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STORIES:
Next School Crisis for Chicago: Pension Fund Is Running Dry
- (www.nytimes.com) One of the most vexing
problems for Chicago and its teachers went virtually unmentioned during the
strike: The pension fund is about to hit a wall. The Chicago
Teachers’ Pension Fund has about $10 billion in assets, but is
paying out more than $1 billion in benefits a year — much more than it has been
taking in. That has forced it to sell investments, worth hundreds of millions
of dollars a year, to pay retired teachers. Experts say the fund could collapse
within a few years unless something is done. “There’s a huge crisis,” said
Laurence Msall, president of the Civic Federation, a nonpartisan research
organization in Chicago that works on fiscal issues. “The problem does not get
easier by waiting. The problem gets bigger, and starts to become an
insurmountable obstacle.”
BofA cutting 16,000 jobs by year end in cost-plan acceleration:
WSJ - (www.reuters.com) Bank of America Corp is
planning to cut 16,000 jobs by year end as it speeds up a company-wide
cost-cutting initiative amid declining revenues, the Wall Street Journal
reported on Wednesday. The job cuts would put the second-largest U.S. bank a
year ahead of schedule in eliminating 30,000 jobs under a program called
Project New BAC. The job cuts could shrink the bank's workforce below that of
rivals JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N). The reductions were outlined in a
document given to top management, the Journal reported. Since taking the helm
in 2010, Chief Executive Brian Moynihan has been working to streamline and
reduce risk at a company that has lagged rivals in recovering from the
financial crisis, largely due to mortgage-related losses.
Money printing has only allowed governments to duck their
problems - (www.telegraph.co.uk) In the land of the setting sun, QE is now such
an everyday part of the economic landscape that it would barely have warranted
a mention, let alone an entire column, but for the fact that the latest dollop
of “unconventional” policy action appears to be part of a coordinated, global
response to the economic slowdown. Like big deficits and mountainous public
debt, in Japan, QE no longer generates the same agonised debate it does in the
West. It just is. For Japan, the “unconventional” is now very much the
conventional. And little good does it seem to have done either. The
Japanese economy remains firmly frozen in time, having barely grown for more
than 20 years now. Everything is relative, of course, and it can reasonably be
argued that without all this monetary and fiscal policy action, things might
have been worse. Measured per head of those of working age, moreover, growth
looks much more flattering, so it could also be argued that overall economic
stagnation is only the inevitable result of an ageing society. The point is,
however, that neither QE, nor indeed massive, Keynesian-style, deficit
spending, have managed to achieve the hoped for economic revival.
Cut
farmers' insurance or food stamps? - (www.money.cnn.com) 
Video…. Both Mitt Romney and Barack Obama want
to cut government spending in the Farm Bill but they want to cut different
parts.
Video…. Both Mitt Romney and Barack Obama want
to cut government spending in the Farm Bill but they want to cut different
parts.
Banks In Europe's
Worst Economies Continue To Bleed Money - (www.businessinsider.com) On July 26th, ECB President
Mario Draghi promised to do “whatever it takes” to defend the euro. It may take
a lot, especially to keep Spain in the euro zone. The latest data compiled from
original central bank sources, show that non-performing Spanish bank loans rose
to a record 9.9% during July. Spanish bank deposits continued to fall sharply
in July, down €74.2 billion m/m and €207 billion y/y. The ECB lent Spain €411.7
billion through August, mostly through the LTRO facility. Pour another glass of
sangria for Mr. Draghi.
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