Dallas "Pension Fund Panic" As Mayor
Warns Of 130% Property Tax Hike To Avoid Collapse - (www.zerohedge.com) "This is much
like a Bernie Madoff scheme, if you ask me," said Dallas mayor Miek
Rawling discussing the collapse of the local Dallas Police and Fire Pension
Fund. The Dallas pension board wants the city to contribute $1.1. billion in
2018, but to do that, they would have to increase the property tax rate by
130%. In August, we created the chart below as a simplistic
illustration of the pension "duration dilemma." The chart
graphs how a pension liability grows in a declining interest rate environment
versus the value of 5-year and 30-year treasury bonds. As you can see, a
$1BN pension that is fully funded at prevailing interest rates would be nearly
$700mm underfunded if interest rates declined 300bps and all of their assets
were invested in 30-year treasury bonds. The result is obviously even
worse if the fund's assets are invested in shorter duration 5-year
treasuries.
China's
Moves to Cool Property Prices May Be Working - (www.bloomberg.com) The push by China’s policy makers to rein in
property bubbles looks to be getting traction, according to early indicators
from the nation’s biggest cities. Beijing home sales volume plunged 41
percent year-on-year last month while Shanghai’s slumped 18 percent, China
Real Estate Information Corp. data show, after new purchase restrictions
and tightened mortgage lending. Transactions fell 50 percent in smaller
cities. Now policy makers must balance deflating property prices with
safeguarding the expansion. Efforts to curb excessive gains could cut 0.6
percentage point from 2017 economic growth, and as much as 1 point with
aggressive national tightening, according to Morgan Stanley.
What
the Heck’s Wrong with This Market? Biggest IPO of the Year Sags to New Low - (www.wolfstreet.com) Shares of parcel-delivery company ZTO Express
dropped another 4.9% today on the New York Stock Exchange and closed at a new
all-time low of $15.20. The previous all-time low had been obtained the
day it went public on October 27: it plunged 15% from its IPO price of $19.50.
The IPO had raised $1.4 billion, the largest US IPO of 2016. It is now down 22%
from its IPO price. The company is based in Shanghai and doing all its
business in China. Why did it go public on the NYSE? We assume because that’s
where the money is. And because its toxic dual-class share structure is illegal
in China. It gives founder Lai Meisong 80% voting power in the company. The
shares traded on the NYSE are not actually shares of the Chinese company
anyway, but shares of a “variable-interest entity” set up in the Cayman
Islands, which is contractually entitled to the profits of the Chinese company.
‘We
Almost Have Riots’: Tensions Flare in Silicon Valley Over Growth - (www.nytimes.com) Silicon
Valley is bent on disrupting the world. Its products affect how millions upon
millions of people live and work. But when it comes to the physical space that
many technologists call home, there are increasing demands to leave things
alone. The heart of Silicon Valley is a 75-mile strip of land anchored by San
Francisco at one end and San Jose at the other. In between is a suburbia strewn
with corporate campuses and the estates of those who run them. Congested and
forbiddingly expensive, it is a region choking on its own success. “Silicon
Valley has been flashing a ‘vacancy’ sign for decades — come here and build a
company,” said Larry A. Rosenthal, a specialist in land use and urban policy at
the University of California, Berkeley. “Now some people are saying, ‘We’ve hit
our limit.’ They may be reaching their threshold tolerance for pain.”
Solar
Lobbyist Whines His Subsidized Panels Aren't Cost Effective Anymore – (www.dailycaller.com)
Solar panels became way less cost-effective after Louisiana cut back solar
subsidies, according to industry insiders Wednesday. Louisiana cut back solar
subsidies late last year and began taxing rooftop solar panels, apparently
costing a solar lobbyist a fair amount of money. “Back in 2012, my family
installed a new solar power system on our home,” Simon Mahan, a renewable
energy manager for the green energy lobbying group called the Southern Alliance
for Clean Energy, wrote in The IND Monthly. “The new rate structure for current net
metered customers, including solar power families like mine, is also likely to
almost double our monthly electric bills. And the new solar tax will likely
double the payback time,” Mahan wrote.
Alarm grows as smart home technology and hacking risks proliferate - (www.cnbc.com)
Central Banks Facing Challenges From Political Events - (www.wsj.com)
Tens of thousands in South Korea call for president to quit - (www.cnbc.com)
Hong Kong lawmakers-elect who called for independence threatened China's security: state TV - (www.reuters.com)
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