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    Daily Digest 9/9 – Seniors Turn To Debt, Japan Economy Minister Urges Stimulus

    by saxplayer00o1

    Wednesday, September 9, 2015, 2:01 PM

Economy

Chicago Schools Seek State Cash, as Crunch Looms

Chicago Public Schools—with 394,000 students and nearly 21,000 teachers—has closed more than half of a projected $1.1 billion shortfall through cuts, borrowing and other means, but is looking to the state to come up with the rest. The school board warns of deep cuts later this year if Illinois, which faces its own fiscal crisis, doesn’t deliver an additional $480 million in the coming months, representing roughly 8% of annual district spending.

Opinion: Junk bond market: Danger ahead

Such yields can often be a canary in the economic coal mine and warn of trouble ahead. And they are especially intriguing now, as U.S. companies in aggregate have never owed as much as they do currently.

Tumbling Markets Set to Thwart Hollande’s 2015 Asset-Sales Goal (France)

With a stagnant French economy and 50 billion euros in spending cuts already in the pipeline, the divestment plan is key to Hollande’s strategy of containing borrowing. Even with the sales, public debt was slated to climb to the equivalent of 97 percent of economic output by the end of this year, up from 89 percent in 2012, the year the Socialist government came to power, according to International Monetary Fund estimates.

China’s Shandong to Buy Unsold Homes Amid Property Downturn

China’s government this year has bought up stocks to stem an equities rout, orchestrated a debt swap for local government to switch loans into bonds, and spent reserves to support the yuan. Now, a provincial government is stepping in to the property market to snap up unsold homes.

Taiwan’s per capita debt passes US$7,000 at end of August

However, if the “hidden debt” by the central and local governments, which totaled NT$18 trillion (US$549.5 billion), are included, the national debt will swell to as high as over NT$25 trillion (US$763.2 billion), or a per capita debt of NT$1.07 million (US$32,700), according to the government’s statistics office.

Seniors turn to debt to finance lifestyle (Canada)

“They just don’t have enough money,” said Yvonne Ziomecki, senior vice-president of marketing and sales of HomEquity Bank, of the new lifestyle seniors are aspiring to. “We have a new term we have been using, right sizing. They are not downsizing. They don’t really need bigger homes, but they move into a house that has all the upgrades.”

Baby boomers burdened by mortgages, credit-card debt in retirement

The Consumer Financial Protection Bureau says the percentage of homeowners ages 65 and older with mortgage debt increased from 22 percent in 2001 to 30 percent in 2011. Among homeowners 75 and older, the rate more than doubled, from 8.4 to 21.2 percent. And the median mortgage debt for seniors increased by 82 percent, from about $43,400 to $79,000.

Problem debt: number of households affected rises by a quarter (UK)

By 2014, 3.2 million families were spending at least 25% of their gross monthly pay on servicing unsecured debts, the definition of problem debt. The figure for 2012 was 2.5 million, according to research commissioned by the TUC and Unison. Young people, the self-employed and low-income families recorded the biggest increases in debt.

Japan economy minister urges fiscal stimulus

Japan should consider an extra fiscal stimulus of Y2tn ($84bn) this autumn, the country’s economy minister has said, as fears grow that a Chinese slowdown will hit growth across Asia.

Indonesian Bond Yields Rise to Highest Levels Since Early 2011

Indonesian bonds fell, pushing the 10-year yield to the highest level since 2011, as the weakening rupiah stoked concern the country’s economic outlook is deteriorating.

Colombian Bonds Fall to Four-Year Low After Inflation Surprise

Colombia’s peso bonds dropped to a four-year low on concern inflation that accelerated to double what analysts had forecast would undermine returns on the securities.

Europe Stocks Climb Second Day on China Support, Led by Autos

Shares rebounded Monday from the previous week’s decline, with miners leading gains, helped by reassurances from China’s central bank governor that stability would return to markets. Chinese stocks rallied Tuesday for the first time in five days on speculation state-backed funds purchased shares after a weak trade report.

