Daily Digest

Daily Digest 11/17 - The Young And The Broke, Converting Wasted Energy To Electricity, Keystone XL Pipeline Will Be Rerouted

Thursday, November 17, 2011, 11:44 AM
  • Presenting Deutsche Bank's Pitchbook To The ECB To Go "All In"
  • The young and the broke – 37 percent of young households held zero or a negative net worth in 2009
  • We’re In The Middle Of A Run On Europe—And It’s Gonna Get Worse
  • Why Krugman's Argument Against Fossil Fuels Fails Economics 101
  • USA Export Land Model Analysis For Food Energy Production And Consumption: Part 3
  • Every Little Helps - Converting Wasted Kinetic Energy into Electricity
  • Keystone Pipeline Will Be Rerouted
  • Mongolia bids to keep city cool with 'ice shield' experiment

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Economy

Presenting Deutsche Bank's Pitchbook To The ECB To Go "All In" (June C.)

Behold: "The Tipping Point - Time To Call The ECB" - Deutsche Bank's definitive attempt to encapsulate the Mutual Assured Destruction that we are "certainly" all going to suffer, unless the ECB prints, and prints, and prints. The bottom line, you would tell Draghi, is "do nothing, and pull the cord now; or do something, risk hyperinflation which may or may not come, but at least extend and pretend for a few years." And one wonders why Crude is about to pass $100...

The young and the broke – 37 percent of young households held zero or a negative net worth in 2009 (Mike K.)

It is hard to imagine a future generation of Americans were those moving forward are actually poorer than the current generation. Yet that is precisely the world we are diving into. Those that purchased homes in the pre-bubble days and alsoattended college in less inflated times have a massive head start on the current younger generation that is contending with a bursting housing bubble and a financial system that might as well be a roulette wheel. One startling figure from a recent Pew Research report shows that 37 percent of young households hold zero or a negative net worth. This is not a good way to build a healthy financial future. The wealth gap between previous generations is also becoming increasingly large. This narrative ties into the overall systemic pilfering of themiddle class.

We’re In The Middle Of A Run On Europe—And It’s Gonna Get Worse (Phil H.)

France is seeing historic spreads this morning with the 10-year yield at 3.67%, and Holland—Holland!—seeing wicked spreads as well. Christ, Holland is essentially Germany’s Germany insofar as fiscal prudence is concerned—and the Dutch yield is surprisingly wide.

Energy

Why Krugman's Argument Against Fossil Fuels Fails Economics 101 (James S.)

In a recent column, “Here Comes the Sun,” Paul Krugman invokes this view to argue for major taxation on fracking (and, by implication, all other fossil fuel production). To believe otherwise, he says, is to be economically illiterate.

USA Export Land Model Analysis For Food Energy Production And Consumption: Part 3 (Crash_Watcher)

Fewer than 2 percent of Americans farm for a living today (USDA Extension). That would be about 6.1 million people in the USA in 2007 or, less than 0.1 percent of the world’s population, responsible for 15 percent of the world’s food energy production. This is truly a remarkable accomplishment and a testament to the efficiency of the industrial, petroleum-driven food production system.

Every Little Helps - Converting Wasted Kinetic Energy into Electricity (James S.)

NET has developed a rumble strip called MotionPower that converts the movement and changes in velocity of vehicles into electricity. However, the amounts of electricity produced are small and are therefore more useful for powering devices local to the rumble strip. Rather than providing an alternative to fossil fuelled power plants it is more likely to provide a more cost effective alternative to solar panels.

Company chief executive John Conklin told AFP that this type of system has tremendous potential in high-traffic areas, such as sports venues, shopping malls, and toll and border crossings, to power lighting and other electrical systems.

Keystone Pipeline Will Be Rerouted

At a special session of the Nebraska Legislature, a state senator announced Monday that TransCanada had agreed to adjust its intended route of the Keystone XL oil pipeline to avoid the environmentally sensitive Sand Hills region of the state.

