Daily Digest

Daily Digest 4/30 - Auerbach Says Bernanke in 'Deep Hole', Acme To Lay Off 900 Workers, Life Set To Get Harder

Saturday, April 30, 2011, 9:45 AM
  • Auerbach Says Fed's Bernanke in `Very Bad, Deep Hole'
  • U.S. Permits Oil Deals With Libya Opposition
  • Europe Investigating Banks Over Derivatives
  • Acme To Lay Off About 900 Part-Time Workers
  • Last Year Saw A Strong Increase In The Number Of Households With Substantial Debt
  • De Nederlandsche Bank publishes the Overview of Financial Stability April 2011
  • Life Set To Get Harder, Say Seven Out Of 10
  • Mauldin: The Endgame Headwind
  • U.S. Silver, Gold Near Lifetime Highs, Dollar Loses Ground
  • Indian Point Had A Small Leak In The Past

Our 'What Should I Do?' guide has steps to cook, see & stay warm in times of power outage

Economy

Auerbach Says Fed's Bernanke in `Very Bad, Deep Hole' (Claire H.)

Robert Auerbach is Professor of Public Affairs at the Lyndon Baines Johnson School of Public Affairs, The University of Texas at Austin. He was an economist with the House of Representatives Financial Services Committee during the tenure of four Federal Reserve Chairmen: Arthur Burns, William Miller, Paul Volcker, and Alan Greenspan. Auerbach also served as an economist in the U.S. Treasury's Office of Domestic Monetary Affairs during the first year of the Ronald Reagan administration and as a financial economist with the U.S. Federal Reserve System. (Ad Lib: umm, THIS guy would know...)

U.S. Permits Oil Deals With Libya Opposition (pinecarr)

The order may help to clear up concerns among potential buyers over legal complications related to ownership of Libyan oil and the impact of international sanctions. A tanker with the first major oil shipment from rebel-held territory is expected to arrive in Singapore on Thursday for refueling before heading to China.

Europe Investigating Banks Over Derivatives (jdargis)

“Lack of transparency in markets can lead to abusive behavior and facilitate violations of competition rules,” the European Union antitrust commissioner, Joaquin Almunia, said in a statement. “I hope our investigation will contribute to a better functioning of financial markets and, therefore, to more sustainable recovery.”

Acme To Lay Off About 900 Part-Time Workers (June C.)

Two-thirds of the jobs being eliminated are in Southeastern Pennsylvania and South Jersey, according to union officials who were given the news at a meeting with Acme officials in Malvern, where the division of Supervalu Inc. has local offices.

Acme president Dan Sanders met with union leaders in the morning and later shared the news with employees via satellite broadcasts to stores.

Last Year Saw A Strong Increase In The Number Of Households With Substantial Debt (Johan V.)

More than 80,000 households requested assistance from local council debt relief agencies, an increase of more than 25,000 compared to 2009. The total amount of loans granted by these agencies rose from 44 million euros in 2009 to 47 million in 2010.

De Nederlandsche Bank publishes the Overview of Financial Stability April 2011 (Johan V.)

The European debt crisis remains the largest threat to the stability of the Dutch financial sector. The combination with other factors, such as the increasing differences between euro countries, in particular as regards competitiveness, enlarges the risks. In addition, the risk remains that financial institutions will be hit by further price falls on European real estate markets. For instance, in the Dutch office market, structural vacancies are looming.



In order to prevent losses from remaining hidden, it is essential that banks, insurers and pension funds are transparent about their investments in real estate and in countries that have been hit by the sovereign debt crisis. At the same time, the value of these investments must be estimated with sufficient caution.

Mauldin: The Endgame Headwind (JRB)

Before we can get to how I think the Endgame of the debt supercycle plays out in the US, we need to quickly survey the current environment, and revisit (at least for long-time readers) a few basic economic themes that I will call the “headwinds” of economic growth. So many leaders in so many countries think that with the right policies they can grow (export) their way out of the problem. As I have written, not everyone can grow their way out of a crisis at the same time. Someone has to buy.

Life Set To Get Harder, Say Seven Out Of 10 (Johan V.)