China Muni Bonds Sold at Highest Premium Over Sovereign in 2015

China’s Inner Mongolia region sold local-government bonds at at the highest premium over sovereign debt this year amid concern an economic slowdown is worsening and the cash supply is shrinking.

China’s Export Data Shows Fresh Signs of Steepening Industrial Downturn

Once seemingly indomitable as the world’s workshop, China is now facing its most protracted declines since the global financial crisis, with overseas shipments falling 5.5 percent last month compared with a year earlier. That has dragged total exports 1.4 percent lower in dollar terms in the first eight months of the year.

Italian banks’ non-performing loans rise to 197 bln euros in July

Non-performing loans at Italian banks rose 14.3 percent to 197.096 billion euros ($220.37 billion) in July from a year earlier, central bank data showed on Tuesday, in a sign of the protracted damage to lenders’ balance-sheets from a three-year recession which ended last year.

South Korea Fiscal Deficit Seen at Seven-Year High in 2016

South Korea’s fiscal deficit will widen to a seven-year high in 2016, as the government plans to spend more to shield the economy from a slowdown in China.

Brazil’s 2016 inflation view rises for 5th week, to 5.58 pct

Economists raised their forecasts for Brazil’s 2016 inflation rate for a fifth straight week, adding pressure on the central bank after it halted a nine-month-long cycle of interest rates hikes last week, a weekly survey showed on Tuesday.

Global Recovery Faces Hurdles as Economic Overhauls Stall

“Growth is too low, productivity is too low, trade numbers are too low, investment is too low, infrastructure projects are too few, and the only thing that is too high is unemployment,” International Monetary Fund Managing Director Christine Lagarde said here over the weekend, after two days of talks among the world’s top finance officials.

G-20 nations say growth short of expectations; remain confident recovery will

G20 finance ministers and central bank chiefs have pledged to act decisively to shore up stuttering global growth and to refrain from unsettling currency moves after China’s controversial devaluation last month. But Beijing did not touch on the Finance Minister’s comment that the tough times could last a decade.

OECD Leading Indicators Point to Further Slowdowns

Growth is set to slow across a number of the world’s largest economies, including China, the U.S. and the U.K., according to leading indicators released Tuesday by the Organization for Economic Cooperation and Development.

China’s FX forwards measure is not capital control: central bank

China’s central bank defended on Tuesday new regulations imposed on the currency forwards market this month, saying they were not a form of capital control and were introduced after investors had speculated in the market.

Indonesia’s Foreign Exchange Reserves Fall as Central Bank Defends Rupiah

ndonesia’s foreign exchange reserves fell to USD $105.3 billion in late August 2015 (from USD $107.6 billion in the preceding month) as the government used foreign exchange (forex) for external debt payments while the central bank (Bank Indonesia) used part of the forex to intervene in the currency market in an effort to support the ailing rupiah rate which has been under severe pressure amid looming further monetary tightening in the USA and concern about the hard landing of China’s economy.

Tepid Japan GDP stirs central bank easing speculation

The Cabinet Office said the world’s number three economy contracted by 0.3 percent in the April-June quarter, slightly less than an initial estimate of a 0.4 percent contraction – and beating market expectations of a 0.5 percent decline.

South Africa’s central bank lacks ammunition to defend rand

South Africa’s central bank has little muscle to defend the rand through the upheaval in global markets, with foreign reserves stuck at low levels that could easily be wiped out if it attempted to influence the exchange rate.

Australian Central Bank Official Warns Against Forgetting Lessons of Past

Ms. Ellis’ comments come as the RBA and the country’s bank regulator nervously watch a boom in housing prices in the major metropolitan areas of Sydney and Melbourne that is being fanned by record low interest rates and surging investor demand for property.

Schaeuble Sees Extended Low Rates and Financial Excess

German Finance Minster Wolfgang Schaeuble said he expects interest rates to stay low, increasing the risk of bubbles as an “overweight” financial industry distorts investment decisions.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/8/15

Provided daily by the Peak Prosperity Gold & Silver Group

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