Daily Digest

Daily Digest 10/28 - Alaska's Oil Reserves Estimate Lowered by 90%, German Boom Creates ECB Policy Nightmare, Copper at $3.80

Thursday, October 28, 2010, 10:00 AM
  • Monetary Meltdown Monday
  • Recession May Be Changing Americans' Attitudes Toward Work
  • The Buttonwood Gathering - View from the Top
  • Copper at $3.80
  • New Zealand Named Least Corrupt Country
  • Broke States Or Stock Selloff: The Capital Gains Tax Dilemma
  • German Boom Creates ECB Policy Nightmare as South Lags
  • India and Japan Eye a Glowing Partnership
  • Treasury to Recover Taxes from Swiss Bank Accounts
  • Alaska's Untapped Oil Reserves Estimate Lowered by About 90 Percent
  • South Pacific Fisheries Close to Collapse

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Economy

Monetary Meltdown Monday (ilene)

This weekend, Timmy took a big doo doo on the rest of the World as he pressed fellow Finance Ministers into (in theory) setting mechanisms to address trade balances (which means export countries need to strengthen their currencies against the dollar) while importing countries (like US) should not try to manipulate their own currency.  Well, that sounds reasonable EXCEPT, before the ink is even dry on the G20 release, Timmy flies off to China to get them to commit to revalue the Yuan, which is pegged to the Dollar and effectively DE-values the dollar in an entirely manipulative manner.  

Recession May Be Changing Americans' Attitudes Toward Work (VeganD)

Recession-linked job insecurity has many Americans questioning the sacrifices they make for work, such as having less time for family, leisure and self-improvement activities, a new study suggests.

The Buttonwood Gathering - View from the Top (ilene)  

On May 17th 1792, twenty-four stock brokers met under a buttonwood tree outside 68 Wall Street and agreed to set up the New York Stock and Exchange board. The tree was a symbol of Wall Street, but also, it was where people originally met to trade, to discuss and to argue.

The Economist has done an excellent job of keeping the tradition alive by bringing together top global financial executives, policymakers, global regulators and opinion leaders to discuss and debate proposed guidelines for the financial community, seeking to bridge fundamental financial issues with macroeconomic and geopolitical viewpoints.

Copper at $3.80 (ilene)

They call it "Doctor Copper" because copper pricing is a pretty good indicator of economic health.  It's more of a demand metal than gold or silver and hard to fake and there aren't any silly ETFs stockpiling it although China has socked away a full-year's supply, which has given copper a very false sense of demand while our masters hoarded the World's substantial excess capacity at an average of less than $2.50 per pound.  China is up 52% on their investment, not bad considering they're holding 300,000 tons of it.  

New Zealand Named Least Corrupt Country (NZSailor)

New Zealand has tied with Denmark and Singapore to be named as the least corrupt country in the world…. The United States dropped out of the "top 20", tarnished by financial scandals and the influence of money in politics.

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Broke States Or Stock Selloff: The Capital Gains Tax Dilemma (pinecarr)

With just two months until the end of the year, the one most important issue facing the US economy, which incidentally is not how many trillions in new, never to be used (or used only upon the case of hyperinflation) dollar bills Ben Bernanke will issue on November 3, but what the fate of the Bush tax cuts will be, and especially that of capital gains tax, remains still unresolved, Bloomberg has done a good analysis that frames the dilemma for the crippled administration: insolvent states or a market sell off.

German boom creates ECB policy nightmare as south lags (pinecarr)

Blistering growth in Germany is aggravating the growing gap between the eurozone's North and South and may force the European Central Bank to tighten monetary policy long before the high-debt states are ready, Standard & Poor's has warned.

India and Japan eye a glowing partnership (pinecarr)

India for years actively sought closer ties with Japan - but Tokyo expressed little interest. This has changed slowly but surely amid a shifting regional landscape and momentum in bilateral ties this week gathered pace.

During his three-day official visit to Tokyo starting October 24, Prime Minister Manmohan Singh and his Japanese counterpart, Naoto Kan, issued a joint statement covering a wide-range of issues. While these included worthy issues such as expansion of the East Asian Summit to include the United States and Russia, and reform of the United Nations, all eyes were fixed elsewhere.

Progress of two important bilateral matters: an India-Japan Comprehensive Economic Partnership Agreement (CEPA) and cooperation on civilian nuclear technology captivated attentions. While a deal is sealed on the first, negotiations will continue on the second.

