Daily Digest

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Daily Digest 4/1 - Investors Crazy For High Yield Bonds, The Colorado River 'Bathtub Ring'

Wednesday, April 1, 2015, 9:44 AM

Economy

Argentine workers walk out in general strike over taxes

Transport unions spearheading Tuesday's strike are demanding the leftist government raise the minimum threshold on income tax as part of salary negotiations. The government said inflation was 24 percent in 2014, but private economists estimate it was about 35 percent.

Making full pension payment would have 'incredible' impact on N.J. residents, treasurer says

The $1.3 billion pension payment proposed in Christie's 2016 budget is less than half of what is required under pension reforms Christie signed.

"We hope you will agree that the governor's proposed fiscal 2016 contribution represents a fiscally responsible and sustainable foundation for moving forward," Sidamon-Eristoff told the committee.

York, Pa.’s fiscal distress sign of statewide municipal pension crisis

A recent report on local government pension plans found that nearly half of the employee plans statewide are in distress and the overall unfunded municipal pension liability is nearly $8 billion.

Treasuries Post Longest Quarterly Streak of Gains Since 1998

Treasuries are posting the longest stretch of quarterly gains since 1998, buoyed by a drop in inflation forecasts and the Federal Reserve’s signal that policy makers won’t rush to raise interest rates.

Panel asks state to absorb $350M in Detroit school debt

A coalition of business, civic, education and religious leaders wants the state of Michigan to assume at least $350 million in debt Detroit Public Schools has accumulated under state oversight and relieve the cash-strapped district of pension payments for retirees.

Atlantic City requests two month extension on $40 million loan from state

Debt remains a major issue for Atlantic City. Lavin’s report said municipal debt has reached $494 million, and a draft 2015 budget listed debt service at $36.9 million.

Chicagoans Owe City $1.5 Billion In Parking, Driving Tickets

Most of the debt comes from unpaid parking tickets, DNAinfo Chicago found, while unpaid tickets from the city's fledgling red-light and speed camera programs has already grown to more than $230 million, two years since the cameras were installed. Since Rahm Emanuel took office in 2011, total ticket debt has gone up 15 percent.

Household debt growth gains speed (Korea)

Korea's household debt is on track to rise further after jumping nearly 4 trillion won ($3.6 billion) in the January-February period; while the "Relief Loans" designed to restructure this debt will not be of much help, experts said Tuesday.

Thai household debt rises to record 85.9% of GDP at end-2014: central bank

Household debt was 10.43 trillion baht (S$437 billion) at the end of 2014, continuing to crimp consumption as the economy struggles. At the end of September, the total was 10.22 trillion baht.

Brazil posts unexpected primary deficit in February

The gauge is of particular importance for Brazil, where President Dilma Rousseff started her second term in office with a concerted effort to stave off a credit rating downgrade after years of lavish spending failed to spur growth.

As pressure from lenders grows, Greece says debt repayment impossible without restructuring

Athens faces debt repayments and rollovers of nearly 3 billion euros ($3.3 billion) in April, mainly in the middle of the month, with obligations rising further in the coming months. Not being able to raise money on international bond markets, Greece depends on bailout creditors for the money to meet those obligations.

Who pulled out the plug? The 'bathtub ring' on the banks of the Colorado river that's thousands of miles long

Seven states and 40 million people get water from different parts of the river's basin, which extends into the southern reaches of Wyoming.

Many climate scientists think that the Southwest is also due for a megadrought this century that would far outlast the current phenomenon.

East Bay Residents Complain About Water Taste After EBMUD Makes Drought-Related Changes (California)

Customers have complained about the change. “Water tasting or smelling a little different than usual, smelling metallic or musty or earthy,” said Amy McKenzie of Piedmont, one of several hundred customers who complained about the water.

As Drought Worsens, Restrictions on Pools Rise in California

The strictest water rules are found in Montecito, a wealthy community that's home to Oprah Winfrey, Ellen DeGeneres, Google CEO Eric Schmidt and Berkshire Hathaway's Charlie Munger. New pool construction is banned in Montecito, where nearby water sources, such as Lake Cachuma, are drying up.

Jumping on junk: Investors crazy for high yield bonds

Fueled by low default rates and generally favorable credit conditions, investors in 2015 have been pouring money into funds that invest in high-yield debt. In fact, the previous six weeks before the most recent week had the highest level of flows to junk funds since the financial crisis in 2008 and 2009, according to Morningstar.

No End in Sight for Bond Rally as ECB Spigot Spills Across Globe

Even as the Federal Reserve prepares to raise interest rates from near zero, the ECB’s trillion-euro bond-buying plan is pushing investors to accept negative yields on more than $1.9 trillion of sovereign debt worldwide.

This digital currency has an unusual gold spin

Move over, bitcoin! Anthem Vault is getting ready to launch a large-scale digital currency. But this one’s backed by gold.

Southeast Asian borrowers wince as deflation looms

Loans to businesses and households in Southeast Asia are growing at their slowest pace in five years, but the region's most indebted economies aren't becoming any less leveraged. Because of deflation, borrowers are at risk of shouldering heavier debt burdens.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/31/15

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."

10 Comments

saxplayer00o1's picture
saxplayer00o1
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Time2help's picture
Time2help
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PEMEX Oil Platform Explodes

PEMEX Oil Platform Explodes; Injuries Reported

(Hopefully an April Fool's joke)

 

Time2help's picture
Time2help
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saxplayer00o1's picture
saxplayer00o1
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Joined: Jul 30 2009
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saxplayer00o1's picture
saxplayer00o1
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pinecarr
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California Governor Orders Mandatory Water Cuts

From ZH, "For First Time In History, California Governor Orders Mandatory Water Cuts Amid "Unprecedented, Dangerous Situation"": http://www.zerohedge.com/news/2015-04-01/first-time-history-california-governor-orders-mandatory-water-cuts-amid-unprecedente

Amid the "cruelest winter ever," with the lowest snowpack on record, and with 98.11% of the state currently in drouight conditions, California Governor Jerry Brown orders mandatory water cuts in California for the first time in history...

Lowest snowpack on record...

20150307_snow_0.jpg

 

Time2help's picture
Time2help
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Re: California Governor Orders Mandatory Water Cuts

The Thing awakens.

A mangled northern hemisphere jetstream

Arthur Robey's picture
Arthur Robey
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Posts: 3936
Operator error.

This is how you are supposed to operate the stream.

I hope Mark comments.

http://earth.nullschool.net/#2015/03/16/2100Z/wind/isobaric/500hPa/ortho...

Mark Cochrane's picture
Mark Cochrane
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Posts: 1216
Tale of two streams

Arthur,

The basic idea of a jet streams that they form at the boundaries of different air masses with large temperature differences. This is prevalent at Hadley Cell boundaries with the strongest happening where the polar cells meet the Ferrel (temperature) cells. Add in Earth's rotation and we are off to the races with strong westerly winds that can act to strongly divide cold and warm air masses in the higher/lower latitudes. Coriolis forces result in Rossby (planetary) waves that propagate toward the east, which in simple terms are the meanders that make the jet stream look like a lazy river.

In the northern hemisphere not everyone agrees yet but the basic idea is that the melting sea ice exposes more warm ocean water in the high Arctic. Instead of an insulating cap of ice, open water can allow much more heating to escape into the atmosphere. The net result is a warmer Arctic and a weaker jet stream. The weaker jet stream creates larger meanders that  drop frigid polar air far into southern latitudes where it isn't expected. What people tend to forget is that this is balanced by an equally large pulse of very warm air to the north in the other bends of the meanders. While oranges are freezing in Florida, rain can be falling and flooding people in Alaska. The end result is some nasty winters for whichever location is unlucky enough to get walloped. It is a very intellectually satisfying theory but it hasn't been proven as of yet and in all likelihood there is more to the story than this simple explanation.

In the southern hemisphere we have a different dynamic with ice covered land surrounded by oceans all around (versus oceans surrounded by land in the Arctic). In this hemisphere the jet stream is being pushed north by greenhouse warming and, as it turns out, being pulled south as the ozone hole recovers. The ozone recovery is currently winning the tug of war (Polar cell shrinking). The end result is stronger westerlies that rip around Antarctica. Anybody who has sailed the Drake Passage knows what I mean by 'strong'! The counterintuitive net result is that the friction of the wind over the sea ice in winters tears open leads that expose sea water to cold winds that freeze more ice. This is exacerbated by the dilution of the saltiness of the surface waters from melting off of the glaciers from the continent in summer. Less salty = easier to freeze. The end result is more sea ice in the Antarctic winter. The opposite of what we see in the Arctic. Note, this doesn't somehow cancel out the Arctic ice loss since the ice isn't accumulating from year to year. We would have to see more, thicker, multiyear ice piling up in the Antarctic to begin to balance losses in the Arctic and even this wouldn't even out the global climate effects.

Mark 

Arthur Robey's picture
Arthur Robey
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Posts: 3936
Yeeha.

Dr. Hugo Ekener used to ride the winds in his airships.

http://www.berlin-airport.de/en/travellers/the-excitement-of-airports/wa...

At 2kW/m2 cross sectional area the Maybach engines drove the airship at an airspeed of 80mph.

With an airspeed of up to 120mph, the ground speed would have been 200mph. Which would have given the ship a great circle route round the world of 3 and a bit days.

Please consider buying an airship for your next passage over the Drake Passage. Only consider a German airship, as the rest of the Saxons really suck at making them, and get the vapors when they fail.

 

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