Daily Digest

Daily Digest 7/18 - More State Cuts Regardless of Debt Outcome, China's Hidden Oil Spill, Fukushima Covered As Typhoon Nears

Monday, July 18, 2011, 10:42 AM
  • No Matter How Debt Debate Ends, Governors See More Cuts for States
  • Both Sides Confident on Debt Talks Despite Impasse
  • Italy's 'Nepotism' Fuels Supply Of Young, Middle Class And Educated Émigrés
  • The True Elephant In The Room Appears: Trillions In Commercial And Industrial Loans To Europe's Insolvent Countries
  • Andrew Jackson On the Paper Money System and Its Consequences
  • How Do You Hide an Oil Spill? Ask China.
  • Administration Says Minor Oil Seepages Persist In Bohai Area
  • Tepco Rushes to Cover Fukushima as Typhoon Nears

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Economy

No Matter How Debt Debate Ends, Governors See More Cuts for States (jdargis)

Gov. Haley Barbour of Mississippi, a Republican, said that a default stemming from a failure to increase the borrowing limit would be “terrible” for states. But he said that states must also brace themselves for managing a new set of cuts even if the limit is raised. “No matter what happens, states are going to get less money from the federal government,” he said.

Both Sides Confident on Debt Talks Despite Impasse (jdargis)

“I do not believe that responsible leaders in Washington will force this to default,” Jacob J. Lew, the White House budget office chief said on the ABC News program “This Week.” “All of the leaders of Congress and the president have acknowledged that we must raise the debt limit. And the question is how.”

Italy's 'Nepotism' Fuels Supply Of Young, Middle Class And Educated Émigrés (jdargis)

Some of the reasons for that can be found in a system of advancement based on family ties and reciprocal, often corrupt, favours – and in the virtual monopolisation of important posts by the elderly. Estimates vary, but as many as 300,000 young adult Italians may be living abroad. Italy's 74-year-old prime minister, Silvio Berlusconi, with a fortune that owes much to political preferment, embodies some of the reasons why Italy this week came alarmingly close to being sucked into the eurozone debt crisis.

The True Elephant In The Room Appears: Trillions In Commercial And Industrial Loans To Europe's Insolvent Countries (pinecarr)

With the market's attention over the past year exclusively focused on bank holdings of insolvent European sovereign debt, which as is now well known had been declining for months, many if not all forgot that banks also have credit exposure via far simpler conduits: retail and commercial debt. And as an analysis of the full disclosure in the EBA's second stress test exposes, banks are on the hook for literally trillions in various plain-vanilla commercial and retail loans to individuals and businesses.

Andrew Jackson On the Paper Money System and Its Consequences (pinecarr)

As the US Federal Reserve System approaches its 100th Anniversary in a few years, and as central banks and their political allies around the world promote the bailout and enrichment of the biggest banks and wealthiest individuals, to be paid for by the impoverishment and sacrifice of the people, it might be well to remember the lessons of history with regard to a fiat currency controlled by private corporations under the guise of an 'independent monetary authority.'

Environment

Administration Says Minor Oil Seepages Persist In Bohai Area (pinecarr)

Officials at the SOA confirmed ConocoPhillips had still not submitted its report on the cause and location of the leaks as ordered and that, so far, more than 4,240 square kilometers of coastal waters have been contaminated by the oil leaks.

How Do You Hide an Oil Spill? Ask China. (pinecarr)

According to the South China Morning Post, ConocoPhillips immediately reported the first spill to the State Oceanic Administration on June 4, the day it occurred. Its partner in the Penglai field, China National Offshore Oil Corporation, said nothing to the public until July 1, despite the fact that large numbers of dead fish were washing up on nearby shores. When SOA got around to saying something on July 5, it fibbed. “There is no visible floating oil on the sea and the leak is now under control,” said a spokesman—although one official conceded that oil was still visible.

