Daily Digest

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Daily Digest 6/1 - Foreign Workers Trapped By Debts In Gulf, Entitlements Are Crowding Out Savings

Wednesday, June 1, 2016, 7:24 AM

Economy

Alan Greenspan: Entitlements are crowding out savings

In an exclusive 'Your World' interview, the former Federal Reserve chief weighs in on the 2016 race, urges entitlements to be the central issue of the presidential debate.

Japan’s dependency ratio worsening

Some 45 per cent of Japan’s households now include one person aged 65 years or more, government figures show, underlining how swiftly the country is moving towards a costly demographic inflection point.

Pew report: CT deep in debt, even considering its high income

With one of the highest per capita incomes of any state, Connecticut in 2013 owed $25.3 billion to its state employee and teacher pensions, $22.6 billion to its retiree health care program, and $19.6 billion in bonded debt. The combined debt of nearly $67.5 billion represented 30.2 percent of personal income

Gulf economic slowdown sees foreign workers trapped by debts

Gulf countries like Qatar largely don't have bankruptcy laws, leaving laid-off workers on the hook for huge outstanding sums while often banned from traveling outside of the country. That leaves many unemployed begging friends and family for help while frantically selling off all their belongings. Others have killed themselves out of desperation.

Downgrade Threat Drives South African Companies From Bond Market

S&P Global Ratings is due to announce the results of its South African credit-rating review on Friday. Twelve out of 13 analysts surveyed by Bloomberg expect S&P to lower the nation’s ranking to below investment grade -- or junk -- by the end of this year. Four think they will cut this week.

Illinois lawmakers near session's end without state budget - again

Rauner wants business-friendly legislation he says will spur economic growth in exchange for signing off on a tax increase to address a $5 billion deficit. Democrats say Rauner's ideas hurt the middle class. The Senate is expected to consider a $7 billion out-of-balance budget passed by the House. But Rauner said he'll veto it.

Trade deficit narrows, but Australian foreign debt hits fresh record

Data released by the Australian Bureau of Statistics also showed Australia's net foreign debt continued to mount, up another 1 per cent over the quarter to a record $1.03 trillion.

Bank of Italy calls for state intervention in bank crises

Turning to public finances, Visco also warned that Italy's public debt - the highest in the euro zone as a proportion of national output after Greece's - may not come down this year as the government has targeted.

Risky Reprise of Debt Binge Stars U.S. Companies Not Consumers

Behind the deterioration in creditworthiness: surging corporate borrowing. Enticed by record-low interest rates, companies increased total debt by $2.81 trillion over the past five years to a record $6.64 trillion. In 2015 alone, liabilities jumped by $850 billion, 50 times the increase in cash by S&P’s reckoning.

Olympic Host Rio Has Debt Paid by Brazil as States Struggle

Rio’s acting governor Francisco Dornelles told reporters Monday the state’s problems are grave, and it is counting on an understanding with the federal government to renegotiate its debt. Rio’s finance secretary Julio Bueno said in an interview this month that states striking a “grand bargain’’ with the federal government is the only solution to the debt crisis.

Missed Rio payment 'credit negative' for all Brazilian states: Moody's

Missed debt payments by Rio de Janeiro underscore credit risks facing all Brazilian states, adding to pressure on the federal government to offer more generous relief to struggling states, Moody's Investors Service said on Monday.

More in Debt Than Puerto Rico, the Virgin Islands Rejects Rescue

The Caribbean island, Puerto Rico’s closest American neighbor, has a sliver of the population -- about 104,300 -- and a fraction of the debt, with $2.4 billion across all issuers. But divvied up, that’s $23,000 of obligations per person, even more than Puerto Rico’s $20,000. The two Caribbean territories with a shared culture also have similar fiscal strains: declining populations, underfunded pensions, histories of borrowing to cover budget shortfalls and unemployment rates that are twice as high as the U.S. mainland’s.

