Daily Digest

Daily Digest 10/14 - Bernanke Sets the World on Fire, China Stakes Claim to Texas Oil, Currency Wars

Thursday, October 14, 2010, 9:01 AM
 
  • Westpac is banker to Carbon Trade Exchange 
  • Google Plans Alternative Inflation Index Using Web Data
  • Yale Ph.D., And Former Fed Member Tells Obama To Pull A "Gordon Brown" And Sell All Of America's Gold
  • Currency Wars: The Phantom Financial Menace
  • Jobless benefit claimants rise again
  • Searching for Crumbs in Syria’s Breadbasket
  • Shell gives MIT $25m for gas, oil research
  • China stakes claim to S. Texas oil, gas 
  • Western lifestyles plundering tropics at record rate, WWF report shows

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Economy

Westpac is banker to Carbon Trade Exchange (pinecarr)

WESTPAC today became Carbon Trade's banker and will facilitate transactions on CTX's web-based global carbon credit trading exchange. In a statement today, Westpac said it would provide banking services to the exchange and transaction capability for its online trading exchange platform. The price of the deal was undisclosed. London-based Carbon Trade Exchange has offices in Queensland’s Southport and New York.

Google Plans Alternative Inflation Index Using Web Data (rector)

Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics.

The work by Google’s [GOOG 538.84 --- UNCH]chief economist, Hal Varian, highlights how economic data can be gathered far more rapidly using online sources. The official Consumer Price Index data are collected by hand from shops, and only published monthly with a time lag of several weeks.

At the National Association of Business Economists conference in Denver, Colorado, Mr Varian said that the GPI was a work in progress and Google had not yet decided whether to publish it.

Yale Ph.D., And Former Fed Member Tells Obama To Pull A "Gordon Brown" And Sell All Of America's Gold (Debu)

Edwin Truman, a senior fellow in the Peterson Institute, who is of course a former Fed member, and of course a Yale Ph.D., writes in the FT, suggesting the brilliant idea that it is high time for the US to sell its gold. In other words do precisely what Gordon Brown did a few thousand percent ago, and now has to defend against allegations he did so merely to protect the LBMA cartel which was on the verge of being margin called into oblivion.

Currency Wars: The Phantom Financial Menace (hucklejohn)

The IMF is being tapped not as a referee in currency disputes, but as an arbitrator and regulator. This role has not quite materialized, and probably won’t until several currencies have imploded, including the dollar, but the end game is clear; we are meant to suffer a dollar derailment, and the IMF is “meant” to step in and take control of the matter for the greater good. Who benefits? The global bankers and elites at the helm of the IMF, who will receive more centralized economic power than has ever been realized in human history. This along with the IMF’s recent admittance that they intend for the SDR (Special Drawing Rights) to become the new world reserve currency, reveals clearly, without a doubt, that a currency war would be a curse for sovereignty, and for the financial life and freedom of the common man, but a windfall in the speedy promotion of globalism. Imagine that."

Jobless benefit claimants rise again (Mobius)

On the wider International Labour Organisation (ILO) measure, unemployment fell by 20,000 to 2.45 million in the three months to August. That took the jobless rate down to 7.7% from 7.8%, the lowest since May 2009. This was mainly due to 16 and 17-year-olds finding work, training or education. By contrast, the number of 18 to 24-year-olds out of work climbed by 35,000 to 742,000, the highest for a year.

Searching for Crumbs in Syria’s Breadbasket

Now, after four consecutive years of drought, this heartland of the Fertile Crescent — including much of neighboring Iraq — appears to be turning barren, climate scientists say. Ancient irrigation systems have collapsed, underground water sources have run dry and hundreds of villages have been abandoned as farmlands turn to cracked desert and grazing animals die off. Sandstorms have become far more common, and vast tent cities of dispossessed farmers and their families have risen up around the larger towns and cities of Syria and Iraq.

Shell gives MIT $25m for gas, oil research (David B.)

The Shell funds will be used to pursue a number of advanced technologies, including the use of seismic data to explore underground oil and natural gas reservoirs, and the study of powerful ocean waves to measure their effect on high-strength steel — an effort to build stronger, but lighter offshore installations. Shell will have the option to license technologies developed by MIT, and some of the university’s research will be made available to other energy companies.

China stakes claim to S. Texas oil, gas (Rector)

The Shell funds will be used to pursue a number of advanced technologies, including the use of seismic data to explore underground oil and natural gas reservoirs, and the study of powerful ocean waves to measure their effect on high-strength steel — an effort to build stronger, but lighter offshore installations. Shell will have the option to license technologies developed by MIT, and some of the university’s research will be made available to other energy companies.

Western lifestyles plundering tropics at record rate, WWF report shows (Mobius)

The report shows shows the impact of living off the planet's "savings": in the last 40 years human consumption has doubled, while the Living Planet index – measuring the decline and increase of thousands of species on land, in rivers and at sea – has declined by 30% overall, and by a massive 60% in the tropics.

However the index –compiled by the Zoological Society of London (ZSL) and likened to a stockmarket charting the progress of the natural world – shows that animal populations have risen significantly in the richer nations in the temperate zones north and south of the tropics, and globally appear to have stabilised in the last few years.

Article suggestions for the Daily Digest can be sent to [email protected]. 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. 

12 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Re: Daily Digest 10/14

"About two trillion yuan (300 billion dollars) in loans to Chinese local governments are at serious risk of default, an investigation published in state media warned on Thursday.

The government probe found that around 26 percent of the 7.66 trillion yuan lent to local authority finance vehicles by the end of June were in danger of going bad, said a report in the official China Securities Journal."

"(Reuters) - Singapore widened the trading band for its currency in response to increasing market volatility and India intervened to temper a rising rupee as foreign exchange tensions persisted ahead of a key G20 meeting.

The U.S. dollar, under pressure for weeks on expectations the Federal Reserve will soon print money again to buoy a faltering economy, fell sharply against a range of currencies on Thursday after the surprise move by Singapore.

Emerging nations are in a policy bind because of an influx of footloose global capital seeking higher returns than the near-zero interest rates on offer in the developed world, which is driving their currencies up and threatening their exports.

In response, several governments have stepped into foreign exchange markets or tried to curb capital inflows, raising fears of a currency "race to the bottom" that may trigger protectionism and hobble global growth.

India's central bank bought dollars around 44.10 rupees on Thursday, dealers said, in what is thought to have been its first such intervention this year."

"Italy's public debt, already one of the highest in the world, hit another record in August after reaching 1.843 trillion euros (2.572 trillion dollars), figures from the Bank of Italy showed on Wednesday.

The public debt was at 1.840 trillion euros in July. The August level was 4.69 percent higher on a 12-month comparison.

Italy's public debt reached 115.8 percent of gross domestic product (GDP) in 2009 and the government has forecast it will rise to 118.5 percent this year."

"Japan will be forced to default on its debt, Greece’s economy is “done” and Iceland is worse off than Greece, said J. Kyle Bass, the head of Dallas-based Hayman Advisors LP who made $500 million in 2007 on the U.S. subprime collapse.

Nations around the world will be unable to repay their debt and financial austerity in a country such as Ireland is “too late,” Bass said today at the Value Investing Congress in New York. "

"WASHINGTON (MarketWatch) - The number of people who signed up for state unemployment benefits jumped 13,000 to 462,000 in the latest week, the U.S. Labor Department reported Thursday. Economists polled by MarketWatch had expected initial claims to fall to a seasonally adjusted 444,000 in the week ended Oct. 9. Claims for last week were revised up by 4,000 to 449,000."

"The nation's foreclosure epidemic gathered steam in September, with banks taking over more than 100,000 properties for the first time. Overall, filings rose 3 percent, according to RealtyTrac, an online service that tracks foreclosure rates.

