Daily Digest

Daily Digest 5/31 - Inflation Looms As China's Economy Slows, Germany To Shut Down Nuclear Reactors, Fukushima Live Cam

Tuesday, May 31, 2011, 9:40 AM
  • A Crackdown On Employing Illegal Workers
  • China's Economy Slows, But Inflation Still Looms
  • Moody's Places Japan Aa2 Rating On Downgrade Review, Notes Possibility Of JGB Funding Crisis
  • Money Blows in to a Patch of Oregon Known for Its Unrelenting Winds
  • Germany To Shut Down All Nuclear Reactors
  • In Japan, A Culture That Promotes Nuclear Dependency
  • TEPCO: Fukushima Live Camera
  • China’s Three Gorges Dam Facing Low Water Levels
  • Hunger Crisis Worsens, Food System Broken: Oxfam

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A Crackdown On Employing Illegal Workers (jdargis)

Republicans, pointing to the decline in arrests of unauthorized workers, say the administration is failing to remove those immigrants from the work force just when Americans are grappling with high rates of unemployment.

China's Economy Slows, But Inflation Still Looms (jdargis)

“They have to continue to tighten policy into what we expect will be a sharp growth downturn, already likely to be under way,” said Diana Choyleva, an economist in the Hong Kong office of Lombard Street Research, an economic forecasting firm based in London.

The world closely monitors the temperature of China’s economy, so crucial has it become to the health of global business and finance. This spring, as economists at Western investment banks have been reducing their growth forecasts for China, the specter of slackening Chinese demand has helped send world prices for industrial commodities like copper falling by 10 percent or more.

Moody's Places Japan Aa2 Rating On Downgrade Review, Notes Possibility Of JGB Funding Crisis (pinecarr)

Moody's Investors Service has today placed the Government of Japan's Aa2 local and foreign currency bond ratings on review for possible downgrade.

The review has been prompted by heightened concern that faltering economic growth prospects and a weak policy response would make more challenging the government's ability to fashion and achieve a credible deficit reduction target. Without an effective strategy, government debt will rise inexorably from a level which already is well above that of other advanced economies.


Money Blows in to a Patch of Oregon Known for Its Unrelenting Winds (jdargis)

Judge Thompson said the payments were intended to reward residents who have made no financial gains from wind energy development, but whose views of Mount Adams and the county’s stunning landscape now include a panorama of turbines. The checks are also intended to soothe any unease about the influx of corporations, occasional turbine noise and the risks posed to bats and birds by turbines.

Germany To Shut Down All Nuclear Reactors (jdargis)

The move, hammered out at a mammoth 14-hour overnight sitting at the Bundestag, came amid mass nationwide protests against nuclear power and at a low point for the chancellor's Christian Democratic party (CDU), support for which has crumbled at the ballot box in five regional elections this year.

Although the proposal was welcomed among the general population, who have long been opposed to nuclear power, it was a move derided by one of Merkel's own MPs as "knee-jerk politics".

In Japan, A Culture That Promotes Nuclear Dependency (jdargis)

Prime Minister Naoto Kan has, at least temporarily, shelved plans to expand Japan’s use of nuclear power — plans promoted by the country’s powerful nuclear establishment. Communities appear willing to fight fiercely for nuclear power, despite concerns about safety that many residents refrain from voicing publicly.

TEPCO: Fukushima Live Camera (guardia)

Video pictures of Units 1 to 4 at Fukushima Daiichi nuclear power station are available.


China’s Three Gorges Dam Facing Low Water Levels (guardia)

Chinese authorities downplayed the capacity of the Three Gorges Dam to discharge heavy amounts of water to provide relief to areas affected by the worst drought in inner and south China in 50 years, warning that the water levels within the dam itself have fallen to levels that may soon make cut backs necessary, according to Chinese media reports Friday. The brokerage said coal prices are likely to rise as China turns to coal-fired power plants to help cover the shortfall.

