Daily Digest

Daily Digest 1/18 - Foreclosures Stopped in Maryland, Lebanon Cbank Committed to Stability, Fossil Fuels On Demand

Tuesday, January 18, 2011, 11:00 AM
  • Ferguson On Whether The Financial Crisis Will Lead To America's Decline
  • Cuomo Threatening Government Shutdown Over Budget
  • 10,000 GMAC Foreclosures Stopped in Maryland
  • Lebanon Cbank Committed To Stability
  • Confidence Among U.S. Homebuilders Stagnates on Lack of Credit for Buyers
  • A Brave New World Of Fossil Fuels On Demand
  • Scientists Warn California Could Be Struck By Winter ‘Superstorm’

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Economy

Ferguson On Whether The Financial Crisis Will Lead To America's Decline (pinecarr)



Two weeks after we presented Niall Ferguson's video lecture - "Empires On The Verge Of Chaos" to tremendous reader response and almost 30,000 views, we follow up with another must watch video presentation, this time highlighting the intellectual rigor of Ferguson, David Gergen and Mort Zuckerman. The topic once again is the Financial Crisis, and specifically how, why and whether it will lead to America's decline. Of particular note is Ferguson's spot on characterization of the primary deficiency in the so-called brains of economists, namely that they see patterns, equilibria and stable systems where there are absolutely none: i.e., in the complex (as in Lorenzian) world of economics.

Cuomo Threatening Government Shutdown Over Budget (pinecarr)



Cuomo relayed his readiness for such a high-stakes confrontation in conversations with key aides and state lawmakers during the past two weeks as he outlined general plans to cut the state payroll and impose billions of dollars in reductions on school districts and the Medicaid program in the fiscal year beginning April 1. "The choice this time for lawmakers is going to be Cuomo's horrible budget or an even more horrible situation: an entire state shutdown," said a source close to the situation.

10,000 GMAC Foreclosures Stopped in Maryland (phil)



In a major ruling Friday, a coalition of nonprofit defense lawyers and consumer protection advocates in Maryland successfully got over 10,000 foreclosure cases managed by GMAC Mortgage tossed out, because affidavits in the cases were signed by Jeffrey Stephan, the infamous GMAC “robo-signer” who attested to the authenticity of foreclosure documents without any knowledge about them, as well as signing other false statements. The University of Maryland Consumer Protection Clinic and Civil Justice, Inc., a nonprofit, filed the class action lawsuit, arguing that any case using Jeffrey Stephan as a signer was illegitimate and must be dismissed. In court Friday, GMAC agreed to dismiss every case in Maryland relying on a Stephan affidavit.

Lebanon Cbank Committed To Stability



Joseph Torbey, chairman of the Association of Banks in Lebanon, said the "banking sector is capable of containing ... and overcoming the situation, wishing that the crisis is not prolonged as it would have a negative impact on the economy," the statement said. Ratings agency Standard & Poor's downgraded Lebanon's outlook to stable from positive on Tuesday, saying prospects of economic reform had been damaged by the government's collapse.

Confidence Among U.S. Homebuilders Stagnates on Lack of Credit for Buyers



Developers Lennar Corp. and KB Home, which this month reported a fourth-quarter profit, are cutting costs as elevated unemployment limits demand and mounting foreclosures add to the supply of unsold properties. At the same time, sales are projected to recover from last year’s post tax-credit slump, helped by falling prices and low borrowing costs. “Housing remains very weak,” said Paul Dales, U.S. economist for Capital Economics Ltd. in Toronto, who had forecast the index would hold at 16. “There’s still excess supply and demand is weak, and that’s going to be the case for a while. It’s no surprise builders aren’t doing a lot of building and their confidence is low.”

Energy

A Brave New World Of Fossil Fuels On Demand (walter)



Joule says it now has “a library” of fossil-fuel organisms at work in its Massachusetts labs, each engineered to produce a different fuel. It has “proven the process,” has produced ethanol (for example) at a rate equivalent to 10,000 U.S. gallons an acre a year. It anticipates that this yield could hit 25,000 gallons an acre a year when scaled for commercial production, equivalent to roughly 800 barrels of crude an acre a year.

