We will have a mirror site at http://nunezreport.wordpress.com in case we are censored, Please save the link

Thursday, July 7, 2011

Ireland May Be Next to Face Junk Status After Moody’s Downgrades Portugal

Ireland’s credit rating may be cut to junk by Moody’s Investors Service after Portugal yesterday lost its investment grade rating, according to analysts.

Moody, which slashed Portugal to Ba2 from Baa1, in April lowered Ireland’s credit rating to the lowest investment grade Baa3 and left country’s outlook on negative.

The ratings company cut Portugal’s rating in part because the nation may not be able to return to debt markets in the second half of 2013. Ireland has been locked out of markets since September, and the yield on 10-year Irish bonds climbed to 12.44 percent today, a euro-area record for the country that agreed to a rescue package with the European Union and International Monetary Fund last November.

“If not re-entering the public funding markets has significance for a sovereign’s rating, then clearly if our view proves correct, then Ireland will suffer an imminent downgrade,” Cathal O’Leary, head of fixed income sales at Dublin-based NCB Stockbrokers, said in a note today.

The yield on Irish two-year notes climbed 239 basis points to 15.27 percent as of 2:35 p.m. in London, the first time it has been above 15 percent.

The downgrade of Portugal highlighted “contagion risks” for Ireland,Goodbody Stockbrokers said today. Moody’s said potential investor involvement in a new Greek bailout makes it more likely the EU will require creditors to eventually contribute to aiding the Portuguese.

Portugal joined Greece
as the second euro country rated non-investment grade by Moody’s, which suggested the government may struggle to meet the terms of its bailout.


20,000 acres of crops damaged in Renville County, Minn


WILLMAR — Farm Service Agency officials estimate that 20,000 acres of crops were damaged by the hail and high winds that tracked across Renville County in Friday’s storms.

Byron Hogberg, Farm Service Agency executive director in Renville County, said that worst of the damage was north of U.S. Highway 212, in an area south of Bird Island and in selected pockets south of Highway 212.

Along with the crop damage, many grain bins, machine sheds and hog barns were damaged, with some structures partially damaged and others completely blown down, he said.

Many grain bins, already emptied of their contents, were strewn up to two miles across fields, leaving a “path of metal,” Hogberg said. The farmers will need to let the fields dry out before they can go in with tractors and wagons to pick up the large steel pieces.

The estimated crop loss could be 10 to 15 percent of the yield, he said. However, farmers will not know the impact for at least a few weeks and ultimately, will not know the full extent of the loss until the fields are harvested in the fall.

The crop damage stopped near the Kandiyohi County line, according to Hogberg and Kandiyohi County Farm Service Agency director Wes Nelson, who went south Tuesday to help with the crop damage assessments.

Nelson noted that the corn crop will likely be OK because the growing point of the plants was still well inside the plants. The bigger concern, he said, is the damage to the soybean plants that were sandblasted and damaged by the wind-blown soil.

The damage estimates, from Renville and other affected counties, will be forwarded to the state Farm Service Agency office, which will sendthe information on to Washington, D.C., for federal disaster consideration.

hostgator coupon 2011

US farmers fear the return of the Dust Bowl

There is not much to be happy about these days in Happy, Texas. Main Street is shuttered but for the Happy National Bank, slowly but inexorably disappearing into a High Plains wind that turns all to dust. The old Picture House, the cinema, has closed. Tumbleweed rolls into the still corners behind the grain elevators, soaring prairie cathedrals that spoke of prosperity before they were abandoned for lack of business.

Happy's problem is that it has run out of water for its farms. Its population, dropping 10 per cent a year, is down to 595. The name, which brings a smile for miles around and plays in faded paint on the fronts of every shuttered business – Happy Grain Inc, Happy Game Room – has become irony tinged with bitterness. It goes back to the cowboy days of the 19th century. A cattle drive north through the Texas Panhandle to the rail heads beyond had been running out of water, steers dying on the hoof, when its cowboys stumbled on a watering hole. They named the spot Happy Draw, for the water. Now Happy is the harbinger of a potential Dust Bowl unseen in America since the Great Depression.

'It was a booming town when I grew up,' Judy Shipman, who manages the bank, says. 'We had three restaurants, a grocery, a plumber, an electrician, a building contractor, a doctor. We had so much fun, growing up.' Like all the townsfolk, she knows why the fun has gone. 'It's the decline in the water level,' she says. 'In the 1950s a lot of wells were drilled, and the water went down. Now you can't farm the land.'

