Daily Digest 1/11 - Venezuela Imports Down More Than Half, Companies Struggle With Pension Plans
Recession-hit Venezuela's imports plunged by more than half to nearly $18 billion in 2016, President Nicolas Maduro said on Monday, as the country prioritized foreign debt payments despite chronic product shortages.
Remarkably, in a span of just 15 years, Houston’s unfunded pension liability went from $0 to $4 billion. In one of the most high-profile reports it produced in 2016, the Kinder Institute explored how this liability grew so large, so fast.
Among the specific issues referenced in the resolution are: the size of the Metro Board and the qualifications of its members; whether binding arbitration used for labor discussions in order to prevent strikes should be removed; financial changes to address the costs of operations and a $2.5 billion unfunded pension and other post-employment benefits liability.
The systems are projected to run out of money in the coming decade and were depending on legislative sign-off of the city’s enactment of a water and sewer usage tax and telephone surcharge designed to help get them 90 percent funded in 40 years.
Lower-than-expected bond yields following the Brexit vote last June have added to U.K. pension deficits, which swelled to £560 billion, £90 billion higher than the previous year, according to a report released Monday by PricewaterhouseCoopers LLP. The funding gap is at its highest level since PwC began its tracking in 2012.
“They spent us into a $130 billion pension deficit, they allowed $11.2 billion in bills to pile up, they have failed to pass budgets … and they refuse to change the business climate or compensation that pays state union workers double what the average Illinoisan makes.”
Austin, Dallas, Houston and San Antonio carry a whopping $22.6 billion in unfunded pension liability, according to Moody’s, the financial analysis firm. “Rapid growth in unfunded pension liabilities over the past 10 years has transformed local governments’ balance sheet burdens to historically high levels,” the Moody’s report stated.
Annual debt payments tied to a bond issue that was called the “Pension Security Plan” in 1997 are continuing to ramp up and will reach $500 million in the next few years. The state’s annual pension contribution is also set to increase by nearly $600 million when Gov. Chris Christie introduces a new state budget next month.
With foreign-exchange shortages mounting, Nigerian businesses have been forced to the black market, where each dollar trades for about 490 naira, compared with the official rate of 315. The BDCs will initially quote a rate of 399, Gwadabe said.
In December, inflation in Germany jumped to 1.7 percent year-on-year, compared with 1.1 percent for the whole euro area. The Bloomberg consensus forecast for 2017 German inflation is 1.6 percent, up from 0.4 percent in 2016; that means a negative real interest rate for savers.
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