D.C.
police plan for future seizure proceeds years in advance in city budget
documents – (www.washingtonpost.com) D.C. police have made plans for millions of
dollars in anticipated proceeds from future civil seizures of cash and
property, even though federal guidelines say “agencies may not commit” to such
spending in advance, documents show. The city’s proposed budget and financial
plan for fiscal 2015 includes about $2.7 million for the District police
department’s “special purpose fund” through 2018. The fund covers payments for
informants and rewards. The financial details emerged Wednesday, when the D.C.
Council’s judiciary committee unanimously voted to forward a bill that
would overhaul asset forfeiture laws in the nation’s capital. The bill would
raise the threshold of proof required for a forfeiture, bolster the rights of
individuals whose property has been taken and require that proceeds from
seizures under federal law go into the city general fund, rather than directly
to the police department. The full council is set to vote on the bill Tuesday. Council
member Tommy Wells, chairman of the Committee on the Judiciary and Public
Safety, said police should not have a financial incentive to make seizures. He
said the bill addresses problems that are common across the country. “All across
the nation, law enforcement agencies are directly benefiting from forfeiture,”
said Wells (D-Ward 6), who is leading the effort to reform asset forfeiture in
the District. “In those places, forfeiture proceeds go directly to the law
enforcement entity, creating at best the appearance of a conflict of interest,
and at worst, an unchecked incentive for slush funds.”
Tense
year end for distressed energy debt - (www.ft.com)
Investing on Wall Street this year has provided many surprises — some with a
painful sting. At the start of 2014, few expected a third straight year of
double digit gains for the S&P 500 and sharply lower long-term Treasury
yields. As for oil prices, the collapse from above $100 a barrel to their
lowest levels in five years was unforeseen. The surprising drop in crude oil illustrates the entrenched complacency
that has existed across markets for several years. Much of this has come from
aggressive central bank action that encouraged investors to downplay risk and
reach for returns. Sharply lower energy prices serve as a warning that
eventually even the most ebullient markets turn, or experience what is known as
a “Minsky Moment”. The economist Hyman Minsky highlighted how at some point
financial engineering and leveraged bets based on the idea that asset prices
will continue ascending usually reaches a peak and then unravels.
Junk
Fervor Cools as Oil Rout Upends Energy Debt: Credit Markets - (www.bloomberg.com) The
plunge in oil prices is
sapping demand in the $1.3 trillion U.S. junk-bond market, pushing yields to
the highest in more than a year and leaving energy companies struggling to
attract financing. Speculative-grade companies have sold $4.52 billion of securities
in the first four trading days of December, the slowest start for the month
since 2011. Gas producer Atlas Energy Group and EnTrans International LLC, a
maker of equipment used in fracking, have postponed loan and bond offerings as
crude oil prices fell to a five-year low and yields on high-risk, high-yield
bonds rose to 6.75 percent, the highest since October 2013. “If you have to
finance in this environment you are in real trouble if you don’t have the
absolute best assets,” Bill Zox, a money
manager at
Columbus, Ohio-based Diamond Hill Investment Group, which oversees $15 billion,
said by telephone. “Energy prices have been driving the high-yield market, and
investors are still discounting the rapid changes in this new environment.”
Feds
to Employers: You Can’t Dump Sick Workers Onto Obamacare – (www.businessweek.com) A loophole touted
as a way for employers to wiggle out of the Affordable Care Act’s insurance
mandate has been closed. What happened? Officials got wind that some employers
planned to bypass the mandate by giving their workers bonuses, asking them to
decline company-sponsored insurance and sending them to the Obamacare
marketplaces to buy subsidized policies. Nudging sick workers, in particular,
onto the exchanges could save employers’ health plans money and shift the cost
onto publicly subsidized plans. The Labor Department published new
guidelines in
November to explicitly forbid that practice. Why did employers think they could
get out of a federal mandate? “Brokers
were running around selling this idea that employers could give everybody a
raise and say, ‘Go, get the tax credit, knock yourselves out,’ and they
wouldn’t pay a penalty. Go figure—the IRS got wise to that,” says Keith
McMurdy, a partner in the employee benefit division at Fox Rothschild, a law
firm in New York City.
Japan's
In Deeper Trouble Than We Thought - (www.businessinsider.com) Japan's economic contraction in July-September
was deeper than initially expected on declines in capital expenditure,
according to revised data on Monday that backs Prime Minister Shinzo Abe's
recent decision to delay a second sales tax hike. The data indicated that the
hit from April's sales tax hike turned out to be bigger than expected. Abe, who
has called a snap poll for Sunday, hopes voters will agree that his stimulus
policies and a decision to delay a second sales tax hike next year will revive
a sputtering economy. The revision to an annualized 1.9 percent contraction,
more than a preliminary 1.6 percent fall, confirmed the world's third-largest
economy had slipped into recession with only a modest rebound expected in the
current quarter. It compared with a median forecast for a 0.5 percent
contraction.
Sudden
swings expose fragility of financial markets: BIS - (www.reuters.com)
China Stocks Set for Record Run; Oil Heads to 5-Year Low - (www.bloomberg.com)
China Stocks Set for Record Run; Oil Heads to 5-Year Low - (www.bloomberg.com)
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