If The Rest Are Only Half As Bad As Ireland …
SUNDAY, MAY 12, 2013 4:05 PM
Ireland was one of the first European countries to get hit by the financial crisis. It decided to bail out its banks at the direct cost of the taxpayer. In 2012, those banks were still overleveraged (and still are today) to the same level as for instance Cyprus, with assets over 800% of GDP. Probably only Iceland has been worse (UK?!). According to IMF/EC, 2012 Irish national debt was 117% of GDP; not a pretty number either. This all as a lead-up to a May 5 article by Dan White in the Irish Independent that TAE’s own Nicole Foss sent over recently. But first a little history, for who may be bit shaky on it, just for fun, and to explain how Ireland got to have its present population of 4.5 million people.
The population of Ireland in the 1830′s, when it was part of Britain, was around 8.5 million. There are estimates of as much as 10-12 million; in those days counting everyone, even in a census, was an obvious struggle. Ireland then had perhaps 30% of the overall population of the kingdom, a sharp contrast with today.
In 1845, the Great (Potato) Famine hit home. Over the next 5 years, 1 million Irish died of hunger and disease, and 1 million emigrated. And it didn’t stop there. Millions more emigrated in the following decades, and the country remained dirt poor, so starvation didn’t stop either. Some say Britain liked things that way (religion was always a big factor). Only in the 1916 Great Rising, the -catholic – Republic of Ireland gained independence, while – protestant – Northern Ireland became part of the UK.
Ironically, it was the very same potato that, once it came to Europe from the Americas in the 16th and 17th centuries, allowed for a huge increase in population in Ireland and beyond. The "Old World" didn’t have a crop that all by itself people could live on. Now they had one. And then someone imported blight.
Today, the Irish Republic counts 4.5 million citizens, or 4 million less than in 1830. Northern Ireland’s 1.8 million make up some of the loss, but the picture is clear: 180 years later, during which time world population rose from just over 1 billion to just under 7 billion, and Britain went from some 20 million to 63 million, Ireland’s population still hasn’t recovered (will it ever?).
There is the Irish diaspora, however. Approximately 15 times as many people of – often fiercely proud- Irish descent live elsewhere in the world today than live in Ireland. In the US alone there are over 40 million.
So today, we have (the Republic of) Ireland at 4.5 million people. That’s useful when looking at debt numbers. Especially since it is just about 70 times less than the US at 315 million. Irish unemployment is 14.1%, youth unemployment 30.3%, both numbers somewhat recovering from deeper pits.
One more thing before we get to the article: it refers to GNP, Gross National Product. Refresher: it’s almost the same as GDP, but not exactly. The latter is a measure of the value of goods and services produced in a country, the former is a measure of the value of goods and services produced in a country by its domestic institutions and individuals. For most countries both will be quite similar, but in Ireland, GNP is estimated to be perhaps as much as 25% smaller than GDP.
The reason for this is that Irish tax laws make the country very attractive for foreign companies (there are some 600 American ones alone operating in the Republic). Ergo (simplified): a lot of the revenue generated in GDP leaves the country as profit for mother companies, and doesn’t count towards GNP. This makes some voices even claim that recent GDP gains are false signs of a recovery, and that when measured in GNP, there has been no recovery whatsoever. One more detail: Irish property prices have fallen over 50% since 2007.
So there: Ireland’s initial cost for the bailout of its banks was €40 billion ($52.4 billion if you use a 1:1.31 exchange rate). In 2011, US "investment manager" BlackRock conducted a stress test that concluded that the four Irish banks still in business, AIB, Bank of Ireland, Permanent TSB and EBS (now part of AIB), would require an extra €24 billion of capital. So that added up to €64 billion ($83.5 billion). In comparative US terms (70 times bigger), that was $5.85 trillion.
And thus we finally get to Dan White, who says the Irish are far from done bailing out. He starts off referring to numbers published by (Danish, thus foreign) Danske Bank Ireland the week before, and takes it from there:
Taxpayer beware! Irish banks need another €30 billion at least
[..] The latest write-offs mean that Dankse will have written off almost €3.6 billion, just over a third of a loan book which had a total peak value of just over €10.5 billion. If that isn’t enough to give taxpayers a bad case of the heebie jeebies then nothing will.
For those of us who have followed the crisis from the beginning Dankse has been a useful pointer to future developments at the Irish-owned banks. Unlike its domestic counterparts, who are still in denial about the full extent of their problems, Dankse has been upfront about its loan losses. Where Dankse goes today the Irish-owned banks look set to follow tomorrow. [..]
The BlackRock stress tests concluded that total loan losses at the continuing Irish-owned banks would amount to between €27.5 billion and €40 billion. The biggest single source of these losses would be residential mortgages with BlackRock forecasting losses of between €9.9 billion and €16.9 billion.
The other big generators of losses were forecast to be commercial real estate lending (between €8.1 billion and €10.3 billion) and corporate lending, including SMEs (between €7 billion and €9.5 billion). [SME=small business]
Even on the basis of the banks’ own figures it is clear that these projected losses were hopelessly optimistic. According to the most recent AIB results, €8.1 billion of its €39.5 billion Irish mortgage book was more than 90 days in arrears at the end of December 2012.
Over at Bank of Ireland €3.6 billion of its €27.5 billion Irish mortgage book was more than 90 days in in arrears at the end of last year, while €5.5 billion of Permanent TSB’s €24.5 billion Irish mortgage book was similarly suspect.
At the end of December 2012 some €38 billion of owner-occupier mortgages and €10.6 billion of buy-to-let mortgages were in arrears, while a further €6.7 billion of owner-occupier and €3.2 billion of buy-to-let mortgages had been restructured but were not in arrears. By value that’s the equivalent to over 41% of the total €142 billion stock of outstanding mortgages held by the domestic and foreign-owned banks.
