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Daily Digest 2/11 - G-20 Leaders Back Aggressive Stimulus, Venezuela Credit Rating Cut

Wednesday, February 11, 2015, 11:37 AM

Economy

U.S. pensions remain on shaky ground, jeopardizing benefits for retirees

None of the distressed plans have cut benefits — yet. But experts point out that their ability to do so is one more example that promises made to employees that once seemed inviolable can now be easily broken. This change in the social contract is growing more common as employers, private employers as well as governments, increasingly view the mushrooming cost of pensions as unbearable, even as the broader economy recovers.


S&P slashes Venezuela credit rating on oil rout

S&P said Venezuela's economy could shrink 7 percent this year, with further contraction possible in 2016. It added inflation could reach 100 percent or more this year, primarily as a result of continuing shortages of basic goods.

Budget will never get back to surplus, says Joe Hockey (Australia)

So big is the hit to the budget from commodity prices and the measures held up in the Senate it may "never get back to surplus", Treasurer Joe Hockey has told the Coalition party room.
The embattled minister made the claim as an independent assessment of the damage to the budget since May put it at $46 billion to $56 billion.

Greek investors buying more gold coins from Britain's Royal Mint

"The one thing everyone knows about gold is it is a good thing to hold if your currency is about to devalue," Matthew Turner, an analyst at Macquarie Bank Ltd., said via phone. "It would be understandable for Greeks to buy gold because they are afraid of losing their money."

Africa Hardest Hit as Miners Trim $20 Billion Spending This Year

The rout in commodity prices to the lowest in 12 years will spur deeper spending cuts by the world’s biggest mining companies in Africa, hurting a region more reliant on mineral exports than any other on the planet.

Japan foresees revenue shortfall in surplus target year 2021

Japan is set to miss budget-balancing pledges in coming years, government forecasts showed on Tuesday, underscoring the difficulty in reducing the country's huge debt burden, despite growth policies that have boosted tax revenues.


Argentina Traders Ignore Default Stalemate as Bonds Rally

The country is in default. Its president is embroiled in a political scandal that’s eroded her public support. And the price of soybeans, a key source of dollars for the cash-starved nation, is tumbling as farmers enter harvest season.

Puerto Rico yields at record high as setbacks mount

Yields on some commonwealth bonds climbed to records Monday after a judge threw out a debt-restructuring law that lawmakers passed last year. The steepening borrowing costs come at a crucial time for the U.S. territory: Officials want to sell $2 billion of petroleum tax-backed debt to pump cash into the Government Development Bank, which lends to the island and its localities.


UK pension deficit hits record high $560 billion in January

The shortfall in Britain's private sector pension plans rose to a record 367.5 billion pounds ($559.59 billion) at the end of January from 266.3 billion pounds in December, the Pension Protection Fund (PPF) said on Tuesday.

China injects $7.2 billion in added funds

China added funds to the financial system Tuesday, adding to seven straight weeks of injections as Beijing seeks to ease a seasonal cash squeeze and cope with a slowing economy and capital outflows.

Junk-Rated Companies Face $791 Billion in Debt Due by 2019

The riskiest companies face $791 billion of maturing debt during the next five years, underscoring concern that issuers that have been gorging on junk-rated bonds and loans will struggle to refinance as interest rates rise, according to Moody’s Investors Service.

U.S. Farmers Watch $100 Billion-a-Year Profit Fade Away

The squeeze on U.S. farmers is getting worse as low crop prices and rising costs erode incomes that not long ago were the highest ever.

G-20 Leaders Back Aggressive Stimulus

Finance leaders from the world’s largest economies endorsed on Tuesday aggressive stimulus measures taken by many of their central banks recently as vital responses necessary to boost a weak global economy.

Number Of Red Light Camera Tickets Issued At Millbrae Intersection Jumps From 40 Per Month To 600

“A California stop is what it’s called,” she said. The fine: $500. And we saw a lot of cars doing it. “It’s easy pickings. I imagine for the city it’s like shooting fish in a barrel,” she said.

US bill would tax ‘currency manipulators’

The recent surge in the dollar and declines in currencies such as the euro and the yen have been attributed largely to the introduction of unorthodox monetary measures by central banks. The US faced its own accusations of feeding a “currency war” in the wake of the 2008 global financial crisis as a result of the Federal Reserve’s massive quantitative easing programme.

Gold & Silver

Click to read the PM Daily Market Commentary: 2/10/15

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."

8 Comments

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1614
Phila. Pension Board sending bonus checks while 47% funded

http://www.philly.com/philly/news/politics/20150211_As_city_s_underfunded_pension_system_doles_out_checks_to_retirees__Nutter_balks.html

Sometime as early as April, Philadelphia's beleaguered pension fund will begin sending out $62 million in bonus checks to retirees.

It will do so despite being woefully underfunded - it has less than 48 percent of its $10 billion in obligations - and sucking up an ever-growing portion of the city's overall revenue.

It is required to make the payments as a result of legislation championed eight years ago by then-City Councilman James F. Kenney, who is seeking the Democratic nomination for mayor in the May primary.

Under the 2007 law change, sponsored by Kenney, the pension fund - regardless of how underfunded it might be - is required to share some of its good fortune with retirees if it manages to outperform its investment goals.