Treasury to recover taxes from Swiss bank accounts (pinecarr)

Britain may recover billions of pounds of tax from wealthy residents who hide their assets in Swiss bank accounts after striking a deal with the Swiss authorities.

Energy

Alaska's untapped oil reserves estimate lowered by about 90 percent (damnthematrix, Dave S.)

The U.S. Geological Survey says a revised estimate for the amount of conventional, undiscovered oil in the National Petroleum Reserve in Alaska is a fraction of a previous estimate. The group estimates about 896 million barrels of such oil are in the reserve, about 90 percent less than a 2002 estimate of 10.6 billion barrels.

The new estimate is mainly due to the incorporation of new data from recent exploration drilling revealing gas occurrence rather than oil in much of the area, the geological survey said.

"These new findings underscore the challenge of predicting whether oil or gas will be found in frontier areas," USGS Director Dr. Marcia McNutt said in a statement. "It is important to re-evaluate the petroleum potential of an area as new data becomes available."

Environment

South Pacific Fisheries Close to Collapse (NZSailor)

South Pacific fisheries, valued at $2.6 billion and home to 25% of global tuna stock, face collapse within 25 years without immediate action, a report says.

"This will have severe economic consequences and will make food security impossible in a region where the population is projected to increase by 50% by 2035," said the report released by the Secretariat of the Pacific Community in Noumea.

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10 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Re: Daily Digest 10/28 - Alaska's Oil Reserves Estimate ...

"College tuition costs shot up again this fall, and students and their families are leaning more on the federal government to make higher education more affordable in tough economic times, according to two reports issued Thursday.

At public four-year schools, many of them ravaged by state budget cuts, average in-state tuition and fees this fall rose 7.9 percent, or $555, to $7,605, according to the College Board's "Trends in College Pricing." The average sticker price at private nonprofit colleges increased 4.5 percent, or $1,164, to $27,293."

"(Reuters) - Ireland's finance minister has been urged by some senior advisers to allow the country's 24 billion euro ($33 billion) state pension fund to buy Irish government bonds to support demand, an Irish official said on Wednesday.

The senior official, who declined to be named but is familiar with financial policy discussions in the Irish government, said no decision to take such action had been made.

A spokesman for Ireland's department of finance, contacted by Reuters, said: "There are no proposals to do this."

Tapping the fund, set aside to pay the state old-age pensions as well as pensions for Irish civil servants, could meet stiff political opposition. Roughly 10 billion euros of it are already earmarked to buy stakes in struggling Irish banks.

But some officials now believe a change in the law covering the fund, which currently prevents it from buying Irish bonds, could help the country as it prepares to return to the debt markets to borrow next year."

"But the dollar fell on Thursday as news that the Fed had sent out a survey asking primary Treasury dealers of their expectations of the size and impact of further asset purchases.

Maurice Pomery at Strategic Alpha said the credibility of the Fed might come into question as the news suggested the central bank had no idea of how much, or how, to throw additional quantitative easing into the market.

“The faith in the dollar is likely to be tested and the credibility of the Fed may be as well,” he said. “Holding US assets might just become as fashionable as kipper ties and large collared shirts.” "

..........................3A) Fed Asks Dealers to Estimate Size, Impact of Debt Purchases

"Finance chiefs from South Korea to South Africa signaled they may act to slow gains in their currencies, just four days after the Group of 20 vowed to soothe trade tensions in the $4 trillion-a-day foreign-exchange market.

Asian currencies fell to a one-week low after Bank of Korea Governor Kim Choong Soo said today that measures to mitigate capital flows could be “useful.” Hours later, the rand dropped as South African Finance Minister Pravin Gordhan said his government will use part of higher-than-expected tax revenue to build foreign reserves as it attempts to weaken the currency.

The shifts suggest G-20 members will keep trying to defend their economies from the slide of the dollar and capital inflows even after the group promised Oct. 23 to refrain from “competitive devaluation” and to increasingly embrace market- determined currencies.

“The G-20 made a vague pledge not to manipulate currencies much, but there was no mechanism to ensure that each country will not keep taking unilateral measures,” said Win Thin, global head of emerging markets strategy at Brown Brothers Harriman & Co. in New York. “It’s every man for himself.” "

 

  • Other news, headlines and opinion:

Anglo Irish Creditor Group Plans to Reject Debt-Exchange Offer

Bank of Japan to Buy Lowered-Rated Corporate Debt (“They are ready for a currency-devaluation race.”)

