Daily Digest

Daily Digest 12/19 - 82% Chance CA Pensions Going Under, Environmentalists Get Down To Earth, Strike 3 For Fracking?

Monday, December 19, 2011, 1:46 PM
  • Report: 82% Chance California Pensions Are Going Under (and You’ll Be Next)
  • Guest Post: Jon Corzine, MF Global, And Unaccountability
  • Earthquakes, Water Pollution and Increased Greenhouse Gas Emissions? Fracking - Strike Number Three?
  • Abundance of Shale Gas Could Drive the US Manufacturing Industry to New Heights
  • India’s Coal Shortages to Worsen as Coal India Reduces Production Target
  • Environmentalists Get Down to Earth
  • Europe’s Energy Companies Call for Higher Carbon Prices

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Economy

Report: 82% Chance California Pensions Are Going Under (and You’ll Be Next) (June C.)

We’ve discussed the destruction of pension funds before, and soon it will become reality. It’s obvious that local, state and federal governments have no intention of cutting spending, regardless of whether that spending is for essential services or discretionary. This means that in order for California (as well as other pension funds nationwide) to keep their funds solvent they need to earn some serious return on their investments. In the case of California that’s 12.5% a year. You’d be hard pressed to find a mainstream financial adviser anywhere in the world that could deliver these kinds of gains (unless, of course, they’re advising you to buy collapse-proof assets like gold and silver).

Guest Post: Jon Corzine, MF Global, And Unaccountability (June C.)

Fast forward to the current MF Global flameout. Abelow shifted to Corzine’s Chief Operating Officer. And not only did Corzine ratchet up the ante on ways to really piss off farmers, but after several days of engaging in verbal dodge ball with Congress, this ‘thorough and exacting boss’ maintained his Forest Gump type cloak of secrecy regarding the stolen $1.2 billion of his customers’ segregated money.

Earthquakes, Water Pollution and Increased Greenhouse Gas Emissions? Fracking - Strike Number Three? (James S.)

The combination of horizontal drilling and hydraulic fracturing has already transformed North America's natural gas market in less than half a decade. In 2000 shale gas was 1 percent of America's gas supplies; today it is 25 percent. While U.S. energy companies began fracking for gas in the late 1990s, there was a dramatic increase in 2005 after the administration of President George W. Bush exempted fracking from regulations under the U.S. Clean Water Act. According to Washington’s energy Information Agency, shale gas production has grown 48 percent annually.

Abundance of Shale Gas Could Drive the US Manufacturing Industry to New Heights (James S.)

“An underappreciated part of the shale gas story is the substantial cost benefits that could become available to manufacturers based upon estimates of future natural gas prices as more shale gas is recovered,” said Bob McCutcheon, U.S. industrial products leader, PwC. He continued, “In fact, the number of U.S. chemicals, metals and industrial manufacturing companies that disclosed shale gas potential and its impact so far in 2011 easily surpassed that of the last three years combined, indicating this is of growing importance in the outlook of U.S. manufacturers. The significant uptick in shale gas commentary among the manufacturing community reflects the positive influence that shale gas is having from investment, operational and demand standpoints.”

India’s Coal Shortages to Worsen as Coal India Reduces Production Target (James S.)

CIL accounts for 81 percent of India’s domestic coal production and is the sole supplier of coal and other basic raw materials to state-owned power utilities across the country. It has already missed the target in 2010-11 with the production barely inching up 0.2 percent over a year before, touching 431 million metric tons. As a pre-emptive measure, CIL cut the current year’s target for the second time to 440 MT from 447 MT, itself lowered from 452 MT set in the beginning.

Environmentalists Get Down to Earth (jdargis)

If there was a tougher moment over the last 40 years to be a leader in the American environmental movement, it would be hard to put your finger on it. The earth is warming, perhaps catastrophically, yet legislative efforts to cap carbon emissions collapsed in 2010. Global carbon limits have been equally elusive, as a conference in Durban, South Africa, showed again last week.

Europe’s Energy Companies Call for Higher Carbon Prices (James S.)

Graeme Sweeney, executive vice-president of renewables, hydrogen and carbon dioxide (CO2) at oil major company Shell, said: “The CO2 price is currently too low to drive the essential energy efficiency measures and support the development of low-carbon technologies at the required speed and scale. To resolve this situation, we need an immediate and meaningful recalibration of the EU Emissions Trading System to drive up the price of CO2.”

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."

8 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2630
Repost

"It's one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global. It's something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%.

That, in essence, is what's happening to investors whose bars of silver and gold were held through accounts with MF Global.

The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value of their holdings. In other words, while traders already may have paid the full price for delivery of specific bars of gold or silver—and hold "warehouse receipts" to prove it—they'll have to forfeit 28% of the value.

