Daily Digest 7/3 - Probation Fees Skyrocket, The Credibility Trap, U.S. Grain Harvest Threatened By Heat Wave
First, here is our rule of thumb to determine if someone who talks about money, inflation or monetary policy has even a vague clue of what they are talking about: do a text search for the words: repo, shadow banking, collateral, collateral-chains, rehypothecation, or deposit-free money creation. If not one of those terms appears anywhere, feel free to toss the reading material right into the trash.
Top 10 Warning Signs of A Global End Game (David B.)
With the simultaneous slowdown in U.S. and Europe, China has become a major market for business and corporations to rely on for revenue and growth. However, economic data coming out of China has gone from bad to worse as Europe’s crisis seriously hurt China’s heavy export-reliant economy. Chinese manufacturing indexes slipped to 48.4 in June, a seven-month lows, as overseas orders dropped (See Chart Below), while Chinese Yuan also had its biggest quarterly decline in 7 years.
A Hong Kong hedge fund may get financing from UBS secured by collateral pledged to the UBS bank’s UK affiliate – say, Indonesian bonds. Naturally, there will be a haircut on the pledged collateral (i.e. each borrower, the hedge fund in this example, will have to pledge more than $1 of collateral for each $1 of credit).
What is clear is the Greek economy is in a heap of trouble, and a thriving company like Microsoft is only there to help. Not sure trying to drive it out of business is such a sharp plan.
In thinking about this manipulation issue further, and the events of the past few weeks, it would not surprise me overmuch if some day in the not too distant future we wake up to the news that the CFTC, the SEC, the Justice Department, the FSA, and the Banks have agreed to a settlement in some major market, perhaps the metals market, as a result of an official investigation. There will be record fines, and the regulators will claim victory.
What really "knocks one's socks off" is the general admission and conclusion beginning around minute 9 of this video that the banks are manipulating the financial and commodity markets, with silver specifically mentioned. And the panel accepts it as 'oh well, that's the banking system.' That's just the way things are and if you don't like it, well then tough luck for you.
“With so many towns economically strapped, there is growing pressure on the courts to bring in money rather than mete out justice,” said Lisa W. Borden, a partner in Baker, Donelson, Bearman, Caldwell & Berkowitz, a large law firm in Birmingham, Ala., who has spent a great deal of time on the issue. “The companies they hire are aggressive. Those arrested are not told about the right to counsel or asked whether they are indigent or offered an alternative to fines and jail. There are real constitutional issues at stake.”
FOFOA: Interview (Thomas C.)
Three weeks ago Vivek Kaul contacted me requesting an interview for the Daily News and Analysis (DNA), an English newspaper published out of six centers in India including Mumbai and Bangalore. The interview comes out today (Monday morning) in India. You can download the pdf here. Below is the interview just as it appears in the paper. (They always include a caricature made from a photo of the interviewee which is why he mentioned something about me refusing to be photographed.
The good news is that with the entire world set to adopt 100%+ taxes on "wealthy" individuals as defined arbitrarily by Ph.Ds, there will be no place to hide. Which incidentally is just the first step toward what we warned back in September 2011 will happen: a 30% tax on all financial assets. Everywhere.
Heatwave threatens US grain harvest (Ben Johnson)
The combination of low subsoil moisture, which is a reflection of the lack of precipitation that we had during the winter, together with the very hot weather that we’re seeing right now could spell a pretty disastrous scenario for corn and soyabeans,” said Hussein Allidina, head of commodities research at Morgan Stanley.
The outcome is critical to global food prices and the agribusiness industry because the US supplies almost half of global corn exports and a third of soyabean exports. Demand for both has risen as consumers in emerging countries eat more meat.
Desalination might sound boring, but it’s super important. Around 97% of the planet’s water is saltwater and therefore unpotable, and while you can remove the salt from the water, the current methods of doing so are laborious and expensive. Graphene stands to change all that by essentially serving as the world’s most awesomely efficient filter. If you can increase the efficiency of desalination by two or three orders of magnitude (that is to say, make it 100 to 1,000 times more efficient) desalination suddenly becomes way more attractive as a way to obtain drinking water.
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