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    Daily Digest 11/15 – Venezuela Defaults On Debt, How Did CalPERS Dig $153B Pension Hole?

    by saxplayer00o1

    Wednesday, November 15, 2017, 3:03 PM


PERA looms large as Colorado lawmakers take first look at governor’s $28.7B budget

The Public Employees’ Retirement Association today faces a $32 billion unfunded liability that’s expected to get worse before it gets better. The financial situation has become so dire that PERA is projected to dip below 20 percent funded within the next 30 years. At that level, PERA wouldn’t be able to withstand another recession.

Opinion: How did CalPERS dig a $153 billion pension hole?

The problem is, despite their fiduciary duty under the state Constitution to “protect the competency of the assets” under their absolute control, CalPERS is roughly $153 billion short of fully funding the retirement promises earned to date.

Venezuela crude output hits 28-year low: OPEC

Venezuela’s annual oil output was 2.373 million bpd in 2016 and 2.654 million in 2015, according to the data it gives OPEC.
Monaldi said the sector’s key indicators – such as numbers of active rigs, exports, and crude quality – were all deteriorating at an “alarming” rate. Next year could see another 10 percent fall in production, he said in an interview.

Kentucky’s public pension debt grew by more than $5 billion last year

As of June 30, Kentucky Retirement Systems had $26.75 billion more in future pension liabilities than it held in anticipated assets. That was up from $21.17 billion on the same day in 2016, according to data presented Monday to the KRS Board of Trustees.

South Africa’s Debt Costs Leap on Record 3.3 Billion-Rand Sale

The Treasury increased issuance at the weekly auction from 2.65 billion rand to raise an additional 122 billion rand of debt needed over the next three years to plug the widening fiscal shortfall. The deteriorating debt trajectory threatens to trigger a downgrade of the local-currency debt rating to junk by S&P Global Ratings and Moody’s Investors Service, both of whom are reviewing their assessments on November 24.

Pool of negative yielding debt swells to nearly $11tn

Central bank stimulus upended the normal rules of fixed income markets after the financial crisis, when policymakers in Europe, the US, Japan and UK launched large-scale bond buying programmes and the European Central Bank and Bank of Japan cut interest rates below zero. The moves were aimed at staving off deflation and buoying growth.

S&P says Venezuela has defaulted on its debt

S&P said Venezuela had failed to make $200 million in coupon payments for bonds due 2019 and 2024 within the allowed 30-day grace period.

Protect Your Savings With Gold: ECB Propose End To Deposit Protection (Cornelius999)

It’s pretty boring reading but there are some key snippets which should be raising a few alarms. It is evidence that once again a central bank can keep manipulating situations well beyond the likes of monetary policy. It is also a lesson for savers to diversify their assets in order to reduce their exposure to counterparty risks.

These Headlines Say Gold is Building a Base for Something Big (Diane C.)

The Central Bank of Russia bought 63 tonnes, pushing their gold reserves to 1,778.9 tonnes. I like this quote from Russian newspaper Kommersant: “If US sanctions are expanded to block Russia’s assets invested in US Treasuries, gold will be a magic wand.” The trend is expected to continue, says Alexander Losev of Sputnik Asset Management: “The regulator will continue to amass gold in its reserves, decreasing the share of US Treasuries.”

Gold & Silver

Click to read the PM Daily Market Commentary: 11/14/17

Provided daily by the Peak Prosperity Gold & Silver Group

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