Daily Digest

Daily Digest 4/21 - The Mother Of All Infographics, BofA Accord In Lawsuit Challenged, Nixon, Gold, And Oil

Saturday, April 21, 2012, 10:44 AM
  • Derivatives: The Unregulated Global Casino for Banks
  • The Mother Of All Infographics: Visualizing America's Derivatives Universe
  • ECB's Knot denounces loose collateral rules - paper
  • Bank of America Accord in Lawsuit Is Challenged
  • Price Controls Keep Venezuela Cupboards Bare
  • Sudan Says Military Evicts South’s Army From Oil Area
  • Nixon, Gold, And Oil
  • Make It So: Energy Science Fiction Becoming Science Fact
  • Stung by the Keystone XL Debacle, Canada Looks Eastwards

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Economy

Derivatives: The Unregulated Global Casino for Banks (Phil H., David C.)

Most large banks try to prevent smaller investors from gaining access to the derivative market on the basis of there being too much risk. Deriv. market has blown a galactic bubble, just like the real estate bubble or stock market bubble (that's going on right now). Since there is literally no economist in the world that knows exactly how the derivative money flows or how the system works, while derivatives are traded in microseconds by computers, we really don't know what will trigger the crash, or when it will happen, but considering the global financial crisis this system is in for tough times, that will be catastrophic for the world financial system since the 9 largest banks shown below hold a total of $228.72 trillion in Derivatives - Approximately 3 times the entire world economy. No government in world has money for this bailout. Lets take a look at what banks have the biggest Derivative Exposures and what scandals they've been lately involved in.

The Mother Of All Infographics: Visualizing America's Derivatives Universe (David C.)

For those curious what a paper equivalent of bailing out the US derivatives market would look like, now you know.

ECB's Knot denounces loose collateral rules - paper (Johan V.)

"If we give liquidity support to 800 banks you cannot rule out there are perhaps a few of them who prove not to be viable in a few years' time and which, with hindsight, should not have been given liquidity support," Knot was quoted as saying.

He said that if uncertain market conditions delayed the ECB from rolling back its various support programmes, there was a risk of creating "zombie banks, making banks dependent for too long on the ECB's drip (feed)".

Bank of America Accord in Lawsuit Is Challenged (jdargis)

The settlement was struck privately on April 12 by lawyers representing two public employee pension funds that had sued the directors of Bank of America for breach of fiduciary duty. The funds are the Louisiana Municipal Police Employees’ Retirement System and the Hollywood (Florida) Police Officers’ Retirement System.

Price Controls Keep Venezuela Cupboards Bare (John M.)

Venezuela is one of the world’s top oil producers at a time of soaring energy prices, yet shortages of staples like milk, meat and toilet paper are a chronic part of life here, often turning grocery shopping into a hit or miss proposition.

Energy

Sudan Says Military Evicts South’s Army From Oil Area (jdargis)

The Permanent Court of Arbitration, an international organization, ruled in 2009 that Heglig was outside the borders of the contested area of Abyei that lies between Sudan and South Sudan, and thus belonged to the government in Khartoum.

“This is our land!” said Abd al-Aziz al-Tayeb, 33, a grocery store owner in Khartoum. “Heglig is Sudanese one hundred percent!”

Nixon, Gold, And Oil (David B.)

During the Nixon administration welfare programs underwent major expansions. States were required to provide food stamps. Supplemental Security Income (SSI) consolidated aid for aged, blind, and disabled persons. The Earned Income Credit provided the working poor with direct cash assistance in the form of tax credits and welfare rolls kept growing.

“The problem with Socialism is that eventually you run out of other people’s money.” Margaret Thatcher

Make It So: Energy Science Fiction Becoming Science Fact (James S.)

So what does this mean for the world of energy? Quite a bit, if the trend seems to follow. Anyone with even a rudimentary understanding of "Star Trek" and virtually all other forms of science fiction knows that a vessel capable of interstellar travel never stops at a gas station or tries to get by with "putting five bucks in." Unless you count Lone Starr's space Winnebago from Mel Brooks' “Spaceballs," but that's beside the point. In the realm of sci-fi, traditional energy sources like fossil fuels have been largely abandoned in favor of presumably more efficient and abundant energy sources.

Environment

Stung by the Keystone XL Debacle, Canada Looks Eastwards (James S.)

Harper’s observations were hardly off the cuff remarks, as in February he told 600 Chinese and Canadian business leaders in Guangzhou that Canada and China are about to enter a new era in a strategic energy partnership, while warning Washington that if it does not want Canadian oil, his government would be happy to sell it to China. Harper told his audience, "We are an emerging energy superpower. We have abundant supplies of virtually every form of energy. And you know, we want to sell our energy to people who want to buy our energy. It's that simple," he said, to applause from the crowd.

So, what’s on the drawing boards to replace Keystone XL?

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."

2 Comments

KennethPollinger's picture
KennethPollinger
Status: Silver Member (Offline)
Joined: Sep 22 2010
Posts: 212
How to handle the Economy/Stock Market contradiction?

Excellent article in NYTimes (Sunday):

"Stocks and the Economy, Singing Different Tunes,"

by Jeff Sommer, amplifying Ned Davis Research.

Maybe this helps: stocks short-term (till end of the year) ; gold/silver long term.

Any comments?  Ken

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2491
KennethPollinger

KennethPollinger wrote:

Excellent article in NYTimes (Sunday):

"Stocks and the Economy, Singing Different Tunes,"

by Jeff Sommer, amplifying Ned Davis Research.

Maybe this helps: stocks short-term (till end of the year) ; gold/silver long term.

Any comments?  Ken

Yup, just a few comments.....

Develop market neutrality.  Trade in the direction the market is moving and take a chunk of the moves it gives you, not what you want it to give. 

Buy and hold is for people who only have it half right, half of the time.

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