Apply this pro rata to the €91.5 billion of Irish mortgages held by the domestic banks and one is looking at over €37 billion of compromised loans. With property prices having fallen by at least 50% since 2007 it would seem reasonable to provide 50% against these loans, say €18.5 billion.
In addition the Irish-owned banks have at least €50 billion of loss-making tracker mortgages on their books. Some of the foreign-owned banks have been offering to reduce loan balances by between 20% and 25% for tracker customers who are prepared to switch to a variable rate. Even a 20% write-down on trackers would cost the Irish banks another €10 billion.
Throw in a further 20% provision for those mortgages not currently impaired, €11 billion, and the Irish-owned banks are looking at mortgage losses of €39.5 billion, €22.6 billion more than forecast by BlackRock in its "worst case scenario".
And that’s barely the half of it.
The Irish-owned banks have €27 billion of SME lending on their books. Last month the Central Bank’s director of credit institutions, Fiona Muldoon, revealed that 50% of SME lending was in distress. On the basis of a 50% write-down of the distressed loans and a 20% precautionary write-down of the remainder that translates into a further €9.4 billion of losses, €4.9 billion greater than BlackRock’s "worst case scenario".
The Irish-owned banks also still have almost €30 billion of commercial property lending on their balance sheets. Once again one has to ask, just how realistic is BlackRock’s "worst case scenario" of €10.38 billion of losses.
By the time one adds losses on other lending, to large corporates, personal loans, credit cards etc. and it is hard to see how the cost of any fresh bank recapitalisation could come in at under €30 billion. That would bring the total cost to the Irish taxpayer of "fixing" our bust banks to almost €100 billion.
Clearly greater love hath no government than that which lays down its citizens for its banks!
Looking through White’s numbers, for instance "Irish-owned banks have at least €50 billion of loss-making tracker mortgages on their books", I’m thinking even he stays on the cautious side, but they’re bad enough as is already. The "total €142 billion stock of outstanding mortgages" translates to $186 billion, which in "US Size" (x70) would be over $13 trillion, about on par with the US at $41.350 per capita, but in a country that has no particular history of owning homes. It’s not home value, it’s mortgages. Not assets, but debt. And prices have already fallen over 50% in Ireland since 2007.
As late as October 2010 Ireland declared itself "fully funded well into 2011", but just one month later, in November 2010, the government asked for a €67.5 billion "bailout" from the EU and the IMF as part of an €85 billion ‘program’ (the Irish State "funded" €17.5 billion itself). By August 2011 total funding for the six biggest banks by the ECB and the Irish Central Bank came to about €150 billion; at that point the largest of the six, Bank of Ireland, had a market capitalisation of just €2.86 billion.
The question then becomes how Ireland is going to facilitate another €30 billion bank recapitalisation. The government stated this spring it was getting ready to ask for further aid, but EU forces apparently – and curiously – have a completely different take on this. Before Ireland was recently handed a 7-year extension on paying back the loans, the "donors" made clear they not only don’t feel like approving extra aid, they want Ireland to exit the bailout scheme and return to the bond markets for funding. As the Irish Times reported on April 12:
Euro zone believes deal will see Ireland exit bailout this year
An imminent deal to postpone Ireland’s bailout repayments will be enough to secure a smooth exit from the EU-IMF programme later this year, according to the chief of the euro zone finance ministers. The position set out by Dutch minister Jeroen Dijsselbloem is in defiance of the Government’s claim for further aid to ease the cost of propping up Allied Irish Banks and Bank of Ireland.
Although the IMF has strongly backed Dublin’s push for the ESM rescue fund to bear historic debts of the two banks, Mr Dijsselbloem indicated in an interview with The Irish Times yesterday that a decision on that front might not be taken for at least another year.
That is well beyond Ireland’s anticipated return to private debt markets at the end of the bailout and means he expects the Government will be able to do without a specific pledge of bank debt relief from the ESM fund.
Asked if the return to market financing would be eased by a definitive commitment of ESM aid, Mr Dijsselbloem insisted that the two issues should be separated. "The access to the markets is relevant right now, and this year, and we will try to help Ireland and Portugal in exiting the programmes," he said.
"The direct recap instrument ESM isn’t available at the moment," he added. "What we can do is to look at the maturities of the EFSF loans and that’s why we are . . . discussing a proposal by the troika on more time for Ireland and Portugal [NB: 7-year extension since granted]. That would greatly help both countries going back to the markets and finding their own funding."
While agreement on whether the ESM can retroactively bear historic debts is anticipated in June, Mr Dijsselbloem said a decision on which countries can use the scheme will only be taken after a common bank supervisor is set up in the middle of next year.
The Government campaign for ESM aid relies on a pledge by euro zone leaders to break the link between bank and sovereign debt, but Germany and like-minded allies, such as the Netherlands and Finland, remain sceptical.
Last week, the IMF reiterated its call for the ESM to take equity stakes in the two Irish pillar banks, arguing that it could play "an invaluable role in marking prospects for recovery and debt sustainability more robust". However, Mr Dijsselbloem said he could not predict whether the retroactive application of the direct recapitalisation instrument would be sanctioned at all.
In other words, there’s now a substantial stretch of financial no man’s land in Europe. The EU still doesn’t have its newest "direct recap" instrument, the ESM Stability Mechanism, ready yet while its predecessor, the EFSF, is still sort of active, though it can’t take on any new commitments, and what’s – still – being discussed is in what shape EFSF loans can be transferred to the ESM – if they can at all – . Of course a banking union could play a large role in all this, but that looks as far away as ever.
Meanwhile, affording Ireland and Portugal more time to pay back loans appears to be seen in Brussels as some kind of end solution, but how realistic is that? Ireland would need to cough up, what, €10 billion a year over that 7 year period (?!), while, in the short term, ingesting another €30+ billion into its banks. Anyone who doesn’t think of Dijsselbloem, Lagarde and Draghi as the next reincarnation of the genius of Albert Einstein might come away with some doubts as to whether this is going to work out.
