The top news is still the Euro bailout farce, so I'll start there. Over the weekend there were more rumors that the IMF would bail out Italy for $600 billion euros. The IMF then squashed those rumors. You know there is trouble when the rating agencies finally get worried. Moody's is at that point. Here is their comment:
"The continued rapid escalation of the euro area sovereign and banking credit crisis is threatening the credit standing of all European sovereigns," Moody's said. "While the euro area as a whole possesses tremendous economic and financial strength, institutional weaknesses continue to hinder the resolution of the crisis… The euro area is approaching a junction, leading either to closer integration or greater fragmentation."
The European banks are in just as much trouble. Look at these numbers:
European banks have sold $413 billion in bonds this year. That's only two-thirds of the $654 billion in bonds that will mature this year, leaving banks with a $241 billion funding gap… This is the first time European banks haven't been able to roll over maturing debt in at least five years. Next year, $720 billion of bonds will mature.
If the market won't fund these banks, who will? We all know the answer is the European Central Bank, the Federal Reserve, and the world's other major central banks. They will provide a flood of cash larger than we've ever seen – even larger than the subprime crisis.
Mohamed El-Erian, co-CEO of PIMCO, wrote a good piece on Europe for CNBC. He discussed the ailing European nation's recently inverted yield curves, when short-term debt is yielding more than long-term debt…
Curve inversions are often seen as indicative of a potential tipping point – when market perceptions of a liquidity problem risk turning into self-fulfilling solvency concerns. As such, there is nothing good associated with last week's curve inversion in Italy, the third largest bond market in the world.
With the two-year interest rate on Italian bonds surging towards 8%, the yield differential with the 10-year ended the week at an inverted 60 basis points. Judging from what has happened in other European economies (namely, Greece, Ireland and Portugal), a prolonged inversion would materially increase the risk of Italy losing market access and having to seek a bailout.
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Some of you know about our charity wiffle ball tournament we do every year. The Gobble is on the Saturday after Thanksgiving. We got a nice write up in the paper this year. Here is the link.
Wiffle Ball Tourney Fun Way to Give Back
We also have injuries every year. We are all getting too old for running around like kids. Slade Bridwell was a victim this year.
Chris Purdy does the videos. We have around 15 of them on Youtube for you to watch.
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Ohio puts 200-pound third-grader in foster care
CLEVELAND (AP) — An Ohio third-grader who weighs more than 200 pounds has been taken from his family and placed into foster care after county social workers said his mother wasn't doing enough to control his weight.
The Plain Dealer reports (http://bit.ly/t68M7D ) that the Cleveland 8-year-old is considered severely obese and at risk for such diseases as diabetes and hypertension.
The case is the first state officials can recall of a child being put in foster care strictly for a weight-related issue.
Lawyers for the mother say the county overreached when authorities took the boy last week. They say the medical problems he is at risk for do not yet pose an imminent danger.
A spokeswoman says the county removed the child because caseworkers saw his mother's inability to reduce his weight as medical neglect.
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In continuation of our welfare state...
Number of N.J. residents receiving food stamps doubled in last four years
The number of New Jersey residents receiving food stamps has doubled in the past four years and is at its highest level in more than a decade as the nation’s still sputtering economy continues to take its toll on the poorest residents of the Garden State, state and federal data show.
As of September, the most recent data released by the state Department of Human Services, more than 400,000 households and nearly 822,000 people were enrolled in the food stamp program, meaning nearly one out of every 10 residents in New Jersey receives assistance.Larena Reed a 49-year-old Newark resident, has been on food stamps since 2007. The former county worker, nurse and security officer now spends much of her time tending to her elderly mother, and although she doesn’t like being enrolled in the food stamp program, it’s become a necessity.
"All over the economy is so bad. We need these food stamps, there just isn’t enough money or jobs," Reed said Saturday while shopping at ShopRite in Hillside. "I don’t want welfare, (and) I can’t get unemployment anymore. We at least need food stamps to feed our family."
It’s a stark reminder that even one of the nation’s wealthiest states — New Jersey ranked number two in household income last year — is far from immune to the effects of the sustained economic slump.
And although there has been a slight dip in what has been a stark increase in food stamp recipients since 2008, state officials caution that it would be "presumptuous" to interpret the slightly lower increases as a sign of an improving economy. "We would have to see this sustained for several consecutive months to establish any verifiable trend," said Nicole Brossoie, a spokeswoman for the Department of Human Services.
New Jersey has seen large annual increases in food stamp participation rates each month since late 2008, according to the state data. The Department of Human Services releases monthly reports comparing the enrollment in the food stamp program with the same month in the previous year. Since November 2008, the number of households enrolled has grown by double digits year over year and peaked in March when the number of households receiving food stamps was 28.6 percent higher than it had been 12 months earlier. In July, the increase dropped to 18.2 percent before moving north once again to 19.4 percent in September.
Frank Pinto, director of the Morris County Department of Human Services, agreed that it’s far too early to draw conclusions.
"There seems to be signs of things picking up, but until there’s significant job creation in Morris County and throughout New Jersey, you are going to see a large increase in those seeking assistance," Pinto said.
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