Daily Digest

Daily Digest 12/1 - Eurozone Crisis In Plain English, Wiemar Vs. Today's Gold Chart, TX Drought Reveals Deep Secrets

Thursday, December 1, 2011, 10:44 AM
  • Simon Johnson Interviewed by Russ Roberts: On Bailouts, Regulatory Capture, Too Big to Fail, Deregulation, Moral Hazard, and Transparency
  • Currency Wars: The Anglo-American Century and Why the Financial Engineers Hate Gold and Silver
  • Europe’s Financial Crisis, in Plain English
  • Of Imminent Defaults And Self Deception. Kyle Bass Prepares For The Worst
  • Weimar’s Gold Chart & Today’s Gold Chart
  • What Keeps Solar Energy Executives Up All Night
  • Breakthrough in Battery Technology Could Radically Change the Energy World 
  • As Water Levels Drop, Texas Drought Reveals Secrets of the Deep

Crash Course DVDOwn the Crash Course Special Edition Set with Presenter’s Pack (NTSC or PAL)

Economy

Simon Johnson Interviewed by Russ Roberts: On Bailouts, Regulatory Capture, Too Big to Fail, Deregulation, Moral Hazard, and Transparency (Jaime)

Think about John Corzine vs. Chuck Prince. John Corzine bet MF Global on sovereign debt - and lost, but he was running a $40bn balance sheet. Who cares? Chuck Prince, bet massively on mortgage-backed securities, and lost. That was a $2.5t balance sheet. Taxpayers ended up taking that one on the chin. Why would anyone want one guy to be in control of a $2.5t balance sheet? We do not want a few guys in a position to be able to bring down the US economy.

Currency Wars: The Anglo-American Century and Why the Financial Engineers Hate Gold and Silver (Mike K.)

NGDP targeting is so obvious and clumsy that I doubt that the Fed will try and hide their enormous efforts at monetization of the debt under such a small fig leaf, as Jim Rickards suggests, except to direct attention away from their more serious efforts. The growth in money supply would be apparent to many and the Internet would be used to spread the word. No, a more clever and covert attempt at persuasion is required, and more in keeping with the Bernanke Fed's penchant for secrecy.

Europe’s Financial Crisis, in Plain English (Jeff B.)

Lack of fluency in financialese shouldn’t preclude anyone from understanding what is going on in Europe or what may yet happen. So we’ve answered some of the most pressing questions in a language everyone can comprehend. Though the word for “Lehman” in virtually any language is still “Lehman.”

Of Imminent Defaults And Self Deception. Kyle Bass Prepares For The Worst (pinecarr)

In his latest letter to LPs, Kyle Bass of Hayman Capital Management, offers his tell-tale clarity on what may lie ahead for Europe and Japan. With his over-arching thesis of debt saturation becoming more plain to see around every corner, Bass bundles the simple (and somewhat unarguable) facts of quantitative analysis with a qualitative perspective on the cruel self-deception that we all see and read every day about Europe.

Whether it is Kahneman's "availability heuristic" (wherein participants assess the probability of an event based on whether relevant examples are cognitively "available"), the Pavlovian pro-cyclicality of thought, or the extraordinary delusions of groupthink, investors in today's sovereign debt markets can't seem to envision the consequences of a default.

Weimar’s Gold Chart & Today’s Gold Chart (pinecarr)

Those worried about a collapse of the currency might find these two charts of interest.

What Keeps Solar Energy Executives Up All Night (James S.)

I found myself stumbling across a lot of discussion about solar energy the past few days. There is both good news and bad news. San Francisco where I live is host to the U.S. Solar Market Insight conference which is officially sold out so conference organizer GTM Research has teased those of us not attending with online conference highlights. GTM is doing the event in collaboration with the solar industry trade group, the Solar Energy Industries Association® (SEIA®). SEIA is crowing because it expects the US to install about 2,000 MW of new solar capacity in 2011 passing the 1GW annual capacity addition bragging rights mark after a much more modest 887MW installed in 2010 and only 435Mw in 2009. So you see the good news about the continued growth of solar energy.

Breakthrough in Battery Technology Could Radically Change the Energy World (James S.)

Standard lithium-ion batteries that power most small electronic devices deteriorate with each charge, as the electrodes crystalline structure wears, meaning that the energy storage capacity reduces over time. Due to the precise structure of this cathode it can remain intact, surviving 40,000 cycles of charging and discharging, after which it could still be charged to more than 80 percent of its original charge capacity. The combination of materials that it uses also enables it to recharge and discharge very quickly, and the quicker that a battery can do this, the more power it can release.

As Water Levels Drop, Texas Drought Reveals Secrets of the Deep (jdargis)

Long-submerged marble tombstones from the 1880s have become visible in the receding waters of Lake Buchanan in Central Texas. Near the Texas-Louisiana border, the grave sites from an early 19th-century cemetery have turned up at one drought-stricken lake. Pat Mercado-Allinger, the director of the Texas Historical Commission’s archaeology division, said one water authority estimated having roughly 200 previously unreported archaeological sites resulting from lowered lake levels.

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."

9 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
A (Former) Banker Speaks, With Regret

These days, Wall Street bankers (and their political cronies) want to push the blame off themselves. But one (former) banker is willing to speak up.

A Banker Speaks, With Regret (November 30, 2011)
"Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable - and that all this was driven by pressure from the top. 'You’ve got somebody making $20,000 buying a $500,000 home, thinking that she’d flip it,' he said. 'That was crazy, but the banks put programs together to make those kinds of loans.'  'The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.' One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers - those with less education, without previous mortgage experience, or without fluent English - and nudged them toward subprime loans. These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up."
http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html

It's not just a housing, credit, fraud bubble and resulting crash and economic recession. It's battered and bruised and broken families. It's kids who afford to go to college now, seniors who can't retire now. It's job losses and dreams dashed to pieces. It's depression and despair, divorces and suicides.

Poet

SingleSpeak's picture
SingleSpeak
Status: Gold Member (Offline)
Joined: Nov 30 2008
Posts: 496
Poet wrote: These days, Wall
Poet wrote:

These days, Wall Street bankers (and their political cronies) want to push the blame off themselves. But one (former) banker is willing to speak up.

A Banker Speaks, With Regret (November 30, 2011)
"Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable - and that all this was driven by pressure from the top. 'You’ve got somebody making $20,000 buying a $500,000 home, thinking that she’d flip it,' he said. 'That was crazy, but the banks put programs together to make those kinds of loans.'  'The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.' One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers - those with less education, without previous mortgage experience, or without fluent English - and nudged them toward subprime loans. These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up."
http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html

It's not just a housing, credit, fraud bubble and resulting crash and economic recession. It's battered and bruised and broken families. It's kids who afford to go to college now, seniors who can't retire now. It's job losses and dreams dashed to pieces. It's depression and despair, divorces and suicides.

Poet

And it's just getting started.

SS

 

plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
A few UK headlines

 

 Bank of England governor calls for bonus and dividend restraint to help cope with 'exceptionally threatening environment' posed by the eurozone crisis.

 http://www.guardian.co.uk/business/2011/dec/01/mervyn-king-warns-uk-banks

 

 Hoarding for the Apocalypse, I really wouldn't blame you...

 http://www.guardian.co.uk/commentisfree/2011/nov/30/autumn-statement-hoarding-for-apocalypse

 

 

 ... and a bit of humour to lighten things up... (warning: language)

 http://www.thedailymash.co.uk/news/business/give-everyone-five-grand-and-let%27s-start-again%2c-says-king-201112014621/

 

jonbutterfly's picture
jonbutterfly
Status: Member (Offline)
Joined: Dec 1 2011
Posts: 7
 Such is the schizophrenic

 Such is the schizophrenic nature of the world economic system that US Bank credit ratings are falling while the Dow is on a holiday tear. The system looks good on the outside, but it's hiding a cancer: http://djia.tv/press-tv/top-us-banks-credit-ratings-fall/


plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
Happy 10th birthday Euro. (touch wood..)

 Celebrating the 10th anniversary of the Euro... (prematurely.. )

 New upload from the ECB.

 http://www.youtube.com/watch?v=o0YrRM7yee0

 May induce giggles from certain cynical minds.

 

 

  Meanwhile..

 We have not had a budget that doesn't use debt for quite a few years. In other countries it was households that got into debt. In others it was both, the state and households.

All economies became totally under the mechanism of finance, the speculative logic. We've seen how it's affected industry. Also how it's degraded the value of work. We can no longer go into debt. We cannot create larger and larger debt. Because those that lend to us no longer want to lend to us.

  Now we have to begin a new economic cycle, a new age. - Sarkozy.

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
National debt passes $15.1 trillion

 

$15,110,498,560,876.77

Treasury Direct link

 

 

The Daily History of the Debt Results

Historical returns from 11/25/2011 through 11/30/2011

The data for the total public debt outstanding is published each business day. If there is no debt value for the date(s) you requested, the value for the preceding business day will be displayed.

( Debt Held by the Public vs. Intragovernmental Holdings )

 

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
11/25/2011 10,334,937,010,056.13 4,713,938,923,709.79 15,048,875,933,765.92
11/28/2011 10,334,597,846,100.25 4,717,075,749,097.65 15,051,673,595,197.90
11/29/2011 10,335,777,593,095.81 4,718,386,028,275.48 15,054,163,621,371.29
11/30/2011 10,389,957,793,202.05 4,720,540,767,674.72 15,110,498,560,876.77
Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
jonbutterfly wrote:  Such
jonbutterfly wrote:

 Such is the schizophrenic nature of the world economic system that US Bank credit ratings are falling while the Dow is on a holiday tear. The system looks good on the outside, but it's hiding a cancer: http://djia.tv/press-tv/top-us-banks-credit-ratings-fall/


 

Hi jonbutterfly.

Welcome to the site!

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Average Foreclosure Time Sets New Record

Average Foreclosure Time Sets New Record (December 1, 2011)
"The average loan in foreclosure has now been delinquent a record 631 days, according to a new report from Florida-based Lender Processing Services... In addition to the "robo-signing" delays, we are now beginning to see the effects of ineffective loan modifications. Repeat foreclosures made up nearly 45 percent of new foreclosures in October. Of the 2.1 million modifications since the start of 2008 more than 10 percent were in foreclosure with another 27.4 percent delinquent 30 or more days, as of the end of the third quarter of this year, according to the Office of the Comptroller of the Currency. "
http://www.cnbc.com/id/45507581

And to think those Option ARM loans from 2006 are already hitting the 5-year mark and resetting...

Poet

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments