Daily Digest

Daily Digest 2/25 - Mideast Protests Continue, Bank Of India Offers Trade Settlement On Yuan, How To Feed The World

Friday, February 25, 2011, 11:49 AM
  • Hundreds of Thousands Protest Across the Mideast
  • Stratfor On Why Developments In Bahrain Are More Important Than Libya's
  • Bank of India becomes first to offer trade settlement in yuan
  • Egypt, Libya et al.: Demographics, the Oil Curse and Post-Colonial Karma
  • U.S. Scrambles To Dig Out Of A Rare Earths Hole
  • Oil And The Arab World's Unrest: Oil Pressure Rising
  • Rising Oil Prices Pose New Threat to U.S. Economy
  • A Special Report On Feeding The World: No Easy Fix

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Economy

Hundreds of Thousands Protest Across the Mideast (jdargis)

Large-scale demonstrations in Yemen appeared to proceed more peacefully, even festively. More than 100,000 people poured into the streets on Friday, after Yemen’s embattled president pledged on Wednesday not to crack down on protesters.

In Egypt, tens of thousands of people returned to Tahrir Square in central Cairo to celebrate one full month since the start of the popular revolution that toppled President Hosni Mubarak.

In Bahrain, pro-democracy demonstrations on a scale that appeared to dwarf the largest ever seen in the tiny Persian Gulf nation blocked miles of downtown roads and highways in Manama, the capital, on Friday. The crowds overflowed from Pearl Square in the center of the city for the second time in a week.

Stratfor On Why Developments In Bahrain Are More Important Than Libya's (pinecarr)

While the world is focusing on the fighting in Libya, there is a much more profound development taking place in the Persian Gulf, particularly in the country of Bahrain, where the government is negotiating with the opposition. And the outcome of those negotiations will be far more geopolitically relevant and significant than the fighting that is taking place in Libya.

The reason why Bahrain is very important is because in any negotiation you have to have some give-and-take, and it’s likely that the Bahraini monarchy will have to give some concession to the opposition. And once that happens, it will lead to an empowerment of the opposition, 70 percent of which is Shia — 70 percent of the population of the country is Shia — and that has very large-scale implications for the region, particularly for Saudi Arabia and Kuwait.

Bank of India becomes first to offer trade settlement in yuan (Claire H.)

Indian buyers are at present making payments in US dollars, and they often have to convert rupee into the US currency for the purpose. The US dollars will no more be the intermediary currency as the BOI is offering direct settlement between the rupee and the Chinese money.

Egypt, Libya et al.: Demographics, the Oil Curse and Post-Colonial Karma (pinecarr)

The key (and generally under-appreciated) feature of this system is its reliance on the willingness of the governed to accept it. The U.S., which haltingly approached the Imperialist roundtable only in the waning days of the 19th century as a fledging wannabe-Empire, found to its dismay in the Philippines that peoples who refused to consent to foreign rule could not be controlled at a distance, no matter how brutal the repression and war waged on the resistance.

The French discovered the same truth in Algeria in the 1950s, when the people walked away from consent, and in Vietnam in the early 1960s. The people in the Mideast and North Africa are withdrawing their consent to be governed, and no amount of repression can force that genie back in the bottle.

Energy

US scrambles to dig out of a rare earths hole (Jeff B.)

The Colorado company is boosting production to meet an insatiable global appetite for rare earth elements - minerals that have become a hot commodity because they're used in all kinds of electronics, including smart phone touch screens, wind turbines and fuel cells.

The U.S. clean-tech industry, which relies heavily on the minerals, is elated by the stepped-up production rate, but some believe it is not coming soon enough. In recent months the industry has been in a bit of a panic after China, which produces 97 percent of the world's supply of rare earths, slashed its exports to a trickle to feed its growing domestic needs.

Oil And The Arab World's Unrest: Oil Pressure Rising (jdargis)

Oil markets don’t like surprises. The sudden ousting of Mr Mubarak and the unrest in Libya, Bahrain, Yemen, Iran and Algeria (which between them supply a tenth of the world’s oil) had added 20% to oil prices by the middle of this week. The big worry is that spreading unrest will culminate in another shock akin to the oil embargo of 1973, the Iranian revolution or Iraq’s invasion of Kuwait.

Rising Oil Prices Pose New Threat to U.S. Economy (jdargis)

If the recent rise in oil prices sticks, it will most likely slow a growth rate that is already too sluggish to produce many jobs in this country. Some economists are predicting that oil prices, just above $97 a barrel on Thursday, could be sustained well above $100 a barrel, a benchmark.

Even if energy costs don’t rise higher, lingering uncertainty over the stability of the Middle East could drag down growth, not just in the United States but around the world.

Environment

A Special Report On Feeding The World: No Easy Fix (jdargis)

Since the 1960s the traditional way of growing more food—by ploughing more land—has been out of favour. That is partly for environmental reasons—much irreplaceable Amazon jungle has already been lost—and partly because many countries have used up all their available farmland. So though the population has soared, the supply of land has not.

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."

8 Comments

saxplayer00o1's picture
saxplayer00o1
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Posts: 4147
Fed Assets Rise to Record $2.54 Trillion on Treasury Purchases

 

"The Federal Reserve’s total assets rose by $24.5 billion to $2.54 trillion, the fourth record in as many weeks, as the central bank bought Treasury securities in a second round of quantitative easing aimed at spurring economic growth and reducing unemployment.

