MORNING YAPS

GM Emerges From Bankruptcy
GM exited Chapter 11 protection, according to reports. The quicker-than-expected reorganization could represent a major accomplishment for the Obama administration.
wsj.com

*California is only the beginning
U.S. states' budgets drained by increasing unemployment
Rising unemployment first hits state budgets by depressing tax revenue, then by driving up expenses of programs such as Medicaid, said Raymond Scheppach, executive director of the National Governors Association. With U.S. unemployment projected to top 10%, the financial condition of states will "get worse in about 10 months, and it'll stay bad for a while," he said. Reuters (09 Jul.)

*more on states woes
California’s financial troubles echo across the US
By Cynthia O’Murchu and John Casey

California has been garnering a lot of unwanted attention recently over the dire condition of its public finances. While California may be the most visible example - it is issuing IOUs to creditors instead of cash - our map shows that other states across the US have budgetary troubles.

Lawmakers in several US states have failed to agree on spending cuts amid falls in revenue from income and property taxes. States faced a cumulative budget gap of $121bn this year, according to the National Conference of State Legislatures, a research group. These states are now having to make difficult decisons, including cutting spending on essential services such as healthcare, education and welfare. Even if spending cuts are made, the fiscal outlook remains uncertain. Which one may be the next to follow California’s unenviable example of issuing IOUs to students and cancer patients? Our interactive graphic shows the “state of the states”, and shows those in most trouble. Go here for Fabulous interactive cgart on states troubles

*this is way to early. Complacency is a bad thing in global economics
BoE surprises market by halting expansion of quantitative easing
In a surprising move, the Bank of England decided against expanding its £125 billion quantitative-easing program. The move triggered concerns that the central bank might suspend its bond purchases. Market observers were widely expecting the Bank of England to increase its purchases of government and corporate bonds. The Times (London) (10 Jul.)

*yes, that's $592 Trillion...
Geithner presses Congress for rules on derivatives market
U.S. Treasury Secretary Timothy Geithner is seeking laws for the $592 trillion derivatives market. Geithner is set to testify before a joint hearing of the House Agriculture and Financial Services committees to call for requiring all "standardized" contracts to be traded on exchanges or other regulated platforms. Disclosure rules also would apply to the derivatives contracts, Geithner said. Bloomberg (10 Jul.)