Those wells were drilled into a geological phenomenon called the Ogallala Aquifer. It is an underground lake of pristine water formed between two and six million years ago, in the Pliocene age, when the tectonic shifts that pushed the Rocky Mountains skywards were still active. The water was trapped below the new surface crust that would become the semi-arid soil of the Plains, dry and dusty. It stretches all the way down the eastern slope of the Rockies from the badlands of South Dakota to the Texas Panhandle. It does not replenish.

Happy is the canary in the coalmine because the Ogallala is deepest in the north, as much as 300ft in the more fertile country of Nebraska and Kansas. In the south, through the panhandle and over the border to New Mexico, it is 50-100ft. And around Happy, 75 miles south of Amarillo, it is now 0-50ft. The farms have been handed over to the government's Conservation Reserve Programme (CRP) to lie fallow in exchange for grants: farmers' welfare, although they hate to think of it like that.

The Telegraph


hostgator coupon 2011

The Sovereign Debt Crisis Is Never Going To End Until There Is A Major Global Financial Collapse

In the past, there certainly have been governments that have gotten into trouble with debt, but what we are experiencing now is the first truly global sovereign debt crisis. There has never been a time in recorded history when virtually all of the governments of the world were drowning in debt all at the same time. This sovereign debt crisis is never going to end until there is a major global financial collapse. There simply is no way to unwind the colossal web of debt that we have constructed in an orderly fashion. Right now the EU and the IMF have been making "emergency loans" to nations such as Greece, Ireland and Portugal, but that is only going to buy those countries a few additional months. Giving more loans to nations that are already drowning in red ink may "kick the can down the road" for a little while but it isn't going to solve anything. Meanwhile, dozens more nations all over the globe are rapidly approaching a day of reckoning.

All of the bailouts that you are hearing about right now are simply delaying the pain. The reality is that when the "emergency loans" for Greece stop, Greece is going to default. Greece is toast. The game is over for them. You can stick a fork in Greece because it is done.

One of the big problems for Greece is that since it is part of the euro it can't independently print more money. If Greece cannot raise enough euros internally Greece must turn to outside assistance.

Unfortunately, at this point Greece has accumulated such a mammoth debt that it cannot possibly sustain it. By the end of the year, it is projected that the national debt of Greece will soar to approximately 166% of GDP.

The financial collapse of Greece is inevitable. If they keep using the euro they will collapse. If they quit using the euro they will collapse. When the rest of Europe decides that it is tired of propping Greece up the game will be over.

At this point very few people are interested in lending Greece more money.

As I wrote about yesterday, many of the nations around the world are only able to keep going because they are able to borrow huge amounts of money at low interest rates.

Well, nobody wants to lend money to Greece at a low rate of interest anymore.

Today, the yield on 2 year Greek bonds is back over 28 percent.

Fortunately for the rest of the world, Greece is just a very, very small part of the global economy, but when interest rates start spiking like that on U.S. debt or Japanese debt the entire world financial system will be thrown into chaos.

So why is there so much of a focus on Greece right now?

Well, there is a real danger that the panic will start to spread.

The other day, Moody's Investors Service slashed the credit rating on Portuguese government debt by four notches.

Portuguese debt is now considered to be "junk".

But even more alarming is that Moody's stated that what is going on in Greece played a role in reducing the credit rating of Portugal.

The following is a portion of what Moody's had to say when they cut the credit rating of Portugal by four notches....

Although Portugal’s Ba2 rating indicates a much lower risk of
restructuring than Greece’s Caa1 rating, the EU’s evolving approach to providing official support is an important factor for Portugal because it implies a rising risk that private sector participation could become a precondition for additional rounds of official lending to Portugal in the future as well. This development is significant not only because it increases the economic risks facing current investors, but also because it may discourage new private sector lending going forward and reduce the likelihood that Portugal will soon be able to regain market access on sustainable terms.

Do you understand what is being said there?

Basically, Moody's is saying that the terms of the Greek bailout make Portuguese debt less attractive because Portugal will likely be forced into a similar bailout at some point.

If the EU is not going to fully guarantee the debt of the member nations, then that debt becomes less attractive to investors.