Environment

Mongolia bids to keep city cool with 'ice shield' experiment (jdargis)

The project aims to artificially create "naleds" - ultra-thick slabs of ice that occur naturally in far northern climes when rivers or springs push through cracks in the surface to seep outwards during the day and then add an extra layer of ice during the night. Unlike regular ice formation on lakes - which only gets to a metre in thickness before it insulates the water below - naleds continue expanding for as long as there is enough water pressure to penetrate the surface. Many are more than seven metres thick, which means they melt much later than regular ice.

Article suggestions for the Daily Digest can be sent to dd@PeakProsperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

9 Comments

Poet's picture
Poet
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Saxplayer00o1's News For 11/17 Reposted

Saxplayer00o1 wrote:

(For 11/17)

"The Spanish Treasury on Thursday sold €3.562 billion ($4.79 billion) of benchmark 10-year paper at a maximum yield of 7.088%, which was the highest yield paid since the euro's inception. The bond represents a new series, therefore yields cannot be directly compared to results of a prior-10-year auction, the Treasury said."

"Europe has as little as days or weeks to act to avoid a default by a euro-region country, Citigroup Inc. Chief Economist Willem Buiter said today."

Other headlines:

  1. France sells debt but borrowing costs rise: report
  2. Spanish and French bond yields soar
  3. Italy bank association calls for BTP-day on Nov.28
  4. Italy to Sell 440 Billion Euros of Debt in 2012, Cannata Says
  5. Greek 10-Month Budget Deficit Widens to 20.1 Billion Euros
  6. Factbox: Banks to cut more than 120,000 jobs
  7. Citigroup may cut 3,000 or more jobs
  8. Detroit mayor: Concessions vital to avoid takeover and Detroit Faces $45 Million Gap, State Takeover, Mayor Bing Says
  9. U.S. Banks Face Contagion Risk From European Debt (More info from yesterday's news)
  10. Moody's downgrades raft of German banks
  11. Franco-German Battle over the ECB Intensifies
  12. North Las Vegas facing $15.5 million budget deficit
  13. Palm Beach County school officials foresee $52 million budget deficit next year
  14. Cities brace for 'Occupy' movement's 'mass day'
  15. Henrico facing estimated $71 million budget shortfall (Virginia)
  16. Ireland to hike sales tax to 23%
  17. Robo-signing scheme busted (Las Vegas)
  18. Fitch: Imperative that Italy retains market access

Note: Zerohedge here wrote about a massive buy of Italian and Spanish debt by the ECB. It is confirmed here and here. Here are the current 10 year yields (and graphs) from Italy and Spain.

crash_watcher's picture
crash_watcher
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Scraping the bottom of the barrel

This recent Bloomberg article by Gizitdinov gives a very nice example of how difficult it has become to find and produce new oil to replace the dwindling giants. Here are some selected quotes from the article:

After 11 years and $39 billion of investment, Exxon Mobil Corp., Royal Dutch Shell Plc (RDSA) and their partners have yet to sell a drop of oil from what was touted as the world’s biggest discovery in four decades.

Centered on a man-made island 70 kilometers (44 miles) from Kazakhstan’s coast, the Kashagan project is just months away from completion, $15 billion over budget and 8 years behind schedule.

...

Kashagan, which may hold enough oil to supply the world for six months, has become a cautionary tale for oil companies worldwide as they spend an estimated $20 trillion through 2035 finding supplies in ever more difficult places. Expenses mounted as engineers underestimated the complexity of drilling under a region of the Caspian Sea that’s frozen almost half the year. The government accused the partners, which are allowed to recoup spending before sharing the oil, of inflating costs.

....

Kashagan has proved potentially lethal as well as complicated. The crude oil, locked 4,200 meters (2.6 miles) below the seabed in a highly pressurized reservoir, has a high concentration of poisonous “sour gas,” according to North Caspian Operating Co., or NCOC, the venture formed to manage the project.

....

The prize for the five main partners is as much as 252,000 barrels of crude a day each from peak output once the second phase is running. That kind of production is growing harder to find worldwide as existing fields age and governments in the Middle East, Russia and Latin America reserve control for state companies.

....

