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Daily Digest 12/23 - Sued Over Old Debt, Oil Collapse Sees Venezuela Burning Through Savings

Wednesday, December 23, 2015, 10:51 AM

Economy

Kremlin says to consider possible counter measures after new round of U.S. sanctions

"This is continuation of this unfriendly stance toward Russia, continuation of the stance which has a devastating impact on bilateral relations," Peskov told reporters on a conference call.

Zimbabwe to adopt Chinese yuan as legal tender in debt write-off

The yuan hasn’t been approved yet for public transactions in the Zimbabwean market which is currently dominated by the US dollar.

Sued Over Old Debt, and Blocked From Suing Back

Mr. Cain said he never knew the lawsuit had been brought against him until the money was gone. Neither did other Baltimore residents who were among the hundreds of people sued by the collector, Midland Funding, a unit of the Encore Capital Group, in Maryland State Court. Some of them said they did not even owe any money, or their debt had long expired and was not legally collectible, according to a review of court records.

Scranton School District OKs 2016 budget, still searching for $31.2M to avoid default

“It’s with a heavy heart, but the state has our backs against the wall,” board President Bob Sheridan said of the tax increase that will raise bills $33 for every $10,000 in assessed property value. “They left us no alternative.”

Brazil loan defaults hit 33-month-high as recession deepens

The default ratio has grown from about a full percentage point over the past year, as rising unemployment and stubbornly high inflation also eroded the ability of companies and households to pay their debt. Latin America's largest economy shrank by an annual 4.5 percent in the third quarter, the steepest drop since the current data series began in 1996.

Death-Tax Fear Drives Portuguese Families to Pass Firms to Heirs

Peter Villax, head of the Portuguese Family Business Association in Lisbon, says several family-owned companies have transferred ownership to their children since the new Socialist government submitted a program to parliament on Nov. 27 saying it may create a tax for any “inheritance of high value” to contribute to a “fairer society.” Before the Oct. 4 election, the Socialists had proposed taxing any inheritance of more than 1 million euros ($1.1 million).

Stopgap budget equals state employee layoffs, lots of them, administration analysis says (Pennsylvania)

According to Gov. Tom Wolf's budget office analysis, about 8,000 employees would be furloughed if the $28.2 billion stopgap budget that the House is planning to vote on Wednesday were to be enacted.

Nigeria expects 2016 deficit to double as Buhari unveils record budget

Nigeria expects its deficit to double to 2.2 trillion naira ($11 billion) in 2016, President Muhammadu Buhari said on Tuesday, as the government tries to overcome an economic crisis with a record budget and a tripling of capital expenditure.

Alberta's finance minister says low oil price may delay government programs

Alberta’s finance minister says low oil prices may force him to hit the brakes on millions of dollars in initiatives promised by the NDP government such as child-care benefits, school fee reductions, student hiring and environmental retrofits.

Japan flags inflation target fudge as commodity rout deepens

Japan's economics minister is laying the groundwork for the country's central bank to fudge its own inflation target as the global sell-off in commodities pushes the consumer price goalposts further away.

RPT-Italian bank rescue leaves bitter families marooned

Last month, the value of the bonds was wiped out overnight as the government saved Giannoni's bank, Banca Etruria, and three other small lenders from bankruptcy under tougher European Union rules that require shareholders and holders of junior or subordinated debt to shoulder some of the pain in a bank rescue.

Chicago Public Schools' credit rating takes yet another hit

The district has not yet gone to market on more than $1 billion in bonds the school board unanimously approved issuing this summer. But with district analysts saying CPS could run out of cash and credit by next month, the board plans to push forward in January despite what could be punishing borrowing costs. CPS' debt load will reach $7 billion after it goes to market with its latest bonds, district officials said.

IRS gains power to revoke tax scofflaws' passports

Some details still need to be worked out, but the new passport rule indicates the government wants to get serious about collecting unpaid tax debts. The IRS reported 12.4 million delinquent accounts owing nearly $131 billion in assessed taxes, interest and penalties in 2014.

SC pension system faces $11 billion shortfall, report says

“The LAC’s report reveals that our retirement and pension system’s longevity is in jeopardy and in need of immediate effective adjustments,” S.C. House Speaker Jay Lucas, R-Darlington, said in a statement. “Thousands of South Carolinians have voluntarily contributed to this program and their hard-earned dollars should always be managed in a way that produces the highest return possible.”

Distressed loan buyers muddy India's bad debt picture

Instead, at a time when regulators are pressing the banking sector to clean up balance sheets, the so-called ARCs are striking mostly paper deals that help lenders extend provisioning by years, camouflaging the scale of their woes.

Euro Yields Drift Further From Ratings After $531 Billion of QE

With low growth and political risks enduring, many downgrades made in the financial crisis still haven’t been reversed, and countries such as Portugal remain at the brink of losing the ratings status needed for QE eligibility.

This parent trap involves $71 billion of federal education debt

That's because parents can borrow tens of thousands of dollars a year for their kids' college education without showing they can pay it back. About 3 million parents have $71 billion in loans, contributing to more than $1.2 trillion in federal education debt. As of May 2014, half of the balance was in deferment, racking up interest at annual rates as high as 7.9 percent.

India Plans Price Curbs to Stem Chinese Steel Import Deluge

Producers including China and Russia are aggressively selling steel at low prices, forcing governments from India to the U.S. to impose protectionist measures. Faced with a glut of domestic production, surging imports and prices trading around a six-year low, Indian steelmakers have sought safeguards against increasingly cheaper imports.

Political uprising in Spain shatters illusion of eurozone recovery

"Our message to Europe is clear. Spain will never again be the periphery of Germany. We will restore the meaning of sovereignty," said Podemos

Osborne Xmas headache: Britain's borrowing INCREASES and debt reaches £1.53TRILLION

it means it's nearly impossible for George Osborne to reach his public finance targets for the year. In a huge blow for the Chancellor, public sector net borrowing INCREASED by £1.3bn compared to November 2014 to reach £14.2bn last month.

China’s local govt debt to reach $US2.47 trln

The cap doesn’t include indirect liabilities, which officials said in August totalled 8.6 trillion yuan. Beijing has been grappling with a debt overhang after its massive stimulus package to kickstart growth during the global financial crisis.

PBOC Injects More Cash as Top Leaders Flag Additional Stimulus

The People’s Bank of China auctioned 30 billion yuan ($4.7 billion) of seven-day reverse-repurchase contracts in its open-market operations on Tuesday at a yield of 2.25 percent, up from 10 billion yuan a week earlier. Monetary policy must be more "flexible" and fiscal policy more “forceful” as leaders create “appropriate monetary conditions for structural reforms,” according to statements released at the end of the government’s Central Economic Work Conference.

Japan govt: stimulus to add 0.6 pct point to GDP over next 3 yrs

The $27 billion stimulus package features cash handouts for some pensioners, benefits for farmers and incentives to increase capital expenditure but has disappointed many economists who were hoping for far-reaching reforms to raise potential growth.

Oil halts decline as emerging market stocks climb on talk of China stimulus

China’s government said late yesterday that monetary policy must be more “flexible” and fiscal spending more “forceful” to combat slowing growth in the world’s second-largest economy.

Oil Collapse Sees Venezuela Burning Through Its Savings: Chart

Venezuela has $5.2 billion of bonds and interest to pay in the next 12 months, and the collapse in oil means the spendthrift government of President Nicolas Maduro may now struggle to meet its $1.5 billion debt payment in February.

U.S. economy set to grow less than 3% for the 10th straight year

The economy expanded a touch slower in the third quarter than previously reported, revised government figures show, but the path of growth is still the same: The U.S. running well below the historical norm more than six years into a recovery.

Gold & Silver

Click to read the PM Daily Market Commentary: 12/22/15

Provided daily by the Peak Prosperity Gold & Silver Group

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9 Comments

saxplayer00o1's picture
saxplayer00o1
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Posts: 4066
China Seen Further Easing Monetary Policy as Growth Grinds Lower

China Seen Further Easing Monetary Policy as Growth Grinds Lower

Bloomberg-12 hours ago
Major banks' reserve required ratio -- the proportion of deposits that must be locked away at the central bank -- will be 15 percent by the end of 2016, from 17.5 ...

Three More China Firms Face Trouble in Bond Payments

Bloomberg-9 hours ago
Three Chinese companies have said they lack funds to repay bonds due in .... as the yield advantage of China's sovereign debt over U.S. Treasuries fell to the ...
 

Singapore Consumer Prices Decline for Longest Streak Since 1987

Bloomberg-10 hours ago
Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong ... as the yield advantage of China's sovereign debt over U.S. Treasuries fell to the ...

Indian Bonds Complete Weekly Decline on Fiscal Deficit Concern

Bloomberg-4 hours ago
The yield premium that investors demand to hold dollar-denominated high-yield Chinese bonds over U.S. Treasuries declined to a two-year low of 607 basis ...
 

Brazil's central bank slashes 2015 GDP estimate

MarketWatch - ‎4 hours ago‎
SÃO PAULO--The Brazilian central bank's outlook for the economy worsened in the fourth quarter mainly because of the country's uncertain political situation, according to the bank's quarterly inflation report. The bank raised its estimate for inflation ...

In the Year's Final Indignity, Slime Coats Brazil's Pristine Beaches

Bloomberg-7 hours ago
... feature in the oil rout in the 1970s, Latin American debt turmoil in the 1980s, ... percent in the third quarter from the previous three months to 1.2 trillion yuan.

Puerto Rico Payment Almost Impossible, Governor Reiterates

Bloomberg-17 hours ago
... certain agency bonds to the central government's coffers, referred to as a claw-back. .... Central bank Governor Valeriya Gontareva said Thursday that political ...
 

Pension risks point to higher 2016 borrowing costs for some US cities

Reuters-21 hours ago
When interest rate spreads widen on a city's general obligation (GO) debt, ... liabilities rose nationally to a near three-year high of $1.71 trillion combined, ...

Record budget impasse belies fix to pension disaster in Illinois

Chicago Tribune-18 minutes ago
Home to the least-funded state retirement system in the nation, Illinois has $111 billion of pension debt, which breaks down to more than $8,000 per resident.

Southern Illinois cities struggle with rising pension costs

WSIL TV-15 hours ago
WSIL -- Many Southern Illinois cities are struggling to keep up with rising pension costs for police and firefighters. In Herrin, city leaders have proposed raising ...

More than 10% of Korean Firms are Chronic Zombie Companies

BusinessKorea-11 hours ago
... two separate occasions, and that their total debt amounted to 228 trillion won (US$194 billion) as of last year, equivalent to 14.1 percent of total corporate debt.

Number of migrants reaching Europe this year passes 1 million

CNN-21 hours ago
... already grappling with the Eurozone debt crisis, with a fresh challenge – one that ... has set aside more than $6 billion to help feed and house the new arrivals.

Fiscal situation grim as Newfoundland and Labrador deficit hits $1.9 billion

CBC.ca - ‎20 hours ago‎
A worsening market for crude has made an already dire fiscal situation in oil-dependent Newfoundland and Labrador even worse, with the new premier revealing Tuesday that the province is now expected to rack up a $1.96-billion deficit this fiscal year.

Watchdog says state may face $1 billion budget gap

The Boston Globe-16 hours ago
... larger next year, adding $200 million for public employee pension obligations. Adding that money plus other mandatory costs, he said, “the billion gets spoken ...

 

thc0655's picture
thc0655
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Fed intentionally destroying the dollar?

Well here's a contrarian among contrarians.  Brandon Smith continues to say that the US private central bank (the Fed) is intentionally destroying the dollar and the US economy.  He correctly called the Dec. rate increase and he's calling for four more in 2016 even in the midst of a collapsing economy.  It seems to me his analysis, as radical as it is, fits the evidence as well or better than anything else I've seen (the Fed's trying to save the economy but they're trapped in a trap of their own making, they're making big mistakes, etc.).

http://www.alt-market.com/articles/2769-what-fresh-horror-awaits-the-economy-after-fed-rate-hike

There is one predominant reality that must be understood before a person can grasp the nature of the Federal Reserve and the decisions it makes, and that reality is this: The Fed’s purpose is not to defend or extend American markets or the dollar; the Fed’s job is ultimately to DESTROY American markets and the dollar. I have been repeating this little fact for years because it seems as though many otherwise intelligent people simply will not accept the truth, which is why they have trouble comprehending the actions that the Fed initiates.

When analysts make the claim that the Fed has positioned itself "between a rock and a hard place" in terms of policy, this is not entirely true.  The Fed is exactly where it wants to be in terms of policy; but the central bank has indeed positioned the U.S. ECONOMY between a rock and a hard place, by design.

Globalists see the U.S. dollar and the U.S. economy as expendable (for the most part), and this sacrifice is meant to create distracting chaos as well as geopolitical advantage towards a new fully centralized world economic system.  You can read the considerable evidence for this agenda in my article 'The Fall Of America Signals The Rise Of The New World Order'.

If you believe the Fed is the sole purveyor of the global economic crisis and is at the top of the internationalist pyramid, then you probably predicted that the privately controlled central bank would “never in a million years” raise interest rates (many prominent people within the alternative economic scene did). If you believe that the Fed’s primary goal is to prolong the life span of the “American empire,” again, you probably predicted that the Fed would never raise interest rates. There is a serious normalcy bias when it comes to parts of the alternative economic world and their position on the Federal Reserve. They refuse to acknowledge that the Fed is a deliberately preset time bomb meant to vaporize the U.S. economic system and currency. And as long as this continues, they will never be able to determine what is likely to happen next within our fiscal structure...

I believe the Fed will continue to hike rates throughout 2016 despite any current or future negative economic signals. It has ignored the global contraction so far and will ignore future events. Why? The Fed is setting the stage for a collapse. Period.

Mainstream analysts claim skepticism over the Fed’s publicly announced “dot plot” schedule of at least four rate hikes in 2016. I am not skeptical. I think they are going for broke and opening the gates to fiscal hell.

But wouldn’t rate hikes result in a stronger and more desirable dollar? Possibly, in the short term. However, many people are unaware that a supposedly “strong” dollar index relative to other national currencies is just as much a death knell for the greenback as a weak dollar index...

I do not see all of these economic developments taking place in an open vacuum. It makes far more sense for them to progress in the background during geopolitical upheaval with terrorism being the main distraction for the general public. I believe 2016 will be labeled the “year of the terrorist,” as ISIS attacks expand to every corner of the U.S. and in numerous EU nations. This “fog of war” is completely necessary to hide the actions of the most dangerous terrorists: international financiers and elites bent on morphing entire global political and financial structures into something more centralized and more sinister.

Other distractions are certainly possible, but there are far too many trigger points around the world at this time to make any kind of prediction as to which ones (if any) will be used. The false East/West paradigm continues and is useful in that it provides a rationale for the eventual dump of the U.S. dollar by Eastern nations (including China). Russian and NATO tensions could be used to foment regional wars or even a world war if that is in the cards. I do not see this as the endgame, though.

Rather, economic collapse is the greatest weapon at the disposal of globalists. National panic, riots, looting, starvation, magnified crime: All of these things result in mass die-offs and desperation. Desperation leads to calls for "strong leadership", and strong leadership usually results in totalitarianism. It might seem sensationalist to tie all of these possible outcomes to the Fed rate hike decision, but give it a little time. Those who make accusations of sensationalism and “fear mongering” today will be asserting tomorrow that such developments were “easily predictable.”

Even if Smith is wrong that the Fed is intentionally destroying the dollar and the economy, you know they're in a bad spot if a decent case based on evidence can be made that they are doing it intentionally.  That's some bad performance, and some colossal mistakes!  This is especially true if his theory is having better predictive results than other theories that are based on the concept that the Fed is making mistakes.

"Welcome to the Hunger Games. And may the odds be ever in your favor."

 
TechGuy's picture
TechGuy
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Posts: 367
Re:Fed intentionally destroying the dollar?

For the short term, Rate hikes will straighten the dollar and weaken foriegn currencies. While the Fed's rate hikes will add more drag on the US economy it will do more damage overseas, especially the emerging market economies that are way over extended and rely on US dollars to pay back debt. We'll likely see anarchy in South America (Venezuela & Argentina) which are both hanging by a thread.

For americans, we'll likely see lower Precious Metal & other commodity prices, as well as lower prices for imported goods.The straightening US dollar will likely crush US exporters, but most US companies already move production overseas. Even if the dollar did not straighten, US companies still would have move production overseas because of regulations as well as mandatory wage hikes via minimum wage regulations. Also with the collapse in the Emerging Markets, Demand for US exports would also have declined as EM's can no longer borrow Billions to by foriegn imports.

 The US was already heading into a recession prior to the rate hike, the rate hike will just make it happen sooner. The Fed will not complete all of the planned increases and will be returning back to QE once the US is in the full swing of a recession (probably by this spring or by the summer). that said rate hikes are very unusual in an election year since incombents want to win elections.

The Fed started the path to destruction when it was enacted in 1913. To believe that the Fed is just now working to undermine the US dollar and the US economy would be very near sighted.

 

 

Arthur Robey's picture
Arthur Robey
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Kablooie.

It might do to swivel our  attention towards the Ukraine again. Dmitry  thinks that they have 19 Nuclear  reactors in peril.

How close is Ukraine to a major nuclear accident? Well, it turns out, very close:

Out of the pan and into the fire for the refuges. Well, that's Europe for you. 

 

http://cluborlov.blogspot.com.au/2015/12/on-19th-day-of-christmas.html#more

Luke Moffat's picture
Luke Moffat
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Grim Reading

Arthur,

That makes for some pretty dire reading, even before I got to the reactor section;

"But now the population has been reduced to levels of poverty not commonly seen outside of Africa, and young people are fleeing, or turning to gangsterism and prostitution, to merely survive."

And yes, nuclear reactors in unstable countries is never a good thing. From your same article;

"I hope that you know this already, but, just in case, let me spell it out again. One of the worst things that can happen to a nuclear reactor is loss of electricity supply. Yes, nuclear power stations make electricity—some of the time—but they must be supplied with electricity all the time to avoid a meltdown. This is what happened at Fukushima Daiichi, which dusted the ground with radionuclides as far as Tokyo and is still leaking radioactive juice into the Pacific."

Perhaps they should call time on the party and shut them down now to avert disaster. How long does a power down cycle take? A week? Two weeks?

From Wiki;

"After shutting down, for some time the reactor still needs external energy to power its cooling systems. Normally this energy is provided by the power grid to which that plant is connected, or by emergency diesel generators. Failure to provide power for the cooling systems, as happened in Fukushima I, can cause serious accidents."

Makes you wonder what was in the CIA's Risk Assessment when they decided to toy with the Ukraine - assuming of course they even bothered to look into this kind of stuff
 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Posts: 4066
New taxes coming to SF in 2016

 

New taxes coming to SF in 2016

San Francisco Examiner-7 hours ago
In the next four years, the deficit is expected to increase to $538.4 million, ... provision in the 2011 voter-approved Proposition C pension reform measure.

Unfunded liabilities for Hawaii's state pension increase this year and ...

Pacific Business News (Honolulu)-16 hours ago
Pension funding has been difficult for Hawaii and the state has one of the most ... by the 2014 fiscal year, an $8.6 billion dollar deficit as it extended retirement ...

Illinois dodges rating downgrades ahead of January ...

Reuters-17 hours ago
... participants, size of unfunded pension liability, Pennsylvania credit spread) ... a $4 billion to $5 billion operating deficit and that its unpaid bill pile, a gauge of ...
 

Judge Rejects San Bernardino's Bankruptcy Proposal

Wall Street Journal-2 hours ago
Some pension plans have tried to overcome shortfalls by cutting benefits for future hires or reducing cost-of-living adjustments. But filing for bankruptcy ...

Oil and Gas Bankruptcy Climbs to More than $16 Billion in 2015

Oil & Gas 360-18 hours ago
Samson Resources filed for Chapter 11 protection reporting total debt was $4.3 billion. Its bankruptcy made up roughly 30% of the total dollar value of oil and ...

Public Debt Rises to 64.5% of GDP

KBS WORLD Radio News-12 hours ago
South Korea's public sector debt has neared almost 65 percent of its gross ... year amounted to 957-point-three billion won, or roughly 816 billion U.S. dollars.

After Math Error, Fitch Doubles Student-Debt Downgrade Estimate

Bloomberg-18 hours ago
The bond market's student-debt headache just got bigger -- almost twice as big, in fact, at least for investors who relied on an initial estimate from Fitch Ratings.

With Infrastructure Costs Mounting, Long Beach Faces $212 Million ...

Long Beach Post-14 hours ago
It's expected that over the next decade over $2 billion in funding is needed to ... the current funding level, the city finds itself with a funding deficit of $212 million ...

 

thc0655's picture
thc0655
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Posts: 1517
sand_puppy's picture
sand_puppy
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Posts: 1763
CHS on the way money is created and distributed

from ZH this morning

In the current system, money is created by central and private banks at the top of the wealth/power pyramid, and distributed within the top of the wealth pyramid. The only possible output of this system is rising wealth inequality and debt-serfdom.

1. Those with first access to nearly free money ... have a built-in advantage in buying income-producing assets. The only possible output of this system is the rich get richer as they buy up all the most profitable and lowest-risk income-producing assets.

2. Those who can borrow virtually unlimited sums at less than 1% interest skim vast wealth by loaning the money out to everyone below the top of the pyramid at 4% (mortgages), 8% (other loans), and 18% (credit cards).

TechGuy's picture
TechGuy
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Posts: 367
Luke Wrote: "Perhaps they

Luke Wrote:

"Perhaps they should call time on the party and shut them down now to avert disaster. How long does a power down cycle take? A week? Two weeks?"

 

They won't do that because the power produced from those reactors is there only lifeline. If they shutdown all the reactors than the entire country faces a blackout. 

In the US the situation isn't as dire, but all of the operating reactors have problems. Many of the reactors have cracked and brittle reactor vessels caused by neutron embrittlement. Currently the NRC has an extend and pray policy. The are extending operating licenses because the operators don't have the money to decommision the reactors. By keeping the reactors online, the plant operators can use the revenue to provide maintaince. But they cannot restore the integrity of the reactor vessels. The only way to fix the reactor is to completed replace the reactor. If they shutdown the reactor the lose the revenue need to keep up with maintaince. Decommissioning a reactor is a long and expensive process.

Best option is to not live/work near a nuclear power plant, and not be downwind of a plant either. Also have ground water source since fallout wil contanminate water reserviors.

Luke also wrote:

"Makes you wonder what was in the CIA's Risk Assessment when they decided to toy with the Ukraine - assuming of course they even bothered to look into this kind of stuff'

In my opinion its te US State Dept and the Obama administration. These people are fanaticals and do not look beyond two feet ahead of them. 

 

 

 

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