Unfortunately, Beijing gets no credit for coming clean. The July announcements, after all, were prompted by whistle-blowing reports on Sina Weibo, a Twitter-like service in China, of the leakages.

Tepco Rushes to Cover Fukushima as Typhoon Nears (pinecarr)

Tokyo Electric Power Co. is rushing to install a cover over a building at its crippled Fukushima Dai-Ichi nuclear plant to shield it from wind and rain as Typhoon Ma-on approached Japan’s coast from the south. The cover will be placed over the turbine building of the No. 3 reactor “momentarily,” Hajime Motojuku, a Tepco spokesman, said yesterday. The utility also detached a hose from a barge docked near the plant that stores contaminated water, he said, without elaborating.

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."

15 Comments

saxplayer00o1's picture
saxplayer00o1
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Sovereign-Debt Risk Rises to Record in Europe..spreading

 

"Credit-default swaps on France surged 9 basis points to a record 123 and Germany climbed 5 to 65, the highest since March 2009, according to CMA prices at 11:30 a.m. in London. Greece, Ireland, Italy and Portugal also rose to records, helping push the Markit iTraxx SovX Western Europe Index of swaps on 15 governments up 11 basis points to an all-time high 309.

Contagion to France and Germany “reflects the reality that the euro zone is in complete crisis,” said Gary Jenkins, head of fixed income at Evolution Securities Ltd. in London. “If we get anywhere close to looking at France, it’s game over.”"

 

  • Other news, headline and opinion: 

Ireland seeks euro bonds as part of crisis solution

Pressure rises for Greek debt buy-back, swap

Belarus bailed out, but bankruptcy beckons

Bay Area courts to be hit hard by state budget cuts (California)

'Unprecedented' Retail Slump Hits Debt Holders: Australia Credit

Italian, Spanish Bond Yields Soar to Records Amid Crisis Concern

Italian, Spanish yields above 6 percent, eyes on meeting

Monday, Bloody Monday... For European Bonds (Zerohedge's headline about the Italian and Spanish yields)

US states cut home health services for seniors

Oregon cuts Medicaid physician pay by average of 11.5%

Greek Capital Stalled In 48-hour Anti-austerity Strike

European debt fears hit markets after stress tests

Six-figure pensions surge for Sacramento County

New York state, public employees union agree to freeze wages for 3 years

States’ Money Woes Show No Favorites

KPERS unfunded liablilties grow to $8.3 billion (Kansas)

San Rafael's unfunded liability mounts (California)

Fitch repeats warning of U.S. debt outlook change

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saxplayer00o1
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rhare
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Republicans - just don't do it!

Obama Says He Would Veto Republican Plan for Mandatory Budget Cuts, Caps

Am I missing something.  It sure seems like if the Republicans really want to cut, just don't do anything.   It's up to the House to raise the limit, and if it doesn't then it will be time to reduce the size of government to one that matches revenue - no need for a balanced budget amendment.  It would also seem that since Social Security, Medicare and Interest payments are considered mandatory, they would have to be paid first, then what's left over covers the hard choices the politicians would have to begin making.

Perhaps the Obama's would have to make a few less vacations.

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darbikrash
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Reich gets it right

The Dangerous Hi-Jinks of the GOP’s Juveniles

Sunday, July 17, 2011

I’ve spent enough of my life in Washington to take its theatrics with as much seriousness as a Seinfeld episode. A large portion of what passes for policy debate isn’t at all — it’s play-acting for various constituencies. The actors know they’re acting, as do their protagonists on the other side who are busily putting on their own plays for their own audiences.

Typically, though, back stage is different. When the costumes and grease paint come off, compromises are made, deals put together, legislation hammered out. Then at show time the players announce the results – spinning them to make it seem they’ve kept to their parts.

At least that’s the standard playbook.

