Daily Digest

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Daily Digest 9/19 - Soaring Global Debt Raises Red Flags, Will Emanuel Put Chicago Taxpayers At Risk?

Wednesday, September 19, 2018, 9:06 AM


Commentary: Will Emanuel put Chicago taxpayers at even greater risk?

There are as yet no firm details, but in essence the pension idea plays roulette with taxpayer money. Chicago would borrow $10 billion, dumping it into the pension funds for short-term gain, and praying that investment returns over the life of the bonds outpace the interest that taxpayers would owe on the borrowing. Plus we’d owe the $10 billion. Worse, the proposal would put up a taxpayer asset, such as future sales tax revenues, as collateral to entice big institutional investors.

Report: Every adult in the state owes $4,000 for teacher health care costs; pensions not included (Illinois)

The report released Tuesday by Bellwether Education Partners estimates that Illinois owes $54 billion in future health care costs that have been promised to teachers after retirement. That’s the sixth-most of any state when divvied up by each state’s adult population. This is not included in the estimated $130 billion in unfunded teacher pension liabilities.

Why the U.S.-China trade deficit is so huge: Here’s all the stuff America imports

In 2017, the U.S. posted a $376 billion deficit in goods with China. Most glaring is the huge deficit in computers and electronics, but the U.S. is a net importer from China in most market segments except for agriculture.

29 Utah cities increased credit card debt in 2018

Several other cities around the nation joined Draper, Park City and more. In 2018, outstanding credit card debt is at the second-highest point it's been since 2008, according to WalletHub.
The total credit card debt for the entire country was $978.90 billion in 2018 and $935.90 billion in 2017.

A spike in 10-year Treasury yields could trigger a financial crisis to rival the Great Depression

Feldstein said he thinks the effects of a bear market could spread into the retail economy, draining it of $300 billion to $400 billion a year, and risk an economic crash to rival the Long Depression of the 1870s and the Great Depression of the 1930s.

Soaring global debt raises plenty of red flags

With global debt hitting $247 trillion in the first quarter of 2018 (the non-financial sector was $186 trillion), concern exists, particularly since the total global economy is “only” $74 trillion, according to the World Bank.
In addition, the McKinsey Global Institute says a record $10 trillion in bonds must be refinanced in five years.

Turkish lira weakens 2 pct, erasing gains made after last week's rate hike

The central bank last week lifted interest rates by a mammoth 6.25 percentage points, helping to boost the lira as far as 6.0100 against the dollar. By 1117 GMT on Tuesday it was at 6.4425 against the greenback, near the level it had been trading at before the rate hike.

Lehman-Era Alphabet Soup of Market Products Is Back on Table

As demand outstripped supply, investors agreed to weaker safeguards and protections on loans to junk-rated companies, according to Moody’s Investors Service. Around 80 percent of leveraged loans are “covenant-lite,” meaning they lack meaningful protections against, for example, the company’s earnings falling to low levels. In 2006-2007, that proportion would have been less than 25 percent, according to Moody’s.

Egypt cancels debt auction as foreign investor appetite weakens

Egypt cancelled a treasury bond auction on Monday, its third such move in as many weeks, as foreign investors cut their exposure to the country's debt at a time of weak appetite globally for emerging market assets.

The Fracking Industry’s Water Nightmare (Paul D.)

Dealing with toxic wastewater has always been a problem for the fracking industry, sometimes leading to illegal workarounds. A big unanswered question for the shale companies doing the fracking is whether they can ever properly handle the amount of toxic wastewater they are producing, whatever the cost is.

How Solar and Wind Mandates Tax the Poor and Middle Class (thc0655)

Only two of the 10 states with the lowest energy costs had these mandates. The 10 lowest-cost states had electric power costs about half of what is charged in high-cost states. We are talking about hundreds and sometimes thousands of dollars of higher costs every year to homeowners to enrich billionaires like Elon Musk and Tom Steyer. This is Robin Hood in reverse: Rob the poor to pay the super rich.

Off Tanzania, in one of the world’s richest seas, why is the catch getting smaller? (Paul D.)

The easiest method used by illegal fishers – but also the most ecologically damaging – is “blast fishing”, which uses dynamite or homemade bottle bombs made from fertiliser and kerosene. A single explosion can kill as much as 400kg of fish in a radius of 100ft, worth up to US$1,800, but will also destroy a reef. The chances of offenders being caught are negligible.

“Only A Matter of Time” Before Category 6 Hurricane Hits U.S. (Paul D.)

Indeed, author Jeff Nesbit’s forthcoming book “This Is The Way The World Ends” is published later this month. At its height Florence was a category 4 Hurricane. Nesbit argues that “There is no such thing as a category 6 hurricane or tropical storm – yet. But a combination of warmer oceans and more water in the atmosphere could make the devastation of 2017 pale in comparison.”

Gold & Silver

Click to read the PM Daily Market Commentary: 9/17/18

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."


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Emerging-market debt issuance on ice after turbulent summer

Emerging-market debt issuance on ice after turbulent summer

Reuters-1 hour ago

LONDON, Sept 19 (Reuters) - Emerging-market debt issuance is on hold after a summer ... The sovereign market was “basically dead”, Regis Chatellier, global ..

EXPLAINER-Why is Japan's monetary policy so unpopular with banks?

Reuters-12 hours ago

The Bank of Japan has been buying large volumes of government bonds in the open market to lower long-term bond yields. It also has a negative interest rate ..

Bank of Japan Maintains Promise to Keep Extremely Low Rates for ...

Wall Street Journal-11 hours ago
The central bank decided to stand pat on policy after making a number of tweaks in July to prepare for a longer-than-expected fight to lift inflation, which has yet ...

The Indian Debt Default That's Got Everyone Worried: QuickTake

Bloomberg-6 hours ago

That's causing concern among the myriad investors, including private individuals, who had regarded the group's debt as rock-solid. With the IL&FS cash crunch ..

Cash-Strapped Americans Are Willing to Leverage Their Homes to ...

Bloomberg-1 hour ago
As U.S. household debt rises and wages stagnate, millions of Americans are ... $13.3 trillion, while mortgage debt also rose 3.5 percent, to a whopping $9 trillion.

Economists warn of trouble over Illinois' pension debt

Illinois News Network-18 minutes ago
Most speakers pointed to pension debt as what will likely be the cause of ... Moody's Investor Services estimates Illinois' pension debt to be $250 billion.

Illinois finances treading water at best, new Moody's report concludes

Crain's Chicago Business-21 hours ago
But that's only because the state traded short-term debt for long-term bonds, paying $6 billion in bills by issuing that much in general obligation bonds.

Amid an epidemic of mortgage stress, a perfect financial storm is on ...

ABC News-20 hours ago
As Australia's levels of household debt relative to disposable income hit historic ... to pay his mortgage but couldn't until the bank served him a default notice.

Venezuela outrage: Leader gorges at top foreign restaurant as citizens ...

Express.co.uk-2 hours ago

Celebrity chef Nusret Gokce, also known as 'Salt Bae', posted a picture of the president dining in his restaurant Nusr-Et Steakhouse, which following the outrage ..


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Trump Weighs In On The Single Worst Mistake In American History

You may hate the guy for whatever idealogical reason floats your boat.  I view this as progress for a politician, and not any politician but the president to admit the plain unvarnished truth.  Fire away if you feel the need but this is progress we have not seen before from a Chief Executive speaking his own mind and not what the bosses tell him to say.



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China slashes US Treasury securities to six-month low as trade

Italy's Savona seeks euro zone debt restructuring, backed by ECB

Nasdaq-22 hours ago
ROME, Sept 19 (Reuters) - Italy wants the public debt of all euro zone states to be ... is no reason why bank deposits should be protected while sovereign bonds ...

S.Korea c.bank warns of fast household debt growth, financial risks

Reuters-12 hours ago

Total household debt stands at 1,493.2 trillion won ($1.33 trillion) as of the second quarter, up 7.6 percent from a year earlier. The BOK also warned that the ..

Argentina issues more debt to shore up peso

Xinhua-13 hours ago
19 (Xinhua) -- Argentina's government issued more debt on Wednesday through ... The debt issue aims to take in some 232 billion pesos (about 5.8 billion U.S. ...

Argentina's GDP shrinks 4.2 pct in 2nd quarter

Reuters-19 hours ago
Argentina posted a primary fiscal deficit of 10.35 billion pesos ($408 million) in August, down 58 percent from the same month last year, the statement said.

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