Daily Digest

Daily Digest 3/16 - Gold At $1900, The Story Nobody Wants To Hear, Yemen Unrest's Larger Implications

Friday, March 16, 2012, 10:47 AM
  • Are Treasuries FINALLY the Short of the Decade?
  • Strike On Iran, A Green Light From Washington
  • The Noose Tightens
  • Central Bank Balance Sheets Put Gold at $1900
  • The Story Nobody Wants To Hear
  • Has the Global Economy Become Less Vulnerable to Oil Price Shocks?
  • A Golden Future for Natural Gas in the US
  • Yemen's Unrest's Larger Implications
  • Shell Boss Took Home £10m Amid Oil Price Surge

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Economy

Are Treasuries FINALLY the Short of the Decade? (Davos)

Check out the chart for TBT, a 2X negative long-term Treasury ETF (in other words, a fund that bets against Treasury bonds). In case the price numbers are hard to read, this fund peaked at 70 in 2008 and has since fallen steadily if irregularly to less than 20. Far from being the short of the decade, Treasuries, especially if you were using leverage to bet against them, have been a sound-money investor’s nightmare.

Strike On Iran, A Green Light From Washington (David B.)

Iran has stopped discussing accepting euros for its oil, but has instead leapfrogged to a more egregious policy of now accepting yen, rials, rubles, renminbi and gold (NYSEArca:GLD) in exchange for its crude. In fact, the Iranians went a step further in January, as to intentionally insult the U.S., by making the announcement that included a gratuitous statement that the policy change in Tehran was suggested by the Russians.

The Noose Tightens (Davos)

It sure appears like preparations for war. It sure seems like we are tightening the noose around Iran’s neck in order to make them do something foolish. I don’t see Hillary being dispatched to Tehran in an attempt to ratchet down the escalation. I only see a military buildup and preparations for an attack. What do you see?

Central Bank Balance Sheets Put Gold at $1900 (adam)

Right now, we have the second most oversold reading since 2008 and, as of yesterday’s low, gold appears to be selling at a discount of $255/oz to its average price. Thus, as I show below, gold investors are currently presented with yet another oversold and undervalued buying opportunity.

The Story Nobody Wants To Hear (adam)

The old cliché that a bull market climbs a wall of worry seems to be playing out this year. Of course, despite the plethora of worries things have been steadily improving. The S&P 500 is up high single digits and the economic data continues to surprise on the upside. Still, the worries persist. Last October the stock market bottomed on October 4th, and the VIX peaked on August 8th at 48 and then again on October 3rd at 45.45. At that time there were multiple worries from the debt ceiling and downgrading of U.S. debt, a double-dip U.S. recession, a meltdown in Europe, a hard landing in China, the ECRI’s recession call (which is still being maintained), to social unrest as exemplified through the “Occupy Wall Street” movement.

Energy

Has the Global Economy Become Less Vulnerable to Oil Price Shocks? (Sandy S.)

Rasmussen and Roitman describe the observed association of high oil prices and contemporaneous rapid economic growth as “surprising.” In fact, there should be nothing “surprising” about this finding. As the economy grows rapidly, demand for oil is likely to be high, driving up oil prices. Thus, as far as the impact of oil prices on economic growth is concerned (rather than the impact of economic growth on oil prices), only an examination of the lagged effects of oil price changes would be meaningful.

A Golden Future for Natural Gas in the US (James S.)

It seems as if the natural gas prices are about to find a bottom. We believe that, at the current level, the sector can no longer work profitably. Numerous production and investment cuts for 2012 and beyond confirm this. For example, Chesapeake Energy announced that it would cut production by 0.5 bcf/d. If the prices were to remain at this level, the company would cut its output by a total of 1 bcf/d. In addition, CAPEX would be reduced from USD 3bn to USD 900mn. Exploration expenditure would be cut by 50%, which would represent a drastic u-turn from the aggressive expansion programme in the past years. And CHK, the second-biggest natural gas producer in the US, reported a decline in production of almost 10%. We expect numerous producers to follow suit, which would lead to further cutbacks and a further decline in drilling activity.

Yemen's Unrest's Larger Implications (James S.)

Since last month Yemeni militants have expanded their operations in southern Yemen following months of turmoil after the “Arab spring” suddenly erupted in the North African Arab Magreb, which increasingly paralyzed the country and eventually unseated former President Ali Abdullah Saleh, who was replaced last month in a vote by Saleh’s chosen successor, Abd-Rabbu Mansour Hadi.

Shell Boss Took Home £10m Amid Oil Price Surge (Michael W.)

Shell chief executive Peter Voser earned more than £10m last year in pay and bonuses at a time of near-record oil prices and in a year when the firm was responsible for 207 oil spills – considerably more than the year before.

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."

11 Comments

saxplayer00o1's picture
saxplayer00o1
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SingleSpeak's picture
SingleSpeak
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Posts: 430
Central Bank Balance Sheets Put Gold at $1900

That chart correlating the central bands assets with the gold price makes a compelling case for picking up some now before the reversal happens.

SS

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rhare
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Gold != GLD

[quote=Article - Strike on Iran, A green light from Washington]

Iran has stopped discussing accepting euros for its oil, but has instead leapfrogged to a more egregious policy of now accepting yen, rials, rubles, renminbi and gold (NYSEArca:GLD) in exchange for its crude.

Gold != GLD (that's not equal for those that are not nerdy computer geeks).

Of course the article came from a souce called ETF daily, so I understand their confusion.

Tall's picture
Tall
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Posts: 289
Environmental crunch 'worse than thought': OECD

Pressures on Earth's ecosystem are now so great that future generations could be doomed to falling living standards, the OECD said on Thursday in a report looking to the mid-century.

"Providing for a further two billion people by 2050 and improving the living standards for all will challenge our ability to manage and restore those natural assets on which all life depends," it warned.

"Failure to do so will have serious consequences, especially for the poor, and ultimately undermine the growth and human development of future generations."

The report by the Organisation for Economic Cooperation and Development (OECD) builds on previous peeks-into-the-future, ending in 2030, that focused on climate change, biodiversity and the impacts on health for pollution.

"The prospects are more alarming than the situation described in the previous edition," it said, speaking of "irreversible changes that could endanger two centuries of rising living standards."

http://news.yahoo.com/environmental-crunch-worse-thought-oecd-160317860.html

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littlefeatfan
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3E links, cartoons, and resources

new postings this week at  http://3es.weebly.com/ 

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Poet
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Posts: 1844
Bank of America: Too Crooked to Fail

Reposting this because it got lost in the arguments (still ongoing) in yesterday's Daily Digest:

Poet wrote:

Another hard-hitting, MUST READ article by Rolling Stone's Matt Taibbi.

He puts together in one article enough of the financial fraud committed by Bank of America that's been in the news over the last few years, and you wonder, how could they be so cumulatively evil, and still keep getting bailed out?

Bank of America: Too Crooked to Fail (March 14, 2012)
"The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep bailing it out?"
http://www.rollingstone.com/politics/news/bank-of-america-too-crooked-to-fail-20120314

"Take your eyes off them for 10 seconds and guaranteed, they'll be into some shit again: This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard."

Where's our Pecora Commission? Where's our Savings & Loan crisis-era prosecution that landed thousands in court and hundreds with felony convictions?  People in government need to be prosecuted for dereliction of duty to the American people.

Please share this article.

Poet

saxplayer00o1's picture
saxplayer00o1
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Tall's picture
Tall
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Posts: 289
World energy consumption since 1820 in charts

If an economist views the period between World War II and 1970 as “normal” in terms of what to expect in the future, he/she is likely to be misled. The period of rapid energy growth following World War II is not likely to be repeated. The rapid energy growth allowed much manual work to be performed by machine (for example, using a back hoe instead of digging ditches by hand). Thus, there appeared to be considerable growth in human efficiency, but such growth is not likely to be repeated in the future.

http://www.energybulletin.net/stories/2012-03-16/world-energy-consumption-1820-charts

saxplayer00o1's picture
saxplayer00o1
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Posts: 2785
'Pothole plague' is cause for concern (UK)

'Pothole plague' is cause for concern (UK...."11-year backlog of outstanding road repairs" )

Homeowners Guard Their Gutters

Nearly 150 clawback' suits filed in NM Ponzi case

Michigan Governor to Detroit: State Won't Step In

Treasury Direct Link

The Daily History of the Debt Results

Historical returns from 03/01/2012 through 03/15/2012

The data for the total public debt outstanding is published each business day. If there is no debt value for the date(s) you requested, the value for the preceding business day will be displayed.

( Debt Held by the Public vs. Intragovernmental Holdings )

 

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
03/01/2012 10,755,610,818,537.19 4,745,403,897,606.53 15,501,014,716,143.72
03/02/2012 10,756,483,483,823.94 4,733,390,167,773.52 15,489,873,651,597.46
03/05/2012 10,755,894,456,550.23 4,736,088,795,646.23 15,491,983,252,196.46
03/06/2012 10,756,417,042,057.90 4,742,606,587,624.54 15,499,023,629,682.44
03/07/2012 10,757,197,476,823.17 4,741,109,215,804.82 15,498,306,692,627.99
03/08/2012 10,773,363,801,666.78 4,744,430,840,644.47 15,517,794,642,311.25
03/09/2012 10,773,406,301,523.09 4,743,645,422,625.81 15,517,051,724,148.90
03/12/2012 10,773,694,877,424.23 4,745,445,998,506.59 15,519,140,875,930.82
03/13/2012 10,773,922,169,212.38 4,750,255,680,277.26 15,524,177,849,489.64
03/14/2012 10,774,728,192,008.90 4,741,721,753,574.83 15,516,449,945,583.73
03/15/2012 10,820,114,556,380.32 4,744,695,335,387.67 15,564,809,891,767.99

Davos's picture
Davos
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rhare wrote:Article -

rhare wrote:

[quote=Article - Strike on Iran, A green light from Washington]

Iran has stopped discussing accepting euros for its oil, but has instead leapfrogged to a more egregious policy of now accepting yen, rials, rubles, renminbi and gold (NYSEArca:GLD) in exchange for its crude.

Gold != GLD (that's not equal for those that are not nerdy computer geeks).

Of course the article came from a souce called ETF daily, so I understand their confusion.

<> for those lowly vb.net programmers who just had to take up C# to get their wife through college.

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2785
Untouchable Pensions in California May Be Put to the Test

Untouchable Pensions in California May Be Put to the Test

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