Nor does this stop at Ireland, of course, or Portugal. Take for instance this loud warning about Spain from everyone’s favorite right-wing anti-Europe correspondent for the Telegraph, Jeremy Warner:
Spain is officially insolvent: get your money out while you still can
I’d not noticed this until someone drew my attention to it, but the latest IMF Fiscal Monitor, published last month, comes about as close to declaring Spain insolvent as you are ever likely to see in official analysis of this sort. Of course, it doesn’t actually say this outright. The IMF is far too diplomatic for such language.
Let’s take the projected budget deficit first. This is expected to decline quite steeply this year to 6.6% of GDP, but that’s mainly because the cost of bailing out the banking sector fell substantially on last year’s budget. On a like-for-like basis, there has in fact been very little fall in the underlying deficit. And nor on the present policy mix is there ever likely to be, for that’s where the deficit is projected to remain until the end of the IMF’s forecasting horizon in 2018. Next year, the deficit is expected to be 6.9%, the year after 6.6%, and so on with very little further progress thereafter. [..]
The situation looks even worse on a cyclically adjusted basis. What is sometimes called the "structural deficit", or the bit of government borrowing that doesn’t go away even after the economy returns to growth (if indeed it ever does), actually deteriorates from an expected 4.2% of GDP this year to 5.7% in 2018. By 2018, Spain has far and away the worst structural deficit of any advanced economy, including other such well known fiscal basket cases as the UK and the US.
So what happens when you carry on borrowing at that sort of rate, year in, year out? Your overall indebtedness rockets, of course, and that’s what’s going to happen to Spain, where general government gross debt is forecast to rise from 84.1% of GDP last year to 110.6% in 2018. No other advanced economy has such a dramatically worsening outlook. And the tragedy of it all is that Spain is actually making relatively good progress in addressing the "primary balance", that’s the deficit before debt servicing costs.
What’s projected to occur is essentially what happens in all bankruptcies. Eventually you have to borrow more just to pay the interest on your existing debt. The fiscal compact requires eurozone countries to reduce their deficits to 3% by the end of this year, though Spain among others was recently granted an extension. But on these numbers, there is no chance ever of achieving this target without further austerity measures, which even if they were attempted would very likely be self defeating. In any case, it seems doubtful an economy where unemployment is already above 25% could take any more. [..] Spain is chasing its tail down into deflationary oblivion.
All this leads to the conclusion that a big Spanish debt restructuring is inevitable. Spanish sovereign bond yields have fallen sharply since the announcement of the European Central Bank’s "outright monetary transactions" programme. The ECB has promised to print money without limit to counter the speculators. But in the end, no amount of liquidity can cover up for an underlying problem with solvency.
Europe said that Greece was the first and last such restructuring, but then there was Cyprus. Spain is holding off further recapitalisation of its banks in anticipation of the arrival of Europe’s banking union, which it hopes will do the job instead. But if the Cypriot precedent is anything to go by, a heavy price will be demanded by way of recompense. Bank creditors will be widely bailed in. Confiscation of deposits looks all too possible.
I don’t advise getting your money out lightly. Indeed, such advise is generally thought grossly irresponsible, for it risks inducing a self reinforcing panic. Yet looking at the IMF projections, it’s the only rational thing to do.
Let’s cautiously summarize it this way: Europe’s finances – still – are in tatters. Ireland and Spain are just two examples. We can come up with similar stories about a handful (or two) of other countries. Perception for now remains that Draghi will do whatever it takes – re: buy buy buy – to rescue anyone and everyone. But that perception rests on the idea that he can, in the first place. Jeremy Warner puts his finger on a sore spot that doesn’t get nearly enough attention anymore:"… in the end, no amount of liquidity can cover up for an underlying problem with solvency".
The illusion of central bank omnipotence, be it in setting interest rates or in buying up any and all kinds of paper, will continue until it doesn’t; we have our media, our politicians and our own gullibility and wishful thinking to thank for that. In the meantime, though, hardly any of the problems in Europe are truly being solved. Moreover, those that are even attempted will increasingly involve bail-ins as a way of funding bail-outs.
It’s just a matter of time until the walls come down, and of course it’s ironic that the longer reality can be kept hidden underneath the carpet, the less real it seems. But that’s simply a predictable consequence of having short attention spans. And we should be able to look beyond that.
Statistics: Posted by yoda — Sun May 12, 2013 2:08 pm
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Half of GTA and Hamilton workers in ‘precarious’ jobs
Barely half of working adults in the GTA and Hamilton have what is considered permanent, full-time steady work, says a new report.
GLENN LOWSON / FOR THE TORONTO STAR
Unstable employment has crept into middle-income households, says McMaster University labour professor Wayne Lewchuk, who co-authored a new report on the rise of precarious work in Hamilton and the Greater Toronto Area or GTA.
By: Laurie Monsebraaten Social justice reporter, Published on Sat Feb 23 2013
Barely half of working adults in the GTA and Hamilton have full-time jobs with benefits and expect to be working for their current employer a year from now, according to a groundbreaking report on precarious work and household well-being.
The other half are working either full- or part-time with no benefits or no job security, or in temporary, contract or casual positions, says the report by McMaster University and United Way Toronto being released Saturday.
It notes that ‘precarious’ or insecure work in the region has increased by 50 per cent in the past 20 years and is impacting everything from people’s decision to form relationships, have children and volunteer in their community.
Precarious work has implications for economic well-being and job security, says the report.
“But it also reaches out and touches family and social life,” it says. “It can affect how people socialize and how much they are able to give back to their communities. It can cause tensions at home.”
One of the report’s most startling findings is that up to half of insecure workers are living in middle-income households earning between $50,000 and $100,000, says one of the report’s lead researchers.
“We know that precarious work arrangements are common in low-income households,” said McMaster University labour and economics professor Wayne Lewchuk .
