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Daily Digest 2/1 - Americans Lose Trust in Financial System, North Dakota Went Boom

Friday, February 1, 2013, 12:44 PM

Economy

Congress Passes Debt Bill as a $1 Trillion Ax Looms (jdargis)

Senator Carl Levin, Democrat of Michigan and chairman of the Armed Services Committee, has drafted more ambitious legislation to raise nearly $200 billion for sequester replacement by closing off a variety of offshore tax shelters, ending preferential tax treatment for many private equity and hedge fund managers, and taxing the exercise of stock options more heavily.

Paul Krugman May Be the World's Last Flat Earth Economist (Arthur Robey)

Some people, like University of Chicago Finance Professor John H. Cochrane, are more pointed, noting that if Krugman were a scientist, he'd be akin to a "flat-earther," an "AIDS-HIV disbeliever" or somebody who believes the continents don't actually move.

This makes him very dangerous in the scheme of things because Dr. Krugman's solution is that "we" just haven't spent enough money...yet.

Rebecca Mairone, Former Countrywide Official, Named In 'Hustle' Lawsuit (adam)

Rebecca Mairone, formerly a top official at Countrywide Financial, has been named in an amended complaint filed earlier this month by Preet Bharara, the U.S. Attorney for the Southern District of New York, against Countrywide and its parent Bank of America. The suit alleges that Mairone, as chief operating officer for Countrywide's Full Spectrum Lending division in 2007, set up a program dubbed the "High Speed Swim Lane," or "HSSL," or "Hustle," to speed up the origination of mortgage loans, including increasingly shady subprime loans. The government claims the alleged Hustle ultimately cost its sponsored entities Fannie Mae and Freddie Mac more than $1 billion in losses.

Record Withdrawals at U.S. Banks as Americans Lose Trust in Financial System (Nervous Nelly)

But since the bulk of these withdrawals were made at larger banks that were not covered by TAG, this explanation hardly suffices. Another more likely explanation is that Americans are simply unsettled with the current state of the financial system, and for all intents and purposes are trying to protect their own assets from insolvency. This is further reinforced by the fact that a similar run on “physical” gold escalated around the exact same time, suggesting that depositors are anticipating rocky times rapidly approaching.

Where's the Crash? (James S.)

What traders instead decided to focus on were the impressive strength of the private sector. Business investment rocketed 8.4%, while consumer spending jumped by 2.2%. It all confirms my theory that the passage of the presidential election broke the dam for private economy, and got people off their behinds once all the negativity and uncertainty was gone. Businesses suddenly began investing and hiring, while consumers stepped up consuming.

Is Germany Preparing For Future Capital Controls? (westcoastjan)

On the surface, it may seem innocuous for Germany to move some pallets of gold closer to home. Some observers note that since Russia isn't likely to be invading Germany anytime soon – one of the original reasons Germany had for storing its gold outside the country – the move is only natural and no big deal. But Germany's gold stash represents roughly 10% of the world's gold reserves, and the cost of moving it is not trivial, so we see greater import in the move.

The Hidden Prosperity Of The Poor (jdargis)

Perry and Donald Boudreaux, an economist at George Mason University, elaborated on this theme in a Jan. 23 op-ed in the Wall Street Journal, “The Myth of a Stagnant Middle Class.” The two economists contend that the “favorite progressive trope” of middle and lower class stagnation “is spectacularly wrong” – that American families today have substantially more discretionary income than ever before because the cost of basic necessities has been steadily falling as a proportion of income:

According to the Bureau of Economic Analysis, spending by households on many of modern life’s “basics” — food at home, automobiles, clothing and footwear, household furnishings and equipment, and housing and utilities — fell from 53% of disposable income in 1950 to 44% in 1970 to 32% today.

Focus on Mental Health Laws to Curb Violence Is Unfair, Some Say (VeganD)

“Good intentions without thought make for bad laws, and I think we have a risk of that,” said J. Reid Meloy, a forensic psychologist and clinical professor at the University of California, San Diego, who has studied rampage killers.

Reserves challenge clouds Shell’s growth ambitions (westcoastjan)

The company pledged a net $33 billion capital spending for next year, some of which will go into controversial places such as Nigeria – where a Dutch court this week found Shell’s local subsidiary partly responsible for pollution, and into the Arctic where it suffered a series of accidents last year that have raised new questions about the safety of offshore drilling.

North Dakota Went Boom (jdargis)

In the fall of 2011 in Crosby, N.D., Continental Resources, the oil company with the most acreage leased in the basin, erected a self-congratulatory granite monument celebrating its work in the so-called Bakken Formation, the Williston Basin rocks that, as Continental put it, ushered in “a new era in the American oil industry.” The number of rigs drilling new wells in North Dakota’s part of the basin reached a record 218 last May. It has now leveled off at around 200, as thousands of wells have been completed under deadline pressure to secure expiring mineral leases. Many thousands more will be spudded in the next two years as the boom moves from discovery to production and crews drill “infill” wells, complete pipelines, fortify roads, enlarge refineries and build natural-gas pumping stations and oil-loading train yards.

