Daily Digest

Daily Digest 2/4 - Looking In On The Housing Disaster, The Little Economy That Could, What's More Precious Than Gold?

Saturday, February 4, 2012, 10:45 AM
  • On the 70th Anniversary of the Munich Students Movement - The War is Lost - The Future of Europe
  • Counterfeit Value Derivatives: Follow the Bouncing Ball
  • What Lies In Store For The "Cradle That Rocks The World" - A History Lesson In Crisis
  • What's More Precious Than Gold?
  • Real Estate: Looking In On The Housing Disaster
  • The Little Economy That Could
  • It Is Safe to Resume Ignoring the Prophets of Doom ... Right?
  • In a Focus on Gold, History Repeats Itself
  • San Onofre Nuclear Plant Radiation Leak, Worn Tubes Raise Concerns

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


On the 70th Anniversary of the Munich Students Movement - The War is Lost - The Future of Europe (June C.)

It is interesting to read this now, when Europe once again considers what its shape and its future will be.

Counterfeit Value Derivatives: Follow the Bouncing Ball (estatesavr)

As buyer and seller of CDS’s either one of us can assign our risks to a third party through another contract, and pretend as if we are covered in case our own game playing blows up in our faces. This allows us to retain even less reserve capital and spend freed-up funds on more high-risk, high-(pseudo) return speculation. (The monster that ate Wall Street.)

What Lies In Store For The "Cradle That Rocks The World" - A History Lesson In Crisis (estatesavr)

History buffs would argue that it is impossible to understand the effects on the world from a Mediterranean roiled by crises occurring simultaneously within both the eurozone and the Arab nations today without looking back to the Mediterranean in history.

The "Arab Spring" has focused the world's attention on the South Shore of the Mediterranean. However, most commentators on the successive revolutions supply maps of each of the states, but almost never a map of Mediterranean civilization. This is both non-historical and misleading.

What's More Precious Than Gold? (Chris M.)

It shouldn’t be news to you, but we live in a economically interdependent world. Think about that for a second. Most of us couldn’t get through an hour without relying on something that’s provided by the global production system. We are completely and utterly dependent on it. So is our community, our state, and our nation.

Real Estate: Looking In On The Housing Disaster (David B.)

We are back to 2003 in terms of average national home prices as shown in the above chart. This hasn’t changed much recently. It does appear that prices are trending flat which is borne out by other data we are seeing. I don’t see the housing market recovering any time soon because there are too many homeowners in trouble with their mortgages. I recently read an article from McKinsey that suggested we are one to two years away from a stabilized housing market. That is as good a guess as any.

The Little Economy That Could (jdargis)

Hardly anybody forecast a happy economic future for Mauritius before it was granted independence from Britain in 1968. To the contrary: the British economist James Meade (who would go on to win a Nobel Prize) concluded that "the outlook for peaceful development is poor" because of its high population density, reliance on a single crop (sugar cane), and ethnic conflict. He might have added that the island was far from markets for its exports, and a daunting plane journey for European tourists in search of sunshine.

It Is Safe to Resume Ignoring the Prophets of Doom ... Right? (jdargis)

For nearly a decade, it turns out, the most accurate forecasts have come from the fringe. So it’s upsetting to learn that many of those same Cassandras now believe, for different reasons, that we are on the brink of another catastrophe that may be far worse. Wolff, the Marxist, fears that China may be entering a significant slowdown, which, combined with Europe’s all-but-inevitable recession, could send the world into an economic tailspin.

In a Focus on Gold, History Repeats Itself (jdargis)

“Hard money is a discipline,” he added. “It is very important for us to understand in finance that the entire contraption that has been built up over the last thirty or forty years has so much paper in it, so much debt, so much leverage, that we probably have a fifteen- or twenty-year period of working our way out of it. And yet, the alternative is to get sicker and sicker and sicker.”


San Onofre Nuclear Plant Radiation Leak, Worn Tubes Raise Concerns (guardia)

Nuclear regulation officials said Thursday that extensive wear had been found on tubes inside a unit at the San Onofre nuclear plant. Another unit at the plant was taken off-line after a small radiation leak earlier this week. Dozens of relatively new tubes that carry radioactive water in a steam generator showed "many, many years" worth of wear, even though the tubing is 22 months old, said Victor Dricks, a spokesman for the Nuclear Regulatory Commission.

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VeganDB12's picture
Status: Platinum Member (Offline)
Joined: Jul 18 2008
Posts: 757
having a little trouble with

having a little trouble with the link on the Anniversary of the Munich Students Movements

Tall's picture
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Great jobs report, but what about the long-term unemployed?

FORTUNE – There are more than a few college-educated, unemployed people over 50 years old living in the Pacific U.S. who aren't cheering today's jobs report.
While the report showed that the economy generated 243,000 jobs in January, it's important to remember the segment of unemployed being left behind. The unemployment rate for January fell to 8.3%, a three-year low that has given the biggest skeptics hope that better days are on the horizon. Stocks and bond yields surged as the U.S. Labor Department report signaled the economy may be weathering Europe's debt crisis. The U.S. economy has been growing now for 10 consecutive quarters, with the latest U.S. manufacturing report showing that the nation is now producing more goods and services than it did before the 2007 downturn.
But all this is happening with six million fewer workers even as the population expands. If we delve into January's labor report a little deeper, prospects for the long-term unemployed (those jobless for six months or longer) didn't improve. The long-term unemployment rate was little changed at 5.5 million workers who account for 42.9% of the unemployed.


Arthur Robey's picture
Arthur Robey
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Joined: Feb 4 2010
Posts: 3936
Little Ray of Sunshine.

Last year, I argued that much of the weakness in US and global economic activity was a temporary consequence of the parts shortages attributable to production disruptions following Japan’s earthquake and tsunami. Also weighing growth down was the Fed’s QE2--starting November 2010 and ending June 2011--which perversely stimulated higher food and fuel prices and depressed consumers’ purchasing power and spending. Those drags dissipated during the summer, but all the commotion over American and European debt issues prolonged the soft patch. Now, though, the US economy shows more signs of recovering from last year’s setbacks.

I like Dr. Ed. because he is on the lonely fringe, like me. He has a tangled thicket of graphs in front of him. Perhaps he needs to take a step or two back and see the forest.

I am partial to the Baltic Dry Index.


The supply of cargo ships is generally both tight and inelastic—it takes two years to build a new ship, and ships are too expensive to take out of circulation the way airlines park unneeded jets in deserts. So, marginal increases in demand can push the index higher quickly, and marginal demand decreases can cause the index to fall rapidly. e.g. "if you have 100 ships competing for 99 cargoes, rates go down, whereas if you've 99 ships competing for 100 cargoes, rates go up. In other words, small fleet changes and logistical matters can crash rates..."

The BDI reflects the fact that shipping is inelastic, so any drop in demand for shipping causes big swings in the curve. In other words the BDI exagerates the demand (or lack of) for shipping.

I see that it is at 640 and falling, although dy/dx is increasing.


phecksel's picture
Status: Silver Member (Offline)
Joined: May 24 2010
Posts: 204
Arthur Robey wrote:I see
Arthur Robey wrote:

I see that it is at 640 and falling, although dy/dx is increasing.


Look at the 1 month chart

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