Daily Digest

Daily Digest 2/26 - The Road To A Gold Standard, 2011 Tipping Points, Fed Playing Down Oil Price Risks

Saturday, February 26, 2011, 11:43 AM
  • QE II: The Road To A Gold Standard
  • Consumers Hold On to Products Longer
  • U.S. Growth Revised Lower in Fourth Quarter
  • 2011 Tipping Points
  • UK economy contracts faster than first estimated
  • Saudi ruler offers $36bn to stave off uprising amid warning oil price could double
  • Fed officials play down oil price risks
  • U.S. Can 'Ride Out' Libyan Oil Supply Disruption With Reserves, Obama Says
  • Solar Energy Faces Tests On Greenness

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QE II: The Road To A Gold Standard (Claire H.)

What an incredible few weeks with global uprisings! It is not all too surprising that social eruptions over food prices come from the Arab world, since they spend up to 75% to 80% of income on food for basic needs. What proof that the global economy is not a closed system! The QE and QE2 initiatives have spread like a powerful virus, leading to global commodity prices heading upward and quickly. Even cotton is up 170% in price.

Consumers Hold On to Products Longer (jdargis)

It is hardly the stuff of generations past, those stung by the Great Depression, who held onto antediluvian dishware and stored canned goods until rust formed on the lids. But for the moment, many citizens of a throwaway society are making fewer visits to the trash and recycling bins.

U.S. Growth Revised Lower in Fourth Quarter (Dave S.)

Amid fears of an oil shock and a further slide in housing comes news that America’s economic recovery is weaker than previously thought. Growth in the fourth quarter of 2010 was slower than initially reported, at an annual pace of 2.8 percent rather than the previous estimate of 3.2 percent, according to data released on Friday by the Commerce Department. Economists had been predicting an upward revision, to about 3.3 percent.

2011 Tipping Points (pinecarr)

Throughout my 2010 article series "Extend & Pretend" and "Sultans of Swap" I stressed that we were rapidly moving from the Financial Crisis of 2008, through the Economic Fallout of 2009 -2010, towards a Political Crisis in 2011 -2012. We are now clearly beginning to see the early emergence of the final part of this continuum. From North Africa to Wisconsin all are fundamentally based on the single insidious underlying problem - excessive global debt and credit levels.

UK economy contracts faster than first estimated (pinecarr)

Britain's economy contracted even faster than previously thought in the last three months of 2010, shrinking by 0.6pc, after downward revisions to industrial and services output, official data showed on Friday.


Saudi ruler offers $36bn to stave off uprising amid warning oil price could double (pinecarr)

The growing turmoil in the region led experts to warn last night that Brent crude oil prices may double from the $111 a barrel mark it peaked at yesterday if the crisis continues to spread to other Middle Eastern countries.

Nomura's commodity team said oil prices risk vaulting to uncharted highs over coming weeks if chaos hits Algeria as well, reducing global spare capacity to the wafer-thin margins seen just before the first Gulf War. “

Fed officials play down oil price risks (Dave S.)

One of the most committed skeptics of the Fed's easing policies, Kansas City Fed President Thomas Hoenig, also played down the risk that oil prices would derail the U.S. recovery.

"It's a matter of whether it is a permanent factor. I don't think that it is right now," he said in an interview on CNBC.

U.S. Can 'Ride Out' Libyan Oil Supply Disruption With Reserves, Obama Says (jdargis)

Crude oil retreated from the highest level in 29 months after the statements by Obama and members of his administration and assurances from Saudi Arabia and the International Energy Agency that they can compensate for any loss of Libyan production. Oil for April delivery declined 82 cents, or 0.8 percent, to settle yesterday at $97.28 a barrel on the New York Mercantile Exchange. The contract touched $103.41, the highest intraday price since Sept. 29, 2008. Futures are up 22 percent from a year ago.


Solar Energy Faces Tests On Greenness (jdargis)

At peak output, the five licensed solar thermal projects being challenged would power more than two million homes, create thousands of construction jobs and help the state meet aggressive renewable energy mandates. The projects are backed by California’s biggest utilities, top state officials and the Obama administration

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plato1965's picture
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SagerXX's picture
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Re: Iraq refinery attacked

Eep!  Doesn't seem like this would have a material effect on world prices/supply.  But the idea could get copied -- militants in Saudi attacked the Abqaiq refinery back in '06.  If a bunch of ME oil infrastructure comes under attack it could be badBadBAD.

Viva -- Sager

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NY Times article - Solar

[quote=NY Times article - Solar Energy Faces Tests on Greeness]

Meanwhile, an American Indian tribe, the Quechan, obtained a federal court injunction temporarily halting Tessera’s 709-megawatt Imperial Valley Solar Project. The tribe says the Interior Department did not adequately consider the impact of the project on its ancestral lands and on wildlife that figure in the tribe’s creation story.

[Quechan Casino

Hmm, I wonder how much power an  Indian casino uses?  I wonder if they did any kind of impact study on the construction of it?  I wonder if the "eye in the sky" was part of the tribe's creation story?  Seems a bit hypocritical to me. Undecided  It's this type of "over zealous" environmentalism and cultural sensitivity  that will make it impossible to even do a partial transition to other energy sources before it's too late.  I wonder how many desert tortoise will be alive when starving people eat all of them when food delivery's stop because of lack of energy. Surprised

Disclosure: I'm invested in some of the companies mentioned in the article.

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Arthur Robey
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I listened to some of the profered talks on the markets and it sounded like burble to me.

I understand the theory of relativity, I can do calculus, Multi-dimentional analysis and imaginary numbers are a doddle. I even have a vague grasp of Quantum physics.

I can profer tentative hypotheses on the mechanism of how Low Energy Nuclear Reactions can occure mitigated by the Weak forces ability to change the flavour of the down Quark and thus change a proton (Charged hadron) into a neutron, and allow penetration of the Coulomb Barrier.

But the burble on the lips of the pundits? No way. Not a chance.

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