The barrage of noteworthy economic news continues as we head into the new year. Here are a few headline news reports of interest from the past couple days.
Japan’s government and central bank are considering a $110 billion scheme to buy bad loans and other financial assets from banks to ease a credit crunch gripping the country’s businesses, daily Sankei Shimbun said on Tuesday.
Such a scheme would come on top of Tokyo’s efforts to keep the world’s second-largest economy from sliding deeper into recession as the global credit crisis hurts exports and corporate funding conditions tighten.
The government has announced extra spending plans and its biggest ever budget for the next fiscal year, while the central bank cut interest rates to near zero and offered to temporarily buy commercial paper outright earlier this month, echoing some of the emergency steps taken by the U.S. Federal Reserve.
Venezuela will seize several gold mining concessions that previous governments granted private operators, in a bid to supplement falling oil prices with proceeds from state-controlled gold, President Hugo Chavez said Saturday.
Chavez named no specific contracts or companies to be affected, but his mining minister has vowed to next year take over the nation’s largest mine, Las Cristinas, which is operated by Canadian mining company Crystallex International Corp.
“We are taking back some concessions that former governments have given, and whose permits are still held by some rich people,” in order to reduce public reliance on oil, Chavez said.
Chavez acknowledges that oil prices — down 70 percent since topping $147 a barrel in July — will affect Venezuela, but he insists the wealthy will suffer more than the country’s poor, who benefit from social spending programs that he vows to continue.
“Social investment will not be halted,” Chavez said Friday. “This, for us, is sacred.”
Clothing makers, balking at the deep holiday discounts offered by retailers such as Macy’s Inc., may force department stores to eat more of the markdowns.
Liz Claiborne Inc., HMS Productions Inc. and a raft of apparel companies plan to push back at the retailers who have slashed some prices by 70 percent amid what’s shaping up as the worst holiday shopping season in four decades.
Apparel manufacturers and department stores will meet before the retail fiscal year ends on Jan. 31 to determine how to split discount costs. Vendors, as is customary, pledged six to nine months ago to compensate retailers for price cuts needed to sell their goods with so-called markdown dollars.
Department-store owners typically set discounts with input from their suppliers and in previous years have had leverage in passing on markdown costs. This time, the retailers may be willing to shoulder more of the burden to help keep vendors solvent, said Michael Appel, a managing director at Quest Turnaround Advisors LLC, a Purchase, New York-based firm that provides crisis management services to retailers.
Department stores have gone beyond “what the markdown rate ought to be,” Liz Claiborne Chief Executive Officer Bill McComb said on a Nov. 11 conference call. “There’s no way that every vendor is going to be paying 100 percent of their liabilities here.”
Markdowns are the new reality. If vendors won’t eat the markdowns stores will order less, if at all.
Toyota Motor Corp. and Honda Motor Co., Japan’s two largest carmakers, may modify their so-called “just-in-time” manufacturing system to avoid possible supplier bankruptcies disrupting production.
“We continue contingency planning” even after the bailout, Mike Goss, a spokesman for Toyota’s North American manufacturing unit in Erlanger, Kentucky, said by e-mail. “We hope the loans provided to Detroit will also help to stabilize suppliers, but the very slow market remains a concern for all.”
Ford Motor Co. plans to offer two Lincoln models next year that can park themselves, the latest move in a strategy aimed at improving the public’s image of the auto maker.
The automatic parallel-parking system will be shown next month at the North American International Auto Show in Detroit, and will be offered as an option on the Lincoln MKS sedan and MKT crossover-utility vehicle.
Similar technology is already available from Toyota Motor Corp.’s Lexus division, but Ford’s push reflects a wider effort championed by Chief Executive Alan Mulally to cast the company in a more favorable light. At the Detroit show, Ford also will show a hybrid version of the Ford Fusion sedan rated at 41 miles a gallon in city driving — eight more than Toyota’s Camry hybrid.
Ford’s system requires less driver input and reduces the risk of selecting a too-small spot, said Ali Jammoul, Ford’s chief engineer for steering systems.
Gainesville’s first community hospital has been on life support since the Shands Healthcare system in northern Florida bought it a dozen years ago.
Like many U.S. hospitals, Shands is being squeezed by tight credit, higher borrowing costs, investment losses and a jump in patients — many recently unemployed or otherwise underinsured — not paying their bills.
All that has begun to trigger more hospital closings — from impoverished Newark, N.J., to wealthy Beverly Hills, Calif. — as well as layoffs, other cost-cutting and scrapping or delaying building projects. More closings and mergers are on the way, industry consultants predict.
“They’ll get swallowed up by somebody else, if they need to exist, and if they don’t, they’ll just close,” said Tuck Crocker, vice president of the health care practice at management consultant BearingPoint.
Most endangered are rural hospitals and urban ones in areas with excess hospital beds and a lot of poor, uninsured patients.
About 30 U.S. slaughterhouses were refused certification to export meat to Mexico, the U.S. Department of Agriculture said, without giving a reason.
Some of the plants are owned by Tyson Foods Inc., the largest U.S.-based meat producer, and process poultry, pork and beef, a report on the USDA Web site showed. Facilities owned by Smithfield Foods Inc. were also included on the list of plants that can’t ship some meats to Mexico.
The move will probably hurt U.S. export sales, reducing demand for hogs, cattle and poultry and causing prices to fall, said Chris Lehner, the brokerage division manager at CommStock Investments in Royal, Iowa.
“Mexico is one of our better export destinations,” Lehner said. “It’s going to hurt at a time when financial problems are hurting the beef or pork industries.”
