Daily Digest

Daily Digest 4/14 - Golden Eye Of The Hurricane, Detroit And The Auto Bailout, Cave Bacteria Resist Modern Antibiotics

Saturday, April 14, 2012, 10:40 AM
  • Simon Johnson On Debt And Deficit
  • Tyler Cowen, America's Hottest Economist
  • 27 Reasons The European Sovereign Debt Bubble Is About To Burst
  • What Detroit’s Resurgence Says About The Auto Bailout
  • Afghan villagers say shootings were revenge
  • Turmoil in global markets as Spanish bank borrowing from ECB doubles
  • China Doubles Yuan Trading Band in First Widening Since 2007
  • China moves on currency after growing US pressure
  • Golden Eye of Hurricane
  • Isolated for millions of years, cave bacteria resist modern antibiotics

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Economy

Simon Johnson On Debt And Deficit (woodman)

In the War of 1812, two hundred years ago this year, the young United States went out into the world without its finances in order – and got its White House burned down.

Flash forward two centuries. The US debt and deficit are huge. President Obama is talking up the Buffet rule this week, to get the rich to pitch in more. Republican Paul Ryan wants to take an axe to the federal budget, and tax rates.

Former chief economist to the IMF Simon Johnson says both fall short. It is high time for the US to get real, he says.

Tyler Cowen, America's Hottest Economist (Ben Johnson)

In January, Dutton published Cowen's e-book, The Great Stagnation. It has shown up twice on the New York Times' e-book bestseller list. Dutton, a Penguin imprint, will release a hardcover edition on June 9. David Brooks has called it "the most debated nonfiction book so far this year" and leaned on it for a column in the Times. "In terms of framing the dialogue," wrote Kelly Evans for the Wall Street Journal, "Tyler Cowen may well turn out to be this decade's Thomas Friedman." The year is young, but among wonks the book has reached that most coveted of states: It must be responded to.

27 Reasons The European Sovereign Debt Bubble Is About To Burst (David B.)

As economies across Europe slide into recession, that is going to put even more pressure on the European financial system. Most Americans do not realize this, but the European banking system is absolutely enormous. It is nearly four times the size that the U.S. banking system is. When the European banking system (NASDAQ:EUFN) crashes (and it will) it is going to reverberate around the globe. The epicenter of the next great financial crisis is going to be in Europe, and it is getting closer with each passing day.

What Detroit’s Resurgence Says About The Auto Bailout (jdargis)

The data reflect unvarnished good news for the country’s economic recovery, and the companies’ production strategies seem neatly tailored to withstand car consumers’ squeamishness over high gas prices. None of these strides would have been possible if the U.S. auto industry had vanished in 2009. That broadly vindicates the government’s intervention at the height of the economic crisis, but it also masks a more complicated story about the degree to which the government’s actions led to Tuesday’s stellar figures.

Afghan villagers say shootings were revenge (Chris M.)

On March 13, Afghan soldier Abdul Salam showed an AP reporter the site of a blast that made a large crater in the road in Panjwai district of Kandahar province, where the shootings occurred. The soldier said the explosion occurred March 8. Salam said he helped gather men in the village, and that troops spoke to them, but he was not close enough to hear what they said.

Ghulam Rasool, a tribal elder from Panjwai district of Kandahar province, where the shootings occurred, gave an account of the bombing at a March 16 meeting in Kabul with President Hamid Karzai. "After the incident, they took the wreckage of their destroyed tank and their wounded people from the area," Rasool said. "After that, they came back to the village nearby the explosion site.

Turmoil in global markets as Spanish bank borrowing from ECB doubles (pinecarr)

The Bank of Spain disclosed the country's biggest institutions borrowed €316.3bn (£260.9bn) from the ECB in March, almost twice the €169.8bn in February.

Traders dumped Spanish stocks and bought insurance against Madrid defaulting, convinced the data showed that the banks are now almost shut out of international credit markets.

China Doubles Yuan Trading Band in First Widening Since 2007 (pinecarr)

The central bank said the widening of the band is to meet “market demands,” promote price discovery, and enhance the currency’s two-way flexibility. The change improves a managed, floating exchange-rate regime that is based on supply and demand and operates in reference to a basket of currencies, it said. The monetary authority will keep the currency “basically stable at an adaptive and equilibrium level,” to preserve the stability of the Chinese economy and financial markets, it said.

