Daily Digest

Daily Digest 1/28 - Americans View Global Economy as Negative, Unemployment Benefits, Foreclosure Rates Slow

Friday, January 28, 2011, 12:00 PM
  • The Big Squeeze: Predicting the Effects of Savings Extortion and Abuse of the Middle Class
  • The Blind Men & The Elephant—The Totally Bullshit FCIC Commission Report and Dissents
  • Americans Increasingly View Global Economy As A Negative
  • Crisis May Seem Criminal, but Try Making a Case
  • Ahead of the Bell: Unemployment Benefits
  • Foreclosure Rates Slow In Hardest-Hit Areas
  • An Export Land Model Analysis for the USA-Part 1

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Economy

The Big Squeeze: Predicting the Effects of Savings Extortion and Abuse of the Middle Class (charles)



Not only have governments from China to the United States committed themselves to a chess game meant to eke out relative advantages on a sinking ship, but they have positively rewarded those who are speeding the collapse. A simple, cannibalistic economic rule now persists until a new system emerges: Economic manipulation, destruction, and extortion are simply more profitable, far more profitable, than good old fashion value creation. Disaster capitalism will be pursued full force.

The Blind Men & The Elephant—The Totally Bullshit FCIC Commission Report and Dissents (gonzalo)



Then the report squarely blames the Federal Reserve for abdicating its regulatory responsibility—which is very true: The Fed under Greenspan made it practically a point of honor to leave all the financial markets alone, and let them “innovate” as they saw fit, without vetting whether the “innovations”—like credit default swaps, mortgage bonds, and so on—were dangerous or not. Warren Buffett famously called default swaps the “financial weapons of mass destruction”—before the crisis. So Greenspan should have known better.

Americans Increasingly View Global Economy As A Negative



The poll also shows a widespread sense that that the closer ties among economies have a direct connection to what is happening in the United States, and that the durability of an interconnected world economy is the primary factor in global stability. The fragility of the international economy is rated as the top threat to world stability by one-third of the public. Security concerns taken together, such as international terrorism and the wars in Afghanistan and Iraq, also rate as top threats for one-third of those polled. Fewer cite an "erosion of shared values" or global climate change as the single biggest threat.

Crisis May Seem Criminal, but Try Making a Case



The commission’s various conclusions provide a plausible defense for almost any executive who might be accused of securities fraud or misleading investors: it was all the fault of uncontrollable market forces and regulatory laxity. So far, the recent financial crisis has failed to produce any criminal cases against big-name bankers or other top corporate executives, unlike the financial scandals in the last decade, when there were signature prosecutions of chief executives likeBernard J. Ebbers of WorldCom and Jeffrey K. Skilling of Enron.

Ahead of the Bell: Unemployment Benefits



Even with the anticipated increase, the four-week average, a less volatile measure, is expected to hover close to a two-year low of 411,250 reached Jan. 1. That suggests companies -- operating with lean work forces -- may need to add more workers as the economy gains momentum. Applications are well below their peak of 651,000 hit in March 2009, when the economy was in a deep recession. When fewer than 425,000 people are applying for jobless benefits, that's consistent with modest job growth. However, applications need to fall consistently to 375,000 or below to substantially bring down unemployment.

Foreclosure Rates Slow In Hardest-Hit Areas



Foreclosures became more widespread "as high unemployment drove activity up in 72% of the nation's metro areas--many of which were relatively insulated from the initial foreclosure tsunami," said James J. Saccacio, chief executive officer of RealtyTrac, in a news release. Houston, Seattle and Atlanta saw the biggest increases among the 20 largest metro areas. Foreclosures jumped 26% in the Houston area in 2010, compared with 2009, according to RealtyTrac. In Seattle, foreclosures rose 23% and in Atlanta, they were up 21%. But fewer homes in hard-hit areas--including Las Vegas, California, Arizona and Florida--received foreclosure filings in 2010 compared with the year before. Even though the areas are improving, they still remain some of the most problematic.

Energy

An Export Land Model Analysis for the USA-Part 1 (crash watcher)



This is particularly important in the period after peak oil, when oil production begins to decline from the exporting countries and but the domstic consumption rate may still be increasing.  The Export Land Model shows that the rate of decline in oil exports will be even faster than the decline in production if there is also increasing domestic consumption.  For example, if the production rate was exponentially decreasing, and, the domestic consumption rate was exponentially increasing, then the export rate, represented by the difference of production minus consumption, would decline at a double exponential rate.  In this kind of scenario, net exports hit zero long before production does.   This has very serious implications for oil importing country, like the USA. 

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: 2690
Re: Daily Digest 1/28 - Americans View Global Economy as ...

"(Reuters) - The United States is effectively printing cheap dollars as it implements an ultra-loose policy to spur its flagging economy, setting the stage for "a world credit war," a Chinese rating agency said on Friday.

The Beijing-based Dagong Global Credit Rating, a relative newcomer in the sovereign debt rating realm, said in its 2011 Sovereign Credit Risk Outlook that quantitative easing by the U.S. Federal Reserve has "eroded the legitimacy of the global monetary system that takes the dollar as the key reserve currency."

The policy easing was also "bringing the U.S. dollar's credit-worthiness to a vulnerable position," it said."

"Dylan Grice, a noted Japan bear at Societe Generale, said the country's ageing crisis would bite in earnest in two to three years, causing pensioners to run down their assets. The savings rate has already dropped from 15pc of GDP in 1990 to under 3pc. It may soon turn negative, depleting reserves needed to soak up state debt.

"They will have to turn to foreign investors, who will demand higher yields of 4pc to 5pc. The government will not be able pay this because interest payments are already 28pc of tax revenues," he said.

"If they try to correct it by a fiscal contraction [raising taxes] they will cause a depression that dwarfs anything in Greece. The Japanese are facing a problem that no country has ever faced before. I think Japan is already is beyond the pale," he said"

"Moody’s Investors Service said its time frame for possibly placing a negative outlook on the Aaa rating of U.S. Treasury bonds is shortening as the country’s deficit widens.

The outcome of the November elections, the extension of tax cuts and the chance that Congress will not address deficit reduction have increased Moody’s uncertainty over the willingness and ability of the U.S. to reduce its debt, the credit-ratings company said today in a report. "

......................3A) Moody's warns of possible move on US credit rating

"Chicago

Fast Facts:

- $7.4 billion in tax-funded debt

- 67% hike in state income taxes limits ability to increase revenue

- Unfunded pension liability highest in nation at $42,000 per household

Cleveland

Fast Facts:

- Total debt: $727 million

- Days cash on hand: -9

- Population change 2000-10: -2.8%"

  • Other news, headlines and opinion:

Geithner Says Growth Still Too Weak to Cut Unemployment

Treasuries Drop Before GDP; Geithner Says Debt Unsustainable

Irish Give 51 Billion More Reasons to Avoid Bonds: Euro Credit

Treasury to Adjust Borrowing as Debt Limit Nears

Bell official says city's finances worse than thought

Orange County Considers $320 Million Pension-Note Sale to Itself

Harrisburg, Pa, Incinerator Seen Worthless To Private Buyers

Bernanke: all but one major firm at risk in 2008

Cutting Billions From Defense Won't Save Medicare: David Pauly

Arizona hospital group wants to assess $300 million bed tax

State budget cuts may mean hundreds of nursing homes close, industry warns (Texas)

Pension issues may hurt US state ratings - Moody's

Barofsky: More Bank Bailouts Are Inevitable

IMF's Lipsky Says `Never Say Never' on Another Euro-Area Bailout

Camden council OKs prospect of 23 percent property tax hike (New Jersey)

City Could Shut Down One Day a Week (Los Angeles)

NY Gov. Threatens To Mothball More Prisons

Social Security Posting $600B Deficit Over 10years (NPR)

Hawaii's debt burden highest in the nation

End of cheap food era as grain prices stay high

Food price hike could spark unrest (Reuters Video)

Poet's picture
Poet
Status: Diamond Member (Offline)
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Posts: 1843
Re: Japan's Elderly..

saxplayer00o1 wrote:

Warning shot for America and Europe as S&P downgrades Japan

"Dylan Grice, a noted Japan bear at Societe Generale, said the country's ageing crisis would bite in earnest in two to three years, causing pensioners to run down their assets. The savings rate has already dropped from 15pc of GDP in 1990 to under 3pc. It may soon turn negative, depleting reserves needed to soak up state debt.

"They will have to turn to foreign investors, who will demand higher yields of 4pc to 5pc. The government will not be able pay this because interest payments are already 28pc of tax revenues," he said.

"If they try to correct it by a fiscal contraction [raising taxes] they will cause a depression that dwarfs anything in Greece. The Japanese are facing a problem that no country has ever faced before. I think Japan is already is beyond the pale," he said"

Japan sees surge in shoplifting by the elderly
"In its annual report, The National Police Agency (NPA) said that more than 27,000 retirees (above the age of 65) were arrested for shoplifting in 2010 -- about one-fourth of all such defendants, and almost equal to the number of teenagers similarly caught."

"The majority of these elderly thieves stole food or clothes, instead of pricier luxury items, the NPA noted."
http://www.ibtimes.com/articles/105871/20110127/japan-elderly-shopliftin...

Another report from 2008:

Silver-Haired Shoplifters On the Rise In Japan
"'When people feel lonely, there is an impulse to commit a crime so they will somehow connect with someone,' said Shibata, whose task force has questioned 220 elderly people arrested mostly on charges of theft.

"A government survey of 137 elderly shoplifters in Tokyo found that a desire to 'cut back on spending' was a primary motivation of 59 percent of the women arrested. Two-thirds of men said they stole because of their tough financial situation."
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/29/AR200811...

This is really a sad ending for a proud nation.

Poet

SailAway's picture
SailAway
Status: Gold Member (Offline)
Joined: Aug 11 2010
Posts: 347
Re: Japan's Elderly..

This debate at "The Economist" is interesting in regards to Energy and Environment:

"Natural Gas

This house believes that natural gas will do more than renewables to limit the world's carbon emissions."

...

http://www.economist.com/debate/overview/193&sa_campaign=debateseries/debate70/alert/round/rebuttal

sundown's picture
sundown
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Joined: Jan 4 2011
Posts: 8
Re: Daily Digest 1/28 - Americans View Global Economy as ...

There was so much I wanted to say today but this article said it all!

 

The Big Squeeze: Predicting the Effects of Savings Extortion and Abuse of the Middle Class

http://www.oftwominds.com/blogjan11/Zeus-one01-11.html

osb272646's picture
osb272646
Status: Silver Member (Offline)
Joined: Mar 14 2010
Posts: 120
The Big Squeeze: Predicting the Effects of Savings Extortion and

"The Big Squeeze: Predicting the Effects of Savings Extortion and Abuse of the Middle Class"

Where are the predictiions?  Just a long drawn out rehash of what's already happened, in great detail.

 

 

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 1/28 - Americans View Global Economy as ...

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Potential revolutionaries should note:

Potential revolutionaries should note:

http://news.techworld.com/sme/3258490/egypt-cut-off-from-internet-as-government-cracks-down-on-protest/?cmpid=TD1N4&no1x1&olo=daily%20newsletter

Egypt cut off from Internet as government cracks down on protest

By Robert McMillan
Published: 10:05 GMT, 28 January 11

As protesters continue to clash with police in anti-government demonstrations, Egypt has pulled the plug on the Internet.

The cut-off happened just after midnight, local time, according to Internet monitoring firm Renesys, when the largest Internet Service Providers operating out of the country stopped providing the Border Gateway Protocol (BGP) routing information used to connect the rest of the world with computers in the Egypt.

Egypt is experiencing its worst civil unrest in more than 30 years, as citizens have taken to the streets demanding an end to the government of President Hosni Mubarak. Protests are set to grow today, with demonstrations likely after Friday prayers.

Similar widespread outages have been blamed on cuts to undersea fibre optic cables, but that doesn't seem to be what happened this time around, said Paul Ferguson, a researcher with security firm Trend Micro. An outage on a cable would not just effect Egypt, it would cut off all of sub-Saharan Africa." he said. "This is apparently a deliberate blackout." 

Renesys agreed.  "The Egyptian government appears to have ordered service providers to shut down all international connections to the Internet," Renesys said. "Critical European-Asian fibre optic routes through Egypt appear to be unaffected for now. But every Egyptian provider, every business, bank, Internet cafe, website, school, embassy and government office that relied on the big four Egyptian ISPs for their Internet connectivity is now cut off from the rest of the world."

Those four large providers, Link Egypt, Vodafone/Raya, Telecom Egypt and Etisalat Misr, have dropped most of their Internet connectivity. Most Egyptian websites are now unreachable and people inside Egypt are largely unable to connect with the outside world using email, instant messaging or the web.

But Egypt's Internet isolation is not complete. One service provider, Noor Data Networks, the provider used by the Egyptian Stock Exchange, is unaffected.

About 88 percent of Egypt's networks have been cut off, according a blog entry on the website of network monitoring toolmaker, BGPmon. Another network monitoring company Arbor Network, has posted a graphic illustrating the dramatic cut-off in traffic to and from Egypt.

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 1/28 - Americans View Global Economy as ...

Old video but still interesting to watch.

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