Daily Digest

Daily Digest 2/18 - March 23 For Greece Default, Al. To Close Hospitals For Mentally Ill, "Peak Oil Is Dead", Says Citigroup

Saturday, February 18, 2012, 11:43 AM
  • Greece “Officially Defaults” March 23, Banks Close
  • Alabama Plans to Close Most Hospitals for Mentally Ill
  • Interference Seen in Philadelphia Papers
  • After MF Global, Traders Hold Tight To Excess Collateral
  • Beware Of A Volume Spike As It Could Be A Bad Sign
  • Tax Cut Extension Passes; Everyone Claims a Win
  • How About Gardening Or Golfing At The Mall?
  • Citigroup Says Peak Oil Is Dead
  • Shell Clears Major Hurdle in Its Bid for New Arctic Drilling

Our 'What Should I Do?' guide has steps to cook, see & stay warm in times of power outage

Economy

Greece “Officially Defaults” March 23, Banks Close (David B.)

“A written document giving firm dates and detailed actions for a planned Greek default has been in the possession of two top Wall Street bank currency trading bosses since the second week in January,” Ward begins his blog post of the morning of Feb. 16. “The Slog has separate but corroborative sources affirming the existence of the document, and a conviction among senior bank staff that – at least at the time – the plan represented ‘a timetable, not a contingency’. The plan gives a firm date of March 23rd for default to be announced after the close of business.”

Alabama Plans to Close Most Hospitals for Mentally Ill (VeganD)

The decision to close four hospitals and lay off 948 employees is a bleak reminder of Alabama’s shrinking budget. But it is also the latest example in a longstanding national effort among states to relocate mentally ill patients from government hospitals to small group homes and private hospitals.

Interference Seen in Philadelphia Papers (jdargis)

Reporters and editors believe that coverage has been steered to favor the prospective buyers and fear what might happen once they control the papers. On Feb. 6, The Inquirer killed an article about a real estate developer who had put together a competing bid to buy the company, which went on the market earlier this month. Then, on Feb. 7, a company spokesman removed a post on The Daily News’s PhillyClout blog that mentioned other potential buyers.

After MF Global, Traders Hold Tight To Excess Collateral (June C.)

"For the clients who haven't taken advantage of this, they are doing it more now," says Pauline Modjeski, president of Chicago-based Horizon Cash Management, which helps manage about $2.5 billion of cash on behalf of dozens of funds and traders.

"As opposed to sweeping large cash balances once in awhile, we're sweeping large cash balances every day."

Beware Of A Volume Spike As It Could Be A Bad Sign (David B.)

The third occurrence of a drop in volume with the S&P in its own trend happened in the first six-and-a-half months of 2011. Once again the index was headed higher while the volume was trending lower. During the week of July 18, volume spiked well above the trendline and the index proceeded to fall sharply over the next 11 weeks. From the volume spike in July to the October low, the S&P lost just over 20%.

Tax Cut Extension Passes; Everyone Claims a Win (jdargis)

Democrats could count far more policy victories in the bill: the payroll tax break will not be paid for, large changes that Republicans sought to the unemployment insurance program were not realized, and the program was extended far beyond what the opposing party sought. But Republicans were satisfied that they had excised an election-year issue that Democrats were seizing on to harm them.

How About Gardening Or Golfing At The Mall? (Stephanie N.)

Malls, over the last 50 years, have gone from the community center in some cities to a relic of the way people once wanted to shop. While malls have faced problems in the past, the Internet is now pulling even more sales away from them. And as retailers crawl out of the worst recession since the advent of malls, many are realizing they are overbuilt and are closing locations at a fast clip.

Energy

Citigroup Says Peak Oil Is Dead (ewilkerson)

Changes in oil markets in the past decade have given significant traction to the argument that world oil production is close to peaking. Despite the huge incentive of a near-threefold increase in the price of benchmark Brent crude from 2000 to 2010, the world barely managed to eke out a 10% increase in crude oil production, according to BP data.

Many have argued that this proves the physical limit on global crude oil production is near, or may already have been passed.

Shell Clears Major Hurdle in Its Bid for New Arctic Drilling (jdargis)

Shell has spent more than $4 billion over five years in its quest to exploit the vast oil and natural gas resources believed to lie beneath the Beaufort and Chukchi Seas off the north coast of Alaska. It has faced opposition from environmental groups and Alaska Natives who worry that extensive petroleum activities will foul the pristine seas and harm wildlife, including bowhead whales, ice seals, polar bears and walruses. Such environmental groups are likely to try to block any drilling in court if final federal approval is granted in coming months.

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."

10 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Online)
Joined: Jul 30 2009
Posts: 2774
What Was The Average Income In 1913, Year Of The First 1040?

