A
federal solution to Chicago's public pension mess - Chicago Tribune - (www.chicagotribune.com) The
Center for Pension Integrity has a proposed solution for a comprehensive
settlement to rectify this mess, and it's a federal one. The relief would not
be a bailout. Instead, it would legally allow state and local governments with
plans that have funding levels below 50 percent to modify plan provisions and
benefits, and ultimately freeze and terminate the troubled plans. At the same
time, local taxes would be raised to fund the restructured plans completely
because beneficiaries shouldn't give up benefits unless they get complete
security for what is left. Because the plans would be terminated, taxpayers
would be able to see their way out of this crushing problem. The plans would be
restructured so that pension benefits would commence at age 65 no matter when
an employee retires. There would be a cap on overall public employment pension
benefits of 150 percent of the local median income — no more automatic
cost-of-living adjustments.
US
Freight Volume Drops to Lowest Level since 2009, “Industrial Recession” Hits
Full Stride, Overcapacity Crushes Rates - (www.wolfstreet.com) The
Cass Freight Index, tracking US shipment volumes by all modes of
transportation, fell 3.1% in September from a year ago, the 19th month in a row
of year-over-year declines, and the worst September since 2009. Donald
Broughton, Chief Market Strategist at Avondale Partners, wrote in the report: After offering a glimmer of “less bad” hope
in August [the index was down “only” 1.1% year-over-year], the Cass Freight
Index shipments data in September disappointed, providing hindsight that August
only gave us “false hope.” September data is once again signaling that overall
shipment volumes (and pricing) continued to be weak in most modes, with
increased levels of volatility, as all levels of the supply chain
(manufacturing, wholesale, retail) continue to try and work down inventory
levels.
BlackRock CEO sees 'hostile' climate as index
funds reel in cash - (www.reuters.com) BlackRock
Inc (BLK.N),
the world's largest asset manager, reported better-than-expected quarterly
profits on Tuesday, showing resilience in what has been a punishing market for
fund managers. CEO Larry Fink nonetheless told Reuters his industry faces a
"hostile" environment as investors migrate to products like index
funds, which typically carry lower fees than actively managed funds. Even as BlackRock
absorbed $55.1 billion in cash in its core products, revenue fell 2.5 percent
due to lower performance fees. A favorable tax rate and income from non-core
investments helped the company beat analyst forecasts.
Shadow
Banks, No-Down-Payment Subprime Mortgages in Canada’s House Price Bubble - (www.wolfstreet.com) The
new policies – covering mortgages that qualify for the government-guarantee
program and the lower rates that come with it – elicited pronouncements of
being everything from “somewhat overdue,” from Toronto Dominion Bank chief Ed
Clark, to “premature,” from Gary Mauris, president and CEO of Dominion Lending
Centres. The latter is a mortgage broker that negotiates with “shadow banks.”
These mortgage finance companies, that include the less-regulated private
lenders or mortgage investment corporations, offer a variety of loans,
including for low-ratio refinancing, jumbo mortgages, long-term amortizations,
and investment or rental properties. These “alternative” mortgages include
subprime mortgages.
The
Chicago Pension Scandal: $100,000+ Teacher Pensions Costing Taxpayers $1
Billion - (www.zerohedge.com) As
we've known for quite some time now, Illinois is completely insolvent, and in
large part due to enormous pension liabilities which as of December were underfunded to the tune of $111
billion. Not only is the state insolvent, its millionaires can't get out fast enough to avoid the massive tax hikes that will be
coming in what is sure to be a failed effort to plug budget holes, as well as
the soaring criminality in cities such as Chicago which recently just passed
the historic milestone of 1,000 gunshot victims in the fastest time in decades. Citing unfunded
pension plans, Moody's downgraded Illinois
to Baa1, and gave it a negative outlook back in October. The issue with the
pension funds (aside for the massive shortfall in funding) is that per the
Illinois Supreme Court, benefits cannot be altered. In a ruling last year, the
state's Supreme Court overturned a 2013 law that tried to ease the burden of
what was then a $105 billion funding gap. "Crisis is not an excuse to
abandon the rule of law. It is a summons to defend it." the supreme court said in its ruling.
Fed’s Regional Bank Boards Ramp Up the Call for
a Rate Increase - (www.bloomberg.com)
Crunch looms on QE as European Central Bank meets - (www.ft.com)
As China’s Economy Slows, a Look at What Could Happen - (www.nytimes.com)
China Holdings of U.S. Treasuries Drop to Almost Four-Year Low - (www.bloomberg.com)
Crunch looms on QE as European Central Bank meets - (www.ft.com)
As China’s Economy Slows, a Look at What Could Happen - (www.nytimes.com)
China Holdings of U.S. Treasuries Drop to Almost Four-Year Low - (www.bloomberg.com)
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