Environment

Scientists Warn California Could Be Struck By Winter ‘Superstorm’ (joe)



A group of more than 100 scientists and experts say in a new report that California faces the risk of a massive "superstorm" that could flood a quarter of the state's homes and cause $300 billion to $400 billion in damage. Researchers point out that the potential scale of destruction in this storm scenario is four or five times the amount of damage that could be wrought by a major earthquake. It sounds like the plot of an apocalyptic action movie, but scientists with the U.S. Geological Survey warned federal and state emergency officials that California's geological history shows such "superstorms" have happened in the past, and should be added to the long list of natural disasters to worry about in the Golden State.

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."

21 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

"US public pensions face a shortfall of $2,500 billion that will force state and local governments to sell assets and make deep cuts to services, according to the former chairman of New Jersey’s pension fund."

"Philippine bonds dropped for a third day as the government failed to sell all of its 20-year debt at an auction today because investors demanded higher yields as inflation accelerates.

The Bureau of the Treasury raised 4.12 billion pesos ($93 million) compared with the planned 9 billion pesos. The notes were sold at a yield of 8.024 percent. Borrowing costs would have climbed to 8.155 percent had the government accepted all the 8.02 billion pesos in bids."

"ALBANY, N.Y.- It's two more weeks before the public can hear Governor Andrew Cuomo's ideas for solving a $10 billion deficit but Cuomo could shutdown state government if the lawmakers don't approve his budget cuts.

Sources said that the governor will shut down state government in April, right after the current budget runs out."

"OLYMPIA, Wash. -- On the Rev. Martin Luther King Jr.'s holiday, hundreds of people rallied on the steps of the state's Capitol to protest proposed cuts to social services.

Facing a $4.6 billion deficit, Gov. Chris Gregoire has proposed eliminating or cutting programs that help the state's poor, including basic health coverage, food stamps and aid for the disabled."

"NEW YORK (CNNMoney) -- There will be fewer cops patrolling the streets of Camden, N.J., come Tuesday.

Struggling to close a $26.5 million budget gap, the city with the second highest crime rate in the nation is laying off 163 police officers. That's nearly 44% of the force.

And Camden will also lose 60 of its 215 firefighters. Some people with desk jobs will be demoted and reassigned to the streets."

"The Pennsylvania Department of Education has granted permission to the Daniel Boone School District to curtail its full day kindergarten to a half day program for 2011-12, said district Superintendent Dr. Gary L. Otto at the Jan. 10 school board meeting.

Board members said they will vote soon on the curtailment, which could reduce the district’s 2011-12 $6.7 million deficit by $420,000 to $450,000 with the reduction in salaries and benefits.

Otto said the savings estimate includes school bus transportation for half-day students."

"Rising costs associated with the state pension program for police and firefighters will continue to be an issue for Ankeny's city budget, City Manager Carl Metzger said last week."

"Ankeny's contribution rate this fiscal year is 19.9 percent of an employee's base salary. For the 2011-12 fiscal year, which begins July 1, it will be 24.76 percent. In 2014-15, it is projected to peak at 37.33 percent before starting to slowly decrease."

  • Other news, headlines and opinion:

 

Euro Falls for Second Day on Concern EU Will Fail to Stamp Out Debt Crisis

Belgium Cancels Jan 31 Bond Auction Due To Syndication

Spain To Sell Bonds Through Syndicate Instead Of Auctions

Greece favours debt repayment extension- Deputy PM

Riverbank eyes debt payment deadline (California)

Brown Burdens Mayors by Unloading California Deficit on Cities

Idaho Health & Welfare director: Medicaid faces tough program cuts

Portuguese Bailout Will Make Euro Crisis Worse: Matthew Lynn

Highway tolls, tobacco tax among ideas to address deficit (Canada)

Anchor Blue to close all 117 stores

Portsmouth's pensions only 37 percent funded (Virginia)

Reports Show Oklahoma's Pension System Could Run Dry By 2020

Ireland’s Cowen Faces Vote for Control of ‘Titanic’

Gold Sold in Tokyo Vending Machines Competes with Drinks, Sweets, Lingerie

Inflation in U.K. Accelerates More Than Forecast as Pressure Mounts on BOE

Rich Raise Consumer Spending With Little Help From Middle Class

ECB Allows Irish Central Bank to Counterfeit 51 Billion Euros (Mish)

Lawmakers Urge Federal Reserve to Abandon TILA Rule Change

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The Economics of Happiness

Saw the film maker, Helena Norberg-Hodge, interviewed on Dylan Ratigan's show yesterday (film: The Economics of Happiness; organization/movement: Gross National Happiness World Project (http://www.gnhworldproject.com/GNHWP/Resources.html)). One of her points was that the Gross National Happiness World Project movement is beyond politics of right or left - that intrigued me as did the premise that "globalization" is an unsustainable path with direct reference to what we know as the three E's. From the synopsis of the film:

"The Economics of Happiness describes a world moving simultaneously in two opposing directions: while government and Big Business push for a globalized economy based on high technology and increased trade, people all over the world are working from the grassroots to nurture smaller scale, ecological, local economies."

"'Going local' is a powerful strategy to help repair our fractured world - our ecosystems, our societies and our selves. Far from the old institutions of power, people are starting to forge a very different future..."

http://www.theeconomicsofhappiness.org/images/stories/downloads/eoh_press_kit.pdf

I am not sure what I think about this movement or related documentary as I haven't learned enough but it certainly struck me as something the CM community might find of interest. 

Note: Original post edited by author

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MarkM
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Re: The Economics of Happiness

The Fed wants to change the TILA rule. WOW, just wow. Nothing should surprise me anymore. Is there really any question as to the direction we are going? It will be interesting to see the ultimate reaction of Congress.

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Johnny Oxygen
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Re: The Economics of Happiness

The proposed rule would reverse the traditional understanding of TILA’s right of rescission by requiring a homeowner to pay off the entire mortgage amount before a creditor is required to cancel its security interest in the home.

All I can say is really?...just really?

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

 

Quote:

Their letter read, “At the depths of the worst foreclosure crisis since the Great Depression, we are surprised that the Federal Reserve board has proposed rules that would eviscerate the primary protection homeowners currently have to escape abusive loans and avoid foreclosure: the extended right of rescission."

Of the banks, for the banks and by the banks.

Doug

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Re: A Brave New World Of Fossil Fuels On Demand

A Brave New World Of Fossil Fuels On Demand?

what bothers me about this article is that is says nothing about how the bacteria are fed; life (ie DNA) requires more elements than CO2 alone...where does the nitrogen & phosphorus come from?

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rjs
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Re: The Economics of Happiness
MarkM wrote:

The Fed wants to change the TILA rule. WOW, just wow. Nothing should surprise me anymore. Is there really any question as to the direction we are going? It will be interesting to see the ultimate reaction of Congress.

i think the Fed has backed down...

Fed Foreclosure Proposal Headed to New Consumer Bureau - A controversial Federal Reserve staff proposal that would make it harder for borrowers to prevent foreclosures will likely be punted over to the new Consumer Financial Protection Bureau amid pressure from lawmakers, consumer advocates and civil rights groups. A senior Fed staffer this week announced at a lawyers’ conference that the proposal, which would limit borrowers’ “right of rescission,” won’t move forward at the Fed and will be taken up by the consumer watchdog agency, according to several people who were either at the conference or briefed on the matter...

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Damnthematrix
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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

http://www.dailymail.co.uk/news/article-1347984/A-product-past-Chinas-president-says-dollar-longer-worlds-currency.html

'A product of the past': China's president says dollar should no longer be world's top currency

By Daniel Bates 
17th January 2011

China’s president today raised grave questions over the future of the dollar by claiming it should no longer be used as the world’s reserve currency.

Hu Jintao said that using the American currency as the default for international trade and investment was a ‘product of the past’.

In unusually frank comments he said that even though the arrangement had stood in place since the end of Second World War, now was the time to reassess.

The statement will be seen as another sign of growing Chinese confidence after the Asian giant emerged relatively unscathed from the financial crisis.

America by comparison is more than $14 trillion in debt, a sizeable chunk of it financed by the Chinese.

Tomorrow Mr Hu and Mr Obama are due to meet for talks at the White House in which the so-called ‘currency wars’ will be among the topics up for discussion.