But this time there’s no back stage. The kids in the GOP have trashed it. The GOP’s experienced actors – House Speaker John Boehner and Senate Minority Leader Mitch McDonnell – have been upstaged by juveniles like Eric Cantor and Michele Bachmann, who don’t know the difference between playacting and governing. They’re in league with tea party fanatics who hate government so much they’re willing to destroy the full faith and credit of the United States. Washington has gone from theater to reality TV – a game of hi-jinks chicken that could end in a crash. 

So now the GOP’s experienced actors are trying to retake the stage. They’ve set a vote Tuesday for a so-called “cut, cap, and balance” plan – featuring an immediate $100 billion-plus cut from next year’s budget and a constitutional amendment requiring a balanced budget.

The plan would be a disaster for the nation, of course – a cut of that magnitude when the economy is still struggling to get out of recession would plunge it back in, and a balanced-budget amendment would make it impossible to counteract future recessions with extra spending and tax cuts.

But, hey, it’s all for show. The GOP’s adults know the President would veto their cuts and they couldn’t possibly muster the two-thirds of the Senate and House needed to override the veto. Nor, obviously, do they have the two-thirds necessary to pass a constitutional amendment.

The point is to give the kids more votes they can wave in the direction of their tea party constituents. It’s hoped that the “cut, cap, and balance” plan — along with Mitch McConnell’s proposed Republican vote disapproving the President’s move to raise the debt ceiling (which the President will then veto) — will be enough to get the juveniles to raise the debt ceiling before the August 2 deadline.

“The cut, cap and balance plan that the House will vote on next week is a solid plan for moving forward,” John Boehner told reporters Friday. Translated: I hope this will be enough playacting to get their votes on the debt ceiling.

MarkM's picture
MarkM
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darbikrash wrote: The
darbikrash wrote:

The Dangerous Hi-Jinks of the GOP’s Juveniles

Sunday, July 17, 2011

I’ve spent enough of my life in Washington to take its theatrics with as much seriousness as a Seinfeld episode. A large portion of what passes for policy debate isn’t at all — it’s play-acting for various constituencies. The actors know they’re acting, as do their protagonists on the other side who are busily putting on their own plays for their own audiences.

Typically, though, back stage is different. When the costumes and grease paint come off, compromises are made, deals put together, legislation hammered out. Then at show time the players announce the results – spinning them to make it seem they’ve kept to their parts.

At least that’s the standard playbook.

But this time there’s no back stage. The kids in the GOP have trashed it. The GOP’s experienced actors – House Speaker John Boehner and Senate Minority Leader Mitch McDonnell – have been upstaged by juveniles like Eric Cantor and Michele Bachmann, who don’t know the difference between playacting and governing. They’re in league with tea party fanatics who hate government so much they’re willing to destroy the full faith and credit of the United States. Washington has gone from theater to reality TV – a game of hi-jinks chicken that could end in a crash. 

So now the GOP’s experienced actors are trying to retake the stage. They’ve set a vote Tuesday for a so-called “cut, cap, and balance” plan – featuring an immediate $100 billion-plus cut from next year’s budget and a constitutional amendment requiring a balanced budget.

The plan would be a disaster for the nation, of course – a cut of that magnitude when the economy is still struggling to get out of recession would plunge it back in, and a balanced-budget amendment would make it impossible to counteract future recessions with extra spending and tax cuts.

But, hey, it’s all for show. The GOP’s adults know the President would veto their cuts and they couldn’t possibly muster the two-thirds of the Senate and House needed to override the veto. Nor, obviously, do they have the two-thirds necessary to pass a constitutional amendment.

The point is to give the kids more votes they can wave in the direction of their tea party constituents. It’s hoped that the “cut, cap, and balance” plan — along with Mitch McConnell’s proposed Republican vote disapproving the President’s move to raise the debt ceiling (which the President will then veto) — will be enough to get the juveniles to raise the debt ceiling before the August 2 deadline.

“The cut, cap and balance plan that the House will vote on next week is a solid plan for moving forward,” John Boehner told reporters Friday. Translated: I hope this will be enough playacting to get their votes on the debt ceiling.