Hunger Crisis Worsens, Food System Broken: Oxfam (pinecarr)

The report said the failure of the food system flowed from failures of government to regulate and to invest, which meant that companies, interest groups and elites had been able to plunder resources.

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."


saxplayer00o1's picture
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Case-Shiller Index Officially Double-Dips;Swimming pools dry up
1) Swimming pools dry up after draining city budgets

"On those summer days when the temperature soars into the 90s and the haze blurs the horizon, city pools across the U.S. have beckoned people from all over to take a cool dip.

But as the Great Recession has drained city budgets across the country, it also has drained public pools for good. From New York City to Sacramento, Calif., pools now considered costly extravagances are being shuttered, taking away a rite of summer for millions. It's especially hard for families that can't afford a membership to private pool or fitness club and don't live in a neighborhood where they can befriend with someone with a backyard pool."

"Home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.

The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.

A backlog of foreclosures poised to reach the market means prices may stay depressed, dissuading builders from taking on new-home construction projects. Unemployment at 9 percent and stricter lending conditions are signs that any recovery in housing may take years.

“The risk that housing will resume the vicious cycle seen at the depths of the recession is still present,” Aaron Smith, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. "

...............2A) Case-Shiller Index Officially Double-Dips

"The Chicago PMI dropped sharply to a reading of 56.6% in May from April's 67.6%, a sign of a weakening recovery, according to data released Tuesday. Production, new orders and order backlogs all dropped sharply. Economists polled by MarketWatch had expected a reading of 60.0%. "Whether by plan or by misfortune, the proportion of firms reporting buildup in inventories increased in May, showing the broadest increase seen since September 2006," the survey said. "

  • Other news, headlines and opinion:

Moody's: Japan fiscal scheme may not be enough to avoid downgrade

Gov't to propose hiking sales tax to 10% by FY 2015 (Japan)

BOJ offers 830 bln yen more loans to support growth sectors

Greece to draw new EU-IMF loan for reforms: report

Air Canada faces $1.6-billion pension bill

Egypt says agrees $3 bln IMF loan

Arizona Land Sells for 8% of Price Calpers Group Paid at Peak

ECB's Draghi Says Inflation Risks Are Rising, Policy Remains Accommodative

Belarus Raises Key Rate to 16%, Most in World, to Stem Outflows

More than 500 cities see more homes become rentals

Rising Rents Risk U.S. Inflation as Fed’s Restraint Questioned

Decline in city services on the horizon (Morgan Hill, California)

Westchester faces massive deficit going into 2012, says Astorino ($100 million deficit)

More unpaid furlough days for Cook County workers ("projected deficit of $250 million to $300 million in 2012")

Temple bracing for a 25-percent cut in state aid

Food prices to double by 2030, Oxfam warns

Oregon Judge Blocks Seizure of Home, Questions Non-Judicial Foreclosure

Thailand Core Inflation May Reach 3% by September, Atchana Says

Bank of Ireland to Impose Up to 90% Losses on Bondholders

Canada Keeps Benchmark Lending Rate at 1%, Says It Will Rise ‘Eventually’

Greek Government Bonds Require ‘Immense Risk Premium,’ Commerzbank Says

China Raises Power Prices for Business, Farmers as Summer Shortage Looms

European Retail Sales Contract to 7-Month Low, Markit Says

Investors flee ex-Goldman trader's Japan hedge fund

China to clean up billions worth of local debt ($308-463 billion)

Public pension bill set aside until fall ("Illinois has $86 billion in unfunded pension liability and its pension systems are the worst-funded in the nation.")