China claims that America keeping its interest rates low is causing inflation around the world, including to its own currency, the yuan.

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Re: The Economics of Happiness

rjs,

Let's hope that it is eventually beaten back.  However, just the fact that the Fed would float the idea tells me about their nature. Unfortunately, many ideas such as this are initially put down only to come back in a more clandestine fashion. I don't think the Fed will give up easily on this matter, they have too much to gain (or lose).

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

I listened to the Ferguson, Zuckerman, Gergen discussion.  Three bright guys who I have in the past greatly admired.  They seemed to agree that the US is on a downward trajectory economically and presented a number of reasons why, not least of all our poor education system.  They agreed that it is absolutely essential to our future financial health that we rebuild our education system to be competitive.  They further agreed that we need to bring our infrastructure up to first world standards and that we need to reenergize our entrepreneurial incentives and spirit.  All well and good. 

On reflection, however, it occurred to me that they made no mention of oil, energy and/or other resource issues and seemed to accept the notion that we can continue to live in a constant growth world economy.  I find it discouraging that three very bright engaged guys seem to just accept that all we have to do is do what we always have, only better.

How can we hope to progress when the best and brightest can't take an honest look at our situation?

Doug

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rjs
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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

I invest in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries.”
 
~ David Stockman, Former US Budget Director

http://solari.com/blog/?p=10039

 

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

DTM's mention of President Hu reminded me of a funny Youtube skit I saw some years ago.

If you haven't seen it guys, have a look. It will make you chuckle.

James.

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

I'm a little confused at the moment. I was talking politics with a friend the other day and he was talking about social security. He kept calling it an entitlement program. I asked how is it that the government can take out of a persons check for years ( social security ) and when that person reaches old age and collects a social security check its an entitlement? He told me that the money was meant to be collected but not paid out. WOW. So those who paid in and now get a check are now getting a gift?

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

 

from ASPO-USA's Peak Oil Review, 17 Jan 2011
China’s coal production
Last week Reuters published a lengthy analysis of China’s coal industry. The report arrived at the
surprising conclusion that unlike some of the "peak Chinese coal" talk that has been emanating from
Beijing in recent months, China may be able to increase its coal production in the next decade to 4
billion tons per year or perhaps to over 5 billion tons per year from the current estimate of 3.2 billion
tons. The impetus for this goal is that in order for China to keep growing its GDP at circa 10 percent
a year, Beijing simply cannot afford to let coal production stagnate. 
 
According to the analysts consulted by Reuters, Beijing currently has a widespread mine
consolidation effort underway that will convert small, inefficient, accident-prone mines into major
mining firms that will have the capital to install the latest mining equipment that can continue to
increase production rapidly. One observer noted that ―an expansion phase will naturally come after
consolidation. With massive economies of scale and sophisticated technology, it would be no sweat
for them to ramp up output by at least 10 percent a year.
 
Some coal analysts consulted doubt that a cap on production in the 3.6–3.8 billion-ton range will be
enforced if the alternative to more coal is shutting factories and turning off lights, which they do not
see happening. Some analysts foresee more efficient use of coal as a way to keep the GDP growing
without actually increasing coal production. Thousands of small coal burning facilities have already
been shut down and this trend is expected to continue.

Much of the Reuters discussion sounds like the Cornucopians of oil production a few years back.
China is already producing nearly half of the world’s coal from a resource base that is only 14
percent of the world’s total and will run out completely in 30–40 years if exploitation continues at
anything approaching current rates. In these circumstances an increase to 5 billion tons a year
seems unlikely.
The problem of moving 3 billion tons of coal each year from increasingly remote western mines is
already overwhelming China’s rail and road network. The notion that the Chinese can increase coal
transport by 50 or 60 percent in the next decade seems rather far-fetched. Moreover, China has
already been increasing its coal imports. This allows the imported coal to be brought by ship directly
to where it will be consumed, thus keeping the burden off the transportation system.
This issue bears close watching over the next few years, for either China’s domestic coal industry is
starting to stagnate as the minable coal seams become thinner, deeper and farther away; or the new
mine consolidation program will breathe fresh life into the industry. Either way the course of China’s
coal industry is likely to have a significant impact on the country’s demand for imported coal and oil
over the next few years.
The Australian floods
It will be some time before the implications of the Queensland flood are clear. Last week conditions
grew worse as the flooding extended into Queensland’s capital of Brisbane and southward into the
state of Victoria. As Queensland ships out about 60 percent of global metallurgical coal exports the
prospects of badly constricted supplies for the next few months raises the issue of the damage that
could be done to China’s, Japan’s, Korea’s, and India’s steel industries. Coking coal prices could
easily surge to a new record and double the cost of producing a ton of steel.
As steam coal supplies, already tight because of flooding in Indonesia last year, grow tighter, there
is the possibility that demand for oil could increase as an alternative source for generating electricity.
Another scenario has industrial production sliding across much of Asia as steel production lags
thereby temporarily reducing the demand for oil.
 
More cars
 
More cars were sold in China last year than in any other country at any time in history. The
30 percent sales growth in China in 2010, to 18 million vehicles, is probably unsustainable,
especially as government officials are moving to put the brakes on car purchases. Experts
expect sales growth in China to slow to 10–15 percent this year. Many automakers are
making investments based on the assumption of continued strong sales gains.
(More at Peak Oil News , 13 Jan, #21 )

 

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

So much for China's reduced lending quota's. It's just simply astonishing the demand for resources from this country.

http://www.theaustralian.com.au/business/big-price-rises-for-commodities-tipped/story-e6frg8zx-1225990587540

"It does appear that industrial production in the developed world will prove to be stronger than we had previously anticipated heading into 2011.

"A pick-up in commodities demand would be less reliant on a return of Chinese apparent demand in 2011, than we had previously envisaged."

Where's the stronger than anticipated industrial production in the Western world coming from?

 

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

Fuel prfoducing bacteria: I'm a little bit worried about what could happen if this organism escapes in the wild... do we risk to polute everything on this planet with diesel?

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

~ VF ~

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Davos has a new article on Financialsence.com

For those of you who have been missing Davos, he has a new article on Financial Sense, "Tossing The Consumer Under The Bus", at http://www.financialsense.com/contributors/d-sherman-okst/tossing-the-consumer-under-the-bus .  Here's the intro:

I’ve been pouring through the Fed Reserve’s recent release of circa 2005 FOMC meeting transcripts. The most striking observation that one can make is that the consumer - the very lifeblood that determines whether our economy will live or die - has been discarded.

Discarded --- as in tossed under the bus.

Ninety-nine percent of our “economists” today have it entirely ass backwards: They believe that the economy supports the consumer. In reality, it really is the other way around. Proof: You can put two or more consumers together and create an economy but remove the consumers from an economy and you are left with nothing.

“Jobless recoveries” are Cable News media spin.

 Hey!  Looks like Davos' article is on ZH, too!  You go, Davos!  Rock 'em!

http://www.zerohedge.com/article/guest-post-tossing-consumer-under-busand-insanely-expecting-economic-recovery

 

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Re: Davos has a new article on Financialsence.com
pinecarr wrote:

For those of you who have been missing Davos, he has a new article on Financial Sense, "Tossing The Consumer Under The Bus", at http://www.financialsense.com/contributors/d-sherman-okst/tossing-the-consumer-under-the-bus .  Here's the intro:

I’ve been pouring through the Fed Reserve’s recent release of circa 2005 FOMC meeting transcripts. The most striking observation that one can make is that the consumer - the very lifeblood that determines whether our economy will live or die - has been discarded.

Discarded --- as in tossed under the bus.

Ninety-nine percent of our “economists” today have it entirely ass backwards: They believe that the economy supports the consumer. In reality, it really is the other way around. Proof: You can put two or more consumers together and create an economy but remove the consumers from an economy and you are left with nothing.

“Jobless recoveries” are Cable News media spin.

 Hey!  Looks like Davos' article is on ZH, too!  You go, Davos!  Rock 'em!

http://www.zerohedge.com/article/guest-post-tossing-consumer-under-busand-insanely-expecting-economic-recovery

Thanks for the heads up Pinecarr.

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

Another great post by Davos

I miss having him around here.

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Re: Daily Digest 1/18 - Foreclosures Stopped in Maryland, ...

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