Daily Digest

Daily Digest 10/17 - Dollar Stability Questioned, The Subprime Debacle, Deepwater Drilling Ban Lifted

Sunday, October 17, 2010, 9:40 AM
  • Mauldin: The Subprime Debacle: Act 2
  • Dollar Fall Sparks Stability Warnings
  • No Relief As Dollar Sell-Off Continues
  • Trichet Says Eurozone Needs Stricter Fiscal Reforms
  • Deepwater Drilling Ban Lifted, Malaise Remains Intact
  • China Says Its Medium, Heavy Rare Earth Reserves May Last Only 15-20 Years
  • Algae To Fuels Under Pressure

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Economy

Mauldin: The Subprime Debacle: Act 2 (JRB)

I think this (and next week’s) is/will be one of the more important letters I have written in the last ten years.

The homebuilding industry, which was the source of so many jobs last decade (aka the good old days), is on its back. This country needs a healthy housing construction market to get back to lower unemployment, and until the overhang in the foreclosure market is cleared out, that is unlikely to happen.

Dollar Fall Sparks Stability Warnings (jdargis)

A senior European policy-maker, who asked not to be named, said a further aggressive round of monetary easing by the US Federal Reserve would be “irresponsible” as it made US exports more competitive at the expense of its rivals.

Simon Derrick, chief currency strategist for BNY Mellon, said: “In narrow terms, the US is winning the currency wars as a weaker dollar will help its economy, but it could damage the other big economic blocs of China, Japan and Europe.”

No Relief As Dollar Sell-Off Continues (jdargis)

The dollar came under heavy selling pressure this week, hitting its lowest level so far this year on a trade-weighted basis amid the prospect of further quantitative easing from the Federal Reserve.

The dollar index, which tracks its progress against a basket of six major currencies, fell to a 10-month low of 76.14 on the week. Expectations for further monetary loosening from the Fed were heightened on Tuesday after the minutes of the central bank’s September meetingstruck a strongly dovish tone.

    Crash Course DVDWatch the Crash Course DVD, a perceptive glimpse at our economic and energy future. (NTSC or PAL)

Trichet Says Eurozone Needs Stricter Fiscal Reforms (jdargis)

Trichet’s comments add further fuel to a debate over European Union fiscal reforms ahead of a meeting of European finance ministers on Monday in Luxembourg to complete the biggest overhaul of the fiscal rules underpinning the euro since the single currency’s creation in 1999.

The ministers will seek to agree on a report for EU leaders on how to make the rules tougher to prevent another sovereign debt crisis, such as that triggered by Greece.

Energy

Deepwater Drilling Ban Lifted, Malaise Remains Intact (jdargis)

Before the Deepwater Horizon disaster there were 33 floating drilling rigs at work in the gulf. Today that’s down to just 6, with half of those doing plugging and abandonment work. Many of the rigs have been sent on long-term contracts (at rates ranging from $225,000 to $400,000 per day) to Brazil and west Africa. It’ll take years for them to come back. The bright side: that’ll give the government and the industry plenty of time to sort out the raft of new regulations and oversight aimed at making sure this kind of thing never happens again.

China Says Its Medium, Heavy Rare Earth Reserves May Last Only 15-20 Years (jdargis)

China, controller of more than 90 percent of production of the materials used in cell phones and radar, cut its export quotas by 72 percent for the second half and reduced output, spurring a trade dispute with the U.S. The country may not be able to meet growing global demand as the government continues to curb output, Lynas Corp. said in March.

“We cannot rule out the possibility that China may need to rely on imports sometime in the future for these minerals, instead of supplying the world,” Chao said.

