Daily Digest

Daily Digest 4/26 - The 'Age Of America' Is Ending, Anatomy Of A Crisis, Fukushima Could Kill 200,000

Tuesday, April 26, 2011, 9:43 AM
  • The 'Age of America' Is Ending
  • Anatomy of a Crisis: 2011
  • Syria: U.S. Considers 'Targeted Sanctions' Amid Crackdown
  • Grantham Comes Face-To-Face With A Paradigm Shift
  • Apmex Starts Reverse Inquiry: Seeks To Buy "Any Quantity" Of Silver From Clients At $3 Over Spot
  • The People's Will: California's Experiment With Extreme Democracy
  • Don't Let Goldman off the Hook
  • China's Minmetals Bows Out To Barrick Gold's $7.7 Billion
  • Three Mile Island Expert: Fukushima Could Kill 200,000

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Economy

The 'Age of America' is ending (Alfredo E.)

To put this into perspective, only 10 years ago the U.S. economy was three times the size of China's, according to Brett Arends at MarketWatch. We knew this was coming, but this is the first time the IMF has put an actual date on it. "Most people aren’t prepared for this," Arends writes. "They aren’t even aware it’s that close."

Anatomy of a Crisis: 2011 (pinecarr)

As I have noted before, price inflation in essentials hurts the lower income citizenry much harder than the top tier, as essentials make up a much larger percentage of the household expenses. A 30% jump in the cost of gasoline means little to a household in which gasoline accounts for 2% of total net income, but it certainly hurts a household in which gas accounts for 10% of total net income.

Syria: U.S. Considers 'Targeted Sanctions' Amid Crackdown (jdargis)

"The US is pursuing a range of possible policy options, including targeted sanctions, to respond to the crackdown and make clear that this behaviour is unacceptable."

The remarks represent a further hardening of the US position on the Syrian protests following US President Barack Obama's strong condemnation on Friday of the Syrian government's use of force.

Grantham Comes Face-To-Face With A Paradigm Shift (Debu)

Accelerated demand from developing countries, especially China, has caused an unprecedented shift in the price structure of resources: after 100 hundred years or more of price declines, they are now rising, and in the last 8 years have undone, remarkably, the effects of the last 100-year decline! Statistically, also, the level of price rises makes it extremely unlikely that the old trend is still in place.

Apmex Starts Reverse Inquiry: Seeks To Buy "Any Quantity" Of Silver From Clients At $3 Over Spot (pinecarr)

Over the past hour Zero Hedge has been inundated with reader comments notifying us that Ampex has, validating the earlier post speculating about a possible silver shortage at the metals distributor, launched a "reverse ïnquiry" in which it will pay "you $3.00 over the current spot price of Silver for your Silver American Eagles. ANY year, ANY quantity!" and "We will pay you $38.00 over the current spot price of Gold for your Gold American Eagles. ANY year, ANY quantity!" So aside from this first public confirmation that one of the biggest wholesale retailers of precious metals is now inventoryless [sic], we can certainly see why Asia has decided to take silver down in the afterhours electronic session.

Don't Let Goldman off the Hook (jdargis)

First: The banks traded for their own interests directly against the interests of their clients. Goldman harnessed its proprietary trading power to go short on the subprime market. It held a $13 billion short position at one point. At the same time, it aggressively marketed the very securities it believed would founder. It knowingly sold junk to its clients so Goldman could prosper on the other side of the trade. Such is the conclusion of bipartisan investigators.



Sen. Levin has suggested that federal prosecutors should investigate whether Goldman executives committed perjury when they testified about this before Congress. Whether charges are brought or not, the Goldman testimony fundamentally misled the public.

The People's Will: California's Experiment With Extreme Democracy (jdargis)

It is striking that such a reminder should even be necessary in a state that once symbolised optimism. But such is the Californian state of mind today. Superficially, California might still resemble its old self. In becoming governor this year, Mr Brown succeeded a former Hollywood star (Arnold Schwarzenegger), just as he did in 1975 (Ronald Reagan).

Energy

China's Minmetals Bows Out To Barrick Gold's $7.7 Billion (pinecarr)

China's Minmetals Resources bowed out of the battle for copper miner Equinox Minerals on Tuesday, saying Barrick Gold Corp's C$7.3 billion ($7.7 billion) bid was too rich to justify a counter-offer.

Environment

Three Mile Island Expert: Fukushima Could Kill 200,000 (guardia)

My thought is that we shouldn’t shut nuclear reactors down immediately because they’re killing people in Japan. You simply can’t do that. Instead, Fukushima forces us to look at this paradigm of putting enormous amounts of money into one plant. The Votgle plants in Georgia — two of them will be pushing $20 billion. I think our money would be better spent distributing the grid.

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." 

13 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4065
Greece, Ireland, Portugal Yields Hit Records on Default Concern

 

"MADRID, April 26 (Reuters) - Spain's short-term costs of borrowing jumped by around half a percentage point at an auction on Tuesday, but strong demand eased markets' immediate concerns and prodded the euro higher.

The Treasury sold 1.97 billion euros ($2.86 billion) of the short-term bills with the average 3-month yield jumping to 1.371 percent compared to 0.899 percent in March and 6-month rates to 1.867 percent from 1.361 percent."

"April 26 (Bloomberg) -- Greece’s budget deficit exceeded expectations and the euro area’s overall debt reached a record, narrowing Europe’s options for putting an end to the fiscal crisis.

Greece’s shortfall was 10.5 percent of gross domestic product in 2010, higher than a 9.4 percent estimate made by the Greek government in February, official European Union figures showed today.

Greek bond yields surged, rekindling speculation that a debt write-off or extension of the country’s repayment timelines will be the only way out of the fiscal trap."

..................2A) Greece, Ireland, Portugal Yields Hit Records on Default Concern

..................2B) ECB Stark pessimistic on the Euro-Zone Restructuring

...................2C) Greek Deficit Tops Forecasts as Merkel Aide Says Debt Must Be Restructured

"Global food prices may rise 4.4 percent to a record by the end of the year, driven by demand for meat, oilseeds and grains used to make ethanol, adding to costs that mean inflation is accelerating from the U.S. to China.

The United Nations’ Food Price Index may climb to 240 points from 229.84 last month, said William Adams, a fund manager at Zurich-based Resilience AG, which has $22.2 million of assets. Global corn stockpiles are shrinking the most in seven years, inventories of nine edible oils will drop to the lowest since 1974 and U.S. beef stocks will be the smallest since 1999, the U.S. Department of Agriculture estimates.

“The stockpiles are being severely depleted,” said Adams, who correctly forecast gains in heating oil and gasoline prices last year. “Eventually it gets to the consumer. The U.S. government isn’t subsidizing pork chops like it is ethanol.” "

 

  • Other news, headlines and opinion:

State retiree benefits gap grows to $1.26 trillion and US States Pension Fund Deficits Widen by 26%, Pew Center Study Says

Fed Confidence in Transitory Inflation Hinges on Low Wage Gains

Poland's Budget Deficit Widened to 7.9% of GDP Last Year, Debt Rose to 55%

San Mateo County expects to lose $21.6 million in state aid

Sign of the times: Strips malls up for auction (Arizona)

S&P's negative outlook on US credit triggers unease from largest debt holder

US Home Prices May Fall 11% This Year, Morgan Stanley Says

Scranton running out of cash, running up deficit

San Carlos Debates Outsourcing Fire Department

Montebello, Calif., in Dire Straits

No sign of breakthrough as Minn. faces $5B deficit

EU adds billions to Britain's deficit numbers

S&P affirms rating and negative outlook for California

Chavez Windfall Tax Hike on Oil Borders on 'Confiscation,' Nomura Says

idoctor's picture
idoctor
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Posts: 1731
Strong Dollar Is 'Always' in

Strong Dollar Is 'Always' in US Interests: Geithner  http://www.cnbc.com/id/42762986

 

Treasury Secretary Timothy Geithner said on Tuesday a strong dollar "will always be" in U.S. interests and that the Obama administration would not undercut the greenback to spur growth.

Timothy Geithner
AP
Timothy Geithner

"Our policy has been and will always be, as long, at least, as I'm in this job, that a strong dollar is in our interests as a country. And we will never embrace a strategy of trying to weaken our currency to gain economic advantage at the expense of our trading partners," he said in response to a question after a speech to the Council on Foreign Relations.

Touching on the fiscal debate swirling in Washington, Geithner also said the United States is in a better position than other advanced nations to manage its fiscal issues.

He noted entitlements, such as Medicare and Medicaid, were a smaller share of spending in the U.S. than in other countries.

Geithner said the chances of agreement by Democratic and Republican leaders on a path of fiscal restraint were better now than they had been at any time in the past decade.