More than 930,437 properties were hit a foreclosure filing in the third quarter of the year -- that includes a default notice, repossession or scheduled notice. The filings are a 1 percent decrease from the same period in 2009. Homeowners experiencing foreclosure filings increased by 4 percent compared with the second quarter.

Foreclosures are expected to fall following the decision by several of the largest lenders to halt filings after it was discovered that paperwork for many loans is missing or incorrect."

.....................6A) US Home Seizures Reach Record Amid Foreclosure Review

"(Reuters) - The United States fired the first shot in the currency war and the rest of the world must be on guard for its deliberate strategy to devalue the dollar, a Chinese economist said in an official newspaper on Thursday.

In a front-page commentary in the overseas edition of the People's Daily, Li Xiangyang described the United States as the conflict's "first maker of tomb figures," a Chinese idiom that means someone who creates a bad precedent."

  • Other news, headlines and opinion:

 

Fed to Buy $32 Billion in Treasury Debt in Next Month

Treasury Sales China's Best Tool Against US Pressure, Researcher Writes

Budget Deficit Estimate for US in 2011 Cut to $1.25 Trillion at Goldman

Hungary's $1.8 Billion of Temporary Taxes Delay `Painful' Cuts

Budapest mayor says city cannot be financed without go't intervention (If the link doesn't work try one from the Google search)

India's external debt rises to $273.1 Billion

NZ govt net debt balloons by $9.6b

Debt levels in Bahrain soar shows report

Transfer of LA workers puts pressure on DWP pension plan

Medicaid coverage at its highest level ever in Montana

500000 adults in Washington could lose prescription-drug coverage

Banks seize 288K homes in Q3, but challenges await

Poll: Just 22 Percent Say Economy Getting Better

U.S. Aug. trade gap widens 8.8% to $46.3 bln

Michigan education retirement costs hit new high: Schools will pay 20 percent surcharge on payroll

St. Louis firehouses may close to cover spiraling pension costs

Dubai's Worst Office Buildings Will Be Empty Forever: CBRE

UK Government: Pension Tax Move To Raise GBP4 Billion

 

alcatwize's picture
alcatwize
Status: Bronze Member (Offline)
Joined: Dec 24 2008
Posts: 78
Foreclosure & morality

I have never thought that paying your mortgage was a MORAL obligation.  When you sign the contract, you are entering a deal where if u pay on time u keep your house, if you don't, your house gets taken.  There's no morality about it from EITHER side.  You know the risks and the bank knows the risks.  It really doesn't matter why you don't pay, the end result is the same.  

Actually, I have no problem with those that walk away and default.  That's not what bothers me.  If one calculates all factors and decides walking away and not paying is in their best interest (and they also know the consequences) then fine by me.  It's the ones who stop paying AND want to stay and think they should live there for free because of some signature snafu or because now someone OWES them... BS.  

Also, 0$ down from a buyers perspective is great!  No risk.  What I don't see is why any bank would want to take on that deal. Obviously they underestimated the severity of the problem.  Of course people are going to walk away when they don't stand to lose anything but a credit rating.  Any bank that wrote zero loan deals are morons and should get shut down.  

alcatwize's picture
alcatwize
Status: Bronze Member (Offline)
Joined: Dec 24 2008
Posts: 78
A must read...

Imagine confidence in the dollar has collapsed. Prices are hyperinflating with what's already out there. We are in July 1922 of the Weimar experience. The government will need inflation-adjusted funding to keep governing, as frequently as inflation is adjusted, which is quite frequent in hyperinflation. 

What do you think Congress will do if the Fed refuses to monetize Congress' $10 Trillion debt issuance just to keep G functioning? Do you think they'll just give up, shut down the federal government, go home and say "to hell with it"? Or do you think Congress might vote the power of money creation back to the Treasury instead of shutting down the federal government? This is the sudden death suicide the Fed will face if it doesn't print for the federal government. And if it doesn't, the Treasury will anyway, so better the Fed do it, Bernanke will think. 

