Daily Digest

Daily Digest 5/4 - The Fraud Recipe For CEO's, Why The Euro Crisis Never Really Went Away, Arab Grain Imports Rising Rapidly

Friday, May 4, 2012, 10:42 AM
  • Bill Black: The Fraud Recipe for CEO's, Why Banks Hate Free Markets and Love Crony Capitalism, and the Dysmal Legacy of Mainstream Economists
  • A Weak Economy Remains Gold’s Best Friend
  • Affordable Resilient Homes? Look Beyond The U.S.
  • Europe: Why The Eurozone Debt Crisis Never Really Went Away
  • Services Slowdown Signals U.S. Growth May Be Cooling: Economy
  • Results of French and Greek Elections Could Signal Shift on Economic Crisis
  • Manhole Lid Theft Is On the Rise
  • Stocks Fall in Anticipation of U.S. Jobs Report
  • Arab Grain Imports Rising Rapidly
  • Mosquitoes Shoot Blanks in Scientist’s Air War on Dengue

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Economy

Bill Black: The Fraud Recipe for CEO's, Why Banks Hate Free Markets and Love Crony Capitalism, and the Dysmal Legacy of Mainstream Economists (Jaime)

Perverse incentives produce criminogenic environments that encourage fraud. When people are able to steal a lot of money, with no threat of imprisonment, nor having to live in disgrace, an environment conducive to fraud is established. Establishing such an environment in practice requires the 3 D's: Deregultation, Desupervision, and de facto Decriminalization. Deregulation: you get rid of the rules. Desupervision: any rules that remain, you do not enforce. Decriminalisation: even if you sometimes sue the perpetrators and get a fine, you do not put them in prison.

A Weak Economy Remains Gold’s Best Friend (David B.)

Meanwhile, economic data as a whole is okay but is currently failing to meet expectations. The Citigroup Economic Surprise Index, (economic data relative to expectations) has gone negative for the US, and the rest of the world is not far behind. Clearly, continued disappointing economic data combined with any weakness in equities would prompt more Fed action. Judging from what happened in 2010 and 2011, it is a near certainty.

Affordable Resilient Homes? Look Beyond The U.S. (Coley H.)

So, what would a resilient home like this cost? That’s the big question. I spent some time talking with the manager of Eco Venao and he said the construction costs to build a modest place like La Casona (I estimated about 2000 square feet) were about $60 per square foot or $120,000 all in.

Okay, but let’s say you wanted to go really resilient… Like “off-grid” resilient. What would the costs be then?

Europe: Why The Eurozone Debt Crisis Never Really Went Away (David B.)

“As the local bond markets have become owned only by domestic institutions, there is less and less incentive for the other countries to support and bail out one of those,” Stephane Monier, head of fixed income and currencies at Lombard Odier Investment Managers, told Bloomberg News. “Basically you’re planting the seeds for the disintegration of the euro zone.”

Services Slowdown Signals U.S. Growth May Be Cooling: Economy (jdargis)

The Standard & Poor’s 500 Index lost 0.8 percent to 1,391.57 at the close of trading in New York. The Stoxx Europe 600 Index ended little changed, erasing an earlier earnings- driven rally of 1 percent. Ten-year Treasury yields were little changed at 1.93 percent.

Results of French and Greek Elections Could Signal Shift on Economic Crisis (jdargis)

Mr. Hollande’s words may have a degree of campaign bravado, but he is riding a wave of political resistance to austerity that has brought down even the government in the Netherlands, one of the best-run economies in Europe and a close ally of Germany. Given France’s importance, if Mr. Hollande wins he might end up leading a sort of “growth bloc,” which would challenge the German medicine, or at least try to dilute it.

Manhole Lid Theft Is On the Rise (jdargis)

Based on current commodity prices for iron, a stolen manhole cover might fetch more than $30. But it costs Con Ed about $200 to replace each one, not counting the labor involved, Mr. Hardy said. That is why he and his team of 12 investigators are canvassing neighborhoods, talking to scrap dealers around the city and sharing information with the police, he said.

“We just tell them that if anybody shows up with a manhole cover with a Con Ed logo on it to let us know,” Mr. Hardy said of the scrap dealers. “They understand that if it has our logo on it, it’s most likely stolen.”

Stocks Fall in Anticipation of U.S. Jobs Report (jdargis)

“Little can be said to remain of any ‘core’ of strength in the region,” Mr. Williamson said in a statement. “Growth has practically ground to a halt even in Germany, and France has joined Italy and Spain in seeing a strong rate of economic decline.”

Arab Grain Imports Rising Rapidly (Mike K.)

The Arab countries in the Middle East and North Africa make up only 5 percent of the world’s population, yet they take in more than 20 percent of the world’s grain exports. Imports to the region have jumped from 30 million tons of grain in 1990 to nearly 70 million tons in 2011. Now imported grain accounts for nearly 60 percent of regional grain consumption. With water scarce, arable land limited, and production stagnating, grain imports are likely to continue rising.

