Daily Digest

Daily Digest 5/6 - Silver Prices Keep Tumbling, Shell Announces 'Risky' Arctic Drilling, The Surge In Rural Land Deals

Friday, May 6, 2011, 10:41 AM
  • Debt Ceiling Has Some Give, Until Roof Falls In
  • Treasury Suggests $2 Trillion Debt Cap Raise: Sources 
  • Silver Prices Keep Tumbling
  • What's Our Money Worth?
  • Unrest Around the Arab World Endangers Turkey’s Newfound Influence
  • More Power Over Wall Street, but Little Chance to Discuss It
  • Shell and Cairn Energy Announce 'Risky' Drilling Plans In Arctic
  • Aberdeen After Oil: Seeking The Next Wave
  • The Surge In Land Deals: When Others Are Grabbing Their Land

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Economy

Debt Ceiling Has Some Give, Until Roof Falls In (jdargis)

Debates over the debt ceiling are a regular feature of political life in Washington. Congress has lifted the ceiling more than once a year, on average, over the last half-century — often right before the deadline. But the debt has never been so large, and the political climate has rarely been as contentious.

Treasury Suggests $2 Trillion Debt Cap Raise: Sources (phil)

Former Treasury officials have said it is routine for Congress to ask the Treasury Department for guidance. Republican leaders have asked the White House to provide the size of any proposed increase before the two sides sit down on Thursday to discuss the debt limit face-to-face.

Silver Prices Keep Tumbling (Alfredo E.)

Since reaching a 31-year high of $48.58 an ounce Friday, silver has plummeted 19%. But the metal, which had become a favorite bet of small investors, remains up 27% year to date.

What's Our Money Worth? (Ilene)

As I pointed out on Monday, silver was beyond ridiculous when you look at it in terms of the value of your home (on Tuesday). The "value" of your home has dropped 78% when priced in silver in just 3 years. Are we to extrapolate that in 3 more years you will have to accept an pound of silver for your home? Surely you have more silver IN YOUR HOME than that!

Unrest Around the Arab World Endangers Turkey’s Newfound Influence (jdargis)

“In the face of this unpredictable change around the Arab world, Turkish foreign policy is facing a major setback,” said Sami Kohen, a columnist for Milliyet, a daily newspaper in Turkey. Prime Minister Recep Tayyip Erdogan “has started losing the leaderships in the Arab world that he trusted and considered important, one after the other.”

More Power Over Wall Street, but Little Chance to Discuss It (jdargis)

In the years before the financial crisis, the Fed was a miserable failure in that role, a creature of the banks, not a watchdog. The news conference was an opportunity for Mr. Bernanke to demonstrate what the Fed had learned from the crisis about banking oversight. After all, a collapsed financial system does spectacular damage to an economy.

Energy

Shell and Cairn Energy announce 'risky' drilling plans in Arctic (pinecarr)

Previous plans to start this summer were halted first by the moratorium imposed after the Deepwater Horizon disaster last April and then by a ruling from the Environmental Protection Agency.But Shell said it was now confident that it could offer regulators the reassurances that should enable it to proceed with a programme said to have cost it $2bn to lease the acreage and possibly an additional $4bn in planning.

Aberdeen After Oil: Seeking The Next Wave (jdargis)

Although there are still thought to be around 20 billion barrels of the black stuff under the waters off Aberdeen, extracting it is getting ever more difficult and costly. Britain’s North Sea production peaked in 1999 at 4.5m barrels a day, and will decline to just 2m by 2016, according to Oil & Gas UK. Giants such as Shell and Exxon Mobil are drifting away, lured by more bountiful reserves in Africa and the Americas. Of the 440,000 workers Britain’s hydrocarbons industry supports, one-tenth are based in Aberdeen itself, so it is highly vulnerable to any decline in oil-related activity.

Environment

The Surge In Land Deals: When Others Are Grabbing Their Land (jdargis)

When deals like this first came to international attention in 2009, it was unclear whether they were “land grabs or development opportunities”, to quote a study published that year. Supporters claimed they would bring seeds, technology and capital to some of the world’s poorest lands. Critics, such as the director of the UN’s Food and Agriculture Organisation, dubbed them “neo-colonialist”. But no one had hard evidence to back up their claims. Now they do. Two years on, a conference at the Institute of Development Studies (IDS) of the University of Sussex, the biggest of its kind so far, examined over 100 land deals. Most judgments are damning.