Gold & Silver

Click to read the Gold & Silver Digest: 1/31/13

Provided daily by the Peak Prosperity Gold & Silver Group

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13 Comments

littlefeatfan's picture
littlefeatfan
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More 3E related Links, Resources and Cartoons

http://3es.weebly.com/ Black Sheets of Rain Edition

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saxplayer00o1
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chm
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Homeless in Japan, Renewable Energy Reality Check

Homeless, jobless forced to take refuge under Golden Arches (Japan)

“It takes 1,000 yen ($11) or so if I sleep at an Internet cafe,” a 37-year-old woman said. “I can stay at a McDonald’s for 100 yen over a cup of coffee.”

http://ajw.asahi.com/article/behind_news/social_affairs/AJ201301310086

Reality Check

Experts who have considered the difficulty of powering the world without fossil fuels or nuclear power have come up with mind-blowing numbers. In an article published in Scientific American in 2009, engineer Mark Z. Jacobson and research scientist Mark A. Delucci tallied up what it would take to power the whole planet on renewable energy alone by 2030: billions of rooftop photovoltaic systems, millions of jumbo-size wind turbines, hundreds of thousands of wave devices and tidal turbines, tens of thousands of concentrated solar power plants and photovoltaic plants, thousands of geothermal plants, and hundreds of hydroelectric dams. But the construction work doesn't end there, because population and living standards are expected to continue rising after 2030. At best, such a plan simply kicks the can down the road.

http://www.thebulletin.org/web-edition/columnists/dawn-stover/reality-check

<Ricefarmer>At last some realistic thinking! I've repeatedly said that running industrial civilization on renewables is a pipe dream, especially under the infinite-growth paradigm. Renewables will help ease our transition back to a pre-industrial lifestyle, but they won't save industrial civilization or the consumer culture.</Ricefarmer>

From Ricefarmer's blog...

Arthur Robey's picture
Arthur Robey
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Fog and Fumes

I would love to know just who is spending up big time in shares and script.

Is the liquidity that was dammed up in the Banks finally getting into the wilds? 

Have the big funds dropped their bond holdings in fear and are chasing a mirage on wall street?

Is the Model-bound Krugman right? Printing an abstraction called money can change the laws of entropy?

This reminds me of the fog of war. 

One small glimmer of light is that the employment numbers have climbed. Employed doing what? Employed growing food is good. Employed "guarding fumes and making haste" is not. Bob Dylan.

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Arthur Robey
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Balance and Harmony.

>At last some realistic thinking! I've repeatedly said that running industrial civilization on renewables is a pipe dream, especially under the infinite-growth paradigm.

And hence my passion for fusion of any kind. But the money (Resources) must be spent parsimoniously. Which form of Fusion energy is giving the most bang for the buck? Cold Fusion.

After (If) we get nuclear fusion in a practical form, then we have to deal with the other exponentials. They need strong feedback loops to control them.

The right to breed will have to be stripped away, with one eye on evolution because the successful will be reckless, cheating breeders. Therefore we will have to seize control over our evolution, with all the problems that that entails. (Outraged, flared nostrils are not a cogent argument. My nostrils can flare just as big as yours at the thought of starving kids.)

If we manage to muddle through those issues we will have to leave the planet, and continue our discrete expansion into the Cosmos.

Maintaining perfect numbers and balance is a task only the Maker of Reality has done successfully. And even He ended up with a gently inflating universe. How can we do better than to emulate the Laws that have created a wonderful and bounteous Universe?

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cmartenson
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Where's the money coming from and going to?

Arthur Robey wrote:

I would love to know just who is spending up big time in shares and script.

Is the liquidity that was dammed up in the Banks finally getting into the wilds? 

Have the big funds dropped their bond holdings in fear and are chasing a mirage on wall street?

Arthur, I have an insider coming very soon that adddresses this precise set of questions.

The preview is things are at historic extremes right now....

Rector's picture
Rector
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Posts: 332
Everything is FINE.

Move along. . .move along.  Prosperity is back like the "roaring oughts!" (sarcasm off).  Read this breathless report:

http://www.cnbc.com/id/100420112

Arthur Robey's picture
Arthur Robey
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Saffron cures Macular degeneration.

http://www.abc.net.au/radionational/programs/rnfirstbite/4493184

Professor Johnathan Stone explains here.

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VeganD
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studied for treatment of dementia and mood as well

I am having trouble with the audio on the link but that is my computer problem I suspect. Saffron actually compared favorably to Aricept (first line therapy for early alzheimer's) in a study in the journal Psychopharmacology

http://nutritionfacts.org/video/saffron-versus-aricept/

It is an expensive spice but it only takes a fraction of a gram (to get the effect in this study patients took 30mg). The cost in this area is maybe 15-20 dollars a gram, but it can be bought in capsule form to simplify dosing. There is fake saffron on the market though, caveat emptor.

