Daily Digest

Daily Digest 2/8 - The Great Deprivation, Pleas For Stimulus Re-Evaluation, Drought in China Threatens Food Security

Tuesday, February 8, 2011, 10:42 AM
  • Monday Market Movement - Where Else? 
  • Lacker Says FOMC Should `Seriously' Re-evaluate Stimulus Plan
  • The Haves And The Have-Nots
  • The Great Deprivation
  • Obama Wants Jobless Aid Help for States
  • A Seer On Banks Raises A Furor On Bonds
  • JPMorgan Sees Oil `Notable Correction' as Unrest Eases
  • U.N. Food Agency Issues Warning on China Drought

Crash Course DVDShare the Crash Course with your friends and family – buy the DVD today (NTSC or PAL)

Economy

Monday Market Movement - Where Else? (Ilene)

We may complain about HOW the game is rigged but if practically every single roll of the dice comes up seven or eleven - you can't blame us for betting on the trend. As the United States of Zimbabwe barrels forward on Ben Bernanke's hyper-inflationary crazy train - we will go along for the ride - just don't be surprised if we jump out before the rest of the riders hit the final terminal, with terminal being the operative word.

Lacker Says FOMC Should `Seriously' Re-evaluate Stimulus Plan (jdargis)

Fed policy makers pledged in November to buy $600 billion of Treasuries through June to spur growth in a second round of so-called quantitative easing, building on the $1.7 trillion first round of purchases of mortgage and government debt that ended in March 2010.

The Haves And The Have-Nots (jdargis)

Yes, that’s right: America’s poorest are, as a group, about as rich as India’s richest. Kind of blows your mind, right?

The Great Deprivation (jdargis)

Data on the percentage of individuals living in poverty have not yet been released for 2009. Ms. Sawhill summarizes efforts to project future trends this way: “bad news on poverty, worse to come.” Her projections, developed in conjunction with Emily Monea, suggest that poverty rates for children could reach 25 percent by 2011.

Obama Wants Jobless Aid Help for States (jdargis)

Under the proposal, the administration would impose a moratorium in 2011 and 2012 on state tax increases and on state interest payments on the debt.

Crash Course DVDShare the Crash Course with your friends and family – buy the DVD today (NTSC or PAL)

A Seer On Banks Raises A Furor On Bonds (jdargis)

If one stock-picker emerged intact from the wreckage of the financial crisis, it was Meredith Whitney. With a prescient warning about bank stocks in 2007 — as well as a gift for the perfect sound bite — she became a media darling, celebrated in a Fortune cover article and in frequent television appearances as a market seer. Until now, that is.

Energy

JPMorgan Sees Oil `Notable Correction' as Unrest Eases (jdargis)

“This week will be characterized by a drift down in crude prices on days where either no new tensions arise or where political progress is perceived,” JPMorgan analysts led by New York-based Lawrence Eagles said in the report. “Investors should therefore consider taking profits on all or a portion of their remaining long positions.”

Environment

U.N. Food Agency Issues Warning on China Drought

The state-run news media in China warned Monday that the country’s major agricultural regions were facing their worst drought in 60 years and said Tuesday that Shandong Province, a cornerstone of Chinese grain production, was bracing for its worst drought in 200 years unless substantial precipitation came by the end of this month.

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

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2846
doorwarrior's picture
doorwarrior
Status: Silver Member (Offline)
Joined: Oct 13 2009
Posts: 166
Re: Daily Digest 2/8 - The Great Deprivation, Pleas For ...

I found this on Kitco today. Maybe he has visited this site, lol.

http://www.kitco.com/ind/Silva/feb082011.html

Rich

SailAway's picture
SailAway
Status: Gold Member (Offline)
Joined: Aug 11 2010
Posts: 354
Re: Daily Digest 2/8 - The Great Deprivation, Pleas For ...

Watch this video, amazing ;-)

Elderly heroine thumps thieves with handbag

Raiders on a jewelry store in England got more than they bargained for Monday when an elderly woman turned super-hero. ITN's Richard Pallot reports on the unlikely heroine with a handbag.

http://www.msnbc.msn.com/id/21134540/vp/41469462#41469462

plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
Re: Daily Digest 2/8 - The Great Deprivation, Pleas For ...

aside: yup, that girl deserves a medal...!! :thumbup:

interesting + potentially significant revelations/wikipropaganda...  (your tinfoil thickness may vary   - YTFTMV ).. 

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

and greenpeace guy sees light... conversion on (well intentioned) road to megiddo/olduvai/nirvana.. ?

http://www.theregister.co.uk/2011/02/08/patrick_moore_greenpeace_dropout/

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Saudi Arabia cannot pump enough oil

<http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks>

WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices

The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

US diplomat convinced by Saudi expert that reserves of world's biggest oil exporter have been overstated by nearly 40%

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".

Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.

One cable said: "According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray."

It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves.

"Al-Husseini disagrees with this analysis, believing Aramco's reserves are overstated by as much as 300bn barrels. In his view once 50% of original proven reserves has been reached … a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output."

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 1636
Re:WikiLeaks cables on Peak Oil in Saudi Arabia

Mike, the latest WikiLeaks story you posted about Peak Oil is big news, or at least should be.  I am really interested to see what level of attention it gets today..  Will it get a serious level of attention , like the great big alarm bell it is if true?  Or will it get filtered-out and ignored by the government, mass media, and the general public, who prefer not to hear it or deal with it?

calmguy's picture
calmguy
Status: Member (Offline)
Joined: Dec 13 2009
Posts: 1
Re:WikiLeaks cables on Peak Oil in Saudi Arabia

The public won't deal with it because it won't believe it. The number of smart people in denial is shocking.They're  looking for a "wonderful time" and will continue this way unless the whole thing blows up in their face. Time will be The Decider.

crash_watcher's picture
crash_watcher
Status: Silver Member (Offline)
Joined: Aug 12 2008
Posts: 146
WikiLeaks cables on Peak Oil in Saudi Arabia

Another wikileak pertains to Saudi Arabia’s inability to maintain oil exports in the face of increased domestic consumption of electricity:

A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. "Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018," it said.

If Al-Husseini is right, and the 715 bbs of reserves is overstated by 300 bbs, then the total reserves are 415 bbs.  Now, if 51% of that is recoverable, then the total recoveray of oil equals 211 bbs.  That's still higher than the Q∞ = 152 bbs I got from the Hubbert Equation fit to the production data, but not a whole lot higher.  My hunch is that even with Q∞ fixed to 211 bbs, the overall shape of the production curve, and impending decline, would not be that much different than depicted in Figure 1 here.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest 2/8 - The Great Deprivation, Pleas For ...

"The major concern with a corn carryout this low is it just covers 18 days of
use. This means any delay to planting this spring or harvest next fall and the
U.S. could be in a very tight corn situation. This is also the reason we are
seeing old crop corn rally today, as that is where all buying is taking place,"
said Karl Setzer, commodity trading adviser for MaxYield Cooperative.

http://www.kitco.com/reports/KitcoNews20110209DeC_inflation.html

FOCUS: Drop In U.S., Global Corn Supply Stokes Inflation Talk
09 February 2010, 01:46 p.m.
By Debbie Carlson
Of Kitco News
http://www.kitco.com/

(Kitco News) - Concerns about inflation have reignited lately as yields on U.S.
Treasury notes drift upward and China hikes interest rates in a bid to stem
rising prices.

This debate received another supportive argument from the U.S. Department of
Agriculture, which said U.S. and global corn supplies had fallen greater than
grain market participants anticipated. Strong use from both ethanol and food
producers lowered the total supply in the U.S., and globally the USDA reduced
production estimates in several other countries. U.S. cut the February estimated
ending stocks, or reserves, of corn by 9% versus their previous January estimate
to 675 million bushels. This is down 60% from last year's actual ending supply.

The news sent corn futures prices up sharply on the Chicago Board of Trade
Wednesday and dragged up neighboring wheat and soybean prices, even though the
USDA data was largely as expected for those two crops. Corn prices are at their
highest levels since July 2008. Other commodity prices were up, too, but gold
prices did not react. However, gold prices are coming off a stout rally in
recent days.

This will "most definitely" raise concerns about inflation, said Don Roose,
president of U.S. Commodities, a grain and livestock risk management firm. "All
you have to do is look at food prices and energy prices. Housing prices may
still be low, but food prices are definitely nipping on the consumer."

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments