Daily Digest 7/10 – Negative Yields Creep Into Emerging Europe, Parental ‘Memory’ Inherited Across Generations



Chicago Pensions Are No Longer 27% Funded (It’s Now 23%) (Saxplayer00o1)

But by far the largest contributor to the plans’ worsening funded status is that the city is not contributing even the minimal amount necessary to “tread water.” For years and years the city has failed to contribute the “Actuarially Determined Contribution” which is based on a determination of the amount needed to pay off the underfunding over a 30 year period.

U.S. government could breach debt ceiling by early September: think tank (Saxplayer00o1)

The Congressional Budget Office estimated in late February that the Treasury Department would probably run out of money near the end of this fiscal year or early in the next one, which is by the end of September or early October, unless the Congress takes action to either extend the suspension of debt limit or increase the limit.

Yield gap between risky corporate debt and investment grade sinks to 12-year low (Saxplayer00o1)

It’s starting to feel a lot like 2007 in some debt markets…

Italy Racks Up Orders for 50-Year Bonds as Yield Hunters Rush In (Saxplayer00o1)

Italy has mandated banks including Citigroup Inc., Goldman Sachs Group Inc. and UniCredit SpA for selling debt maturing in 2067 with a coupon of 2.80%, according to a statement.

Global Recession Risks Are Up, and Central Banks Aren’t Ready (Saxplayer00o1)

But today, interest rates remain below zero in Japan and Europe. They are low by historical standards in the United States, leaving less room to cut in a downturn. Most central banks still hold huge amounts of the bonds and other securities they bought to prop up their economies the last time, which could make another buying binge more difficult and dampen its effects.

ECB Seen Readying the Pumps for Return to Massive Bond Buying (Saxplayer00o1)

Policy makers could relaunch bond purchases as soon as September — barely nine months after they capped the program at 2.6 trillion euros ($3 trillion), according to Evercore ISI’s Krishna Guha. Other institutions calling for the ECB to restart purchases by early next year include ABN Amro Bank NV, Danske Bank A/S, and BNP Paribas SA.

Negative Yields Creep Into Emerging Europe (Saxplayer00o1)

All of the Czech Republic’s outstanding euro bonds are trading at negative yields, while the rate on Poland’s 2029 note is 16 basis points away from dropping below zero. Junk-rated Serbia’s 10-year bonds offer less than 1.5% and the spread on euro-area hopeful Croatia’s 2028 notes has almost halved this year.

Gigantic Wealth Transfer Coming – Gregory Mannarino (Thomas R.)

Mannarino thinks the next market correction will be a big one, and the Fed stopped the last market freefall in 2008. Mannarino explains, “We do know that the Fed stepped in and stopped the last market meltdown at 6,000. Was that the bottom, was it Dow 3,000 or was it Dow 2,000? All we know is we get this environment where we get larger and larger swings here. Is DB telling us this is a market top? Maybe they are. I do know the greater the high, the greater the fall. I would not be surprised in a total market meltdown to drop below 6,000 (Dow). You don’t know where the real bottom is.”

FBI and ICE use DMV photos as ‘gold mine’ for facial recognition data (newsbuoy)

As a result, there isn’t much consent or accountability for these searches. It’s not clear who’s being targeted or how many searches lead to false hits, let alone that agents are using facial data responsibly. Some searches have been conducted using little more than email to a state contact, for that matter. These lapses create serious concerns for the privacy-conscious. Georgetown’s Clare Garvie called it a particularl “insane breach of trust” for undocumented immigrants in states where they’re allowed to drive, as these people are being encouraged to submit info that could promptly be used against them.

In a scene reminiscent of the financial crisis, axed Deutsche Bank workers leave with belongings (Thomas R.)

Deutsche, which once sought to compete with Wall Street’s top investment banks and trading desks, said that the vast restructuring is aimed at improving the firm’s profitability and reduced adjusted costs by 25% to 17 billion euros over the next several years.

Study finds that parental ‘memory’ is inherited across generations (Adam)

For the study, the fruit flies were cohabitated with female wasps for four days before their eggs were collected. The embryos were separated into two cohorts—a wasp-exposed and unexposed (control) group—and developed to maturity without any contact with adult flies or wasps. One group was used to propagate the next generation and the other was analyzed for ethanol preference.

Study: Psychiatric Diagnoses Are ‘Scientifically Meaningless’ In Treating Mental Health (thc0655)

Researchers came to a number of troubling conclusions. First, the study’s authors assert that there is a significant amount of overlap in symptoms between disorder diagnoses, despite the fact that each diagnosis utilizes different decision rules. Additionally, these diagnoses completely ignore the role of trauma or other unique adverse events a person may encounter in their life.

Share market correction may be imminent for ASX, stockbrokers warn (David B.)

“But that is the story being told by the bond markets and clearly nobody quite knows what it is, but so far it’s been very good for equities and clearly no-one is really considering what the root problem is.”

Watch: Honey Bees Drop Dead Following California Earthquake (Paul B.)

?”I just read that they abandon the hive during earthquakes, and return when it’s over. The constant aftershocks could be keeping them from ‘homing, which is probably not good”, one Twitter user wrote, while another associated the bee deaths to fluctuations in the Earth’s magnetic field during quakes.

It Sure Seems Like the Trump Administration Is Suppressing Reports of Climate Change at USGS (Sparky1)

“Coastal inundation due to sea-level rise (SLR) is projected to displace hundreds of millions of people worldwide over the next century, creating significant economic, humanitarian and national-security challenges,” the researchers wrote in that study. “We show that for California, USA, the world’s 5th largest economy, over $150 billion of property equating to more than 6% of the state’s GDP and 600,000 people could be impacted by dynamic flooding by 2100.”

Gold & Silver

Click to read the PM Daily Market Commentary: 7/9/19

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