These nutriceuticals are not getting the attention they deserve until pharma can figure out how to patent and own them-one bad thing about research funding by private sector instead of the government.

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VeganD
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Focus on Mental Health Law to curb violence-this is a broad law

I really think New Yorkers are unaware of the implications of this law with respect to reporting dangerousness. They will find out.

As I read it, ALL licensed social workers, physicians, psychologists and RN's (including people like the school nurse and your orthopedist) are MANDATED by law to report ANYONE who is an "imminent" threat to self or others. Report to law enforcement. Through a county agency.  This law is not limited to mental health care providers evaluating gun owners who are dangerous to self or others. It applies to all licensed healthcare workers with a CSW, RN, PhD or MD and all patients.

I really think people have not thought through the implications of this. Example : a CSW (clinical social worker) geriatric case manager taking care of your mother afflicted with alzheimer's hears your mom say she feels she should end it all. CSW turfs this to the supervising PhD or MD who, to cover themselves, reports it to law enforcement. Law enforcement decides to search your home for firearms. And you didn't know about that little drug stash your adolescent had in the closet.....child goes to jail, you get assessed by the authorities for being an unfit parent, and on and on......

Nicaragua had a policy to mandate physicians to report all women who had abortions to the police or face arrest. It was based on the judgment of the doctor to guess if the woman had the procedure, and she faced certain arrest and incarceration once reported.  Of course doctor's judgment in these situations is perfect /sic. The consequences with this gun law remain to be seen. It is that vague. IMHO there are ugly consequences when healthcare providers become an arm of law enforcement. 

Saying this law only identifies the dangerously mentally ill is unintentional misdirection at best.

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VeganD
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"mental health professional" broadly defined
"S 9.46 REPORTS OF SUBSTANTIAL RISK OR THREAT OF HARM  BY  MENTAL  HEALTH
 PROFESSIONALS.
 (A)  FOR  PURPOSES  OF  THIS  SECTION, THE TERM "MENTAL HEALTH PROFES
 SIONAL" SHALL INCLUDE A PHYSICIAN,  PSYCHOLOGIST,  REGISTERED  NURSE  OR
 LICENSED CLINICAL SOCIAL WORKER.
 (B)  NOTWITHSTANDING  ANY  OTHER  LAW  TO  THE CONTRARY, WHEN A MENTAL
 HEALTH PROFESSIONAL CURRENTLY PROVIDING TREATMENT SERVICES TO  A  PERSON
 DETERMINES,  IN  THE  EXERCISE OF REASONABLE PROFESSIONAL JUDGMENT, THAT
 SUCH PERSON IS LIKELY TO ENGAGE IN CONDUCT THAT WOULD RESULT IN  SERIOUS
 HARM  TO  SELF OR OTHERS, HE OR SHE SHALL BE REQUIRED TO REPORT, AS SOON
 AS PRACTICABLE, TO THE DIRECTOR OF COMMUNITY SERVICES, OR THE DIRECTOR'S
 DESIGNEE, WHO SHALL REPORT TO THE DIVISION OF CRIMINAL JUSTICE  SERVICES
 WHENEVER  HE  OR  SHE AGREES THAT THE PERSON IS LIKELY TO ENGAGE IN SUCH
 CONDUCT.  "

http://open.nysenate.gov/legislation/bill/s2230-2013

bolding and highlighting mine. Let's hope everyone follows this in the spirit of good. Although McCarthyisms start out that way don't they?

Arthur Robey's picture
Arthur Robey
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For VeganD

studied for treatment of dementia and mood as well

Sorry your audio does not work. Prof. Stone does say that it seems to be effective for Old Timer's Disease, But the signal is hard to determine. My guess is that if it works on the eyes it will work on the brain.

Saffron seems to work by boosting the neuron's repair systems. (I think they are refering to the Glial cells). How it works is a mystery. But the Italians have run a double blind, placebo controlled test on 27 patients with crossover, and when the patients were taken off Saffron they knew without breaking the code.

You sprinkle the same amount of safron on your food as you would salt. The saffron must not be heated or the active ingredient (whatever that is) might be denatured.

I have instructed my sister to put my mother on it, as she has lost her sight to Macular Degeneration.

Here is a text based page.

And here is the much more informative site of Professor Stone.

One intriguing possibility is that saffron relieves depression. There is only one clinical trial, which suggests that it is as effective as approved anti-depressants. But quite a few anecdotes – unpublished, uncontrolled observations – which suggest that one side effect of consuming saffron regularly is cheerfulness.



Which is presumably a good outcome for the individual; but might (in extremis) irritate one's carers.

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chm
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LED Helmet Against Dementia

Five+ years ago I read an article on the internet about a cheap helmet with quite a lot of simple red LEDs that was used to succesfully treat dementia. The patient would wear the helmet for IIRC 30min to 60min a day. The difference in mental performance was considerable, one example that was given was of a man who could accompany his family to a restaurant and read and order there without problems and a bit more than that as well IIRC compared to being completely unable to do all of the above.

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