States Facing Public Pension Crisis
Morning Business Memo…
Public pension pain… and it's been getting a whole lot worse . A new report reveals the depths of the funding crisis in many states. Pew's Center on the States says few states have enough money in their public retirement systems to cover all the pensions they're required to pay in coming decades. Economic problems have decreased the value of their investments, and many states have simply failed to contribute their full share to retirement systems. Experts say retirement systems should have assets to cover at least 80 percent of the money they owe in the long run. In 2010 - says the report - Illinois had the lowest level of funding with just 45 percent of the $138.8 billion it owes long-term. Rhode Island was second on the laggard list with 49 percent of the $13.4 billion it owes long-term. Connecticut, Kentucky and Louisiana rounded out the bottom five. Some states have recently overhauled their pension systems and cut retirement benefits.
Do you have a gripe with your bank about credit cards? The government's new consumer finance watchdog agency is launching an online database of complaints. You can see what types of complaints people have filed against any bank that issues credit cards. You can also search complaints by ZIP code and see how banks responded. The database, which goes live today, does not include personal information.
The latest on Europe's debt mess… The yield on 10-year Spanish bonds remains perilously high. Rates on Spain's short term debt were sharply higher in this morning's auction compared with a similar sale last month. Ten-year rates are close to 7.10 percent, a rate usually considered unsustainable. A similar rate eventually forced three other countries in the eurozone to seek bailouts.
Greece's conservative leader is holding a second day of talks with rival party leaders in an attempt to form a coalition government. Antonis Samaras' New Democracy party won 129 of Parliament's 300 seats on Sunday, not enough to govern alone. He is seeking an alliance with parties that have pledged to respect the commitments for further austerity and reforms that Greece agreed to as conditions for two massive international bailouts. There's now growing debate in Europe over whether terms of the bailout for Greece will be renegotiated.
The leaders of the world's biggest economies are expected to present a united front on the global economy. The G20 summit statement in Mexico is expected to talk about efforts to boost growth and job creation. But there may not be much more than vague promises.
A big takeover in the retail pharmaceutical business… Walgreen - the largest U.S. drugstore operator - says it will spend $6.7 billion to buy a stake in European based health and beauty retailer Alliance Boots. Walgreen plans to spend about $4 billion in cash and more than 83 million shares for a 45 percent ownership stake, and it has an option to buy the rest of the company. Alliance Boots runs more than 3,300 health and beauty retail stores in 11 countries, and its pharmaceutical wholesale business supplies pharmacies, doctors and other providers in 21 countries.
Facebook is saving face after its disappointing IPO. Over the past three trading days Facebook shares rose nearly 15 percent. Facebook is now worth 17 percent less than it was when its shares were initially priced, but that's a lot better than the 32 percent loss two weeks ago.
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc