Daily Digest

Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades Near Record, Hungarian Assets Slip

Monday, December 6, 2010, 11:00 AM
  • No, The Big Banks Have Not "Paid Back" Government Bailouts and Subsidies
  • Branson Says Crude Oil Prices Might Hit $200 a Barrel Without New Policies
  • Eurozone Ministers Set for Crisis Talks
  • Gold Trades Near Record on Concern U.S. Economy May Need Further Stimulus
  • Getting JAL On Its Feet
  • Hungarian Assets Slip On Moody's Downgrade
  • Crude Wavers Amid Higher Dollar, European Concerns

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Economy

No, The Big Banks Have Not "Paid Back" Government Bailouts and Subsidies (hucklejohn)



To get a clear picture of what is going on here, ignore the intermediate steps (borrowing money from the fed, investing in Treasuries), as they are riskless, and it immediately becomes clear that this is merely a direct payment from the Fed to the banking executives...for nothing. No nifty new tech product has been created. No illness has been treated. No teacher has figured out how to get a third-grader to understand fractions. No singer's voice has entertained a packed stadium. No batter has hit a walk-off double. No "risk"has even been "managed", the current mantra for what big banks do that is so goddamned important that it is doing "god's work"

Branson Says Crude Oil Prices Might Hit $200 a Barrel Without New Policies (solidswede)



“It’s certainly conceivable unless we can start to conserve energy quickly and come up with alternative fuels,” Branson said yesterday in Cancun, Mexico, where countries are meeting to negotiate a new accord to combat climate change. Branson predicts an “unbelievably painful” economic slump if governments don’t do more to encourage renewable energy as an alternative to fossil fuels such as oil. In the U.S., where efforts to cap carbon-dioxide emissions failed in the Senate earlier this year, unemployment could reach record highs, the British billionaire said.

Eurozone Ministers Set for Crisis Talks 



Finance ministers from the 16 eurozone nations are expected to debate new ways to combat the continuing debt crisis at a meeting on Monday night amid growing signs of discord over how to allay fears in the bond market that further bail-outs might be needed. Ahead of the meeting in Brussels several ministers have publicly proposed new measures – including raising the amount in the eurozone’s €440bn ($583bn) rescue fund and creating a Europe-wide bond – aimed at improving the European Union’s system of dealing with rising borrowing costs for so-called “peripheral” countries.

Gold Trades Near Record on Concern U.S. Economy May Need Further Stimulus



The dollar climbed against the euro as European officials voiced divisions over the steps needed to stop the sovereign- debt crisis. Federal Reserve Chairman Ben S. Bernanke said the central bank may boost Treasury purchases to prop up the economy. Gold futures, which usually move inversely to the dollar, traded within 1 percent of a record $1,424.30 an ounce set on Nov. 9. Bernanke’s comments “are largely bullish for precious metals,” Walter de Wet, an analyst at Standard Bank Plc in London, wrote in a report. “More liquidity means a further boost for precious metals, especially gold, as well as a weaker dollar.”

Getting JAL On Its Feet (guardia)



Japan Airlines Corp. on Nov. 30 received approval from the Tokyo District Court for its reconstruction plan. JAL achieved a consolidated operating profit of ¥132.7 billion in the April-October period helped by a strong yen and a temporary upturn in the Japanese economy. But the reconstruction of JAL won't be easy, given its internal problems and possible competition from low-cost carriers. It needs to turn itself into a competitive firm within two years or so.

Hungarian Assets Slip On Moody's Downgrade 



The forint slipped in early London trading by 0.7% against the euro, Hungarian government bonds rose by 10 basis points across the curve on the secondary fixed income market and stocks also dropped, although losses were indirect there as they were due mainly to the easing forint. In a further negative sign, the cost of insuring Hungarian sovereign debt against default rose following Moody's action. According to data provider Markit, Hungary's five-year sovereign credit default swaps--a key measure of credit risk--were around 16 basis points wider at 381 basis points. In just a month, Hungary's CDS spreads have risen over 90 basis points.

Energy

Crude Wavers Amid Higher Dollar, European Concerns 



European authorities are set to convene later Monday to discuss ways to contain Europe’s debt crisis on the wake of a bailout for Ireland that did little to convince markets of Europe’s financial health. Read more on divisions within the euro-zone on dealing with the crisis. “While the financial markets continue to focus on euro-zone debt risk, the future of the euro and the size of any bailout fund that is needed, the oil market seems to have divorced itself from these concerns, and despite (Monday’s) correction, prices remain robust,” analysts at J.P. Morgan said in a note to clients Monday.

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

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

"The State of Illinois is still paying off billions in bills that it got from schools and social service providers last year. Arizona recently stopped paying for certain organ transplants for people in its Medicaid program. States are releasing prisoners early, more to cut expenses than to reward good behavior. And in Newark, the city laid off 13 percent of its police officers last week.

While next year could be even worse, there are bigger, longer-term risks, financial analysts say. Their fear is that even when the economy recovers, the shortfalls will not disappear, because many state and local governments have so much debt — several trillion dollars’ worth, with much of it off the books and largely hidden from view — that it could overwhelm them in the next few years."

"But without action, lawmakers face the prospect of delivering a tax hike to all taxpayers at the end of the year, when the current rates expire and revert to higher pre-2001 and 2003 levels.

Negotiations between the Obama administration and a bipartisan group of lawmakers centered on a two-year extension of current rates.

At the same time, a jump in the unemployment rate to 9.8 percent is putting pressure on Republicans to accede to President Barack Obama's demand that Congress extend unemployment insurance for a year. GOP congressional leaders had opposed an extension of benefits without cuts elsewhere in the federal budget.

"I think most folks believe the recipe would include at least an extension of unemployment benefits for those who are unemployed and an extension of all of the tax rates for all Americans for some period of time," said Sen. Jon Kyl of Arizona, the Senate's Republican negotiator in the talks."

"American Silver Eagle bullion coins sprinted out US Mint doors in November 2010. Prior sales records were shattered left, right and center.

2010 Silver Eagle coin sales were higher for a second straight month, supported by physical demand driven by November silver prices which soared 15 percent and reached above $29 an ounce. But more impressive for the .999 fine silver pieces:

November was their best ever month

They broke the all-time mintage record

Their year-to-date sales became an annual record "

silver

 

silver1

 

  • Other news, headlines and opinion:

Eurozone under pressure to aid euro with more cash ("creation of pan-European bonds")

Czechs Have De Facto Ability to `Opt Out' of Euro, Necas Says

Italy, Spain Lead Increase in European Sovereign Credit Risk

China's credit bubble on borrowed time as inflation bites (Ambrose Evans-Pritchard)

Moody's Cuts Hungary Close to Junk, Warns of Risks

LA County libraries in a bind

Spain may extend state of emergency after strike

State's fiscal crisis leaves 16 CNY farms waiting for cash (NY)

Oregon Timber Counties Face Financial Collapse

Russians to gain US uranium foothold

Euro's Worst to Come as Trichet Fails to Calm Crisis, Top Forecasters Say

PBGC helped preserve pensions for 360000, as deficit widened in FY 2010

Wal-Mart, Carrefour Face Temporary Price Controls in Southwest China City

Trade in gold coins on the rise (Greece)

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
PMs consolidating...

...their positions today:  gold firmly above US$1400, and silver up over $30 (!) despite stronger dollar.  

Makes me wonder how much of this is due to the "Crush JPM" campaign that's been around the net lately...

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

I think it's a little of everything... crash JPM (I am participating! ), Bernanke on 60 minutes suggesting that he is 100% sure nothing can go wrong, and that he will be glad to keep on QE'ing to infinity, and our own Congress' letting us know that they will probably be able to do a deal whereby the Republican's get their  way, extending Bush tax cuts (deficit negative) and the Democrat's get their way and extend Unemployment (deficit negative).  Our leadership has ABSOLUTELY no stomach to deal with the deficit.  PM's to the moon.    

junkyard71's picture
junkyard71
Status: Member (Offline)
Joined: Sep 6 2009
Posts: 22
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

<<PM's to the moon>>

jim i'm keeping my pms here at home.  getting them to the moon seems expensive. but the real problem will be getting them back someday to use them.  i doubt we'll have much of a space program over the next decades.  although witht value they should have some of us might just start a space program of our own someday...

jumblies's picture
jumblies
Status: Silver Member (Offline)
Joined: Jun 13 2010
Posts: 244
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

does buying silver at bullionvault.com help the crash jpm campaign? it is physical silver there after all.

 

vinnya's picture
vinnya
Status: Bronze Member (Offline)
Joined: Jan 5 2009
Posts: 27
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

Great video about Ben on 60 minutesmust see

http://vinceseconomicblog.wordpress.com/2010/12/06/60-minutes-ben-bernan...

 

Marty59's picture
Marty59
Status: Member (Offline)
Joined: Oct 23 2009
Posts: 10
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

It was a good video but it is an old one.

Here is a link to the one this past weekend.

 

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

http://thelede.blogs.nytimes.com/2010/12/06/latest-updates-on-leak-of-u-s-cables\
-day-9/?src=twt&twt=nytimes

Operation Payback, a group of Internet activists and hackers, took credit on Monday for crashing the Web Site of a Swiss Bank hours after it froze an account set up by the founder of WikiLeaks, Julian Assange.

Writing on Twitter the group called on fellow hackers to attack the PostFinance.ch site and within minutes it was knocked offline.

Earlier on Monday, the same group of activists said they attacked PayPal, which froze a WikiLeaks account three days ago.

alcatwize's picture
alcatwize
Status: Bronze Member (Offline)
Joined: Dec 24 2008
Posts: 78
Re: Daily Digest 12/6 - Eurozone Crisis Talks, Gold Trades ...

The only problem with Jim's view is that he believes in a fixed pricing or exchange.  This opinion is contrary to fofoa in that gold needs to float freely to the dollar and not be fixed to it.  I happen to think a floating price is the future.

http://fofoa.blogspot.com/

Either way, if u don't have gold and u have savings, get gold and take PHYSICAL possession. 

 

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