• 1) China Losses Inevitable as Dollar Weakens, Ex-PBOC Adviser Says

“Nov. 26 (Bloomberg) — China’s foreign-exchange reserves face a “triple whammy” as inflation, oversupply and the “inevitable” decline of the dollar threaten to erode the value of its holdings of U.S. Treasuries, said Yu Yongding, a former adviser to the Chinese central bank.

China needs to divert its trade and investment surpluses away from U.S. debt if it is unable to reduce them, Yu, a member of the central bank’s monetary policy committee from 2004 to 2006, said in a speech in Melbourne last night. The nation, with the world’s largest foreign-exchange reserves of $2.3 trillion, is the U.S.’s biggest creditor, holding $798.9 billion of Treasuries as of September.”

• 2) Dubai default threat rattles world stocks

“”This last-minute moratorium on debt repayments at Dubai World is unacceptable has all the smacking of an Ireland — nay worse, an Iceland — in the making.”

…….2A) European banks may have $40 billion Dubai exposure

…..2B) Moody’s downgrades Dubai government-related issuers ratings

“DP World issuer and debt ratings were downgraded to Baa2 from A3;

- Dubai Electricity & Water Authority (DEWA) issuer and debt ratings were downgraded to Baa2 from A3;

- DIFC Investments (DIFCI) issuer and debt ratings were downgraded to Ba1 from A3;”

• 3) L.A. analysts project $1-billion budget gap by 2013

“Los Angeles could face a $1-billion deficit by the time Mayor Antonio Villaraigosa wraps up his second term in 2013, a dire forecast driven primarily by escalating employee pension costs and stagnant tax revenues, the city’s top budget analyst said Wednesday.

The grim financial outlook came a day after the city’s credit rating was downgraded by Wall Street-based Fitch Ratings. That could worsen L.A.’s already precarious financial situation by making it more expensive for the city to borrow money.”

• 4) N.J. budget deficit could reach $1.5 billion

“TRENTON — New Jersey’s budget problem worsened in October, with a $222 million shortfall that exceeded its deficit in tax collections from July, August and September combined.

In a prospectus sent Wednesday to prospective bondholders, the state says its deficit could be $1 billion. It said that could be closed in part through “up to $400 million actions affecting major cost centers, including: school aid, municipal aid, higher education, hospitals and the state contribution to the pension plans.”

However, the 5.1 percent, $412.7 million year-to-date tax shortfall would, if maintained over the course of the next eight months, leave collections almost $1.5 billion behind budget.”

• 5) $1 billion gap in state’s next budget is predicted (Iowa)

“Iowa next year will face the largest budget gap in its history: more than $1 billion, a new budget review projects.

The review, released Wednesday by the state’s Legislative Services Agency, shows Iowa lawmakers will face a projected shortfall between revenue and expenses of $1.07 billion in the fiscal year that begins July 1.

That’s nearly $300 million more than the previous record gap - the one projected before lawmakers began hammering out the current budget.”

• 6) Food pantries swamped by families in need (New Jersey)

“Normally, we have turkey donations coming, and the freezer here would be filled to the brim. In fact, when you open the door they’d fall out on your feet,” she said. “This year, it’s almost empty.”

…..6A) Record number of recipients use county food pantry (Maryland)

…..6B) West Texas Food Needs Reach High 11/25/09

“Need has exploded this year,” said Folsom.

“We have one agency that had to close because they couldn’t handle the need, they served 21 in January, and it went up to 92 in August.”

And the list goes on; in fact many of the agencies have reported doubling or even tripling needs since last October.

• 7) Advertising to Consumers May Raise Drug Prices (US News & World Report)

“Consumer ads for clopidogrel began in 2001. Between then and 2005, spending on DTCA for clopidogrel in the United States was more than $350 million, an average of $70 million a year. In that same time frame, use of the drug in Medicaid programs did not increase, but cost per unit per quarter increased by 40 cents (12 percent), leading to an additional $40.58 in pharmacy costs per 1,000 Medicaid enrollees per quarter, the study found.”

• Yen soars to 14-year high against dollar, concerns about double-dip recession

“Similarly Toyota Motor Corp. assumes the dollar will trade at the 90 yen level in the latter half of its fiscal year, meaning a rise of 1 yen will erase about 25 billion yen from its operating profit on an annual basis, Japan’s number one automaker said.

“We are reaching a level where cost cuts alone will not get us anywhere,” a senior official at Sony Corp. said, adding that a stronger yen will further hurt its price competitiveness in the marketplace.

A representative at a major heavy industry firm also weighed in on Thursday saying, “There will be a huge impact so we hope this (current level of the yen versus the dollar) is temporary,” an official at Fuji Heavy Industries Ltd. commented.”

• 9) Outlook bleak for county school system’s budget (Maryland)

“Next fiscal year may include up to $100M in education cuts, official says”

• 10) Vietnam devalues its currency/citizens buy gold as currency falls

(Bloomberg: I’m not going to say anything about that headline about Vietnam )

• 11) Hong Kong Snaps Up Treasurys To Defend Dollar Peg

“The interventions by Hong Kong, which is part of China but administered separately, reflects the challenge facing policy makers in many Asian economies: managing the influx of investments, fueled by cheap U.S. dollars, while at the same time preventing their local currencies from appreciating sharply and hurting their export industries, for many of these countries the key driver of growth.

Hong Kong’s close links with China make it particularly attractive to foreign investors, but other export-driven Asian economies–from Indonesia to Thailand–have intervened to keep their domestic currencies from appreciating sharply.”

• 12) US Mint to Suspend American Eagle Gold 1-Ounce Coins

“The U.S. Mint said Wednesday it will suspend sales of the popular American Eagle 1-ounce bullion coins as rising demand depleted its inventory.

“The United States Mint has depleted its current inventory of 2009 American Eagle 1-ounce gold bullion coins due to the continued strong demand for this product,” the Mint told its authorized dealers in a memorandum on Wednesday.”

“Increasing worries about inflation, a falling U.S. dollar and geopolitical tensions are prompting individual investors to take physical possession of gold coins and other bullion products due to the metal’s appeal as a safe haven in financial and political crises.”

• 13) Falling dollar puts reserves at risk (Philippines)

“In a forum organized by the University of the Philippines School of Economics (UPSE) late Wednesday, Bangko Sentral ng Pilipinas (BSP) Sterling Chair Professor of Economics Maria Socorro G. Bautista said that with the global economic crisis and the depreciating value of the US dollar, policymakers should now consider creating and using a “supranational currency” such as special drawing rights (SDRs) as their new main global reserve currency.”

………..Another day of everything in the red, and more dollar rejection.

Happy Thanksgiving!

• 14) Chinese credit tightening chills Asian markets (E.S.)

China has stepped up efforts to halt the explosive growth in credit, ordering the country’s five top banks to raise capital over coming weeks or face lending sanctions.

15) A Way Out Of Foreclosure (M.W.)