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Daily Digest 7/13 - Italy To Face Two-Decade Recession, Social Security Insolvency Looms

Wednesday, July 13, 2016, 10:19 AM

Economy

Ground Zero of China’s Slowdown Leaves Locals Looking for Exit

Ads offering work visas abroad are peppered across hoardings, and billboards offer loans for people in "urgent need." Shuttered car-parts factories flank the highway to the high-speed train station. In the center, a closed wedding-photograph studio has a notice in the window that reads: "Owner is going overseas. Shop for sale."

Italy to face two-decade recession: IMF

Italy’s economy, the eurozone’s third largest, is expected to grow by less than 1 percent this year, the International Monetary Fund (IMF) said in a report published Monday, downgrading its previous forecasts after the British Brexit vote.

Chicago’s total debt more than triples to over $24B in 2015

The city already passed a $700 million hike in October 2015 to help plug the hole in police and firefighter pensions, and the city is expected to raise property taxes by another $250 million to fund ailing Chicago Public Schools, or CPS, pensions. And with billions more in other health care and pension shortfalls still unfunded, more hikes are on the way.

China’s Zombie Companies Stay Alive Despite Defaults

But the process of letting companies fail will be painful and risky. China is sitting on the world’s largest pile of corporate debt as a percentage of GDP. Some $1.3 trillion comes due in the second half of this year. Of that, some $24.7 billion is among the most toxic, owed by rust-belt producers such as Dongbei that have less cash than short-term debt, according to Fitch Ratings.

Debt to top World War II peak within 20 years

The biggest drivers of the debt are spending on Medicare and other major health programs, along with Social Security and interest on the country's debt.

Bank of England's Carney hints again at more stimulus after Brexit

Bank of England Governor Mark Carney said on Tuesday that a hit to Britain's economy from last month's decision by voters to leave the European Union could prompt the Bank to act, hinting again that more stimulus is on the way.

Japan’s Abe Tells Bernanke He Wants to Speed Up End of Deflation

Japanese Prime Minister Shinzo Abe told former Federal Reserve Chairman Ben S. Bernanke at a meeting in Tokyo he wants to speed up the nation’s exit from deflation, underscoring his commitment to implementing fresh economic stimulus.

Bernanke Says Bank of Japan Still has Tools for Further Easing

Mr. Bernanke visited Tokyo at a time of intense speculation that Mr. Abe may resort to so-called “helicopter money,” a radical form of monetary easing advocated by the former Fed chief.

Spain and Portugal’s Budgets Found Wanting by EU Ministers

European Union finance ministers said Tuesday that Spain and Portugal didn’t take enough action to reduce their 2015 budget deficits, setting in motion a process that can lead to financial sanctions and the freezing of EU funds for the two Iberian countries.

Social Security insolvency is now one year closer

The 2016 Social Security Trustees report showed a continuation of the current trend toward insolvency of both of its trust funds. The Trustees estimate that Social Security's combined retirement and disability trust funds will become exhausted in 2034, the same as reported last year. Regrettably, the lack of change in the combined trust funds' insolvency dates has lulled some into a false sense that the program's finances are now stable. Please don't be fooled.

Amid Brexit debacle, another EU crisis emerges: Southern Europe

Together, Italian banks hold some 360 billion euros ($398 billion) in loans that, in all likelihood, will not be paid back in full. These loans represent roughly 17 percent of the country’s total loans, compared to the EU average of about 6 percent.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/12/16

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."

5 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4167
Helicopter money 'the next step' in monetary policy..Fed officil

 

Helicopter money 'the next step' in monetary policy says Fed official ...

ABC Online-16 hours ago
A top official from the US Federal Reserve has said "helicopter money" could be considered to stimulate America's economy if conventional monetary policy fails.

Germany's Bonds Rise as 10-Year Debt Sale Draws Negative Yield

Bloomberg - ‎3 hours ago‎
Germany's government bonds rose, halting a two-day decline, as the nation auctioned 10-year debt with a negative yield for the first time. The country's finance agency allotted 4.038 billion euros ($4.5 billion) of zero-coupon bunds maturing in August ...

