1--Food Banks Bracing For End Of Extended Unemployment Benefits, Huffington Post
Excerpt: Two federal programs -- Emergency Unemployment Compensation and Extended Benefits, which together provide up to 73 weeks of jobless aid on top of 26 weeks of state aid -- are set to begin to expire this week because Congress has not reauthorized them. According to the Labor Department, two million long-term unemployed will be dropped from the programs by the end of December if Congress does not act.
Congress allowed benefits to lapse twice for a brief time earlier this year, and once for a long time, when 2.5 million had their benefits interrupted for nearly two months over the summer....
The Congressional Budget Office recently reported that extended unemployment benefits prevented record poverty in 2009 and were used mostly by middle-class Americans. Households with total income more than twice the poverty threshold received 70 percent of the $120 billion the federal government spent on unemployment benefits last year. Part of the reason is that the benefits themselves push families into higher-income groups.
A study released by Feeding America this year found that of the 37 million people served by its member food banks, 70 percent came from households with incomes below the poverty line. The study found that 5.7 million people received emergency food assistance in 2009, a 27 percent increase from 2006.
2--Obama seeks to freeze government workers pay, but gains nothing, EPI
Excerpt: In the context of the deficit, Obama will get chump change from freezing federal pay, and will only enlarge the degree to which federal pay lags that of the private sector (a gap of 22%, according to the federal pay agent’s report.
This is another example of the administration’s tendency to bargain with itself rather than Republicans, and in the process reinforces conservative myths, in this case the myth that federal workers are overpaid. Such a policy also ignores the fact that deficit reduction and loss of pay at a time when the unemployment rate remains above 9% will only weaken a too-weak recovery. --Lawrence Mishel
3--Japan, South Korea factory output slumps as inventory rebuild slows, Reuters
Excerpt: Japanese companies cut production for the fifth month and by the biggest margin since February 2009, while South Korea's industrial output fell for the third month in a row, disappointing markets which had bet on a rebound.
"The inventory rebuilding cycle after the recession has come to an end, and what we're left with is final domestic demand, which isn't doing that well across the globe," said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong.
Economists had long expected Asia and the world economy would slow in the second half of this year and early in 2011 as the rebuilding of inventories that had been depleted during the recession was drawing to an end and the effects of stimulus packages were wearing off.
4--Investors start to dump Spanish bonds, Bloomberg
Excerpt: Spain’s banks may struggle to refinance about 85 billion euros ($111 billion) in debt next year as costs surge on concern continental Europe’s fourth- biggest economy may need an Irish-style bailout.
“There’s a universal dumping of Spain going on,” said Andrea Williams, who helps manage about 623 million pounds ($968 million), including shares in Banco Santander SA, at Royal London Asset Management. “The fear is that Portugal, Spain and Italy are now in line after what happened in Ireland.”...
“The big elephant in the room is not Portugal but, of course, it’s Spain,” Nouriel Roubini, the New York University professor who predicted the global financial crisis, said at a conference in Prague yesterday. “There is not enough official money to bail out Spain if trouble occurs.”
5--Putin's call to end dollar hegemony, credit writedowns
Excerpt: (Video) Russia and Germany should increase their economic co-operation. This is the message Russian Prime Minister Vladimir Putin delivered to some of Germany’s top business leaders in Berlin. Putin went so far as to suggest a Russian-EU free trade zone "from Lisbon to Vladivostok." The under-current from Putin’s remarks has much to do with anti-US Dollar sentiment because he said specifically that having the U.S. dollar as the sole reserve currency "is definitely something negative."
Putin is serious about ditching the dollar. But will this gain any traction? RT video below. Watch the last portion as well in which Max Keiser says the re-emergence of Germany as a super power is the trend to watch.
6--Insolvent – Greece, Ireland, Portugal and probably Spain, FT. Alphaville
Excerpt: Former FT blogger Willem, ‘Maverecon’, Buiter has lost none of his power to shock....Buiter claims Ireland is insolvent, Portugal is quietly insolvent, Greece is de facto insolvent and Spain will be insolvent once the problems in its banking sector are recognised.
At which point things get really interesting. Buiter predicts the ECB could be forced to buy Spanish government paper and fund its banking system by purchasing the debt from the European Financial Stability Facility if things get really bad....
Buiter: in our view, once Spain needs assistance, the support of the ECB will be critical (by purchasing Spanish sovereign debt through its Securities Markets Program — SMP — and funding Spanish banks using Spanish sovereign debt or sovereign-guaranteed financial instruments as collateral or by making loans to or purchasing the debt of the EFSF, legally a limited liability company that could even be made an eligible counterparty of the Eurosystem for this purpose).
In the longer term, there may be a need for large-scale restructuring of the debt of the Spanish banking sector and possibly the sovereign.
7--Number of the Week: 492 Days From Default to Foreclosure, Wall Street Journal
Excerpt: 492: The number of days since the average borrower in foreclosure last made a mortgage payment.
Banks can’t foreclose fast enough to keep up with all the people defaulting on their mortgage loans. That’s a problem, because it could make stiffing the bank even more attractive to struggling borrowers.
banks are taking progressively longer to foreclose. The average borrower in the foreclosure process hadn’t made a payment in 492 days as of the end of October, according to LPS. That compares to 382 days a year ago and a low of 244 days in August 2007.
In other words, people who default on their mortgages can reasonably expect, on average, to stay in their homes rent-free more than 16 months. In some states such as New York and Florida, the number is closer to 20 months.
8--The great "dollar crash" fiasco, Pragmatic Capitalism
Excerpt: “If my theories prove correct it is likely that the dollar is well oversold and equities have become overextended on false hopes of a Fed driven economic recovery. This means the market is excessively concerned about inflation and we are likely to move closer towards our economic reality of disinflation with a higher risk of deflation than high inflation. If this is correct it means there is a fairly sizable air pocket beneath risk assets currently. Warren Buffett once said it is better to be greedy when others are fearful and fearful when others are greedy. I am currently fearful.”
Since then we’ve seen a 7%+ move in the trade weighted dollar and the smallest 12 month increase in the history of the CPI report. In other words, inflation remains non-existent. For the minority who understood how QE was actually going to impact the economy this was an obvious inefficiency at work (yes Eugene Fama, you are still wrong and this was real-time evidence of it). QE2 wasn’t inflationary and it never was going to be inflationary because it merely alters the term structure of outstanding government debt and nothing more. It is not money printing.
This was just one more opportunity for the fear mongering hyperinflationists to latch onto something. Even as Ben Bernanke himself explained that he was not printing money we continued to see aspiring Presidential candidates, talking heads and even bunny rabbits explain to millions how the Fed was destroying the value of the dollars in our pockets. This was not only irresponsible, but entirely wrong. QE2 is not inflationary in the least bit. It does not help the US government spend in the future. It will not cause a dollar crash. It’s just an asset swap. It’s an unusual form of the standard monetary operations that the Federal Reserve always performs. But monetary policy during a balance sheet recession becomes a blunt instrument. QE2 is perhaps the most misunderstood and irrelevant policy the Fed has ever embarked upon. Or as I prefer to call it – the greatest monetary non-event.
9--A bit of truth on North Korea, Jimmy Carter, Washington Post
Excerpt: Nearly eight years ago, I wrote on this page about how in June 1994 President Kim Il Sung expelled International Atomic Energy Agency (IAEA) inspectors and proclaimed that spent fuel rods could be reprocessed into plutonium. Kim threatened to destroy Seoul if increasingly severe sanctions were imposed on his nation.
Desiring to resolve the crisis through direct talks with the United States, Kim invited me to Pyongyang to discuss the outstanding issues. With approval from President Bill Clinton, I went, and reported the positive results of these one-on-one discussions to the White House. Direct negotiations ensued in Geneva between a U.S. special envoy and a North Korean delegation, resulting in an "agreed framework" that stopped North Korea's fuel-cell reprocessing and restored IAEA inspection for eight years. ...
Sporadic negotiations over the next few years among North Korea, the United States, South Korea, Japan, China and Russia (the six parties) produced, in September 2005, an agreement that reaffirmed the basic premises of the 1994 accord. Its text included denuclearization of the Korean Peninsula, a pledge of non-aggression by the United States and steps to evolve a permanent peace agreement to replace the U.S.-North Korean-Chinese cease-fire that has been in effect since July 1953. Unfortunately, no substantive progress has been made since 2005, and the overall situation has been clouded by North Korea's development and testing of nuclear devices and medium- and long-range missiles, and military encounters with South Korea.