Kashagan may initially produce 370,000 barrels a day, which will rise to 450,000 barrels a day by 2016, Kazakhstan’s Mynbayev said Oct. 4. The expansion would more than triple that to 1.5 million barrels a day, according to President Nazarbayev. That’s almost double Kazakhstan’s current production of about 1.6 million barrels a day, about the same as Libya produced before the revolt against Muammar Qaddafi.

....

Completing the expansion as early as 2017 is only possible if the partners choose a plan by early next year, KazMunaiGaz National CEO Bolat Akchulakov said in an interview in Astana, the capital, on Oct. 25.

from: Biggest Oil Find in Decades Becomes $39B Caution

So, we have, purportedly, the largest discovery in four decades being delayed by a decade, over budget, and, which ultimately may supply world oil consumption for 6 months. However, that rate of production will be only 0.37 bbs/d (the parteners spliting 0.25 bbs/d), and,  that rate of production could maybe be increased to approach the production rate in pre-revolt Libya, but, only with another five years of work and further investment from the big oil companies. 

In light of such reports, how anyone (e.g., Yergin and the EIA) can believe that the global oil production will continue to increase, or even remain flat, in the coming decades is beyond me. 

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Fed's Dudley: 'Deeply unhappy' with job outlook

"William Dudley, the president of the New York Federal Reserve Bank, said Thursday that he is "deeply unhappy" with the current forecast of prolonged high unemployment. As a result, Dudley said he planned to "continue to review whether there is more that we could do that would bring more benefit than cost." Dudley's comments came in a speech at the U.S. Military Academy at West Point. He said that the Fed could engineer another round of asset purchases, saying it "might make sense" to purchase mortgage-backed securities to aid the housing market. Dudley said he also supported giving the market clear guidance about what conditions the Fed would expect to see before raising short-term interest rates"

"CHICAGO (MarketWatch) -- Food stamp use continued to rise in the U.S last year, with almost 12% of all households receiving some form of the assistance, the Census Bureau said Thursday. In 2010, 13.6 million households reported receiving food stamps, a 16% increase over the previous year. The state with the highest percentage was Oregon at 17.9%. Other states near the top of the list include Tennessee and Michigan. Among those with the lowest level of food stamp use were California, New Jersey, and Wyoming. Of the 50 states and the District of Columbia, 45 reported increases while only one - Louisiana - posted a decrease. Nevada, Idaho and Rhode Island had the fastest rates of growth in food stamp use. "

Oregon revenue forecast down another $107M
 

....................Poet.: Thanks for the earlier repost.

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2008 redux..

MF Global fallout.

"The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not.And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy."

http://market-ticker.org/akcs-www?post=197702

LME Warehouses in US Overloaded with Copper, Zinc, Aluminum, Steel because of Economic Downturn

http://globaleconomicanalysis.blogspot.com/2011/11/lme-wharehouses-in-us-overloaded-with.html

Forex trouble ?

Poet's picture
Poet
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Shouldn't The Punishment Fit The Crime?

Another good one from Matt Taibbi at Rolling Stone. Makes you wonder why this stuff isn't in The New York Times, Washington Post, MSNBC, or Fox News...

Woman Gets Jail For Food-Stamp Fraud; Wall Street Fraudsters Get Bailouts (November 17, 2011)
"All of these companies have been repeatedly dragged into court for fraud, and not one individual defendant has ever been forced to give back anything like a significant portion of his ill-gotten gains. The closest we've come is in a fraud case involving Citi, in which a pair of executives, Gary Crittenden and Arthur Tildesley, were fined the token amounts of $100,000 and $80,000, respectively, for lying to shareholders about the extent of Citi’s debt. Neither man was forced to admit to intentional fraud. Both got to keep their jobs. Anita McLemore, meanwhile, lied to feed her children, gave back every penny of her "fraud" when she got caught, and is now going to do three years in prison."
http://www.rollingstone.com/politics/blogs/taibblog/woman-gets-jail-for-...

Poet

P.S. - Reminds me... Seen this?

Shouldn't the punishment fit the crime?

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heffe
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Monetary Economics usurps objective law

It should be clear by now that under a monetary-market system, that any attempts of establishing an objective, lawful, and honest judicial system are likely (or certainly) going to be usurped by corruption.  Similar to Rothschild's quote, "He who has control over the money, has control over the law"

I will say it now, and continue to say it.....our only hope for true prosperity is in the application of the scientific method towards decision making. This means every individual, every city, every country, adopting the basis of the scientific method of inquiry. Most important is accepting the potential to be falsified, not holding on to prior beliefs for sake of confirmation bias, ego complex, or belief preserverance. This means accepting that the monetary model of resource management may be ill-formed, and backwards to our goals. I know it will come soon enough, I just wish the older generations would step out of their ideological comfort zone and start approaching our problems, with a sincerity, objectivity, and true self interest in bettering this world.

Poet wrote:

Another good one from Matt Taibbi at Rolling Stone. Makes you wonder why this stuff isn't in The New York Times, Washington Post, MSNBC, or Fox News...

Woman Gets Jail For Food-Stamp Fraud; Wall Street Fraudsters Get Bailouts (November 17, 2011)
"All of these companies have been repeatedly dragged into court for fraud, and not one individual defendant has ever been forced to give back anything like a significant portion of his ill-gotten gains. The closest we've come is in a fraud case involving Citi, in which a pair of executives, Gary Crittenden and Arthur Tildesley, were fined the token amounts of $100,000 and $80,000, respectively, for lying to shareholders about the extent of Citi’s debt. Neither man was forced to admit to intentional fraud. Both got to keep their jobs. Anita McLemore, meanwhile, lied to feed her children, gave back every penny of her "fraud" when she got caught, and is now going to do three years in prison."
http://www.rollingstone.com/politics/blogs/taibblog/woman-gets-jail-for-...

Poet

P.S. - Reminds me... Seen this?

Shouldn't the punishment fit the crime?

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Posts: 1267
Communism and it's effects through Austrian economic lense

An interesting article from Casey Research today...

Casey Research wrote:

Just like low interest rates encourage wasteful projects, the artificially low commodity prices – particularly oil – did the same thing. Just look at the auto-focused structure of American cities, which barely have any mass transport and where the suburbs are endless miles outside the city centers. Cities such as Los Angeles and Houston were not built with the assumption of $200 or higher oil prices. They were built on artificially lower demand for oil – a low demand created by communist-crippled economies elsewhere. Just like a real-estate investor leverages himself in hopes of a perpetually booming market, we have pushed our cities to the limit assuming an endless supply of cheap oil. In both cases, the interventions of world governments were pushing people in the wrong direction.

http://www.caseyresearch.com/cdd/what-2011-gold-price-correction

The newsletter also has some interesting charts about gold corrections when viewed on different timelines (daily, weekly,...).

Poet's picture
Poet
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Posts: 1840
Occupy Wall Street Tried To Occupy Wall Street

By way of a friend...

Occupy Wall Street Tried To Occupy Wall Street, Police Crack Down HARD
 

Link to above video:

Why is it we have to get our news from so many alternate, non-mainstream sources?

Poet

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Poet wrote: Another good one

Poet wrote:

Another good one from Matt Taibbi at Rolling Stone. Makes you wonder why this stuff isn't in The New York Times, Washington Post, MSNBC, or Fox News...

Woman Gets Jail For Food-Stamp Fraud; Wall Street Fraudsters Get Bailouts (November 17, 2011)
"All of these companies have been repeatedly dragged into court for fraud, and not one individual defendant has ever been forced to give back anything like a significant portion of his ill-gotten gains. The closest we've come is in a fraud case involving Citi, in which a pair of executives, Gary Crittenden and Arthur Tildesley, were fined the token amounts of $100,000 and $80,000, respectively, for lying to shareholders about the extent of Citi’s debt. Neither man was forced to admit to intentional fraud. Both got to keep their jobs. Anita McLemore, meanwhile, lied to feed her children, gave back every penny of her "fraud" when she got caught, and is now going to do three years in prison."
http://www.rollingstone.com/politics/blo...

Poet

Poet, thanks for the link to the Matt Taibbi article.  I love Matt Taibbi's work; to me, he is one of the clarion voices of truth of our times.  Kinda like our own modern-day Paul Revere: "The bankers are coming!!   The bankers are coming!!'

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