Daily Digest

Daily Digest 2/28 - ASX "Tech Glitch" Loses $1.5bn, Oil's Next Danger Zones, Will 'Chindia' Rule The World?

Monday, February 28, 2011, 10:41 AM
  • Mauldin: When Irish Eyes Are Voting
  • Public Pension and Healthcare Costs and Financial Common Sense
  • Will 'Chindia' Rule The World In 2050, Or America After All?
  • As Bloomberg Reporter Is Beaten Up In China, Wen Jiabao Promises To Crack Down On "Power Abuse"
  • ASX Hits Tech Glitch, $1.5bn In Lost Trade
  • "Technical Glitch" Takes Down Australian Stock Exchange
  • HSBC Profits Double To Almost £12bn
  • Higher Personal Income To Aid The Needy [China]
  • Massachusetts Company Making Diesel With Sun, Water, CO2
  • Oil's Next Danger Zones
  • Survey of Oil Exports from the Middle East

Crash Course DVDThe 3-disc Crash Course features a handy presenter’s pack for guiding group showings (NTSC or PAL)


Mauldin: When Irish Eyes Are Voting (JRB)

Most of the world is focused on the Middle East and Libya, and rightly so. We will look at that in a minute. (Sidebar: the White House spelled the country “Lybia” in a recent tweet. Can you imagine what the liberal media would have done to poor Dan Quail if that tweet was from him? Just saying.) And I agree the Middle East is important. But my eyes are focused on what I think is the far more important event of the day, and that is the election going on in Ireland.

Will 'Chindia' Rule The World In 2050, Or America After All? (pinecarr)

With a small tweak in assumptions and the inexorable force of compound arithmetic, Citigroup and HSBC have come up with radically different pictures of what the world will look like in 2050.

As Bloomberg Reporter Is Beaten Up In China, Wen Jiabao Promises To Crack Down On "Power Abuse" (pinecarr)

As for the beatings, Bloomberg's Stephen Engle managed to experience one up close and personal: "Security officers also detained several foreign journalists, including Stephen Engle, a reporter for Bloomberg Television. The Wall Street Journal saw Mr. Engle being grabbed by several security officers, pushed to the ground, dragged along by his leg, punched in the head and beaten with a broom handle by a man dressed as street sweeper.

ASX Hits Tech Glitch, $1.5bn In Lost Trade (pinecarr)

Trading on the Australian Securities Exchange was halted midway through the afternoon session, as a technical glitch wiped an estimated $1.5 billion of turnover from the bourse.

"Technical Glitch" Takes Down Australian Stock Exchange (pinecarr)

After last week we saw the Euronext, the Italian and the London Stock Exchanges crashing and burning, it is now Australia's turn. According to the ASX, the exchange is "currently experiencing technical difficulties regarding trade dissemination on Partition 3 Securities" which in non-binary means the prices on the ASX are not updating. Must be all that pent-up buying pressure over the continuing Libyan revolution... Of course, those who only trade the futures, such as the big banks and the quant desks are immune as futures are still trading without a glitch. How long before the threat of a racist, unpatriotic down print takes down the Nikkei, the Shanghai Composite, and finally the Deutsche NYSE?

HSBC Profits Double To Almost £12bn (pinecarr)

HSBC revealed that its highest paid banker took home more than £8.4m last year as it reported that profits more than doubled to $19bn (£11.8bn) in 2010.

The UK's largest bank said 280 of its most senior employees had shared in bonuses of $374m. Some 186 of these were in the UK and their share of the bonuses was $172m. This means key bankers in the UK get paid an average of $920,000 verses $1.3m group-wide, although this is partly because the UK numbers include lower-paid staff involved in monitoring the bank's risks.

Higher Personal Income To Aid The Needy [China] (pinecarr)

Though Wen did not reveal by how much the threshold is going to be raised this time, analysts have predicted it will rise to 2,500 yuan or even 3,000 yuan.

Experts believe that the move will act like hitting two birds with one stone: to aid average Joes combat rising inflation with a fatter income, and to help expanding domestic consumption and give a boost to China's economy at a time Beijing has implemented a spate of a dministrative measures to restrain a bubbling housing market.

The move will also help social tranquility and stability, as Chinese residents have more to spend, experts say.


Massachusetts Company Making Diesel With Sun, Water, CO2 (jrf29)

Joule Unlimited has invented a genetically-engineered organism that it says simply secretes diesel fuel or ethanol wherever it finds sunlight, water and carbon dioxide . . . Joule claims, for instance, that its cyanobacterium can produce 15,000 gallons of diesel full per acre annually, over four times more than the most efficient algal process for making fuel. And they say they can do it at $30 a barrel.

Public Pension and Healthcare Costs and Financial Common Sense (pinecarr)

If we set aside ideological biases and seek financial common sense, we can see that the public sector costs are simply unsustainable.

Oil's Next Danger Zones (pinecarr)

As the turmoil spreads in the Middle East, crude prices are on a steady upswing and endangering the global economy. Here is The Globe’s assessment of the threats to the major suppliers.

Survey of Oil Exports from the Middle East (Crash_Watcher)

With all of the current strife in the Middle East and North Africa hitting the main stream media, I thought it would be interesting to examine the petroleum export trends for the countries in these regions.

My hypothesis is that as the exports for oil exporting countries go into decline, this stress on the economy will increase the likelihood of civil unrest and political upheaval. Especially those countries which are heavily dependent upon petroleum exports for revenue will suffer sever economic contractions as export revenues decline and then ceases altogether. These ex-exporters will then either have to decrease their domestic consumption or start importing petroleum. The transition from exporter to importer would not be easy, and cutting consumption, to maintain exports, would not go over very well, politically either. With little other revenue sources, declining rates of petroleum exports are a formula for civil unrest and regime change.

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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 Marc Faber, who predicted

 Marc Faber, who predicted the U.S. stock market crash in 1987, recommended buying oil and energy names on Monday.

 Faber said that as the world's economies improve, demand for energy will increase. He noted that demand has already picked up in developing countries and continues to rise in emerging markets.

"I think in a, let's say Goldilocks outlook, you have to own some oil," Faber said. "If you're very bearish about the world, it's a nightmare scenario in the Middle East and I don't think that Saudi Arabia can affect production shortfalls of Libya and Saudi Arabia itself is very vulnerable and so I would say under any scenario, I would own some oil and energy shares."



Faber cautioned, however, that oil and energy names have rallied a lot and are due for a correction. Being as Faber likes natural gas, he would buy Chesapeake Energy

[CHK  35.25    -0.12  (-0.34%)   ]

on a pullback.

Meanwhile, Faber said the downside in housing is limited. Faber thinks the inflation trade has become overly populated, however. The correction that started in November will likely continue, as stocks in emerging economies are down up to 40 percent. He thinks the ongoing correction will affect even good U.S. stocks, like KB Home

[KBH  13.25    -0.27  (-2%)   ]

. Rather than play U.S. stocks or the bond market, Faber would consider buying a home given the low prices right now.

An investment banker, Faber is also publisher of "The Gloom Boom & Doom Report," a widely read newsletter that highlights his investment strategies.

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Lester Brown and Richard Heinberg speak out

2008 All Over Again?

Richard Heinberg -- As oil prices reach $100 a barrel for the first time since 2008, many people are wondering whether 2011 will see a replay of crashing car sales, nose-diving airlines, and fuel-starved farmers. Food prices—which these days move almost in lockstep with oil prices—are already at frightening levels, leading Lester Brown of Earth Policy Institute to warn of The Great Food Crisis of 2011.

Altogether, 2011 looks to be potentially an even more crucial year than 2008. Libya’s oil production will likely fall to near zero, whatever changes in government occur. The Saudis promise to replace that 1.5 million barrels per day of production from their own spare capacity, but recent history leads some observers to question whether they really can. And Saudi Arabia faces its own potential for domestic unrest (hence the announcement of $36 billion in new social spending in that country just two days ago). We may again see a brief oil price surge to $150a barrel—perhaps even $200—this year, but if this occurs it will trigger a massive recession and financial crash that will prompt further revolt and revolution around the world. But of course the recession will dampen demand such that oil prices will once more collapse, causing further instability in the Middle East.


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Inflating all things rubber...

Rubber’s 15 percent slump in about a week may be the prelude to rallies to a record high, driving up the cost of everything from Michelin tires to surgical gloves.



Apparently all those cars that have been sold in Chinidia now need tires... And, with all the green pieces of paper we have sent abroad but especially to China they are now being liberated to stake claims to any and all commodities/raw materials. Leaving a cash tight USA to compete with a cash rich China/Asia for all things needed to make our world go whirrrr and to enable us to live, like food and oil and.... 



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Peter SChiff & Jim Rogers

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The endless slums of

The endless slums of Detroit.......I thought there were fines for littering.....hum LOL....


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Saudi Arabia sends tanks to Bahrain

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