Daily Digest

Daily Digest 11/27 - End of Cheap Coal, Irish Bailout Protests, Small Business Saturday

Saturday, November 27, 2010, 11:00 AM
  • The End of Cheap Coal?
  • Banks Start to Dig Out From Troubled Loans
  • Spanish, Portuguese Bonds Drop as Europe’s Debt Crisis Deepens
  • 'Pent-Up Demand' as Shoppers Storm Malls Across U.S.
  • Thousands Protest Against Irish Bailout
  • Small Business Saturday Entices Locals to Shop Mom and Pop
  • Countries Pare Ambitions for Talks on Climate Change

Help your finances weather a tumultuous economy by reading our 'What Should I Do?' guide


The End of Cheap Coal? (jeff)

China, the world's biggest producer and consumer of coal, has coal resources of 187 billion metric tons, second to the U.S., according to data collected in the 2000-10 national resource survey by China's Ministry of Land and Resources. That's about 62 years' worth of coal, according to Heinberg and Fridley. But the duo are skeptical of that claim, and say that coal is often more scarce and more difficult to retrieve than current estimates. Although India, which almost doubled purchases of energy coal for its power stations last year, has found that there are more coal reserves than it previously thought, " the overwhelming global trend, as revealed by national coal surveys over the past few decades, is for the size of countries' estimated reserves to shrink as geologists uncover restrictions,” Heinberg and Fridley said.

Banks Start to Dig Out From Troubled Loans 

The Federal Deposit Insurance Corporation reported this week that the proportion of troubled loans on bank books fell to 9.1 percent at the end of September, down by more than a percentage point from the record 10.3 percent figure posted at the end of 2009. “The industry continues making progress in recovering from the financial crisis,” said Sheila C. Bair, the F.D.I.C. chairwoman. “Credit performance has been improving, and we remain cautiously optimistic about the outlook.”

Spanish, Portuguese Bonds Drop as Europe’s Debt Crisis Deepens

Spanish 10-year bonds fell for a sixth straight week, the longest run since the period ending June 22, 2007, as officials raced to complete an aid agreement for Ireland in an effort to contain the meltdown of its banks. The Irish yield premium over benchmark German bonds reached a record after Prime Minister Brian Cowen requested an international bailout on Nov. 21. “The market has lost faith over the likelihood that the Irish problem can be ring fenced,” said Steven Mansell, director of interest-rate strategy at Citigroup Global Markets Ltd. in London. “It’s a transformation from a market thinking the problem resided in the weaker periphery to a situation where the market is worried about a broader-based contagion.”

'Pent-Up Demand' as Shoppers Storm Malls Across U.S. 

Across the U.S., stores reported heavier traffic than last year as Black Friday, the biggest shopping day of the year, got off to its earliest start yet. Foot traffic at the Mall at Robinson increased the most in five years, Krinsky said. At Macy’s Inc.’s flagship store in New York’s Herald Square, many people were shopping for themselves for the first time in two years, Chief Executive Officer Terry Lundgren said. After denying themselves in the wake of the recession, many American consumers seem ready to spend this holiday season, says Neil Stern, senior partner at Chicago-based consultancy McMillan Doolittle.

Thousands Protest Against Irish Bailout 

More than 100,000 Irish citizens took to the streets of Dublin today to protest against the international bailout and four years of austerity. Despite overnight snow storms and freezing temperatures, huge crowds have gathered in O'Connell Street to demonstrate against the cuts aimed at driving down Ireland's colossal national debt. So far the march has passed off peacefully although there is a huge Garda presence with up to 700 officers on duty working alongside 250 security guards for the Irish Congress of Trade Unions.

Small Business Saturday Entices Locals to Shop Mom and Pop 

To counter the corporate world's Black Friday, public and private organizations are joining American Express OPEN—the company's small business unit—in declaring the Saturday after Thanksgiving Small Business Saturday. The first-time event encourages shoppers to include small, independently-owned businesses when they make their shopping rounds the day after Black Friday.


Countries Pare Ambitions for Talks on Climate Change 

At a two-week United Nations climate conference in the Mexican resort city of Cancun, negotiators will focus not on the stick of mandatory emissions limits but on the carrot of tens of billions of dollars in subsidies from industrialized countries to help developing nations grow on a greener path. Almost all growth in global greenhouse-gas emissions in coming years is expected to come from developing countries. The subsidies likely would, among other moves, help China build more-efficient coal-fired power plants, Brazil preserve forests, and an array of developing countries build wind farms and solar projects.

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 11/27 - End of Cheap Coal, Irish Bailout ...

"This year, the combined expenditures on Social Security, Medicare and Medicaid are projected to account for 45 percent of primary federal spending, up from 27 percent in 1975. The Congressional Budget Office projects that annual entitlement spending could triple in real terms by 2035, to $4.5 trillion in today's dollars. Defense spending is similarly unsustainable, and our tax code is riddled with special-interest provisions that have little to do with our broader economic prosperity."

"With more than 70 percent of U.S. Treasury obligations held by private investors scheduled to mature in the next five years, an erosion of investor confidence would lead to sharp increases in government and private borrowing costs."

"The writer is chairman of the Federal Deposit Insurance Corp. "

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pinecarr's picture
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Re: Daily Digest 11/27 - End of Cheap Coal, Irish Bailout ...

Thanks for the heads-up on the King World News interviews, idoctor!

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Re: Daily Digest 11/27 - End of Cheap Coal, Irish Bailout ...



""Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."

The refrain was picked up this week by German finance minister Wolfgang Schäuble. "We're not swimming in money, we're drowning in debts," he told the Bundestag. "

"ATHENS (Reuters) - The EU and the IMF could extend the period in which Greece must repay its bailout loans by five years, to make it easier for it to service its debt, a Greek newspaper said on Saturday, citing an IMF official.

"We have the possibility to extend the repayment period ... from about six years to around 11," the newspaper Realnews quoted Poul Thomsen, the IMF official in charge of the Greek bailout, as saying in an interview.

Greek, EU and IMF officials have repeatedly mooted the possibility of extending the period in which Greece must repay its 110 billion euro ($145.9 billion) bailout loans.

But the IMF official was more specific on how the repayment period could be stretched after Greece receives its last installment in 2013."

"FRANKFURT (Dow Jones)--Emergency borrowing from the European Central Bank rose again Thursday, ECB data showed Friday, indicating that some banks are having trouble tapping the market for funds amid fears that the fiscal crisis in Ireland and Greece may spread to other parts of the euro zone.

ECB data showed that one or more banks borrowed EUR3.948 billion from the central bank overnight Thursday, compared with EUR2.170 billion Wednesday. This is the 10th day in a row that banks have requested more than EUR1.5 billion from the ECB at a penalty rate of 1.75%.

The ECB wouldn't disclose the names or origin of the banks seeking emergency funding, but money market dealers said the data highlight a growing divergence and a lack of trust in the euro money market.

ECB data also showed that banks across the 16-nation euro zone parked EUR40.179 billion overnight with the central bank at 0.25%, a rate that is below the overnight market rate, currently at 0.48%.

This shows that banks are holding back from lending to their peers, and are instead opting to keep their funds in the safest accessible location. "

"Ireland is pushing to conclude talks for an international rescue package today as European Union officials race to stop the country’s financial crisis from spreading to the rest of the euro region.

The Irish government wants to reach an agreement before markets open tomorrow to stamp out the “uncertainty” that’s unsettling investors in the euro region, Energy Minister Eamon Ryan told Dublin-based broadcaster RTE yesterday. European finance ministers plan to meet from around 1 p.m. in Brussels, EU officials said on condition of anonymity. "

“The euro is under threat here,” said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. “The market has got it into its head that it is going to pick off one country at a time.”

"BERLIN, Nov 27 (bdnews24.com/Reuters) - Contagion spreads from Ireland to Portugal and then to Spain, forcing European leaders to exhaust the $1 trillion bailout fund they set up only half a year ago to defend their ambitious single currency project. "

"Unthinkable only a few weeks ago, a small but growing number of experts now believe some version of this nightmare scenario could become a reality for the euro zone if policymakers fail to unite behind a more forceful strategy for saving the euro and address investor concerns about fiscal and economic imbalances.

Until now, doomsday predictions of a euro zone breakup have come mainly from Anglo-Saxon sceptics, some of whom saw the single currency bloc and its one-size-fits-all monetary policy as fatally flawed from the very start.

Over the summer, British economist Christopher Smallwood of consultants Capital Economics produced a 20-page paper entitled "Why the euro-one needs to break up" and US economist Nouriel Roubini, alias Dr. Doom, predicted euro members would be forced to abandon the single currency.

But as the second wave of Europe's debt crisis gathers pace, engulfing Ireland and heaping pressure on Portugal and Spain, a new group of doubters is emerging. They believe it may be difficult for the euro zone to hold in its current form, even if many think that remains the most likely scenario."

"LONDON (Dow Jones)--The euro zone's sovereign debt crisis escalated Friday as the market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors' fear.

Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to dispel the growing anxiety surrounding the country's fiscal position Friday, saying there was ""absolutely"" no chance the euro zone's fourth-largest economy would seek a bailout from the European Union.

But his attempt to calm the markets had little effect, with the euro tumbling and the sell-off in Spanish and Portuguese sovereign bonds persisting.

""If we continue to see the recent trend in Spanish bond yields then the crisis is going to be taken to a completely new level as Spain accounts for approximately 11.7% of euro-zone GDP which is pretty much double the figure of Ireland, Portugal and Greece,"" said Gary Jenkins, head of fixed-income research at Evolution Securities."


In pictures: Dublin protests against austerity plans

Young Portuguese go abroad as bailout looms

westpennpogo's picture
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Re: Daily Digest 11/27 - End of Cheap Coal, Irish Bailout ...

     Right now I am reading The Coming of the French Revolution by Georges Lefebvre (translated by R.R.Palmer).  It was first published in France in 1939, so that was before a few tumultuous years of genuflecting on current events of Europe and America.  I believe Mark Twain said 'History doesn't repeat itself, but it often rhymes.'  I am amazed at the similiarities I am reading about.  Especially the 2nd chapter, it is like reading a present day newspaper except the names and institutions have changed!  Mr. Lefebvre went into great explanations on that time era (1789).  This book is a summary of a 4 volume dissertation on which he worked on for twenty years.  In short , he knew his stuff.   

     The main idea of that revolution he is getting across was that it was not a revolution of the peasantry, but it was affected by all classes.  They all played a part, no one was left out!



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