Daily Digest

Daily Digest 10/6 - What The U.S. Needs Is Hope, Troika In 'Chicken Game' With Greece, Energy Breakthroughs And Peak Oil

Thursday, October 6, 2011, 9:40 AM
  • What This Country Needs Now Is Hope
  • The Key To Wealth: Stop Acting Rich
  • OWS: Want To Turn The Tide?
  • Troika in 'Chicken Game' With Greece: Kyle Bass
  • Steve Jobs Has Passed Away
  • The Price Tag for Clean Coal
  • Energy Technology Breakthroughs and Peak Oil
  • The Solar Industry is Thriving and Solyndra was the Exception Not the Rule
  • Serious Flaws in Department of Energy’s Latest Report on Energy Priority Setting
  • China Believes it has Indisputable Sovereignty Over the South China Seas

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Economy

What This Country Needs Now Is Hope (JimQ)

Total credit market debt of $52.5 trillion is 3.5 times GDP, versus a long-term leverage ratio of 1.6. This is called living well above your means on borrowed money. We have a long way down before we reach the bottom of this mountain of debt.

The Key To Wealth: Stop Acting Rich (Coley H.)

We downsized from a 4000 square foot house in the U.S. to a much smaller and much cheaper 2000 square foot condo in Panama 5 years ago. We’re a family of five (now) and a dog, so there’s not much room and even less closet space… I simply don’t have the room for many clothes anymore, nor – living in a tropical climate – do I need them.

OWS: Want To Turn The Tide? (June C.)

What is leverage? Leverage is simply the ability to act as though you have much more of something than you really do. For example, you can use leverage to pry off the lid on a beer bottle. Your raw strength is multiplied by the lever (the bottle opener) to lift the cap.

But note that there is no free lunch. While the opener may multiply the force applied to the cap, the distance the opener moves is proportionally reduced compared to the movement of your hand.

Troika in 'Chicken Game' With Greece: Kyle Bass (kelvinator)

International regulators known as the "troika" are in a “chicken game” with Greece right now, forcing the struggling nation to prioritize payments, Kyle Bass, managing partner of Hayman Capital said Wednesday. The troika includes the International Monetary Fund , the European Central Bank and the European Union. “They are forcing Greece to almost internally default and figure out who they are going to pay, and who they are not going to pay,” said Bass. He believes a disorderly Greek default could come at any time and the likelihood of a meaningful longer term delay of default is not that great, because it would depend on a substantial German commitment to underwrite Europe, which he thinks is unlikely based on polling of German public and leaders. The interview begins at 2:25 on the video link.

Steve Jobs Has Passed Away (Brian D.)

Steve Jobs has passed away, according to Apple. May the greatest one man success story of our times rest in peace.

Energy

The Price Tag for Clean Coal (James S.)

Carbon Capture and Storage technology (CCS) locks up these emissions deep underground forever. The problem is that there is only one of these plants in operation in North Dakota, a legacy of the Carter administration, and new ones would cost $4 billion each. The low estimate to replace the 250 existing coal plants in the US is $1 trillion, and this will produce electricity that costs 50% more than we now pay. In a budget constrained congress, this is a bi ticket that is unlikely to get picked up.

Energy Technology Breakthroughs and Peak Oil (James S.)

Improvements in transportation and other energy related technologies are being reported every day. Most of the developments, however, are down in the technological weeds and involve technical concepts nearly incomprehensible to laymen; however, some of the reports do give insights into the directions in which our civilization may be evolving.

The Solar Industry is Thriving and Solyndra was the Exception Not the Rule (James S.)

“Frankly, it’s disappointing when any plant closes and workers lose jobs,” said Tom Kimbis, SEIA’s director of policy and research and general counsel in Washington, DC. “The fact is that Solyndra had a highly innovative, high-efficiency product, but faced pressure from cheaper solar panels with prices that declined much faster than anyone in the industry expected.”

Serious Flaws in Department of Energy’s Latest Report on Energy Priority Setting (James S.)

The DOE needs to re-think its priorities for an entirely different kind of world–a world of energy scarcity. In a world of energy scarcity, citizens are poorer and less able to pay for basic services, much less higher-priced services. Maintaining basic transportation and electrical services for as much of the population as possible needs to be a top priority. Some government agency, presumably the DOE, will need to make certain that rationing systems are set up so that essential industries get the fuel they need and essential workers are able to obtain transportation to work.

China Believes it has Indisputable Sovereignty Over the South China Seas (James S.)

The Zhongguo Qingnian Bao article begins by noting, “For some time, with the intensification of the international energy crisis, countries around the South China Sea have taken more initiative regarding sovereignty over the South China Sea, with the involvement of some powers that have ulterior motives, which has made the situation in the South China Sea more turbulent. It is the Chinese who first discovered and developed the islands in the South China Sea. In terms of history and jurisprudence, China has indisputable sovereignty over the islands and adjacent waters in the South China Sea. As early as the Qin and Han Dynasties, our Chinese ancestors carried out shipping and fishing in the South China Sea.”

