Daily Digest

Daily Digest 1/21 - The 'Perils' Of A Gold Standard, New Normal On Wall Street, Is Europe Going To Let Greece Default?

Saturday, January 21, 2012, 10:42 AM
  • The ‘Perils’ Of A Gold Standard?
  • Rural Poverty In America
  • Europe: They Are Actually Going To Let Greece Default?
  • U.S. General Visits Israel for Discussions on Iran
  • Greece Inches Toward a Deal With Its Bondholders
  • New Normal on Wall Street: Smaller and Restrained
  • Siemens Says Germany Nuclear Phase Out to Cost Trillions
  • Drilled, Baby, Drilled: The Strange Battle To Keep Big Oil From Cheating

Our 'What Should I Do?' guide has steps to cook, see & stay warm in times of power outage

Economy

The ‘Perils’ Of A Gold Standard? (David B.)

Let’s begin with the general principle. The reason why virtually no one in our society engages in competent causation analysis is because this term is so poorly understood. To illustrate this defect in thinking (as always) we must start with definition of terms. Sadly few analysts have more than a vague understanding of the word “correlation”. Once one understands this term/principle correctly it becomes much harder to continue to make the same mistakes in causation analysis.

Rural Poverty In America (jdargis)

From the 1965 film

http://www.youtube.com/watch?feature=player_embedded&v=gMfWSPVzIls

Europe: They Are Actually Going To Let Greece Default? (David B.)

Many prominent voices in the financial world that have been watching all of this play out are now openly declaring the Greece is about to default. Moritz Kraemer, the head of S&P’s European sovereign ratings unit, made the following statement on Bloomberg Television on Monday: “Greece will default very shortly. Whether there will be a solution at the end of the current rocky negotiations I cannot say.”

U.S. General Visits Israel for Discussions on Iran (jdargis)

Israel and the United States both say that Iran is pursuing the building of nuclear weapons — an assertion denied by Tehran — but they have had differing views on how aggressive the pursuit has been and what should be done about it. Both countries say that if Iran achieved that goal it would pose enormous dangers to them, their allies and Iran’s neighbors and would set off a lethal nuclear arms race in a highly unstable region. Both say they are committed to preventing Iran from building nuclear weapons.

Greece Inches Toward a Deal With Its Bondholders (jdargis)

Now, a compromise seems to be at hand, with the Greeks close to locking in an interest rate just below 4 percent on the new bonds, according to officials involved in the negotiations. A coupon below 4 percent represents a significant breakthrough for Greece, as creditors have long pushed for a rate above 4 percent, which they say would compensate them for the 50 percent haircut they would receive on their new securities.

New Normal on Wall Street: Smaller and Restrained (jdargis)

Some of the forces that weighed on earnings last year — like Europe’s government debt crisis and a sluggish United States economy — could go away. Yet Wall Street still faces permanent pressures on profitability, particularly stricter regulations aimed at making the financial system safer. For instance, Wall Street firms cannot borrow such large amounts of money and make bets with it. With much less of this kind of leverage, the game is changed — perhaps forever.

Energy

Siemens Says Germany Nuclear Phase Out to Cost Trillions (guardia)

The energy wing of German company Siemens estimates that phasing out nuclear power as planned will cost the country between €1.4 trillion and €1.7 trillion (US $2.17 trillion) by 2030. As reported by Reuters, the company believes investments in renewable energy, natural gas, and other replacements for nukes will far exceed previous estimates.

Drilled, Baby, Drilled: The Strange Battle To Keep Big Oil From Cheating (jdargis)

Until a few months before Salazar arrived in Lakewood, few people had ever heard of MMS. Responsible for collecting royalties on oil, gas and mineral leases on federal lands, Indian reservations and offshore waters, MMS was small in size but huge in its impact on federal revenues, bringing in between $10 billion and $20 billion a year. It was an obscure yet extremely important bit of government business.

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8 Comments

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Doctors living on loans

NEW YORK (CNNMoney) -- Government-backed loans to doctors have surged more than 10-fold in the past decade, a trend industry insiders say is a red flag that doctors in America are in financial distress.

From 2000 to 2011, Small Business Administration loans to physicians' offices, including private practice doctors and mental health specialists, ballooned to $675 million from less than $60 million.

Among the factors they (doctors) cite for their shrinking revenue: falling insurance reimbursements, changing regulations and rising business, medical liability and drug costs.

Loan lifeline. Dr. Zuhdi Jasser, a family physician with a private practice in Phoenix, isn't surprised by the surge in loans. "Many of us [independent doctors] are becoming a dying breed," he said. "And those of us remaining are struggling to survive."

http://money.cnn.com/2012/01/20/smallbusiness/doctor_loans/index.htm?iid=HP_LN

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Of dogs and depression

Nice insights from the piece "The Perils of a Gold Standard."

The “joke” among economists (who aren’t exactly the wittiest group) is that economists are still trying to determine whether economic booms “cause” sunspots; or whether sunspots “cause” economic booms.

An illustration of correlation. There are an infinite set of such correlations.

and

The poorest people always spend 100% of every dollar that comes into their possession.

therefore

a dollar in the hands of someone near the bottom of the wealth pyramid always generates more economic activity than a dollar in the hands of someone near the top.

Jeff Nielson Then argues that the cause of the depression is the usual Kleptocracy. A gold standard is not the cause of depressions. I guess that if I were raping the economy I too would want to deflect attention away from my actions.

Therefore we can assume that the richest economies will have wealth evenly distributed to masses of desperate, poor people?

I'm just a country boy and know nothing.

"The more I see of men and women, the more I love my dog."

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Of goats and depression
Arthur Robey wrote:

"The more I see of men and women, the more I love my dog."

Love that quote Arthur...!  Yours?

I might use that but change dog to goats....

Mike

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Dodgy quote.

It was a bit risky useing the quote because it is almost a cliche.

However I cannot find it on the quotation page.

Perhaps it leaked across from one of my parallel universes.

This happens more often than you might imagine. You just have to recognise the phenomenon when it happens. It can be a bit disorientating.

nigel's picture
nigel
Status: Silver Member (Offline)
Joined: Apr 15 2009
Posts: 138
The quote is slightly off,

The quote is slightly off, here it is on my favourite dog internet page: http://www.crazybear.org/Quotes.htm

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Sometimes you don't need words.

Sometimes you don't need words.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Sometimes you don't need words.

But correct spelling comes in handy...!

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