U.S. authorities pulled the certification of the plants as part of an accord with Mexico, said Marco Antonio Sifuentes, a spokesman for the Latin American country’s Agriculture Ministry. Any plant that fails on three consecutive occasions to meet sanitary and quality standards automatically loses its right to export, he said by telephone from Mexico City.
“This is a common practice,” Sifuentes said. The plants may be certified for export in the future, he said. Some Mexican plants were barred from exporting to the U.S. following a similar review about three months ago, he said.
This looks like a clear case of Tit for Tat Protectionism
Family finds $10,000 cash in a box of crackers
The box of Annie’s Sour Cream and Onion Cheddar Bunny crackers was green – but the Rogoff family had no idea that its contents were green, too.
Sandra Rogoff reached into the cupboard on Oct. 10 and opened a box of crackers, only to find an unmarked white envelope taking up residence next to the bagged crackers. She opened it to discover $10,000 in $100 bills.
Police went to Whole Foods where managers told them an elderly customer came in a few days earlier, hysterical after she realized she had mistakenly returned the box of crackers with her life savings inside. Frightened by the government takeover of several banks, the Lake Forest woman, whose identity was not released, had decided to take her money out of the bank and hide it in her home.
Police told Rogoff that Whole Foods usually sends returned food to a composting facility in the Inland Empire, and store managers told the woman her money was likely gone. An apparent mix-up led the box of crackers to be restocked on the shelves, where an unsuspecting Debra Rogoff purchased them. She guesses that the elderly woman glued the box shut after putting the money in, “because I’m a pretty careful shopper. I would have noticed if the box was open.”
The woman was reunited with her money. The Rogoffs never heard from her and didn’t receive any sort of reward. But Debra did return to Whole Foods a couple of weeks later.
“I asked them if I could have another box of crackers,” she said with a laugh. The store obliged.
A box of Annie’s Sour Cream and Onion Cheddar Bunny Crackers is the new safe place to stash cash.
“Shaped like our favorite mascot, Bernie the Bunny, these yummy, crisp crackers are made with organic wheat flour and real cheddar cheese. All of our flavors – Original Cheddar, Sour Cream & Onion, White Cheddar, and Whole Wheat, are flavorful, wholesome, and healthy snacks for kids and Annie’s fans of all ages.“
Focus on Weatherization Is Shift on Energy Costs
In the forgotten corners of tens of millions of American attics and basements, near the old Trivial Pursuit games and out-of-season clothes, are flaws that waste vast amounts of energy. Buildings often resemble colanders. Leaking ducts bleed heated air into areas outside living space. Cold-air returns suck in dust and mold from attics, or gas and oil fumes from garden equipment stored in basements. Long-neglected air filters clog, forcing furnaces or air-conditioners to work harder.
Correct those flaws, and heating and cooling costs are typically cut by 20 percent to 30 percent, a saving of more than $1,000 annually in some households. In addition, carbon dioxide emissions and the strain on the national electric and gas systems are reduced.
About 140,000 houses will be weatherized with public help this year, a total that President-elect Barack Obama has promised to raise to one million, to reduce energy consumption and cut energy costs for households and taxpayers, who often absorb those costs for the poor. This would represent a historic shift in emphasis for the federal and state governments, reducing poor people’s energy bills instead of helping to pay them.
Weatherizing a million homes annually would also create about 78,000 jobs for a year, according to the federal Energy Department’s weatherization project director, Gil Sperling.
The current 140,000 annual total creates about 8,000 jobs, Mr. Sperling said.
Although that is a tiny fraction of the five million green-collar jobs that Mr. Obama promised in the campaign, “it’s a decent number of jobs per dollar spent,” said Harry J. Holzer, an economist at Georgetown University and at the Urban Institute, a nonprofit group in Washington. “The work is productive, and the jobs are at a mix of skill levels.”
Congress added $250 million to the weatherization budget for the fiscal year that began Oct. 1. Energy experts say that money could be effectively spent in low-income households and in households that have no need of public assistance.
Few in this threadbare little mill town gave much thought to the Donald W. Wyatt Detention Facility, the maximum-security jail beside the public ball fields at the edge of town. Even when it expanded and added barbed wire, Wyatt was just the backdrop for Little League games, its name stitched on the caps of the team it sponsored.
Then people began to disappear: the leader of a prayer group at St. Matthew’s Roman Catholic Church; the father of a second grader at the public charter school; a woman who mopped floors in a Providence courthouse.
After days of searching, their families found them locked up inside Wyatt — only blocks from home, but in a separate world.
In this mostly Latino city, hardly anyone had realized that in addition to detaining the accused drug dealers and mobsters everyone heard about, the jail held hundreds of people charged with no crime — people caught in the nation’s crackdown on illegal immigration. Fewer still knew that Wyatt was a portal into an expanding network of other jails, bigger and more remote, all propelling detainees toward deportation with little chance to protest.
Wyatt offers a rare look into the fastest-growing, least-examined type of incarceration in America, an industry that detains half a million people a year, up from a few thousand just 15 years ago. The system operates without the rules that protect criminal suspects, and has grown up with little oversight, often in the backyards of communities desperate for any source of money and work.
The above article is long, a full 6 pages. There are many sides to the story. What do you do with a child born in the US who is a legal US citizen, perhaps in grade school, but his father and mother are not US citizens, and one of them is in prison and his family ho idea where?
Here is a link to an interactive map showing the Growing Detention Network in the US.
Mike “Mish” Shedlock
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