110,000 current and soon to be eligible retirees working for IBM woke up to an unpleasant surprise this morning, when the WSJ reported that as a result of soaring healthcare costs, the tech bellwether giant will be terminating its company-sponsored health plan and instead giving (soon to be former) beneficiaries a lump sum payment to buy coverage on a health-exchange: a move which the WSJ characterized as indicating that employers are unlikely to keep providing the once-common benefits as medical costs continue to rise.
Despite the eagerness of Abenomics and the new BOJ head Kuroda to have their cake and eat it too, in this case manifesting in soaring stock prices, plunging Yen, rising GDP and exports, and most importantly, flat or declining bond yields, so far they have succeeded in carrying out three of the four (assuming Japanese economic data reporting is more accurate than that of its neighbor China), as it is physically impossible for any central planner to completely overrule the laws of math, economics and physics indefinitely.
Add Desert Hot Springs, CA to the list of California cities in dire straits due to poor management, union wages, and ridiculously unaffordable pension promises.
Please consider Another U.S. city mulls bankruptcy due to soaring wages and pensions
The biggest story this week in oil and gas is declining profits and production and soaring project costs for the supermajors as disappointing fourth-quarter 2013 earnings come in, among other bad news for the big boys.
Last night Japan reported August CPI/inflation news that at least on the surface were astoundingly good: at 0.8%, the core CPI (excluding fresh irradiated food) was more than expected and higher than July's 0.7%. And yet, even the most absurdly clueless economist is silent this morning in their praise of Abenomics, which supposedly has succeeded in its one goal - bringing sexy inflation back. Why?
In what was painfully obvious to everyone with half a brain months ago (see here) Japan's desperate gambit at reflating would backfire massively by sending energy prices soaring in a world in which Japan no longer has access to internally producer, nuclear power plants and is forced to import all of its energy from abroad.
British no-frills airline easyJet said on Tuesday that net losses widened to £114 million (131 million euros, $187 million) during the group's first half, hit by soaring fuel costs.EasyJet said losses after tax for the six months to March 31 compared with a net loss of £59 million during the group's first half in 2009/10."The past six months has been tough with sharply rising fuel costs combined with cautious behaviour by consumers and an adverse impact from taxes on passengers," easyJet chief executive Carolyn McCall said in a statement.
Insurers say rising medical costs justify a 24.4% rate hike, but employers and the governor oppose it.
Soaring medical costs may drive up premiums paid by already beleaguered California employers for workers' compensation insurance -- after rates plunged 65% over the last six years.