“What we didn’t expect to see was how much precarious work has crept into middle-income households,” he said. “The impact is even being felt in upper-income levels.”
RelatedProfiles: The faces of precarious work
Job insecurity: When a smaller paycheque is better
Half of GTA and Hamilton workers in precarious jobs
These “stressed-out” middle-income workers are often found in universities and colleges as contract lecturers and research assistants, in hospitals and government as contract nurses and office staff, and in non-profit agencies where those on the front-lines rely on time-limited grants to pay their wages.
Low-income workers in unstable jobs are typically employed by temporary agencies that pay minimum wage, with no benefits or security. They can also be found in the fast-food, cleaning and service sector and in manufacturing where they are often “on call,” and uncertain of their work hours or weekly schedule. Lack of job security often makes these workers reluctant to report or refuse work they consider dangerous, the report notes.
Across all income groups, the report found “clear indications” that insecure work is causing increasing household stress and limiting people’s ability to participate in their communities.
“The findings . . . raise serious concerns regarding the potential breakdown of social structures as precarious employment becomes more of the norm in Canadian society,” the report says.
Some question whether the report’s definition of ‘precarious employment’ is too broad. For example, the self-employed who choose to run their own businesses may not know a year from now if they will have a job. And yet they are also considered precariously employed by the study.
“But I think it is the start of a necessary conversation we need to have,” says Jamison Steeve of the University of Toronto’s Martin Prosperity Institute .
Steeve, who left his position as principal secretary to former Ontario premier Dalton McGuinty last spring, is among a dozen academic, labour, business and community members who will be panellists at a Toronto symposium on the report on Monday.
“In the session on Monday . . . we’re going to have a chance to look at that definition and develop policies that are going to help the most affected,” he says.
The report, which surveyed 4,000 working adults between the ages of 25 and 65 and conducted in-depth interviews with 100 of them, is part of a five-year, $1-million research project on precarious employment in Southern Ontario, funded by the federal Social Sciences and Humanities Research Council.
The project’s goal is to document the characteristics and prevalence of unstable employment and show how society is changing as a result. The current report looks at household well-being and community participation, while future research will try to assess the economic impact and recommend solutions.
“If we have people . . . who are not working to their full potential, then that is an economic issue,” says Steeve
“If the nature of the workforce has changed so dramatically but our laws and social structures have not, then we’re not leveraging all of the economic benefits,” he adds.
United Way Toronto first sounded the alarm on precarious employment in its , 2007 report Losing Ground , which showed how the phenomenon was aggravating social problems.
“While we knew from Losing Ground there was an issue, we wanted to understand the complexity and the actual complexion of the issue,” says United Way President Susan McIsaac . “Is this episodic in people’s lives, or is this a new trend in what employment looks like in the province and in particular the Toronto and Hamilton regions?”
The ongoing research will help the charity focus its community investments and advocacy for the future, she adds.
European countries have been documenting the shift to precarious work for some time, Lewchuk says.
“As far as we can tell, there is no research like this in North America, certainly not in Canada,” he says. “The idea is to build a database to track precarious employment and dig deeper into its impact here.”
Precarious employment compounds the impact of poverty, Lewchuk says. But, as the study shows, it also hurts middle-income households.
“Financial resources help to mitigate the destabilizing effects of precarious work,” he says. “But we found that in some cases, middle-income households with precarious work are under more stress than low-income households with secure employment.”
The report expands the common definition of precarious employment — typically described as seasonal, temporary or casual — to include the self-employed without employees, such as truck drivers, people offering child care in their homes or freelance editors. By that measure, about one in five Toronto and Hamilton area workers is precariously employed. When the researchers added part-time and full-time workers without benefits or job security, the rate jumped to half of the area’s workers.
Non-whites and newcomers in Canada less than 20 years were more likely to be in insecure work, as were those aged 25 to 35 and over age 55.
“Regardless of a worker’s personal characteristics, work sector or the region they live in, there is a reasonable chance that their employment will have many of the characteristics of precarious employment,” the report says.
Unlike poverty, which is often concentrated in certain neighbourhoods, precarious work is found in both high- and low-income regions, the report adds.
Labour law and income security programs were designed in the postwar era when precarious work was rare and employers were largely responsible for training, benefits and pensions, Lewchuk notes. The report points to the need for a new set of policies to limit the spread of unstable employment or mitigate its negative effects.
The impact of unstable work on personal and family life is profound, the report found. For example, people in low-income precarious jobs are less likely to have a close friend to talk to or to help with small jobs than those in more secure employment.
Workers in unstable jobs are less likely to have children. Men, in particular, reported they put off having a family due to insecure employment. These workers find it more difficult to find child care, help their children attend extracurricular activities and pay for school supplies and trips. At lower incomes, they are more likely to run into trouble paying for food.
Researchers also heard that income uncertainty makes it hard to commit to family or community activities.
They heard that precarious work is becoming even more unstable. For example, workers reported that it is no longer common for temporary agency work to lead to full-time jobs. And wage premiums to compensate for the lack of benefits and permanency are now rare. Most temp work pays the $10.25 hourly minimum wage.
More than 80 per cent of those in precarious employment do not receive any benefits, making them vulnerable to unexpected life circumstance such as illness, injury, or premature retirement, the report notes. Those who do get benefits often don’t have family coverage.
Workers often feel powerless to complain or turn down hours or assignments for fear of losing the job or the next contract, the report says.
They are also more likely to work multiple jobs in a year and often juggle more than one at a time. It means increased transit time, more difficulties organizing child care and less family time.
Work in GTA and Hamilton
•50.3 % have permanent, full-time jobs with benefits and security
•18.4 % are in precarious employment, meaning their work is contract, temporary, casual
•22.5 % are in full-time employment but without benefits, regular working hours, or job security beyond the next 12 months.
•8.8 % are in permanent part-time work
•Precarious employment has increased by 50 per cent in the past 20 years.
•Temporary employment has increased in the CMA by 40 per cent since 1997
•Self-employment with no employees jumped by 45 per cent between 1989 and 2007
•Newcomers are more likely to be in precarious employment
•Manufacturing sector workers are least likely to be in secure work
Portrait of precarious workers
•Earn 46 per cent less than secure workers and report household incomes that are 34 per cent lower
•Rarely get benefits
•Often paid cash and more likely to not get paid at all
•Often don’t know schedule a week in advance. Unexpected schedule changes are common
•Limited career prospects
•Reluctant to raise employment rights for fear of losing job
•More likely to have work monitored
•Less likely to be unionized
•Often required to work on-call
•Often hold more than one job
•Rarely receive employer training and often required to pay for own training
Impact of precarious work
Precarious workers are more likely to:
•Have a spouse who works part-time or not at all
•Have no children
•Say employment anxiety interferes with personal and family life, and household activities
•Say uncertain work schedules interfere with doing things with family and friends
•Run out of money to buy food if they are also low-income
Impact of precarious work on children of low- and middle-income households
•Most likely to report problems paying for school supplies, trips and extracurricular activities
•Less likely to attend school meetings or volunteer at children’s activities outside school
•More likely to have difficulty finding appropriate child care
•Most likely to report delaying having children
Statistics: Posted by yoda — Sat Feb 23, 2013 5:42 pm
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Canada sees biggest jobs decline in half a year
The Globe and Mail
Published Friday, Feb. 08 2013
Canadian employers shed 21,900 jobs last month, the first decline in half a year, as schools and factories reduced headcount.
Despite the drop, the country’s jobless rate ebbed to 7 per cent in January from 7.1 per cent as fewer people looked for work, Statistics Canada said Friday.
Job growth had been robust in recent months, strength that seemed at odds with other data that showed a clear slowdown in the economy. The latest report shows employment levels are now starting to reflect that soft patch, economists said.
“That the labour market continued to power along when the economy was growing at a less than 1-per-cent pace in the second half of 2012 seemed out of whack,” said Dawn Desjardins, assistant chief economist at RBC, in a note.
While January’s report was “disappointing,” she sees the jobless rate gradually easing to 6.7 per cent by the end of next year, helped by an improving global economy.
For the near term, separate reports out Friday showed softer-than-expected housing starts and a weakening trade picture, more evidence of a tepid economy.
The Canadian dollar fell after the reports, trading just below parity.
Last month’s larger-than-expected employment drop came as the public sector eliminated 27,000 positions. The number of private-sector workers also eased in the month while self-employment rose.
In the private sector, Sears Canada, Best Buy, Talisman and Cirque de Soleil have all announced job cuts in recent weeks.
As the federal government prepares its upcoming budget, some say it should ramp up spending on infrastructure projects, in part to bolster employment.
“As federal and provincial governments formulate their budgets, they should invest more in public services and infrastructure to support employment,” said Erin Weir, economist and president of the Progressive Economics Forum, in a note.
Among sectors, education and manufacturing led the decline, falling by 30,900 and 21,600 respectively. Factory employment is now at similar levels to a year earlier, the agency said.
Construction companies added to payrolls and so did public administration.
Employment fell in Ontario and British Columbia last month, and among men between the ages of 25 and 54. Older men and youth saw jobs gains.
Job levels are still higher than a year ago. Employment has grown 1.6 per cent from last year, all in full-time positions, Statscan said.
Economists had expected 5,000 new jobs with the jobless rate rising a notch to 7.2 per cent.
Statistics: Posted by yoda — Fri Feb 08, 2013 1:33 pm
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Nearly Half of All US Farms Now Have Superweeds
—By Tom Philpott
| Wed Feb. 6, 2013 3:06 AM PST
Last year’s drought took a big bite out of the two most prodigious US crops, corn and soy. But it apparently didn’t slow down the spread of weeds that have developed resistance to Monsanto’s herbicide Roundup (glyphosate), used on crops engineered by Monsanto to resist it. More than 70 percent of all the the corn, soy, and cotton grown in the US is now genetically modified to withstand glyphosate.
Back in 2011, such weeds were already spreading fast. "Monsanto’s ‘Superweeds’ Gallop Through Midwest," declared the headline of a post I wrote then. What’s the word you use when an already-galloping horse speeds up? Because that’s what’s happening. Let’s try this: "Monsanto’s ‘Superweeds’ Stampede Through Midwest."
That pretty much describes the situation last year, according to a new report from the agribusiness research consultancy Stratus. Since the 2010 growing season, the group has been polling "thousands of US farmers" across 31 states about herbicide resistance. Here’s what they found in the 2012 season:
Superweeds: First they gallop, then they roar. Graph: Stratus
• Nearly half (49 percent) of all US farmers surveyed said they have glyphosate-resistant weeds on their farm in 2012, up from 34 percent of farmers in 2011.
• Resistance is still worst in the South. For example, 92 percent of growers in Georgia said they have glyphosate-resistant weeds.
• But the mid-South and Midwest states are catching up. From 2011 to 2012 the acres with resistance almost doubled in Nebraska, Iowa, and Indiana.
• It’s spreading at a faster pace each year: Total resistant acres increased by 25 percent in 2011 and 51 percent in 2012.
• And the problem is getting more complicated. More and more farms have at least two resistant species on their farm. In 2010 that was just 12 percent of farms, but two short years later 27 percent had more than one.
So where do farmers go from here? Well, Monsanto and its peers would like them to try out "next generation" herbicide-resistant seeds—that is, crops engineered to resist not just Roundup, but also other, more toxic herbicides, like 2,4-D and Dicamba. Trouble is, such an escalation in the chemical war on weeds will likely only lead to more prolific, and more super, superweeds, along with a sharp increase in herbicide use. That’s the message of a peer-reviewed 2011 paper by a team of Penn State University researchers led by David A. Mortensen. (I discussed their paper in a post last year.)
