Daily Digest

Image by LorenzWorkz, Flickr Creative Commons

Daily Digest 6/1 - The Greatest Financial Bubble in History, China Vows To Stand By Paris Agreement

Thursday, June 1, 2017, 8:07 AM

Economy

The Greatest Financial Bubble in History (thc0655)

In the past ten years, bank customers have chosen almost $12 trillion of WMPs. That might be fine if WMPs were like high-quality corporate or municipal bonds. They’re not. They’re more like the biggest Ponzi scheme in history.

Here’s how they work. Proceeds from sales of WMPs are loaned to speculative real estate developers and unprofitable state owned enterprises (SOEs) at attractive yields in the form of notes.

Mylan shareholders revolt, say directors’ greed has gone too far (jdargis)

The ongoing EpiPen pricing scandal has caused Mylan "significant reputational and financial harm," the investors complained. Yet directors continued to be rewarded. The investors were particularly critical of Chairman Robert Coury, who received more than $160 million in compensation in 2016 and will receive a $1.8 million per year “cash retainer” as part of a deal made with Mylan last year. Trade publication FiercePharma reports that Coury is the highest-paid executive in the drug industry.

Invest In Yourself (Axel M.)

May I propose that you analyze your current spending habits to better understand how your spending may evolve? Your current spending discipline may speak volumes about your future spending discipline. To give an example: a good fifteen years ago, I discussed spending habits with two investors: both had a family, both lived in affluent neighborhoods; one of them had about four times the income of the other one. Yet, the person with the more modest income saved more each year than the high earner. And guess what: today, the high earner continues to splurge most of his money while the more modest person has continued to prudently build his retirement nest egg.

Kafka In Vegas (jdargis)

In October 2012, a judge declared that Steese, after 20 years in prison, was innocent. It was an extraordinary ruling — in fact, unprecedented in that court. But the Clark County district attorney was not willing to free Steese. Prosecutors vowed to put him through lengthy appeals. Even to re-try him. The process would take years. Or, if Steese just wanted to be released, the prosecutors had a tantalizing proposition: he could agree to an Alford plea. In a feat of logical gymnastics, this obscure plea allows defendants to maintain their innocence while at the same time pleading guilty and accepting the status of a convicted felon. And, perhaps most damaging to prisoners like Steese, after decades behind bars, the plea meant giving up the right to sue. It would also allow prosecutors to keep a “win” on the books, admit no wrongdoing, and avoid civil and criminal sanctions for their behavior. In exchange for all this, the prosecution in Las Vegas would let Steese go.

Saudi Prince Mohammed Meets With Putin To Discuss Oil, Syria (Michael K.)

The outcome of today’s meeting, which should also include the signing of four cooperation agreements between Russia and Saudi Arabia, will be particularly interesting to see in the context of heightened tensions between Riyadh and Tehran as well as a flare-up of tension within the Gulf Cooperation Council. The latter was caused by friendly remarks from Qatar’s Sheikh about Iran on state media, which were later removed and attributed to “fake news”.

How Rising Seas Drowned the Flood Insurance Program (PaulJam)

Recently, the U.S. Army Corps of Engineers pumped more than ten million cubic yards of sand from offshore dredges to widen Long Beach Island’s beaches and dunes – part of a Sisyphean-like effort to protect the island’s $15 billion of high-calorie real estate. But there is a problem. The sand keeps washing away. A series of storms over the last two years gouged the neatly groomed beaches, costing tens of millions in additional repairs. When all is said and done, the project will cost more than half a billion dollars, most of the money paid by U.S. taxpayers.

You're Not Imagining It: Your Allergies Really Are Worse This Year (jdargis)

Dr. Leonard Bielory, an allergist in Springfield, New Jersey, and a professor at Rutgers' Center for Environmental Prediction, explains the difference between those long- and short-term effects. He also advises: check the actual pollen count instead of the pollen index and adjust your time spent outdoors accordingly.

As Trump Wavers on Climate Pact, China Vows to Stand by It (jdargis)

The German leader pointed to future cooperation between the Brussels and Beijing, making clear the similar intention in Europe to move ahead with potential partners to fill any vacuum created by Washington’s absence.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/31/17

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."

7 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4239
China's debt downgrade signals alarm over its finances

 

China's debt downgrade signals alarm over its finances

Nikkei Asian Review - ‎13 hours ago‎
HONG KONG China's financial vulnerabilities are fueling the belief that China might have a "Minsky moment," in which debt levels hit the breaking point and asset values collapse. Among the dangers, local lenders being squeezed by tighter interbank ...

Texas Governor signs Dallas, Houston pension bills

Reuters - ‎15 hours ago‎
The city of Houston estimated that without any type of reform, the city would contribute $3.7 billion to the pension systems over five years. With reforms, the city will contribute $2.0 billion. The city estimates a savings of $1.4 billion, and an ...

Bubble, bubble, Canada's housing market poses trouble, IMF says

MarketWatch - ‎17 hours ago‎
Household debt rose to 167.3% of disposable income in the last quarter of 2016. As Canadian consumers have become more leveraged, the IMF and other agencies are on watch. Earlier this year, Canadian regulators alleged the Toronto-based mortgage ...