The downgrade of Portugal is having all kinds of consequences. The cost of insuring Portuguese government debt set a new record high on Wednesday, and yields on Portuguese bonds have gone haywire.

If you want to get an idea of just how badly Portuguese bonds have been crashing, just check out this chart.

But it is not just Portugal that is having problems.

Just recently, Moody's warned that it may downgrade Italy's Aa2 debt rating at some point within the next few months.

Spain is also on the verge of major problems and Ireland may need another bailout soon.

Things don't look good.

Unfortunately, if the dominoes start to fall the entire EU is going to go down.

Big banks all over Europe are highly exposed to sovereign debt and they are leveraged to the hilt.

It is almost as if we are looking at a replay of 2008 in many ways.

When Lehman Brothers finally collapsed, it was leveraged 31 to 1.

Today, major German banks are leveraged 32 to 1, and major German banks are currently holding a tremendous amount of Greek debt.

Anyone with half a brain can see that this is going to end badly.

So how is the European Central Bank responding to this crisis?

They are raising interest rates once again.

That certainly is not going to help the PIIGS much.

But Europe is not the only one facing a horrific debt crunch.

In Japan, the national debt is now up to about 226 percent of GDP. So far the Japanese government has been able to handle a debt load this massive because the citizens of Japan have been willing to lend the government gigantic mountains of money at interest rates so low that they are hard to believe.

When that paradigm changes, and it will, Japan is going to be in a massive amount of trouble. In fact, an article in Forbes has warned that even a very modest increase in interest rates would cause interest payments on Japanese government debt to exceed total government revenue by the year 2019.

Of course the biggest pile of debt sitting out there is the national debt of the United States. The U.S. is so enslaved to debt that there is literally no way out under the current system. To say that America is in big trouble would be a massive understatement.

In fact, the whole world is headed for trouble.

Right now government debt around the globe continues to soar at an exponential pace. At some point a wall is going to be hit.

The Wall Street Journal recently quoted Professor Carmen Reinhart as saying the following about what we are facing....

"These processes are not linear," warns Prof. Reinhart. "You can increase debt for a while and nothing happens. Then you hit the wall, and—bang!—what seem to be minor shocks that the markets would shrug off in other circumstances suddenly become big."
That is the nature of debt bubbles - they keep expanding and expanding until the day that they inevitably burst.

Governments around the world will issue somewhere in the neighborhood of 5 trillion dollars more debt this year alone. Debt to GDP ratios all over the globe continue to rise at a frightening pace.

Because the world is so interconnected today, the collapse of even one nation will devastate banks all over the planet. If even one domino is toppled there is no telling where things may end.

The combination of huge amounts of debt and huge amounts of leverage is incredibly toxic, and that is what we have all over the globe today. Almost every major nation is drowning in a sea of red ink and almost all of our major financial institutions are leveraged to the hilt.

There is only one way that the sovereign debt crisis can end.

Very, very badly.

I hope you are ready for what is coming.

The Economic Collapse
hostgator coupon 2011

Israel fears Iran and North Korea strengthening ties

Israeli officials say Pyongyang is helping Iran develop its military nuclear program, add that if Iran was only interested in nuclear energy for civilian purposes, Russia's aid should suffice.

Iran and North Korea are tightening their relations after a lull, defense sources have told Haaretz. Israeli defense officials are concerned about the development, saying it may reflect an expansion of North Korean aid to Iran's nuclear and missile programs.

In May, the Iranian and North Korean foreign ministers met during a conference of the Non-Aligned Movement in Malaysia. It was a rare public meeting of senior officials from the two countries.

Israeli officials believe that Pyongyang is helping Iran develop its military nuclear program, saying that if Iran was only interested in nuclear energy for civilian purposes, Russia's aid on the matter should have sufficed.

A report by a UN team of experts, whose publication is being delayed by Chinese opposition, has criticized North Korea for its relationship with Iran, which essentially violates the sanctions on both countries. The report says North Korea violated the sanctions when it supplied missile technology to Iran. The components were regularly shipped from North Korean to Iran via a third country, the report said.

Last week, Iran conducted a major missile-launching exercise. It said it launched 14 missiles, including the Shihab 3, which can reach Israel. British Foreign Minister William Hague said the missiles were capable of carrying nuclear warheads and the tests were in violation of a UN resolution.
Meanwhile, the new U.S. secretary of defense, Leon Panetta, did not mention the Iranian nuclear problem when listing his priorities at his inauguration last week. He said his top four priorities were retaining American military strength in an era of budget cuts, defeating Al-Qaida, stabilizing Afghanistan and building a true long-term partnership with Iraq.