And such novel seeds won’t be available in the 2013 growing season anyway. None have made it through the US Department of Agriculture’s registration process. The USDA was widely expected to award final approval on Dow’s 2,4-D/Roundup-resistant corn during the Christmas break, but didn’t. The agency hasn’t stated the reason it hasn’t decided on the product, known as Enlist, but the nondecision effectively delays its introduction until 2014 at the earliest, as Dow acknowledged last month. Reuters reporter Carey Gillam noted that the USDA’ delay comes amid "opposition from farmers, consumers and public health officials" to the new product, and that these opponents have "bombarded Dow and US regulators with an array of concerns" about it.
So industrial-scale corn and soy farmers will likely have to muddle along, responding in the same way that they have been for years, which is by upping their herbicide use in hopes of controlling the rogue weeds, as Washington State University’s Charles Benbrook showed in a recent paper (my post on it here). That means significant economic losses for farmers—according to Penn State’s Mortensen, grappling with glyphosate resistance was already costing farmers nearly $1 billion per year in 2011. It will also likely mean a jump in toxic herbicides entering streams, messing with frogs and polluting people’s drinking water.
For a good idea of what’s in store, check out this piece in the trade mag Corn & Soy Digest on "Managing Herbicide-Resistant weeds." Here’s the key bit—note that "burndown" means a complete flattening of all vegetation in a field with a broad-spectrum herbicide such as paraquat, an infamously toxic weed killer that’s been banned in 32 countries, including those of the European Union:
For those with a known resistance problem, it’s not uncommon to see them use a fall burndown plus a residual herbicide, a spring burndown before planting, another at planting including another residual herbicide, and two or more in-season herbicide applications. “If you can catch the resistant weeds early enough, paraquat does a good job of controlling them. But once Palmer amaranth [a common glyphosate-tolerant weed] gets 6 ft. tall, you can’t put on enough paraquat to kill it," [one weed-control expert] says.
But of course there’s another way. In a 2012 study I’ll never tire of citing, Iowa State University researchers found that if farmers simply diversified their crop rotations, which typically consist of corn one year and soy the next, year after year, to include a "small grain" crop (e.g. oats) as well as offseason cover crops, weeds (including Roundup-resistant ones) can be suppressed with dramatically less fertilizer use—a factor of between 6 and 10 less. And much less herbicide means much less poison entering streams—"potential aquatic toxicity was 200 times less in the longer rotations" than in the regular corn-soy regime, the study authors note. So, despite what the seed giants and the conventional weed specialists insist, there are other ways to respond to the accelerating scourge of "superweeds" than throwing more—and ever-more toxic—chemicals at them.
Statistics: Posted by DIGGER DAN — Wed Feb 06, 2013 3:14 pm
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Rare Half Cent sold for £225,000 Belonged to Tragic Mountaineer
By DOMINIC GOVER: Subscribe to Dominic’s RSS feed
January 24, 2013 2:06 PM GMT
A man who died in a climbing accident unknowingly bequeathed a valuable inheritance to his family – a rare coin struck after the turbulent birth of the United States.
The humble half-cent coin, minted in 1796, lay undiscovered for 50 years inside a matchbox before it was found by the family of Mark Hillary during a clean-out.
The coin fetched £225,700 ($353,000) at auction – 72 million times its original face value.
Only 1,400 of the coins were made at the Philadelphia Mint in the US.
Daniel Fearon, a coin consultant at Salisbury auctioneer’s Woolley and Wallis, which sold the half cent, said it was in good condition.
"The condition of the coin is unchanged with a good, even brown colour and some traces of redness around the obverse letters and around the wreath on the reverse," he said.
"The coin is one of just a handful that have survived in this condition. Half cents have always been a rarity in the collectors’ market."
Coin collecting thrived in Regency Britain during the years when the United States was forging itself as a nation.
"[Britain] is the natural place for coins of the former colony to end up," said Fearon.
"It was very exciting when it was brought to us. It is an instantly recognisable and beautiful coin. I’m so pleased to have found it."
The precious half cent was found during a house clean by the family of Hillary, who was killed in a climbing fall in 1963 at the age of 20.
Lagging behind auction stakes
Oxford University classics student Hillary had the coin as part of a collection of 70 he kept inside a set of miniature drawers made from matchboxes.
Despite making nearly a quarter of a million at auction, the half cent lags far behind in the auction stakes.
A dollar coin minted just one year before Hillary’s half cent was sold for $7.85m in 2005. The dollar was the first of that currency unit issued by the United States federal government, in 1795.
Another US coin fetched $7.59m at auction. It was made from 98 percent gold and was struck during the California gold rush.
A medieval coin depicting King Edward III of England was bought for $6.8m. It was in circulation for just eight months from December 1343.
Statistics: Posted by yoda — Thu Jan 24, 2013 1:49 pm
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By Mark A. Calabria
A fundamental question with both the Bush and Obama approaches to the mortgage foreclosure crisis is to what extent are policies simply putting off the inevitable? Are “permanent” solutions being offered, or are we just recycling the same borrowers through one foreclosure after another? Recent data from Lender Processing Services (LPS) sheds some light on the question.
The most recent LPS data, covering to the end of August 2012, shows that for the first time, over half of foreclosures are for borrowers that were previously in foreclosure. Now there are several ways to read the chart below. On one hand first time ever foreclosures are at their lowest levels since 2008, and in fact have been on a steady decline since the middle of 2009. That is good news. The pipeline of new foreclosures in decreasing, a reflection of both improving labor and housing markets (or at least not getting a lot worse). The bad news is that foreclosures are increasing the same borrowers who have been delinquent for years. I was recently told that the average time to foreclosure for Chicago, for instance, is over 1,000 days. The LPS data also highlight that the largest increase in repeat foreclosures has been in states that use a judicial foreclosure process, providing further evidence that such a process generally does not change the final outcome, but simply delays it.