"We are a much younger country than the other major economies, we have much better underlying growth rates ... we started with a much lower overall debt burden as a share of our economy," Geithner told the conference in New York.

"The size and expense of our commitments in the safety net are a much smaller share of the economy as a whole so we are in a much better position to manage through this."

He added he was confident Congress will raise the U.S. debt ceiling, and said the harder issue was establishing fiscal rules to ensure future deficit reduction.

"I'm completely confident that they'll do what's necessary," Geithner said. "What I want to make sure they don't do is to take us too far into June, take us too close to the edge ... At a moment like this, you don't want to leave people with any concern that they'll take too much time."

"The harder thing ... is how you legislate a framework that can lock in meaningful fiscal reforms that get these deficits down to a sustainable level," he said.

The White House has called for $4 trillion in deficit reduction to be phased in over 12 years or less. Likewise, top House Republicans are in favor of cutting $4.4 trillion in budget deficits over the next decade.

Debates over how to get the country's fiscal house in order are coming to a head with Republicans threatening not to allow the Treasury to borrow more unless the government makes deep cuts to spending.

The deadline to raise the debt ceiling or legal amount the U.S. can borrow is looming and Geithner has already warned of catastrophic consequences if Congress fails to do so by mid-June.

Treasury predicts the $14.3 trillion debt ceiling will be reached by May 16. The department then has about 8 weeks to employ emergency measures to give the country more room to borrow before the United States begins to start defaulting on its loans and other obligations.

Obama has proposed a debt trigger to force spending cuts if debt levels do not decline as planned.

maceves's picture
maceves
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Posts: 281
strong dollar?

"...a strong dollar is in our interests as a country. And we will never embrace a strategy of trying to weaken our currency to gain economic advantage at the expense of our trading partners,"

uuhhh.........

What am I missing here? 

rhare's picture
rhare
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Posts: 1323
What are you missing?
maceves wrote:

What am I missing here?

 

 

bmc's picture
bmc
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Posts: 13
LOL! The Phillips Curve has

LOL!

The Phillips Curve has been producing hypocrites since before Diocletian became the only Roman emperor to "voluntarily" abdicate his title.

The limit of X over Y with respect to T as Y approaches zero equals... Infinite Economic Growth!

 

 

"Now just wilt your dollars in that Florentine sauce because-- Bam! We don't want to waste good spinach. Now you're cooking [with Keynesians]!"

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
I don't know LOL but this

I don't know LOL but this dollar doesn't look to strong to me???

US Dollar Index
73.84
-0.14
-0.2%

As the Chinese students keep laughing around the world.

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Americans depend more on federal aid than ever

Americans depended more on government assistance in 2010 than at any other time in the nation's history, a USA TODAY analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly 2 years old.

A record 18.3% of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010. Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929.

http://www.usatoday.com/news/nation/2011-04-26-government-payments-economy-medicare.htm?loc=interstitialskip

SingleSpeak's picture
SingleSpeak
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Posts: 496
Stop searching for solutions, pension problem solved.

"Much has changed in the last 18 months -- virtually all of it for the better," said Hank Kim, executive director of the National Conference on Public Employee Retirement Systems, which represents public sector pension funds.

          Or what I mean is, there is no problem according to this "expert". Carry on.

           SS

 

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Dime Gas

Dime Gas

es2's picture
es2
Status: Bronze Member (Offline)
Joined: Dec 31 2010
Posts: 68
http://www.kitco.com/reports/

http://www.kitco.com/reports/KitcoNewsMarketNuggets20110426.html
Market Nuggets: BNP Paribas: Nickel Prices Still Face 'Tougher Times'
Market Nuggets: Market Nuggets: Platinum Could Gain On Gold –optionsXpress
Market Nuggets: Market Remains Subdued Awaiting FOMC: BNP Paribas
Market Nuggets: Barclays: Silver ETP Holdings Hit Record High Of 15,775 Metric Tons
-Details on the page, this is just a headline snapshot.

'I'm Out Of My Speculative Silver Position' – David Morgan http://www.kitco.com/reports/KitcoNews20110426DeC_david_morgan.html
Well-known silver investor David Morgan said he sold his speculative silver position following Monday’s rally to over $49 an ounce on the futures market and is “happy to be in cash.”
He said he is sitting on 25% cash, but keeping his core 75% position in silver.

Silver's story: a brief look at how it got to its highs http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=125715&sn=Deta...

Short Sellers Now Screaming About a Buy Side Silver Conspiracy http://seekingalpha.com/article/265381-short-sellers-now-screaming-about...

WSJ: Fed Searches for Next Step http://online.wsj.com/article/SB20001424052748703396404576283433129888532.html  Google search
New Focus on Interest-Rate Plan as Controversial Bond-Buying Strategy Winds Up

Home Prices in 20 U.S. Cities Drop Most in More Than Year on Foreclosures http://www.bloomberg.com/news/2011-04-26/home-prices-in-20-u-s-cities-fe...
The S&P/Case-Shiller index of property values in 20 cities fell 3.3 percent from February 2010, the biggest year-over-year decline since November 2009, the group said today in New York.

Greek Deficit Tops Forecasts as Merkel Aide Says Debt Must Be Restructured http://www.bloomberg.com/news/2011-04-26/germany-s-feld-says-greece-can-...
Greece’s budget deficit exceeded goverment estimates and the euro area’s overall debt reached a record, narrowing Europe’s options for putting an end to the fiscal crisis.

Japan’s Terrifying Day Saw Unprecedented Blown Roof Expose Tepco Fuel Rods http://www.bloomberg.com/news/2011-04-25/japan-s-terrifying-day-saw-unpr...

China Said to Raise Biggest Banks’ Capital Adequacy Targets http://www.bloomberg.com/news/2011-04-25/china-said-to-raise-capital-ade...
China’s banking regulator set capital targets for the nation’s five biggest lenders above the minimum 11.5 percent ratio amid concern that credit risks may rise, three people with knowledge of the matter said.

Paulson Bought Lehman Bonds for as Low as 9 Cents on Dollar http://www.bloomberg.com/news/2011-04-25/paulson-bought-lehman-senior-bo...
Paulson paid 9 cents on the dollar for $5.1 million of Lehman’s senior bonds on Dec. 1, 2008, according to the filing. Paulson paid 34 cents to 35 cents on the dollar for the bonds when Lehman filed bankruptcy on Sept. 15, 2008. Calpers paid 86 cents to $1.04 on the dollar for $90.1 million of Lehman’s senior bonds between July 2006 and December 2007, according to the filing, which was made on April 22.

Ed Steer's Gold and Silver Daily: http://www.caseyresearch.com/gsd/edition/200-silver-and-5-digit-gold-price

es2's picture
es2
Status: Bronze Member (Offline)
Joined: Dec 31 2010
Posts: 68
State pension crisis balloons

saxplayer00o1, thank you for all of your posts.  I like that there are quite a few on the states/counties, etc. as too often the focus is on European countries.  (The economy of the whole European Union is a little larger than all of the states combined.)

 

State pension crisis balloons http://finance.yahoo.com/news/State-pension-crisis-cnnm-422551523.html
States are $1.26 trillion in the hole when it comes to their pension and retiree health obligations, according to a report released Tuesday.
And taxpayers are ultimately on the hook for this shortfall, which soared 26% in one year.

Jim Sinclair's In the News Today http://jsmineset.com/2011/04/26/in-the-news-today-847/
Will they or will they not continue QE is not the question. They must, be it through the front or back door. The future of the dollar is what you need to know if you are to navigate this...

'Disturbing' revelations in probe of possible gas price manipulation http://content.usatoday.com/communities/ondeadline/post/2011/04/disturbi...
"There are a couple things that … are disturbing,'' Holder said, declining to elaborate.

James Turk - Silver Still in Backwardation, Headed Higher http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/26_Ja...
When asked about the reason for the increased volatility Turk stated, “There are some earthshaking events coming, that’s what the precious metals are telling us...

Embry, Pento - Gold, Silver, Bernanke Destroying the Dollar http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/26_Em...
Ahead of tomorrow’s Fed meeting and with the US dollar lower along with gold and silver, King World News spoke with John Embry of Sprott Asset Management and Michael Pento of Europacific Capital...
It looks like the Richard Russell piece they are referring to might be http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/22_Ri...

AinSophAur's picture
AinSophAur
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Posts: 18
ljhaines's picture
ljhaines
Status: Bronze Member (Offline)
Joined: Apr 23 2009
Posts: 35
Timmy's Alternate Universe

According to Wikipedia....A parallel universe or alternative reality is a hypothetical self-contained separate reality coexisting with one's own.

Geithner's comments clearly show his alternate reality. Somehow facts, data and trends play no part in his universe.

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