That has investors fuming. "Warehouse receipts, like gold bars, are our property, 100%," contends John Roe, a partner in BTR Trading, a Chicago futures-trading firm. He personally lost several hundred thousand dollars in investments via MF Global; his clients lost even more. "We are a unique class, and instead, the trustee is doing a radical redistribution of property," he says.

Roe and others point out that, unlike other MF Global customers, who held paper assets, those with warehouse receipts have claims on assets that still exist and can be readily identified. "

A few headlines:

  1. China Local Debts Dwarf Official Data Prompting Alarms
  2. EU Ministers Seek Crisis IMF Funding as Confidence Wanes
  3. EU Loans To IMF Likely To Fall Short Of Expected EUR200 Billion: Sources
  4. Fitch may cut France, six more euro zone countries
  5. Medicaid cuts stun N.J. nursing homes
  6. Markets Unprepared for Euro Zone Default, JPMorgan’s Staley Says
  7. Rhode Island Munis Face Downgrades as Economy Sags, Moody's Says
Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1840
Plan B - How To Loot Nations And Their Banks Legally

This is a long read with a explanation that builds up to the end, but I think it's worth reading. A must-read for those who want to delve into the shark tank that is derivatives and re-hypothecation trading.

It's a thought about what the banks may be doing to each other in this end game, where neither Plan A (Central Bank rescues) nor Plan B (banks preying on banks) bode well for the rest of us - using derivatives and hypothecation.

Plan B - How To Loot Nations And Their Banks Legally (December 15, 2011)
"So when a bank goes bankrupt, BEFORE even the most senior bond holders, the repo lenders and derivatives traders can remove, or keep all the assets pledged to them. This amendment which was touted as necessary to reduce systemic risk in financial bankruptcies also allowed a whole range of far riskier assets to be used, making them too immune from the automatic stay in the event of bankruptcy. Which meant traders flocked to a market where risky assets would be traded and used as collateral without apparent risk to the lender. The size of the repo market hugely increased and riskier assets were gladly accepted as collateral because traders saw that if the person they had lent to went down they could get your money back before anyone else and no one could stop them."
http://www.golemxiv.co.uk/2011/12/plan-b-how-to-loot-nations-and-their-b...

Forgive me if this has already been posted.

Poet

deehay's picture
deehay
Status: Member (Offline)
Joined: Feb 8 2011
Posts: 5
Times a changing

This made me smile. 

I wonder how many producers at RTAmerica have seen a Chris presentation. I wonder how long before the American MSM will attempt some useful education like this.

I wonder when it will be too late.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2342
Predator of Wall Street

Professor Yaneer Bar-Yam, President of NECSI, maintains this was no "freak" or coincidental event. "When 100 million shares are borrowed on a single day and then returned on a single day, the evidence that this is a concerted action is hard to refute. The likelihood of such an event happening by coincidence is one in a trillion."

Physorg

Looks as though Max Keiser has a point.

"There used to be a rule that prevented it from happening by forbidding borrowed shares from being sold in large blocks that drive the price down," said Bar-Yam. "The Securities and Exchange Commission repealed that rule, known as the price test or uptick rule, on July 6, 2007."

Question. If a bomb is disguised as a TV, is it a bomb or a TV? It is a bomb. If a monster looks like a man, is it a man? (Rhetorical question)

Are psychopaths humans? Do they qualify for human rights?

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2342
Things that you dont know.

McKubre gives a talk at SRI in Silicom Valley on the state of Cold Fusion.

http://www.youtube.com/watch?feature=player_detailpage&v=EtweR_qGHEc

A lot has happened in the last 20 years since the original Pons and Fleishmann experiments.

A new physics is emerging.

Caution: Not for pseudosceptics.

horstfam's picture
horstfam
Status: Bronze Member (Offline)
Joined: Sep 6 2008
Posts: 71
Are we a lot closer to SDR's than we realize?

The USPS has already put on their web site the conversion to SDR's. What's this all about?

Link: http://pe.usps.com/text/imm/immc3_007.htm

Scroll to: 323.62 Accepting Clerk's Responsibility


Maybe we are a lot closer to a one-world currency than we realize. Can anyone shed light on this?

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1507
euro and SDRs (special drawing rights)

horstfam,

The USPS has already put on their web site the conversion to SDR's. What's this all about?

Link: http://pe.usps.com/text/imm/immc3_007.htm

Scroll to: 323.62 Accepting Clerk's Responsibility

Maybe we are a lot closer to a one-world currency than we realize. Can anyone shed light on this?


Actually, this looks like they are anticipating the Euro to be replaced by SDRs - and soon.

Your link was to a section that was mainly conversion charts to pay for international insurance on package, under intrenational shipping. Interesting rate of exchange...
deehay's picture
deehay
Status: Member (Offline)
Joined: Feb 8 2011
Posts: 5
Sheesh

I scrolled down just a little further past the above video in my Youtube subscription, and lo and behold. Congrats Chris.

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