Daily Digest

Daily Digest 4/16 - Fitch Warns On China, Japan One Month Later, Syria At Boiling Point

Saturday, April 16, 2011, 9:47 AM
  • Google Goes Down As Costs Inflate
  • Fitch Warns On China
  • Default or Hyperinflation? Take Your Pick - Gold Wins!
  • Syria's Unrest: At Boiling Point
  • Japan's Crisis: One Month Later
  • All 5,466 of Detroit Public School Teachers to Receive Layoff Notices 
  • Study Ties Suicide Rate in Work Force to Economy
  • Georgia Pastor Plans Prayer Gathering At Gas Pumps
  • Vegetable Bandits Strike As Food Prices Soar
  • Japan Nuclear Crisis Goes Global

Crash Course DVDThe Special Edition DVD, in a unique 3-disc format with presenter’s pack to guide live showings. (NTSC or PAL)


Google Goes Down As Costs Inflate (Ilene)

We expected Q1 earnings to be rough and we've already seen FDX, NKE, ORCL, RIMM, FAST, FCS and AA struggle so hopefully you don't have to be hit on the head with another whole week of earnings before you get a little more cautious. Next week we hear from C, HAL, LLY, TXN, BK, GS, INTC, IBM, SYK, USB, VMW and YHOO on Monday and Tuesday and then we're off to the races with hundreds of companies reporting each week for the rest of the month. Our job in the first few weeks of earnings season is to get a feel for the quarter and, so far, that feeling is rough.

Fitch Warns On China (Ilene)

Why are they bouncing? Why not? We went down and people love to buy those dips and that means they are just going to love this chart, courtesy of Barry Ritholtz's team. We don't get our next Case-Shiller data point until the 26th but we did get mortgage applications this week and they are down ANOTHER 6.7%. This is despite the fact that an average 30-year mortgage is still just 4.98%.

Default or Hyperinflation? Take Your Pick - Gold Wins! (Alfredo E.)

Today, Treasury Secretary Geithner warned Republicans against a brush with default. In essence, if we continue threatening to vote against raising the debt ceiling, the very act of using default as a political weapon, causes our creditors to squirm. Really, how willing should any other country be right now to lend us money? Why would anyone buy a Treasury from us tomorrow?

Syria's Unrest: At Boiling Point (jdargis)

Syrian leaders are backing themselves into a corner by escalating a five-week-old standoff with protesters. At least 28 were killed across the country by security forces and thugs on April 8th. Four more were shot dead two days later in Banias after the army surrounded the coastal city and let loose the shabiha, a thuggish smuggling gang backed by the regime that has been responsible for violence elsewhere. Nearby villages including Bayda were raided. Human rights organisations say at least 100 residents were arrested in one day.

Japan's Crisis: One Month Later (jdargis)

Japan is just in the beginning of the long term recovery effort from the earthquake that struck off northeastern Japan on March 11. The crisis alert level from the damage to the Fukushima Nuclear Power Plant has now been raised to the highest level of impact, the same as the Chernobyl Russia incident 25 years ago. Searchers continue to look for the dead, displaced Japanese live in shelters, protests continue over use of nuclear power, Japan's economic engine may be disrupted, the massive cleanup of debris is just underway, aftershocks are feared and many continue to mourn those who were lost. The photos collected here are from one month to the day of the quake and beyond.

    Crash Course DVDThe Special Edition DVD, in a unique 3-disc format with presenter’s pack to guide live showings. (NTSC or PAL)

All 5,466 of Detroit Public School Teachers to Receive Layoff Notices (jdargis)

Detroit’s public school system is facing a steep $327 million budget deficit that’s been aggravated by slipping enrollment and decreased state investment. The district-wide layoff announcement is but one of the emergency steps Bobb’s taken to deal with the financial emergency. Back in February Bobb ordered half the district’s schools shut down. He later announced that 41 of those schools would become charter schools.

Study Ties Suicide Rate in Work Force to Economy (jdargis)

While many researchers have argued that economic hardship can raise the likelihood of suicide in people who are already vulnerable — like those with depression or other mental illnesses — research has been mixed. Some studies have supported such a link, but others have found the opposite: that rates drop in periods of high unemployment, as if people exhibit resilience when they need it most.


Georgia Pastor Plans Prayer Gathering At Gas Pumps (jdargis)

Mabry said that with prices reaching almost $4, he says he plans to ask God for help. He said it's the third time members of his congregation have met at gas pumps to pray.


Vegetable Bandits Strike As Food Prices Soar (Alfredo E.)

Late last month, a gang of thieves stole six tractor-trailer loads of tomatoes and a truck full of cucumbers from Florida growers. They also stole a truckload of frozen meat. The total value of the illegal haul: about $300,000.

The thieves disappeared with the shipments just after the price of Florida tomatoes skyrocketed after freezes that badly damaged crops in Mexico.

Japan Nuclear Crisis Goes Global (pinecarr)

To return to the more probable outcomes of the crisis, the weight of Europe, and of Germany inside Europe, will increase. "What is clear is that after the United States and China, with Japan sidelined with its own multiple crises, Germany has become the world's third most important power," David Rothkopf writes in Foreign Policy.

This will impact the balance inside Europe, where the rivalry between the major European powers, and specifically between France and Germany, is well known. What the future of that rivalry will be, is more difficult to predict.

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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Obama signs repeal of ‘1099’ tax-reporting rule
Obama signs repeal of health-care law’s ‘1099’ tax-reporting rule

President Obama on Thursday signed into law a measure that repeals the unpopular 1099 tax-reporting provision of the national health-care law.

The move marked the first successful effort by Congress to repeal a portion of Obama’s signature health-care legislation.

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Weekly summary on 3 Es posted

http://3es.weebly.com/  with summary of this weeks cartoons and resource links

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Saudi Arabia Did Not Make Up For Libyan Oil


Saudi Arabia Did Not Make Up For Libyan Oil

By Stuart Staniford

16 April, 2011

The OPEC MOMR came out late yesterday, but it adds to the picture from the IEA report mentioned yesterday morning. In particular, I can now present revised graphs for total liquid fuel production. Here's the last three year view (not zero scaled):

Note that the rise that's been going in since last fall has now been abruptly interrupted by the Libyan situation, and total oil production has fallen by about 0.5mbd. This is about 0.6% of global production, but given that the world economy has been growing rapidly and needing about another 0.5mbd/month, the shortfall over what would have happened in a counterfactual world with no Middle Eastern unrest is more like 1.2% of global production.

In terms of the price production picture, this has put us much more into territory akin to the 2005-2008 oil shock:

We can put the situation almost entirely down to two things: the fact that Libyan production has plummeted, and that Saudi Arabia has made no significant move to compensate. In fact, Saudi Arabia slowed down production increases that it had been making in prior months.


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