Treasuries held by the Fed rose by $23.1 billion to $1.21 trillion as of yesterday."

 

  • Other news, headlines and opinion:

Moody's: U.S. Faces Ratings Cut if Debt-Limit Spat Worsens and Moody's Could Review US In Unlikely Event Govt Misses Debt Payment

Your share of the budget: about $12000

Fannie Mae, Freddie Mac Seek $3.1 Billion Amid Improved Earnings

AIG Says Risk of Losses Has Increased on $46.6 Billion Muni-Bond Portfolio

Greece to draw up list of state assets for sale

Alberta sinks $3.4 billion into the red (Canada)

No guard layoffs as Texas prisons to cut 555 jobs

'It is not a pretty truth' ("The mayor outlines his plan to lift Honolulu from a $100 million deficit")

US warns extreme food prices will stay (Or use this search link)

NJ gov says pension system could go broke by 2020

Commission: Freeze pensions for Calif. workers

Cogent: 80% Of US Pensions Underfunded

In Tiny Rhode Island, a Massive Public Pension Crisis Looms

idoctor's picture
idoctor
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Man Erin Burnett thinks the

Man Erin Burnett thinks the USA could be an oil exporter LOL??? Listen to video on this link. Also talk of the USA having 4 times the oil reserves of Saudi Arabia?? WOW CNBS smoking heavy stuff these days...LOL....

Oil Could Hit $120 a Barrel: Boone Pickens

  http://www.cnbc.com/id/41780773

 Oil prices, now topping $100 a barrel, could hit $120, energy financier T. Boone Pickens, chairman and CEO of BP Capital, and an advocate of replacing oil with natural gas in some applications, told CNBC Friday.

 “Be careful counting on the Saudis,” said Pickens, a wildcatter who first gained notoriety in the 1980’s as a corporate raider. “They [the Saudis] claim they can produce 12 million [barrels] a day. They won’t let anybody audit the reserves or the production, so you’re totally at the mercy of what they tell you they can do.”

 

 

He said the Saudis naturally have an “interest” in supporting higher oil prices, but to a certain limit. “It won’t go to $150,” he added. “If it went to $110, $120, I don’t think anybody over there would get excited about it.”

Pickens reiterated that the United States needs an energy policy that addresses lessening OPEC-dependence.

“We have no energy plan for America, and we use more oil than any country,” said Pickens. “We use 22 or ‘3 percent of the oil with 4 percent of the population. That’s not sustainable. And why in the world can’t we get some legislation to get us on our own resources?”

Answering his own question, Pickens said that the (political) leadership in the United States doesn’t act until oil prices rise to a level that erodes the American family’s budget.

About natural gas, Pickens said, “One MCF of natural gas will do as much work and provide as much energy as seven gallons of diesel. Seven gallons of diesel is $25, one MCF of natural gas is $4. We look like fools that we’re not using this for heavy-duty trucks in America.”

Pickens has a vested interest in proposing increased use of natural gas, because some of his stakes in companies would go up in value if use of the commodity were to rise.

Denny Johnson's picture
Denny Johnson
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osb272646's picture
osb272646
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U.S. Oil Supply

"Pickens has a vested interest in proposing increased use of natural gas, because some of his stakes in companies would go up in value if use of the commodity were to rise."

This sentence often appears at the end of stories about Pickens' efforts to get the U.S. onto Nat. Gas.  It implies that he is only doing this to line his pockets.  To me, it's more like he's putting his money where his mouth is.

 

Johnny Oxygen's picture
Johnny Oxygen
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Oh sheesh I'd love to hear

Oh sheesh

I'd love to hear the morning pep rallies at CNBC!

Erin Burnett...serious journalist

[Moderator's note: Removed photograph of Erin Burnett on the cover of a Men's Magazine. This is known to be a Photoshop "fake" that has floated around the Internet for a couple of years. It has been removed because it gives the impression that Erin Burnett has in fact posed for a men's magazine when that is not the case.]

Woodman's picture
Woodman
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From that article in the

From that article in the Economist above - Oil pressure rising...

This supposed spare capacity in Saudi Arabia doesn't seem to pass the straight face test.  Even if they could pump and extra 100,000 gallons a minute , and I think the data shows they never have yet, I doubt it can be done at the flick of a switch.  Think about the cost just to build and maintain that kind of infrastructure, only to have it just sit by idle?

plato1965's picture
plato1965
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Posts: 615
 It may be possible to

 It may be possible to increase output for a short time... draining storage tanks for example, but the important question is

 how long can that be maintained ? 3 months ? A year ?

 Simply looking at a particular number for flow rate tells you nothing about whether it's sustainable.

 Apparently Saudi Aramco has 200M bbl storage .. =  about 50 days at 4M bbl extra

http://www.saudiaramco.com/irj/portal/

 

guardia's picture
guardia
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Posts: 592
Re: It may be possible
plato1965 wrote:

 It may be possible to increase output for a short time... draining storage tanks for example, but the important question is

 how long can that be maintained ? 3 months ? A year ?

 Simply looking at a particular number for flow rate tells you nothing about whether it's sustainable.

 Apparently Saudi Aramco has 200M bbl storage .. =  about 50 days at 4M bbl extra

http://www.saudiaramco.com/irj/portal/

Yes, plus the price trends look eerily identical to 2008... Not looking forward to this summer

Samuel

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