Daily Digest

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Daily Digest 11/25 - Global Debt Defaults Near Milestone, Household Debt Rises At Record Rate

Wednesday, November 25, 2015, 12:12 PM

Economy

Puerto Rico Bond Payment Overshadows Debt Exchange Optimism

Puerto Rico and its agencies owe $70 billion. Officials are seeking to reduce that debt load by delaying principal payments or asking investors to take a loss in a debt exchange. The island’s economy has failed to grow since 2006.

Singapore oil borrowers seeking more slack to avoid bond defaults

Borrowers in Singapore, so far spared from a wave of defaults in the oil services industry, are starting to ask creditors to cut them some slack.

Global debt defaults near milestone

Investors have become increasingly concerned about the state of the credit market, reflecting how companies have borrowed heavily against the backdrop of low interest rates during the era of easy money. Since 2007, the proportion of corporate bonds S&P has rated speculative-grade, or junk, has climbed to about 50 per cent from 40 per cent.

TVA racks up $6 billion shortfall in its employee pension fund (Tennessee)

TVA's pension plan, which provides benefits to 23,700 retirees and also includes nearly 10,000 active TVA employees, reported assets of $6.8 billion as of Sept. 30, or only 53 percent of the $12.8 billion that actuaries estimate the plan needs to provide all of the future benefits promised to TVA workers and retirees.

Quarter of adults struggling to cover healthcare costs, high deductibles, Commonwealth Fund says

A new report by The Commonwealth Fund has found that a quarter of working-age adults struggle to pay for their healthcare in 2015 in the wake of rising deductibles and out-of-pocket costs. The Health Care Affordability Index report also found that among adults with low incomes, 53 percent simply can't afford healthcare.

Gov. Tom Wolf: Deal to end budget stalemate 'in deep peril' (Pennsylvania)

The deal would raise the 6 percent sales tax by 21 percent to 7.25 percent — and to 8.25 percent in Allegheny County and 9.25 percent in Philadelphia. The extra money would cover most of the state's $1.3 billion deficit, offset some local school property taxes and add about $350 million in education spending. Other money would be shifted to cover ballooning pension costs.

U.S. GDP growth raised for third quarter

In the third quarter, businesses accumulated $90.2 billion worth of inventories, instead of the $56.8 billion reported last month. That followed more than $100 billion worth of inventories accumulated in each of the prior two quarters.

Chinese fertiliser firm says may not be able to make bond payment

Chinese bond defaults have been accelerating this year as the construction, heavy industry and mining sectors remain under severe pressure from weak demand and falling factory gate prices. Following the latest default by China Shanshui Cement Group Ltd in early November, more than 40 companies have delayed or cancelled more than 40 billion yuan of bond issuance.

Chicago pension ruling seen a loss as retirement costs climb

As Chicago awaits the ruling on whether Mayor Rahm Emanuel's plan to save its retirement funds from insolvency is dead or alive, investors are already marking the fight down as a loss that will strain city coffers and boost pension costs by billions.

S&P revises outlook on Mass. debt to ‘negative’

The current balance of the rainy day fund is $1.25 billion, down from $2.3 billion in the summer of 2007, before the Great Recession. Credit analysts generally want to see emergency funds building up in times of economic growth, as Massachusetts has experienced in recent years.

Japan’s government urged to cut doctor fees, drug costs

Japan’s economic health is the worst among industrialized nations with public debt at more than 200 percent of nominal gross domestic product. A deficit in the primary balance means the government cannot finance its annual budget, excluding debt-servicing costs, without issuing new bonds.

California launches DebtWatch open data site

California’s new open data website, DebtWatch, provides details about $1.5 trillion in debt issued by state and local government entities.

Household debt rises at fastest rate on record (Korea)

Korea’s household debt and credit card spending not only reached a new high in the third quarter but also grew at the fastest pace since data has been compiled due to a percolating real estate market and the government’s encouragement of consumer spending to help the economy.

National debt spikes $578 billion in three weeks

Before the debt ceiling was suspended, the national debt stood at $18.15 trillion. But over the last 22 days, it soared $578 billion. As of Friday, total national debt stood at $18.72 trillion.

‘Bad Bank’ Sees More Chinese Debt Souring as Economy Slows

China’s slowing growth will lead to more bad loans on bank balance sheets, according to a new estimate from one of China’s official bad-loan buyers, putting further strains on the country’s financial system.

Deflation, then versus now: Is Singapore in crisis as consumer prices fall?

Singapore officially entered its twelfth consecutive month of deflation in October, after the Consumer Price Index (CPI) fell to -0.8%. This marked the largest fall in headline prices since the Global Financial Crisis six years ago, and also represented the longest stretch of deflation since the last deflationary period from June to December 2009.

CalSTRS, CalPERS okay risk reduction

Despite a major bull market, the pension funds have not recovered. The CalPERS fund, valued at $295 billion, has about 74 percent of the projected assets needed to pay future pensions. CalSTRS, with $188 billion, is about 69 percent funded.

Australian economic forecasts cut as Treasury predicts slower growth for longer

Treasury officials have cut Australia’s economic growth forecast and predicted that the federal budget will remain in deficit for longer than previously thought.

Stung by Oil, Distressed-Debt Traders See Worst Losses Since '08

After six years of easy-money central-bank policies kept over-leveraged companies afloat and left scant opportunities for traders who profit off the market’s scrap heaps, a rout in commodities prices in 2014 presented what had seemed like a perfect chance to buy again. Instead, those prices only declined further this year, causing the debt of everyone from oil drillers to coal miners to fall deeper into distress. As the losses intensified, gun-shy investors pulled back from almost anything that smacked of risk, spreading the losses to industries from retail to technology.

Number of people served by food bank rising (Rhode Island)

Each month the food bank serves thousands of people, and that number keeps going up instead of down. 60,000 thousand people in Rhode Island turn to the Rhode Island Food Bank, shelters, and community centers for help putting food on the table--a sharp increase from 33,000 people eight years ago.E

Russia says recession over but economic pain goes on

As Russia has been roiled by its economic crisis the poverty rate has climbed to 15.1 percent, representing 21.7 million people, according to the World Bank. In some regions, more than 35 percent of the population live in poverty, it said.

More Young Adults Live With Their Parents Now Than During the Recession

The share of 18-to-34-year-olds living with their parents was 31.5% as of March 2015, up from 31.4% last year, according to a report from the Commerce Department on Monday. In 2005, just 27% of young adults lived with their parents, a number that has climbed pretty steadily since then.

Japan to raise minimum wage by three percent to boost consumption

Raising wages is an urgent task for policymakers as Tokyo is keen to ramp up consumer spending, which is seen as crucial to boosting domestic demand and pulling the economy out of 15 years of deflation.

Four nations risk breaking EU budget rules in 2016: euro zone finmins warn

This year, the Commission said Italy, Lithuania, Austria and Spain were at risk of breaking the rules and that France would fail to meet some fiscal goals set out by EU finance ministers.

Turkey prices hit record highs — but you should still be thankful

With turkey prices at their highest, the average total price of Thanksgiving dinner for 10 people will be $50.11 this year, up from $49.41 in 2014. Prices of other items the Federation surveyed rose as well, including sweet potatoes, pumpkin-pie mix, cubed stuffing, pie shells and rolls, but the turkey’s price jump was the largest.

Gold & Silver

Click to read the PM Daily Market Commentary: 11/24/15

Provided daily by the Peak Prosperity Gold & Silver Group

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5 Comments

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

The author used the word "growth" 11 times and the word "growing" once.  Clarke and Dawes did  a comedy skit on growth.  I guess he missed it. 

http://www.theguardian.com/business/2015/nov/24/australian-economic-fore...

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 428
Re: Growth

There is plenty of Growth. You just have to look in the "right" places. There's growth in: Debt, Unemployment, Bankrupties. By Golly we are clearly in an economy of growth! /sarc

 

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2839
Explosive Growth
 
 
Uncletommy's picture
Uncletommy
Status: Platinum Member (Offline)
Joined: May 4 2014
Posts: 586
Re: growth.

If you missed it, Arthur; I didn't

https://www.google.ca/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=clarke%20and%20dawe%20growth

By the way, my last Tom dressed out at 32 lbs. and I had to saw it in half to fit it in the oven. Now that's growth.

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2839
Happy Thanksgiving

Have a great holiday season everyone!

(And for all you Canadians, a somewhat belated...)

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