CEO Stephen Hemsley said Tuesday that the company expects losses from its exchange business to total more than $1 billion for this year and last. He added that the company cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers.
Spain has raised its public deficit target this year from 2.8 percent of GDP to 3.6 percent, the economy ministry said Tuesday, meaning it will once again overshoot the limit demanded by Brussels.
While all 20 analysts surveyed by Bloomberg predict that the the main rate will be kept unchanged at a record low of minus 0.5 percent on Thursday, the Riksbank may extend its government bond buying program.
Hedge funds that own about $5 billion of Puerto Rico’s general-obligation bonds, which are guaranteed under the island’s constitution, are fighting the House measure that would give the U.S. territory ability to write off some of its $70 billion in debt. Firms that own securities backed by sales taxes are working to ensure its passage, seeing it as a way to protect their investment from a cascading series of defaults.
Nearly $64 million in debt payments are sinking the Detroit Public Schools (DPS), underscoring the need for a long-term state legislative fix, according to a report released on Monday by the district’s state-appointed transition manager.
The $19.7 billion in debt amassed by the state’s 857 public school districts breaks down to be $10,000 for each Illinois public school student in pre-K through 12th grade.
Developers’ cash flows are coming under pressure as rising leverage has overshadowed income from home sales. The combined net debt of 82 Chinese developers tracked by Bloomberg Intelligence rose to 5.1 times earnings last year, a seven-year high, from 4.7 times in 2014, even as a property-market recovery buoyed sales at many firms.
For the Bank of Japan, it is no longer if, but how. Bank of Japan Governor Haruhiko Kuroda all but promised more easing in an interview with The Wall Street Journal Monday, saying, “without hesitation we would adopt additional monetary easing” if deemed necessary.
Spooked by a fresh wave of defaults at state-owned enterprises, investors in China’s yuan-denominated company notes have driven up yields for nine of the past 10 days and triggered the biggest selloff in onshore junk debt since 2014. Local issuers have canceled 61.9 billion yuan ($9.6 billion) of bond sales in April alone, and Standard & Poor’s is cutting its assessment of Chinese firms at a pace unseen since 2003.
Welcome to the upside-down world of modern monetary policy. In this new reality, borrowers get paid and savers penalized. Almost 500 million people in a quarter of the global economy now live in countries where interest rates measure less than zero. That would’ve been an almost unthinkable phenomenon before the 2008 financial crisis, and one major economies didn’t seriously consider until two years ago, when the European Central Bank first partook in the experiment. Now the ECB and the Bank of Japan are diving deeper into the sub-zero world as they seek more ways to spark inflation.
South Korea’s central bank lowered its growth forecast for Asia’s fourth-largest economy on Tuesday, citing the country’s weak first-quarter economic performance and a downgrade in the global economic outlook.
Japanese investors are moving into higher risk assets abroad as negative yields erode the appeal of domestic government bonds. Eight of 11 Japanese regional banks surveyed by Bloomberg last month said they’ve begun or are considering asset reallocation, with foreign bonds and real estate investments among the most popular products.
A poll of reserve managers from 77 central banks, entrusted with reserves worth $6tn last August, found a clear majority were changing their portfolio management strategy as a result — including taking steps such as buying riskier assets.
Gold & Silver
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