Daily Digest

Image by Frankieleon, Flickr Creative Commons

Daily Digest 7/12 - LA Budget Woes Continue, CA Cuts Services To Pay Pension Costs

Wednesday, July 12, 2017, 9:38 AM


A city pension board vote could add to Los Angeles' budget woes

Pension boards across the state have been revising their earnings assumptions downward, taking them to 7.25% or 7%. Taxpayer watchdogs long have argued that Los Angeles’ city retirement systems rely on overly rosy investment projections.

Senator calls Illinois tax increase a 'welcome to Michigan' sign

Bertram said his family now resides in Michigan in a house twice the size of what he had in Illinois, on twice the land. “All that and we pay 50 percent less in property taxes,” he said. “It’s realities like this that explain why the state is still experiencing a population drain.”

California Cuts Services, Staff to Pay Pension Costs

Government projections continually underestimate pension costs. According to a new study by the Hoover Institution, pension liabilities are understated by trillions of dollars. This happens because governments assume unrealistic rates of return on pension investments. The California Public Employees’ Retirement System (CALPERS), the agency managing pension and health benefits for most California employees, will assume arate of return of 7% starting in 2020 (the current assumption is 7.5%), however, last year, CALPERS earned a return of 0.6%.

Emanuel sloughs off Moody’s threat to drop Chicago’s bond rating

Emanuel was asked repeatedly how he plans to bridge the gap between what CPS gets from the state and the $400 million-to-$600 million the broke system needs to be put on solid financial footing. “What I’m gonna do is make sure that . . . the re-write of the funding formula which benefits school districts with poor children and children of color becomes the law,” he said.

Troubled Chicago school system sells $500 million bonds at high rates

Underwriters led by J.P. Morgan priced the unrated general obligation bonds targeted at "qualified institutional buyers," with a final 7.65 percent yield and 7 percent coupon for new bonds due in 2046, according to the district. The bonds were initially priced to yield 7.75 percent.

Illinois' $21 billion in school debt pushes up property taxes

School districts across Illinois owe nearly $21 billion in long-term debt. That’s an increase of over 67 percent since 2002, when debt equaled $12.3 billion. School debt grew at nearly double the rate of inflation over the 2002-2015 period.

Risks in China's banking sector controllable: official

By May, outstanding loans to small and micro businesses were 28 trillion yuan (around 4.11 trillion U.S. dollars), up 14.9 percent year on year. Outstanding agricultural lending totaled 29.6 trillion yuan, up more than 40 percent from the end of 2012.

US consumer credit up $18.4 billion in May, most in 6 months

The $18.4 billion rise in credit pushed borrowing measured in the monthly report to a fresh record of $3.84 trillion. The Fed's monthly credit report does not cover home mortgages or any other debt secured by real estate such as home equity loans.

EU seeks more collective approach to dealing with bad loans

At a regular gathering on Tuesday, the finance ministers outlined policy actions to reduce the EU's total stock of bad loans, which amounted to nearly 1 trillion euros ($1.14 trillion) at the end of 2016 — equivalent to 6.7 percent of the bloc's annual GDP, or 5.1 percent of total loans.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/11/17

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."

Login or Register to post comments