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Daily Digest 3/30 - Cheap Money Leads To Bad Debts In U.S., Why Greeks Are Ditching Cash

Wednesday, March 30, 2016, 7:09 AM


SCE&G seeks rate increase to help pay for pension costs (South Carolina)

The manufacturers’ group estimates the proposed rate increase will cost commercial customers $1,272 in additional electric rates and manufacturers will pay an extra $65,437 per year.

Kentucky state budget negotiators go another day with no deal

“This is at a time when we have a $38 billion pension liability. And we think it is time to make sure that we put every dollar in that pension, into either KTRS or KERS, to work toward solving that unfunded liability. That will help every facet of government,” Stivers said.

PERS deficit climbs to $21 billion (Oregon)

The deficit stems from high pension costs, poor returns on investments that fund state pensions, and a state Supreme Court decision overturning legislative efforts to rein in pension costs.

Fast facts: Illinois pension systems by the numbers

Based on the market value of assets, which does not include asset smoothing effects, unfunded liabilities totaled $111 billion and the funded ratio 41.9 percent.

Pension crisis looming as UK firms face £800bn black hole

Companies are facing an £800 billion pensions black hole which has almost doubled in size in the past decade, a report has warned.

Cheap money leads to bad debts in U.S.

The average credit rating for the companies on the S&P 500 has dropped to the lowest level in 15 years, according to Standard & Poor's Ratings Services. Even lower than levels seen during the Great Recession, which was what prompted the Fed to act in the first place. When the average rating drops below the reliable BBB level, it usually signals that a spike in defaults is on the way.

Mounting debts could derail China's plans

China's campaign to slim down its bloated industries could be derailed by more than $US1.5 trillion ($A1.97 trillion) of debt in its steel, coal, cement and non-ferrous metal sectors, which threatens to overwhelm local banks.

Federal Judge in Puerto Rico Calls Walmart Tax Unlawful

Puerto Rico has had trouble balancing its budget every year for at least a decade. It accumulated a $72 billion debt, in part, by issuing long-term bonds just to get the cash to balance its budget, a practice widely considered unsustainable. At the time the legislature was amending the alternative minimum tax, it was trying to plug a $125 million budget hole.

Oil Explorers Face Challenge to Secure Financing as Oil Prices Fall

Globally, the net debt of publicly listed oil and gas companies has nearly tripled over the past decade to $549 billion in 2015, excluding state-owned oil companies, according to Wood Mackenzie, the energy consultancy.

Fitch cuts Chicago credit rating in wake of pension ruling

Fitch called Thursday's ruling "among the worst of the possible outcomes for the city's credit quality," while warning the rating could be downgraded further in the absence of "a realistic plan that puts the pension funds on an affordable path toward solvency."

Brazilians scrimp and save in unwelcome surprise for investors

Unemployment in Latin America's largest economy rose to an almost seven-year high of 8.2 percent in February. The deteriorating job market combined with the highest interest rates among major economies has led banks to tighten credit and consumers to shy away from higher-priced items such as cars and appliances.

Imminent QE Boost Sends Spain's 5-Year Debt Yield to Record Low

The nation’s five-year note yield fell six basis points to 0.324 percent, after sliding to 0.321 percent, the lowest since Bloomberg started collecting the data in 1993. Germany’s 10-year bund yield dropped three basis points to 0.15 percent, having reached the lowest since March 1.

Flood of Central Bank Moves Can't Lift World Out of Rut

The concern is that policy makers are mainly putting off the pain for now while adding to the difficulties they’ll face later. What’s more, the meager growth they’ve generated means a downside shock still threatens to sink the world into recession, with central bankers already pressing against the limits of their powers.

Japan’s negative rate bounty sparks calls for fresh spending

For example, the yield on 10-year bonds is now minus 0.095 per cent, compared with 0.22 per cent before the move to negative rates, so the government makes money when it borrows.