Mosquitoes Shoot Blanks in Scientist’s Air War on Dengue (jdargis)

About half of the world’s people are already at risk of infection, and the incidence of dengue is rising as the human population increases and climate change causes mosquitoes to disperse more widely, the Geneva-based WHO says. Mosquitoes that transmit dengue are found in at least 28 U.S. states and may extend their reach as temperatures warm, the New York-based Natural Resources Defense Council said in 2009.

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."

8 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2651
littlefeatfan's picture
littlefeatfan
Status: Silver Member (Offline)
Joined: Jul 20 2009
Posts: 141
New 3Es postings

Road To Nowhere Expanded Edition at  http://3es.weebly.com/ 

Energy, Environment, Economic Links\Resources\Cartoons

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2378
The Emergence of the Strong Man.

Listening to Professor Constntine Gurdgiev on Lauren Lister's Capital Account requires concentration, but what I was reminded of is that we can anticipate the rise of the Strong Man.

People will vote for him, not because they agree with his policies, but because the "catch all" centralist parties are tainted with responsibility for our present situation.

There is no sign of him in USA yet.

Bill Hicks's picture
Bill Hicks
Status: Bronze Member (Offline)
Joined: Jul 3 2011
Posts: 34
Drivers Pay "Secret" Road Tax In $15 Billion For Car Repair

This goes along with the manhole covers theft story above.

billhicksisdead.blogspot.com/2012/05/crumbling-infrastructure-porn-drivers.html

Motorists pay $67 billion annually for increased fuel consumption, body dents, worn tires and premature wear wrought by pitted roads, according to The Road Information Program, a Washington-based research group. The group’s board includes representatives from construction-equipment makers Caterpillar Inc. (CAT) and Deere & Co. (DE), as well as Vulcan Materials Co. (VMC), a Birmingham, Alabama-based asphalt and concrete producer.

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1441
Arthur Robey

Arthur Robey wrote:

Listening to Professor Constntine Gurdgiev on Lauren Lister's Capital Account requires concentration, but what I was reminded of is that we can anticipate the rise of the Strong Man.

People will vote for him, not because they agree with his policies, but because the "catch all" centralist parties are tainted with responsibility for our present situation.

There is no sign of him in USA yet.

concad's picture
concad
Status: Member (Offline)
Joined: Jul 8 2009
Posts: 4
Mosquitoes shoot blanks

This approach is typical of the "kill all oposition brigade and make lots of money from GM". I suggest people who are interested check out the information at the site below for a simpler solution that has a different approach that will be more effective and does not require ongoing payment to GM  patent owners.

http://www.imb.uq.edu.au/index.html?page=164174

Marty59's picture
Marty59
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Joined: Oct 23 2009
Posts: 10
http://www.zerohedge.com/news

http://www.zerohedge.com/news/everything-you-know-about-monetary-policy-wrong-and-why-very-bad-news-europe?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

A succinct argument on what was missing in the models and why Europe will crash.
 
 
The 51 page report at the end is just 51 bullet points, a really easy Cliff Notes version of the whole concept.

horstfam's picture
horstfam
Status: Bronze Member (Offline)
Joined: Sep 6 2008
Posts: 71
Is another MF Global ready to happen? Be careful!
MF GLOBAL 2.0 MAY BE UNFOLDING NOW
POSTED BY ANN BARNHARDT - MAY 2, AD 2012 11:41 PM MST
If you are foolish enough to still be in the markets and you are doing business with anyone who clears through Penson Worldwide, you need to get out of there.

The stock symbol is PNSN. Just google that and look at the chart. $31.50 high, now trading at $0.49, making new lows daily.

In case you didn't know, I was clearing through Penson when I closed my firm last November. I was blessed in that all of my back office stuff was handled by a lovely little boutique office in Wisconsin that handled IBs like me, that had just been acquired by Penson before I came on board. I never spoke to Chicago or New York, just a merry band of Wisconsinites who were always wonderful to work with. I was truly blessed in that. (The cattle and feeder futures paper that I did in the pit, as opposed to the electronic, which was less and less over the years as the electronic markets grew and grew, was actually all done as give-ups by the FC Stone meat desk. Shout out to Larry and the Stooges, who still call to chat every so often, and have a photo of me with my pink AR-15 hanging in their desk. Good people.) But, the Penson ship is going down, it appears.

They were in trouble last year when MF Global happened and were looking to dump their European divisions, and they did bounce a bit after MF Global when they unloaded their Aussie holdings, but it looks like it is all but over for them. The stock is cratering, and there is chatter on the net that they are taking forever to get cash withdrawls out, posted and cleared. That's a very bad sign. MF global was the same way in the weeks before the end.

The extreme danger is that the CME is going to do with Penson what they did with MF Global and NOT backstop and keep customers liquid when the end comes. MF Global proved that the CME is no longer going to fulfill its fiduciary duty and will screw clients twelve ways from Sunday without hesitation. DO NOT get caught up in that crap. Just get out of the whole, stinking, festering, putrefied mess. Get out of the markets ENTIRELY.

Here is a six month chart on PNSN, which is basically the timeframe since MF Global. Once it broke back under $1.00 in March, it has been Katy-bar-the-door. Strong support at zero. Ugh. 

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