Markets Need a 30% Stock Drop or 50% Higher U.S. Yields. Or Not.

Bloomberg - ‎19 hours ago‎
He forecasts the U.S. Treasury will be under-financed by as much as $4.5 trillion over the next five years and have to issue more debt. To find enough demand, interest rates would have to climb 120 basis points from current levels, or equity prices ...

S.C. pension deal will hit cities, counties, schools hard

The State-11 hours ago
The plan includes sending the money to cover half of the increased pension costs for employers that are not state agencies — cities, counties and school ...

 

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 5 2009
Posts: 605
sand_puppy's picture
sand_puppy
Status: Diamond Member (Offline)
Joined: Apr 13 2011
Posts: 2039
Market dominance leads to market dominance

Google could face a $9bn EU fine for rigging search results in its favour

A seven-year investigation into the world's most popular internet search engine was triggered by scores of complaints from both US and European rivals

---

EU antitrust regulators aim to slap a hefty fine on Alphabet unit Google over its shopping service before the summer break in August....

The European Commission's decision will come after a seven-year investigation into the world's most popular internet search engine ... [which]  accused Google in April 2015 of distorting internet search results to favour its shopping service, harming both rivals and consumers.

 

pyranablade's picture
pyranablade
Status: Silver Member (Offline)
Joined: Nov 8 2010
Posts: 206
Kafka in Vegas

A really great piece of journalism!

A good read. Doesn't address sustainability in any way, but I suppose is relevant to us because it speaks to the inefficiencies of our very complex legal system.

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4239
BOJ's total assets climbs to top ¥500 trillion for first time

BOJ's total assets climbs to top ¥500 trillion for first time

The Japan Times-6 hours ago
The Bank of Japan said Friday its total assets surpassed ¥500 trillion ($4.5 ... BOJ assets mainly consisted of government debt worth ¥427.25 trillion as of the ...

Fed's Powell Suggests Outsized Balance Sheet Is Here to Stay

Bloomberg-14 hours ago
“It's hard to see the balance sheet getting below a range of $2.5-$3 trillion,” Powell told ... The central bank owns $2.5 trillion of Treasury debt and $1.8 trillion of ...

S&P cuts Illinois' debt rating and warns it's at risk of entering a 'negative credit spiral'

Yahoo Finance - ‎17 hours ago‎
It has more than $14 billion in unpaid bills. "If lawmakers fail to reach agreement on a budget with provisions designed to reduce the state's structural deficit, it's likely we will again lower the ratings," Petek wrote. Illinois isn't alone in its ...

May Tremors Rock U.S. Junk-Bond Faith as Investors Flee ETFs

Bloomberg-3 hours ago
With the riskiest corporate debt more widely held -- the U.S. high-yield market has more than doubled to $2 trillion since 2010 amid a boom in ETFs and other ...

Portugal's public debt rises to 247.4 bln euros in April

Xinhua-15 hours ago
LISBON, June 1 (Xinhua) -- Portugal's public debt rose to 247.4 billion euros in April, 3.9 billion euros higher than in March, the Bank of Portugal revealed on ...

Americans delaying tax payments, now government is running short

OregonLive.com-Jun 1, 2017
In March, for example, the government brought in $217 billion in new revenue ... Social Security, $75 billion for Medicare, and $30 billion in interest on the debt.

Italy asks EU for more budget leeway as election edges closer

Reuters UK - ‎Jun 1, 2017‎
It could dodge a 20 billion euro (£17.4 billion) sales tax hike due on Jan. 1, which was put in place to help meet the previous deficit goals but would be unpopular with voters. Padoan's letter, addressed to European Commission Vice President Valdis ...

Dallas County Schools on the Brink of Default; Credit Rating ...

NBC 5 Dallas-Fort Worth-17 hours ago

Dallas County Schools on the Brink of Default; Credit Rating Dropped Again ... The rating is so low they are rated to debts held by Puerto Rico -- a bankrupt ..

Kentucky Pensions Could Face Insolvency in Five Years

Chief Investment Officer-21 hours ago
Kentucky's retirement system faces a funding shortfall across its pension systems ... with an updated KRS policy, the unfunded liability would rise to $42 billion.

 

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2890
Top to bottom

Have lost 100% all faith in the existing system.

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 453
Re:As Trump Wavers on Climate Pact, China Vows to Stand by It

China commitment to Carbon emissions doesn't begin until 2030. Currency China is still expanding coal consumption (New high in April 2017). China only commits to these agreements because thier compliance is in the distant future (2030) and by agreeing they know that more Western business will shift prodction to China. Of course they are commited because they want more Western production to move to China!

China now products 30% of all global CO2 emissions. China agreeing to the Climate Pact is like a 500 lb Fat man preaching about how to stay thin. It would be better for the West to retain domestic production and using reasonable emissions controls, instead to send all of the remaining production over to China with has absolutely the worst evirorment in the world. 

China has no intention of honoring its commitments, Original China was to cut emissions by 2020, which later was delayed to 2025 and now its at 2030. China will continue to push the date back over and over. The West has elected a Neo-Neville chamberlain when it comes to China's Pach agreements.

 

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments