Jueves 15/03/12 Actividad manufacturera en NY (empire state)

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SCCO +0.41%

BVN -0.23%

EPU +0.78%

BAP -0.79%

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Au down 1,644

-8.63

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Hay varias Grecias en US.

Los sindicatos estan quebrando a Detroit de la msima manera como quebraron a las automotrices. Los bomberos pueden retirarse a los 55 anios con el 70% del sueldo mas alto garantizado, mas el 2.25% de aumento anual de por vida. Todos esos costos son la mitad del presupuesto total. Las pensiones se han cuadriplicado y los costos de salud hann subidoo 60% desde el 208.

REVIEW & OUTLOOKMarch 14, 2012, 7:18 p.m. ET
The Message of Motown
Detroit and its public unions head toward bankruptcy

The clock's running out on Detroit. City leaders are up against a $200 million deficit driven by exploding labor costs and may not be able to pay the bills come May. The state of Michigan has just swept in with a deux ex machina. Trouble is, city pols don't like the strings attached.

Governor Rick Snyder is offering Detroit a "consent agreement," which includes $100 million of state-backed bonds that would tide the city over until labor agreements can be restructured. The catch: Labor agreements will have to be restructured. The compact between the state and the city would turn over financial decision-making to a nine-member financial advisory board of state and city appointees who would have the authority to amend labor contracts.

Legacy costs are bankrupting Detroit just as they crushed its automakers. Firefighters can retire at 55 and earn 70% of their highest salary plus a 2.25% annual cost-of-living inflator in perpetuity. The result? Employee benefits alone now make up about half of the city's general fund. Health costs have grown by more than 60% since 2008 while the city's pension bill has quadrupled to $200 million.

Since state law and collective-bargaining agreements bar the city from modifying worker benefits, Mayor Dave Bing earlier this year announced plans to lay off 1,000 workers, saving $14 million. But according to a report by Ernst & Young, Detroit could lay off 2,200 workers and still run out of money by July. Getting rid of all 11,000 city employees wouldn't solve Motown's problems.

That's because the city, which has twice as many retirees as workers, is spending more on retirement benefits than wages. Pensions make up about two thirds of the public-safety payroll, and many collective-bargaining agreements entitle laid-off workers to pensions. The city has a $600 million unfunded pension liability and a $5 billion—you read that right—liability for retiree health benefits.

The only way to wring out the savings that the city requires is to modify retirement benefits and make workers pick up more of the tab. For instance, public-safety officers pay only an eighth of their pension and retiree health costs, and many workers don't pay a penny. Splitting costs down the middle could save the city upward of $150 million per year.

Additionally, freezing workers' pensions and modifying the benefits they accrue going forward as the city did last year with its 2,000-member police union would reduce the city's unfunded liability and thus how much it must pay into its pension funds each year. Cutting the police pension multiplier to 2.1% from 2.5% and shifting new officers to defined-contribution plans is expected to save the city some $16 million a year.

Unfortunately, the city's 20 other unions aren't conceding as much as police, which is why the Governor wants to give a financial board the power to impose such changes. City leaders don't like Mr. Snyder's plan because it would do away with collective bargaining and strip them of most of their powers. Turning control over to an unaccountable board isn't ideal. However, the likely alternatives would be handing the reins to a state-appointed receiver or Chapter 9 municipal bankruptcy, which would damage city and state credit ratings.

The best solution would be for the state to limit collective bargaining as Republican Governor Scott Walker did in Wisconsin. This would allow city leaders to remain in charge and give them the flexibility to modify benefits and ward off future fiscal cardiac arrests. Such a move, if unlikely, would help the 109 other fiscally distressed cities on Michigan's watch list too.

Even if the state and city work out a deal to avoid default, Detroit must still contend with the problem of growth. Due to manufacturing job losses, a high crime rate and failing public schools, Detroit's population has shrunk by 25% in the last decade. The city has raised property and income taxes to make up for lower revenues, but that's merely caused more residents to leave. Detroit's unemployment rate was 17.3% in December.

