Will Employer Health Insurance Go the Way of Pensions?

For years, employers have been getting out of the pension business. With old-style pensions giving way to 401(k) plans, most workers are now responsible for making their own investment decisions for their retirement.

Now it appears that companies may start doing the same thing with their health insurance benefits. The resulting shift could leave employees with a lot more work to do to manage their health costs.

A recent report from the Employee Benefit Research Institute shows that fewer than half of the employers it surveyed are certain about their plans to continue offering traditional health benefits to their workers. A substantial portion of the remainder expects to seriously consider moving to what is called a "defined-contribution" strategy for health benefits.

READ MORE:  http://www.dailyfinance.com/2012/07/30/will-employer-health-insurance-go-the-way-of-pensions/

Why Capitalism Has an Image Problem

Charles Murray examines the cloud now hanging over American business—and what today's capitalists can do about it.

 Mitt Romney's résumé at Bain should be a slam dunk. He has been a successful capitalist, and capitalism is the best thing that has ever happened to the material condition of the human race. From the dawn of history until the 18th century, every society in the world was impoverished, with only the thinnest film of wealth on top. Then came capitalism and the Industrial Revolution. Everywhere that capitalism subsequently took hold, national wealth began to increase and poverty began to fall. Everywhere that capitalism didn't take hold, people remained impoverished. Everywhere that capitalism has been rejected since then, poverty has increased. 

Capitalism has lifted the world out of poverty because it gives people a chance to get rich by creating value and reaping the rewards. Who better to be president of the greatest of all capitalist nations than a man who got rich by being a brilliant capitalist?

Yet it hasn't worked out that way for Mr. Romney. "Capitalist" has become an accusation. The creative destruction that is at the heart of a growing economy is now seen as evil. Americans increasingly appear to accept the mind-set that kept the world in poverty for millennia: If you've gotten rich, it is because you made someone else poorer.

READ MORE:  http://online.wsj.com/article/SB10000872396390443931404577549223178294822.html?fb_action_ids=4389655258305&fb_action_types=og.recommends&fb_source=timeline_og&action_object_map={%224389655258305%22%3A10151062362544182}&action_type_map={%224389655258305%22%3A%22og.recommends%22}&action_ref_map=[]

Ten Ways You’ll Know The Recession Is Over

When Gallup asked people about the state of the economy this spring, as a recovery appeared to have taken hold, the polling company found “nearly half of Americans, 46%, still say the economy is in either a recession or a depression.” Only 40% said they thought a recovery was underway. By the strictest measurements of economic data, economists said the Great Recession had ended. For a very large number of Main Street Americans, that opinion means nothing.

The public dialog about the economy has gone from “how strong will the recovery be?” to “why are we slipping back into a recession?” In a period as short as the past three months, economists have revised rosy forecasts that called for sharp increases in gross domestic product in the last quarter of 2012 and the entire year 2013 to worse predictions — some of which now project there will be no economic growth in the United States at all over the next year. Some experts even believe that the so-called fiscal cliff at the end of the year could cause an economic catastrophe.

READ MORE:  http://247wallst.com/2012/07/20/ten-signs-a-recession-is-over/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JUL262012A&utm_campaign=DailyNewsletter

Economist Morici: Not Much More the Fed Can Do Read more: Economist Morici: Not Much More the Fed Can Do

While the Federal Reserve is close to announcing additional measures to stimulate the economy, there is little left that the central bank can do to constrain the threat of another recession, according to Peter Morici, professor at the Smith School of Business at the University of Maryland and former chief economist at the U.S. International Trade Commission.

The Fed has already done all the actions that might make a difference, and short-term interest rates, including the overnight bank-borrowing rate and the one-month and one-year Treasury bills, are already close to 0 percent.

Moreover, the yields on 30-year Treasurys and mortgage rates are near record lows, so any additional Fed measures would not be effective, he wrote on his website.

Yet, the economy is growing at less than 2 percent, and jobs creation is not even keeping up with the population growth.

