Daily Digest 5/31 - Spain Runs Out Of Money, Liquidation Syndrome, Rome Refinery To Cease Activities By End Of Year

• Spain Runs Out Of Money
• Liquidation Syndrome
• Former IMF Chief Economist: The End of the Euro Survivor's Guide
• Bill Black "disinvited" from Testifying before Congress about Derivatives
• Peter Schiff: America Is Already Bankrupt
• Spain Ejects Clean-Power Industry With Europe Precedent: Energy
• SEC: Taking on Big Firms is 'Tempting,' But We Prefer Picking on Little Guys
• Easy Energy is Delaying Further Technological Innovation
• Solar power generation world record set in Germany
• Rome Refinery to Cease Activities by End of Year

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Economy

Spain Runs Out Of Money (Thomas C.)

Spain must somehow rustle up €20bn or more on the debt markets. This will push the budget deficit back into the danger zone, though Madrid will no doubt try to keep it off books – or seek backdoor funds from the ECB to cap borrowing costs. Nobody will be fooled.

Liquidation Syndrome (Chris M.)

Massive monetary interventions have not done much for the economy, but have proved capable of provoking speculation for several months at a time. As I've noted recently, there may be latitude to take a more constructive stance between the point that any new monetary intervention produces an improvement in our measures of market internals, and the point where we re-establish an overvalued, overbought, overbullish syndrome. Without a material improvement in valuations or market action here, we remain defensive. Undoubtedly, the best outcome would be a strong improvement in valuations, followed by signs of improvement in our measures of market action, which is the typical sequence of events that complete a market cycle and can launch a very favorable investment environment.

Former IMF Chief Economist: The End of the Euro Survivor's Guide (kelvinator)

In every economic crisis there comes a moment of clarity. In Europe soon, millions of people will wake up to realize that the euro-as-we-know-it is gone. Economic chaos awaits them.

Bill Black "disinvited" from Testifying before Congress about Derivatives (Jaime)

The day of the hearing, I walked toward the witness table, but was called over by St Germain’s chief of staff. He proceeded to disinvite us from testifying on the grounds that we had filed non-responsive testimony. (We had, of course, responded to every inquiry they made. They simply hated the response because we documented the enormous role that control fraud was playing in causing Texas S&Ls to fail.)

Peter Schiff: America Is Already Bankrupt (David B.)

The man who forecast the end of the housing bubble in his book Crash Proof says the housing implosion wasn’t his primary concern. “I was worried about what was going to happen when the government tried to reflate the bubble.” The ensuing meltdown is going to result from the cure, not the original disease.

Spain Ejects Clean-Power Industry With Europe Precedent: Energy (anton95)

Solar energy was the biggest drag on the system, accounting for almost half of the annual 6 billion euros of liabilities and producing just above 2 percent of the power, said Eduardo Tabbush, an analyst in London at Bloomberg New Energy Finance.

With peak electricity demand at less than half of capacity, the country doesn’t need more power plants, he said. Spain has a capacity of 99 gigawatts, and peak demand of 44 gigawatts.

SEC: Taking on Big Firms is 'Tempting,' But We Prefer Picking on Little Guys (Thomas C.)

The S.E.C. in recent years has failed in almost every possible way a regulator can fail to police powerful criminals. Failure #1 was that it repeatedly fell down on the job even when alerted to problems at big companies well ahead of time by insiders. Six months before Lehman Brothers collapsed, setting off a chain reaction of losses that crippled the world economy, one of Lehman’s attorneys, Oliver Budde, contacted the S.E.C. to warn them that the firm had understated CEO Dick Fuld's income by more than $200 million; the agency blew him off. There were similar brush-offs of insiders with compelling information in cases involving Moody’s, Chase, and both of the major Ponzi scheme scandals, i.e. the Bernie Madoff and Allen Stanford cases.

Energy

Easy Energy is Delaying Further Technological Innovation (James S.)

Most of the 19th and early 20th century innovations highlighted in the article relate directly to or result directly from a radical revolution in humankind’s ability to harness energy for its own benefit. Prior to the industrial revolution, energy for economic production came primarily from livestock and human labour. By the mid-19th century, Western civilization was pushing on the very capacity of those energy-producing technologies to sustain the economic growth and wealth creation demanded by its societies, setting the stage for the Industrial Revolution.

Solar power generation world record set in Germany (adam)

Germany's government decided to abandon nuclear power after the Fukushima nuclear disaster last year, closing eight plants immediately and shutting down the remaining nine by 2022. They will be replaced by renewable energy sources such as wind, solar and bio-mass.

Rome Refinery to Cease Activities by End of Year (Suzie G.)

Researched by Industrial Info Resources (Sugar Land, Texas) -- Total ERG, a joint venture between Total SA TOT -0.35% (Paris, France) (51%) and ERG SpA (bit:ERG) (Milan, Italy) (49%), plans to cease operations at its 86,000 barrel-per-day (BBL/d) refinery in Rome, Italy. Like many other refineries in Europe, the refinery has been affected by a drop in refining profit margins.

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