, a premium that easily crashed through euro-era records set each day of this week.

CONTINUE:  http://ca.news.yahoo.com/spains-borrowing-risk-premium-hits-record-high-090831994.html

Are Investors Running Out of Safe Havens to Put Money?

Amid all the challenges facing the markets — Greece, Facebook, JPMorgan — investors face an even larger potential problem: They soon could be running out of traditional safe havens for their money.

CNBC/Getty Images

Much has been made recently of how gold no longer offers its traditional buffer against financial turmoil, with the yellow metal in a sharp pullback since early March.

But some strategists are beginning to worry that other places where investors are stowing their money — high-grade bonds, Treasurys and defensive stocks in particular — also could be losing their protective shields.

"The problem is we're seeing safe-haven flows with shrinking instruments into which you can run," says Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco. "Once the run for the exits gets started it's going to be an absolute stampede."

CONTINUE:  http://www.cnbc.com/id/47539692

Escape From New York? High-Taxing Empire State Loses 3.4 Million Residents in 10 Years

New York State accounted for the biggest migration exodus of any state in the nation between 2000 and 2010, with 3.4 million residents leaving over that period, according to the Tax Foundation.

Over that decade the state gained 2.1 million, so net migration amounted to 1.3 million, representing a loss of $45.6 billion in income.

Where are they escaping to? The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted growth income with them.

Over that same time period, 208,794 Pennsylvanians moved to Florida, taking $8 billion in income.

“Many of these New York and Pennsylvania residents no doubt moved to Florida for the warm weather,” says the foundation, a nonpartisan research group. “[B]ut many more may have moved there because the state does not have an individual income tax, an estate tax, nor an inheritance tax.”

See entire article here:  http://cnsnews.com/news/article/escape-new-york-high-taxing-empire-state-loses-34-million-residents-10-years

If You Live In California Things Just Got A Whole Lot Worse

Why does the state of California seem to be so incredibly hopeless? These days California can't seem to do anything right, and if you live in California things just got a whole lot worse. Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax increases in November. Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending. Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state. Those companies have taken a whole lot of good jobs with them. Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing. California may be the land of "endless sunshine", but for the California economy there are only dark clouds on the horizon. The state is coming apart at the seams and there is not much hope that things are going to turn around any time soon.
These days, California is very similar to Greece in many ways.

Just like Greece, California has had round after round austerity.....

http://theeconomiccollapseblog.com/archives/if-you-live-in-california-things-just-got-a-whole-lot-worse

Manufacturing Contributed Less to U.S. Growth Last Year

BLOOMBERG
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Manufacturing added less to U.S. economic growth last year than in 2010, indicating a pickup in the expansion depends more on bigger gains in the services industry.
Factory production accounted for 0.5 percentage point of the 1.7 percent increase in gross domestic product in 2011, the Commerce Department said today in Washington. A year earlier, manufacturing added 1.2 percentage points to economic growth of 3 percent.  MORE...................

Europe faces Japan syndrome as credit demand implodes

The Telegraph by Ambrose Evans-Pritchard
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Europe (minus Germany) looks more like post-bubble Japan each month.
The long-feared credit crunch has mutated instead into a collapse in DEMAND for loans. Households and firms are comatose, or scared stiff, in a string of countries.  MORE....................

Student Loans: The Next Bailout?

CNBC by Kelly Evans
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Here’s what we do know about student loan debt: it’s roughly $1 trillion in size, greater than either auto or credit-card debt and second only to mortgage debt in the U.S.
 Borrowers in their 30s today owe $28,500, on average. The debt burden has soared just as — and partly because — the recession hit, so younger graduates carrying the highest balances are hit with the double whammy of a weak job market (that still isn’t showing any sign of rapid improvement).

And this all comes as globalization and technological change have upended once-reliable career paths, wiped out many mid-level professional jobs and leave low-paying fields in health, food and beverage services, and retail as among the fastest growing job markets over the next decade. MORE.....................

UK Slides Back Into Recession in First Double Dip Since 1970s

CNBC
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Britain's economy slid into its second recession since the financial crisis after official data unexpectedly showed a fall in output in the first three months of 2012, piling pressure on Prime Minister David Cameron's embattled coalition government.
The Office for National Statistics said Britain's gross domestic product fell 0.2 percent in the first quarter of 2012 after contracting by 0.3 percent at the end of 2011, confounding forecasts for 0.1 percent growth.

Most economists had expected Britain's $2.4 trillion economy to eke out modest growth in the early 2012, but these forecasts were upset by the biggest fall in construction output in three years coupled with anaemic service sector growth and a fall in industrial output. MORE.....................

For first time since Depression, more Mexicans leave U.S. than enter

The Washington Post  by Tara Bahrampour

View Original Article Here

 A four-decade tidal wave of Mexican immigration to the United States has receded, causing a historic shift in migration patterns as more Mexicans appear to be leaving the United States for Mexico than the other way around, according to a report from the Pew Hispanic Center.

It looks to be the first reversal in the trend since the Depression, and experts say that a declining Mexican birthrate and other factors may make it permanent. MORE...................

Spain and Italy borrowing rates soar in latest auctions

 RTE NEWS/Business 

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Borrowing costs for both Spain and Italy rose today in their latest auction of government bonds.

Spain's borrowing rate nearly doubled in a short-term debt auction as investors fretted over the euro zone's determination to deal with its debts. 

And Italy raised nearly €3.5 billion in a short-term bond sale today but at sharply higher interest rates amid fresh concerns over the euro zone outlook, the Bank of Italy said.

The Spanish treasury said it raised €1.933 billion but the timing could hardly have been worse, with financial markets slumping on concern that Europeans are wavering in their commitment to austerity.

The sale of three-month and six-month bills came a day after Spain's central bank declared the country had plunged back into recession in the first quarter of 2012.  MORE........................

US home prices drop for 6th straight month

Yahoo! Finance 

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Home prices fall in most US cities for sixth straight month, as housing struggles to recover.

WASHINGTON (AP) -- Home prices dropped in February in most major U.S. cities for a sixth straight month, a sign that modest sales gains haven't been enough to boost prices.
The Standard & Poor's/Case-Shiller home-price index shows that prices dropped in February from January in 16 of the 20 cities it tracks.
The steepest declines were in Atlanta, Chicago and Cleveland. Prices rose in Phoenix, San Diego and Miami. They were unchanged in Dallas.
The declines partly reflect typical offseason sales. The month-to-month prices aren't adjusted for seasonal factors. MORE.........................                   

Shift on executive power lets Obama bypass rivals

The New York Times by Charlie Savage
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COMMENT:   When the judgment of many is replaced by the judgment of one man, we're heading into very dangerous territory for both the economy and our freedoms.

One Saturday last fall, President Obama interrupted a White House strategy meeting to raise an issue not on the agenda. He declared, aides recalled, that the administration needed to more aggressively use executive power to govern in the face of Congressional obstructionism.


“We had been attempting to highlight the inability of Congress to do anything,” recalled William M. Daley, who was the White House chief of staff at the time. “The president expressed frustration, saying we have got to scour everything and push the envelope in finding things we can do on our own.”
For Mr. Obama, that meeting was a turning point. As a senator and presidential candidate, he had criticized George W. Bush for flouting the role of Congress. And during his first two years in the White House, when Democrats controlled Congress, Mr. Obama largely worked through the legislative process to achieve his domestic policy goals.   MORE.........................

  

Eurozone cuts deficits but overall debt rises

Yahoo! NEWS by Gabriele Steinhauser

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BRUSSELS (AP) — The 17 countries that use the euro still face an uphill struggle to control their debts in spite of managing to slash government deficits to 4.1 percent of economic output in 2011, official data show.

Figures reported Monday by the European Union's statistics office confirmed the effects of harsh austerity programs on the eurozone members' economies, which in 2010 ran an overall deficit of 6.2 percent of gross domestic product. Yet despite these efforts, overall debt rose from 85.3 percent of GDP to 87.2 percent — the highest level since the euro was created in 1999.

After a financial crisis that has now dragged on for close to five years, Monday's figures underline how difficult it will be for the eurozone to bring its deficits and debts back below the EU-stipulated limits of a deficit of 3 percent and debt of 60 percent of GDP.

This task will become even harder if the eurozone's economy has fallen back into recession. Separate data also released Monday indicated that the private sector in the 17-country block continued to shrink in April. The purchasing managers' index for eurozone, compiled by private data firm Markit, fell to a five-month low of 47.4, down from 49.1 in March. A level below 50 means that the private sector is contracting.  MORE.........

President Obama's Economic Programs Have Failed

USNews by Mortimer Zuckerman

View Original Article Here

The recovery has not yielded job vacancies, but here are five ways to cure our labor woes.

America has long been a country where almost everyone, including the poor and unskilled, could get a job. Given the will to do a reasonable day's work, a job was a passport to economic and social well-being; it was the fount of self-esteem and the foundation of family life. Indeed, work was Life.
More than 15 million Americans no longer have that passport to Life. Think of it as roughly the entire population of the states of Connecticut, Delaware, Arkansas, Iowa, and Oklahoma, all standing idle—every man, woman, and child. The traditional breadwinners, namely men between the ages of 25 and 54, are among those hardest hit. According to an Investor's Business Daily/TIPP poll, some 25 percent of households include someone who is unemployed and looking for work. As well as laying waste to work, to the equivalent of losing every job created in the last decade, the Great Recession has visited us with reduced incomes, declining home equity, and a growing contraction in credit.  MORE.......................