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."

14 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4164
Fed Balance Sheet Grows To $2.723 Trillion

"The U.S. Federal Reserve's balance sheet continued to grow last week as the central bank maintained efforts to spur economic growth through asset purchases.

The Fed's asset holdings in the week ended May 4 climbed to $2.723 trillion, from $2.695 trillion a week earlier, it said in a weekly report released Thursday. Holdings of U.S. Treasury securities rose to $1.442 trillion on Wednesday from $1.413 trillion the previous week."

  • Other news, headlines and opinion:

China loses $271 bln from debt holdings

China Paying 'Close Attention' to US Debate on Debt Level

Maturing debt brings flurry of refinancing activity

Portugal learns terms for $115 billion bailout

Portuguese Strike Against Bailout Austerity Plan

$48.5 million in unpaid bills await new Detroit Public Schools manager

Rising gasoline prices fuel the growing appeal of compressed natural gas vehicles

Troubled Montebello's bonds downgraded to junk status

Restaurants Lift Prices as Inflation Hawks See Fed Behind Curve

Europe Wheat Harvest to Fall on Drought, May Be Catastrophic, Agritel Says

Drought to Persist in China, U.S. Europe Wheat Areas, U.K. Forecaster Says

Silver Set for Worst Weekly Drop Since 1975 Amid Rout in Commodity Prices

‘Squatter Rent’ May Boost Spending as U.S. Mortgage Holders Bail

Pimco’s Gross Says U.S. Economic Growth Not Enough to Support Asset Gains

Hungary Stocks Face 25% Trade Slump on Pension Grab, Buhl Says

.............A lot of these are out of stock:

....................APMEX silver bars

................................Silver Eagles

...............................Silver Maple Leafs

sammy's picture
sammy
Status: Bronze Member (Offline)
Joined: Feb 23 2010
Posts: 35
Tapani's picture
Tapani
Status: Bronze Member (Offline)
Joined: May 3 2009
Posts: 69
Greece to leave Euro!?

What Sammy posted, but the English version in der Spiegel:

http://www.spiegel.de/international/europe/0,1518,761201,00.html

 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Iraq halves oil output
 

IRAQ is preparing to halve its official production target, forcing oil companies including BP and Shell to renegotiate their contracts.

The Times has learnt that the country's Oil Ministry, with backing from the Prime Minister Nouri al-Maliki, will set a new target to produce between 6.5 million and seven million barrels per day by 2017, down from original plans to pump 12m barrels, according to industry insiders .

Iraq, which is a member of the Opec cartel that pumps 40 per cent of the world's oil, produces about 2.68m barrels per day, barely higher than under Saddam Hussein.

It had been hoped that with a huge injection of foreign investment, it would be able to challenge Saudi Arabia as the world's biggest oil exporter this decade.

Confirmation that it has scrapped the old target will add to fears that global supply will be unable to keep pace with demand in coming years.

It is understood that government negotiations to change the long-term service agreements signed by companies in the past two years based on the old production target will begin soon.

Analysts said that companies would seek improved terms to compensate them for losing out on revenue, which at present is earned for each barrel of oil produced above a base target.

Baghdad believes that it would not be in its interests to try to achieve the 12m target by 2017 because boosting global supply would depress prices.

Ministers also argue that there is not sufficient demand for the extra oil, despite soaring prices.

Last month, Saudi Arabia cut its output by 800,000 barrels per day after pumping more in response to the political crisis in North Africa, complaining that the extra crude was sitting in tankers with no customers.

<SNIP>

"The sense we had after the Iraq war that the country was going to emerge as a swing producer, along with the Saudis - that is now off the table.

“Not a lot of people had bought into the 12m target being achieved, but now it's definitely not going to happen, it will have an impact in the market," Mr Ciszuk said.

Arthur Robey's picture
Arthur Robey
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Posts: 3936
Hans Rosling's statistics.

