Daily Digest

Daily Digest 4/1 - Low Wage Jobs Fail To Meet Basic Needs, The Global Supply Chain And Japan, Radiation Fears Linger

Friday, April 1, 2011, 9:49 AM
  • Japan Focus: Returning To Tokyo
  • Many Low-Wage Jobs Seen as Failing to Meet Basic Needs
  • European Monetary Policy: Trigger Happy
  • Broken Links: Japan And The Global Supply Chain
  • Japanese Earthquake Threatens to Shut Down Taiwanese Fabs
  • Spanish Scientists Search For Fuel Of The Future
  • Recycled: Platitudes From The President
  • Plutonium And Mickey Mouse
  • Despite Assurances on Milk, Radiation Fear Lingers
  • New Problem In Japan: Radioactive Corpses

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

Economy

Japan Focus: Returning To Tokyo (jdargis)

It goes without saying that compared to the struggles facing the grieving, the homeless and the jobless, hunting for toilet paper and switching off the lights in Tokyo – now that I’ve returned home – is not much of a hardship.

But the subtle (and not so subtle) shifts in Tokyo’s landscape show the extent to which countless residents and businesses have been touched by recent events.

Many Low-Wage Jobs Seen as Failing to Meet Basic Needs (jdargis)

According to the report, a single worker needs an income of $30,012 a year — or just above $14 an hour — to cover basic expenses and save for retirement and emergencies. That is close to three times the 2010 national poverty level of $10,830 for a single person, and nearly twice the federal minimum wage of $7.25 an hour.

European Monetary Policy: Trigger Happy (jdargis)

The increase may be small but it would mark the turn in the interest-rate cycle. And the case for early tightening looks flimsy. True, euro-wide inflation has risen in recent months above the ECB’s target of “below but close to 2%”. But the overshoot, to 2.6% in March, has been primarily driven by higher energy costs, reflecting the jump in world oil prices. Measures of “core” inflation, which exclude more volatile things like energy and food, have remained at around 1%.

Broken Links: Japan And The Global Supply Chain (jdargis)

Like the sudden evaporation of liquidity that the banks experienced, factories are finding that parts that had always turned up reliably have stopped coming. As with financial regulators’ discovery of how poorly they understood the “shadow banking” system and arcane derivatives contracts, manufacturers are discovering how little they know about their suppliers’ suppliers and those even farther down the chain. When Lehman went bust, other banks struggled to measure their exposure because Lehman turned out to be not a single institution but a tangle of many entities. Assembly firms are now finding that their supply chain looks much the same.

Japanese Earthquake Threatens to Shut Down Taiwanese Fabs (guardia)

Taiwan’s high-tech sector is scrambling to determine how its own manufacturing will be affected by the troubles across the sea. Industries that rely on Japanese suppliers for raw materials and components are wondering how long it will take to restore reliable power and transportation in eastern Japan, which is home to several key suppliers. But some Taiwanese companies may also be able to find opportunities in the crisis, filling the void left by the temporary shutdown of Japanese plants.

Energy

Spanish Scientists Search For Fuel Of The Future (Alfredo E.)

At a time when companies are redoubling their efforts to find alternative energy sources, the idea is to reproduce and speed up a process which has taken millions of years and which has led to the production of fossil fuels.

"We are trying to simulate the conditions which existed millions of years ago, when the phytoplankton was transformed into oil," said engineer Eloy Chapuli. "In this way, we obtain oil that is the same as oil today."

Recycled: Platitudes From The President (jdargis)

Mr Obama’s plan has four main strands: increasing domestic production of oil, boosting the use of biofuels and natural gas as substitutes, encouraging the spread of electric cars and making petrol-powered vehicles more efficient. He also chucked into the mix his “clean energy standard”, a scheme to promote less polluting forms of electricity generation, even though it has nothing to do with oil imports (energy generation relies on coal, gas, nuclear or renewables, but not on oil, which is used almost exclusively for transport, heating and industry.)

None of this is new. The clean-energy standard was first wheeled out in Mr Obama’s state-of-the-union speech in January, and is anyway only a rehashed version of a much older proposal to promote renewable energy, with nuclear power and natural gas bolted on to broaden its appeal. The administration was already working on a fresh series of ever more demanding fuel-efficiency standards for vehicles for when the current lot run out in 2016. Mr Obama had also previously pledged to nurture growth in domestic oil production, to counter Republican cries of “Drill, baby, drill.”

Environment

Plutonium And Mickey Mouse (jdargis)

Japan’s nuclear crisis drags on, exposing profound failures both at the company and in national energy policy.

Despite Assurances on Milk, Radiation Fear Lingers (jdargis)

“I’ve had members call to ask whether we’ve seen the media, and media calling to ask how this is impacting our members,” said Michael Marsh, the chief executive of Western United Dairymen, the milk industry’s West Coast trade association. Mr. Marsh said he had repeated the assurances given by officials, but he also understood the fears in the supermarket’s refrigerated aisle.

“Consumers, doubtless, when they hear about something like this, the cautionary principle kicks in,” he said. “Even if you’d have to drink an oil tanker of this.”

New Problem In Japan: Radioactive Corpses (guardia)

Authorities in quake-affected northeastern Japan are seeking to decontaminate infected corpses before they can be disposed of.

Meanwhile, thousands of people are fleeing the area as radioactive material still leaks from the stricken plant on Japan's east coast.

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
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4060
Fed Accepted More Defaulted Debt Than Treasuries

"However, the money it raised didn't come cheap amid widespread expectations that Portugal will soon have to join Greece and Ireland in requesting a bailout.

The government debt agency said it's paying a 5.8 percent interest rate on the bonds, which mature in June 2012. The yield in a 12-month bond auction last month was much lower at 4.33 percent."

"The balance sheet, a broad gauge of Fed lending to the financial system, expanded to $2.606 trillion in the week ended March 30 from $2.585 trillion the prior week."

"“I sit before you as a representative of a $1.2 trillion money manager, historically bond oriented, that has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden.

Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates."

"March 31 (Bloomberg) -- The Federal Reserve accepted more defaulted debt than U.S. Treasuries as collateral to back $155.7 billion on the largest day of borrowing from the Primary Dealer Credit Facility, according to documents released today.

The U.S. central bank allowed borrowers to use $929 million in market-valued debt rated D as collateral on Sept. 29, 2008, more than the $905.5 million in Treasuries that were pledged, according to Fed documents released today. "

  • Other news, headlines and opinion:

 

Ireland puts $100 bln price on bank rescue

Calif. teacher pension fund will need more cash and California teacher pension shortfall grows to $56 billion

Treasury to Sell $86 Billion of Bills Next Week

ECB Suspends Minimum Credit-Rating Threshold for Irish Debt

France's Finances Are 'No Better' Than Spain's, O'Neill Says

NC Faces Gap of $2.5B Due to End of Stimulus

State budget fiasco could could push San Mateo County budget deficit past $100 million

Ireland’s Debt Rating Is Reduced One Level to BBB+ by S&P on Banking Costs

 

 

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
interesting post from Trader Dan...

....about conflicting statements (re QE/dollar/etc.) from Fed Bigs and what they mean for the dollar vs. the long bond:

http://traderdannorcini.blogspot.com/2011/04/federal-reserve-confusion-i...

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
No ECB funding facility for Ireland
No ECB funding facility for Ireland after stress tests due to political disagreements - This was supposed to be the big day for Ireland to extricate itself from the crisis, and what happened? No ECB announcement on a medium-term funding facility. Further uncertainty about the status of unsecured bondholders. Portugal announced a dramatic upward revision of its 2010 deficit due to account errors; a Spanish bank merger unravels, eurozone inflation exceeds everybody’s worst guesses, and bond spreads shoot up to new records. Another day in the eurozone’s never-ending crisis. Reuters reports that internal disagreements within the ECB’s governing council had prevented an agreement for a medium-term funding facility that had previously been leaked to the press (and that must have been in an advanced stage of preparation). Reuters quoted Nout Wellink as saying that he preferred Ireland and other European countries to solve the Irish banking crisis, not the ECB. Axel Weber was quoted as saying that he also favoured bail-ins of bondholders – in contrast to the ECB’s position on this matter; Reuters also reports of legal concerns about such a facility, as it may be in breach of the European Treaties; Patrick Honohan said yesterday that following the discussions, there was no prospect of an announcement any time soon. The ECB did, however, agree, to suspend all rating requirements for collateral pledged by Irish banks in repo operations, to insure continued funding, and to wean the Irish banks off the emergency lending assistance from the Irish central bank. FT Alphaville thinks this is a pre-cursor to an eventual special funding regime.
 