The city may not be able to support its growing retiree force even with benefit modifications in another decade without population and economic growth. What that would require is making the city a more attractive place to live and do business—e.g., reducing the city's 2.5% income tax and 1% business tax. Mayor Bing, on the other hand, has proposed raising the business tax to 1.9% and the city council wants to increase income taxes.

Similar fiscal crises are playing out in cities across the country from Stockton, California, to Providence, Rhode Island. Maybe if a big city like Detroit fails, more politicians would start caring.

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Es decir que todo el sector publico de Detroit tiene que trabajar para mantener las pensiones y seguros de salud de su sector publico. Que estupida puede ser la gente.

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El que necesita un stress test urgente no es la banca Americana, es su gobierno.

Muy buen articulo:

Stress Tests
When do taxpayers get to stress-test the government?

So the Federal Reserve and Treasury have stress-tested America's 19 biggest banks and deemed that only the relatively small Ally Financial is short of capital. Hallelujah, brother. Bank stocks promptly rallied and the mini-mania of the current phase of recovery got another fillip. If only someone would now test where the next "stress" is most likely to occur—in the government.

Undertaken after the bailouts of 2008-2009, the bank stress tests have reassured skittish markets that the financial industry is healing. While the tests did not hold banks to the higher Basel III capital standards being implemented over the course of this decade, the Fed did subject bank balance sheets to a fairly harsh economic scenario: a spike in unemployment to 13% from today's 8.3%, and steep declines in housing and stock prices.

And there is no doubt that the U.S. government is setting a higher standard for bank safety than many governments across the Atlantic. One senior executive of a multinational financial institution tells us how stress tests are administered in Europe.

Regulator: Are you a European bank?

Bank employee: Yes.

Regulator: Congratulations! You passed.

That's an exaggeration, but if a U.S. stress test were applied to Europe's 19 largest banks, the report card might resemble John Blutarsky's transcript from Faber College.

The limitation of stress tests in 2012 is that by now they are a look through the rearview mirror. Most banks have written down billions of dollars in losses, regained profitability and rebuilt their capital base. They've done so, moreover, despite being subjected to vast new regulatory uncertainty, periodic political raids on their cash flow (the $25 billion heist known as the foreclosure settlement), and general vilification.

With the exception of housing, which is still subject to political attempts to prop up prices, the rest of the private economy is also doing well. Corporate balance sheets are as healthy as they've been in many years. The bond market and private hiring are coming back. Even consumers have shed much of their debt and are doing better, save for the raid on their real incomes from rising food and energy prices. Absent stupid policy, the next economic or financial crisis isn't likely to start with banks or another business bubble.

The balance sheet to worry about belongs to the U.S. government, which in the name of trying to restore growth threw the party of the century. The Treasury is still rolling out $1.3 trillion deficits, three years into a recovery, and the Federal Reserve is still holding interest rates at near-zero and has tripled its own balance sheet.

Neither institution—much less the White House or Congress—seems to have an exit strategy worth the name. The White House says a big tax increase next year will solve any fiscal woes, and Fed Chairman Ben Bernanke says, well, trust him.

Earlier this week we described the Treasury's financial pickle if interest rates rise even 200-300 basis points. What we don't know, but would like to, is what would happen to the Fed's balance sheet if interest rates rose rapidly, say, to their historic modern norm of about 5%? What really needs a stress test is the government.

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Yields up 2.28%

-16.16

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AAPL +1.06%

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El desempleo Griego sube del 17.7% a mas del 20%. Desgracia humana.

Yields up 2.28%

-11.24

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Oil down 105.27

Au down 1,642

Ag down 32.10

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Manufactura en Philadelphia sube a 12.5

-2.57

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Oil down 105.40

-7.48

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Au up 1,645

Futures cu up 3.86

VIX down 15.16

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Euro up 1.3044

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Se espera que la economia de India crezca 7.85%, un poco mas que la de China.

Los bonos en sell off por los mejores indicadores economicos, no muy claro que habra otro QE. De todas maneras los yields estan historicamente muy bajos.

-10.33

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Los seguros de desempleo estan en sus niveles mas bajos en 4 anios.

Europa mixta.

-12.11