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Daily Digest 12/30 - PR On The Brink Of Default, Putin's Bailout Bank Needs $18B

Wednesday, December 30, 2015, 10:13 AM


Student loans: Borrowers will get robocalls, thanks to Congress

If you’re behind on your government student loans, your mobile phone may soon begin ringing with calls from debt collectors. Your friends and family may hear from them, too, thanks to Congress.

Key Funding Source for Miners Is Depleted

Contending with falling profits and hefty debt payments, mining companies such as Glencore PLC and Vale SA this year increasingly turned for cash to specialist lenders who pay large lump sums in exchange for metal deliveries.

Chinese Bond Defaults Seen Rising as Borrowing Costs Climb

More firms in China are struggling to repay debt amid the worst economic slowdown in a quarter century. The number of listed companies with more debt than equity has jumped to 913 from 705 in 2007, according to data compiled by Bloomberg. Three Chinese manufacturers said last week that they lack funds to repay bonds due this month.

Obamacare Patients Spend 10% Of Income Out Of Pocket Despite Government Subsidies

“We show that despite the additional assistance available, individuals across the income distribution who are ineligible for Medicaid can still face very high expenditures,” authors of the report, released last week by the Urban Institute, said. “10% of marketplace enrollees with incomes between 200% and 500% of (the federal poverty level) will spend more than 21% of their income on healthcare costs.”

Without any benefit cuts, Obamacare costs to rise

But the changes have had no effect on the millions of new Obamacare customers or Medicaid enrollees — only on the president’s promise that his health care program wouldn’t add to the deficit.

Taiwan’s youth struggle as govt workers seek pensions

The plight of young workers such as Mr Tsai highlights a serious problem for Taiwan, which has gone from a young and vibrant Tiger economy to ageing and unsteady in just two generations. The working-age population is not growing fast enough, nor earning nearly enough to pay for their parents’ retirement.

Oregon PERS costs to rise by billions

The rising costs stem from an Oregon Supreme Court case, Moro v. State of Oregon. The decision said the state can't retroactively decrease pension benefits promised to employees. The Moro decision raised PERS unfunded actuarial liability costs by $5.1 billion overnight. Total unfunded liabilities are more than $18 billion, according to the most recent estimates.

Japan Steelmakers Fall as Inventories Rise Despite Output Cuts

Steelmakers led declines in Japan after an increase in stockpiles signaled a slower pace of a recovery as global peers struggle with overcapacity.

Congress loses interest in the deficit: Our view

All by themselves, the latest measures will add an estimated $830 billion to the deficit over the next decade. Even in Washington, that’s real money, equal to roughly 20 years of all federal spending on agriculture, for example. Roll in some of the other things Congress quietly borrowed money to pay for this year, and lawmakers have added about $1.2 trillion to the debt between now and 2025.

Wall Street Predicts Corporate America's Bond Binge Will Go on

Wall Street’s biggest dealers are forecasting that blue chip U.S. companies will sell more than $1 trillion of bonds for a fifth straight year in 2016 as corporate America’s borrowing binge endures beyond the end of the Federal Reserve’s zero-rate monetary policy.

Saudi Stocks Drop as World's Biggest Oil Exporter Cuts Subsidies

The kingdom reduced energy subsidies and intends to cut spending in 2016 to 840 billion riyals ($224 billion) from 975 billion riyals this year.

Brazil primary budget deficit swells, debt seen climbing

In December, Fitch became the second credit ratings agency to cut its Brazilian debt from investment-grade to junk status, which meant that many foreign investments funds, under their bylaws, could no longer invest in the country.

Puerto Rico is on the brink of a big default

The island's government must pay about $1 billion to its creditors on January 4 to avoid defaulting for the second time since August. Even if it pays on time, Puerto Rico will still be saddled with a ton of debt -- roughly $73 billion in total, according to Moody's. The odds of Puerto Rico making the January payment aren't good.

Credit card debt projected to reach $900 billion by New Year's Day

Cardhub.com released data that shows spenders racked up $15.3 billion in the third quarter, bringing total outstanding credit-card debt to $871.9 billion.

Top Wyoming oil companies write off $41 billion in assets

"For some of these companies it may be crippling because instead of spending money to drill new wells, they will have to spend money to plug and abandon wells that have hit the end of their productive life," said Ed Hirs, a professor of energy economics at the University of Houston and managing director of Hillhouse Resources LLC, a Texas-based oil and gas company.

U.S. companies led the world in debt defaults in 2015, S&P says

As of last week, 111 companies worldwide had defaulted on their obligations, the highest tally since 2009 when the the figure hit 242 for the same period. About 60 percent of this year's global defaults have come from U.S. borrowers, Vazza wrote, up from 55 percent a year ago, when 33 of 60 defaulters were American.

Oil-Producing States Battered as Tax-Gushing Wells Are Shut Down

In Kern County, California, one of the nation’s biggest oil producers, tumbling energy prices have wiped more than $8 billion from its property-tax base, forcing officials to tap into reserves and cut every department’s budget. It’s only getting worse.

Putin's Bailout Bank Needs a Rescue; It's an $18 Billion Whopper

Hit by Western sanctions last year, VEB has stopped new lending. The cost of its bailout could reach 1.3 trillion rubles ($18 billion), according to several senior government officials, ballooning the budget deficit at a time when plunging oil prices are forcing spending cuts.

Gold & Silver

Click to read the PM Daily Market Commentary: 12/29/15

Provided daily by the Peak Prosperity Gold & Silver Group

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