If there is one policy lesson we should take away from the foreclosure crisis, it is that delaying the inevitable makes the problem worse. Had these borrowers finished the foreclosure process the first time around, housing prices would have adjusted quicker and the housing market would have also been on the road to recovery quicker. These families would also not be stuck in “limbo” and would have been able to move on with their lives. While some have argued that delaying these adjustments was appropriate, it is far from clear to me that longer periods operating under “false” prices will lead to better market outcomes.
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Japan carmakers to cut China production by half: Nikkei
October 07, 2012|Reuters
(YURIKO NAKAO, REUTERS)
TOKYO (Reuters) – Japan’s Toyota Motor Corp <7203.T>, Nissan Motor Co <7201.T> and Honda Motor Co <7267.T> plan to slash production in China by roughly half, the Nikkei newspaper reported on Monday, as a territorial row between Asia’s two largest economies cuts sales of Japanese cars in the world’s biggest auto market.
Statistics: Posted by yoda — Mon Oct 08, 2012 3:41 pm
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By Neal McCluskey
Last week, American Public Media’s Marketplace posted an interactive map—attached to a much-appreciated interview with me—enabling users to see how much states spent per public-college student in 2011, and how that had changed over the the last twenty-five years. It cites as its sources the State Higher Education Executive Officers and me. Unfortunately, it gives only half of the story I was trying to relate with my crunching of SHEEO’s data: per-pupil state and local spending has generally been on a downward trend, but that does not come close to fully explaining rising prices.
To get the full breakdown of the data you can access my calculations here. Note, though—as I wrote in the blog post to which my crunching was originally attached—I didn’t put the spreadsheet together for widespread dissemination, at least not to appear authoritative. I think it’s on target, but I didn’t triple-check it as I would have a more formal data analysis. More importantly, the key point is that while most states have seen decreasing per-pupil allocation trends—primarily because of very large enrollment spurts—they have much more than made up for those losses through tuition increases, bringing in roughly two dollars for every dollar lost. Taxpayers aren’t cheap— colleges are greedy.
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A very large segment of the population has figured out that it can use voting as a tool to get more money and benefits from the government, and that is a very dangerous thing. Once upon a time, the free market was the one that distributed nearly all the wealth in our system. But now the federal government has become a giant deluded “Santa Claus” that distributes goodies to the American people far beyond its actual capacity to do so. In fact, we are borrowing trillions of dollars that we do not have so that our politicians can continue to buy votes with handouts. Look, we will always need a safety net. We don’t want anyone in America starving to death or sleeping in the street. However, our current system has gotten completely and totally out of control. Today, there are nearly 80 different “means-tested welfare programs” operated by the federal government. As I have written about previously, more than 100 million Americans are enrolled in those programs. Sadly, that does not even count Social Security and Medicare. Tens of millions of Americans are enrolled in each of those programs as well. And when you add in more than 22 million government workers, you get one giant pile of people that are getting money or benefits from the government. In fact, at this point more than half of all Americans are at least partially dependent on the government.
A recent Forbes article by Bill Wilson estimates that over 165 million Americans are government dependents to at least some degree….
New research from Ranking Member of the Senate Budget Committee Jeff Sessions (R-AL) reveals that this reality may already be here, with more than 107 million Americans on some form of means-tested government welfare.
Add to that 46 million seniors collecting Medicare (subtracting out about 10 million on Supplemental Security Income, Medicaid, and other senior-eligible programs already included in Sessions’ means-tested chart) and 22 million government employees at the federal, state, and local level — and suddenly, over 165 million people, a clear majority of the 308 million Americans counted by the U.S. Census Bureau in 2010, are at least partially dependents of the state.
That is absolutely staggering.
So why is this happening?
Well, for one thing our economy is not producing enough good jobs. Millions of our jobs have been shipped out of the country, and of the jobs that remain, only 24.6 percent of them are considered to be “good jobs” at this point.
So millions of families are really hurting. In fact, 77 percent of all Americans are now living paycheck to paycheck at least some of the time.
This week, Joe Biden declared that “the middle class is coming back”, but that was a giant lie.
The truth is that the middle class is being absolutely shredded. More Americans fall out of the middle class every single day. Right now there are more than 100 million Americans that are considered to be “poor” or “near poor”, and the number of Americans on food stamps has risen by more than 14 million since Barack Obama entered the White House.
No, the middle class is definitely not coming back. Poverty is exploding all around us and every single day even more Americans become dependent on the government.
And that is how the social engineers like it. They don’t want us to be strong and independent. They want us to be weak and groveling and dependent on them.
So who is paying for all of this?
Well, it sure isn’t the wealthy. They have become absolute masters at avoiding taxes.
And it sure isn’t the poor people. Most of them don’t even pay any income taxes.
So who is paying for all of this?
Hard working middle class Americans are, and our children and our grandchildren are.
Both Democrats and Republicans see nothing wrong with stealing trillions of dollars from future generations so that they can shower their constituents with benefits that we simply cannot afford.
What we are doing to our children and our grandchildren is beyond criminal. I am amazed that more people are not completely outraged by all of this.
Obama, Bush, Clinton and our Congress critters have showered the American people will trillions of dollars that have been ripped off from Americans that have not even been born yet. They seem to think that it is really funny that they are going to stick them with the bill.
I find it absolutely revolting.
But very few of our politicians will even discuss seriously cutting back the benefits that we have promised to hand out.
Nobody wants to be the bad guy.
And more specifically, very few of our politicians are willing to risk their careers in order to do what they know is right.
We are becoming a society that is completely and totally addicted to government money and government benefits.
We expect the government to take care of us from the cradle to the grave.
In many ways, the government has actually become a god to millions upon millions of Americans.
And the social engineers like it that way.
They want the government to be as large and as powerful as possible.
In fact, they don’t even want us taking care of each other.
Earlier this year I wrote about how feeding the homeless is illegal in many major cities all over the United States.
