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    Daily Digest 7/1 – PR Debt Crisis Worsens, Eurozone Inflation Eases

    by saxplayer00o1

    Wednesday, July 1, 2015, 3:54 PM

Economy

Puerto Rico Bonds Fall to Record Low as Debt Crisis Worsens

Prices on some commonwealth securities continued to fall Tuesday. General-obligation bonds maturing July 2035 traded at an average price of 65.8 cents on the dollar, the lowest since the bonds were first sold at 93 cents in March 2014. The price has dropped 15 percent since Friday, according to data compiled by Bloomberg.

Lawmakers ‘no closer’ to deal hours away from state budget, CPS deadlines (Illinois)

Tuesday is the final day of the state’s current budget year, and top officials turned to planning for a Wednesday in which Illinois government has limited authority to spend money. It’s also the day a cash-strapped CPS is due to make a $634 million pension payment.

White House: No federal bailout for Puerto Rico

The White House threw cold water Monday on the notion of bailing out Puerto Rico from its financial crisis, instead urging Congress to consider changing the law so the island can declare bankruptcy.

Puerto Rico poses bigger threat to U.S. investors than Greece

But U.S. investors would actually have much more to lose in a potential Puerto Rican default than in a Greek default. The reason is that Puerto Rico’s bonds are trading in the U.S. municipal bond market, while the vast majority of Greek debt is in the hands of the International Monetary Fund, the European Central Bank and eurozone countries.

Spain’s PM says Greek exit could send message euro is reversible

Spain’s Prime Minister Mariano Rajoy said on Tuesday a Greek exit from the euro could send a message that the common currency union is reversible and open up the possibility that other countries might follow suit.

Alaska freezes inflation-linked payment increases to Medicaid providers

Citing a “significantly underfunded” budget for the new fiscal year, the Alaska Department of Health and Social Services has told Medicaid providers they won’t be seeing the usual rate increases for inflation.

Brazil Posts Widest Primary Budget Deficit of the Year in May

Finance Minister Joaquim Levy is raising taxes and cutting spending to reach that target, which is key to showing whether public debt is sustainable in Brazil. His efforts are designed to boost investor confidence and stave off a sovereign-credit downgrade after Moody’s Investors Service last year lowered its outlook on Brazil to negative.

France’s Debt Burden Reaches 97.5% of GDP

France’s public debt burden rose 51.6 billion euros ($57.2 billion) in the first quarter to EUR2,089 billion, French statistics agency Insee said. That total represents 97.5% of gross domestic product, compared with 95.6% in the fourth quarter of 2014.

Eurozone inflation eases, reviving deflation fears

Eurozone consumer prices rose for the first time in six months during May, a victory for the ECB in its campaign to avoid a debilitating period of deflation, during which businesses and households might hold back on spending in the expectation that they will get better deals in the future.

Drugmakers Say Greek Unpaid Bills Total $1.2 Billion

Drugmakers operating in Greece said they’re owed 1.05 billion euros ($1.2 billion) by the government for medicine supplied to hospitals and the state social insurance fund.

Households’ financial soundness worsens on rising debt: central bank (Korea)

Financial soundness of South Korean households worsened in the first quarter as their debts snowballed on the back of low interest rates, a report showed Tuesday, adding to persistent concerns that a looming U.S. rate hike may unleash credit risks.

China Rate Swap Drops Most This Quarter Since 2008 as PBOC Eases

China’s benchmark interest-rate swap dropped this quarter by the most in six years as the central bank stepped up monetary easing to combat an economic slowdown.

Canada Surprise April Contraction Opens Door to 2nd Rate Cut

Canada’s economy unexpectedly shrank for the fourth month in a row in April as oil and mining slumped, opening the door to a second interest-rate cut from the central bank this year.

ECB Billions Can’t Save Euro-Area Bonds From Worst Quarter Ever

The European Central Bank’s first full quarter of quantitative easing hasn’t stopped the region’s government bonds from heading for their worst performance on record.

Greece faces supply-chain crunch as crisis deepens

Supply chain experts say that Greek importers and exporters could be affected as soon as this week by the country’s decision over the weekend to shut down its banking system for at least seven days as it seeks to prevent money from flooding out of the country.

Here’s where some Greeks are stashing their cash — in gold sovereigns

“In June, we experienced twice the expected demand for Sovereign bullion coins from our customers based in Greece,” the U.K.’s Royal Mint said in a statement.

The next Greece may be in the U.S.

When Chicago Public Schools announced on June 24 that it would borrow $1 billion to make a $600 million-plus pension payment due June 30 an eerie feeling spread across bond investors and taxpayers alike. It was the same feeling that gripped investors when Moody’s Investors Service downgraded Chicago’s credit rating to junk based almost entirely on the city’s pension problems.

California Drought Taking Serious Toll On Aging Sewer System In San Francisco

Few things in America have lasted 150 years. San Francisco’s sewer system is a working relic but one that works

Gold & Silver

Click to read the PM Daily Market Commentary: 6/30/15

Provided daily by the Peak Prosperity Gold & Silver Group

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