Costly pay and pension deals are hurting Alberta's schools

NASA owes hefty sum for civilian pensions

Cash-strapped families switch £60bn-worth of mortgages to interest-only (UK)

Ireland May Restructure Debt as Economy Contracts, E&Y Says

UBS's Deo Says Greek Debt Default `Almost Unavoidable' (Video)

Greece, troika agree on lower VAT tax: reports

Belgian Central Bank Details Debt Holdings

In Showdown Over Debt Ceiling, Neither Party Is Blinking

saxplayer00o1's picture
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Food Stamp Usage Hits Fresh Record


Food Stamp Usage Hits Fresh Record (Zerohedge...notice the graph)


Link to their info: http://www.fns.usda.gov/pd/34SNAPmonthly.htm

Doug's picture
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Posts: 3227
Whose ox is gored?

The article on illegal immigrants suggests that we finally have an administration that is unwilling to follow the BAU hypocrisy of past administrations (of all political stripes).  The nexus between business owners and politicians on this issue has been obvious for a very long time.  Finally, enforcement is focusing on the real perps, the businesses that employ illegals.  Simply deporting illegals does nothing to stop the revolving door at the border that continually feeds illegal (read cheap) labor into the country.  As long as there are illegal employers, that flow won't stop.  Cracking down on the employers is the only way to significantly decrease the flow.  If no one is hiring, the illegal immigrants will stop coming here.  Simple solution for those willing to take the political heat.


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Posts: 564
Fresh Financial Crisis Around Corner Amid Volatile Derivatives

Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”

The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.

The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008. The MSCI AC World Index of developed and emerging market stocks tumbled 46 percent between Lehman’s downfall and the market bottom on March 9, 2009.


Damnthematrix's picture
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Posts: 3998
Australian Economy suffers worst fall since 1991

Economy suffers worst fall since 1991

By online business reporter Michael Janda


Australia's economy has suffered its biggest quarterly contraction since the recession of the early 1990s.

The Bureau of Statistics national gross domestic product (GDP) figure fell a steep 1.2 per cent in the March quarter, largely as a result of the flood impact on Queensland coal exports.

The fall is larger than the 0.9 per cent contraction at the height of the financial crisis in late 2008, and is the worst result since the March quarter of 1991, when the economy shrank 1.3 per cent.

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Arthur Robey
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Posts: 3936
The Pimp of Perth

I have been watching the volatility of the silver market and I think that I see evidence not only of manipulation, but manipulation by machine algorithms.

Watch the precipitous plunges. It is as though machines are all given the "sell" signal at the same time. 

Lets face the truth. I am as paranoid as they come, but the story I am telling myself is that Morg. Stan. is (Naked?)short silver. It is fighting for it's life. It has to shake the real silver back out into the market. Paper silver is being bought and then dumped to try and stampede the herd. 

Where can I find out if real silver is flowing into the market? The Perth Mint is not selling Lumpy Bullion any more. They only sell pimped up coinage. Last time I looked you could buy a 1 Kilo Coin. Is this evidence that real silver is not being sold to the mint?

It looks as though companies are persons after all. They die.

Arthur Robey's picture
Arthur Robey
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Posts: 3936
Gail's back, and her head in not on fire!

Gail Tyverberg (Gail the Actuary) over at Ourfiniteworld href=/comment/2628#comment-2628 is back from China.

She attended a symposium in which she spoke of Peak Oil. She said that the Chinese economists have a mindset similar to that of economists in the West. Peak Oil is not an issue.

Which reminds me

My mother asked me "If everybody is putting their head in the fire, are you going to put your head in the fire too?" 

I don't know. I shall have to ask my grandsons.

neilk's picture
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Posts: 10
Illegal immigration is easily dealt with

Illegal immigration could easily be dealt with. If illegal workers had been regularised, they would have enjoyed holiday pay and other benefits. Make a law that confiscates this money, going back say for a decade of work, from employers and gives it to illegals if they are caught. Illegal workers would turn themselves in for a payout. Even better fine employers $20,000 and give half to the illegal worker. Once again, illegals would rush to turn themselves in. Better to take the money and return home than to work in a crappy job with bad conditions.

The result would be that employers carefully check that workers are legal. Problem solved over night.

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