Two comments (questions) to think about while viewing:

What else happened in 1913?

What are these income numbers when priced in gold?

What Was The Average Income In 1913, Year Of The First 1040?

============================

Athens rehearses the nightmare of default (FT)

Greece rescue at crossroads as debt cut shortfall grows

 

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
How to make 250K/year

saxplayer00o1 wrote:

Two comments (questions) to think about while viewing:

What else happened in 1913?

What are these income numbers when priced in gold?

What Was The Average Income In 1913, Year Of The First 1040?

Earn an average salary in 1913 dollars.

Good point saxplayer,

That average annual salary of $3000/year in 1913 (which sounds high to me) would translate into about $250K/year in 2012 (given a gold price of $1725/oz.).  Interesting that this is the "cut-off" number commonly cited by Obama above which one is considered "rich".

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2502
etcetra and so forth.

I hear that silver could go above $200 in the near future.

Now would that be in todays dollars or future dollars?

If the world is hyperinflationary then $200 might seem a pitance. If the world is deflationary then no-one will have any money to buy the silver with. Either way silver looses.

Unless silver replaces paper, of cause. "I shall give you 300 ounces for your house. Not one ounce more. " etcetra and so forth.

That is what silver bugs are banking on.

Bill Hicks's picture
Bill Hicks
Status: Bronze Member (Offline)
Joined: Jul 3 2011
Posts: 34
Abercrombie & Fitch to Close 180 Stores

http://billhicksisdead.blogspot.com/2012/02/abercrombie-fitch-to-close-1...

In case you hadn't heard...another major retailer is closing a whole bunch of stores.

Abercrombie & Fitch plans to close 180 stores in the United States over the next three years as part of a strategy to focus on higher-tier markets, both domestically and overseas, said Jonathan Ramsden, chief financial officer at Abercrombie. 



When finished, Abercrombie will have closed more than 300 stores, which includes the 135 stores that were closed the past two years. 



While the company has not announced specific stores that will be shuttered, Ramsden said they have tended to close more abercrombie kids and Abercrombie & Fitch stores than Hollister stores. The closings will be based on store performance. 



In past calls with analysts, Abercrombie officials have indicated that such closings benefit the company by reinforcing its exclusive image.

ewilkerson's picture
ewilkerson
Status: Gold Member (Offline)
Joined: Jul 18 2010
Posts: 390
Is it the deleveraging which

Is it the deleveraging which causes gold to drop in a situation like the Greek default?  I would have thought with the uncertainty that the contagion will spread, which I believe it will, gold would rise.  The printing presses are going to be going full force everywhere.  I know the dollar will be strong, assuming our banks aren't tumbling which is normally bad for gold.  Sounds like a crap shoot.

Ernst

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 2763
by any other name

There will, at some point, have to be a marked devaluation of the USD, no matter whether they call it inflation or just a devaluation.  That is what I own PMs to protect myself and my family against.  If I'm wrong, then the kids will have to find a cheaper home to put me in.

Doug

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2502
Reality Junkie

Someone is being naughty. Am I being baited with the citigroup peak oil story? Personally I hope that I can continue to ride my bike for a few more years, but I doubt it.

If the economy gets the lead out of it's pants it could have a much better, cleaner soution for energy than good old fossil fuels. There is the issue of wether it can be weaponised of cause. I'll bet that the Leaders that Be will be scratching their heads right now as they will be on the horns of a dilemma.

Wether to allow their wealth to die from oil scarcity or to allow LENR.

If I were them I would emphasise the Nuclear word to terrify the great unwashed into accepting restricted access thus making it a scarce and valuable resource (which it isn't).

I just cant get enough of this stuff.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2502
How Dangerous is US Government Debt?

For those interested in the state of the American Economy Francis Warnock has written a lucid essay on the Council of Foreign Affairs website.

Precisely because the world is happy to have a dependable asset to hold as a store of value, it will buy so much of that asset that its issuer will become unsustainably burdened. The endgame to Triffin’s paradox is a global, wholesale dumping of the hcenter country’s securities.

Wholesale dumping of $US.

Francis Warnock.

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Is it the deleveraging which

ewilkerson wrote:

Is it the deleveraging which causes gold to drop in a situation like the Greek default?  I would have thought with the uncertainty that the contagion will spread, which I believe it will, gold would rise.  The printing presses are going to be going full force everywhere.  I know the dollar will be strong, assuming our banks aren't tumbling which is normally bad for gold.  Sounds like a crap shoot.

It's even more simple than that. A default means that someone somewhere lost money, and to balance their books, they've got to find money somewhere, so they sell everything, including gold. That simple. Forget about uncertainty, etc. when TSHTF they need money, now. Not money, later.

And that creates an opportunity for people without debt to buy gold. :)

Samuel

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