And then, to quell his dissonance on the matter, Bernanke may consider how Gideon Gono's career survived hyperinflation and that he is still Zimbabwe's CB governor today. Perhaps, he might think, Bernanke and the dollar can survive a monumental devaluation! After all, it's only a transactional currency and specific value doesn't even matter in a transactional currency! 

It's certainly a better course of action than the sudden death suicide act of refusing to fund Congress with $10T for another month of stooge payroll, he'll think. And then he may look in the mirror, pound his chest, and say out loud to himself, "they don't call me Helicopter Ben for nothing!"

And then imagine that! All of a sudden, all the debt accumulated in 200 years of governing is reduced to one month's stooge payroll. Quite a sight it will be to behold. I wonder what all those creditors holding 200 years worth of US debt will do once it is only worth one month of governing. I bet they won't be buying any new US debt! Only the Fed will be buying US debt at that point!

And to Caveman, when confidence is gone the price of gold will fall. And all the deflationists will scream "I told you so!" for a couple months! That's because the only price of gold we have right now is the price of paper gold. Look for it to fall like a rock right when this system is expiring. But don't expect to get any of the good stuff at the falling price! You gotta get that right now at the high price if you want any! Because its price will be through the stratosphere (though not reported anywhere) when confidence leaves the system once and for all. 

Sincerely,
FOFOA

http://fofoa.blogspot.com/

pwanex's picture
pwanex
Status: Member (Offline)
Joined: Sep 14 2008
Posts: 8
Foreclosure registry to start Nov. 2

I just thought this was interesting.  From Georgia

Foreclosure registry to start Nov. 2

Beginning with DeKalb’s Nov. 2 foreclosure sale, foreclosed property owners must register with the county within 30 days or pay a fine.

Members of a committee which established the program explained to commissioners last week how they expect the foreclosure registry to work.

Mortgage holders must pay $175 to register a property. Failing to register costs $1,000 per day.

Committee member Chris Morris, of the Community Development Department, said the registry enables code enforcement officers to find creditors who do not take care of their properties.

“When you can’t find who owns the property and they’re not maintaining it, it destabilizes the neighborhood,” she said. “These are hard times for everybody and people want to have strong, safe neighborhoods. If you drive through, you don’t want to see these vacant properties that are run down.”

There are between 13,000 and 14,000 foreclosed properties in DeKalb, Ms. Morris said.

Only properties foreclosed on after Oct. 27 will be required to register, she said.

Ms. Morris said federal Neighborhood Stabilization funds will be used to establish the registry, and hire two employees for the clerk’s office and three code enforcement officers to support it.

Additionally, money collected from a $1,000 per day fine to creditors and mortgage holders who allow properties to fall into disrepair will be used to support the program, said committee member Rick Setser, of the Clerk of Superior Court’s office.

“The foreclosures in DeKalb have really hit the county’s tax base a great deal,” he said. “It doesn’t just affect one area, it affects Dunwoody and it effects Lithonia, East Atlanta and here in Decatur.”

Commissioners approved the formation of the registry July 27.

Owners must register with a street address, the ordinance states.

“My office will not accept any form with a P.O. box address,” Setser said.

Creditors and mortgage holders located outside of Clayton, DeKalb, Fulton, Gwinnett, Henry and Rockdale counties are required to designate a local property agent to maintain the property.

Information: (404) 286-3305 or e-mail [email protected].

article link:

http://mid.nn.marietta.new.adqic.com/stories/Foreclosure-registry-to-start-Nov-2,164410?content_source=&category_id=6&search_filter=&event_mode=&event_ts_from=&list_type=&order_by=&order_

sort=&content_class=&sub_type=&town_id=&page=

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Gideon Gonorrhea, Bernanker Sores

Got money problems due to quantitiative easing?