 

Detroit: Here we come!  frown

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4147
saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4147
Panel could scrap warning on dietary cholesterol

"Other cardiologists agree it's time to stop telling people to limit cholesterol from food.

"It's the right decision," said Steven Nissen, chairman of cardiovascular medicine at the famed Cleveland Clinic. For years, "we got the dietary guidelines wrong. They've been wrong for decades."

He noted that only 20% of a person's blood cholesterol—the levels measured with standard cholesterol tests—comes from diet. The rest comes from genes, he said.

"We told people not to eat eggs. It was never based on good science," Nissen said.

Advice to avoid foods high in fat and cholesterol led many Americans to switch to foods high in sugar and carbohydrates, which often had more calories. "We got fatter and fatter," Nissen says. "We got more and more diabetes." "

DennisC's picture
DennisC
Status: Gold Member (Offline)
Joined: Mar 19 2011
Posts: 310
Pension Funding

I just love these articles.  You're not being a good politician (e.g. if there is a surplus of some sort, somewhere) if you're not giving away something to somebody, as opposed to paying down debt or improving pension plan funding.  This article, although almost two years old, should be frightening to some state workers, particularly the ones in a certain northeast state (hint below).

http://www.ncsl.org/documents/summit/summit2013/online-resources/Moody-A...

And now for the fun part.

http://www.courant.com/business/hc-ap-connecticut-rich-residents-dont-le...

Connecticut, home to some of the richest Americans, has a big stake in the billions of dollars in revenue their income taxes generate. State tax officials track quarterly estimated payments of 100 high net-worth taxpayers and can tell when payments are down. Of that number, about a half-dozen taxpayers have an effect on revenue that's noticed in the legislature and the state Department of Revenue Services.

"There are probably a handful of people, five to seven people, who if they just picked up and went, you would see that in the revenue stream," said Kevin Sullivan, the state's revenue services commissioner.

Yep...the house of cards is essentially in the hands of ~six "contributors".

 

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
EIA Data for Week Ended: February 6, 2015

http://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf

see the graph for Stocks of Crude Oil on 10 page (Figure 1)

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
cholesterol is good for you?

hell, what's next, salt?

Low salt diets associated with death? - "We obtained morning fasting urine samples from 101,945 persons in 17 countries and estimated 24-hour sodium and potassium excretion (used as a surrogate for intake). We examined the association between estimated urinary sodium and potassium excretion and the composite outcome of death and major cardiovascular events."

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Helicopter Money

 begin sending out $62 million in bonus checks to retirees. 

Not my turf, but is this how we begin to see money handed out as Chris said would happen?

Is now the time to begin spending like a drunken sailor? Is this the beginning of the end of the failed QE printing extravaganza and where TPTB start handing it out to all and sundry?

A bit too early to tell in my opinion. Let us see if this idea becomes fashionable.

lambertad's picture
lambertad
Status: Silver Member (Offline)
Joined: Aug 31 2013
Posts: 179
Sign of the times?

What I find telling about this 'radical' proposal to scrap the dietary warnings about cholesterol is that it's coming out at this point in time. Every since these guidelines were put in place by McGovern's committee on the back of Ancel Keys' faulty and cherry picked evidence, it was obvious they would fail sooner or later. In my mind, there were two reasons it has taken this long to come out.

First, the scientific community is absolutely unable to make a 'consensus' decision until overwhelming evidence is in. In some cases this is good, in others it is bad. But, how did they make a consensus decision on the back of bad science? As Nissen says "It was never based on good science". Also, as you quoted "they've been wrong for decades". Whenever these guidelines were put in place everyone was in lock step thinking with the gooberment agenda. Relatively few people questioned the official narrative, and if they did, there was no way for competing agendas to receive wide recognition. Now we have the internet-published blogs, self-published kindle books, websites, youtube, etc. I personally discovered the fact that this cholesterol, saturated fat, eat-whole grains, BS was untrue and based on poor science back in 2009. I have three people to thank for this - Gary Taubes, Robb Wolf, and Loren Cordain. If you're interested in nutrition whether for personal health or professional life, read some of their stuff, more so Wolf and Cordain.

The second reason that I see that this is coming out now is that the goobernment is losing their grip on dictating the consensus. While the goobernment still dictates all things financial, we still see competing views. The PP subscribers/readers are a perfect example. How would Chris have spread his message 'back in the day' before the internet? He could have published a book, but even then he would be at the whim of the publishers. The ease with which information spreads nowadays is astounding, and is likely one reason the current administration wants to 'regulate the internet', you know, for your own good and so those evil capitalists can't do with it what they want...

Ending this illogical recommendation will be the right call. However, the gooberment can't stand to lose face, so I don't think 'official' channels will change their recommendations anytime soon. After all, doing so illustrates their falability. In the end, this reminds me of John Lockes quote when he was on trial - "Some men say the earth is flat. Some men say the earth is round. But if it was flat, could parliament make it round? And if it is round, could the Kings command flatten it?" He was appealing to the jury about the Natural Law, but the same can be true for science. The gooberment can declare cholesterol to be unhealthy, but that doesn't make it so. Finally, we are hearing from cardiologists that the gooberment should change their recommendations. Next up is them admitting their recommendations have caused the current low-fat, high-carb, inflammation inducing, blood sugar elevating, cardiovascular disease, obesity, diabetes epidemic. I'm not holding my breath.

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