Daily Digest

Daily Digest 11/21 - Ireland Persues Aid, Food Produces See Growth, Benefits of Local Produce

Sunday, November 21, 2010, 12:00 PM
  • Mauldin: O Deflation, Where is Thy Sting?
  • Ireland Will Pursue Aid From Europe, Minister Says
  • Food Producers See Growth
  • Internet Giants Foster, and Threaten, Innovation Economy
  • Will China Kill Boeing's Most Important Airplane?
  • Gas, Fire Hinder N.Z. Mine Rescue
  • Buying Local Produce has Many Benefits

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Economy

Mauldin: O Deflation, Where is Thy Sting? (jrb)



The CPI was out this week, and it showed a continued drop in inflation. There were those who immediately pointed out that this vindicated the Fed's move to QE2. We have to get ahead of this deflation thing, don't we? Well, maybe, depending on how you measure inflation/deflation. This week we look deep into the BLS website on inflation to see just exactly what it is we are measuring, and then take a walk down Nostalgia Lane. But first we look at what I think we can call The Sputtering Economy, because that will tie into our inflation discussion.

Ireland Will Pursue Aid From Europe, Minister Says 



Speaking on Ireland’s RTE radio, Mr. Lenihan said the application would be approved at a cabinet meeting later Sunday in Dublin. The bailout would be in the tens of billions of euros, he said, adding that the final figure was subject to further negotiations. His announcement ended a feverish bout of speculation on the rescue talks, which took on added urgency this weekend as the depth of the problems in the Irish banking sector became known to I.M.F. and European officials.

Food Producers See Growth 



Across the nation, food producers are seeing enough growth that many are expanding and investing in new equipment. For cheesemakers, dairy farmers and vegetable growers, the slow economy has brought opportunities to expand while construction costs are low. Food makers have also benefited from having products that consumers still buy in hard times and from ongoing efforts to open up new markets overseas. The result is growth - both in sales and in facilities.

Internet Giants Foster, and Threaten, Innovation Economy 



Among the business people gathered in San Francisco last week for the annual Web 2.0 Summit, there was little doubt that the second Internet boom will be just as transformative as the first. The connected pocket computer (otherwise known as a smartphone) and the social Web have created monster new markets, as more than one speaker noted, and the money is flowing accordingly. Much of that money is flowing to the Bay Area, home to what are arguably the four most important companies of today’s consumer Internet: Google, Apple, Facebook and Twitter. Apple and Google are the second and sixth most valuable public companies by market cap in the country, respectively. The other two are commanding private-market valuations in the billions.

Will China Kill Boeing's Most Important Airplane? 



How important is Boeing (BA) to the US economy? The company’s $29 billion worth of foreign sales in 2009 singlehandedly comprised about 2% of America’s total exports. And, even though unprecedented portions of Boeing’s $33 billion supply chain are outsourced -- particularly for the beleaguered 787, a project which is three years behind schedule -- according to Boeing estimates, it is indirectly responsible for 1.2 million stateside jobs.





Energy

Gas, Fire Hinder N.Z. Mine Rescue (submitter)



Prime Minister John Key and Energy Minister Gerry Brownlee both visited the scene of the disaster over the weekend and expressed hope that engineers could draw on lessons from the unlikely rescue of 33 miners trapped underground for 69 days in Chile last month. Australian Prime Minister Julia Gillard and Chile's government both offered assistance. A combination of poisonous gas and indications of a fire inside the mine have so far stopped any direct efforts by engineers to locate and extract the miners, who have been unreachable since an explosion was reported at 3:50 p.m. local time on Friday. Unlike in the Chile mine disaster, the New Zealand mine's shaft is sunk horizontally—allowing access for heavy machinery that could assist a rescue—but engineers are wary of a secondary explosion.

Environment

Buying Local Produce has Many Benefits 



There are many reasons for the growing popularity of farmers markets. They include bargain-hunting consumers in tough economic times, high food costs in grocery stores, concerns about food quality, and a desire to live “sustainable” lifestyles. What is so “sustainable” about buying directly from a farmer? For one thing, buying direct generally means buying locally produced food, and buying local reduces transportation, conserving dwindling energy supplies. Cutting energy use translates into a reduced carbon footprint. Another part of sustainability is economic. Buying directly from a farmer means money stays in the local economy.

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

Poet's picture
Poet
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Seven Towns Where Land Is Free

7 Towns Where Land Is Free
"As small towns suffer from a continuing flight from rural toward-more urban living, some economic development groups and governments in these troubled areas have chosen to stay and fight."

http://finance.yahoo.com/real-estate/article/111360/7-towns-where-land-i...

Poet

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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...

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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...

Countrywide Admits to Not Conveying Notes to Mortgage Securitization Trusts -

Testimony in a New Jersey bankruptcy court case provides proof of the scenario we’ve depicted on this blog since September, namely, that subprime originators, starting sometime in the 2004-2005 timeframe, if not earlier, stopped conveying note (the borrower IOU) to mortgage securitization trust as stipulated in the pooling and servicing agreement. Professor Adam Levitin in his testimony before the House Financial Services Committee last week described what the implications would be:

If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever. The chain of title concerns stem from transactions that make assumptions about the resolution of unsettled law. If those legal issues are resolved differently, then there would be a failure of the transfer of mortgages into securitization trusts, which would cloud title to nearly every property in the United States and would create contract rescission/putback liabilities in the trillions of dollars, greatly exceeding the capital of the US’s major financial institutions….

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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...

Poet's picture
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Irish Banks On Brink Of Collapse?

Irish banks on the brink of collapse due to bank run?
http://www.dailymail.co.uk/news/article-1331690/Ireland-bailout-Banks-brink-collapse.html

"Ireland's biggest banks are facing collapse this week unless an immediate international bail-out package can be agreed, senior insiders have revealed.

"Allied Irish Banks and Bank of Ireland have each suffered a multibillion-euro ‘run’ as foreign investors withdraw their cash amid fears that both institutions are effectively bust.

"It was this secret ‘run’ that brought the IMF and EU bail-out teams to Ireland in an effort to prevent the banks collapsing entirely. If they do, it would trigger Ireland’s €440bn blanket bank guarantee – potentially leaving the State unable to pay the debt." 

Poet

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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...

 * humour alert *

 h/t tom @ http://www.zerohedge.com/article/we-have-clearly-anticipated-early-2010-ireland-about-go#comment-727469

Breaking News: Ireland plans to drop Euro, adopt Potato currency.

Ireland plans to change its currency from the Euro to the Potato, a new currency convertible to potatoes, according to an "in the know" source who wishes to remain anonymous until the official announcement of the "switcheroo".  The Irish Finance Minister shortly will announce a one week bank holiday during which Irish bank deposits denominated in Euros would be converted to Potatoes. The new Irish currency will be redeemable in potatoes and issued in these denominations:

One Pound of Potato Note

Five Pounds of Potatoes Note

Ten Pounds of Potatoes Note

Twenty Pounds of Potatoes Note

One Hundred Pounds of Potatoes Note

Five Hundred Pounds of Potatoes Note

One Thousand Pounds of Potatoes Note

Squabbling over what variety of potato will be depicted on each Note is delaying the Note printing process. Lobbyists for the two most popular varieties of potato, the Rooster and Kerr's Pink, are waging a behind-the-scenes last-potato-standing cage fight to win the coveted prize: engraving of their potato on the face of the One Thousand Pounds of Potatoes Note. Less ""floury" varieties will have to be content to be depicted on the lowly One or Five Pound Note.

One other hurdle is how to cushion the "switcheroo" to repay bondholders of Irish bank debt with Potato Notes rather than Euro Notes. Bondholders are not big potato eaters and prefer to eat caviar, foie gras, escargot, Wiener Schnitzel, and children of future generations. To sweeten the deal for bondholders,  for each one million Pounds of Potatoes bond conversion, the Irish Finance Minister plans to add a one-time issued Note for one thousand pounds of Irish blood pudding, a traditional Irish sausage made from pig's blood, onions, herbs, spices, oatmeal or barley.   

During the bank holiday the Irish Finance Minister intends to convert Euro (EUR) to Potato (PTO) at the rate on One Euro = Two Potatoes. For those interested in Forex trading, here is handicapping of key exchange rates assuming the Irish launch the Potato next week:

PTO/USD = .68

PTO/EUR = .5

PTO/GBP =  .42

PTO/CHF = .67

PTO/YEN = 55.75

The reckless debt acquired by Irish banks is forcing the Irish government to abandon the Euro and establish its own currency and control over monetary policy. To rebuild public confidence in the Celtic Tiger, Ireland has decided to establish a hard currency redeemable in hard potatoes. When  asked why Ireland is choosing potatoes rather gold to back the new currency, the "in the know" source responded, "Well, you can't eat gold, can you now. Hi di-diddly-idle-um, diddly-doodle-idle-um,diddly-doo-ri-diddlum-deh."

When  asked about the potential for a bank run in which the Irish public demands their Notes be redeemed for potatoes, the "in the know" source responded, "Well, if you go to the bank in a bank run and redeem, say, Notes for 10,000 Pounds of Potatoes, what, pray tell, are you going to do with 10,000 pounds of potatoes?...sell them to the all the other lads who redeemed thousands of pounds of potatoes?  And how many pounds of potatoes can you carry out of the bank...10,000 pounds? There arent enough wheelbarrows and donkey carts in all of Ireland to cart away the potatoes in a bank run, so there will be no bank run.   Argh, isn't that the beauty of the switcheroo. Too-ra-loo-ra-loo-ral,..come on, sing along...

"Too-ra-loo-ra-loo-ral, Too-ra-loo-ra-li,
Too-ra-loo-ra-loo-ral, hush now, don't you cry!
Too-ra-loo-ra-loo-ral, Too-ra-loo-ra-li,
Too-ra-loo-ra-loo-ral, that's an Irish lullaby."

 

 

SagerXX's picture
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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...
plato1965 wrote:

Too-ra-loo-ra-loo-ral, that's an Irish lullaby."

As a man who's 1/4 Irish, this brought a smile to my face (esp. the part about how the Potato would make bank runs impossible)...

Poet's picture
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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...
SagerXX wrote:
plato1965 wrote:

Too-ra-loo-ra-loo-ral, that's an Irish lullaby."

As a man who's 1/4 Irish, this brought a smile to my face (esp. the part about how the Potato would make bank runs impossible)...

Certainly funnier and more lighthearted fare than Swift's "A Modest Proposal".

Poet

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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...

Republic of Ireland confirms EU financial rescue deal

Is it in the bank'[s] favour for a bailout to happen? If so I wonder if govt's may be pushed towards a bailout even if it's not entirely necessary [at that point].

Also...

Immigration is "unacceptably high," must be cut - PM

Is this a case of Romanes eunt domus? Or Romani ite domum?

 

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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...
SagerXX wrote:
plato1965 wrote:

Too-ra-loo-ra-loo-ral, that's an Irish lullaby."

As a man who's 1/4 Irish, this brought a smile to my face (esp. the part about how the Potato would make bank runs impossible)...

You're going to love the currency people have used in a place I've been to recently (Palau):
http://en.wikipedia.org/wiki/Rai_stones
Stones!!! The bigger, the harder to carry, the larger the amount of people who died carrying it, etc. the more valuable it was. Now that's a hard currency

Samuel

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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...

Japan Goes From Dynamic to Disheartened http://www.cnbc.com/id/39714568

Like many members of Japan’s middle class, Masato Y. enjoyed a level of affluence two decades ago that was the envy of the world. Masato, a small-business owner, bought a $500,000 condominium, vacationed in Hawaii and drove a late-model Mercedes.

But his living standards slowly crumbled along with Japan’s overall economy. First, he was forced to reduce trips abroad and then eliminate them. Then he traded the Mercedes for a cheaper domestic model. Last year, he sold his condo — for a third of what he paid for it, and for less than what he still owed on the mortgage he took out 17 years ago.

“Japan used to be so flashy and upbeat, but now everyone must live in a dark and subdued way,” said Masato, 49, who asked that his full name not be used because he still cannot repay the $110,000 that he owes on the mortgage.

guardia's picture
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Re: Daily Digest 11/21 - Ireland Persues Aid, Food Produces ...
idoctor wrote:

“Japan used to be so flashy and upbeat, but now everyone must live in a dark and subdued way,” said Masato, 49, who asked that his full name not be used because he still cannot repay the $110,000 that he owes on the mortgage.

Thank God/Universe/Nature expectations are not over the top in the entire world.. This places Japan in a unique position to come around before any other country IMO.

Samuel

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