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."

8 Comments

maizipeng's picture
maizipeng
Status: Member (Offline)
Joined: Sep 29 2009
Posts: 4
Mr. Obama, do we have to buy an recession insurance every year?

http://investmentwatchblog.com/mr-obama-do-we-have-to-buy-a-job-insuranc...

President Barack Obama on Thursday cast his jobs bill as insurance against a double-dip recession and urged Congress to pass the measure swiftly. “If we don’t take action, we could end up having more significant problems that we have now,” Obama said at a news conference.

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4061
littlefeatfan's picture
littlefeatfan
Status: Silver Member (Offline)
Joined: Jul 20 2009
Posts: 141
Thieves steal a 50ft bridge!

Things are accelerating to a whole new level

 http://www.ellwoodcityledger.com/news/local_news/bold-thieves-steal-bridge-in-north-beaver/article_4a5ae43e-20df-5b6f-a732-9b33716e2b3b.html 

NORTH BEAVER TWP. — As the value of scrap metal — including copper and steel — increases, thieves have been becoming more daring and less respectful of institutions such as churches and schools.

But one group of thieves might have set the standard last week by stealing a 50-foot-long bridge. State police said the bridge was stolen between Sept. 27 and Wednesday in North Beaver Township. The theft was discovered shortly after 9 a.m. Wednesday.

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
the world has a shortage of safe assets...

from a canadian econ blog:

The world wants more US government debt. The US Treasury should supply it. -- This fascinating story came out during the psychodrama of the US debt ceiling: U.S. Treasury debt prices soared on Friday on fears a U.S. default could trigger a shortage of Treasuries and even push the world's largest economy back into recession. On the face of it, this makes no sense. The market's reaction to a higher perceived probability that the US would default on its debt was to demand more US debt? If the markets behaved this way with Greece, there'd be no Eurozone debt crisis. But of course, the US isn't Greece; US debt is special:  The potential that the Treasury might postpone debt sales in the event the debt ceiling is not extended by next Tuesday bolstered Treasuries on concerns fund managers and short-term traders might have to compete for tight supply for their everyday operations.  "There's a lot of demand for these issues, just kind of a natural demand that always comes up," . "So with less or truncated supply you have a lot more demand chasing less supply." So long as investors want to shift to liquid assets during episodes of uncertainty and so long as US Treasuries are perceived as being among the most liquid assets, then there's going to be a strong demand for them. And if the only way to acquire US debt is to acquire USD, then we'll also see a pattern of USD appreciating on bad news - even if the bad news is about the US economy.

 

finaltable's picture
finaltable
Status: Member (Offline)
Joined: Sep 2 2009
Posts: 4
I am not so sure they take the title from this theft

www.wjactv.com/news/17432092/detail.html

On September 9th, 2008 in Somerset County, Pennsylvania thieves stole a 120 foot radio tower.  In terms of sheer audacity this cannot be very far from the bridge theft.

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1428
The Solar Industry is Thriving

What a joke.   The power Reccurent provides is a drop in the bucket and meaningless.  Also, CA is not green since it imports most of its power from surrounding states' coal-fired power plants.

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1428
rjs wrote:from a canadian
rjs wrote:

from a canadian econ blog:

The world wants more US government debt. The US Treasury should supply it. -- This fascinating story came out during the psychodrama of the US debt ceiling: U.S. Treasury debt prices soared on Friday on fears a U.S. default could trigger a shortage of Treasuries and even push the world's largest economy back into recession. On the face of it, this makes no sense. The market's reaction to a higher perceived probability that the US would default on its debt was to demand more US debt? If the markets behaved this way with Greece, there'd be no Eurozone debt crisis. But of course, the US isn't Greece; US debt is special:  The potential that the Treasury might postpone debt sales in the event the debt ceiling is not extended by next Tuesday bolstered Treasuries on concerns fund managers and short-term traders might have to compete for tight supply for their everyday operations.  "There's a lot of demand for these issues, just kind of a natural demand that always comes up," . "So with less or truncated supply you have a lot more demand chasing less supply." So long as investors want to shift to liquid assets during episodes of uncertainty and so long as US Treasuries are perceived as being among the most liquid assets, then there's going to be a strong demand for them. And if the only way to acquire US debt is to acquire USD, then we'll also see a pattern of USD appreciating on bad news - even if the bad news is about the US economy.

 

 

This is because persons are still conditioned to think that the US is the shelter from the storm.  So if something bad happens to the US, then it must be more bad elsewhere.   But surprises do happen and things can drag on for years and years.  Like Roman deflating over centuries.

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