saxplayer00o1's picture
saxplayer00o1
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Posts: 4060
Fitch cuts Portugal by three notches to 'BBB-'

 

"SAN FRANCISCO (MarketWatch) -- Fitch Ratings on Friday downgraded Portugal's long-term foreign and local currency issuer default ratings to BBB- from A- and kept the ratings on negative watch. "

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
from the Post Carbon Institute

2. We must prepare for business unusual.
Is it just me or have the last three years felt like a breathless series of one crisis after the other? A global economic cliff drop... massive earthquakes in Haiti, New Zealand, and Japan... record floods, droughts, and fires in Asia, Russia, Australia, and the US... oil price spikes in 2008 and again in 2011... government debt crises in Greece and Ireland... the worst oil spill in US history... record high food prices... political regimes overthrown or threatened in Tunisia, Egypt, Libya, Yemen, and Bahrain...

For the most part, the public conversation has focused—with increasing desperation—on “getting back to normal”: robust economic growth, profligate energy use, unbridled consumerism, etc. But what if all this is the new normal?

3. Resilience is not just a quaint concept. As someone working for an organization that promotes resilience, I've been pleased to see a real growth in the use of the term resilience—to describe everything from the wives of former Presidential candidates to sports teams. But resilience is not just a quaint concept; its real world application (or lack thereof) can have a profound impact.

Case in point: The Fukushima Daiichi Nuclear Power Plant to which the world's eyes are currently glued. The plant consists of six nuclear reactors in close proximity to the Pacific ocean and one another, in a region prone to earthquakes.

Core components of resilient systems are redundancy and distribution. Particularly in the realm of energy production, distributed systems are often viewed as inefficient and therefore unwise. But how wise was it to place six nuclear reactors close together? Four of the six Fukushima Daiichi reactors are in one state of emergency or the other.

I'm sure the designers were convinced that they had created redundant electricity systems, when maintaining electricity to cool the reactors is high on the list of safety requirements. Not only did they have backup diesel generators but they also had emergency batteries. Perhaps they thought this was enough. It wasn't. The earthquake knocked out the electricity; the tsunami flooded the emergency generators. Wholly unexpected right? A real Black Swan? But Tokyo Electric Power, operators of the Fukushima plant, had numerous warnings, including a report by the US Nuclear Regulatory Commission in 1990, which "identified earthquake-induced diesel generator failure and power outage leading to failure of cooling systems as one of the most likely causes of nuclear accidents from an external event."

And if you think this lack of proper safety protocols is limited to these reactors, or even the whole of Japan, think again. In the US, here are just a few examples of resilience in (in)action:

  • The Diablo Canyon nuclear plant, which lies less than a mile from a fault line, isn't required to include earthquakes in its emergency plans.
  • The Palisades nuclear power plant in Michigan has been storing nuclear waste in outdoor concrete bunkers 100 yards away from the shores of Lake Michigan (source of water for 40 million Americans) since 1993, against safety regulations.
  • In 2006 inspectors discovered that the emergency generators at the Fermi 2 plant in Michigan (same design as Fukushima Daiichi unit 1) had been inoperable for 20 YEARS.
Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Massive Fuel Savings For Air Industry

 

New fuel savings boost for air industry. This might just be the energy salvation we're looking for. Lighter planes will make travel much, much cheaper. It might even replace cars and trains.

Air plane revolution in line for overwhelming operating lift savings...

Poet

 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
end of growth

This is must watch stuff.....  much of it many here should already know, but there are some stunning graphics in there.  Like did you know the latest bailout cost nearly as much as WWII??

http://www.slideshare.net/postcarbon/the-end-of-growth-preparing-for-a-n...

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: end of growth
Damnthematrix wrote:

This is must watch stuff.....  much of it many here should already know, but there are some stunning graphics in there.  Like did you know the latest bailout cost nearly as much as WWII??

http://www.slideshare.net/postcarbon/the-end-of-growth-preparing-for-a-n...

That's funny.. Japan is also comparing Fukushima to WWII... How many WWIIs do we need before the world blows itself up?

Samuel

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