Daily Digest

Daily Digest 4/9 - Measuring Up Citigroup And BofA, Pent Up Gold Demand To Be Unleashed, The Earth Is Full

Monday, April 9, 2012, 9:47 AM
  • Greek Statistician Under Scrutiny for Budget Estimates Before Euro Crisis
  • Some Dreary Forecasts From Recovery Skeptics
  • Measuring Up Citigroup and Bank of America
  • Intelligence Report: Why Prospects of an Israel Iran Conflict Remains Low
  • Iran Sends Mixed Signals Ahead of Nuclear Talks.
  • India's Jewellers End Gold Strike As Government Caves On Excise Duty: Pent Up Gold Demand To Be Unleashed
  • China Sets Up Rare Earth Body To Streamline The Sector
  • The Earth Is Full

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Economy

Greek Statistician Under Scrutiny for Budget Estimates Before Euro Crisis (jdargis)

As the director of Greece’s newly founded statistical authority, he was prepared to be summoned for questioning, but not for what actually awaited him. “To my surprise, we were called not as witnesses but as suspects,” he said.

Some Dreary Forecasts From Recovery Skeptics (jdargis)

There is also the asset manager John P. Hussman. Last month, he wrote in a research note that “while investors and the economic consensus has largely abandoned any concern about a fresh economic downturn, we remain uncomfortable,” given the deterioration of certain leading measures, like consumption growth.

Measuring Up Citigroup and Bank of America (jdargis)

Both companies have also had to issue significant amounts of new stock to raise capital that solidified their balance sheets but left their shares at a fraction of precrisis highs. Citigroup and Bank of America also face the risk of a credit downgrade by the ratings agency Moody’s Investors Service in mid-May.

Intelligence Report: Why Prospects of an Israel Iran Conflict Remains Low (James S.)

The fact that the Iranian domestic political situation is clouded, as a result of recent first round of the Majlis elections (March 2, 2012; run-off round for the remaining 65 seats on May 4, 2012) which have already severely crimped the influence of incumbent Pres. Mahmud Ahmadi-Nejad, who may, in any event, soon be eclipsed from power with the end of his term. However, even the present “Supreme Leader”, “Ayatollah” Ali Khamene’i, did not gain as much ground in domestic politics as he would have wished vis-à-vis Ahmadi-Nejad. This leaves power — insofar as it is concentrated at all — largely in the hands of the leader of the Quds Force of the Iranian Revolutionary Guard Corps (IRGC: Pásdárán), Brig. Qassem Suleimani. In any event, all talk of “reformists” in the Iranian clerical scene has evaporated.

Iran Sends Mixed Signals Ahead of Nuclear Talks (jdargis)

There was no immediate Western response to his remarks. Such offers have been greeted with skepticism in the past, since the West is pressing for Iran to do so much more. The apparent difference in tone between the remarks of Mr. Abbasi and Mr. Salehi seemed to reflect continued debate among the Iranian elite over the handling of the planned negotiations. But it was not immediately clear whether the mixed signals represented a deliberate strategy.

India's Jewellers End Gold Strike As Government Caves On Excise Duty: Pent Up Gold Demand To Be Unleashed (pinecarr)

A month ago, after causing a spike in cotton prices following the imposition of an export ban, India promptly overturned said surprising move following a surge in protest from not only various trade local groups, but more importantly China, whose already razor thin margins would become negative if input costs soared even further. The whole process lasted about 72 hours from beginning to end. Days after, desperate to fund ongoing budget shortfalls, the government shifted its attention to price controls in a market it knew China would absolutely not mind to having the price kept artificially low - gold. What happened then was an announcement by the government to impose to levy an excise duty on unbranded jewelry. The response was swift - a countrywide strike among India's jewellers who all went dark, crippling demand from one of the traditionally strongest gold markets in the world. And all this happening at a time when the wedding season is at its peak, with Akshaya Tritiya, one of the biggest gold buying festivals later in the month, making the period crucial for jewellers. As of hours ago, the Indian finance ministry has caved, and while it took three days to end the cotton export ban, it took three weeks to end the excise duty proposal, India's Finance Minister Pranab Mukherjee said that the government would consider scrapping a budget proposal to levy an excise duty on unbranded jewellery. The result will be three weeks of pent up demand for precious metals being unleashed suddenly, likely pushing spot gold far higher, to where it would be had this latest artificial price control never been established.

Energy

China Sets Up Rare Earth Body To Streamline The Sector (jdargis)

China's trading partners have alleged that Beijing has been trying to utilise its position as the world's biggest producer of rare earths to benefit domestic manufacturers.

Environment

The Earth Is Full (Jeff B.)

The eminent scientists of the Global Footprint Network, for example, calculate that we need about 1.5 Earths to sustain this economy. In other words, to keep operating at our current level, we need 50% more Earth than we've got.

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."

3 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
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saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Debt-laden Spain eyes charging rich for healthcare

Debt-laden Spain eyes charging rich for healthcare

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
How to be a Crook.

From Max.

 

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