Daily Digest

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Daily Digest 9/5 - U.S. Heading For Crash 'As Bad As 1929,' Italy's Politics Shaking Markets Again

Wednesday, September 5, 2018, 11:13 AM

Economy

Iowa employers face steep health insurance price increases, but keep offering benefits

On average, Iowa employers faced premium increases of 8.4 percent for 2018, according to the new survey by consultant David P. Lind.
Iowa employers with fewer than 50 employees faced increases of more than 12 percent. Those employers are not required to offer health insurance, unlike larger companies.

New report shows the harmful effect rising health care costs have on wage stagnation

Average workers in the bottom 40 percentiles of the earnings distribution saw their disposable earnings decrease over a 16-year period: In constant dollars, annual premiums for full-time, full-year single workers rose from $415 in 1999 to $1,068 in 2015, an increase of $623 per year.
Average U.S. health expenditures rose to $10,348 per person in 2016.

Police hunt loan sharks riding Britain's rising tide of debt

Cuts to government benefits, stagnant wages and a reduction in banks’ willingness to lend to the poor have since the 2008 crisis pushed many households’ finances to the brink.
Unsecured borrowing such as credit card debt rose to a record 213 billion pounds in June.

Turkey Ripples Hit Korea as Record Money-Market Funds Pulled

Investors pulled 8.7 trillion won ($7.8 billion) from mutual funds dealing in short-term debt and other cash-like instruments on Friday, the biggest single-day outflow ever from such products, according to the latest data from the Korea Financial Investment Association.

Japan finmin seeks record 2019 budget to boost welfare, defence spending

It is possible for the finance ministry to cut the final size of next fiscal year's budget to below initial requests, but this is unlikely to ease concern about Japan's debt burden, which is proportionally the highest in the world at more than twice annual gross domestic product.
In comparison, the U.S. debt burden is around 125 percent of gross domestic product, according to the Organisation for Economic Cooperation and Development.

Robert Reich: We Might Be Heading for a Crash as Bad as 1929 | Opinion

We’re getting dangerously close. By the first quarter of this year, household debt was at an all-time high of $13.2 trillion.
Almost 80 percent of Americans are now living paycheck to paycheck. In a recent Federal Reserve survey, 40 percent of Americans said they wouldn’t be able to pay their bills if faced with a $400 emergency.

Turkey’s woes could be just the start as record global debt bills come due

Total debt is a whopping $169 trillion, up from $97 trillion on the eve of the Great Recession, according to the McKinsey Global Institute.

Iranian rial hits record low at 128,000 to the dollar - Bonbast website

Last week, Iran’s parliament sacked the minister of economic affairs and finance, the latest in a continuing shakeup of top economic personnel. In early August Iranian lawmakers voted out the minister of labour and in July President Hassan Rouhani replaced the head of the central bank.

Italy's politics are shaking markets again

The stakes are high: Italy is the eurozone's biggest government borrower. While foreigners and households sold Italian debt this summer, Italian banks were buying it at the fastest pace since the eurozone debt crisis. That means any losses in Italian bonds puts more pressure on the banks' already modest capital ratios, driving them to buy even more debt, according to research firm TS Lombard.

Cash ban may have driven Indians away from banks

Worse yet, perhaps, households are keeping far more of their net savings in cash, not less. And their net savings going to banks are almost 50 percent lower than the five-year average before demonetization. In other words, the idea that the crackdown would leave banks flush with household savings that they could lend to productive parts of the economy has been comprehensively debunked.

Turkish Banks Need $6 Billion Refinancing Amid Economic Crisis

Turkish banks may have to pay up once again as they rush to meet $6 billion of financing deadlines amid the country’s worst economic crisis in years.
At least nine lenders have to complete annual dollar loan syndications by year-end, leaving an industry heavily reliant on overseas funding little time and few options to conclude deals often involving dozens of global banks.

Indonesia braces for prolonged pressure as rupiah slides

Indonesia is bracing for prolonged pressure on the rupiah amid souring emerging market sentiment exacerbated by Argentina’s economic woes, the country’s finance minister said on Monday, as the local currency plumbed its weakest levels since 1998.
The rupiah hit 14,825 per dollar on Monday, the weakest since the Asian Financial Crisis two decades ago, before closing at 14,810. It has lost nearly 9 percent this year.

Argentina announces new taxes, ministry cuts amid turmoil

"These were the worst five months of my life since I was abducted," the president said, referring to the early '90s when he was kidnapped for 12 days by a criminal gang that demanded several million dollars in ransom.
He said that he will ask more of exporters because they "have more capacity to contribute" and had benefited from the devaluation.
He also acknowledged that a tax on exports is "very bad," but said that it was necessary because there was an "emergency" situation.

Water levels continue to drop at Lake Mead, Lake Powell

Lake Powell is about 48 percent full, and Lake Mead is about 38 percent full. By the end of the year, Powell’s levels are projected to fall 94 feet below where the reservoir stood in 2000 when it was nearly full.....The Colorado River and its tributaries support about 40 million people and more than 7,800 square miles of farmland.

