Daily Digest 3/13 - The Iran War Clock, Oil And Alternatives With Marc Faber, Which Country Is Next To Default?

• Greece Officially Defaults; Which European Country Is Next?
• It's 10 Minutes to Midnight: Introducing The Iran War Clock
• The "Let's Pretend" Economy and False Consciousness
• Oil, Alternatives, and Nuclear Weapons - An Interview with Marc Faber
• Balestra Capital: "If Government Programs Were Cancelled, The Economy Would Collapse Back Into Severe Recession"
• The Audacity of Bonuses at MF Global
• New Report: Nitrate Contamination Threatens California’s Drinking Water
• Team: Radiation Exposure In Tokyo Far Below Limit

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Economy

Greece Officially Defaults; Which European Country Is Next? (David B.)

The “restructuring deal” was approved by approximately 84 percent of all Greek bondholders, but the key to triggering the payouts on the credit-default swaps was the fact that Greece decided to activate the “collective action clauses” which had been retroactively inserted into these bonds. These collective action clauses force most of the rest of the bondholders to go along with this restructuring deal.

It's 10 Minutes to Midnight: Introducing The Iran War Clock (jdargis)

The Iran War Clock is not designed to be pro-war or anti-war. Instead, the purpose is to estimate the chances of conflict in the hope of producing a more informed debate. If people hold a very inaccurate view of the odds of war it could be dangerous.

The "Let's Pretend" Economy and False Consciousness (art)

In light of stagnant incomes and rising costs, Smith suggested that while tuition costs rise the value of a college degree has fallen. Smith: "The supply of those with college degrees exceeds the demand." Even further, "student loans enable young people to 'stay in school' or 'go back to school'", i.e., individuals are "taking out student loans just to live; the loans are essentially a form of 'state funding' a.k.a. welfare that must be paid back." Whereas global corporations are hiring overseas while students graduate with excessive student loan debt only to find a disastrous job market, Smith concluded that the $1 trillion in student loans furthers "profits and debt serfdom". That being the case, Smith suggested that as a growing number of students are beginning to default, the student loan market appears to be starting to implode.

Oil, Alternatives, and Nuclear Weapons - An Interview with Marc Faber (James S.)

OilPrice.com: What are your 3-5 year projections for oil prices?

Marc Faber: Well, you’ll have to give me a second. I need to call Mr. Ben Bernanke and ask him how much money he will print. Commodity prices were in a bear market from 1980 to 1998, and since then they've gone up. But because of expansionary monetary policies and artificially low interest rates they have increased more than would have otherwise been the case. We don't know exactly how long this asset bubble will last - but say if you had interest rates in real terms, of five percent, instead of negative five percent, then I think all commodity prices, including gold, would be lower.

Balestra Capital: "If Government Programs Were Cancelled, The Economy Would Collapse Back Into Severe Recession" (Davos)

The world is changing rapidly. The old rules that so many investors rely upon may no longer apply the way they did during the great growth years after World War II." Alas, this too is spot on.

The Audacity of Bonuses at MF Global (June C.)

Three wrinkles of audacity underscore the potential MF Global bonus approvals. First, there is the moral responsibility layer. MF Global, classified as a broker-dealer wasn’t specifically subject to the investment-advisor fiduciary rule that requires ‘systemic safety and soundness’’ with respect to retail customers. But, comingling customers’ funds inappropriately with the firm’s, as former chief, Jon Corzine’s European bets were blowing up, was an abject misinterpretation of the rule's intent.

Environment

New Report: Nitrate Contamination Threatens California’s Drinking Water (jdargis)

Holbrook explains that nitrates are odorless, tasteless compounds that form when nitrogen from ammonia and other sources mix with water. While nitrogen and nitrates occur naturally, the advent of synthetic fertilizer has coincided with a dramatic increase in nitrates in drinking water. He notes that rural residents are at greater risk because they depend on private wells, which are often shallower and not monitored to the same degree as public water sources, writing, “Current contamination likely came from nitrates introduced into the soil decades ago. That means even if nitrates were dramatically reduced today, groundwater would still suffer for decades to come.”

Team: Radiation Exposure In Tokyo Far Below Limit (guardia)

The team estimates that this level of radiation exposure will increase infant cancer rates later in life by 3 per 100,000 individuals. The risk is said to be a little lower than that caused by exhaust gas from diesel-engine cars.

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