READ MORE:  http://www.moneynews.com/StreetTalk/economist-morici-not-much-fed/2012/07/26/id/446701?s=al&promo_code=F945-1

Are Fiat Currencies Headed for a Collapse?

As the investment world eagerly awaits more stimulus, a debate on a previously unthinkable topic has started to emerge – can fiat currencies survive round after round of debasement?

Some heavy hitters say the answer is no.

A fiat currency derives its worth from the issuing government - it is not fixed in value to any objective standard. That means central banks can print as much money as they want.  If an economy is struggling, injecting more notes into the system juices activity but lowers the value of the currency in question. 

With major central banks all desperate to stimulate their economies, some say currencies have entered a dangerous new phase often described as a race to the bottom.

READ MORE:  http://www.cnbc.com/id/48349503

Home Sales Disappoint Twice

Sales of newly built homes fell hard in June, despite newfound optimism in the housing recovery, especially among the home builders themselves.

Signed contracts to buy new homes fell 8.4 percent from the previous month, according to the U.S. Commerce Department, although they are still up 15 percent from a year ago. 

Sales levels are now at their lowest since January. 

This is the second miss for housing in the same month. Sales of existing homes fell as well, despite expectations for a gain. 

READ MORE:  http://www.cnbc.com/id/48318563

UK economy contracts by a shock

The UK economy has shrunk by a shock 0.7pc in the second quarter, far more than expected as record rainfall and the Jubilee holiday added to pressure from austerity cuts and the eurozone debt crisis. 

The figures from the Office for National Statistics are much worse than forecasts for a 0.2pc contraction.

It marks the third successive quarter of contraction, leaving Britain in its longest double-dip recession in more than 50 years. The economy shrank by 0.3pc in the first quarter of the year, following a 0.4pc contraction in the final quarter of 2011.

The news will increase pressure on Finance Minister George Osborne to ease up on his austerity measures and push for growth. 

READ MORE:  http://www.telegraph.co.uk/finance/economics/9425611/UK-economy-contracts-by-a-shock-0.7pc.html

8,753,935: Workers on Disability Set Another Record in July; Exceed Population of 39 States

(CNSNews.com) - The number of workers taking federal disability insurance payments hit yet another record in July, increasing to 8,753,935 during the month from the previous record of 8,733,461 set in June, according to newly released data from the Social Security Administration.

The 8,753,935 workers who took federal disability insurance payments in July exceeded the population of 39 of the 50 states. Only 11 states—California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Michigan, Georgia, North Carolina and New Jersey—had more people in them than the number of workers on the federal disability insurance rolls in July.

READ MORE:  http://cnsnews.com/news/article/8753935-workers-disability-set-another-record-july-exceed-population-39-states

Roubini: US Rebound a 'Fairy Tale,' Stocks to Fall Read more: Roubini: US Rebound a 'Fairy Tale,' Stocks to Fall

U.S. stocks have risen in recent years but mainly due to the Federal Reserve's moves to stimulate the economy.

The Fed may move again to prop up the country and stave off recession, but results will be weak and stock prices will plummet when the monetary sugar rush ends, said New York University economist Nouriel Roubini.

Previous calls for U.S. gross domestic product growth of around 3 percent this year have been off, with forecasts being slashed.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"The first-half growth rate looks set to come in closer to 1.5 percent at best, even below 2011’s dismal 1.7 percent," Roubini wrote in a Project Syndicate column.

READ MORE:  http://www.moneynews.com/StreetTalk/Roubini-US-Stocks-fed/2012/07/20/id/446052%20?s=al&promo_code=F890-1

Report Details Woes of Student Loan Debt

As in the housing market, securitization of student loans led to more aggressive underwriting for borrowers who could not possibly afford the debt they took on, according to a government report.

The 131-page report was formally released by the Education Department and the Consumer Financial Protection Bureau on Friday. It provides new estimates for total outstanding student loan debt: more than $1 trillion in 2011, composed of $864 billion in federal government loans and $150 billion in private student loan debt.

Cumulative defaults on private student loans exceeded $8 billion, a sum from over 850,000 distinct loans. 