Tax hike delay signals Japan giving up on fiscal reform

Japan's government debt, at nearly 250 percent of GDP, is the biggest among major industrialised nations as tax revenues fall short of meeting ballooning social welfare costs for a rapidly ageing society. Raising the sales tax is considered crucial to reining in debt, but has been a taboo for politicians. After an increase to 8 percent from 5 percent in April 2014 tipped Japan into recession, Abe postponed a further hike to 10 percent planned for October 2015 for 18 months.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/31/16

Provided daily by the Peak Prosperity Gold & Silver Group

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6 Comments

lambertad's picture
lambertad
Status: Silver Member (Offline)
Joined: Aug 31 2013
Posts: 184
Sam Zell Interview 5/26/2016

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4237
Japan: “morphing into a de facto helicopter money drop”

 

OECD Cuts Growth Forecasts

Morningstar.com-5 hours ago
Major central banks' prolonged quantitative easing programs and low interest or negative interest rates have even created distortions that threaten the global ...
 

Japan's Shinzo Abe admits deflation fears with sales tax delay

Financial Times - ‎20 minutes ago‎
He argued that, in the longer term, Japan's economic policy was “morphing into a de facto helicopter money drop”, with the BoJ's bond purchases financing deficit spending by the government. The BoJ, like other central banks, says its bond purchases are ...

Japan delays sales tax rise to 2019

BBC News-6 hours ago
The Bank of Japan (BOJ) introduced a negative interest rate policy of -0.1% in January, a move which surprised many economists. The introduction of negative ...
 

Pension Funds Pile on Risk Just to Get a Reasonable Return

Wall Street Journal-22 hours ago
Some investors such as David Villa of the $100 billion State of Wisconsin ... rates to stimulate growth, dropping real returns close to zero for higher-quality debt.

Second-Quarter Canadian GDP Looks Grim and It's Not Just Oil

Bloomberg-10 hours ago
Prime Minister Justin Trudeau delayed his budget including C$29.4 billion ($22.5 billion) of deficit spending, until late March, after his October election win.

 

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Market distortions of cheap student loans

And damage done by for-profit colleges:

The study found that, on average, students pursuing bachelor’s and associate’s degrees at for-profit colleges saw their earnings drop, compared to before they started the program. The overwhelming number of students who don’t complete their degrees account for most of this pattern. Six years after attending these programs, for-profit college attendees were not only earning less, but were often saddled with debt and often without new credentials. Cellini and Turner theorize that dropping out might have been a negative signal to employers about a person's productivity, essentially leading employers to assume that this wasn't a person who "got things done," which in turn led to lower pay. The outcomes were far more positive for students who completed their degrees, for whom the researchers found a slight increase in earnings—about $3,500 to $4,000 more per year.

http://www.theatlantic.com/business/archive/2016/06/for-profit-earnings/485141/

 

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Another consequence of oil / gas wells near your home

On a sunny Saturday afternoon, Cody Murray's water well exploded in flames.

Natural gas unexpectedly flowed up with the water and ignited when a switch flipped in the pump house where he stood. It turned the air to fire.

Murray, a sturdy middle-aged rancher, oil worker and father of two, suffered second- and third-degree burns over nearly a quarter of his body. His father and 4-year-old daughter were also burned in the August 2014 flash fire.

Groundwater contamination has been one of the most persistent complaints about the country's drilling boom, powered by advanced hydraulic fracturing. State oil and gas officials, along with U.S. EPA, have tried to assure the public the problems are not widespread. Still, the issue hasn't gone away.

The case here, outside the tiny Texas town of Perrin, is different from most disputes about contaminated groundwater in places like Pavillion, Wyo., and Dimock, Pa. The contamination here led not only to undrinkable water, but to horrible injuries.

http://www.eenews.net/energywire/2016/06/01/stories/1060038097

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4237
It's only $39 billion

The Daily History of the Debt Results

Historical returns from 05/30/2016 through 05/31/2016

The data for the total public debt outstanding is published each business day. If there is no debt value for the date(s) you requested, the value for the preceding business day will be displayed.

( Debt Held by the Public vs. Intragovernmental Holdings )

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
05/27/2016 13,857,303,233,304.40 5,369,114,557,034.15 19,226,417,790,338.55
05/31/2016 13,886,302,639,366.64 5,379,148,932,964.07 19,265,451,572,330.71

 

LesPhelps's picture
LesPhelps
Status: Platinum Member (Offline)
Joined: Apr 30 2009
Posts: 811
Greenspan

I find not logical connection between productivity, savings and entitlements.  Is there any logic to what Geeenspan is saying, or is he just clueless?

For the record, programs that you pay into over your entire life, are NOT entitlement programs.  

I know that the US Government has no legal obligation to make social security payments, but I WAS legally required to pay into the system.  What is wrong with this picture?

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