Daily Digest

Daily Digest 12/20 - The Great Disruption, Gold ETFs Vs. Gold Stocks, 2011 Year Of Big Gas Squeeze

Tuesday, December 20, 2011, 10:55 AM
  • Doug Kass Rips Off a Primal Scream at Europe
  • How To Lose Money Investing In Commodities
  • The Great Disruption
  • Jon Corzine, MF Global, And Unaccountability
  • Gold ETFs Vs. Gold Stocks: Shunning Miners May Be An Error
  • Gold will recover in 2012, says Smith & Williamson's Markova
  • Trends in Indian Petroleum Production, Consumption and Imports
  • At gas pump, 2011 was the year of the big squeeze
  • Critical Mass

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Doug Kass Rips Off a Primal Scream at Europe (Ilene)

In a missive this morning entitled “The Opening Missive I Wanted to Write,” Kass, of Seabreeze Partners Management, unloads on Europe for spoiling what could have been a perfectly decent US stock market, given that everything seems to be coming up roses in the US economic data.

How To Lose Money Investing In Commodities (David B.)

One of the biggest issues commodity investors have is poor risk management with their investments. The hefty volatility that commodities display can often cause investors to exit a position prematurely, or to hold on for too long. Some may see signs of volatility and simply sell out to avoid further losses when holding on a bit longer would have led to profits. On the flip side, some investors see the volatility as a juicy opportunity and may keep faith in a position that has lost its way. Perhaps the most important thing an investors can do before making any kind of commodity trade is diligent research. Know how a commodity behaves and what factors play into its pricing. If the underlying fundamentals and technicals change, don’t be afraid to exit the position, but also make sure to not get discouraged by a few rough trading days.

The Great Disruption (woodman)

“Growth as we’ve known it is over, Paul Gilding and Richard Heinberg told a Climate One audience in San Francisco on November 7. Confronted by resource constraints and crippling debt, nations must instead focus on growth that respects nature’s limits.”

Jon Corzine, MF Global, And Unaccountability (June C.)

Acronym alert. SEC director, Robert Cook testified that MF Global Holding Company (like AIG) had no official consolidated supervisor regulating it; one of its subsidiaries, MF Global UK Limited, fell under the UK Financial Services Authority (FSA.) The other one, MF Global Inc. (MFGI) was registered under the Commodity Futures Trade Commission (CFTC) as a FCM (futures commission merchant) and also, under the SEC as a broker-dealer. It was the Chicago Board of Options Exchange (CBOE) supposedly overseeing MFGI’s broker-dealer activities, while its futures activities fell under the CFTC, National Futures Association and the Chicago Mercantile Exchange (CME). Somewhere in the mix lurked the private self-regulatory body, the Financial Industry Regulatory Authority (FINRA). Really, how many inept regulatory bodies does it take to screw customers out of $1.2 billion?

Gold ETFs Vs. Gold Stocks: Shunning Miners May Be An Error (ScubaRoo)

Golden Prospect Precious Metals, which Wong runs alongside fellow managers Will Smith and Ian Francis, has returned a massive 460% in the past three years, while the S&P GSCI Precious Metals index, a benchmark, has only risen 90.5%.

Gold will recover in 2012, says Smith & Williamson's Markova (ScubaRoo)

Markova, who co-manages the Smith & Williamson Global Gold & Resources fund with Bob Lyon, says gold will continue to grow in value as it’s the only asset governments cannot print. She also thinks undervalued shares in gold miners will rally.


Trends in Indian Petroleum Production, Consumption and Imports (Crash_Watcher)

India's rate of petroleum consumption for the last thirty years has been exponentially increasing and out-striping Indian's domestic production which is in a flat-to-declining trend. In 2010, India imported 75% of its petroleum, mostly from the MENA countries. This trend, of increasing dependence on foreign petroleum imports, is likely to continue, at least until the global export pool declines.

At gas pump, 2011 was the year of the big squeeze (Jeff B.)

The trap has caught Michael Reed of Charlotte, N.C. He hasn't been able to find work since he lost his computer-support job in 2009. Now high gas prices are claiming more of what he has left. He and his wife won't exchange gifts this Christmas.