The Growing Economic Sandpile (thc0655)

I’ll be quoting from a very important book by Mark Buchanan called Ubiquity, Why Catastrophes Happen. I HIGHLY recommend it if you, like me, are trying to understand the complexity of the markets. Not directly about investing, although he touches on it, the book is about chaos theory, complexity theory, and critical states. It is written so any layman can understand—no equations, just easy-to-grasp, well-written stories and analogies.

Why people who claim Social Security early often live to regret it (Thomas R.)

The study was recently circulated by the National Bureau of Economic Research: “Early Social Security Claiming and Old-Age Poverty,” by Gary Engelhardt, an economics professor at Syracuse University, Jonathan Gruber, an economics professor at MIT, and Anil Kumar, an economic policy adviser and senior economist at the Federal Reserve of Dallas.

Foreigners Selling UK Debt as Hard BEXIT appears (Thomas R.)

We can see on our Capital Flow Map where we trace the net movement of capital that Britain has turned RED. We have been monitoring the significant net capital flight from Britain thanks to Theresa May. This is also one primary reason it appears that the British pound is still is a distinctive bear market trend with respect to the broader term.

This poll shows millions of Brexit voters now want to remain in the EU (Thomas R.)

Analysis of the polling also recorded a shift in support for Remain across the UK, with 112 constituencies switching from major Leave-supporting to supporting Remain. There has been a shift towards Remain in 93% of constituencies, and 341 seats now favour staying within the EU, with 291 wanting to Leave.

Water levels continue to drop at Lake Mead, Lake Powell (sand_puppy)

“Better options might be found by thinking outside of this familiar framework. Lakes Mead and Powell, after all, are essentially one giant reservoir,” the group said. “Managing — and thinking — of these facilities as two distinct reservoirs, one for the benefit of the Upper Basin and one for the Lower, now seems outdated.”

Corruption, incompetence and a musical: Nauru's cursed history (Paul D.)

At the moment Nauru’s main industry could perhaps be described as misery and suffering, courtesy of Australia’s offshore detention policies. Since 2013, when the offshore detention and processing centre reopened, Australia has been providing about two-thirds of Nauru’s GDP of $170m by way of direct aid, visa fees and payments to the government for hosting the refugees.

Governments 'not on track' to cap temperatures at below 2 degrees: U.N (Paul D.)

“1.5 is the goal that is needed for many islands and many countries that are particularly vulnerable to avoid catastrophic effects. In many cases it means the survival of those countries. With the pledges we have on the table now we are not on track to achieve those goals,” Espinosa told Reuters in a telephone interview on Sunday in Bangkok.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/4/18

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."

13 Comments

saxplayer00o1's picture
saxplayer00o1
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As Emanuel exits, pressure builds on Chicago's $10 billion pensi

Argentina to Go Deeper Into Recession, Central Bank Survey Says

Bloomberg-16 hours ago
Argentina's economic outlook deteriorated significantly in August amid a renewed currency crisis, with economists surveyed by the central bank forecasting a ...

Emerging markets rout deepens amid Argentina, Turkey fears

CNBC-1 hour ago
Argentina's economy has been mired by rampant inflation despite its central bank trying to curb it through rate hikes. Turkey's economic troubles stem from rates ...

As Emanuel exits, pressure builds on Chicago's $10 billion pension ...

Crain's Chicago Business-19 hours ago
The bar just got raised for a $10 billion plan to refinance the city's enormous pension debt in the wake of Mayor Rahm Emanuel's decision not to seek re-election ...

'Cash Call' suddenly stops quick cash loans

KGO-TV-10 hours ago
RELATED: Man goes $47K in debt after falling for online scam ... a business model based on the assumption that at least 40 percent of borrowers would default.

 

sand_puppy's picture
sand_puppy
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Bloomberg: Tech Titans Plot New Zealand Escape

Bloomberg carried the following article about wealthy US "tech titans" plotting bolt holes in New Zealand to escape the Zombie Apocalypse.

“If you’re the sort of person that says ‘I’m going to have an alternative plan when Armageddon strikes,’ then you would pick the farthest location and the safest environment — and that equals New Zealand if you Google it,” former Prime Minister John Key said in a phone interview.

“It’s known as the last bus stop on the planet before you hit Antarctica,” he said. “I’ve had a lot of people say to me that they would like to own a property in New Zealand if the world goes to hell in a handbasket.”

I am reminded of Jared Diamonds comments about the actions of the elites that benefit themselves, but harm the rest of society--this is only possible if the elites are insulated from the effects of their own actions, such as by "living in gated communities and drinking bottled water."

TechGuy's picture
TechGuy
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Re: Early SS

"Why people who claim Social Security early often live to regret it"

if you start collecting at 62, but continue to work, you can save more and use the extra income for an emergency fund or just add it to your retirement savings. Considering the instability of SS & Medicare, perhaps a bird in hand is better than two birds in the bush.

 

 

 

Time2help's picture
Time2help
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Re: New Zealand Escape
sand_puppy wrote:

I am reminded of Jared Diamonds comments about the actions of the elites that benefit themselves, but harm the rest of society--this is only possible if the elites are insulated from the effects of their own actions, such as by "living in gated communities and drinking bottled water."

Good luck building community when all of their neighbors wind up being elite psychopathic assholes like them.

TechGuy's picture
TechGuy
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Re: New Zealand Haven

I have my doubts that New Zealand will be a haven.If there is a major crisis, there will literally be boat loads of refugees arriving, since anyone the the Asian region is aware of it. Is NZ even food\energy independent today? 

thc0655's picture
thc0655
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This is why reforms aren't going to work. We must collapse.

Everything has gotten so complex that adjustments and reforms simply aren't going to work.  We're going to have to radically simplify by starting over with "a new operating system."

http://thezman.com/wordpress/?p=14949

Anyone who has been through a change in software platforms for their company knows that it starts out as a lot of fun, but then turns into drudgery. Initially, thoughts of all the new stuff and better programs makes it feel like Christmas. Then the reality of going through every single business process of the company hits home. You end up re-thinking vast chunks of the company’s business processes, much of which is terribly dull, even though it is essential. It is the only way to get it right and take advantage of the new system...

Putting aside the cost of complexity, systems often become so complex that they become unpredictable. Even in business systems, which are simple compared to the software for driving a car, the complexity can reach a point where no one truly knows what will happen if some change is implemented. The result is a whole new process for performing quality control, to make sure the changes do not have some unexpected and unwanted downstream result. There are now certifications for software quality control professionals.

This is often why legacy systems are replaced. It’s not the technology, although that is often a handy excuse. It’s that the old system has so many patches and mods that no one knows how it works anymore. New changes result is weird outcomes and costly followup changes. As is true with everything in life, things sometimes get so complicated that the best answer is to start over. It’s why men leave their families and why people change careers. It’s also why the people stand aside and let the revolutionaries topple the rulers.

That’s what a revolution is, when you think about it. It’s a lot like the decision to buy a new software system for the company. It’s not that what comes next will be better. It’s that the status quo is so complicated and unpleasant, anything has to be better. Of course, just a new software never turns out as expected, revolutions always turn out to be a lot more unpleasant than anyone imagined. Instead of firing the initial consultants, the revolution eats its own, by killing off the first group of revolutionary leaders.

Even so, it is something to think about as the West struggles to reform itself. The web of pirates, grifters, reformers and patriots within the ruling classes of the West has reached a point where no one understands what’s happening. That’s why official Washington remains in a state of emergency over Trump. It’s why the European ruling class is worried that they may be too lazy to fight their own people. Everyone knows that the system is not working, but no one has any idea how to fix and everyone is afraid to touch it.

It might be time for a new system.

KugsCheese's picture
KugsCheese
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Reich is an Idiot

Where is Buy-Across-State-Lines?  Ain't voting.  Back to Trumpster The Grenade.   Blow it up!

robie robinson's picture
robie robinson
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thc0655

would love to hear JHK talk about the "remedievalization" of modernity,,,,enter the dark ages, the new operating system.

ezlxq1949's picture
ezlxq1949
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Peak Bafflement

thezman also said:

What you learn from such an ordeal is that the company software system is the repository of the company rules that define how it exists.

This repository, i.e. the corporate memory, used to be the human employees. Now it's the artificial intelligence.

People are so difficult to deal with, aren't they. It's so hard to emply them and understand them and cope with them.

To automate everything in sight, including the entire corporation itself, with its promise of making life simpler, is a highly attractive proposition.

Uncletommy's picture
Uncletommy
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Future synergies; a-la JHK?

davefairtex's picture
davefairtex
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compatibility layer

One important issue is that if you force everyone to jump to a new system, there is a period of time where normal stuff you have to do every day just stops working.  I saw this when I was part of an effort to rewrite the operating system back at the dawn of time.

I concluded from this experience that it is probably better to spend some extra effort to provide a bridge between the old and the new systems.  Mostly, people just want to live their lives.  This involves writing a compatibility layer that allows people to use the new system without changing their code.

I'm not 100% sure how that applies to "rewriting our national operating system", but the extra effort that allows people to continue functioning without having to do a rewrite is well worth it - in the software biz anyway.

 

Michael_Rudmin's picture
Michael_Rudmin
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Not the last bus stop

I think there is another one. Isn't there a genetic depository on an island between tierra del fuego and Cape horn? I'm thinking that's the last bus stop; but I'm also thinking not so many will want to mention that.

But that's only the last bus stop.

If we go back to stone age, the real good pickings are on the glacial boundaries; so that means Antarctica and the Bering Strait is really where it's at. And if you think man can't survive there... stone age man did great at the boundaries. It's modern man who has trouble, because he's trying to depend on active systems like combustion to keep himself warm, instead of passive systems.

The eskimos didn't have that.

richcabot's picture
richcabot
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Friends down under

I have friends in New Zealand and they aren't too keen on the projected influx.  I expect these carpet baggers aren't going to find a welcoming environment.  If they are depending on their money to buy friends when they arrive they might think about how that will work if the international finance system crashes.

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