READ MORE:   http://www.cnbc.com/id/48253421

Earnings Show Recession May Be 'Fast Approaching'

While this quarter's earnings reports have crossed a substantially lowered profit bar, future expectations through the year indicate a recession could be on the way.

Estimates for the third and fourth quarters have been dropped to levels not seen since the days of the 2008 financial crisis, below even the muted 2 percent expected level of inflation.

That's an ominous recession sign for an economy that has barely managed to attain positive growth this year even with the strong level of earnings beats, according to an analysis by Nicholas Colas, chief market strategist at ConvergEx in New York.

READ MORE:  http://www.cnbc.com/id/48259674

US poverty on track to rise to highest since 1960s

WASHINGTON (AP) — The ranks of America's poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

Census figures for 2011 will be released this fall in the critical weeks ahead of the November elections.

The Associated Press surveyed more than a dozen economists, think tanks and academics, both nonpartisan and those with known liberal or conservative leanings, and found a broad consensus: The official poverty rate will rise from 15.1 percent in 2010, climbing as high as 15.7 percent. Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965.

READ MORE:  http://news.yahoo.com/us-poverty-track-rise-highest-since-1960s-112946547--finance.html?_esi=1

Jobless Spaniards protest as crisis outlook darkens

Thousands of jobless Spaniards marched through Madrid Saturday in the latest angry demonstrations against economic crisis cuts, as fears rose for the country's financial stability.

Young people thrown out of work by the recession converged on the capital, many of them having hiked hundreds of miles from around Spain, and walked through the city's central avenues, waving banners and whistling.

"Hands up, this is a robbery!" they yelled, their regular refrain over recent days of protests.
"Everyone get up and fight!"

It was the latest in a string of protests that have erupted since Prime Minister Mariano Rajoy announced 65 billion euros ($80 billion) in fresh austerity measures on July 11, including cuts to pay and unemployment benefits.

READ MORE:  http://ca.news.yahoo.com/fresh-protests-due-madrid-crisis-outlook-darkens-092851618.html

Don't Die in 2013: Confiscatory 55% Death Tax Set to Take Effect

In 2013, the death tax will revert to its antiquated, pre-2001 form.

Current Law

The 2001 tax relief bill (EGTRRA), drastically reduced the impact of the death tax over the course of a decade, so that it was eliminated entirely for one year in 2010 — a good year to die, joked a number of pundits. The bill lowered marginal rates and increased the applicable exclusion amount, but it also included a provision allowing individuals to carry over exclusion dollars that were unused by their spouse at the time of his or her death. This “portability” measure effectively increased the applicable exclusion for many households, in some instances putting millions of dollars beyond the reach of the federal government.

The death tax rose from the grave at the end of 2010, with a Bush-era top rate of 35% and an applicable exclusion amount of $5 million ($5.12 million in 2012).

Scheduled Changes

In 2013, the death tax will revert to its antiquated, pre-2001 form. The applicable exclusion amount will plummet to $1,000,000, and the top marginal rate will leap twenty points to 55%. A 5% surtax will also return, to be levied on estates between $10 million and $17 million. This raises the top effective rate of the death tax to 60%.

READ MORE:  http://atr.org/dont-die-confiscatory-percent-death-tax-a7051

Bay Area Drivers Could Be Tracked By GPS, Taxed Per Mile Driven

OAKLAND (KCBS) – Bay Area drivers could one day be tracked using a GPS-like device in their cars and taxed per miles driven – a scenario which is part of a proposed long-range study aimed at finding ways to reduce traffic and pollution, while also raising revenues.

Members of the Metropolitan Transportation Commission and the Association of Bay Area Governments are scheduled to vote on Thursday on whether or not to authorize a study of the proposal. Under the plan, drivers would have to install  trackers in their vehicle and officials would tax drivers for every mile they travel.

KCBS’ Tim Ryan Reports: Bay Area Drivers Could Be Taxed Per Mile Driven

 

Randy Rentschler with the Metropolitan Transportation Commission said this is a 20-year look at what may be best for transit funding and as always, there is going to be a concern from consumers about government tracking.

