Daily Digest

Daily Digest 11/26 - World Markets Slump, Gold Falls as Dollar Rallies, Gift Economies

Friday, November 26, 2010, 11:00 AM
  • Promotions, Tradition Lure Shoppers On Black Friday
  • Portugal Approves Austerity Budget
  • World Markets Slump as Europe Debt Worries Linger
  • Gold, Other Metals Fall as U.S. Dollar Rallies
  • Can Energy Retrofit Loans Bring Wonderful Life to Economy?
  • Thanksgiving: A Time to Think About Gift Economies?
  • Oil-Rich South Sudan Weighs Cost of Progress

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Promotions, Tradition Lure Shoppers On Black Friday 

Retailers' eagerness for shoppers is reflected in the sharp discounts they are offering to lure customers early on Black Friday. Many apparel retailers--like Gap Inc. (GPS) and AnnTaylor Stores Corp. (ANN)--are offering blanket discounts during the early morning hours, while retailers like Wal-Mart Stores Inc. (WMT), Target Corp. (TGT) and Best Buy Co. (BBY) are offering deep discounts on popular consumer electronics. Business is "very brisk" at Best Buy, and demand is broad, said Michael Vitelli, president of the company's Americas division. Among the popular items are e-readers, tablet computers and motion games like Microsoft's (MSFT) Xbox Kinect. Unfortunately for shoppers, the high-profile sale items often don't last long. Shopper Henry Diaz got in line at a Target in Hackensack, N.J., at 3:30 a.m., 30 minutes before the store open, but was still not early enough to secure the 40-inch high-definition television sold at $298, a savings of more than $250. Nonetheless, he found other items to purchase. "You want to save a couple bucks," Diaz said.

Portugal Approves Austerity Budget

The Parliament’s approval came at the end of a tortuous week in which the borrowing costs of several ailing economies that share the euro rose to new records amid concerns that others would be forced to follow the example of the Irish government, which capitulated to bond market pressures by requesting rescue money last Sunday. The team of European Union and International Monetary Fund experts working in Ireland was aiming to announce the terms of its package this weekend, before markets open on Monday, to try to lift some of uncertainty that is rattling investors, according to a person with knowledge of the matter, who did not want to be identified because the discussions were ongoing.

World Markets Slump as Europe Debt Worries Linger 

World markets sank Friday as concerns mounted over the possibility of further bailouts for debt-laden European nations and tensions escalated between North and South Korea following a brief military clash. Oil prices hovered below $84 a barrel as traders mulled whether economic growth in China will slow and drag down demand for crude. In currencies, the dollar was up against the yen and the euro.

Gold, Other Metals Fall as U.S. Dollar Rallies 

“Extended Thanksgiving holidays will likely keep trade thin and the [metals] complex remains vulnerable to further pressure as traders look to lock in profits and maintain cash positions to cover margin requirements,” said James Moore, London-based analyst at Fast Markets, in a note. Also pressuring gold prices was a rally in the U.S. dollar. “The main negative factor is the firm U.S. dollar, which has risen to its highest level in two months versus the euro,” wrote analysts at Commerzbank in a note to clients. “Furthermore, the increase in the margins for gold futures trading on the Shanghai Futures Exchange is also having an adverse effect.”

Can Energy Retrofit Loans Bring Wonderful Life to Economy? 

In Frank Capra's classic 1946 film It's A Wonderful Life, Jimmy Stewart as Building and Loan manager George Bailey discovers what the world would have been like if he had never existed. Without George Bailey's heroic efforts to save the small lender that helped the middle class, Bailey's home town of Bedford Falls would have fallen into decay. Bailey's guardian angel Clarence shows him the town, renamed "Pottersville", under the control of evil slumlord and big banker Henry Potter. The crushing effects of poverty have destroyed the lives of many closest to Bailey. 
 Much as in the Pottersville scene from the movie, hopelessness and poverty are now spreading across America.

Thanksgiving: A Time to Think About Gift Economies?

It seemed to me that if our current system fails us, we should have at least some idea regarding what options might be available that could perhaps be pieced together into a new system that works. As I looked at gift economies a bit, I realized our current system has a substantial element of gift economics in it. Perhaps if our already functioning gift economy can be expanded, it may play a role in transitioning to a more suitable long-term economy.


Oil-Rich South Sudan Weighs Cost of Progress 

Their potentially rich but grossly underdeveloped region is in a quandary. Its desperately poor people, mostly subsistence farmers and cattle grazers, need oil money but officials say livelihoods are being threatened by pollution. In January, southerners will have a chance to take a step towards redressing that problem, voting in a referendum on whether to separate from the rest of the country and form a new state. The oil industry will then, at least legally, be under their control, and they might be able to do something.

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
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4260
Re: Daily Digest 11/26 - World Markets Slump, Gold Falls as ...

"Borrowing costs for Europe’s most indebted nations are at record highs as Ireland’s capitulation in accepting a bailout of its banking industry stokes concern that other countries also will have to seek aid.

The average yield investors demand to hold 10-year debt from Greece, Ireland, Portugal, Spain and Italy reached 7.52 percent yesterday, a euro-era record. The average premium investors demand to hold those securities instead of German bunds widened to 480 basis points, approaching this year’s 485 basis-point high reached on Nov. 11. The average cost of insuring against a default by the five nations using credit- default swaps reached a record 517 basis points on Nov. 23.

“It’s no longer taboo to speak about a restructuring,” said Johannes Jooste, a portfolio strategist at Bank of America Corp.’s Merrill Lynch Global Wealth Management in London, which oversees about $1.4 trillion for clients. “The fact that bond yields continue to rise and put pressure on countries that have to fund from the market makes investors less and less confident, and it’s bringing forward the day of reckoning.” "

"The European Central Bank is pushing Portugal to become the third eurozone country to accept an EU-IMF “rescue” because of concerns that a Portuguese debt crisis will sink its Iberian neighbour Spain.

The EU and eurozone fears that Spain, Europe’s fifth largest economy, is too big to bailout and that a Spanish crisis would tear down the European single currency."

........................2A) Portugal Says EU Can't Force Governments to Accept Rescue Aid

  • Other news, headlines and opinion:

Hungary bonds tumble on policy worries, global fears

Fitch Considers Hungary Rating Cut After Pension Plan

EU deliberates boosting size of bailout fund

China Fails to Draw Enough Demand at Bill Sale for First Time Since June

Projected deficit rises to $1.7 billion: finance minister (B.C)

Emergency spending hikes deficit to $5B (Alberta)

Irish Aid of EU90 Billion May Not Be Enough, Credit Suisse Says

Anglo Irish Says It Lost 12 Billion Euros in Deposits This Year

Europe in freefall - Belgium could be next to need help

UPS Fights `Fire With Fire' as Borrowers Fill Pension Gap: Credit Markets

Romania Jan-Oct Budget Gap Widens Slightly To 4.63% Of GDP -Report

Portuguese, Spanish CDS spreads continue to widen

Doctors say Medicare cuts forcing them to shift away from elderly

Nomura Says Europe Can Afford to Rescue Spain And Aid Portugal

Irish crisis spreads to UK as McCabe suspends site work

Ireland to use National Pension Reserve Fund assets

State's pension gap looms large (New Jersey..."Officially, New Jersey is $46 billion short".."The pension liability also is accompanied with an unfunded health care liability of some $52 billion.")

Anglo Irish Bank Credit Rating Cut to Junk by S&P on Concern About Support

Commodities Fall on China Tightening Speculation, Higher Exchange Margins

Poet's picture
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1892
Captive Irish Market?

Am I reading this right? Irish 10-year bond yields soar above 9% as investors demand a higher return for the higher risk. So what does Ireland do (besides requesting a bail-out from the EU and IMF)? It make its National Pension Reserve Fund (NPRF) help out by investing its assets in Irish 4-year bonds that return 1% annually, with a possible bonus if invested longer. Gee...

Irish bond yields soar despite new austerity plan

Ireland to use National Pension Reserve Fund assets


osb272646's picture
Status: Silver Member (Offline)
Joined: Mar 14 2010
Posts: 120
Thanksgiving-Gift Economy

I found this article thought provoking.  I have always thought that a local economy based on tit for tat barter and careful accounting would decay cohesion of the community.  Give more than you get seems to be the way things work best, at least for me.



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