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U.S. credit default swaps currently trade in euros. After all, if the U.S. defaults, who will want payment in devalued U.S. dollars? The euro recently weakened relative to the dollar, and market participants are calling for contracts that require payment in gold. If they get their way, speculators on the winning side of a price move will demand collateral paid in gold.
The market can create an unlimited number of these contracts very rapidly. The U.S. wouldn't have to ever default to trigger a major disruption in the gold market. Spreads (or prices) on the credit default swaps could simply move based on "news," and demand for gold would soar.
If this speculation drives up the price of gold, and the available gold supply becomes limited, are you willing to post your children as collateral? I am pushing the point so that we put a stop to this before it is too late.
General education spending would fall by about $1.4 billion, he said, an 11 percent decrease. The "foundation level" of state support for each child would fall from $6,119 now to about $5,600 next year.
Vaught estimated schools would have to lay off about 17,000 teachers.
Do Britain's banks have enough capital to [survive] a second recession? Probably.
A little–noticed law could soon result in smaller Social Security checks for hundreds of thousands of the elderly and disabled who owe the U.S. money from defaulted loans and other debts more than a decade old.
Social Security benefits are off–limits to creditors, such as credit–card companies and banks. But the U.S. can collect debts to federal agencies by "offsetting," or withholding Social Security and disability payments.
The Treasury currently withholds benefits of 3.1 million Social Security recipients to recover defaulted student–, farm– and small–business loans, unpaid income taxes, amounts veterans owe for health care, and other debts to the government.
The US government recorded a budget deficit of $221bn (£147.6bn) in February - the largest monthly deficit in its history.
The total deficit since the beginning of the fiscal year in October now stands at $651.6bn, the figures from the US treasury show.
Treasury Secretary Timothy Geithner called the deficit "unsustainable".
However, he maintained that running the deficit was helping the US continue its recovery from the recession in the short-term.
Like the UK, the US is suffering from a fall in tax receipts due to tough economic conditions, while relying on increased spending to drive the recovery.
But analysts called the figures "frightening".
KANSAS CITY, Mo. - The Kansas City school board narrowly approved a plan Wednesday night to close nearly half of the district's schools in a desperate bid to avoid a potential bankruptcy.
The board voted 5-4 after parents and community leaders made final pleas to spare the schools even as the beleaguered district seeks to erase a projected $50 million budget shortfall. The approved plan calls for shuttering 29 of 61 schools — a striking amount even as public school closures rise nationwide while the recession eats away at academic budgets.
US retail sales showed a surprise rise in February as consumers braved extreme bad weather to get to the shops.
The US Commerce Department said retail sales rose 0.3% last month, whereas forecasts had predicted a fall of 0.2%.
The rise, the biggest since November, fuelled hopes that economic recovery is gaining momentum and helped to boost shares on Wall Street...
Greece's economy will shrink more than the government is forecasting this year, its central bank governor said, while the European Commission produced an even bleaker prognosis for the debt-laden country.
Financial markets are gripped by the role derivatives have played in Greece's debt crisis, but Italy also has a derivatives time bomb, and hundreds of cities are in the 24 billion euro blast zone.
U.S. states and cities may increasingly turn to deficit borrowing to deal with still sagging tax revenue and the pending loss of federal stimulus money.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $38.1 million. Home Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Statewide Bank is the 30th FDIC-insured institution to fail in the nation this year, and the first in Louisiana. The last FDIC-insured institution closed in the state was The Farmers Bank & Trust of Cheneyville, Cheneyville, December 17, 2002.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $94.6 million. Centennial Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Old Southern Bank is the 29th FDIC-insured institution to fail in the nation this year, and the fourth in Florida. The last FDIC-insured institution closed in the state was Marco Community Bank, Marco Island, February 19, 2010.
As part of this transaction, the FDIC will acquire a cash appreciation instrument. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $50.7 million. Valley National Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. The Park Avenue Bank is the 28th FDIC-insured institution to fail in the nation this year, and the second in New York. The last FDIC-insured institution closed in the state was LibertyPointe Bank, New, York, New York, on March 11, 2010.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $24.8 million. Valley National Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. LibertyPointe Bank is the 27th FDIC-insured institution to fail in the nation this year, and the first in New York. The last FDIC-insured institution closed in the state was Waterford Village Bank, Williamsville, July 24, 2009.
The euro zone has not agreed a deal on financial support for heavily indebted Greece, but technical work is continuing and the Commission stands ready to act if need be, a spokesman said today.
Asked whether the 16 euro zone members had reached a deal on financial support for Greece, European Commission spokesman Jonathan Todd said: "The Commission stands ready to act if necessary. Technical work is ongoing and has not yet been concluded.
All the rest is speculation." Britain's Guardian newspaper on Saturday quoted an unnamed senior European Commission official saying euro zone members had agreed on "coordinated bilateral contributions" in the form of loans or loan guarantees if Greece asks the EU for help.
In its report, the Guardian claimed the 16 euro zone members had agreed on "co-ordinated bilateral contributions" in the form of loans or loan guarantees to Greece if Athens is unable to refinance its debts and asks the European Union for help.
The agreement was reached despite strong resistance by Germany, and Berlin has played the pivotal role in organising the deal, the paper quoted other sources as saying.
Euro zone finance ministers will finalise the package on Monday, the paper said.
The aid to be made available by the bailout could reach €25 billion, the paper quoted its sources as saying. Greece's borrowing needs for the whole of 2010 total €53.2 billion.
Greece, labouring under a crippling debt burden, announced a €4.8 billion package of austerity measures last week designed to reduce its budget deficit to 8.7 per cent of GDP this year from 12.7 per cent in 2009.
It has been paying a high premium over benchmark European bonds to raise funds, the yield spread of 10-year Greek government paper over bunds topping 400 basis points in January.
The bailout "will be a coordinated approach of bilateral contributions . . . a bilateral contribution can be a loan or a loan guarantee. The guarantees will facilitate the kind of funds potentially needed in this context," the paper quoted the senior commission official as saying.
The agreement has been tailored to avoid breaking the ban, in the rules governing the operation of the euro currency, on a bailout for a country on the brink of bankruptcy, and to avoid a challenge by Germany's supreme court, the official addded.