I do hope you enjoy Hans Rosling's statistics as much as I do.

http://www.flixxy.com/200-countries-200-years-4-minutes.htm

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Silvers drop

I hold it to be an axiomatic truth that the real value of a three bedroom home is 3.5 kilograms of silver.

This silver bust looks like manipulation to me.

The way I see it is that there is a populist internet based movement to buy silver and force Morg. Stan who are short silver into bankruptcy. The big boys dumped whatever silver they had on the market in order to stampede the herd. Classic pump and dump.

I am watching the herd to see when it runs out of puff and panic.That is when I buy more.

I am enjoying this.

Every cloud has a silver lining.

mrobinson's picture
mrobinson
Status: Bronze Member (Offline)
Joined: Jan 13 2009
Posts: 71
Commodity Speculation

Commodities are speculative plays while QE hangs around

http://ftalphaville.ft.com/blog/2009/08/21/68101/dresdnercommerzbank-blames-oil-speculators/

http://ftalphaville.ft.com/blog/2011/05/06/561981/deutsche-chimes-in-on-the-commodities-rout-its-the-qending/

Watch this space in June If QE3 doesn't eventuate with markets and commodities declining.

gmeader3's picture
gmeader3
Status: Member (Offline)
Joined: Jan 13 2009
Posts: 13
Three bedroom home real value in silver?

Hmmm, let's calculate:

3.5kg= 123.5 ounces

Silver is about $35 per oz today

123.5 x 35 = $4322.50

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
gmeader3 wrote: Hmmm, let's
gmeader3 wrote:

Hmmm, let's calculate:

3.5kg= 123.5 ounces

Silver is about $35 per oz today

123.5 x 35 = $4322.50

Actually, silver is measured using oz Troy.

1 kilogram = 31.15 OZ Troy.

3.5 Kilograms = 109.025 OZ Troy or about  $3815.88

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Three bedroom home real value in silver?

Your error is to translate into fairy money. It is an illusion.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Let the good times roll. (Or where the QE money went.)

It's party time on Wall St..        Woo Hoo.

What a sugar hit!!  (That is sugar, isn't it?)

Dimitri Orlov prediced a stepwise decline on the back of oil.

http://www.huffingtonpost.com/2011/05/06/ceo-pay-high-pre-recession_n_858430.html?utm_source=DailyBrief&utm_campaign=050611&utm_medium=email&utm_content=FeaturePhoto&utm_term=Daily%20Brief

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Commodity bubble.

 

Instead, it is our opinion that in recent years, because they drew the wrong conclusions and over-invested, they caused a speculative bubble in commodities, particularly in the oil market. Rather than profiting from existing trends, investors greatly accelerated and to some extent caused those trends.

from http://ftalphaville.ft.com/blog/2009/08/21/68101/dresdnercommerzbank-blames-oil-speculators/ link supplied by MRobinson.

Precis: Ben's money has gone into speculation, causing bubbles in commodities. (See sugar hit above).

My comment: This will all end in Tears.

The sweat of the sun, the tears of the moon. (Silver)

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
The super intelligence of the average westerner.

A peon working his bit of land to feed his family is engaged in razor sharp decisions. If he gets the timing of the rain wrong he loses his family. He has to intergrate myriads of facts and come to exactly the right conclusion. Time after time.

We westerners do much better than the peon. We are rich. We do not have to make such onerous decisions. The difference is in the soil. Our soil (had) oil. 

We do not have to fly. We have lost our wings.  Dodos.

In Vienna, Boltzmann not only taught physics but also lectured on philosophy. Boltzmann’s lectures on natural philosophy were very popular, and received a considerable attention at that time. His first lecture was an enormous success. Even though the largest lecture hall had been chosen for it, the people stood all the way down the staircase.

From Boltzmann, wikipaedia. (My bold)

Can you imagine such a thing happening today, at a lecture on natural philosophy?

 

Josey's picture
Josey
Status: Bronze Member (Offline)
Joined: Mar 24 2011
Posts: 40
Peons, westerners, and dodos

Arthur,

That is a great line about the peon and westerners! Is that yours?

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