Sadly, this trend has gotten even stronger since that time.
According to USA Today, more than 50 American cities have now passed “anti-camping or anti-food-sharing laws”….
Philadelphia recently banned outdoor feeding of people in city parks. Denver has begun enforcing a ban on eating and sleeping on property without permission. And this month, lawmakers in Ashland, Ore., will consider strengthening the town’s ban on camping and making noise in public.
And the list goes on: Atlanta, Phoenix, San Diego, Los Angeles, Miami, Oklahoma City and more than 50 other cities have previously adopted some kind of anti-camping or anti-food-sharing laws, according to the National Law Center on Homelessness & Poverty.
So what are we supposed to do?
If it is illegal to help the homeless and it is illegal to be homeless, what is left?
The answer is obvious.
We are supposed to let the government take care of everything because the government is our super-powerful nanny that always knows what is best.
In the end, however, this system is going to collapse. It is unsustainable by nature and the weight of our 16 trillion dollar national debt is absolutely going to crush us.
Millions of Americans realize that the system is failing, and that is why so many of them have started to prepare for the worst.
This even includes members of Congress. For example, just check out the following excerpt from an article about U.S. Representative Roscoe Bartlett….
Deep in the West Virginia woods, in a small cabin powered by the sun and the wind, a bespectacled, white-haired man is giving a video tour of his basement, describing techniques for the long-term preservation of food in case of “an emergency.”
“We don’t really think of those today, because it’s so convenient to go to the supermarket,” he cautions. “But you know, you’re planning because the supermarket may not always be there.”
The electrical grid could fail tomorrow, he frequently warns. Food would disappear from the shelves. Water would no longer flow from the pipes. Money might become worthless. People could turn on each other, and millions would die.
Remember, this is a member of the U.S. Congress that is saying these things.
Any rational person can see that our current system is unsustainable by any definition.
Many of our politicians continue to insist that it can be “fixed” if you will just allow them to “tweak” it a bit.
Sadly, they are all lying to you.
A few small changes here and there is not going to change anything.
We need radical reconstructive surgery in this nation, and unfortunately that is not even being presented to the American people as an option in 2012.
We are just going to keep doing more of the same and we are going to keep expecting different results.
And that truly is insanity.
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Half of US counties now considered disaster areas
By JIM SUHR | Associated Press
ST. LOUIS (AP) — Nearly 220 counties in a dozen drought-stricken states were added Wednesday to the U.S. government’s list of natural disaster areas as the nation’s agriculture chief unveiled new help for frustrated, cash-strapped farmers and ranchers grappling with extreme dryness and heat.
The U.S. Department of Agriculture’s addition of the 218 counties means that more than half of all U.S. counties — 1,584 in 32 states — have been designated primary disaster areas this growing season, the vast majority of them mired in a drought that’s considered the worst in decades.
Counties in Arkansas, Georgia, Iowa, Illinois, Indiana, Kansas, Mississippi, Nebraska, Oklahoma, South Dakota, Tennessee and Wyoming were included in Wednesday’s announcement. The USDA uses the weekly U.S. Drought Monitor to help decide which counties to deem disaster areas, which makes farmers and ranchers eligible for federal aid, including low-interest emergency loans.
To help ease the burden on the nation’s farms, Agriculture Secretary Tom Vilsack on Thursday opened up 3.8 million acres of conservation land for ranchers to use for haying and grazing. Under that conservation program, farmers have been paid to take land out of production to ward against erosion and create wildlife habitat.
"The assistance announced today will help U.S. livestock producers dealing with climbing feed prices, critical shortages of hay and deteriorating pasturelands," Vilsack said.
Vilsack also said crop insurers have agreed to provide farmers facing cash-flow issues a penalty-free, 30-day grace period on premiums in 2012.
As of this week, nearly half of the nation’s corn crop was rated poor to very poor, according to the USDA’s National Agricultural Statistics Service. About 37 percent of the U.S. soybeans were lumped into that category, while nearly three-quarters of U.S. cattle acreage is in drought-affected areas, the survey showed.
The potential financial fallout in the nation’s midsection appears to be intensifying. The latest weekly Mid-America Business Conditions Index, released Wednesday, showed that the ongoing drought and global economic turmoil is hurting business in nine Midwest and Plains states, boosting worries about the prospect of another recession, according to the report.
Creighton University economist Ernie Goss, who oversees the index, said the drought will hurt farm income while the strengthening dollar hinders exports, meaning two of the most important positive factors in the region’s economy are being undermined.
The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Thursday’s expansion of federal relief was welcomed in rain-starved states like Illinois, where the USDA’s addition of 66 counties leaves just four of the state’s 102 counties — Cook, DuPage, Kane and Will, all in the Chicago area — without the natural disaster classification.
The Illinois State Water Survey said the state has averaged just 12.6 inches from January to June 2012, the sixth-driest first half of a year on record. Compounding matters is that Illinois has seen above-normal temperatures each month, with the statewide average of 52.8 degrees over the first six months logged as the warmest on record.
"While harvest has yet to begin, we already see that the drought has caused considerable crop damage," Illinois Gov. Pat Quinn said. In his state, 71 percent of the corn crop and 56 percent of soybean acreage is considered poor or very poor.
In South Dakota, where roughly three-fifths of the state is in severe or extreme drought, Vilsack earlier had allowed emergency haying and grazing on about 500,000 conservation acres, but not on the roughly 445,000 acres designated as wetlands.
Vilsack’s decision to open up some wetland acres in a number of states will give farmers and ranchers a chance to get good quality forage for livestock, federal lawmakers said.
"The USDA cannot make it rain, but it can apply flexibility to the conservation practices," Sen. Tim Johnson, a South Dakota Democrat, said Wednesday. The USDA designated 39 of his state’s counties disaster areas.
Statistics: Posted by yoda — Thu Aug 02, 2012 8:15 am
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