Jim’s Mailbox

Posted at 12:48 PM (CST) by & filed under Jim's Mailbox.

Dear Eric,

The end is not just near. It is here now!

Jim

Spain Warns Market Access Being Shut, Calls For EU Action On Bank Recap
CIGA Eric

The calls for liquidity will be answered soon. Headline: Spain Warns Market Access Being Shut, Calls For EU Action On Bank Recap

By David Roman MADRID–Spain Tuesday urged euro-zone partners to act faster to help support its enfeebled banks, with Budget Minister Cristobal Montoro saying that the government has effectively lost access to capital markets because of steep risk premiums demanded by sovereign bond investors. In making this dramatic admission, Mr. Montoro joined recent calls by the Spanish government for direct aid from European Union institutions for Spanish banks as the government hopes to avoid a full-blown bailout package. The matter has gained urgency after Madrid was forced into a EUR19 billion euro rescue of lender Bankia SA (BKIA.MC) and as the government’s borrowing costs have surged to record highs. Yields on Spanish 10-year bonds were above the 6% mark for the third straight week and at late in Europe, the yield was at 6.26%. By comparison, the yield on the German 10-year bond, considered a haven for investors, was at 1.20%. "What this premium tells us is that the State, and Spain as a whole, has a problem when it comes to accessing markets, when we need to refinance our debt," Mr. Montoro said in a radio interview. "What that premium says is that Spain doesn’t have the market’s door open, as such, the challenge is to open that door and regain the confidence of those markets, our creditors." Speaking later Tuesday in parliament, Spain’s Prime Minister Mariano Rajoy said that the European Union needs to quell doubts on the euro’s project by reinforcing integration and creating a common banking union and euro-zone bonds. Mr. Rajoy said that Spain plans to continue an ambitious reform drive, but EU partners must also do their part to improve the situation. The warning from Madrid is reminiscent of similar alarms over prohibitive borrowing costs sounded by Greece, Portugal and Ireland before entering into bailout talks with such international lenders as the European Union and the International Monetary Fund. It also came as finance chiefs from the Group of Seven leading industrialized nations Tuesday discussed Europe’s financial crisis and potential responses amid concerns that the continent isn’t moving fast enough to contain its problems. A U.S. Treasury official said that the talks, among G-7 finance ministers and central bankers, at Tuesday’s teleconference included "progress toward financial and fiscal union in Europe." This plan has been gaining traction recently but may not be in place in time to address Spain’s urgent funding needs.

Source: online.wsj.com

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Jim,

How have you been my friend? My wife and I are so thankful to you for your advice from six years ago now. I followed it, and we are sitting relatively secure.

We were wondering what your thoughts were concerning moving cash from the banks, when this pops, should we be mostly out of the banks?

The community is so blessed to have your insights as we move forward. Thank you – Thank you.

CIGA Mike and Bonnie

Dear Mike and Bonnie,

Cash in banks is unsafe as the FDIC insurance on accounts is under-funded.

You either keep the cash itself since there is no interest paid to speak of, or buy gold.

Jim

 

Full-time jobs are getting harder to find
CIGA Eric

The Great Recession which has become the social acceptable description of yet another Depression continues to wreck havoc on families across America.  Part-time rather than full-time jobs in the lower-paying, service-producing sector is becoming the norm to make ends meet (chart).

Chart: Good-Producing (GP), Manufacturing (MFG), and Service-Producing (SP) Sector As % of Nonfarm Payrolls (NFP)

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Headline: Full-time jobs are getting harder to find

By Eve Tahmincioglu Andrea Mulhearn Brobst wants a full-time job. Despite having a four-year degree in business, she’s only been able to find a low-paying part-time retail job since she was laid off “from a real job at the beginning of this economic mess,” she said. And Kathi Nguyen has been relying on temporary jobs since she lost her full-time corporate position in 2007. “It’s just an extremely frustrating situation,” she said. “I want full-time.” Unfortunately, finding a coveted full-time gig has gotten harder since the Great Recession hit, and last week’s May unemployment data showed the problem is getting worse. The Bureau of Labor Statistics reported an uptick in the number of workers classified as “involuntary part time,” or those who’d rather be working a 40-hour plus week. The data shows the number of people working part time for economic reasons climbed above 8 million in May. There are two types of employees that come under the involuntary part-time category: those who are working fewer hours because their present employer cut back hours due to business conditions, and those who just can’t find full-time jobs. While the number of employees who saw their full-time work schedules cut by their existing employers stayed about even with last month, and declined 8.8 percent from last year; the number of workers who could only find part-time jobs rose about 12 percent to 2.6 million in May, and increased about the same percentage compared to the same month last year.

Source: msnbc.msn.com

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