“We’re not interested in where they go. We’re only interested in the amount they travel,” said Rentschler. “But for some folks, that’s a distinction without a difference. Anytime you talk about getting information from people, whenever that conversation comes up, it’s another hurdle you have to overcome.

READ MORE:  http://sanfrancisco.cbslocal.com/2012/07/18/bay-area-drivers-could-be-tracked-by-gps-taxed-per-mile-driven/

Factory, jobs data show economy mired in weakness

(Reuters) - The slowdown in the economy persisted early in the third quarter as factory activity in the U.S. Mid-Atlantic region contracted in July for a third straight month and new claims for jobless aid surged last week.

Other reports on Thursday showed home resales slumped to their lowest level in eight months in June and a gauge of future economic activity slipped last month.


"The data confirm that the economy has cooled off pretty considerably late in the second quarter and early in the third quarter from the pace we saw earlier in the year," said Omair Sharif, an economist at RBS in Stamford, Connecticut.

The economy has been hit by fears of deep government spending cuts and higher taxes next year, as well as troubles from the debt crisis in Europe, culminating in slower job growth, weak consumer spending and soft manufacturing output.

READ MORE:  http://www.reuters.com/article/2012/07/19/us-jobless-idUSBRE86I0NI20120719

U.S. student debt on scary trajectory

By Daniel Indiviglio
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

U.S. student debt is on a scary trajectory. New statistics from the New York Federal Reserve show just how steep it is. Education loans are piling up at an unsustainable rate and delinquencies are rising despite the slowly improving American economy. Instead of trying to tackle the problem, Washington’s policies continue to exacerbate it.

Student loans in the United States have surged to $900 billion from $360 billion in just seven years. Even as the U.S. housing bubble inflated between 1999 and the start of 2006, mortgage balances didn’t grow that fast. The bursting of that bubble triggered the worst recession since the Great Depression. Sure, the numbers were considerably larger. But there’s enough student debt to cause trouble – more than auto loans or credit card debt, for example.

READ MORE:  http://blogs.reuters.com/breakingviews/2012/07/18/u-s-student-debt-on-scary-trajectory/

Police fire rubber bullets after huge Madrid protest

Spanish police fired rubber bullets and charged protestors in central Madrid early Friday at the end of a huge demonstration against economic crisis measures.

The protest was one of over 80 demonstrations called by unions across the county against civil servant pay cuts and tax hikes which drew tens of thousands of people, including police and firefighters wearing their helmets.

"Hands up, this is a robbery!" protesters bellowed as they marched through the streets of the Spanish capital.
At the end of the peaceful protest dozens of protestors lingered at the Puerta del Sol, a large square in the heart of Madrid where the demonstration wound up late on Thursday.

READ MORE:  http://ca.news.yahoo.com/spain-workers-plan-mass-demos-against-cuts-181530139.html

For the First Time, Canadians Now Richer Than Americans

The average Canadian household is worth about $40,000 more than their American counterparts

 While Americans might enjoy throwing politically-charged barbs at their neighbors to the north, Canadians now have at least one reason to be smug.

For the first time in recent history, the average Canadian is richer than the average American, according to a report cited in Toronto's Globe and Mail.

And not just by a little. Currently, the average Canadian household is more than $40,000 richer than the average American household. The net worth of the average Canadian household in 2011 was $363,202, compared to around $320,000 for Americans.

READ MORE:  http://www.usnews.com/news/articles/2012/07/18/for-the-first-time-canadians-now-richer-than-americans

Energy Revolution 2: A Post Post-American Post

Forget peak oil; forget the Middle East. The energy revolution of the 21st century isn’t about solar energy or wind power and the “scramble for oil” isn’t going to drive global politics. The energy abundance that helped propel the United States to global leadership in the 19th and 2oth centuries is back; if the energy revolution now taking shape lives up to its full potential, we are headed into a new century in which the location of the world’s energy resources and the structure of the world’s energy trade support American affluence at home and power abroad.