US warns airlines of threat of 'implanted bombs

Airport body scanner (file)

The US has warned airlines of a potential threat from militants surgically implanting explosives.

It came after the Department of Homeland Security issued a memo to security officials and foreign counterparts alerting them to the threat of "body packing".

No specific plot has been identified but an anonymous official said new intelligence highlighted the threat.

Air passengers could now face even tougher screening measures.

In a statement, the Transportation Security Administration (TSA) said that due to "significant advances in global aviation security in recent years, terrorist groups have repeatedly and publicly indicated interest in pursuing ways to further conceal explosives.

"As a precaution, passengers flying from international locations to US destinations may notice additional security measures in place.

"These measures are designed to be unpredictable, so passengers should not expect to see the same activity at every international airport.

"Measures may include interaction with passengers, in addition to the use of other screening methods such as pat-downs and the use of enhanced tools and technologies."

Existing airport screening methods cannot detect plastic explosives under the skin, TSA spokesman Nicholas Kimball told the Los Angeles Times.'Implausible'

The memo sent to security officials was obtained by the Associated Press, which quoted it as saying that "body packing" was a "criminal tactic with possible terrorist application".

Some militant organisations seeking to mount an attack on aviation have used increasingly creative methods in their efforts to evade detection in recent years.

Al-Qaeda in the Arabian Peninsula (AQAP) has been linked to the attempt by a Nigerian man to bring down a plane over Detroit using a bomb concealed in his underpants in 2009.

The group was also thought to be behind an attempt in 2010 to bomb cargo planes using printer cartridges sent by post.

But experts are divided over the feasibility of mounting an attack using implanted explosives.

Chris Ronay, a former chief of the FBI explosives unit, told AP it would be "rather easy" once a willing would-be suicide bomber was found, the explosives secured and the bomb made.

Dr John Clifford Jones, an explosives expert at the University of Aberdeen, said the quantity of explosives that could be surgically implanted would not be enough to blow up a plane but might be enough to break open the fuselage.

"Energy to initiate the action of the explosive, making it detonate," he told the BBC, "could be provided by something incorporating a 9-volt battery," which the bomber might have to carry along with them, disguised as something like a mobile phone.

"Yet my intuition is that, all things considered, concealment followed by 'successful' operation of the device seems quite implausible."


hostgator coupon 2011

As Plastic Reigns, the Treasury Slows Its Printing Presses

WASHINGTON — The number of dollar bills rolling off the great government presses here and in Fort Worth fell to a modern low last year. Production of $5 bills also dropped to the lowest level in 30 years. And for the first time in that period, the Treasury Department did not print any $10 bills.

The meaning seems clear. The future is here. Cash is in decline.

You can’t use it for online purchases, nor on many airplanes to buy snacks or duty-free goods. Last year, 36 percent of taxi fares in New York were paid with plastic. At Commerce, a restaurant in the West Village in Manhattan, the bar menus read, “Credit cards only. No cash please. Thank you.”

There is no definitive data on all of this. Cash transactions are notoriously hard to track, in part because people use cash when they do not want to be tracked. But a simple ratio is illuminating. In 1970, at the dawn of plastic payment, the value of United States currency in domestic circulation equaled about 5 percent of the nation’s economic activity. Last year, the value of currency in domestic circulation equaled about 2.5 percent of economic activity.

“This morning I bought a gallon of milk for $2.50 at a Mobil station, and I paid with my credit card,” said Tony Zazula, co-owner of Commerce restaurant, who spoke with a reporter while traveling in upstate New York. “I do carry a little cash, but only for gratuities.”

It is easy to look down the slope of this trend and predict the end of paper currency. Easy, but probably wrong. Most Americans prefer to use cash at least some of the time, and even those who do not, like Mr. Zazula, grudgingly concede they cannot live without it.

Currency remains the best available technology for paying baby sitters and tipping bellhops. Many small businesses — estimates range from one-third to half — won’t accept plastic. And criminals prefer cash. Whitey Bulger, the Boston gangster who lived in Santa Monica for 15 years,paid his rent in cash, and stashed thousands of dollars in his apartment walls.

