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    Daily Digest 6/21 – Chicago Police Pension Will Be Broke In 2021, PR Foreclosures Surge

    by saxplayer00o1

    Wednesday, June 21, 2017, 2:37 PM

Economy

Quad City Illinois lawmakers head to Springfield to pass budget before deadline

McCombie says finding a solution to this 2 year budget crisis has made her rethink her stance on borrowing money.
“You’re going to have to borrow some money. You’re going to have to figure out how your going to have to pay those bills back, ” she says.
Illinois has already $15 billion in overdue bills. Some Credit rating agencies have warned they will downgrade the state’s rating to junk without a budget.

Medica intends to stay in Iowa’s health-insurance market, at 43% higher price

The last carrier standing in Iowa’s individual health-insurance market said Monday that it intends to keep selling such policies here next year, but it would need to charge much higher premiums than it’s collecting now.

Health insurers request 22 percent premium increases in Washington for 2018

Insurance Commissioner Mike Kreidler said uncertainly over the future of the Affordable Care Act is likely contributing to higher rate increases. The Trump administration has said it will not enforce the mandate requiring people to buy health insurance, which could mean healthy people opt out of coverage, driving up average costs.


Rauner, schools play blame game as CPS takes out costly $275M loan (Chicago)

What’s unusual about CPS’ latest loan is that the district is relying on a government that’s delinquent on paying its own bills — and the district needs the money to avert insolvency.

Australia’s central bank frets on financial stability as household debt mounts

Australia’s household sector is under severe strain with debt-to-income at a record high 189 percent while wages are crawling at the slowest pace ever. The share of national income going to households has shrunk to its smallest since 1964 while the savings rate has fallen to a 10-year low.

Pension Crisis Won’t Be Reversed by High Returns, Moody’s Says

The growing gap between how much state and local governments are projected to pay employees and how much funds they actually have set aside has risen to over $4 trillion nationwide. New Jersey sports the widest funding gap, followed closely by Kentucky and Illinois.
The optimistic “best case” of cumulative 25% investment return would reduce net pension liabilities by just 1% through 2019 year-end because of past bad investment returns and weak contributions. Meanwhile, the “base case” scenario of 19% returns would see net pension liabilities rise by 15%.

Illinois Medicaid talks to blow past judge’s deadline

Yates added that while he could not divulge details of the talks, no motion will be filed today on behalf the recipients, some of whom could lose their access to medical services because Illinois owes Medicaid providers $2 billion.

Projection: Chicago’s police pension fund will be broke in 2021

Without a taxpayer bailout, Chicago’s police pension fund won’t have enough money to pay benefits to retirees in 2021, according to a projection by Local Government Information Services (LGIS), which publishes Chicago City Wire.
At the end of 2020, LGIS estimates that the Policemen’s Annuity and Benefit Fund of Chicago will have less than $150 million in assets to pay $928 million promised to 14,133 retirees the following year.

Illinois’ unpaid bill backlog grows to more than $15B

Illinois’ rapidly growing budget deficit for the fiscal year ending June 30 is estimated to arrive at $6.2 billion, according to a fiscal review conducted by the Commission on Government Forecasting and Accountability, or COGFA. And COGFA predicted that if Illinois were to enter its third fiscal year with no budget, the deficit would grow to $7.7 billion and the state’s unpaid bills would rise to $22.7 billion by June 2018.

Puerto Rico families fight, flee a surge in foreclosures

An average of 14 families lose homes every day to foreclosure in Puerto Rico, more than double the rate a decade ago as the island faces a real-estate crash worse than the one that sparked the great recession on the U.S. mainland. Families across Puerto Rico are moving in with relatives, becoming homeless or simply fleeing to the U.S. mainland with destroyed credit records as the island’s government struggles to restructure a portion of its $73 billion public debt and help the economy emerge from a decade-long recession.

Gold & Silver

Click to read the PM Daily Market Commentary: 6/20/17

Provided daily by the Peak Prosperity Gold & Silver Group

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6 Comments

  • Wed, Jun 21, 2017 - 11:13am

    #1
    Nate

    Nate

    Status Silver Member (Offline)

    Joined: May 05 2009

    Posts: 316

    quote of the day

    “Our brand is worse than Trump”
    Democrats seethed, second-guessed and sought to regroup on Wednesday after a disappointing special election defeat in Georgia, with the party’s campaign chief in the House of Representatives outlining alternative paths to taking power, and some lawmakers questioning anew the leadership and political strategy of Nancy Pelosi, the Democratic minority leader.
    Representative Tim Ryan of Ohio, who has been a vocal critic of his party’s overarching political strategy, said Democrats needed to recognize that they were “toxic” in huge parts of the country.
    “Our brand is worse than Trump,” said Mr. Ryan, who urged Democrats to make forging a clear economic agenda an urgent priority. “We can’t just run against Trump.”
    http://www.msn.com/en-us/news/politics/democrats-seethe-after-georgia-loss-%e2%80%98our-brand-is-worse-than-trump%e2%80%99/ar-BBCZnbn?li=BBnb7Kz

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  • Wed, Jun 21, 2017 - 11:39am

    #2

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4501

    I saw a good tweet on that today...

    One person Tweeted something along the lines of “We Democrats have to find a way to reach the Trump voters who can be swayed!”
    Someone else responded “Seems like it might be easier to reach the voters who stayed home.”
    From this I take it that while some Democrats are struggling to figure out how to fight for the few people left in the active voting pool, others are beginning to ask if perhaps there isn’t a more basic defect at work for the party.
    To me one of the very worst things you can do after a crushing defeat is to fail to learn why it happened and address the root issues.
    Russia-gate, to me, has been nothing but a gigantic exercise in refusing to look in the mirror, and that’s a really devastating outcome for anybody who cares about the Democratic party.  The republicans have their own issues, and I’d be happy to slice those up to, but for now the psychology on display in the crumbling Democratic party is really fascinating.

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  • Wed, Jun 21, 2017 - 1:47pm

    #3

    thc0655

    Status Platinum Member (Offline)

    Joined: Apr 27 2010

    Posts: 1435

    100 million dead in the US

    Deninger on the financial crises and the role “health care” plays in it:
    https://www.theburningplatform.com/2017/06/21/100-million-dead-in-us/#more-153045

    Go ahead folks, read this one.

    Accordingly, I must communicate to you at this time the full extent of our dire fiscal straits and the potential disruptions that we face in addressing even our most critical core responsibilities going forward into the new fiscal year.  My Office has very serious concerns that, in the coming weeks, the State of Illinois will no longer be able to guarantee timely and predictable payments in a number of areas that we have to date managed (albeit with extreme difficulty) despite an unpaid bill backlog in excess of $15 billion and growing rapidly.
    We are effectively hemorrhaging money as the state’s spending obligations have exceeded receipts by an average of over $600 million per month over the past year. (ed: That’s $7.2 billion/year)
    My cause for alarm is rooted in the increasing deficit spending combined with new and ongoing cash management demands stemming from decisions from state and federal courts, the latest being the class action lawsuit filed by advocates representing the Medicaid service population served by the state’s Managed Care Organizations (MCOs). As of June 15, the MCOs, and their provider networks, are owed a total of more than $2.8 billion in overdue bills at the Comptroller’s Office. There is no question that these obligations should be paid in a more timely manner and that the payment delays caused by the state’s financial condition negatively impact the state’s healthcare infrastructure. We are currently in court directed discussions to reach a workable and responsive payment schedule going forward, but any acceleration of the timing of those payments under the current circumstances will almost certainly affect the scheduling of other payments, regardless of other competing court orders and Illinois statutory mandates.

    Now folks, you can call this a “one off” if you wish.
    It’s not.
     
    It is also not a surprise where the problem is centered.  It’s in health care.
    I’ve only been yelling about this since the 1990s, when I saw the impact on my firm’s balance sheet and cash flow statement on a year-over-year basis for a few years running.  You don’t need to see it for more than a couple of years to grasp the gravity of the problem if you have a brain and are not politically poisoned to wave it off.
    Anyone with a $3 WalMart calculator can figure it out, given 5 minutes and an IQ greater than their shoe size.  You merely need to run the exponential series out 5, 10, 20 years and what happens becomes obvious.
    At ~9% expansion the rule of 72 gives you a close-enough approximation: Costs double every 8 years; in 24 years you spend eight times as much money as you did originally.
    There isn’t 8x as much money and you can’t raise it.
    You can’t increase taxes by 800%.  You can’t expand the economy by 800% over 24 years; at a 3% GDP expansion rate (which we haven’t had in the last two decades for any sort of time period, I remind you) the economic output expands by 200%.  This means that you’d have to quadruple taxes compared against economic output, and if you try to do that GDP will collapse because you will consume all of the expansion in economic output and then some.
    There is only one answer to this problem and that is to take the entire medical system, which is where the entire problem resides, and dismantle it.  Prosecute every single hospital administrator, owner of an imaging center, drug company executive and physician that has ever, even once, stuck his head in a hospital room and then billed someone $1,000 for a “drive by” consultation — or anything like it, such as charging $90,000 for a drug here that’s $2,000 in another nation, or billing one person $100,000 for a procedure where another is billed $5,000 or $10,000.
    Bankrupt them all by imprisoning every last ******ned one of these people and fining their firms out of existence using the 100+ year old and still valid body of law found in 15 United States Code, Chapter 1

     

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  • Wed, Jun 21, 2017 - 3:44pm

    #4
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 514

    Et tu, Brute?

    As I ponder the results of the most recent U.S. congressional election and their potential implications, my mind returns to the end of the Roman Republic and the events that demarcate the beginning of the Roman Empire. As one scholar from long ago surmised (Florence DuPont) the end came about by:

     However, without question, the Romans lost liberty through plunder, by “their morally undermining consequences.” Wikipedia

    Could it be that similar “consequences”  are at play, today. Powerful and vested interests always seem extend their grasp beyond their reach with devastating results. Finance, Health care, wage disparity, “whose an American”, are the first to come to mind. For those of you interested, Tiberius Gracchus comes to mind as a friend of the common man. 

     

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  • Wed, Jun 21, 2017 - 6:16pm

    #5

    Arthur Robey

    Status Platinum Member (Offline)

    Joined: Feb 03 2010

    Posts: 1814

    Australia, you're standing in it.

    I noted with amusement the RBA’s verbiage.
    “The improvement in global economic conditions had been evident in stronger growth in both merchandise trade and industrial production. Data on new export orders suggested continued strong growth in exports in the near term. Members observed that there had been some signs that this strength was flowing through to business investment, particularly in Japan and the high-income economies in east Asia. Business investment had also picked up recently in the United States.'”
    And so on and so forth.
    And the last line
    ‘”The Decision
    The Board decided to leave the cash rate unchanged at 1.5 per cent.”
    http://www.rba.gov.au/monetary-policy/rba-board-minutes/2017/2017-06-06….

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  • Thu, Jun 22, 2017 - 6:13am

    #6

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2932

    Anthem, MDwise pulling out of Indiana health insurance exchanges

    Phoenix approves plan that could add billions to pension debt

    AZCentral.com-11 hours ago

    That’s the long-term impact of the City Council’s decision Wednesday to punt on paying pension debt. They voted 7-2 to ask the state-run pension system to ..

    S.Korea’s high-risk household debts rise amid expected rate hike

    Xinhua-7 hours ago
    The figure accounted for 11.6 percent of the total households having debts. Their financial debts amounted to 186.7 trillion won (163.5 billion U.S. dollars), taking …

    WA householders hit with a $440 hike to bills and fees as Government attempts budget repair

    ABC Online – ‎6 hours ago‎
    Power bills will rise $169 a year for the average West Australian household as part of a suite of increases to fees and charges announced by Treasurer Ben Wyatt today that will see households fork out almost $440 a year extra in total.

    Sears faces $300M retirement benefit shortfall as retailer seeks …

    Benefits Canada-13 hours ago
    According to the struggling company’s annual report for 2016, its registered pension plans had a deficit of $110.3 million for that year. That was down from …

    UPDATE: Anthem, MDwise pulling out of Indiana health insurance exchanges

    Indianapolis Business Journal – ‎19 hours ago‎
    Last year, Indiana University Health Plans pulled out of the Obamacare marketplace in Indiana, just one month after state regulators approved its proposal to raise premiums nearly 15 percent. IU Health Plans, a wholly owned subsidiary of the Indiana …

     

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