San
Bernardino Dumps CalPERS As Pension ‘Death Spiral’ Looms - (www.breitbart.com) The
City of San Bernardino has voted to become the first participant to dump
CalPERS after the state’s pension plan shocked participants by announcing
contribution rates would rise by 61 percent over the next five years. The
city’s savings will grow from $4.7 million next year to
$17.2 million a year by 2021. Each CalPERS participant that leaves will force
pension contributions rates to rise even faster in what could result in a
“death spiral.” Breitbart News reported four
months ago that the California Public Employees’ Retirement System’s actuaries
had demanded the under-funded pension plan’s plans participants increase annual
cash contributions by a stunning 10 percent in each of the next 5 years due to an
inappropriate “assumption” about the solvency of the plan. That meant CalPERS’
annual payments would leap from $4.5 billion this year to $7.25 billion in year
five.
US
shale oil industry hit by $30bn outflows - (www.ft.com) US shale producers
reported a cash outflow of more than $30bn in the first half of the year, in a
sign of the challenges facing the US’s once-booming industry as the slump in oil prices begins
to take effect. The shortfall points to a rise in bankruptcies and
restructurings in the US shale oil industry, which has expanded rapidly in the past seven
years but has never covered its capital expenditure from its cash flow. Capital
spending by listed US independent oil and gas companies exceeded their cash
from operations by about $32bn in the six months to June, approaching the
deficit of $37.7bn reported for the whole of 2014, according to data from
Factset, an information service. US oil production fell in May and June, according
to the US Energy Information Administration, and some analysts expect it to
continue falling as financial constraints limit companies’ ability to drill and
complete new wells.
Foreign Firms Feel China’s Chill - (online.wsj.com) Market
turmoil and Beijing’s crackdown on brokers and investors is complicating the
plans of funds and banks. Months of
market turmoil in China and a government crackdown on brokers and investors is complicating
the plans of foreign funds and investment banks that had bet on bigger business
in China. The chaos and uncertainty marks a sharp detour from as recently as
this spring, when Chinese shares were soaring and a march of new investment
programs were being prepared to make it easier for foreigners to access China’s
mainland markets. Global investors now are showing little appetite for Chinese
assets. A total quota of 300 billion yuan ($47.13 billion) that Beijing granted
last year giving foreign investors unprecedented access to shares trading on
China’s main stock market in Shanghai via a trading link with Hong Kong is less
than half used nearly a year after the program’s launch.
Germany Feels Backlash for Welcoming Migrants - (online.wsj.com) Praise
for Germany’s handling of the thousands of refugees pouring into the country is
giving way to domestic and international criticism of Berlin’s open-arms
policy. The criticism, though still muted, could spell trouble for German
Chancellor Angela Merkel once
the outpouring of sympathy that has greeted the migrants since late last week subsides and Berlin
resumes its push to distribute them more broadly across Europe. The
chancellor’s decision on Friday night to let thousands of migrants traveling
through Hungary into the country “sends a completely wrong signal in Europe,”
Bavarian Interior Minister Joachim Herrmann told public television Saturday.
“This must be corrected.” Leaders of the Christian Social Union, Bavaria’s
ruling party and an ally of Ms. Merkel’s Christian Democrats, unanimously
criticized the decision as wrongheaded during a telephone conference on
Saturday, Andreas Scheuer, the party’s secretary-general said.
‘Chaos
and carnage’ threaten emerging market-focused hedge funds - (www.ft.com) Holidaying investment professionals were jolted
out of their sun loungers last month when extreme volatility across global
markets forced them to switch on their BlackBerrys and respond to panicky
emails from clients and colleagues. China’s stock market rout throughout the summer,
followed by the Chinese central bank’s unexpected decision to devalue its currency last month, prompted a rollercoaster week
in markets on August 24. The fallout for traditional fund houses with an
emerging market focus, such as UK groups Aberdeen Asset Management and Ashmore,
was clear. Both companies suffered a sharp drop in their share prices over the past month, with some analysts
predicting further falls if the US raises interest rates later this year.
China stocks lead Asia lower in choppy trade - (www.cnbc.com)
Emerging Currencies Drop as Ambiguity on Fed Timing Hurts Stocks - (www.bloomberg.com)
Charting the Markets: China Respite Over - (www.bloomberg.com)
Europe Stocks Rebound From Weekly Drop as Glencore Leads Miners - (www.bloomberg.com)
Asian Stocks Swing With Chinese Shares After Holiday; Yen Drops - (www.bloomberg.com)
Lira Weakens to Record as Stocks Retreat After Deadly Attack - (www.bloomberg.com)
Korean Won Falls Below 1,200 a Dollar for First Time Since 2011 - (www.bloomberg.com)
China's Banks Getting Less Strict on Bad Loans, Moody's Says - (www.bloomberg.com)
Indonesia Is More Exposed to Capital Flight Than Malaysia, Says S&P - (www.bloomberg.com)
Greece considers U.S. request to close airspace to Russian aid flights - (www.reuters.com)
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