Almost six out of 10 think their own children will be worse off financially – including 45% of high income families. And 85% think it a problem that rich and poor are leading increasingly separate lives because they mix less at school and in residential areas.

U.S. Silver, Gold Near Lifetime Highs, Dollar Loses Ground (Alfredo E.)

"If the dollar continues to weaken, then it's only likely to boost gold as well as silver as the inverse relationship between the two assets persists. I would say that for gold I am still looking for it to hit $1,600 this year," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

"In the long term, I think if we see silver prices at such a high level, then it could hurt the industrial demand."

Energy

Indian Point Had A Small Leak In The Past (VeganD)

Indian Point has two huge pools of spent nuclear fuel rods stored at its working reactors, each housing tons of uranium and plutonium no longer strong enough to turn steam into electricity, but still strong enough to be lethal.

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."

20 Comments

DavidC's picture
DavidC
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Robert Auerbach

Claire (and Chris),

Thanks for posting the Robert Auerbach Bloomberg video - another voice of reason.

With the stock markets now at post 2008 highs (Russell at all time highs) and the fundamentals getting worse each day (not to mention that NONE of the problems of 2008 have even been addressed, let alone resolved), it's thanks to people like this that I feel reassured that my feelings of what is going on (to the amusement and someitmes ridicule of friends) are justified.

Thanks.

DavidC

rhare's picture
rhare
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Environmentalism - it's own worst enemy...

[quote=In the "Indian Point had small leak in the past" article supplied by VeganD]

Without a national repository for the fuel, it is likely to remain there indefinitely, and the Nuclear Regulatory Commission recently said such storage would be safe for at least 60 years.

This is one of those cases where we can clearly see emotions winning out over proper risk analysis. We have spent billions building a site to store all this spent nuclear fuel in a site that was used for nuclear testing for years, yet the Yucca Mountain project was terminated leaving no long term storage solution.  I for one would much prefer the smaller risk of storage in a deep underground bunker than the storage in spent fuel pools and storage caskets scatter around the country. 

It appears we have chosen the same solution as so many of our other problems, if we just pretended it doesn't exist maybe it will go away. Frown

 

green_achers's picture
green_achers
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What will Wile E. Coyote do?

What will Wile E. Coyote do?

Doug's picture
Doug
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Posts: 3200
DavidC wrote: Claire (and
DavidC wrote:

Claire (and Chris),

Thanks for posting the Robert Auerbach Bloomberg video - another voice of reason.

With the stock markets now at post 2008 highs (Russell at all time highs) and the fundamentals getting worse each day (not to mention that NONE of the problems of 2008 have even been addressed, let alone resolved), it's thanks to people like this that I feel reassured that my feelings of what is going on (to the amusement and someitmes ridicule of friends) are justified.

Thanks.

DavidC

Now that I've been "prepping" for a few years, I have to say that even if I'm completely wrong about everything, my life has nonetheless been enriched.  I've made friends with a new energetic and high spirited group of people, my financial wherewithall has improved, the homestead is more secure, I'm closer to being off-grid and the new approach we're taking to managing our few acres has become a real adventure.  And, a new thing I and others in my group have been noticing is that it seems everywhere we go and talk to others in the community we find more people who are coming around to our pov and are enthusiastic about getting onboard.  At least in our small rural community, I'm sensing a movement of sorts.  Our activities are a lot of fun.  It is truly amazing how creative people can be when they share a common purpose.  I owe a great debt of thanks to this (CM) community for setting me on the path I am now on.

Doug

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james_knight_chaucer
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green_achers wrote: What
green_achers wrote:

What will Wile E. Coyote do?

Yes, I never knew Acme was a real shop. I had only seen it mentioned in Roadrunner cartoons here in the UK.

wags999's picture
wags999
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They must be getting

They must be getting government "incentives" since they still make anvils. 

es2's picture
es2
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U.S. Treasury: China Has Decreased Its Holdings of U.S. Debt

Fed's secrecy is deceitful and corrupt, Texas professor Auerbach says on Bloomberg TV http://www.gata.org/node/9852
Interviewed Tuesday by Bloomberg Television, University of Texas Professor Robert Auerbach, formerly an economist for the Federal Reserve and an aide to the late House Banking Committee Chairman Henry Gonzalez, D-Texas, recalls how the Fed has a long, corrupt history of hiding and then destroying its records to keep the public ignorant of what it is really doing.

U.S. Treasury: China Has Decreased Its Holdings of U.S. Debt http://cnsnews.com/news/article/us-treasury-china-has-decreased-its-hold
Mainland China has decreased its holdings of U.S. Treasury securities since last October, according to a report updated today by the U.S. Treasury Department.

littlefeatfan's picture
littlefeatfan
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3Es Links and Cartoons posted

Weekly roundup of Energy, Economics and Environmental links, cartoons, and resources posted at http://3es.weebly.com/

Johnny Oxygen's picture
Johnny Oxygen
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Re: What will Wile E. Coyote do?

I know. Its sad. No more jet packs and roller skates or defective bombs. Oh well...and end of an era.

dps's picture
dps
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Weekly roundup
littlefeatfan wrote:

Weekly roundup of Energy, Economics and Environmental links, cartoons, and resources posted at http://3es.weebly.com/

 

Knowledge is asking the right questions!   <== It's a statement, not a question.  Maybe you could fix the punctuation on the website.

Valuable link.  Thank you.  I particularly liked the essay on human population.

Keep up the good work.  Who are you?

Hugs ... dons

Woodman's picture
Woodman
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Doug wrote: Now that I've
Doug wrote:

Now that I've been "prepping" for a few years, I have to say that even if I'm completely wrong about everything, my life has nonetheless been enriched.  ......

Doug

Same here Doug. I live every day better and better, thriving on personal resilience and heading towards a simpler higher quality future, not in dread of future doom. Tom

guardia's picture
guardia
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Re: Environmentalism - it's own worst enemy...
rhare wrote:

This is one of those cases where we can clearly see emotions winning out over proper risk analysis. We have spent billions building a site to store all this spent nuclear fuel in a site that was used for nuclear testing for years, yet the Yucca Mountain project was terminated leaving no long term storage solution.  I for one would much prefer the smaller risk of storage in a deep underground bunker than the storage in spent fuel pools and storage caskets scatter around the country. 

It appears we have chosen the same solution as so many of our other problems, if we just pretended it doesn't exist maybe it will go away. Frown

Err, you're thinking about it the wrong way. If they said: "Ok, we'll stuff the mountain with all this crap because we have no better place to put it, but we will stop making any more of it", then ok, maybe, but that's not what they proposed. What they proposed goes more like: "Ok, we'll keep producing crap and stuff that mountain until we can stuff no more, and then find some other place where to ditch the ever increasing production of crap, I don't care, because that will be someone's else responsibility". A bit different, don't you think?

Samuel

es2's picture
es2
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Posts: 68
Canadian Economy Suffers Setback

Canadian Economy Suffers Setback WSJ http://google.com/news/search?aq=f&pz=1&cf=all&ned=us&hl=en&q=Canadian+E...
Gross domestic product, the sum total of goods and services produced in the country, fell 0.2% to C$1.26 trillion (US$1.32 trillion), marking the first decline in five months, Statistics Canada, the government statistics agency, said Friday.

No Silver Lining Left for Users of the Metal WSJ http://www.google.com/news/search?aq=f&pz=1&cf=all&ned=us&hl=en&q=No+sil...
Tactics Include Shrinking Their Dependence, Raising Prices
Silver investors are smiling about this year's rally in the price of the precious metal, now closing in on an all-time high. But silver's surge is hurting major users and even a few miners, including some blindsided by the relentless climb.

U.S. Prosecutors Probe High-Frequency, Algorithmic Trades http://www.bloomberg.com/news/2011-04-29/high-frequency-trades-manipulat...
U.S. prosecutors have joined regulators’ investigation into whether some high-speed traders are manipulating markets by posting and immediately canceling waves of rapid-fire orders, two officials said.

Europe Probes Goldman Sachs, JPMorgan, Investment Banks Over Default Swaps http://www.bloomberg.com/news/2011-04-29/goldman-sachs-jpmorgan-face-eu-...
Goldman Sachs Group Inc., JPMorgan Chase & Co. and 14 other investment banks face the first-ever European Union antitrust probes into the swaps market, following investigations by U.S. regulators.

Coffee May Climb 40% on Brazil Frost Risk as Kraft, Smucker Raise Prices http://www.bloomberg.com/news/2011-04-29/coffee-may-climb-another-40-on-...
Brazil, the world’s biggest coffee grower, is facing the risk of frost after hail this month, raising the prospect of a 40 percent jump in bean costs after Kraft Foods Inc. (KFT) and J.M. Smucker Co. already increased prices.
The chance of frost in Brazil increased with the weakening of La Nina, a cooling of waters in the Pacific Ocean, Brazil’s Somar Meteorologia said this week.

China’s Manufacturing Grows at Slower Pace, Survey Shows http://www.bloomberg.com/news/2011-05-01/china-s-manufacturing-grows-at-...
A Chinese manufacturing index fell after the government raised interest rates and lenders’ reserve requirements and allowed gains in the yuan to pick up pace.
The Purchasing Managers’ Index was at 52.9 in April from 53.4 in March, China’s logistics federation and the statistics bureau said in an e-mail today. That was below a median forecast of 53.9 in a Bloomberg News survey of 20 economists.

German government experts see Greece restructuring debt http://www.reuters.com/article/2011/04/30/us-greece-debt-restructuring-i...
Two German government advisers see a debt restructuring by Greece as inevitable while two of the overborrowed country's ministers continued to rule it out in newspaper interviews on Saturday.
Mounting fears that Greece will have to restructure a debt mountain expected to reach 340 billion euros this year, roughly one and a half times its output, have pummeled Greek bonds, driving yield spreads over German bunds to new record highs.

BOJ Shirakawa warns Japan economic outlook "very severe"
Bank of Japan Governor Masaaki Shirakawa said on Saturday that the country's economic outlook was very severe and that the central bank would take appropriate action to support the economy.

Euro zone inflation rises, points to higher ECB rates http://www.reuters.com/article/2011/04/29/us-eurozone-economy-idUSTRE73S...
Euro zone inflation rose further above the European Central Bank's target in April, increasing the chances of an interest rate rise in June, despite a weakening of economic sentiment and household demand.
Inflation in the 17 countries using the euro rose to 2.8 percent year-on-year this month from 2.7 percent a month earlier, the highest level since October 2010, when it was 3.2 percent.

RNcarl's picture
RNcarl
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Posts: 382
dps wrote: littlefeatfan
dps wrote:
littlefeatfan wrote:

Weekly roundup of Energy, Economics and Environmental links, cartoons, and resources posted at http://3es.weebly.com/

 

Knowledge is asking the right questions!   <== It's a statement, not a question.  Maybe you could fix the punctuation on the website.

Valuable link.  Thank you.  I particularly liked the essay on human population.

Keep up the good work.  Who are you?

Hugs ... dons

After looking at the link, I am not sure if the question marks are meant as satirical - rhetorical type questions or was it  simply  a computer induced syntax error? (pun intended)

Either way, I got a good laugh.

C.

DavidC's picture
DavidC
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Posts: 243
es2 Re BOJ Shirakawa warns Japan economic outlook "very severe"

BOJ Shirakawa warns Japan economic outlook "very severe".

I cannot help feeling that the Central Bankers are educated idiots, stuck in rigid dogma and ideas. They don't know how to say the words 'Deflation' or 'Depression' and don't understand the organic nature of economies and the need to rebalance. There is already enough pain being inflicted on the average person with inflation and these idiots want to keep printing or even increase the rate of printing.

I know it's been said in various other places, but if the system was allowed to deflate naturally the oncoming tsunami would be averted - as it is, maybe the Mayan calendar was/is right!

DavidC

rhare's picture
rhare
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guardia wrote: Err, you're
guardia wrote:

Err, you're thinking about it the wrong way. If they said: "Ok, we'll stuff the mountain with all this crap because we have no better place to put it, but we will stop making any more of it", then ok, maybe, but that's not what they proposed. What they proposed goes more like: "Ok, we'll keep producing crap and stuff that mountain until we can stuff no more, and then find some other place where to ditch the ever increasing production of crap, I don't care, because that will be someone's else responsibility". A bit different, don't you think?

No I don't think it's any different.  I don't view that those two are linked.  We have tons of spent fuel sitting around in above ground storage pools or caskets that is much more accessible and problematic than if it were  buried in a storage facility in the middle of Nevada.   If and when we decide we will abandon nuclear energy (I doubt anytime soon - particularly when energy scarcity becomes even more of an issue) then we can decide what to do with the remaining waste.  However, at this point we spent years and billions to create a facility only to abandon it and keep waste in a much less secure location.  It's insane! 

Do you honestly believe that not opening the waste facility puts any reasonable pressure to stop producing waste?  It hasn't for 50 years, why would it now?

 

guardia's picture
guardia
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rhare wrote: No I don't
rhare wrote:

No I don't think it's any different.  I don't view that those two are linked.  We have tons of spent fuel sitting around in above ground storage pools or caskets that is much more accessible and problematic than if it were  buried in a storage facility in the middle of Nevada.   If and when we decide we will abandon nuclear energy (I doubt anytime soon - particularly when energy scarcity becomes even more of an issue) then we can decide what to do with the remaining waste.  However, at this point we spent years and billions to create a facility only to abandon it and keep waste in a much less secure location.  It's insane! 

Do you honestly believe that not opening the waste facility puts any reasonable pressure to stop producing waste?  It hasn't for 50 years, why would it now?

Yes, exactly because it isn't stored. America will have to live through a Fukushima before they actually do anything about it. If you store the garbage away, then it will only postpone the accident to a future generation.

Is this really the legacy you want to leave to your childen? Or do you rather we actually deal with the issue right now, right here?

EDIT: Besides, why didn't the government offer a few billions to the residents of Nevada? I'm sure that would have satisfied some people over there. But then we delve again into the cost efficiency of nuclear power. How much money do they really want to "waste" on that?

Samuel

rhare's picture
rhare
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Wasteland in the US - no big deal if it stops nuclear power?
guardia wrote:

Yes, exactly because it isn't stored. America will have to live through a Fukushima before they actually do anything about it. If you store the garbage away, then it will only postpone the accident to a future generation.

Is this really the legacy you want to leave to your childen? Or do you rather we actually deal with the issue right now, right here?

Ah, so I see you are hoping for an incident so that you can push an agenda, rather than buy time and try to build concensus.   Rather than reduce the risk and buy time you prefer to increase the risk.  Makes perfect sense to me. Surprised

So let me guess, you would prefer we remove seat belts and other safety gear from cars so that we would get off oil?  Have you choosen to live near a nuclear plant so that you can be a martyr for your cause, or are you just choosing to sacrifice others for your cause?

guardia's picture
guardia
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Re: Wasteland in the US - no big deal if it stops nuclear power?
rhare wrote:

Ah, so I see you are hoping for an incident so that you can push an agenda, rather than buy time and try to build concensus.   Rather than reduce the risk and buy time you prefer to increase the risk.  Makes perfect sense to me. Surprised

So let me guess, you would prefer we remove seat belts and other safety gear from cars so that we would get off oil?  Have you choosen to live near a nuclear plant so that you can be a martyr for your cause, or are you just choosing to sacrifice others for your cause?

Hum, can't think of a good reply to that, but you're not wrong... thanks for the thoughts

BTW, I am living in Tokyo, and there are talks of shutting down all nuclear plants in Japan, so... may work out for the best.

Samuel

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News highlights and information

Deeply appreciate the weekly news highlights. The CM commuunity postings highlight that anyone interested in being aware of the news and information of today's world can not afford to sit idle waiting for the 6 o'clock news hour . . . but really needs to actively seek the pertinent news and information on a concerted basis. Thanks for assisting and contributing in such an endeavor.

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