By some estimates, the United States has more oil than Saudi Arabia, Iraq and Iran combined, and Canada may have even more than the United States. A GAO report released last May (pdf link can be found here) estimates that up to the equivalent of 3 trillion barrels of shale oil may lie in just one of the major potential US energy production sites. If half of this oil is recoverable, US reserves in this one deposit are roughly equal to the known reserves of the rest of the world combined.

READ MORE:  http://blogs.the-american-interest.com/wrm/2012/07/15/energy-revolution-2-a-post-post-american-post/

France's proposed tax hikes spark 'exodus' of wealthy

Looming tax hikes by France's new socialist government have triggered an exodus of the Gallic super-rich to 'wealth-friendly' nations like Britain and Switzerland. 

 

 The latest estate agency figures have shown large numbers of France's most well-heeled families selling up and moving to neighbouring countries. 

 

Many are fleeing a proposed new higher tax rate of 75 per cent on all earnings over one million euros. (£780,000)

The previous top tax bracket of 41 per cent on earnings over 72,000 euros is also set to increase to 45 per cent.

Sotheby's Realty, the estate agent arm of the British auction house, said its French offices sold more than 100 properties over 1.7 million euros between April and June this year - a marked increase on the same period in 2011.

Alexander Kraft, head of Sotheby's Realty, France, said: "The result of the presidential election has had a real impact on our sales.

READ MORE:  http://www.telegraph.co.uk/news/worldnews/europe/france/9404209/Frances-proposed-tax-hikes-spark-exodus-of-wealthy.html

 

Banks Behave Badly Redux: Is It Killing Confidence?

It wasn't supposed to be like this.

After the worst financial crisis since the Great Depression almost took the global economy over a cliff, tough new regulations and stronger internal controls at the world's major banks were meant to help restore confidence in the financial system.

But recent headlines have some top investors and strategists questioning whether there has been any progress at all.

The horror stories include the deepening scandal that big banks rigged Libor, the benchmark international lending rate; JPMorgan Chase's [JPM  35.12    0.03  (+0.09%)   ] mounting losses from disastrous credit bets and a possible cover-up attempt; and the disappearance of customer funds from Iowa futures broker PFGBest, discovered after its founder tried to commit suicide and left a note outlining a 20-year fraud.

READ MORE:  http://www.cnbc.com/id/48191948

Have Gasoline Prices Bottomed?

Gasoline futures settled in New York at the highest price in nearly two months, surging over 20 cents in July alone.

August RBOB [RBCV1  2.8774    0.0227  (+0.8%)   ] gasoline futures gained nearly 1.5 percent and closed above $2.85 a gallon on Monday, mirroring the climb in oil prices as the U.S. dollar weakened and tensions rose in the Middle East.

Some analysts suggest the slide toward a $3.00 retail gasoline may have permanently stalled. Retail gasoline prices often follow the trend in the futures market within a week or so, analysts say. 

The national average for regular self-serve gasoline is $3.40 a gallon, up 2 cents from a week ago, according to AAA. 

While a few areas in the Southeast have sub-$3.00 gas, along the East and West Coasts prices are well over $3.50 a gallon.

READ MORE:  http://www.cnbc.com/id/48196684

IMF cuts forecast for global growth

Revision prompted by weak recovery of world economy

• IMF slashes UK growth forecast
• beyondbrics IMF forecast - cloudy, risk of lightning
• IMF faces balancing act over eurozone
• Global Market Overview Economy worries keep stocks in check

From COMPANIES 1:48pm

Citi profit falls 12% on global slowdown

Investors ‘should not infer’ about possible Libor fines

• Ex-Citi banker faces trial over CDO sale
• Citi shifts investor relations chief 

READ MORE: 

http://www.ft.com/cms/s/0/ad1ec426-cd07-11e1-92c1-00144feabdc0.html?ftcamp=published_links%2Frss%2Fmarkets%2Ffeed%2F%2Fproduct#axzz20eWr86b8

America's Top States for Business 2012

#43 DELAWARE

ECONOMIC PROFILE

Governor: Jack Markell (D)