Well, you obviously got a case of Gideon Gonorrhea, or Bernanker Sores...

Poet

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
Re: Daily Digest 10/14 - Bernanke Sets the World on Fire, ...
Bank Shot - Kunstler: 

The banking authorities were shocked - shocked - to discover last week that an awful lot of mortgage paper in this country is not quite in order... appears to contain, er, irregularities... seems less than kosher... frankly, exudes an odor like unto dead carp or, shall we say, a heap of dead carp the size of the building at 3900 Wisconsin Avenue, N.W., Washington, D.C. Any day now we will hear that... mistakes... were... made. 

 
middleclassamerican's picture
middleclassamerican
Status: Member (Offline)
Joined: Apr 16 2010
Posts: 19
Re: A must read...

Alcatwize...That is the game!

Either a Hyper-inflationary Collapse or deflationary collapse.  Take your pick.  I think Damon Vrabel gives the best explanation here!

If anyone has not viewed, I highly suggest they do!

 

http://www.swarmusa.com/vb4/content.php/291-Renaissance-2-0

I

 

 

 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest 10/14 - Bernanke Sets the World on Fire, ...

URL

jhart5's picture
jhart5
Status: Bronze Member (Offline)
Joined: Jul 25 2009
Posts: 89
Re: Daily Digest 10/14 - Bernanke Sets the World on Fire, ...

Matrix -  Excellent Video

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2237
Re: Daily Digest 10/14 - Bernanke Sets the World on Fire, ...

Chris's recent article "Future Chaos: There Is No "Plan B"", is the Featured Editorial on FinancialSense.com; congratulations Chris!

http://www.financialsense.com/contributors/chris-martenson/future-chaos-there-is-no-plan-b

Chris Martenson PhD 14 Oct 2010 Note: This article builds on my recent report Prediction: Things Will Unravel Faster Than You Think. It explores the coming energy crunch in more detail by looking at existing government planning and awareness, and the implications of what...

ashvinp's picture
ashvinp
Status: Gold Member (Offline)
Joined: Jan 20 2010
Posts: 412
Re: Foreclosure & morality
alcatwize wrote:

I have never thought that paying your mortgage was a MORAL obligation.  When you sign the contract, you are entering a deal where if u pay on time u keep your house, if you don't, your house gets taken.  There's no morality about it from EITHER side.  You know the risks and the bank knows the risks.  It really doesn't matter why you don't pay, the end result is the same.  

Richard Thaler had a pretty good article about this which can be found here - http://www.nytimes.com/2010/01/24/business/economy/24view.html?_r=1

Here is a short summary and a way in which communities may be able to inform their citizens of "efficient breaches":

Quote:

Richard Thaler wrote an article in the New York Times this year exploring the reasons why so many people continue to make payments on mortgages that are significantly "underwater" (outstanding debt obligation is more than the home is worth), despite it being against their financial interests. One factor is that people feel a moral obligation to "honor" their debt contracts, thanks to the propaganda of bankers and politicians who helped place them in this precarious situation. [11]. Businesses frequently commit "efficient breaches" of their contracts when the liability cost of doing so is outweighed by the benefits of getting out from under future obligations, and they would give you a very strange look if you told them these breaches were unethical. The moral obligation argument is especially weak in states with non-recourse mortgages, where homeowners initially have to pay more for the benefit of the loan being secured only by the home, so that banks cannot go after any other assets in the event of default. [12]. Communities in non-recourse states, or the states themselves, could require their banks to explain the concept of "efficient breach" on mortgage documents to their customers. They could also use flyers and television advertisements to reinforce the message and present some options for homeowners who wish to proceed with default (local apartments to rent, legal aid offices to consult, etc.). No competition here, just a small nudge.

http://peakcomplexity.blogspot.com/2010/10/choice-architecture-capitaliz...

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Re: Daily Digest 10/14 - Bernanke Sets the World on Fire, ...

 '''

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments