Daily Digest

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Daily Digest 3/1 - Pension Costs Crippling Budgets, World Debt to Increase to $44T

Wednesday, March 1, 2017, 10:27 AM

Economy

Struggling farm economy could worsen state budget woes (Nebraska)

Lawmakers on the budget-writing Appropriations Committee have developed a plan to reduce their original $895 million shortfall to roughly $134 million. Because of the forecasting board’s new estimates, however, that projected shortfall will now grow to $298 million.

Without a fix, teacher healthcare fund is empty next year (Texas)

This session, the Texas House Committee on Pensions is trying to figure out how to dig out of a billion dollar hole. If major reforms are not made to teacher retirement benefits, the system will run out of money.

Modesto considers freeze on hiring, promoting as pension costs loom

Brandvold said he asked for these steps, adding that he is most concerned about rising pension costs. The city report states that Modesto expects its pension costs to increase by more than 50 percent in five years.

Passions run high as Kentucky Retirement Systems’ pension hole grows

According to fiscal year 2016 actuarial numbers, the state is on the hook for $38.7 billion in unfunded liabilities, but Bevin, during his recent State of the Commonwealth address, said the liability is actually $82 billion.

The City Deficit Approaches $250 Million! How Can LA’s Mayor Get Anything Short of a Failing Grade?

There is also the real possibility that the cumulative budget gap for the next four years may soar to well over $750 million, up from the current estimate of $300 million.

Pension costs still crippling Phoenix budget

In the next year, Phoenix faces sticker shock from its payments to the state-run pension system for police officers and firefighters. Costs are expected to balloon by $58 million, bringing the city's total pension tab up to $294 million of its general fund.

Number of distressed U.S. retailers at highest level since Great Recession

The number of U.S. retailers ranked at the most-distressed level of the credit-rating spectrum has more than tripled since the Great Recession of 2008-2009 and is heading toward record levels in the next five years, Moody's Investors Service said Monday.

Chicago schools seek immediate halt to 'discriminatory' state funding

CPS warned it could be forced to end the school year on June 1 instead of June 20 and cancel some summer school programs as it deals with a lingering $129 million deficit in its $5.41 billion budget and a looming $721 million pension payment. Unlike all other Illinois public school districts, which participate in a teachers retirement system heavily subsidized by the state, CPS maintains its own pension fund for educators.

N.J. pension debt soared to $49B last year

The combined unfunded liability rose from $59 billion in the 2015 fiscal year to $66.2 billion in the fiscal year that ended in June.

European Credit Investors Face Uncertain Future After QE Unwind

The ECB has purchased around 67 billion euros ($71 billion) of corporate bonds under the scheme, it said in a Feb. 27 statement, implying average weekly purchases of 1.68 billion euros since the program began in June 2016.

Bank of Japan publishes bond buying plans to keep yields at 0%

Japan’s 10-year yield is currently trading at 0.04 per cent, having reached 0.11 per cent at one point earlier this month before the BoJ stepped in and offered to buy in unlimited quantity to prevent it from rising any higher.

A Big Dutch Populist Win May Swell Election Risk on French Bonds

The anti-EU Dutch Freedom Party, or PVV, is forecast in polls to become the largest in parliament and a big victory would again unsettle nerves among investors in euro-area government bonds.

Stock investors are seeking protection from Marine Le Pen

Le Pen’s lead widened in an electoral poll released last week, though she’s still expected to lose in the second round, according to some polls. It’s widely believed that a Le Pen victory could spark a selloff in European stocks and French sovereign debt. Le Pen has vowed to hold a referendum on France’s membership in the EU should she win. She has also called for France to leave the euro

Africa: World Debt to Increase to U.S.$44 Trillion - S&P

Absolute debt levels of countries continue to increase and total outstanding global sovereign commercial debt stock will rise to reach an all-time high of $44trn by the end of this year, according to rating agency Standard & Poor's (S&P).

Gold & Silver

Click to read the PM Daily Market Commentary: 2/28/17

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

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Californians Hit as Bad Debts Lead to Government Pension Cuts

Sydney Home Prices Surge at Fastest Annual Pace Since 2002

Bloomberg - ‎13 hours ago‎
Dwelling values in Australia's largest city rose at the fastest annual pace in 14-years in February as record-low interest rates outweighed regulatory efforts to avert a housing bubble. Average values in Sydney surged by 18.4 percent, the biggest jump ...

Italy grows slightly more than forecast in 2016 but debt hits new peak

Nasdaq-6 hours ago
The European Commission is concerned about Italy's inability to rein in its debt and has asked Rome to adopt an extra 3.4 billion euros of belt tightening ...

Debt-plagued US Postal Service eyes bipartisan bill to solve woes

USA TODAY-5 hours ago
Mail volume is now at a 29-year low, and for the past 10 years, USPS recorded annual losses as high as $15.9 billion. Last year, it tallied a $5.6 billion loss.

San Diego Unified cuts 850 jobs to balance budget

The San Diego Union-Tribune-11 hours ago
... Tuesday to eliminate about 850 positions to balance its $1.3 billion budget, ... in a massive debt that will be balanced on the backs of children,” the letter read.

UK corporate fund deficits more than double over year

Pensions & Investments-4 hours ago
The total deficit of all U.K. corporate defined benefit funds increased 2.7% in February, to £270 billion ($335.6 billion), and grew 147.7% for the year ended Feb.

Spring budget could reveal further growth in province's $1.2-billion deficit

News Talk 650 CKOM - ‎14 hours ago‎
Saskatchewan's deficit currently is projected at $1.2 billion, but it could grow even higher before the spring budget comes down. That's because the final numbers are still coming in, with respect to revenues in particular and even some expenses. "But ...

Saudi bank lending growth slows to lowest in nearly seven years

Times of Oman - ‎3 hours ago‎
The government is continuing to draw down assets abroad to help cover a budget deficit caused by low oil prices. Net foreign assets at the central bank fell by $12.0 billion from the previous month to $516.7 billion in January, their lowest level since ...

Pensioners brace for latest crisis cuts

Kathimerini-7 hours ago
The IMF believes the combination of low contribution revenues and high pension spending led to the pension deficit climbing from 7.3 percent of GDP in 2010 to ...

State workers could have to give 9% of paycheck to fund pension

Myrtle Beach Sun News-4 hours ago
In the short term, that would increase the pension system's unfunded debt because new workers would not be paying into the retirement system. But, in the long ...

Californians Hit as Bad Debts Lead to Government Pension Cuts

Bloomberg-4 hours ago
"Unless something is done to stem the mounting costs or to find ways to fund those mounting costs for employees, then the only recourse, beyond reducing ...

 

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