Daily Digest

Daily Digest 1/22 - Euro Gains Amid Optimism, Gold Heads for Decline, Increased Ethanol in Auto Fuel Approved

Saturday, January 22, 2011, 11:00 AM
  • The Yuan's Coming Out Party
  • Alpha 2 Says “Cliff Ahead”
  • Euro Gains Amid Optimism Leaders Will Act to Ease Debt Crisis
  • Gold Heads for Third Straight Weekly Decline on Outlook for Interest Rates
  • California Unemployment Rate Ticks Up To 12.5%
  • E.P.A. Approves Increased Ethanol in Auto Fuel
  • US Renewable-Energy Incentives Help Bloom Energy To Expand Sales

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Economy

The Yuan's Coming Out Party (alfredo)



These new bank accounts are the type of thing that used to make China very nervous. Why? Because if everyone opens up yuan bank accounts, that could increase demand for the currency and push the exchange rate up. China doesn't want that happen because it wants to keep its goods cheap for foreign buyers. This fear is likely the reason these new savings accounts, like the currency, have a lot of controls on them. For example, customers can't put more than $20,000 in one account over the course of a year.

Alpha 2 Says “Cliff Ahead” (liene)



As David Fry notes on his DIA chart, POMO does make this time different and it does seem like we are being hard-wired to buy those F’ing dips.  That’s OK, we can accept that if that’s how we have to play it but please Lloyd, show us that you are willing to break the pattern first – then we’ll be willing to step a little closer to the edge of the cliff.  Forgive us, of course, if the idea of standing next to you at a cliff when we know that you might make a Dollar for pushing us over gives us the creeps – it’s just that, well, we know you!  

Euro Gains Amid Optimism Leaders Will Act to Ease Debt Crisis



The 17-nation euro advanced the most against the currencies of commodity-exporting countries, such as the South African rand and New Zealand dollar, on concern China will take more measures to cool economic weakened, curbing appetite for raw materials. Canada’s dollar weakened, touching parity with its U.S. counterpart, after the nation’s central bank held interest rates unchanged. The U.S. dollar fell against the euro before a Federal Reserve policy meeting next week.

Gold Heads for Third Straight Weekly Decline on Outlook for Interest Rates



Gold futures for February delivery fell $3.80, or 0.3 percent, to $1,342.70 an ounce at 10:38 a.m. on the Comex in New York. The metal is down 1.3 percent for the week, after losing a total of 4.3 percent in the previous two weeks. The Federal Reserve has kept the benchmark interest rate at zero percent to 0.25 percent since December 2008 to bolster the economy. U.S. equities have been rising on optimism for the U.S. recovery.

California Unemployment Rate Ticks Up To 12.5%



California employers added just 4,900 jobs to payrolls in December, the Employment Development Department said Friday, after adding 30,500 the month before. The beleagured construction sector lost 3,200 jobs. But the month's biggest loser was the government sector, which shed 15,400 jobs. (The jobless rate rose despite the net increase in jobs because an even greater number of people joined the labor market; the reverse can also be true.)

Energy

E.P.A. Approves Increased Ethanol in Auto Fuel



Ethanol, derived primarily from corn in the United States — versus beet sugar and switchgrass in leading ethanol-producing nations like Brazil — has lost much of the buzz that surrounded it in 2008, when companies like E-Fuel envisioned ethanol pumps in every driveway. Still, the fuel enjoys federal backing because it is viewed as a “home-grown fuel,” according to Lisa P. Jackson, the E.P.A. administrator.

US Renewable-Energy Incentives Help Bloom Energy To Expand Sales



Privately held Bloom Energy, which makes fuel cells that generate emissions-free electricity, has expanded into the electricity sales business because of government incentives. For example, the Sunnyvale, Calif.-based company now offers such customers as Wal-Mart Stores Inc. (WMT) the option of buying the power generated by a fuel cell installed on its property rather than the fuel cell itself. The model is already in use by solar-power providers, such as Solar City Inc. It's become increasingly popular since the 2008 financial crisis as customers became less inclined to pay the large upfront cost of buying a renewable energy system, even though the appetite for renewable energy has continued to grow.

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."

11 Comments

idoctor's picture
idoctor
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rjs's picture
rjs
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Posts: 445
Re: Daily Digest 1/22 - Euro Gains Amid Optimism, Gold ...

DylanRatigan: The Fed Works... for Chinese Workers
re: 2005 FOMC transcripts

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Posts: 4060
National debt graphs

Federal Government Debt: Total Public Debt (GFDEBTN)

National Debt

 

debt

 

 

"NEW YORK (CNNMoney) -- Those who clamor for more "limited government" rarely define what they mean. But assuming nothing changes over the next decade, Americans could be left with a de facto limited government -- limited in what it will be able to do.

Today, the United States spends roughly 76 cents of every federal tax dollar on just four things: Medicare, Medicaid, Social Security and interest on the $14 trillion debt. That leaves 24 cents of revenue to pay for everything else the federal government does.

That's not a lot. But it's a mint compared to what could be left over by 2020, according to a simulation made by the Government Accountability Office.

Barring serious efforts to curb the growth in the country's debt, by 2020 Washington could be spending 92 cents of every tax dollar on Medicare, Medicaid, Social Security and interest alone. That would leave just 8 cents to pay for everything else.

How much of "everything else" can 8 cents buy? Not a lot, especially relative to what Americans are accustomed to their government providing."

 

Stockton's debt rating downgraded

Despite $1B debt, UC still giving bonuses

Fitch Warns Spain’s Debt Rating Could Fall Further

bmc's picture
bmc
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Re: Runing the Govt on 8 cents

I'm always curious about the numbers in articles like this. When I look at the budget for FY2010 and do fourth grade math, I get a different number. (I am certainly using a different number for interest; and am unsure where the $228B comes from.)

 

$1,035,783M Centers for Medicare and Medicaid Services

$   754,179M Social Security Administration

$   413,955M Interest on the Public Debt

 

$2,203,917M Total Expenditures (for the Big 4 non-discretionary)

$2,161,745M Total Revenues

 

Big 4 non-discretionary as a % of Revenues (for FY2010) = 102%.

 

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SteveW
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Re: Daily Digest 1/22 - Commercial settlements in Yuan

From a marketwire press release yesterday:

BMO: First Canadian Bank to Offer North American Corporate Clients Foreign Exchange Transactions in Yuan

 

http://www.theglobeandmail.com/globe-investor/news-sources/?date=20110121&archive=ccnm&slug=201101210668232001

So Canadian importers no longer need to settle with the Chinese in US dollars but can use Chinese Yuan. I wonder if any US banks have this facility?

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Re: Daily Digest 1/22 - Euro Gains Amid Optimism, Gold ...

Question. When thinking about "dropping" people off social security, what about those who are already on it as a sole source of income and have nothing else to fall back on? Dump  them into the street?

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Re: Daily Digest 1/22 - Euro Gains Amid Optimism, Gold ...

http://www.rawstory.com/rs/2011/01/republicans-2010-election-triumph-will-fuel-civilizations-demise-chomsky-says/

Republicans’ 2010 election triumph will fuel civilization’s demise, Chomsky says

22 Jan 2011

 

The Republican Party's triumph in the 2010 congressional elections, coupled with the rapid depletion of the earth's natural resources, signaled the impending collapse of human civilization, according to a world-renowned scholar known for his left-wing politics.

“You could almost interpret [the election] as a kind of a death knell for the species," Noam Chomsky, professor emeritus of linguistics at the Massachusetts Institute of Technology, said in a recent interview.

But he's not the only one worried; the US business press is, too.

Chomsky continued, "There was an article in Bloomberg BusinessWeek, you know – not a radical rag exactly. They’re running through the new Republicans coming to Congress, and they’re worried about them.”

The cause for concern is that these newly-elected conservative members that now comprise the majority in Congress believe that global climate change is not the result of human industrial activities.

“One of the reasons is because they’re global warming deniers,” he told the Nation magazine. “Almost all – that means the powerful House committees, like science and technology and so on, are in hands of people who think there’s nothing to it – or at least claim that they think that, but what they actually think is another story.”

Chomsky is one of a number of professionals who have spoken about peak oil and climate change for a video series by the leftist magazine and On The Earth Productions.

Damnthematrix's picture
Damnthematrix
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Re: National debt graphs

"Today, the United States spends roughly 76 cents of every federal tax dollar on just four things: Medicare, Medicaid, Social Security and interest on the $14 trillion debt. That leaves 24 cents of revenue to pay for everything else the federal government does."

REALLY........  what about the MILITARY?  I was always under the impression US Defense spending was way up there......

MarkM's picture
MarkM
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Re: National debt graphs

Mike,

We BORROW the rest.  Half the military and EVERYTHING else after what you mentioned is borrowed.  Makes perfect sense to me.

TechGuy's picture
TechGuy
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Posts: 364
Re: Daily Digest 1/22 - Euro Gains Amid Optimism, Gold ...

Question. When thinking about "dropping" people off social security, what about those who are already on it as a sole source of income and have nothing else to fall back on? Dump them into the street?

 Answer: Its not going to happen. Boomers + current retirees make up the biggest voting block. Any politican that even mentions a cut back in entitlements commits politicial suicide. The logical answer is that the gov't just prints money to pay for entitlements until the dollar becomes worthless. It is also the easiest solution and for the past 40 years Washington has always choosen the easy path (which got us in this mess).

 

rhare's picture
rhare
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Posts: 1323
Re: National debt graphs
Damnthematrix wrote:

REALLY........  what about the MILITARY?  I was always under the impression US Defense spending was way up there......

It's up there, 23%, but becoming a smaller portion and will become smaller as the entitlement programs really take off as baby boomers retire.

Chomsky wrote:

Republican Party's triumph in the 2010 congressional elections, coupled with the rapid depletion of the earth's natural resources, signaled the impending collapse of human civilization, according to a world-renowned scholar known for his left-wing politics.

...

But he's not the only one worried; the US business press is, too.

This over the top rhetoric is just plain stupid.   To think that a political majority in one house is the cause of  the end of the world and is really going to make a difference is just whacked. I think his statement really highlights that for many of the "AGW" proponents, it's not really about global warming, but about political objectives.  In the end it doesn't matter, Chris did a great explanation as to why all the Global Warming "talk" is pretty useless in his article "Why Copenhagen Is A Failure".

We can only hope that the US media is frightened.  Perhaps we might get some real journalism in the future.  I don't hold out much hope that he is right, I suspect we will continue to get opinion masquerading as fact and will continue to spend on anything and everything (including global warming) until we can spend no more...

Mike, I also have to agree with earthwise in yesterdays Daily Digest, please post your global warming stuff in the controversial topics section.

 

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