Daily Digest

Daily Digest 11/16 - Oil Facility Attacked in Nigeria, U.S. Economy Slowly Recovers, GM Raise IPO price

Tuesday, November 16, 2010, 11:00 AM
  • U.S. Economy in 'Slow Recovery,' BofA CEO Moynihan Says
  • GM Raises IPO Target Price
  • Geithner Acknowledges Damage To U.S. Credibility Internationally
  • Monday Market Movement - Meaty Beaty Big and Bouncy!
  • Oil Attacks In Nigeria Show New Militancy
  • Oil Pushes Up Wholesale Prices
  • Arnold Schwarzenegger Demands Action at Final Climate Summit

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U.S. Economy in 'Slow Recovery,' BofA CEO Moynihan Says 

“Everything we see points to a continued recovery, albeit a slow recovery,” Moynihan said during a conference held by the lender in New York. “We continue to see delinquencies improve in all our products across the board.” Commercial lending is starting to turn around and consumers are spending more on leisure, he said. Bank of America, which gets more than three-quarters of its revenue from the U.S., is a “mirror” to the domestic economy, Moynihan said this month. Employers added 151,000 workers to payrolls in October, the first increase since May, according to the Labor Department. The average number of Americans filing claims for jobless benefits dropped to a two- year low, the agency said.

GM Raises IPO Target Price 

The automaker also announced an increase in the number of converted preferred shares it plans to sell, boosting the amount it expects to raise to $4 billion from $3 billion. As a result, the total size of the offering is now expected to be close to $16 billion. GM had previously announced plans to sell about $13 billion in common and preferred shares as part of its IPO, one of the largest in U.S. history.

Geithner Acknowledges Damage To U.S. Credibility Internationally 

Speaking to a gathering of corporate executives in Washington, Geithner said the economic crisis during the last two years “caused a huge amount of damage for [the U.S.'] crebility” internationally, and that “it’s going to take us a while to dig out” of it. “The most important thing the U.S. can do for the world is to make sure we’re growing out of this this mess–we’re repairing the damage caused by this crisis–as quickly as we can.” How to do it? Geithner wants Congress to act before the end of the year to extend temporarily the Bush-era tax cuts for the middle class. “It would not be a responsible act of government” to do otherwise, he says. The White House is still calling for the tax cuts to expire on the wealthiest 2% of Americans.

The Business Podcast: A Crisis of Economics 

On this week's edition of The Business, instead of discussing the economic crisis – we examine the crisis of economics. Aditya Chakrabortty's joined in the studio by the Guardian's economics editor Larry Elliott, as well as Roger Bootle, the managing director of Capital Economics, and political economist and John Maynard Keynes biographer Robert Skidelsky. Also in the podcast, we hear from Nobel prize-winning economist, Elinor Ostrom, Freakonomics author Steven Levitt, and UN advisor and developmental economist Daniel Gay. With this stellar line-up, we analyse the past, present and future of a humbled profession and ask, why did so few people see this downturn coming? What lessons can we draw from Keynesianism and the economic theories of the past, now that the Washington consensus and the unshakeable belief in market fundamentalism has been shattered?

Monday Market Movement - Meaty Beaty Big and Bouncy! (ilene)

The Fed is in all-out attack mode this week with $35Bn scheduled for release in the next 5 days.  If that doesn't goose the markets, then I think we are screwed because people, $35Bn is A LOT of money for a week.  It's $1.82Tn a year at that pace or 12% of our entire GDP being created by the Fed to give you the illusion that all is well with the markets.  So say, thank you Chairman Bernanke, for treating us like children who would rather be lied to than facing reality and making necessary choices.  


Oil Attacks In Nigeria Show New Militancy 

Gunmen in five skiffs with powerful motors attacked Exxon Mobil's Oso platform late Sunday, according to a security executive who works in the area and had seen an internal report on the incident. They boarded the platform and "conducted a room-to-room search. Crew and staff were beaten and robbed, the power supply was cut and communications were damaged," according to the security executive. …Exxon declined to say how the attack would affect output at one of Nigeria's biggest oil fields. It suspended Oso's production as a "precautionary measure," the company said in a statement. The field can produce the equivalent of 100,000 barrels of oil a day—as much as 5% of the country's daily output.

Oil Pushes Up Wholesale Prices 

The index of producer prices, which measures how much manufacturers and wholesalers pay for goods and materials, rose a seasonally adjusted 0.4% for finished goods last month from September on the back of higher energy prices, the Labor Department said Tuesday. Stripping out more-volatile food and energy prices, however, wholesale prices fell by 0.6% in October, the sharpest drop in more than four years. There were big price declines for light motor trucks and passenger cars. Measures of inflation have continued to slow in recent months, especially those net of food and energy items that are closely watched by the Federal Reserve. Increasingly slow underlying inflation readings -- the core personal consumption expenditure rose just 1.2% in September --- are a key reason behind the Fed's move to try and stimulate a weak economy via large-scale buying of Treasury securities.


Arnold Schwarzenegger Demands Action At Final Climate Summit 

At the opening of his third and last climate summit, Schwarzenegger said leaders could learn from California's example as an environmental pioneer. "I know that together we can usher in a new era and build a cleaner and brighter, more prosperous future, so I say: let's do it," Schwarzengger told the summit at the University of California at Davis. The two-day summit is one of his final opportunities to shore up his reputation as California's green governor. His successor, Democrat Jerry Brown, takes over in January. Schwarzenegger plans to drive home the message tomorrow with the launch of his R20 partnership of regional and business leaders, which aims to function like a financial matchmaking service, finding investors from the World Bank and private corporations for renewable energy projects in developing countries.

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."


saxplayer00o1's picture
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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

"Portugal is at a high risk of needing a bailout due to the danger of contagion from other debt-hit euro nations, the country's finance minister said in comments carried by the Financial Times Monday.

"The risk is high because we are not facing only a national or country problem," the FT website quoted Fernando Teixeira dos Santos as saying in reference to the possibility Lisbon will need international financial aid.

"It is the problems of Greece, Portugal and Ireland. This is not a problem of only this country," he added.

Advertisement: Story continues below His comments came after Ireland said it was in talks with "international colleagues" on its budget woes but denied reports that it was seeking EU assistance similar to that received by Greece earlier this year."

"Nov. 16 (Bloomberg) -- Spain sold 5 billion euros ($6.8 billion) of Treasury bills, less than the maximum target of 5.5 billion euros set for its regular monthly auction, the Bank of Spain said.

The Treasury sold 3.73 billion euros of 12-month bills at an average yield of 2.363 percent, compared with 1.842 percent when the securities were last sold on Oct. 19. It also sold 1.24 billion euros of 18-month bills at 2.664 percent compared with 2.009 percent last month. "

"LISBON--Greece should restructure its debt because its interest burden is unsustainable in the long term, the president of Germany's Ifo economic research institute said in a Portuguese newspaper interview on Monday. “Actually I think that a debt restructuring in Greece will be necessary soon,” Ifo President Hans-Werner Sinn told the Portuguese business daily Jornal de Negocios. "

.....................3A) Greece raises $531 million in debt sale

"ATHENS: Greece's debt management agency says it has raised 390 million euro ($531 million) in the sale of 13-week treasury bills, but at a higher interest rate than a similar auction last month.

The agency said Tuesday's sale, originally for 300 million euro, resulted in a yield of 4.1 per cent, compared with 3.75 per cent in a three-month T-bill auction on October 19."

....................3B) Greece's PM says debt restructuring would be 'catastrophe' for Greece, Europe

"According to figures from the Bank for International Settlements, UK banks hold about $200bn (£125bn) of Greek, Portuguese and Irish sovereign debt. In addition, UK banks also hold $180bn of Spanish and Italian sovereign debt. Concerns over these exposures could not have come at a worse time for UK banks, which are under intense political and commercial pressure for not providing sufficient credit to the private sector to help finance its recovery. "

"Nov. 15 (Bloomberg) -- Positions in foreign-exchange derivatives contracts increased by 8 percent in the first half of 2010, according to the Bank for International Settlements."

"Outstanding amounts of over-the-counter interest-rate derivatives stayed at $452 trillion in the first six months of 2010, after increasing by 3 percent in the previous six months, the BIS said."

"New York’s deficit for the current year, pegged by the Division of Budget at $315 million, may more than triple, Deputy Comptroller Tom Nitido said today.

This year’s projected gap will be followed by a $9 billion deficit in the year beginning April 1, according to budget documents. Next year’s imbalance may reach $9.3 billion if lawmakers don’t close the current deficit with spending cuts, according to Robert Megna, the state budget director. "

"Hartford, Conn. (WTNH) - Governor-elect Dan Malloy got the sobering news Monday that next year's state budget is nearly $3.5 billion in the red.

It also appears that some budget adjustments may be required within the next couple of weeks or thousands of Connecticut families may be unable to heat their homes.

Timothy Bannon, Governor-elect Malloy's chief of staff got the bad-news-budget-news from the out the going Rell administration Monday afternoon.

Just to maintain current levels of service in the state will require a 10.5 percent hike in spending because of increased costs."

"Without the financial assistance, Bobb said DPS — steeped in a $327 million deficit —would have to implement more "draconian cuts" such as reducing the number of schools by half, increasing class sizes to 62 in high schools and boosting fees to play sports, according to documents submitted to the state. "

"The Oklahoma Teachers Retirement Fund has an unfunded liability that is close to 10 billion dollars and the deficit is growing. It could put thousands of teachers retirements in jeopardy.

"Actually, the older I get the more concerned I become because it becomes a bigger and bigger issue," Churchill said.

State leaders agree, it is becoming a bigger issue, and one that can no longer be ignored.

"Right now this is the biggest problem we are facing by far," said State Treasurer Scott Meacham."

"SAN FRANCISCO (MarketWatch) -- The CME Group late Monday raised margin requirements for its most popular gold, silver, platinum and palladium futures contracts in the U.S. A margin requirement is the money investors must pony up to trade, and in the case of silver the exchange raised the maintenance requirement after a 30% increase last week. For the 100-ounce gold contract, initial and maintenance requirements rose 5.9%. Silver maintenance requirements increased nearly 12%, while silver initial requirement rose 11.5%. Gold for December delivery retreated $16.90, or 1.3%, to $1,351.40 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. December silver was off 73 cents, or 2.8%, to $25.38 an ounce. The CME owns Comex"

"Gap Inc., J.C. Penney Co. and other U.S. retailers may have to pay Chinese suppliers as much as 30 percent more for clothes as surging cotton prices boost costs.

“It’s a little terrifying to deal with cotton suppliers now,” said Vicky Wu, a sales manager at Suzhou Unitedtex Enterprise Ltd., a closely held, Jiangsu province-based clothes maker that counts Gap and J.C. Penney among its clients."

  • Other news, headlines and opinion:


IMF Reduces Weighting of Dollar, Yen in SDR Basket

Study: Amid housing slump, home sizes shrink

Sarkozy Under Pressure as France Feels Irish Heat: Euro Credit

EU Could Swap Sovereign Debts, Ireland Needs Restructuring, Roubini Writes

Ruble Government Bond Sales Scaled Back as Yields Increase: Russia Credit

Oil expected to run out long before new fuels developed

Japan's lower house OKs 60 billion dollar stimulus

Foreclosure Mess Could Threaten Banks, Report (NPR)

Deficit Panel Ignores $153 Trillion Hole: Laurence Kotlikoff

Soros: Global Power, Influence Shifting From US To China

Mortgage-Bond Yields Guiding Home Loans Soar to Five-Month High

Finland seen strongly opposing Ireland EU bailout

Tax-Exempts Tumble as California Sells $10 Billion: Muni Credit

Calif Board Clears Way For Sale Of State Buildings

UBS May Lose $41 Billion Due to New European Tax Policy Rules

Watson: TX budget gap might be $28B

In 17.4 million US households, someone goes hungry: study

Sellers’ Profits Fell 8 Percent Last Year (Home sales)

Analysts See 7% Drop in Home Prices over Next Year

Bank of America insider sale

suesullivan's picture
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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

"Measures of inflation have continued to slow in recent months, especially those net of food and energy items that are closely watched by the Federal Reserve."

Because food, heating, electricity and gasoline are only the basics, the most fundamental needs for people. Do they ever remember to factor those "volatile" food and energy prices back in to their thinking? I think not. And every time I read the phrase "stripping out more-volatile food and energy prices," it makes me want to bite someone hard, on the leg, at the Fed.

