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Daily Digest 8/7 - Shell Pulling Cash Out Of Eurozone, Ending Blackouts One Solar Lamp At A Time

Tuesday, August 7, 2012, 1:22 PM

Economy

Shell 'pulling cash out of Europe on eurozone fears' (Alan W.)

The firm is forced to keep some money in Europe to fund its operations, but is keeping the bulk of its reserve liquidity out of the eurozone to avoid growing macroeconomic risk, the report said.

How To Prepare For The Treasury Bond Apocalypse (David B.)

...from a credit standpoint, U.S. Treasuries – even without their vaunted AAA rating – are indeed among the world’s safest securities. Sure, a few blue-chip companies have higher credit ratings. But that could change. Plus, they aren’t able to crank up the printing presses to repay their corporate debt. And some other countries have been fiscally responsible enough to maintain their AAA-ratings. But most don’t have the economic strength, political stability, or military might to attract large capital flows.

U.S. Midwest Hit By Perfect Gasoline Storm (James S.)

An industry analyst said much of the region was hit by "a cluster of bad luck." Last month, pipeline company Enbridge reported a leak on a pipeline in Wisconsin. A section of the Lakehead oil pipeline system ruptured there, cutting off oil supplies to Chicago-area refineries. U.S. Transportation Secretary Ray Lahood said the incident was "absolutely unacceptable" and forced Enbridge to keep the line closed until authorities review a restart plan for the entire 467-mile pipeline.

The Other Side Of The Sanctions (James S.)

After nearly thirty years of dealing with American sanctions, the Iranians have developed methods of evading some of the restrictions, but the current application goes far beyond anything faced earlier. The National Iranian Oil Company has been forced to relinquish its monopoly of sales and authorized private traders to market the crude. The Oil Products Exporters Union expects to manage a fifth of exports and claims to have completed arrangements with refiners in Europe.

Ending Blackouts, One Solar Lamp At A Time (Amanda)

For many Indians, diesel is not an affordable option, and the wait for a reliable connection to the grid seems like it will be a long one given the paralysis in policy making in New Delhi and slow pace of infrastructure development around the country. As a result, many Indians have been left to improvise, often by burning driftwood or kerosene, an oil-based fuel similar to diesel.

What Is Missing? (Tall)

Maya Lin is best known for the Vietnam War Memorial in Washington, D.C., that she
designed. Now she has created a memorial to honor the
vanishing natural world.

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."

4 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Poet's picture
Poet
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How The Next Shock Will Shatter The Global Economy

Reposted here as the Daily Digest has appeared.

This was just posted on Business Insider earlier today. Nothing we don't already know before... But more details, from David Korowicz, a physicist and human-systems ecologist. Ignore the hyperbole of "horrifying" - those are not the worlds of the paper's author:

Expert Explains In Horrifying Detail How The Next Shock Will Shatter The Global Economy (August 7, 2012)
"Neither wealth nor geography is a protection. Our evolved co-dependencies mean that we are all in this together."
http://www.businessinsider.com/trade-off-financial-system-supply-chain-cross-contagion-a-study-in-global-systemic-collapse-2012-8

Original 78-page paper in PDF: "Trade-Off: Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse"
http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

Poet

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Posts: 2473
S&P lowers Greece ratings outlook to negative

"Standard & Poor's said Tuesday it was lowering its outlook on Greece to negative from stable on the possibility that it may fail to secure further bailout funds from the European Union and the International Monetary Fund. S&P has CCC/C long- and short-term foreign and local currency sovereign ratings on Greece. "We see the likelihood of shortfalls, owing to election-related delays in the implementation of budgetary consolidation measures for the current year, as well as the worsening trajectory of the Greek economy," S&P said in a statement."

Damnthematrix's picture
Damnthematrix
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Posts: 3998
this will blow your mind.....

Chart of the day, HFT edition

By Felix Salmon
http://blogs.reuters.com/felix-salmon/2012/08/06/chart-of-the-day-hft-edition/

>

This astonishing GIF comes from Nanex, and shows the amount of high-frequency trading in the stock market from January 2007 to January 2012. (Which means that the Knightmare craziness of last week is not included.)

The various colors, as identified in the legend on the right, are all the different US stock exchanges. You might think there are only two stock exchanges in the US, but you’d be wrong: there are only two exchanges where stocks are listed. There are many, many more exchanges where stocks are traded.

What we see here is relatively low levels of high-frequency trading through all of 2007. Then, in 2008, a pattern starts to emerge: a big spike right at the close, at 4pm, which is soon mirrored by another spike at the open. This is the era of traders going off to play golf in the middle of the day, because nothing interesting happens except at the beginning and the end of the trading day. But it doesn’t last long.

By the end of 2008, odd spikes in trading activity show up in the middle of the day, and of course there’s a huge flurry of activity around the time of the financial crisis. And then, after that, things just become completely unpredictable. There’s still a morning spike for most of 2009, but even that goes away eventually, to be replaced with sheer noise. Sometimes, like at the end of 2010, high-frequency trading activity is very low. At other times, like at the end of 2011, it’s incredibly high. Intraday spikes can happen at any time of day, and volumes can surge and fall back in pretty much random fashion.

It’s certainly fair to say that if you take a long, five-year view, then you can see a clear rise in trading activity. But it’s also fair to say that there’s something quite literally out of control going on here. Just as the quants at Knight found themselves unable to turn off their machines for 30 long minutes last week, the HFT world in aggregate seemingly has a mind of its own when it comes to trading patterns. Or, to put it another way, if there’s a pattern here, it’s one incomprehensible to human minds.

Back in 2007, I wasn’t a fan of a financial-transactions tax; today, I am. And this chart shows better than anything why my opinion has changed. The stock market is clearly more dangerous than it was in 2007, with much greater tail risk; meanwhile, in return for facing that danger, society as a whole has received precious little utility. Are spreads a tiny bit tighter than they might be otherwise? Perhaps. But that has no effect on stock-market returns for long-term or even medium-term investors.

The stock market today is a war zone, where algobots fight each other over pennies, millions of times a second. Sometimes, the casualties are merely companies like Knight, and few people have much sympathy for them. But inevitably, at some point in the future, significant losses will end up being borne by investors with no direct connection to the HFT world, which is so complex that its potential systemic repercussions are literally unknowable. The potential cost is huge; the short-term benefits are minuscule. Let’s give HFT the funeral it deserves.

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