Daily Digest

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Daily Digest 7/15 - School Budgets Reflect Dire Finances, Too Much Debt And Too Little Cash

Wednesday, July 15, 2015, 8:57 AM


Greece May Have to Sell Islands and Ruins Under Its Bailout Deal

“It’s an affront,” says Georgios Daremas, a strategist and adviser to the Greek Ministry of Labor, Social Security and Social Solidarity. “It’s basically saying sell the memory of your ancestors, sell your history just so we can get something commercial for it,” he tells TIME on Monday. “This is an idea to humiliate Greeks.”

Chicago Public Schools' budgets spend $500 million district doesn't have

Chicago Public Schools on Monday unveiled school spending plans that rely on a half-billion dollars more than the district has on hand — an approach the head of the city's principals association compared to writing a bad check.
To make the individual school budgets work, CPS is banking on help from Springfield, which has so far been uncooperative. Without that, the district said it will have to resort to "unsustainable borrowing and additional cuts" midway through the coming school year.

Too Much Debt + Too Little Cash = Most Distressed Pain Since ’08

The pool of distressed U.S. corporate bonds, typically those yielding more than 10 percentage points above benchmarks, has swelled to $127 billion, from the low last year of $43.7 billion, Bank of America Merrill Lynch index data show. This month alone, Peabody Energy’s $4.8 billion of bonds have fallen 14.9 percent, while Cliffs Natural Resources’s $2.5 billion of notes have declined 14.6 percent.

VA May Close Some Hospitals To Fix $2.5 Billion Budget Gap

The Department of Veterans Affairs may have to shut down some hospitals next month if Congress does not address a $2.5 billion shortfall for the current budget year, VA officials warned Monday.
The VA told Congress that it needs to cover shortfalls caused by an increased demand by veterans for health care, including costly treatments for hepatitis C.

Airlines Pocket a Record $38 Billion From Extra Fees

In fact, despite grumblings from passengers about additional charges, revenue from checked bags, changed reservations and a host of other additional fees jumped nearly 21 percent to an all-time high of $38.1 billion, according the annual study by IdeaWorksCompany and CarTrawler.

CPS: School budgets reflect dire finances (Chicago)

But a good chunk is spent paying down the district’s ballooning debt payments and pension obligations. Those payments are devouring the revenues normally spent on running schools every day. Last year, CPS spent $1.24 billion on debt and pension payments—$603.8 million and $638 million, respectively.
Those debts will only continue to grow into the future.

Asia's rising economic stars lose luster on China's slowdown

The slump, which spans India to Malaysia and South Korea, is partly a consequence of China's deceleration -- to a growth estimated at 6.8 percent for last quarter, behind the government's target for about 7 percent for 2015.
Making things worse is that, unlike the global slowdown in 2008-09 when Asia was primed to unleash stimulus, this time the region is saddled with debt.

In Drought, Puerto Rico Rations Water, Setting Off a Collection Frenzy

For 160,000 residents and businesses on the island, water is turned off for 48 hours and then back on for 24 hours, sending people into a frenzy of water collection. Another 185,000 are going without water in 24-hour cycles, and 10,000 are on a 12-hour rationing plan.

Taiwan's debt obligations total almost NT$24 trillion: TIER

The total of these obligations over the next 30 years will be an estimated NT$17 trillion to NT$18 trillion, which when added to public government debt totals nearly NT$24 trillion, or about 160 percent of Taiwan's current GDP.

China Said to Consider Extra 1 Trillion Yuan Debt-Swap Quota

The new quotas will be in addition to the 2 trillion yuan already granted as part of a program to convert high-cost existing debt maturing this year into low-yielding municipal bonds. Local authorities have 1.86 trillion yuan of debt that matures in 2015, as well as a further 919.3 billion yuan in contingent liabilities, according to a government audit report based on data as of June 2013.

Korean zombie companies threaten banks’ books as economy slowing

The central bank, which has cut rates to a record low and trimmed its 2015 economic growth forecast to 2.8 percent, has said some of these companies, labeled hangye or ‘marginal’ in Korean, may be staying alive by taking advantage of low borrowing costs to pile on more debt. Loans to shipbuilders, steelmakers and shippers pose the biggest threat to banks, according to Moody’s.

Brazil Retail Sales Fall More Than Forecast as Recession Looms

The fourth consecutive drop reflects the impact of higher joblessness, accelerating inflation and near record-low consumer confidence in Latin America’s largest economy. The slowdown in families’ spending, which has been the motor of economic growth for the last decade, has been exacerbated by policy makers raising borrowing costs to damp price increases.

Europe fails to rid itself of deflation threat

Data on Tuesday underlined that central banks across the continent are making little headway in boosting inflation despite flooding their economies with cash through rock-bottom interest rates and/or outright money-printing.
At the same time, commodity prices, especially for oil, are falling on a number of factors, including an economic slowdown in China, and should feed even lower inflation over time.

China May Tip World Into Recession: Morgan Stanley

That is the prediction from Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, who says a continuation of China’s slowdown in the next years may drag global economic growth below 2 percent, a threshold he views as equivalent to a world recession.

Italy's public debt reaches new record high

Italy's public debt has risen to a new record of 2.2 trillion euros ($2.4 trillion), up by 23.4 billion euros in May. The figure published by the central bank on Tuesday brought recriminations by opposition politicians against Finance Minister Pier Carlo Padoan for not bringing down the debt load, which had even at lower levels threatened a sovereign debt crisis.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/14/15

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."


DennisC's picture
Status: Gold Member (Offline)
Joined: Mar 19 2011
Posts: 351
"unsustainable borrowing", ROTFLMAO

Is that a new code phrase for "we have no intention, or means, to pay back the funds we plan to borrow (from you unfortunate bagholders)"?

saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4262
Japan, White House Cut Growth Forecast


  1. Japan's Central Bank Trims Growth Forecast
  2. White House Cuts Growth Forecast for 2015, 2016
  3. Bank of Canada cuts main interest rate to 0.50%
  4. China growth beats forecasts but stocks dive again
  5. Chinese economic growth based on 'money created from thin air'
  6. Ratings agency S&P says Nigeria can't avoid devaluation, Central Bank won't budge
  7. Russia Sees Steep Rise in Fake U.S. Dollar Bank Notes
  8. Fed sees some signs investors 'reach for yield' in credit markets
  9. US facing $1 trillion pension shortfall
  10. Utah's Debt at $2.5 Billion
  11. Cook County Board To Debate Preckwinkle’s Proposed Sales Tax Hike
  12. Interest payments on their way up (Manitoba)
  13. Puerto Rican financial crisis drives migration to Central Florida
  14. Decaying modern Rome 'needs a miracle'
  15. Chicago Faces Yield Penalty in 'Clean-Up' Deal
  16. Moody's: UK consumer debt boom leaves borrowers vulnerable to economic shocks
  17. Debt Crisis: Greeks Say Bailout Austerity Will Cause a 'Revolution'
  18. Varoufakis Attacks Greece’s New Bailout Agreement
  19. Greek deputy finance minister resigns over bailout deal
  20. Greek civil servants, pharmacists strike against bailout reforms
  21. Spain’s Podemos attacks Greek bailout deal
  22. Calpers Chief Sees Interest Rates as Greatest Portfolio Stress
  23. Russian Industry Drops for Fifth Month, Longest Slump Since 2009
  24. Standard & Poor's cuts Puerto Rico's financing arm, says default certain
  25. Moody’s Visit Puts Brazil on Edge, Sending Stocks and Real Lower
  26. Short on cash, H.H.C. considers seasonal borrowing (New York)
  27. Study: Michigan’s unfunded pension liabilities increase
  28. What America Thinks: What If A State Goes Broke?
  29. NJ Transit fares increased 9 percent



Tall's picture
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Posts: 564
IMF stuns Europe with call for massive Greek debt relief

The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a full moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression.

"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report.

Greek public debt will spiral to 200pc of GDP over the next two years, compared to 177pc in an earlier report on debt sustainability issued just two weeks ago.

The findings are explosive. The document amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief.


Time2help's picture
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2903
Good cop, bad cop
Tall wrote:

The document amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief.

Good cop, bad cop. Nation-states like Germany are bad, IMF good. More theatrics.

saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4262
This is how much land prices have changed, and how much they hav

This is how much land prices have changed, and how much they haven’t


saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4262
Puerto Rico Default Would Trigger Humanitarian Crisis

"The fact of the matter is the $73 billion in debt that Puerto Rico can’t resolve could lead to a humanitarian crisis unlike any Puerto Rico has ever seen," Schumer told reporters. "We are talking about the potential loss of critical public services, schools shutting their doors, ultimately the shutting down of government across the island."


Any doubt about the future for the average Puerto Rican citizen?

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Grab Your Binoculars.

An asteroid will be passing by, close enough to be visible by binoculars. There is nothing like seeing the object with your own eyes to bring home the threat.

One of those babies hits and the whole conversation changes. Ideology will be SO  yesterday. 


Michael_Rudmin's picture
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 971
Wow, a bankrupt Puerto-rican government could be bad

Just ask the Lithuanians about their horrors in the 1990s, with almost no government. After Russia let them go, they had almost no laws, an apartment and 1/4 acre garden each, no jobs until they started their own businesses, so much freedom that they didn't even talk about it.

They had markets where you could buy a kilo of potatoes for 25 cents, handmade baskets of steel wire for four bucks, handmade vegetable peelers for a dollar.

Fortunately, into that horrible humanitarian crisis came salvation from companies like Phillip Morris, helping them privatize their cigarette industry (klaipedos cigarrettes), and various petroleum companies, not to mention the EU which helped them shut down their just-modernized nuclear reactors.

Surely if Puerto Rico runs out of government, something will have to be done by us Free-n-brave (tm) Americans.

Michael_Rudmin's picture
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 971
One of those hits land, and we might get mass fires and ice age

Yes, an asteroid hitting land could be real bad. However, worse would be an asteroid hitting obliquely into the mantle below iceland or Hawaii.

Those plumes, I think, are caused by a collection of calcium-uranium bergs below the mantle; vapor pressure keeps them separated enough not to go super-critical.

But knock one into the center, and it blows sky high, making an 950-mile-radius shock cone of kimberlites around and downstream of it, just like the diamond ring from Venezuela to North Africa, to North India, to Australia (and including the African Karoo). Then the shock waves rush through the mantle and the compression triggers the other to blow, making an 850-mile radius ring of kimberlites just like that around the Hudson bay. And out of the center of each blows an asteroid -sized collection of mantle and crust, enough to make 1/16 of the moon. And the tensile forces crack open a new ocean that continuousl grows, just like the Atlantic Ocean did when it split from the Karoo to the Hudson, during the Permian extinction's first moments.

saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4262
saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4262
AWOL Canada Exports Probably Mean Poloz Will Cut Key Rate Again

"Debt Purchases

Poloz told reporters he has “a fair bit of room to maneuver” if more stimulus is needed, citing tools such as quantitative easing Canadian officials outlined during the financial crisis. QE is when a central bank whose policy rate is at or close to zero undertakes large-scale debt purchases to lower market interest rates."


lunableu22's picture
Status: Bronze Member (Offline)
Joined: Oct 19 2011
Posts: 41
Primary Water

Just found out about this.  Looks like there may be plenty of water available.



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