Tax Shortfalls Spur New Fear on Europe’s Recovery Bid

Illinois Pensions Dwindle as Governor Candidates Skirt Budget Crisis

States Are in 'Crisis Mode:' Washington Governor (CNBC)

Hollister district faces possible state takeover (California)

Harrisburg set to decide on bankruptcy attorneys

169 Cincinnati firefighters facing layoffs

Irish, Portuguese Bonds Decline on Deficit-Reduction, Political Concerns

Irish borrowing costs at new high on debt fears

Greek Default Costs Soar

Pension Plans in California Underfunded by $326 Billion: Study

A scary scenario: What if a US state defaults?

Foreclosure activity up across most US metro areas

Wells Fargo to refile 55,000 foreclosures

Teachers' retirement plan's unfunded liability increases (Oklahoma)

Foreclosures increase in 65% of MSAs in 3Q: RealtyTrac

Clinton Calls on China to Clarify Rare Earth Policy as Asia Tour Starts

Funds dump U.S. stocks for emerging markets: Reuters poll

In Spain, Homes Are Taken but Debt Stays (“I will be working for the bank for the rest of my life”)

 

EndGamePlayer's picture
EndGamePlayer
Status: Platinum Member (Offline)
Joined: Sep 2 2008
Posts: 546
No Double Dip . . . but . . here's another mixed message

 

No double-dip recession

. . . But the bad news is that a revival in economic growth is not yet in sight. The slowing of economic growth that began in mid-2010 will continue through early 2011. Thus, private sector job growth, which is already easing, will slow further, keeping the double-dip debate alive.

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Tim Jackson: Prosperity Without Growth

In this TED conference talk, economist Tim Jackson hits on some major points that resonate with much of Dr. M's work . I particularly liked this quote:

"... people are being persuaded to spend money we don't have, on things we don't need, to create impressions that won't last, on people we don't care about"

Prosperity Without Growth PDF

Roundhouse's picture
Roundhouse
Status: Bronze Member (Offline)
Joined: Sep 14 2008
Posts: 36
Re: Tim Jackson: Prosperity Without Growth

Now if I could only get that on a bumper sticker (that could be read without rear ending me first)!  What a great quote, thanks for the link, JAG.

"... people are being persuaded to spend money we don't have, on things we don't need, to create impressions that won't last, on people we don't care about"

Nate's picture
Nate
Status: Platinum Member (Online)
Joined: May 5 2009
Posts: 573
Re: Daily Digest 10/28 - Alaska's Oil Reserves Estimate ...

"... people are being persuaded to spend money we don't have, on things we don't need, to create impressions that won't last, on people we don't care about"

Had a sermon on this 2 years ago and have mentioned it to many people.  Spot on.

Matt Holbert's picture
Matt Holbert
Status: Bronze Member (Offline)
Joined: Oct 3 2008
Posts: 95
Re: Tim Jackson: Prosperity Without Growth

Thanks for the link, JAG. I posted this at my site the moment I finished viewing it.

Matt, http://UniverseClub.org

hardingcrew's picture
hardingcrew
Status: Member (Offline)
Joined: Aug 18 2010
Posts: 13
Re: Daily Digest 10/28 - Alaska's Oil Reserves Estimate ...

Really enjoyed Tim Jackson's info!

Thanks!

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Krugman: Friedman on Japan

http://krugman.blogs.nytimes.com/2010/10/28/friedman-on-japan/

Quote:

In fact, Japan’s experience is a key element of the case against monetarism. Just printing notes does not work when you’re in a liquidity trap.

Did Krugman actually write something that makes sense? Wow, gotta check the window for flying pigs here just in case...

Samuel

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 10/28 - Alaska's Oil Reserves Estimate ...

Jag nice find.....reminds me of a guy I met in Central America that said I don't believe in creating necessities that I don't even need especially if I have to piss in my own drink to create it.

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5570
Re: Daily Digest 10/28 - Alaska's Oil Reserves Estimate ...

A quick note to potential spammers...we do not allow useless posts that consist only of links to unverified or irrelevant products.

They get deleted and your accounts get immediately blocked.  

So you could save yourself some time by not bothering to go through the trouble of singing up for an account because it will not last day and often will not even last ten minutes depending on how fast our members identify your spam as spam.

But good luck in trying to generate business, I understand the need and desire; this just isn't the right site for that because we are quite vigilant.

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