Muni
Fund Collapses To Record Lows As Puerto Rico Risk Rises - (www.zerohedge.com) Quietly
behind the scenes and away from the exuberant stock market trading headlines of
the mainstream media, Muni bond markets are in turmoil. Thanks to the
'shenanigans' in Puerto Rico - after lawmakers last month approved a bill
allowing some public corporations to restructure debt - PR bonds have
collapsed to record lows (and dragged a number of large Muni funds with them). As
Bloomberg's Michelle Kaske reports, A Franklin Templeton Investments
municipal-bond fund with the industry’s biggest allocation to Puerto Rico has
sunk to the lowest in its 29-year history as prices on the struggling
commonwealth’s debt set record lows. The price per share of the $300.4 million
Franklin Double Tax-Free Income Fund fell to $9.28 yesterday, the lowest since
its inception in April 1985. The drop follows Moody’s three-step downgrade of
Puerto Rico’s GOs last week to B2, five levels below investment grade.
Espirito
Santo Bonds Tumble to Records Amid Missed Note Payments - (www.bloomberg.com) Banco
Espirito Santo SA bonds plunged to record lows after a parent company delayed
payments on short-term notes, reawakening concern that banks remain vulnerable
as the euro region emerges from the sovereign debt crisis. Portugal government
bonds also fell, sending the 10-year yield up the most in two months, leading
declines among securities from Europe’s most indebted nations. A gauge of Portuguese stocks fell to a seven-month low. The selloff
was prompted by Espirito Santo International SA saying it delayed payments on
some securities and follows a warning from the bank in May that its parent
company faced a “serious financial situation” that could be damaging. Moody’s
Investors Service placed Banco Espirito Santo
'Second CIA spy in Germany':
Berlin raids Ministry of Defense - (www.rt.com) German
authorities have carried out a raid on the residence of a defense ministry
official suspected of passing secrets to the US, just one week after the arrest
of a German intelligence officer who worked as a double agent. Officials from
the Federal Prosecutor's Office said Wednesday that residential and office
premises of the staff of the Federal Ministry of Defense in Berlin were
searched on “initial suspicion of activity for an intelligence agency.”
According to the German newspaper Die Welt, a soldier of the Bundeswehr is
suspected of committing espionage. The individual was said to have made “intensive
contacts” with alleged US intelligence officials and was under the
surveillance of the Military Intelligence (MAD) some time ago. "When
sufficient evidence existed, the case was handed over to the federal
prosecutor," security sources told the paper.
US
government made at least $100 bn in improper Medicare payments last year - (www.rt.com) The
US government estimates that it made about $100 billion in improper payments
last year to those not entitled to receive them. The Medicare program only
accounted for about half of the amount that was erroneously doled out. Congressional
investigators believe the number of inaccurate payments could be even higher.
The House Oversight Subcommittee on Government Operations is scheduled to hold
a hearing on Wednesday afternoon regarding the improprieties. "Nobody
knows exactly how much taxpayer money is wasted through improper payments, but
the federal government's own astounding estimate is more than half a trillion
dollars over the past five years," said Rep. John Mica, chair of the
subcommittee. "The fact is, improper payments are staggeringly high
in programs designed to help those most in need — children, seniors and
low-income families." The total of inappropriate awards is down from a
peak in 2010 of $121 billion.
MBIA
in Longest Slump Ever on Puerto Rico Default Concern - (www.bloomberg.com) MBIA Inc. fell
for a 13th day, the bond insurer’s longest streak of declines since going
public in 1987 amid concerns it faces losses tied to guarantees on Puerto
Rico’s debt. MBIA, based in Armonk, New York, tumbled as
much as 5.8 percent before ending trading in New York down 3.5 percent at
$9.65, the lowest since October. Bermuda-based competitor Assured Guaranty Ltd. (AGO) also extended a decline today, falling 1.7
percent to $22.71, the lowest since February and the 11th drop in 12 days. MBIA,
with $4.8 billion of net exposure, and Assured, with $5.3 billion across three
units, are sinking on their Puerto Rico guarantees after surviving U.S.
mortgage losses that toppled other bond insurers during the financial crisis.
After lawmakers in the self-governing U.S. territory last month approved a bill
allowing some public corporations to restructure debt, prices on the
commonwealth’s bonds have dropped to record lows.
China
PPI Falls at Slowest Pace in Two Years - (www.bloomberg.com)
Japan’s Current-Account Surplus Masks Export Weakness - (www.bloomberg.com)
Japan’s Current-Account Surplus Masks Export Weakness - (www.bloomberg.com)
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