Daily Digest

Daily Digest 3/23 - Family Men Set Off For SD Jobs, U.N. Council Backs Syria Plan, $8 Gas On The Horizon

Friday, March 23, 2012, 10:47 AM
  • Charts Of Truth
  • Portugal Town Halls Face Default Amid $12 Billion Debt
  • Union leaders gather in Woonsocket to demand more schools' aid
  • Geithner Asked What Would Be Very Last Debt Ceiling Request; Says "A Lot, Would Make You Feel Uncomfortable"
  • U.N. Council Backs Plan for Ending Syria Conflict
  • The HFT Revolution: 6 Reasons Why High Speed Trading Is Taking Over the Markets
  • German Bond Prices Decline, Unsettling Confidence in a Safe Haven
  • How Far Would You Go for a Comeback?
  • CERAWEEK: Total's Upstream Chief Says Peak Oil Is Around The Corner
  • Worried About $6 Gas Prices? Try $8
  • Unhappy Public Not Sure Who To Blame For High Gas

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Economy

Charts Of Truth (June C.)

Now for the coup de grace. This is a busy chart but tells the whole story. The Ghawar oil field is the biggest in the world. It generates 50% of all Saudi Arabian production at 4.5 million barrels per day. It started producing in 1951. That makes it 61 years old. Please observe the production line on the chart. Do you notice a trend?

Portugal Town Halls Face Default Amid $12 Billion Debt (Saxplayer00o1)

Portugal’s town halls face default amid 9 billion euros ($12 billion) of debt unless the government provides aid soon, said Fernando Ruas, president of the nation’s association of municipalities.
“At a company we call it insolvency,” Ruas said in a telephone interview from Lisbon on March 21. “It could happen that some town halls could have to restructure their debt if the government doesn’t intervene.”

Union leaders gather in Woonsocket to demand more schools' aid (Saxplayer00o1)

With a $10-million deficit in the school budget, painful cuts in programs, and every one of the city's 500 teachers pink-slipped, national and local union leaders gathered Thursday in front of Woonsocket High School to demand more help from the state's political leaders.
Randi Weingarten, president of the American Federation of Teachers, demanded Governor Chafee and the General Assembly provide more money for schools "if you think the future of this state is important ... if you really care about kids."

Geithner Asked What Would Be Very Last Debt Ceiling Request; Says "A Lot, Would Make You Feel Uncomfortable" (June C.)

"If this were the last debt ceiling increase you could ask for, the final one, and you had to make it large enough for all current and future obligations, what would the request need to be?" Congressman Trey Gowdy (R-SC) asked Treasury Secretary Tim Geithner at a Capitol Hill hearing on Wednesday.

"I don’t know how to answer that question," Geithner said to Gowdy.

After being prodded by the Congressman, Geithner eventually told him, "it would be a lot."

U.N. Council Backs Plan for Ending Syria Conflict (jdargis)

The statement said Mr. Annan’s plan would “facilitate a Syrian-led political transition to a democratic, plural political system, in which citizens are equal regardless of their affiliations or ethnicities or beliefs, including through commencing a comprehensive political dialogue between the Syrian government and the whole spectrum of the Syrian opposition.”

The HFT Revolution: 6 Reasons Why High Speed Trading Is Taking Over the Markets (adam)

Rather than making a prediction as to which scenario above will play out, I believe we should at least understand the basic reasons why HFT is revolutionizing the market since it appears almost certain that it will eventually dominate not just the stock market (as it does now), but also foreign exchange, futures contracts, and the derivatives market. More than likely, without any major changes by regulatory bodies around the globe, HFT will quickly gain asset-wide dominance of the entire global financial marketplace.

German Bond Prices Decline, Unsettling Confidence in a Safe Haven (jdargis)

The spiking yields partly reflect a shift by hedge funds and asset managers into debt issued by countries like Italy and Spain. Those offer a much higher interest rate — but are evidently not considered quite as risky as they were just a few months ago, as Europe shows signs of having muddled through the worst of the crisis.

As long as that crisis was raging, Germany’s relatively robust economy and aura of financial discipline made its bunds seem such a safe bet that the yield fell well below the rate of inflation as their prices rose.

How Far Would You Go for a Comeback? (jdargis)

Mr. Ripka is one of thousands of men with similar stories. They have descended on Williston and its environs over the last two to three years, pulled by the magnet of jobs created by an oil boom with the potential to make the region one of the largest petroleum resources in the country, and pushed by the hope that a steady income can put their finances back on track after a grueling downturn. While the national unemployment rate is 8.3 percent, in North Dakota it is 3.2 percent — and it is 1 percent in Williams County, where Williston has grown from a population of 12,500 before the boom began in 2008 to an estimated 20,000 now.

Energy

CERAWEEK: Total's Upstream Chief Says Peak Oil Is Around The Corner (Ivo M.)

He admits that his view seems “paradoxical” when considering the amazing growth of supplies from shale fields; further, he says that the 95-97 million number excludes potential growth from biofuels and the manufacture of liquid fuels from coal. Still, he says, by 2030, “25 to 45 million bpd will need to be supplied from fields that are not online today.” That’s akin to the creation of two new Saudi Arabias.

Worried About $6 Gas Prices? Try $8 (David B.)

But a military conflict with Iran could throw Leeb’s $6 price target far off the mark, as approximately 17 percent of the world’s oil supply could be shut out for, not a matter of weeks as the Pentagon has estimated, but months, according to Caitlin Talmadge, fellow at the John M. Olin Institute for Strategic Studies at Harvard University.

Unhappy Public Not Sure Who To Blame For High Gas (Steve Y.)

They’re skeptical the president is really to blame. Lots think it’s commodity traders. One even mentions the fed and inflation. But the phrase “peak oil” or the word “supply” don’t even appear in the article.

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."

6 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Time2help
Status: Gold Member (Online)
Joined: Jun 9 2011
Posts: 487
Time2help's picture
Time2help
Status: Gold Member (Online)
Joined: Jun 9 2011
Posts: 487
KugsCheese's picture
KugsCheese
Status: Platinum Member (Offline)
Joined: Jan 2 2010
Posts: 672
Charts of Truth

It is in the interests of OPEC to keep supply constrained; they have always done this.  I am not saying we do not have a problem, but to take OPEC's murky oil production market and extrapolate from there seems fraught with WAG.   So they have more rigs, but do higher margins cover the cost of those marginal rig costs so profits stay even and there is still oil to pump for years?  Again, I am not saying there is not problem as I think gas will have a floor around $4 in America.  'Gas prices are heading higher and higher"...in what time frame?

KugsCheese's picture
KugsCheese
Status: Platinum Member (Offline)
Joined: Jan 2 2010
Posts: 672
Portugal Local Debt

Yields on 10 yr Portugal debt have been decreasing since the start of March.  So the central banks loaning to EU banks is letting them buy Portugese debt that will then be used to pay the municipality debt.

KugsCheese's picture
KugsCheese
Status: Platinum Member (Offline)
Joined: Jan 2 2010
Posts: 672
HFT

Let's not forget the central banks money printing is big part of the higher correlation between stocks and the S&P500.   The more scary correlation is manufacturing sector to S&P500.   The FED and other central banks are creating a fictional economy, not a New Economy.  It will break somewhere but we don't know where or when, but it will break as sure as the Sun will run out of fuel.

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