Population: 907, 135

GDP (per capita): $63,159

Number of S&P companies: 2

Top corporate tax rate: 8.70 percent

Top individual tax rate: 6.75 percent

Gasoline taxes/fees: 23.0 cents

Bond Rating/Outlook: Aaa/Stable

SAT scores (average): 1455/2400 

Degree Granting Institutions (colleges/universities): 11

Sources:  Census Bureau (2011), Standard & Poor’s (2012), Tax Foundation (2012), American Petroleum Institute (2012), Bureau Labor Statistics (2011), National Center For Education Statistics (2011), Moody’s (2012), CNBC

READ MORE:  http://www.cnbc.com/id/46414986

Biggest and Smallest Among Worst of Top States for Business

When it comes to the worst states in our Top States for Business study, a handful almost always winds up in the final five spots. There's also usually little change in the bottom 10.

The former is once again true in our 2012 edition. But the latter certainly is not, with three states falling out.

Once again, Rhode Island finished last, scoring some 25 points less than Hawaii, a perennial bottom-five state. Those two and West Virginia (48) are the only three states to score less than 1,000 points (out of 2,500).
 Three other states ranked pretty much where they were last year: Alaska(47/49), Mississippi (46/47), Nevada (45/45).

New to the bottom 10 are Connecticut (44/39), Delaware (43/36) and New Jersey (41/30). (Check their respective state pages to see what happened.)

READ MORE:  http://www.cnbc.com/id/47904118

Spain Deepens Austerity Under European Pressure

Prime Minister Mariano Rajoy announced a swathe of new taxes and spending cuts on Wednesday designed to slash 65 billion euros from the budget deficit by 2014 as recession-plagued Spain struggles to meet tough targets agreed with Europe.

Grant Faint | The Image Bank | Getty Image

Rajoy, of the center-right People's Party, proposed a 3-point hike in the main rate of Value Added Tax on goods and services to 21 percent, and outlined cuts in unemployment benefit and civil service pay and perks in a parliamentary speech interrupted by jeers and boos from the opposition.

"These measures are not pleasant, but they are necessary. Our public spending exceeds our income by tens of billions of euros," Rajoy told parliament.

READ MORE:  http://www.cnbc.com/id/48144383

DRIESSEN: American consumers pay dearly to go ‘green’

Obama’s war on fossil fuels means higher prices for families 

President Obama has spent 3 1/2 years waging war on fossil fuels - and American consumers and families are caught in the crossfire.

They are getting hit with higher energy prices, watching billions go to unfriendly overseas countries for oil we could produce in the United States, and seeing billions of tax dollars wasted on energy schemes designed to make “green” energy more competitive by making gasoline, diesel and other fossil fuels that really power our economy more expensive.

Even worse, Mr. Obama’s policies are killing jobs and preventing job creation in the oil patch, coal country and hundreds of industries whose survival depends on reliable, affordable energy. Family salaries and budgets, health and welfare, and hopes and dreams are being pummeled.

In reality, the only thing “green” about Mr. Obama’s ideologically driven energy policies is the money leaving our wallets. His energy policy isn’t about serving American consumers. It’s about appeasing environmentalists and crony capitalists the president is counting on for his re-election campaign.

READ MORE:  http://www.washingtontimes.com/news/2012/jul/10/american-consumers-pay-dearly-to-go-green/

The other foreclosure crisis: Losing a home over $400 in back taxes

NEW YORK (CNNMoney) -- People are losing their homes over unpaid tax bills that, in some cases, add up to just a few hundred dollars.

Outdated state laws that allow local governments to sell tax liens on delinquent properties to investors in order to more quickly collect on overdue property taxes is sparking a second "foreclosure crisis," a report from the National Consumer Law Center said Tuesday.

When homeowners don't pay property taxes or other municipal bills, like water or sewer fees, local governments have less money to maintain services like schools, police and fire departments and road maintenance. By selling tax liens, those governments can collect on what it is owed.

READ MORE:  http://money.cnn.com/2012/07/10/real_estate/tax-liens/index.htm

Job Weakness Starts to Shape Election Tone

It is increasingly apparent what the economy will look like when President Obama faces voters in November: pretty much what it looks like today.

And that picture, a report from the Labor Department made clear on Friday, is far from the booming job growth that prevailed only a few months ago. In June, the economy added a meager 80,000 jobs, and the unemployment rate remained at 8.2 percent. 

Early this year, optimists buzzed that the jobless rate might touch below 8 percent by the election, a milestone that would be a major symbolic victory for the incumbent. Then employment growth slowed in March and took a turn toward the paltry in April and May. 

READ MORE:  http://www.nytimes.com/2012/07/07/business/economy/unemployment-report-for-june.html?_r=2&pagewanted=all

IMF's Lagarde voices concern over global economy

(Reuters) - The head of the International Monetary Fund expressed concern on Friday at a deterioration in the global economy, saying the outlook has become more worrying as developed and big emerging nations show signs of slowing down.

The comments by IMF Managing Director Christine Lagarde came after the European Central Bank, the Bank of England and China's central bank all eased monetary policy in a sign of the growing alarm over the health of the world economy.

Financial markets will be glued later on Friday to news of U.S. jobs data for the month of June for the latest sign on the health of the world's biggest economy, which has shown signs of losing momentum.
China, the world's second-biggest economy, releases a raft of data next week, including on second-quarter GDP.

"In the last few months, the global outlook has been more worrying for Europe, the United States and large emerging markets," Lagarde said in a speech in Tokyo.

READ MORE:  http://www.reuters.com/article/2012/07/06/us-imf-lagarde-japan-idUSBRE86505J20120706

Japan's government could run out of cash by October

(Reuters) - Japan's government could run out of money by the end of October, halting all state spending including salaries, pensions and unemployment benefits, because of a standoff in parliament that has blocked a bill to finance the deficit.

The deficit financing bill, which would allow the government to sell bonds needed to fund almost half of the budget, has languished in parliament as the ruling Democratic Party tussles with opposition parties that can use their control of the upper house to reject legislation.

"Without this bill, the budget will collapse," Finance Minister Jun Azumi said on Friday, pleading for cooperation from the two largest opposition parties.

"It doesn't matter which party is in power. I really hope that we can get a multi-partisan agreement on the deficit bill."

If the bill is not passed, government spending would grind to a halt, the world's third-largest economy would be put in jeopardy and its standing among credit ratings agencies could suffer.

READ MORE:  http://www.reuters.com/article/2012/07/06/us-japan-economy-azumi-idUSBRE86501O20120706

China's Fleet of 'Ghost' Ships Signals Worsening Slowdown

China's huge fleet of coastal ships, usually confined to plying the Chinese seaboard, has sailed out of the shadows to seek international business in yet another sign that China's economy is slowing.

Thierry Dosogne | Riser | Getty Images

The fleet, previously unnoticed by the global market, is suffering from a slowdown in China's coastal trade amid weaker domestic demand from utilities and steel mills and a growing glut in Chinese coal and iron ore stockpiles.

The vessels are now being forced to seek new business such as in the Indonesian coal trade, dealing a further blow to the depressed global dry bulk shipping market.

"There are many more ships lying idle at Chinese ports now - the environment for making money is not so good," said a source at one of the big five coastal shippers, who asked not to be identified.

READ MORE:   http://www.cnbc.com/id/48076866

Anxiety Mounts as US Economy Limps Into 2nd Half

A slew of weak U.S. economic data is casting doubts over expectations of a pick-up in growth in the second half of the year.

From manufacturing to job growth to consumer spending, the numbers have been grim, and economists are wondering whether they need to dial down forecasts for the remainder of the year.

"Our sense was that of a gradual improvement. Now the sense is of muddling along at a low level of activity," said Adolfo Laurenti, deputy chief economist at Mesirow Financial in Chicago. "We went from seeing progress, though gradual and very uneven, to not seeing progress at all."

The economy grew at a 1.9 percent annual pace in the first quarter and estimates for the April-June period are increasingly coming in around 1.5 percent.

READ MORE:  http://www.cnbc.com/id/48086345

France Faces Major Test as It Enters 'Danger Zone'

Having been in power for less than two months Francois Hollande is facing the first major test of his pro-growth election (related: 10 Game-Changing Elections) commitments after a warning from the national audit office that France’s economy is in the “danger zone” and risks falling into a “debt spiral.”

Bloomberg | Getty Images Francois Hollande, France's president, arrives for a news conference following the European Leaders (EU) summit at the European Council headquarters in Brussels, Belgium, on Thursday, May 24, 2012.

Late on Monday the national audit office said the French budget deficit will overshoot by 6-10 billion euros ($7.56-12.6 billion) this year and by 33 billion euros in 2013. In order to bring the budget in-line with EU rules, Hollande is going to have to make difficult decisions on spending and taxes that could draw criticism from his own party and unions who supported the pro-growth message that saw him beat Nicolas Sarkozy to the presidency in May.

READ MORE:  http://www.cnbc.com/id/48054565

Mammoth Lakes files for bankruptcy

The High Sierra town of Mammoth Lakes said Monday that it filed for bankruptcy because it cannot afford to pay a $43-million breach-of-contract judgment against it brought by a developer.

In a prepared statement, Mammoth Lakes officials said "bankruptcy, unfortunately, is the only option left" for the town, whose largest creditor, Mammoth Lakes Land Acquisition, had won a state court order requiring full payment by June 30, 2012.

Facing a judgment nearly three times the size of its annual operating budget and a $2.8-million shortfall in its 2011-12 fiscal year, the town had already cut many services and asked employees to take reductions in pay. Compounding problems, the adjacent Mammoth Mountain ski resort was forced to lay off 70 full-time employees last year due to a dearth of snow.

PHOTOS: California cities in bankrupcy

A breakdown in negotiations with the developer was the last straw.

READ MORE:  http://latimesblogs.latimes.com/lanow/2012/07/mammoth-lakes-bankruptcy.html

'It's an addiction': Dallas NAACP wants to BAN 'racist' state lottery because it drains money of minorities and poor people

The Dallas, Texas, branch of the NAACP has called for a ban on the state lottery, claiming that it is a drain on the finances of low-income people, and especially minorities, who can least afford games of chance.

Chapter President Juanita Wallace said many people have spent all their hard-earned money in hopes of  striking it rich, but instead, the lottery has left their finances in shambles.  
‘It’s an addiction,‘ she told CNN.

Wallace said one man she knew died last week without health insurance because he withdrew all of the funds from his policy to buy lottery tickets.

Read more: http://www.dailymail.co.uk/news/article-2166826/Its-addiction-Dallas-NAACP-wants-BAN-racist-state-lottery-drains-money-minorities-poor-people.html#ixzz1zaDSdl5i

Government Medical "Insurance"

One of Ludwig von Mises's keenest insights was on the cumulative tendency of government intervention. The government, in its wisdom, perceives a problem (and Lord knows, there are always problems!). The government then intervenes to "solve" that problem. But lo and behold! instead of solving the initial problem, the intervention creates two or three further problems, which the government feels it must intervene to heal, and so on toward socialism.

No industry provides a more dramatic illustration of this malignant process than medical care. We stand at the seemingly inexorable brink of fully socialized medicine, or what is euphemistically called "national health insurance." Physician and hospital prices are high and are always rising rapidly, far beyond general inflation. As a result, the medically uninsured can scarcely pay at all, so that those who are not certifiable claimants for charity or Medicaid are bereft. Hence, the call for national health insurance.

But why are rates high and increasing rapidly? The answer is the very existence of healthcare insurance, which was established or subsidized or promoted by the government to help ease the previous burden of medical care. Medicare, Blue Cross, etc., are also very peculiar forms of "insurance."

READ MORE:  http://mises.org/daily/6099/Government-Medical-Insurance

JPMorgan Trading Loss May Reach $9 Billion

Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation.

When Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. But the red ink has been mounting in recent weeks, as the bank has been unwinding its positions, according to interviews with current and former traders and executives at the bank who asked not to be named because of investigations into the bank.

The bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year.

READ MORE:   http://dealbook.nytimes.com/2012/06/28/jpmorgan-trading-loss-may-reach-9-billion/?partner=MYWAY&ei=5065