Algae To Fuels Under Pressure (jdargis)

Removing the water from raw algae is a highly energy intensive process, and to minimize the overall energy costs of biofuel production from algae, a process called hydrothermal liquefaction may instead be employed in which the algae are not dried but heated under pressure such that the water they contain acts as a chemical reagent and solvent that breaks-down the algal cells and converts not only the oil (lipid) but the sugar and protein component into fuels such as liquid hydrocarbons, gaseous fuels like methane and a complex material called “bio-oil” with a similar energy content to crude oil.

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13 Comments

pinecarr's picture
pinecarr
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Fears re French protests disrupting fuel supplies?

Here's an interesting discrepancey in news reporting.  It is regarding protests in France over raising retirement age to 62.  As part of that, there have been strikers blocking fuel storage depots, causing gasoline shortages in Paris.  It sounds like the situation is changing/evolving, but US online media has "surprisingly" little to say about it over the last day or two.  More from other countries.  Check it out...

From Egypt::: http://www.egyptiangazette.net/news-13301-Fuel%20supplies%20low%20as%20protests%20hit%20France.html :

Frequent strikes in the last few weeks have hobbled French trains and airports, closed schools and docks, and left garbage piling up in the southern port of Marseille.

But now the airline industry is getting worried, after all of France's 12 fuel-producing refineries went on strike and many depots were blocked by protesters. Police were called in to force three crucial fuel depots to reopen Friday, including one outside Marseille.

The Civil Aviation authority sent out an advisory Friday night to airlines requiring short- and medium-haul flights to Paris' Charles de Gaulle airport …quot; one of Europe's key hubs …quot; to arrive with enough fuel to get home, spokesman Eric Heraud said.

"They must come with a maximum capacity in their fuel tanks," Heraud said by telephone. "Obviously, these instructions apply only to short- and medium-haul flights" of less than four or five hours because trans-Atlantic flights cannot "double carry" fuel.

As fearful drivers headed to the pumps, Finance Minister Christine Lagarde urged the nation not to panic.

"Today, there is no reason, no reason, I repeat, to panic because there is no risk of shortages," she told BFM-TV on Saturday, noting that only 230 of the country's 13,000 gas stations were out of fuel. "There are weeks of reserve."

The Ecology Ministry, however, said fuel stocks at Paris' Charles de Gaulle airport were good only until Tuesday and the fuel pipeline to the airport was working only intermittently.

"I don't say we can't guarantee beyond Tuesday ... we will find other solutions," a ministry spokesman told The Associated Press. He said France had not yet resorted to emergency fuel imports from neighboring Italy or Spain. He could not be identified by name in keeping with ministry policy.

From Voice of America, "French Protesters Rally Over Pension Reform",   http://www.voanews.com/english/news/French-Protesters-Rally-Over-Pension-Reform-105100329.html:

Tens of thousands of people are marching in cities across France in the latest protests against President Nicolas Sarkozy's efforts to raise the retirement age.

Workers marched in dozens of cities Saturday, with the largest crowds assembling in the capital, Paris.

Saturday is the fifth day of strikes that have cut train services and grounded flights.  Walkouts at oil refineries have cut fuel supplies.

French officials have given oil companies permission to tap into their own emergency stocks, but have insisted there is no reason for drivers to fear a gas shortage.

On Friday, French riot police forced through blockades of protesters to reopen fuel depots, while refinery workers cut a fuel pipeline to Paris and its airports.

Saturday's protests are the latest in a month full of demonstrations and strikes that have affected transportation, hospitals and schools across the country.  

 And here's a report from the UK for good measure, "Gas shortegae spectre looms in France", at http://www.morningstaronline.co.uk/index.php/news/content/view/full/96436: .  Note, though, that this is dated Thursday, October 14th:

Rattled Sarkozy administration officials urged drivers not to rush to the petrol pumps on Thursday.

They insisted that stocks will last despite the shutdown of refineries by a general strike in defence of the right to retire at 60.

Panic buying triggered tail-backs at petrol stations and local shortages on Wednesday, when strikes shut down 70 per cent of France's refining capacity.

"There will be no shortage of petrol at the pump if there is no more panic buying," Transport Minister Dominique Bussereau told television viewers. He claimed France had "as much as we need for at least a month."

Transport was still not back to normal on Thursday, although officials insisted that public transport in Paris was running to schedule.

But state rail company SNCF said national services were disrupted for the third day in a row, with only four out of 10 high-speed trains running from Paris.

Strikers were boosted by a message of support from British transport union leader Bob Crow.

 

 And then here is the AP's report, "French minister: No fuel shortage at Paris airport" at http://www.google.com/hostednews/ap/article/ALeqM5i2a0z-aXoUxB9P01zDOp-s8tpZTA?docId=c03f3ea34c9b45e2896b71efc70d39ad (the whole thing):

PARIS (AP) — France's transport minister insists there are "no worries" about refueling planes at Paris' Charles de Gaulle airport, despite strikes that have forced aviation authorities to order some planes to arrive with enough jet fuel to get back home.

Strikes and blockades at a dozen French refineries and oil depots are part of widespread protests against President Nicolas Sarkozy's plan to raise the retirement age to 62.

Facing some shortages, French drivers have flocked to gas stations, worried about filling up their cars.

But Transport Minister Dominique Bussereau told Europe-1 radio Sunday that Paris' main airport is "perfectly fed by a pipeline" now after fuel began flowing again this weekend. He conceded that fuel stocks are weaker in the cities of Nice and Nantes.

 Here's the NYT's coverage, at http://www.nytimes.com/2010/10/16/world/europe/16briefs-PROTESTS.html, "France: Pension-Reform Protests Continue Amid Fuel Shortage Fears":

Protests and industrial action against planned pension reforms in France continued for a fourth day Friday as fears about fuel supplies intensified. Production at the country’s 12 crude refineries remained stalled by striking workers, according to union officials. There were also concerns about a possible shortage of jet fuel at the main Paris airports after news reports had quoted Trapil, a supply company, as saying that pipelines carrying jet fuel to the airports had stopped operating because of industrial action. Trapil did not respond to calls for comments.

 Canada's Montreal based "The Gazette" news seems to have more to say,in "France seeks to calm fuel fears as strike momentum builds", at http://www.montrealgazette.com/business/France+seeks+calm+fuel+fears+strike+momentum+builds/3684438/story.html

PARIS - The French government sought Sunday to calm fears of nationwide petrol and aviation fuel shortages as strikes against pension reform began to bite two days ahead of another wave of mass protests.

Officials tried to head off panic buying of petrol amid the ongoing strikes and protests that saw hundreds of thousands take to the streets for the latest day of action against President Nicolas Sarkozy's key reform on Saturday

Transport Minister Dominique Bussereau told Europe 1 radio that with 10 out of France's 12 oil refineries shut by strike action, panic buying had led to a 50 per cent jump in petrol sales last week and hundreds of stations running dry.

French Oil Industry Association (UFIP) head Jean-Louis Schilansky said service stations were now being replenished after the government authorized the use of extra-large 44-tonne trucks, usually banned for environmental reasons.

"We have 'almost normal' means to deliver to petrol stations," Schilansky told AFP.

The government has given oil companies permission to tap into their own emergency stocks, but has resisted calls to use government-controlled strategic reserves ahead of Tuesday's mass protest day, the sixth in as many weeks.

 But unions slammed the management's reopening of a crucial pipeline bringing fuel to Paris' Roissy-Charles de Gaulle airport, which officials warned could have run empty as early as Monday, saying untested fuel was flowing to planes.

"Turning the pumps on again was done secretly this morning around 7:00 am by a handful of managers who are absolutely not trained for this kind of operation, at the ministry's behest," said Philippe Saunier of the powerful CGT union.

"This creates a very big safety problem," the union representative in the northwestern port of Le Havre told AFP.

"Under these conditions, the strikers, who up to now were ensuring the safety of the site have decided to let management face up to its responsibilities. Safety is no longer ensured an the oil depot.

"The aviation fuel that was pumped was neither sampled nor analysed," as it should be. "Its quality is unknown," Saunier said.

France's powerful road transport workers are to enter the strike from Monday, possibly to be joined by armoured van drivers, which would hit money deliveries to cash machines.

"Truckers are happy to join the action. Next week is going to be decisive, everybody knows that," said the head of the CFDT union's transport branch, Maxime Dumont.

Truckers have vowed to begin nationwide disruption early Monday, possibly also at oil depots or "strategic sites."

Unions have said their protests may not end even after the pension reform law raising minimum retirement age from 60 to 62 is passed by the Senate this week, and planes have been told to refuel abroad before returning to France.

Unless I'm blatantly missing news reports in the US when doing a very broad keyword search, it is quite an interesting example of a big discrepancy in news reporting in US vs other countries' MSM.

Do we have any members from France with more insight into this?

 

littlefeatfan's picture
littlefeatfan
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Re: Fears re French protests disrupting fuel supplies?

http://www.dailymotion.com/video/xf8ead_strikes-cause-paris-airports-fuel-s_news 

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lpowell23
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Re: Fears re French protests disrupting fuel supplies?

It's true that the US main stream media is not covering the uprising of the populace in Europe.    IMO I think TPTB are intentionally censoring media coverage.   If you remember back in May there were huge demonstrations going in Greece, very similar to what is now occurring in France.  The financial media did in fact cover that event because of the deaths of three people who were trapped in a building set on fire by demonstrators.   I believe it was the same day that the "flash crash" occurred on May 6th.    Perhaps, there are fears of  a similar situation happening in the markets again.   It doesn't matter whether the US media covers it or not because the riots/strikes happening across the pond will be coming to a live threatre near you!

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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

from john mauldin's letter:

from the foreclosure mess section:

“However, legally…and this is the important part…MERS didn’t hold any mortgage notes: the true owner of the mortgage notes should have been the REMICs.

“But the REMICs didn’t own the notes either, because of a fluke of the ratings agencies: the REMICs had to be “bankruptcy remote,” in order to get the precious ratings needed to peddle mortgage-backed Securities to institutional investors.

“So somewhere between the REMICs and MERS, the chain of title was broken.

“Now, what does ‘broken chain of title’ mean? Simple: when a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a mortgage-backed security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the ‘chain of title.’

“You can endorse the note as many times as you please…but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically, on the note, one after the other.

“If for whatever reason any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.

“To repeat: if the chain of title of the note is broken, then the borrower no longer owes any money on the loan.

“Read that last sentence again, please. Don’t worry, I’ll wait.

“You read it again? Good: Now you see the can of worms that’s opening up.

 

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saxplayer00o1
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

"It seemed too good to be true: You bought a house in foreclosure at a fraction of the former price. Maybe you even knocked out a wall or two and remodeled with all the money you saved.

But now thousands of foreclosures around the country may be invalid because of bank paperwork problems. Should you worry?

"Anyone who's purchased a foreclosed property in the last three years should really be concerned," says George Babcock, a Providence, R.I., attorney who represents homeowners who have been foreclosed on."

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maaa
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

Dear rjs,

Thanks and Whoopie, because my wonderful dear husband (who I have been scrimping and saving my way through life with) has been wondering about the rami's of the "broken chain of title" thing.

We have a rental property with a mortgage that Countrywide bought, and then it went to Bank of America, so we are going to have to find out how to get the title search to see if the chain of title on it has been broken now, won't we! And then we see what to do next, don't we.

We had scrimped and saved all these years and had already paid off everything except that rental property, which seemed like a good investment because it was "cash flowing," and still is, but now maybe now it will turn out to be a pretty good investment after all.

What a dream that still will not fully make up for the big pile of our life's savings that got robbed in the 2008 crash. But, it would be a joyous payback!

