Daily Digest

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Daily Digest 7/1 - PR Debt Crisis Worsens, Eurozone Inflation Eases

Wednesday, July 1, 2015, 10:54 AM

Economy

Puerto Rico Bonds Fall to Record Low as Debt Crisis Worsens

Prices on some commonwealth securities continued to fall Tuesday. General-obligation bonds maturing July 2035 traded at an average price of 65.8 cents on the dollar, the lowest since the bonds were first sold at 93 cents in March 2014. The price has dropped 15 percent since Friday, according to data compiled by Bloomberg.

Lawmakers 'no closer' to deal hours away from state budget, CPS deadlines (Illinois)

Tuesday is the final day of the state's current budget year, and top officials turned to planning for a Wednesday in which Illinois government has limited authority to spend money. It's also the day a cash-strapped CPS is due to make a $634 million pension payment.

White House: No federal bailout for Puerto Rico

The White House threw cold water Monday on the notion of bailing out Puerto Rico from its financial crisis, instead urging Congress to consider changing the law so the island can declare bankruptcy.

Puerto Rico poses bigger threat to U.S. investors than Greece

But U.S. investors would actually have much more to lose in a potential Puerto Rican default than in a Greek default. The reason is that Puerto Rico’s bonds are trading in the U.S. municipal bond market, while the vast majority of Greek debt is in the hands of the International Monetary Fund, the European Central Bank and eurozone countries.

Spain's PM says Greek exit could send message euro is reversible

Spain's Prime Minister Mariano Rajoy said on Tuesday a Greek exit from the euro could send a message that the common currency union is reversible and open up the possibility that other countries might follow suit.

Alaska freezes inflation-linked payment increases to Medicaid providers

Citing a “significantly underfunded” budget for the new fiscal year, the Alaska Department of Health and Social Services has told Medicaid providers they won’t be seeing the usual rate increases for inflation.

Brazil Posts Widest Primary Budget Deficit of the Year in May

Finance Minister Joaquim Levy is raising taxes and cutting spending to reach that target, which is key to showing whether public debt is sustainable in Brazil. His efforts are designed to boost investor confidence and stave off a sovereign-credit downgrade after Moody’s Investors Service last year lowered its outlook on Brazil to negative.

France's Debt Burden Reaches 97.5% of GDP

France's public debt burden rose 51.6 billion euros ($57.2 billion) in the first quarter to EUR2,089 billion, French statistics agency Insee said. That total represents 97.5% of gross domestic product, compared with 95.6% in the fourth quarter of 2014.

Eurozone inflation eases, reviving deflation fears

Eurozone consumer prices rose for the first time in six months during May, a victory for the ECB in its campaign to avoid a debilitating period of deflation, during which businesses and households might hold back on spending in the expectation that they will get better deals in the future.

Drugmakers Say Greek Unpaid Bills Total $1.2 Billion

Drugmakers operating in Greece said they’re owed 1.05 billion euros ($1.2 billion) by the government for medicine supplied to hospitals and the state social insurance fund.

Households' financial soundness worsens on rising debt: central bank (Korea)

Financial soundness of South Korean households worsened in the first quarter as their debts snowballed on the back of low interest rates, a report showed Tuesday, adding to persistent concerns that a looming U.S. rate hike may unleash credit risks.

China Rate Swap Drops Most This Quarter Since 2008 as PBOC Eases

China’s benchmark interest-rate swap dropped this quarter by the most in six years as the central bank stepped up monetary easing to combat an economic slowdown.

Canada Surprise April Contraction Opens Door to 2nd Rate Cut

Canada’s economy unexpectedly shrank for the fourth month in a row in April as oil and mining slumped, opening the door to a second interest-rate cut from the central bank this year.

ECB Billions Can’t Save Euro-Area Bonds From Worst Quarter Ever

The European Central Bank’s first full quarter of quantitative easing hasn’t stopped the region’s government bonds from heading for their worst performance on record.

Greece faces supply-chain crunch as crisis deepens

Supply chain experts say that Greek importers and exporters could be affected as soon as this week by the country's decision over the weekend to shut down its banking system for at least seven days as it seeks to prevent money from flooding out of the country.

Here’s where some Greeks are stashing their cash — in gold sovereigns

“In June, we experienced twice the expected demand for Sovereign bullion coins from our customers based in Greece,” the U.K.’s Royal Mint said in a statement.

The next Greece may be in the U.S.

When Chicago Public Schools announced on June 24 that it would borrow $1 billion to make a $600 million-plus pension payment due June 30 an eerie feeling spread across bond investors and taxpayers alike. It was the same feeling that gripped investors when Moody’s Investors Service downgraded Chicago’s credit rating to junk based almost entirely on the city’s pension problems.

California Drought Taking Serious Toll On Aging Sewer System In San Francisco

Few things in America have lasted 150 years. San Francisco’s sewer system is a working relic but one that works

Gold & Silver

Click to read the PM Daily Market Commentary: 6/30/15

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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saxplayer00o1's picture
saxplayer00o1
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Posts: 4240
China’s equity bubble is a monumental distraction (FT)

 

"In May alone, more than 12m equity trading accounts opened in China — a figure somewhat higher than the population of Greece. No wonder: a year of gains had helped the Chinese stock market put on $6.5tn in value. Since mid-June $2tn have disappeared. China may be experiencing an equity bubble only ever exceeded during the late 1990s US dotcom boom."

 

"Australian property prices are in a bubble and heading towards a correction in the next two or three years, says a leading investment bank.

UBS crunched the numbers and has done a historical comparison that indicates soaring property prices in major cities across Australia have begun to exhibit some bubble-like characteristics but there is no sign yet of an impending cause for it to burst until 2016-2017."

China’s authorities have stepped in more quickly than in the US, too, with monetary easing, newspaper articles talking up shares and on Wednesday a cut in stock exchange transaction fees.

Even after a fall of a quarter, by Tuesday’s low, China’s stocks face further risks. The heavy use of margin finance could lead to a downward spiral of margin calls and forced selling.

Bankers Slave's picture
Bankers Slave
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Posts: 523
World debt, world poverty and

concad's picture
concad
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Posts: 4
California drought taking serious toll on ageing sewer system...

"Few things in America have lasted 150 years"

How is it that Roman trunk sewers are still functioning and in reasonably good condition after 2000+ years, but so much of American infrastructure is in a bad state of repair?

Time2help's picture
Time2help
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Dead Inside

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
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saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4240
CPS set for $200 million in cuts; mayor floats property tax plan

 

"Mayor Rahm Emanuel on Wednesday detailed the fallout he attributes to Chicago Public Schools making good on a $634 million pension payment: 1,050 workers will lose their jobs, 350 vacant positions will be eliminated and several education programs will be slashed as a result of $200 million in budget cuts.

Emanuel also proposed a $175 million property tax increase to help pay for teacher pensions — but only if the state and Chicago's teachers chip in as part of what the mayor described as a "grand bargain" to put an end to the district's perennial money woes.

Much of that plan would require approval from state legislators who remain gridlocked over their own budget problems."

Time2help's picture
Time2help
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Posts: 2892
Sure looks like the S&P is topping out

KugsCheese's picture
KugsCheese
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Posts: 1469
Shanghai Composite Index - Looks Like DOW 1930s

Shanghai Composite Index

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1469
Time2help wrote:Look at
Time2help wrote:

Look at those footprints!   Those first two peaks were credit problem times.  Shale, student loans, auto loans (again!) anyone?

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