Daily Digest 1/8 – Fake Wealth Exposed, The Deeper Story Behind the Assassination of Soleimani

Economy

The U.S. Spends $2,500 Per Person on Health Care Administrative Costs. Canada Spends $550. Here’s Why (Saxplayer00o1)

Administrative costs now make up about 34% of total health care expenditures in the United States—twice the percentage Canada spends, according to a new study published Monday in Annals of Internal Medicine.

Kansas governor turns to pensions for budget breathing room (Saxplayer00o1)

Legislators have wrestled with public pension costs for decades, and the KPERS system remains 68% funded, with a long-term gap between its funding and promised benefits still projected at $9.2 billion.

Pension costs could erase the impact of Arizona’s teacher raises. What will we do about it? (Saxplayer00o1)

But teachers and school districts are now paying four times what they did in 2002, while the plan’s unfunded liability has grown (the plan is 71% funded now, though it was fully funded in 2002).

Record bond defaults as China lifts credit allocation (Saxplayer00o1)

The trend of rising defaults in China’s domestic bond market will extend its run in the foreseeable future as the allocation of debt becomes more disciplined amid Beijing’s growing tolerance for such episodes.

2 U.S. cities are not prepared for a recession, Moody’s finds (Saxplayer00o1)

In August 2019, just months after taking office, Chicago Mayor Lori Lightfoot announced that the city was facing a $838 million deficit in its upcoming budget.

“We walked into a staggeringly large deficit for next year and, what was worse, we were not left with any credible plan on how to fix this massive problem,” said Lightfoot at the time.

Big Week for NJ’s Debt: State to Issue $800M+ in Bonds for Transit, Libraries, Schools, More (Saxplayer00o1)

At $45 billion, the state’s total for bonded debt outstrips the annual budget for fiscal year 2020 of $38.7 billion. The state’s annual debt-service payment, which is effectively like a credit-card bill that covers both principal and interest, currently exceeds $4 billion.

A Borrower Will Be 114 When Bonds Backed by Her Student Loans Mature (Saxplayer00o1)

Julie Chinnock is 50 years old and owes about $250,000 in student loans. She was happy to get a new payment plan that lowered her monthly bill, but the holders of two bonds backed by her loans were probably less cheerful.

Ben Bernanke says the Fed shouldn’t rule out using negative interest rates (Saxplayer00o1)

Negative rates, he said, have been used to positive effect elsewhere in the world. In Europe, rates across the spectrum went below zero earlier this year, with about $11 trillion of sovereign debt still possessing negative yields. At one point, the entire German government yield curve was negative.

Fed Adds $76.9 Billion in Overnight Money to Markets (Saxplayer00o1)

The Federal Reserve Bank of New York added $76.9 billion in temporary money to financial markets Monday.

Risk of pension meltdown grows as Congress fails to act (Sparky1)

Congress did slip a rescue package into the massive $1.4 trillion spending bill passed last month for one plan close to failure, sponsored by the United Mine Workers of America. But the House and Senate are deeply divided on how to solve the broader problem. Democrats are pushing for a package of low-interest loans to prop up the funds, while Republicans want to boost insurance premiums paid by employers, add new premiums paid by plan participants and force more conservative accounting assumptions.

The Deeper Story Behind the Assassination of Soleimani (westcoastjan)

I was supposed to meet him [Soleimani] later in the morning when he was killed. He came to deliver a message from Iran in response to the message we had delivered to the Iranians from the Saudis.

We can surmise, judging by Saudi Arabia’s reaction, that some kind of negotiation was going on between Tehran and Riyadh.

Dow jumps 100 points as Trump speaks after Iran attack on Iraqi bases (Thomas R.)

“After the panic 50 [point] decline last night in the S&P futures, I believe the markets response this morning is rational in the belief that these missile launches are likely the end of this spat rather than a further escalation,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Iranian missiles target U.S. troops in Iraq, Trump consults advisers (Sparky1)

Earlier on Wednesday, an Iranian army spokesman had denied “foreign media reports” suggesting there had been some kind of coordination between Iran and the United States before the attack to allow bases to be evacuated, Fars news agency said.

Trump conferred with advisers at the White House on Wednesday. Vice President Mike Pence, Defense Secretary Mark Esper and Secretary of State Mike Pompeo were expected to be with him when he makes the statement.

US air force says fighter jet test is ‘coincidence’ after Trump’s Iran threat (Sparky1)

The exercise represented the achievement of full warfighting capability for the F35, estimated to be the most expensive military program ever, which has been marked by controversies, technical issues and cost overruns.

The F-35A is a conventional takeoff and landing version of the plane. There are also short takeoff and vertical landing, and catapult-assisted takeoff variants.

Airlines avoid Iranian airspace, cancel flights as Middle East tensions spike (Thomas R.)

“We are carefully monitoring the developments and are in close contact with the relevant government authorities with regards to our flight operations, and will make further operational changes if required,” Emirates said in a statement to Reuters.

The announcements came after Iran launched more than a dozen ballistic missiles against multiple bases housing U.S. troops in Iraq.

Iranian state TV says 80 “American terrorists” killed in Iran missile strikes (Sparky1)

State TV, citing a senior Revolutionary Guards source, also said Iran had 100 other targets in the region in its sights if Washington took any retaliatory measures. It also said U.S. helicopters and military equipment were “severely damaged”.

Iran launched missile attacks on U.S.-led forces in Iraq in the early hours of Wednesday in retaliation for the U.S. drone strike on an Iranian commander whose killing has raised fears of a wider war in the Middle East.

Trump to address nation after Iran’s retaliatory attacks against Iraqi bases housing US troops (Thomas R.)

These officials floated the notion that Iran could have directed their missiles to hit areas that are populated by Americans, but intentionally did not. Iraq did receive advance warning that the strike was coming and was able to take “necessary precautions,” according to a statement from Iraq’s Prime Minister Adil Abdul Mahdi. A US defense official said that Iraq, in turn, gave advance warning to the United States.

One More Trip (Don R.)

… around the Big Dumb War Cycle

Fake Wealth Exposed (pinecarr)

The inevitable consequence of this is a massive implosion of the fake wealth bubble and also the debt bubble made of fake money. This will lead to tremendous wealth destruction, hardship and suffering for people around the world.

Puerto Rico earthquake triggers blackout, reports of injuries and at least one dead
Strong earthquake leaves widespread blackout, damage in Puerto Rico
(Thomas R.)

Tuesday’s earthquake followed a 5.8-magnitude quake on Monday and was among numerous seismic events along an underwater fault line in recent days. All of them sent shock waves across the U.S. territory amid fears that further tremors could knock out key infrastructure.

Future Navy, Marine Corps aircraft spending estimated at $11 billion per year (Sparky1)

The office’s projections are based on procurement schedules and costs extrapolated from Department of Defense documents, the report said, as well as the retirement ages and costs fo the aircraft being replaced.

Costs would range from from $7 billion to $17 billion and total $280 billion, the report said.

Goldman Sachs restructures to create consumer lending division (Sparky1)

Goldman Sachs first made an aggressive move into the consumer lending space with the 2016 launch of its Marcus platform, which President David Solomon hopes to leverage and eventually offer consumer-facing services like checking accounts, payment solutions, credit cards, mortgages and auto loans and insurance products.

Report: Ransomware takes down online currency exchange (Sparky1)

Travelex did not immediately respond Tuesday to emails and a phone call from The Associated Press seeking comment. In a Jan. 2 Twitter post, the company said the virus had compromised some of its services on New Year’s Eve and that it took all systems offline immediately. The statement said Travelex’s investigation “to date shows no indication that any personal or customer data has been compromised.”

Tens of thousands strike in India as slowdown hits jobs (Sparky1)

C.H. Venkatachalam, general secretary of the All India Bank Employees’ Association, said the proposed merger of 10 state banks into four banks would affect jobs and could hit the recovery of bad loans amounting to near $140 billion.

“Modi government’s policies have led to a severe economic slowdown and have created bad loans for banks,” Venkatachalam told Reuters by phone, adding the government should take steps to help boost consumer demand by offering incentives to workers.

Middle East tensions have put a floor under oil prices, says Marathon Oil CEO (Thomas R.)

“I think the dampening effect … is really the impact of the U.S. energy renaissance,” he said Tuesday on CNBC’s “Power Lunch” from the Goldman Sachs energy conference in Miami Beach, Florida. “We make up about 8% of the global supply today, and those are reliable, highly secure barrels that the market is counting on, and I do believe that’s reduced this risk premium from returning back into the market.”

California considering statewide ban on gas-powered gardening equipment (thc0655)

Mayor Eklund says she respects long-time business owners like Mark Bailey, so the plan is to first discuss the ban within the first half of 2020, giving plenty of time to consult with locals who could be affected.

Some 16 million gas-guzzling gardening equipment is in use in California, according to one estimate.

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