20 Shevat 5771
(1) Staggering US $14.3 Trillion debt limit warned will hit March 31
Financial markets will listen closely to President Barack Obama's State of the Union address on Tuesday for any clues on whether he would be willing to strike a deal with Republicans to cut spending in exchange for a debt limit increase.
A lengthy standoff could lead to worries in markets about a potential U.S. default.
...As of January 20, the U.S. national debt stood at $14.004 trillion, just $290 billion below the limit.
The Treasury has estimated that based on recent spending and revenue trends, the government will hit the limit as early as March 31. This could stretch out until May 16, depending on the strength of government tax receipts and economic growth. Treasury Secretary Timothy Geithner has asked Congress to raise the limit before the end of March so the government can meet previous spending commitments made by lawmakers.
WHAT IF CONGRESS FAILS TO ACT AND THE LIMIT IS HIT?
The government would have to stop issuing debt to fund its day-to-day operations. If it does not have sufficient cash on hand from other sources, such as tax receipts, it would have to curtail some activities, including closing government offices.
The government may have to halt payments of federal benefits, such as Social Security or Medicare, or default by halting interest payments on Treasury debt. It paid $148.2 billion in interest to bondholders from October through December 2010.
WHAT WOULD HAPPEN IF THE UNITED STATES DEFAULTED?
Treasury officials have said this would be "catastrophic." Financial markets could experience severe turmoil. The government would likely have to deeply cut spending, which would suck fiscal support away from a still-fragile recovery and hurt those who depend on federal benefits.
...CAN THE TREASURY DELAY REACHING THE DEBT LIMIT?
Yes. It has several tools to alter its cash flow, but these measures can only last about eight weeks or so, pushing back the day of reckoning to mid-July at the latest.
(2) FEMA Requests Information on the Availability of 140 Million Packets of Food, Blankets, and Body Bags
DHS specifically cites the states that it will be needed in. North Carolina, South Carolina, Louisiana, Texas, Alabama, Mississippi, Georgia, and Florida. That’s right, the Gulf of Mexico.
(3) The End of History for Russian Oil
The Soviet Union ended in December 1991. In years to come, historians may well date the end of the Soviet oil industry to January 2011.
This month, Rosneft, the Kremlin-controlled oil giant, signed a deal to jointly explore for oil and gas in Russia's Arctic waters with Western major BP. For Russia's sake, it would be fortunate if this heralds a new era.
Oil revenues provide half of Russia's budget, according to BofA Merrill Lynch Global Research. The price needed to balance the public books last year was $110 a barrel ...
(4) Crop warning over China drought
Shandong province is experiencing its driest weather for 60 years.
Half the wheat-growing land there is affected, while almost a quarter of a million people face drinking water shortages, the China Daily said.
Beijing has also been experiencing its longest dry spell for more than 30 years, another state daily said.
The Chinese capital has had no significant rainfall for three months, the Beijing Times reported.
Analysts say this drought is likely to put further pressure on food prices, which have been rising sharply for months.
(5) China warned is on collision course with US
...The political reality is that China’s export of manufacturing over-capacity is hollowing out the US industrial core, and a plethora of tricks to stop Western firms competing in the Chinese market rubs salt in the wound. It is preventing full recovery in the US, where half the population is falling out of the bottom of the Affluent Society. Some 43.2m people are now on food stamps. The US labour force participation rate has fallen to 64.3pc, worse than a year ago. Only the richer half is recovering.