Indeed, cash remains so pervasive, and the pace of change so slow, that Ron Shevlin, an analyst with the Boston research firm Aite Group, recently calculated that Americans would still be using paper currency in 200 years.

“Cash works for us,” Mr. Shevlin said. “The downward trend is clear, but change advocates always overestimate how quickly these things will happen.”

hostgator coupon 2011

£50 trillion needs to be spent on going green if world is to avert 'major planetary catastrophe’

Smoke billows from a power plant in Wuzhong, of the Ningxia Hui Autonomous Region, China: China announces carbon target for Copenhagen

Governments must invest three per cent of world GDP – about £1.2 trillion in 2010 – annually for 40 years to stop climate change and famine, according to the UN's department of economic and social affairs.

At least £688 billion of that will need to be spent each year in developing countries, in order to meet their populations' increasing demands for resources, the 2011 World Economic and Social Survey said.

Rob Vos, the lead author of the report, said that “business as usual is not an option” if the world were to “reverse the ongoing ecological destruction”.

His report said that to feed a rapidly growing number of mouths, farmers around the world will have to essentially double total international food production between now and 2050.

But to do this sustainably would require huge spending on “clean” energy production, on reducing the non-bio-degradable waste and on other improvements to farming and forestry techniques, it said.

This broader analysis prompted a rise of about 50 per cent in the amount of money said to be required to make human life sustainable. Last year's survey called for spending of up to £750 billion a year.

The report said that the extent of technological transformation required was greater in scale, and must be done more quickly, than the industrial revolution.

"It is rapidly expanding energy use, mainly driven by fossil fuels, that explains why humanity is on the verge of breaching planetary sustainability boundaries," the report said.

"A comprehensive global energy transition is urgently needed in order to avert a major planetary catastrophe."

Moody's says 26 banks may need stress test support

People walk past the Bank of Greece in Athens May 9, 2011. REUTERS/Yiorgos Karahalis

(Reuters) - Nearly a third of European Union banks being tested for their resilience in bad markets may need some outside support, credit rating agency Moody's said on Wednesday.

The European Banking Authority (EBA) was expected to announce the results of its stress test next week. Analysts expect more failures than the seven recorded last year as regulators seek to boost credibility in the exercise.

Moody's said the overall impact of the stress test on bank ratings will be limited. "Of the 91 EU banks subject to the EBA's 2011 stress test, Moody's believes that 26 rated banks have a heightened risk of needing extraordinary external support."

"Moody's expects the banks that fail the EBA stress test will be among those lower-rated banks, or among the non-rated banks included in the EBA stress test," it said.

The health check, aimed at restoring investor confidence in a sector hit by the euro zone debt crisis, weaker returns for investors and regulatory uncertainties, should have positive effects for banks, Moody's said.

The test has already prompted several banks to bolster their capital cushions and will give investors details of each lender's exposure to sovereign debt and an insight into regulators' assessment of banks' capital positions.

"However, whilst the 2011 stress test is stricter than the 2010 European bank stress test, Moody's notes that the EBA's 2011 stress assumptions do not assume a sovereign default at a time when the risk of a sovereign default within the euro area has increased," the agency said.

The EU has been trying to put together a second bailout for Greece, and Moody's on Tuesday became the first ratings agency to cut Portugal's credit standing to junk.

EU finance ministers will discuss backstops for failing banks next Tuesday when they will be told the test results by the EBA ahead of publication later that week.

hostgator coupon 2011

Tsunami alert cancelled after 7.8-magnitude quake strikes off coast of New Zealand

A TSUNAMI alert for New Zealand and Tonga was cancelled today but a risk of dangerous seas remained after a strong 7.7 undersea earthquake, officials said.

The Pacific Tsunami Warning Centre (PTWS) issued the tsunami warning after the quake struck off New Zealand's Kermadec Islands at 7.03am (NZT) at a depth of just 1km.

Tsunami waves were measured off Raoul Island, one of New Zealand's Kermadec Islands, up to a height of 0.84 metres above normal sea level, the centre said.

"Sea level readings confirm that a tsunami was generated," the centre said.

"This tsunami may have been destructive along coastlines of the region near the earthquake epicentre."

However tsunami alert was cancelled shortly after 6.30am (AEST).
The quake struck at 7.03am today (NZT) at a depth of just 1km, the United States Geological Survey (USGS) said.

Video of the dust storm on Phoenix

hostgator coupon 2011