(Thank you, Saxplayer, for the work you put into these digests every day. Even if it made me growl today.)

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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

.... ugh .... even though i totally believe that gold will continue to rise, buying a few ounces today at $1329 still was a little hard given my last purchase was @ $1050...

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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

watch the Citi vice-presidents:

Videos: Depositions of Alleged Robo-Signers from Nationwide Title Clearing - Over the past several years, Bryan Bly, Crystal Moore and Dhurata Doko have signed thousands of mortgage assignments as vice presidents of Citi Residential and other major lenders. Yet when asked in a recent deposition what a mortgage assignment is, Bly replied: "I’m really not sure." Moore, meanwhile, defined a promissory note as something "that says the interest rate and stuff like that on it.” And Doko, a native of Albania who speaks shaky English, expressed befuddlement at the whole idea of loaning someone money to buy a house. "We don’t do mortgages in my country,” she said. Bly, Moore and Doko work for Nationwide Title Clearing, a Pinellas County company that found itself in an unwelcome spotlight this week when video depositions they gave in a foreclosure case popped up on YouTube and AOL.

they made them vice presidents because some state laws require the signature of a vice president on mortgage assignments...


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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...


The Future of Silver Prices: Why I Don't Foresee Stratospheric Levels


There are those who believe that the price of silver and other precious metals will continue to climb well into the stratosphere. Some are touting that silver will hit $200 in the next three to five years. While I won't dispute that there is a possibility that silver prices could rise that much, I would contend that the probability is relatively low.

For one thing, precious metals prices rise in times of uncertainty. So, it would not require economic activity to rise significantly to reduce the level of uncertainty. Let's not forget that GDP in 2008 was $14.6 trillion and dropped only to $14.1 trillion in 2009. It is rising in 2010, albeit very slowly. I attribute the uncertainty primarily to the debate about whether or not there will be a double dip in the near future.

Of course, there are other variables that contribute to uncertainty, such as the question of whether China will reduce its growth rate and raise interest rates, or whether sovereign debt in Europe will bring another global crisis, or if housing values will plummet in China, the US, Spain or any number of other nations where values appear to remain high. The list could go on for a long time, but that would get tedious and the fact remains that there always potential problems lurking around the globe, all the time. Always have been, always will be. I give you the Middle East as an example.

But, getting back to silver prices, I have a theory. The astronomical future prices quoted above are only possible, in my opinion, if we experience runaway inflation in the U.S. It would require a significant devaluation of the US dollar for silver to go much above $50. My intermediate term view is for silver to hit somewhere around $50 in the next 3-5 years.

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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

Treasury Direct link


Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
11/10/2010 9,136,758,086,733.07 4,582,789,597,013.42 13,719,547,683,746.49
11/12/2010 9,137,994,773,432.55 4,583,984,692,252.77 13,721,979,465,685.32
11/15/2010 9,203,788,917,732.66 4,585,224,643,761.06 13,789,013,561,493.72
idoctor's picture
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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

Damnthematrix's picture
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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

Is this for REAL..???

Senate Bill S 510 Food Safety Modernization Act vote imminent:
Would outlaw gardening and saving seeds

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robie robinson
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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...

FWIW, I fully expect laws similar to and including Senate bill S510 to be precursers to a neccessary end where a teetering(as in unstable not tweetering) Gov. indentures farmers to their land to be certain the masses can be quelled with "cake".



MarkM's picture
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Re: Daily Digest 11/16 - Oil Facility Attacked in Nigeria, ...
robie robinson wrote:

FWIW, I fully expect laws similar to and including Senate bill S510 to be precursers to a neccessary end where a teetering(as in unstable not tweetering) Gov. indentures farmers to their land to be certain the masses can be quelled with "cake".



I couldn't agree more, Robie. The government will attempt to control the food supply, even more than they do now, if they deeem it necessary. This bill is merely the small end of (one of) the wedge(s).

As Charles Hugh Smith likes to ask, "To whose benefit?"  I can assure it is not to the benefit of the small producer. That leaves the government and large producers as the beneficiaries. You decide which it is. Neithier is desirable. I think we all are adult enough to know that the real intent is not the protection of the end user.

This bill is possibly up for debate today. Reid claims he has enough votes to pass it.




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