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Daily Digest 7/23 - Crony Capitalism in the USA, The Argentina Energy Showdown

Monday, July 23, 2012, 10:31 AM

Economy

Lieborgate: Here Come The Arrests (Thomas C.)

The reason we have bolded the third paragraph is that if one had gone to the BBA's Governance section as recently as a few weeks ago, or prior to Liborgate becoming front page news, the paragraph read something totally different. However, courtesy of the Way Back Machine, we have a great idea of just what the BBA quietly and under the radar tried to change vis-a-vis its own obligations and responsibilities in the Libor scandal. This is what the third paragraph said before.

From an Unlikely Source, a Serious Challenge to Wall Street (safewrite)

Cities and towns won’t need to ask for an act of a bank-subsidized congress to do this, and they won’t need a federal judge to sign off on any settlement. They can just do it. In the Death Star of America’s financial oligarchy, the ability of local governments to use eminent domain to seize toxic debt might be the one structural flaw big enough for the rebel alliance to exploit.

Power Pwn: This DARPA-funded power strip will hack your network (Chris M.)

To summarize that for you, the Power Pwn can launch remotely-activated Wi-Fi, Bluetooth, and Ethernet attacks to identify network weaknesses. You can send commands via a convenient Web interface, accessible through the unit's built-in 3G radio, or directly to the device via text message. In fact, if you're feeling really lazy, you can use Apple's Siri voice-recognition software to send it instructions.

Crony Capitalism in the USA (Jaime)

Click on the infographic to experience US crony capitalism in full-size glory...

Never Mind the Bubbly, Some Can’t Buy Groceries (jdargis)

Ms. Ordonez, a single mother who lives in the Bronx and came to the States from Ecuador in 1981, was already working full days as a home health aide in East Harlem when she accepted the 5 p.m. to 1 a.m. cleaning shift at Con Edison, embarking on a schedule and route — multiple subways and two-hour trips in the middle of the night — that allowed her no more than three hours of sleep.

As California Warehouses Grow, Labor Issues Are a Concern (jdargis)

Still reeling from the economic downturn, many community leaders in the Inland Empire say they are desperate for jobs, particularly for low-skilled workers, many of whom lost their jobs in construction after the housing collapse. They see the region’s warehouses and related delivery industries — which now employ an estimated 200,000 people, more than Salt Lake City’s population — as the best way out of the doldrums, seeing salvation in the form of shipping containers.

The Energy Showdown in Argentina - Interview with Sam Logan (OPA)

The Eskenazi family really took a hit from this action. When brought on board by the Kirchners, they took out loans to buy their stakeholder position in YPF. The payback on those loans was based partially on dividend payments. So the Kirchner nationalization and subsequent decision on dividends has left them in default. Carlos Slim, who got 8% of YPF when Eskenazi defaulted, was simply making a personal investment, not a political statement. When you're the world's richest man, it's not particularly risky to make low-value purchases and hold them long term to see if they pan out.

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."

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saxplayer00o1
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saxplayer00o1's picture
saxplayer00o1
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Posts: 2714
Italian provinces warn on spending cuts

"Italy's provincial government association warned on Monday that schools may not be able to open after the summer holidays due to planned spending cuts, highlighting growing concerns about local finances in the euro zone's third-largest economy.

The comments follow Prime Minister Mario Monti's warning last week that the autonomous region of Sicily was on the brink of a default and come on the same day La Stampa newspaper said that 10 Italian cities faced serious financial difficulties - echoing similar problems in Spain.

“With these cuts we won't be able to guarantee the opening of the school year,” UPI President Giuseppe Castiglione told reporters in Rome.

Speaking at the same news conference, Piero Lacorazza, president of the province of Potenza in southern Italy, said the comment was “not an exaggeration”, adding that “half of the provinces are in serious financial difficulty”.

Funding strains in Italian provinces follow on the heels of more acute regional fiscal problems in Spain, which have raised fears Spain may be the next euro zone member to require a full-blown bailout. "

""The chilling statistics"

Here are the chilling statistics. In the first five months of the year, Spain's banks lost 3% of their deposits as savers moved their cash to perceived safe havens, such as Germany, or spent their accumulated savings to make up for the collapse in their incomes.

Meanwhile, in not much more than six months, Spanish banks' borrowing from the European Central Bank has risen from 106bn euros (in November 2011) to 365bn euros - or 9.5% of all their borrowing needs.

The relevant comparators are not encouraging. The banks of Ireland and Portugal, two countries already in formal rescue programmes provided by the Eurozone and IMF, are dependent on funding from the ECB to the tune of 13.5% and 10% of their respective liabilities.

Or to put it another way, the ECB's support for Spain's banks is already around the levels in Ireland and Portugal at which the ECB felt that enough was enough, and put pressure on eurozone governments to provide a full-blown rescue programme for those countries."

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saxplayer00o1
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Moody's cuts Compton, Calif. sewer enterprise rev bond rating

"Moody's Investors Service said on Monday it cut the rating on sewer enterprise revenue bonds issued by Compton, California, to Ba1 from A2, affecting $4.9 million of debt.

The rating could be cut further into the junk category, the rating agency said in a statement.

The downgrade is primarily based on the city's severe liquidity crisis, which raises the risk that the city could seek bankruptcy protection, according to the statement.

Compton, located 16 miles south of Los Angeles, may declare bankruptcy by September, according to c ity officials."

"Moody's Investors Service on Monday lowered the outlook on Germany's triple-A rating to negative from stable due to mounting uncertainties from the euro-zone debt crisis. Moody's also downgraded the outlooks on the Netherlands and Luxembourg and affirmed Finland's triple-A rating. Moody's cited the possibility of Greece's exit from the euro zone and the impact that would have on Spain and Italy. "Even if such an event is avoided, there is an increasing likelihood that greater collective support for other euro area sovereigns, most notably Spain and Italy, will be required," said the ratings agency. This burden is likely to fall most heavily on better rated members "if the euro area is to be preserved in its current form," it said. Moody's rates both Netherlands and Luxembourg at triple-A."

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