China moves on currency after growing US pressure (pinecarr)

China took a major step closer to turning its yuan into a fully tradable global currency today, by doubling the range by which it is allowed to rise or fall against the dollar.

Golden Eye of Hurricane (pinecarr)

What an incredibly complex confusing and treacherous month. It can be safely said that 80% of the activity is almost totally kept from the public. The financial system is breaking in an accelerated fashion. Compare to some grisly horror movie where a man is strapped in a chair. The more he moves, the tighter the bindings pull on his gasping throat and pressed nether stones.

The most significant two factors at work are the Iran sanctions and their powerful backfire, and the futile efforts in Europe to stem the banking center collapse. The anti-USDollar federation that spans widely across the globe is gathering strong momentum. Financial aggression is being met by financial alternative development. As Greece moved off the daily news fabrication factory, the reality of a collapse in Spain and Italy has moved to the front center of observations.

Environment

Isolated for millions of years, cave bacteria resist modern antibiotics (VeganD)

The team say that their discovery supports the idea that antibiotic resistance long precedes the rise of modern medicine. This shouldn’t be surprising. As I wrote last year, many antibiotics come from natural sources, or are tweaked versions of such chemicals. Penicillin, the first to be synthesised, famously comes from a mould that surreptitiously landed on Alexander Fleming’s plate. Daptomycin comes from a bacterium called Streptomyces roseosporus.

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."

5 Comments

DavidC's picture
DavidC
Status: Silver Member (Offline)
Joined: Sep 29 2008
Posts: 239
Chris on Capital Account

Chris,

I know you'll be putting it on to your Media section, but just wanted to say thanks for a very informative and (as usual!) enlightening appearance on Capital Account with Lauren Lyster yesterday.

www.youtube.com/user/CapitalAccount#p/u

I have to admit, given the preponderance of pretty young women on 'news' programmes these days, that when I fist came across Captial Account I wasn't sure whether Lauren would be just another 'airhead' mouthpiece. My doubts were dispelled pretty quickly, she's very smart and allows interviewees to have their say without interruptions.

DavidC

littlefeatfan's picture
littlefeatfan
Status: Silver Member (Offline)
Joined: Jul 20 2009
Posts: 141
New 3Es postings

New Links, Resources, and Cartoons posted at  http://3es.weebly.com/  

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2766
Spanish minister calls on ECB to buy more bonds

"A Spanish minister has urged the European Central Bank (ECB) to buy more bonds to slow the country's sovereign debt crisis, amidst fears that Spain will be the next euro member in need of a bail-out. "

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 1602
Thanks for the link to Chris's inteview, DavidC!

DavidC, thanks for the tip about Chris's appearance on Capital Account.    I always enjoy watching Chris's live appearances; as the interviewer commented "always very illuminating"! 

Nice interview Chris!  It's fun to watch you start to get some more visibility and air time.  Are you noticing a big difference since your book came out? 

Oh, for others interested in seeing Chris interviewed at the link DavidD posted above, his interview starts right at about 4 minutes, and I think goes to around 22 minutes. 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2502
Carpet Slippers.

Good interview with Lauren Lister. (A devastating combination of a fine brain in a beautiful package).

I am trying to make sense of a Solvency and a Liquidity crisis happening at the same time. On one side of the equation we have Solvency and on the other side Liquidity. As money disappears due to defaults on loans, money is being printed that makes it's way onto the stockmarket. The stockmarket is a liquidity guage.

I see this as a transfer of wealth from homeowners (Taxpayers) and onto the stock market. The big fund managers follow the money onto the market and are fleeced by the high frequency traders.  Is there any chance that the Fund Managers are switched on enough to use high frequency trading? Or are they very nice blokes with carpet slippers and pipe?

Prof. Steve Keens idea of a debt jubilee is the best solution. Everyone gets an amount of money on the proviso that it is used to kill debt first. Anything left over is yours to spend.

Mental note to self: Continue prepping.

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