Please post if you find out who is "organizing" for folks like us!

Mary Kay
at http://PersonalSecurityZone.com

rjs's picture
rjs
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...
aufrance wrote:

Dear rjs,

Please post if you find out who is "organizing" for folks like us!

Mary Kay
at http://PersonalSecurityZone.com

dont know if this will help:

Request for original mortgage note and additional information

Hat tip comments in Economic Populist:

Where is the note offers a way to check on your house!

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yoshhash
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

regarding sax's link about foreclosures:

does anyone know how widespread this problem with foreclosure mixups is?  I would tend to think that it is mostly an American problem (the listed banks seem to all be American), but I noticed that on the same page there was a link for Toronto Dominion Bank, and I can't tell if it is just targeted advertising (scary how accurate they are these day, it is like they are reading my mind) or if it implies Canadian content.

I did buy a foreclosed home, so it has me a little nervous.

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livsez
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Re: Fears re French protests disrupting fuel supplies?

Unless I'm blatantly missing news reports in the US when doing a very broad keyword search, it is quite an interesting example of a big discrepancy in news reporting in US vs other countries' MSM.

 

I read this in the NYT today.

French Report New Threat of Terrorist Attack in Europe

PARIS — Saudi intelligence officials have informed France that Al Qaeda’s affiliate in Yemen may be planning an attack in France or Europe, the French interior minister said Sunday.

The minister, Brice Hortefeux, said in an interview broadcast on French radio and television that France had received the information “just a few days ago.” He described it as “a new message from the Saudi services telling us that Al Qaeda in the Arabian Peninsula was without doubt active, or planned to be active” in Europe, “and notably, France.”

http://www.nytimes.com/2010/10/18/world/europe/18france.html?_r=1&hpw

maaa's picture
maaa
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

Dear rjs,

THANK YOU THANK YOU!

We are also going to head down to our county recorder's office next week and see what they have on file for our deed. And then again, I'll have to find out what the title insurance does.

There are "opportunities" and then there are "necessary steps to protect one's self." Which is this? Guess we'll all find out along the way.

Mary Kay at http://PersonalSecurityZone.com

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Mr. Fri
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

Nice work Pinecarr. 

The US is not very good at reporting things going on in "the rest" of the world.  I first noticed this about 25 years ago when a British co-worker pointed out the reporting of a big hurircane that moved through southern California, Mexico and Texas.  He pointed out that the US news reported a lot on the storm damage in California and Texas then said, "What's in between those two states?  How come we haven't heard one word about Mexico?  You know they must have had damage from the storm."  That was a big eye opener.

I thought I was internationally minded because I watched "World News Tonight."   What a joke.  In the last 15 years we've lived in Europe twice and were very impressed on how they report world news compared to here.  The US "world news" coverage is only things which pertain to the US.  If it doesn't affect us they don't take it seriously.

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that1guy
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

http://uk.news.yahoo.com/18/20101018/tbs-global-leaders-mull-joint-governance-5268574.html  

 

 

??? Its kinda funny in a wierd way to see/ read a headline and story like this after hearing so many peoples fears and issues with "conspericy theories."  Personnally up until this one i have only seen "proof" by way of clips from speeches, never whole stories, and entire G20 meetings dedicated to it..... 

LogansRun's picture
LogansRun
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Re: Daily Digest 10/17 - Dollar Stability Questioned, The ...

Yeah, but it really isn't happening.  At least not in many peoples minds here.  ~ugh~

that1guy wrote:

http://uk.news.yahoo.com/18/20101018/tbs-global-leaders-mull-joint-governance-5268574.html  

 

 

??? Its kinda funny in a wierd way to see/ read a headline and story like this after hearing so many peoples fears and issues with "conspericy theories."  Personnally up until this one i have only seen "proof" by way of clips from speeches, never whole stories, and entire G20 meetings dedicated to it..... 

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