The poisonous gift of cheap money in Portugal

Already, the downsides of such single-minded investment are becoming visible in Portugal's property market where prices in lucrative locations especially in the capital Lisbon have gone through the roof, fuelling a mounting speculative bubble. In addition, the cheap ECB money has also caused public debt to start rising again,

Why Greeks are ditching cash for digital barter systems

Barter systems often emerge from monetary societies after unforeseen events make money scarce, historians say: After Rome fell, for example Europeans used barter as a substitute for Roman currency.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/29/16

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."


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A Nightmare is Unfolding in the Great Barrier Reef

A Nightmare Is Unfolding in the Great Barrier Reef (Gizmodo)


If scuba diving in the Great Barrier Reef is on your bucket list, you might want to book tickets soon. This week, marine biologists dropped some horribly depressing news: the Great Barrier Reef is dying. The world’s largest reef is in the midst of a widespread coral bleaching event, and scientists aren’t sure whether it will fully recover.

Over the past few days, Terry Hughes of James Cook University has led aerial surveys of more than 500 reefs from Cairns to Papa New Guinea, including the most pristine sections of the Great Barrier Reef. Everywhere Hughes traveled, he was met with a nightmarish scene—the ghostly white remains of a once vibrant ecosystem. All told, Hughes estimates that 95 percent of the northern Great Barrier Reef is “severely bleached,” marking the worst such event on record.

“Almost without exception, every reef we flew across showed consistently high levels of bleaching, from the reef slope right up onto the top of the reef,” Hughes said in a statement. “This has been the saddest research trip of my life.”

Coral Bleaching Taskforce documents most severe bleaching on record (Arc Centre for Excellence Coral Reef Studies)


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The US West's leaking mines

Worries about the West's once-lucrative but now mostly abandoned old mines are intensifying because thousands — at least 230 in Colorado — still are draining thousands of gallons a minute of acidic, metals-laden muck into streams and rivers. // Headwaters of major rivers that originate in Colorado are tainted... Acid metal drainage from mines is identified as a main source of contamination.

The cost of addressing the estimated 500,000 inactive mines around the West, congressional natural resources staffers said this week, would be $20 billion to $54 billion...


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Now on China's Default Watch: $617 Billion in Regional Debt

Now on China's Default Watch: $617 Billion in Regional Debt

Bloomberg-10 hours ago
China's default watch is starting to include the 4 trillion yuan ($617 billion) debt of financing arms of regional authorities, so far spared amid at least a dozen ...

China's Large Banks Wary on Li Keqiang's Plan for Bad Loans

Bloomberg-16 hours ago
Behind the caution is a lack of clarity about how exactly the government will proceed with the conversion of up to 1.27 trillion yuan ($195 billion) of bad debt ...

Europe's Bond Shortage Means Draghi Is About to Shock the Market

Bloomberg-3 hours ago
While policy makers will expand their asset-purchase plan by 20 billion euros ($22.7 billion) a month at the start of April, corporate debt won't be included until ...

As Detroit schools went broke, principals allegedly took nearly $1 ...

Washington Post-4 hours ago
The conspiracy allegations add insult to injury for the Detroit public school system, which suffers from a debt exceeding $3 billion. The system's financial troubles ...

Abe Weighs Stimulus Package Before Japan Summer Vote, NHK Says

Bloomberg-7 hours ago
... members of his own party said could amount to as much as 10 trillion yen ($89 billion). ... Public debt is piling up and the Bank of Japan's unprecedented ...

Brazil's Budget Deficit Swells to Record as Economy Shrinks

Bloomberg-11 minutes ago
The deficit before interest payments, which includes results of states, municipalities and government-owned companies, reached 125.14 billion reais ($35 ...

Former Alaska lawmakers join ex-governors in urgent call for fiscal ...

Alaska Dispatch News-11 hours ago
... of diverse political stripes and backgrounds convened in Anchorage on Tuesday for a meeting of the minds on how to solve Alaska's $4 billion budget deficit.

In Venezuela, An Electricity Crisis Adds To Country's Woes

NPR-22 hours ago
Venezuela might seem like an odd place for an energy crisis. It's home to the world's largest oil reserves as well as huge natural gas deposits and massive rivers ...

Venezuela police officers are mowed down and killed by bus hijacked by protesters

Daily Mail - ‎18 hours ago‎
Two police officers have been mowed down and killed by a bus hijacked by protesters at a demonstration in Venezuela, according to local officials. Authorities say the two were killed during a protest over a hike in public transportation fares in ...

TUA: Illinois taxpayers pay 678% more than 'multi-millionaire ...

Madison County Record-20 hours ago
He also stated that SERS, the third largest of the government employee pension funds in Illinois, is "critically underfunded" at 35.27 percent. Only the General ...


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Antarctica at Risk of Runaway Melting

The world’s greatest reservoir of ice is verging on a breakdown that could push seas to heights not experienced since prehistoric times, drowning dense coastal neighborhoods during the decades ahead, new computer models have shown.

A pair of researchers developed the models to help them understand high sea levels during previous eras of warmer temperatures. Then they ran simulations using those models and found that rising levels of greenhouse gases could trigger runaway Antarctic melting that alone could push sea levels up by more than three feet by century’s end.

The same models showed that Antarctica’s ice sheet would remain largely intact if the most ambitious goals of last year’s Paris agreement on climate change are achieved.



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John Perkins AGAIN

Why wasn't this guy murdered?

I just wanted to share an email I sent to my group.  Hope you enjoy it.  Perkins is the BEST!!!

Greetings from Nyack.  I'm back in the north again.  Really weird!!

In the last two days, and especially in the long flight to USA, I managed to read The NEW Confessions of an Economic Hit Man (updated and expanded), by John Perkins.  I know I keep recommending books to you all and I keep saying THIS is  THE one--BUT, I really mean it this time.
Sure The Creature from JekyllIsland by Griffin was a BIG eye-opener about the BIG PICTURE but this latest book goes into greater detail about how the USA goes about creating a global empire. WAKE UP, AMERICA, maybe should have been the title?
Have you heard of these men:
Arbenz of Guatemala
Mossadegh of Iran
]Allende of Chile
Jaime Rodlos of Ecuador
Omar Torrijos of Panama, 
especially the last two.  I now have two more HEROS to add to my list of GREAT people, in spite of what the Mainstream Media may say about them.
FYI: all were offed of by the CIA or other elite oriented hit men or jackals (these last MURDER presidents if they refuse to go along with the kinder Hit Men). Mind-blowing.
I especially enjoyed how Perkins is constantly re-examining his life and WAKING UP to the realities of this world.
Key question:  What is it that I really want in life? 
This book will make you think about A LOT of things.
Lastly, have you yet had the time to watch this one:

The Veneer of Justice in a Kingdom of Crime - YouTube

Mar 18, 2016 - Uploaded by BestEvidence

For a transcript of this video, please seehttp://www.karlonia.com/2016/03/23/veneer-justice-kingdom-crime ...

This is about the DOJ (Department of Justice and Goldman Sachs)  WAKE UP, AMERICA!!
At least, in my own way, I am trying to help with the WAKING UP PROCESS.
Hope this helps you also to WAKE UP before it's too late and who knows it may ALREADY be TOO LATE.
Your amigo in Nyack,  ZenKen


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Japan Trust Banks to Start Imposing Negative Rates on Clients

Japan Trust Banks to Start Imposing Negative Rates on Clients ...

Jakarta Globe-14 hours ago
Some Japanese trust banks will start to put negative interest rates, ... on the cost of the central bank's negative rates, sources with knowledge of the matter said.

BOJ to cut fiscal 2016, 2017 inflation forecasts-sources

Reuters - ‎4 hours ago‎
While BOJ Governor Haruhiko Kuroda has stressed that he sees no limits to its already massive money-printing programme, many central bank policymakers are hesitant of easing now after having just adopted negative interest rates in January. "Currency ...

S&P Lowers Outlook on China's Credit Rating to Negative

Wall Street Journal-2 hours ago
S&P kept its double-A minus rating on China's sovereign debt, but lowered the outlook ... which also this month lowered its outlook on China's debt to negative.

ECB will not take rates to 'absurdly' negative levels - Coeure

RTE.ie - ‎Mar 30, 2016‎
The European Central Bank will not move interest rates into "absurdly" negative territory, Executive Board Member Benoit Coeure said today. Negative rates are not the bank's main policy instrument even if further cuts can not be ruled out, Mr Coeure added.

Brazil Central Bank's View of Economy, Inflation Worsens

Wall Street Journal-2 hours ago
SÃO PAULO—The Brazilian central bank's view of the country's economy this year worsened considerably since December as political events have increased ...

ECB could give 1300 euros to bloc's citizens, Nordea says

euronews-1 hour ago
LONDON (Reuters) – The European Central Bank could give 1,300 euros (1,029 pounds) to every person in the euro zone if it found no other way to revive ...


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Posts: 670
Mish and new NUKES

Former Defense Secretary Says US on “Precipice of New Arms Race” as Obama Plans $1 Trillion in “Small, Flexible” Nukes


Fears of a New Arms Race

Are we on the verge of another ridiculous buildup in nuclear weapons?

I think so, and so does former Defense Secretary William Perry who says “We now are at a precipice of a new nuclear arms race.”

Perry was commenting on the Pentagon’s plan to blow $1 trillion or more on smaller, more tactical nuclear weapons.

President Obama agrees with the Pentagon.


Please consider Obama’s Plans for Nuclear Arsenal Raise Fears of New Arms Race.

Over the past year, the US has called out what it sees as “irresponsible” Russian comments about using nuclear weapons. Ashton Carter, Defence secretary, complained of “Moscow’s nuclear sabre-rattling” while General Philip Breedlove, Nato commander, has called the statements “destabilising”.

Yet the Obama administration — which is hosting a big summit this week on nuclear security — is facing its own criticism at home over plans to modernise the US nuclear arsenal, a project that could cost as much as $1 trillion over the next three decades.

“We now are at a precipice of a new nuclear arms race,” William Perry, former secretary of defence and a one-time mentor to Mr Carter, said this year.

Yet supporters of the nuclear upgrade reject all suggestions that the weapons will encourage thoughts of a limited nuclear war. “It is a complete fallacy that any American leader would say, ‘this is a low-yield weapon, so I am going to use it’,” says Franklin Miller, former senior White House official in charge of arms control.

When President Barack Obama signed the 2010 New Start Treaty with Russia to reduce stockpiles of nuclear weapons, he reached a separate side agreement with the US Senate: the treaty would only be ratified if the administration modernised the nuclear arsenal.

As a result, the Pentagon is putting in place ambitious plans to upgrade each section of the nuclear triad, including adding a long-range bomber, submarines and missiles.

Mr Perry has become the most prominent critic of the nuclear cruise missile. He says such missiles increase the risk of miscalculation because they can be launched without warning and because adversaries would not know if they contained a nuclear or a conventional warhead. He argues that the US can easily maintain deterrence with submarines and bomber aircraft, and no longer needs intercontinental ballistic missiles as well.


More Nukes

Tactically-speaking, these weapons are more “use friendly”. But don’t worry, we won’t use them.

Mike “Mish” Shedlock

About mishgea

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management.

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  1. Why is Israel left off this chart?????????????????????????

    This Obama plan fits right in the John Perkins’s analyses of The New Confessions of Economic Hit man.
    Part of the overall plan to remain the world’s number 1 superpower. And if the presidents of other countries do not go along with the LOANS offered by the USA and International banks, (Hit Men, see Perkins’s book), then the “jackals” are called in. If the jackals fail to convince, then “other weapons” might be used, such as car bombs, plane bombs, military coups, poisons, fear tactics (LIKE TACTICAL, small NUKES).

    Wake Up, America, PLEASE. Ken


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