The German auction of 10-year bonds failed to receive the 6 billion euros the government wanted to raise. Countries across Europe including the UK, Italy, Spain, Austria, Belgium, and the Netherlands, had either to struggle to sell their bonds or cancel their debt offerings because of lack of demand. This is particularly foreboding because this year governments around the world are looking to raise $3,000 billion, three times more than in 2008.
And Los Angeles County officials said they would cover welfare payments to more than 500,000 local recipients — for now.
But California is projected to be $346 million short of the funds it needs to pay all its bills in February. By March, the state would be so far in the red that even continuing to suspend payments would not cover the shortfall. California would be insolvent, making the issuance of IOUs likely.
From later on in the article….
The state has also halted payments of bond money for more than 5,300 public-works projects.
On Friday, the state Department of Finance temporarily exempted 276 of the projects from the freeze, reasoning that because they are nearly complete, it could cost the state more to shut them down than to finish them.
Traders unable to get rid of crude are selling at a huge discount as storage facilities fill up with unwanted oil and gas, said analyst Stephen Schork.
Those lucky enough to find unused storage facilities are holding their oil in hopes of cashing in on the higher March prices. But those prices could evaporate quickly, Schork said.
“Who the heck wants to buy right now?” Schork said. “If you’ve got barrels, you’re going to sit and wait and wait and wait.”
The uptick in February oil prices suggests there are still buyers out there who can either move crude or have found a rare storage facility. Still, Schork doesn’t expect industrial demand to perk up before the fourth quarter of 2009, and crude prices in March could suffer a worse fate than February, dropping below $30 a barrel, he said.
All those speculators who bought oil on the idea that it was going to go up forever are now getting wiped out. At first they were storing the oil hoping that it would go back up. But now they are running out of places to store the oil and and prices are still low.
Wu is one of 160,000 collectors in Beijing who make a living from the detritus of urban life – plastic sheeting, office printouts, bottles, radiators and scraps of cardboard. Recycling has become a global industry and China is the largest importer of the world’s waste materials, taking in as much as a third of Britain’s recyclables for example. Then came the slump, decimating the Chinese recycling industry and leaving Britain, the US and others grappling with growing volumes of recycled waste and nowhere to send it.
“It’s a canary in the coalmine: it’s the front and back end of industry,” said Adam Minter, who runs the Shanghai Scrap blog and specialises in the metal trade. “Until about eight weeks ago, for example, the entire [US] west coast paper market was sent to China and most of it was sent south. It was processed and made into packaging for products that then shipped back to the US … But when US consumer demand dropped off, that broke the cycle.”
Never realized before that the US sent so much of its recyclables overseas to be processed.
This came via RussiaToday, which is a propaganda arm of the Russian Government (sort of like voice of America except more effective)
The claim about the proposed American backed pipeline having no gas to ship is wrong. Certainly those countries are currently selling their gas to Russia and China, but that is because they have no other way of getting it to market. There is nothing in their contracts that would make those countries keep on selling the gas to Russia and China once they had alternatives. Moreover, if that pipeline were to be built, lots of western companies would come in and find new sources of gas.
The real issue for the proposed American backed pipeline is who has the will and capability to defend should it be built. Furthermore, it is questionable if any of the proposed pipelines can be built in the current economic climate. Who is going to fund them when everybody is worried about keeping their banking systems intact? That is Ukraine’s only prayer in this contest.
In the long term, this is all a non-issue. The real issue is the continuing implosion of all Slavic societies. Spats such as this one will only accelerate that implosion.
The same story applies to the official sector as a whole. Central banks sold $26.2b of long-term Treasuries, but added $66.6b to their short-term Treasury holdings. Net central bank holdings of Treasuries — judging from the TIC data — rose by $40.4b. That is consistent with the $49.1b rise in the Fed’s custodial holdings of Treasuries. Central banks by contrast are reducing their holdings of short-term and long-term Agencies. They sold $14.3b of long-term Agencies, and their short-term holdings likely fell by a comparable amount.**
Selling long dated treasuries in exchange for short dated Treasuries is a sign that they think interest rates will rise in the near future. Otherwise the move does not make any sense at all in this environment. What do they know that we do not?
From the Deal Journal (A WJS blog)….
Many of the problems originated at Merrill Lynch, which had a loss of $15 billion in the quarter, or three times worse than the last quarter. “To put [the] $15 bn after-tax [loss] in perspective, 60% of the common equity base of the company was lost in one quarter,” Goldman Sachs research analysts noted wryly in a research report this morning.
Felix Salmon has some questions.
Since Bank of America is bailing out/buying Merrill Lynch, you should also read “WSJ: Bank of America to Receive $20 Billion Injection, Support for $118 Billion of Loans” from Naked Capitalism to get a better idea of the extent of this mess.
Electronics retailer Circuit City Stores reached an agreement with liquidators on Friday to sell the merchandise in its 567 U.S. stores after failing to find a buyer or a refinancing deal.
The company – which had been the nation’s second-biggest consumer electronics retailer, employing about 35,000 employees – appointed Great American Group, Hudson Capital Partners, SB Capital Group and Tiger Capital Group as liquidators.
A major sticking point for the DEC was the threshold used to determine if inflow (water coming into the system from above ground) or infiltration (groundwater) is excessive. The report uses a threshold established in Massachusetts because New York has no established standards, explained John Lagorga, a consultant with Stearns & Wheler who is overseeing the flow management evaluation.
DEC Engineer James Burke said it would take about a week to determine if the Massachusetts threshold is acceptable or if new standards were required.
Got that? Their was no standard mandated by law. So they tried to use another State’s standard. But that still might be found in noncompliance. The DEC just has not made up its mind yet. You are guilty until proven innocent.