Critical Mass (guardia)

This is how the government handled Minamata disease caused by industrial mercury poisoning in the 1950s and 60s, the HIV-tainted blood products problem in the 1980s, and the BSE scare of a decade ago. And now it is how it has handled Fukushima. Fear of spreading panic, for example, prevented warnings being issued on the dangers of radiation predicted by simulations. As a result, more residents than necessary were exposed.

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."


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Doug Kass Schizophrenia

One gets the impression that Doug Kass despises socialism on an individual country level but he loves it on a global level. His letter is textbook hypocrisy.

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Oil boomlet sweeps U.S. as exports and production rise

The U.S. exported more oil-based fuels than it imported in the first nine months of this year, making it likely that 2011 will be the first time since 1949 that the nation is a net exporter of such goods, primarily diesel.

That's not all. The U.S. has reversed another decades-long trend. It began producing more crude oil in 2008 than the year before and accelerated that upswing 3% in the first nine months of this year compared with the same period in 2010. That production has helped reduce U.S. imports of crude oil by about 10% since 2006.


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As for the French, they are governed by a bunch of socialists in the Senate — they don’t believe in capitalism to begin with.

Doug Kass

Socialism is the product of capitalism. It is how we choose to spend our money. It is the party at the end of the working day.

Communism is a something else again.

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The New Blue Collar: Temporary Work, Lasting Poverty And...

Don't fall through the cracks, my friends. And don't let your less fortunate friends and relatives do if you can help it, either...

The New Blue Collar: Temporary Work, Lasting Poverty And The American Warehouse
"The job was fast-paced and stressful. Dickerson says supervisors would walk along the warehouse's bay doors, marking the workers' progress over time. The supervisors, Dickerson and other workers say, often told them to speed it up if they wanted to be invited back. Many of the workers were temps with no job security and no recourse. And the local unemployment rate, then around 11 percent, promised a long line of potential replacements. 'By the end of the day, your body hurts so bad,' says Dickerson, who was among a small minority of females working as lumpers at the warehouse. 'You tell them you can't do it the next day, ...they'll tell you, "We've got four more people waiting for your job."'"


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Arthur Robey

Arthur Robey wrote:

Socialism is the product of capitalism. It is how we choose to spend our money. It is the party at the end of the working day.

  Very well put.


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So, you think you're ready?

Well written and thought provoking.



This is part one of a two part exploration into what the world might look like after a total or partial collapse of the currency/economic system from the perspective of holding Gold. As the title explains this is a thought experiment, not a dissertation filled with footnotes and references. Consider it one man’s flight of fancy, so take what you need and leave the rest. Anyone who claims they know what will actually happen is a fool greater than me.

As markets are starting to sink

The end could be here in a wink

So should I prepare?

Should I even care?

My PMs will save me!!! (I think......)

(The Limerick King)

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QE to infinity



The European Central Bank will lend euro-area banks a record amount for three years in its latest attempt to keep credit flowing to the economy during the sovereign debt crisis.

The Frankfurt-based ECB awarded 489 billion euros ($645 billion) in 1,134-day loans today, the most ever in a single operation and more than economists’ median estimate of 293 billion euros in a Bloomberg News survey. The ECB said 523 banks asked for the funds, which will be lent at the average of itsbenchmark interest rate -- currently 1 percent -- over the period of the loans. They start tomorrow.

“It was obviously an offer the banks could not refuse,”said Laurent Fransolet, head of fixed-income strategy atBarclays Capital in London. “It shows the ECB is not out of ammunition and it gives banks security on liquidity for a few years. On the other hand it means banks will rely on the ECB for longer.”

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in case you issed it yesterday

Hosfram found this: USD conversion of SDRs, in an official United Stsaes Postal rate chart - for insuance on international packges.

Link: http://pe.usps.com/text/imm/immc3_007.htm

Scroll to: 323.62 Accepting Clerk's Responsibility

Note the conversion rate: 100 USD = 65.16 SDR. Hm...looks like the Eurozone will go to SDRs, and soon.

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