Japan Cuts Forecasts as Abe Advisers Urge Coordinated Stimulus

Bloomberg - ‎4 hours ago‎
Honda said that the central bank should accelerate its already unprecedented government bond purchases rather than further reduce negative interest rates. He advocated action at the BOJ's July 28-29 policy meeting and said options also include further ...

Japan government advisers shun fiscal discipline, open door to new ...

Reuters-6 hours ago

Japan's debt-GDP ratio is the world's worst, standing at more than twice the size of the $5-trillion economy. Fitch Ratings has already threatened to downgrade .

Amid Talk of Money Helicopters, Abe Eyes Reboot of Economic Plan

Bloomberg - ‎2 hours ago‎
Now a fellow-in-residence at the Brookings Institution, Bernanke has argued in a blog post on the Washington think tank's website that "in theory at least, helicopter money could prove a valuable tool," when "conventional monetary policies are ...

Asian markets gain, but off highs after Japan says no 'helicopter money' coming

MarketWatch - ‎5 hours ago‎
The Nikkei Stock Average NIK, +0.84% closed up 0.8%, holding onto its gains in early trade despite comments from Chief Cabinet Secretary Yoshihide Suga that Japan won't resort to so-called “helicopter money,” a radically inflationary measure that would ...

Malaysia Central Bank Cuts Overnight Policy Rate to 3%

Wall Street Journal-8 hours ago

KUALA LUMPUR, Malaysia—Malaysia's central bank unexpectedly cut interest rates Wednesday for the first time in seven years in a bid to ma

China exports, imports fall in June amid further signs of weakening ...

South China Morning Post-7 hours ago
... fall in June amid further signs of weakening demand in slowing economy ... economic outlook complicated by Britain's vote to leave the European Union.

China's June exports, imports fall more than expected
Highly Cited-CNBC-8 hours ago

China's second-quarter growth slows to 6.6 pc

The Indian Express-2 hours ago
As the world's biggest trader in goods China is crucial to the global economy, investors worldwide have been worried by its slowing growth. By: AFP Shanghai ...

 

Crisis-hit euro governments swayed banks to buy their debt: ECB ...

euronews-3 hours ago
Regulators and supervisors including the European Central Bank are trying to break a 'doom loop' of debt interdependence between lenders and their ...

IMF Says Russian Banks Concealing Bad Debt May Need More ...

Bloomberg-1 hour ago
The impairments would present a further drain on banks after the government spent almost 1 trillion rubles ($16 billion) last year to recapitalize the financial ...

Puerto Rico governor says it may take two years to return to municipal bond market

MarketWatch - ‎19 hours ago‎
... Puerto Rico Governor Alejandro Garcia Padilla suggested Tuesday the commonwealth's central government may not be able to borrow from the $3.7 trillion municipal bond market any time soon, as the uncertainty of restructuring the island's $70 billion ...

Greek Unpaid Debt to State Funds at 50% of GDP

Greek Reporter-6 hours ago
Market officials estimate that overdue debt will be more than 95 billion euros by the end of the year, rising to 95 billion euros as taxpayers debt keeps rising by 1 ...

Defaults among U.S. drillers hit record

Houston Chronicle - ‎16 hours ago‎
In the five years leading up to the crash, the U.S. oil industry ran up more than $500 billion in risky debt to finance the shale drilling boom. But the boom pumped more oil than global markets could absorb. The result: a crippling two-year bust that's ...

Junk-Bond Defaults Keep Climbing

Wall Street Journal - ‎21 hours ago‎
Energy companies defaulted on $28.8 billion of debt the first half of this year, Fitch calculates, putting the sector's default rate at 15%. For exploration and production, the rate is 29%. Notwithstanding this year's 20%-plus rebound in crude ...

Monte Paschi Bail-In Concerns Stoke Purchases of Credit Swaps

Bloomberg-2 hours ago
Credit-default swaps covering a gross $95 million of Monte Paschi debt changed ... Ltd. in London, which oversees 24 billion pounds ($32 billion) of assets.

Italian Banks Desperate For a Bailout

Wall Street Daily - ‎6 hours ago‎
To his credit, Renzi is threatening to tell the EU to take a hike and proceed without it, to inject €40 billion into the banks. Renzi is willing to do so, even though Italy has the second-highest debt level in Europe, after Greece. It is crucial that ...

Venezuela army deployed to control food production and distribution

BBC News - ‎21 hours ago‎
Venezuela's military has taken control of five ports in an effort to guarantee supplies of food and medicine. In a decree, President Nicolas Maduro has ordered the army to monitor food processing plants, and co-ordinate the production and distribution ...

UK company pension deficits rise £89bn in a month

Financial Times-22 hours ago

The pension deficit of UK companies grew by £89bn in just one month, ... from the Pension Protection Fund showed the total private sector pension shortfall rose ..

 

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
U.S. Faces Dramatic Rise in Extreme Heat, Humidity

We found that scores of U.S. cities home to tens of millions of people will face dramatic increases in dangerous and extreme heat days by the middle of this century if current greenhouse gas emissions trends continue. 

The hottest parts of the country, including Texas, the Southwest, and Florida have already experienced large increases in extreme heat days, including days over 90°F, 95°F, and 100°F, as well as rising levels of humidity that make hot days feel miserable and extremely hot days downright dangerous.  Cities in those same states are facing the biggest projected increases in dangerous heat over the next several decades. 

http://www.climatecentral.org/news/sizzling-summers-20515

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Britain must prepare for flooding, heatwaves and food shortages

Urgent action must be taken to protect Britain from flooding, deadly heatwaves, water shortages and an international food crisis that will all become increasing risks as the Earth warms, according to a Government report.

“The regional details vary, but the UK's recent recorded warming and the projected rise in temperatures and increases of extreme weather events are typical and pervasive across the Earth's surface,” he (Kargel) said.

“I have seen it in melting glaciers from Nepal to Chile to Alaska.  Climate change is occurring so rapidly that people around the world are noticing the changes in global warming and extreme weather with their own eyes and skin.  

http://www.independent.co.uk/environment/climate-change-report-flooding-...

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4167
Inflation still below Fed's target

US health spending to grow 5.8% annually in coming decade, rising to $5.6 trillion

CNBC - ‎7 hours ago‎
Health care is expected to account for more than $1 out of every $5 spent in the United States by 2025, according to a new government projection announced Wednesday, which also estimated that health spending will increase by a historically moderate ...

National Health Spending to Surpass $10000 a Person in 2016

New York Times - ‎7 hours ago‎
“Health spending growth is likely to accelerate in response to improvements in economic conditions that are projected over the coming decade,” said Sean P. Keehan, the lead author of the report, who is an economist in the actuary's office at the ...

Fed's Kaplan Says June Jobs Report Shows Progress Continues

Bloomberg-7 hours ago
Federal Reserve Bank of Dallas President Robert Kaplan said a strong June employment report, coming ... The Fed's preferred measure of inflation stood at 0.9 percent in the 12 months through May, below the central bank's 2 percent target.

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4167
US Pension Funding Levels to Deteriorate, Moody's Says

Italian banks could spark next euro financial crisis

ABC Online-15 hours ago
That includes almost 200 billion euros ($290 billion) worth of bad debts and 124 billion euros in likely defaults as well as assorted other non-performing loans.

US Pension Funding Levels to Deteriorate, Moody's Says

Wall Street Journal (blog)-17 hours ago

The pension insurer projected that its multiemployer pension insurance program will have a deficit of $53.4 billion in today's dollars by 2025, if it cannot raise the .

The recession hiding behind Wall Street's record highs

STLtoday.com-3 hours ago
Wall Street may have set new record highs this week, but the rally is masking an uncomfortable truth: Corporate America is still in the midst of recession.

Up to 70% of people in developed countries 'have seen incomes stagnate'

The Guardian - ‎16 hours ago‎
Half a billion people in 25 of the west's richest countries suffered from flat or falling pay packets in the decade covering the financial and economic crisis of 2008-09, according to a report highlighting the impact of the Great Recession on household ...

Brazil Central Bank Economic Activity Index Down 0.51% in May

Nasdaq-2 hours ago

SAO PAULO--Brazilian economic activity dropped in May, according to an index compiled by the central bank, reinforcing economists' views that Latin America's ..

Brazil's Economy Shrinks More Than Economists Forecast in May

Bloomberg-3 hours ago
Acting President Michel Temer took office in May pledging to revive confidence and pull Brazil out of a recession that is extending into its second year.

 

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