"So now the GOP’s experienced actors are trying to retake the stage. They’ve set a vote Tuesday for a so-called “cut, cap, and balance” plan – featuring an immediate $100 billion-plus cut from next year’s budget and a constitutional amendment requiring a balanced budget."

$100 billion? Well, that ought to shape things right up.

Constitutional amendment?  More political grandstanding. How about just using a calculator and being responsible.

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frobn
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rhare wrote: Obama Says He
rhare wrote:

Obama Says He Would Veto Republican Plan for Mandatory Budget Cuts, Caps

Am I missing something.  It sure seems like if the Republicans really want to cut, just don't do anything.  It's up to the House to raise the limit, and if it doesn't then it will be time to reduce the size of government to one that matches revenue - no need for a balanced budget amendment.  It would also seem that since Social Security, Medicare and Interest payments are considered mandatory, they would have to be paid first, then what's left over covers the hard choices the politicians would have to begin making.

Perhaps the Obama's would have to make a few less vacations.

You may be missing a lot considering that politicians of both parties spent in the good times  and spent in the bad times while more and more of total income and assets went to the top 1% of the population. Decent middle class jobs were outsourced while CEO and executive pay exploded through the roof. I have no doubt that every social program regardless of its merit will be gutted beyond repair and that includes SS and Medicare but we will still have a bloated government and military to protect the assets of the privileged 1%. Programs will be gutted because as a nation we are broke morally and financially. We have the tipping points but it takes awhile to see and feel the effects. My bet is that you and I will see all the cuts we can imagine and lot a more but I doubt if anyone will be celebrating. Well perhaps 1% will be.

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The mal-investment has occured, now it's time to face the music.
frobn wrote:

You may be missing a lot considering that politicians of both parties spent in the good times  and spent in the bad times while more and more of total income and assets went to the top 1% of the population.

No doubt, however, if the more Libertarian minded in the house just hold up any new deal maybe we can get the out of control government spending stopped.  Your right, we have had lots of mal-investment in the past that has benefited the wealthy through government cronyism, but, the sooner we stop the government stealing from all to the benefit of the wealthy, the sooner we can start down a sustainable path.

You are right that I doubt we will see many in Washington grow a backbone and start facing reality, so we will continue with the unsustainable until we have a catastrophic failure. 

 

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phecksel
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MarkM wrote: . How about
MarkM wrote:

. How about just using a calculator and being responsible.

Click your heels dorothy :)

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badScooter
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"experienced actors?"

 

<quote>

"So now the GOP’s experienced actors are trying to retake the stage."

<endquote>

Really?  Our experienced masters need to take the keys away from "the kids"?  Really??

Seems to me that none of my more liberal friends would disagree with me that the damned Republican party in DC is just as responsible for our ridiculous deficit and debt as any Progressive Democrat.  Calling Cantor a "kid" is repugnant to me.  Some of these "young guns" (self-coined term) are actually trying to deal with the problems our "experienced actors" have heaped upon them and us.

Seems to me that the only way through it, is through it.  Reality visits America, the author got that part right, at least...except it is not scripted, and it is not going to be entertaining.

Mike

 

 

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speakcat
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federal debt limit

I don't get it.  We need to raise the debt limit to keep from going broke and defaulting.?    We are already borrowing 40% of every dollar we spend.  If we need to borrow more money, are we not already broke?  If you have it to spend, you do not need to borrow.  And as far as defaulting, how would owing more money make the U. S. less likely to default?  I don't get it.

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Marty59
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federal debt limit

The thing is that if you have been spending more than your household can afford, you still have to pay the rent/mortgage, utilities, insurance, etc., etc. and any other commitments you have already made while at the same time figuring out how to spend less and find a way to raise more money.

Do you really want to be out of debt but homeless?

 

Same with companies and countries.

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osb272646
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Reich gets it right

Reich apparently prefers the good 'ol boys meeting behind closed doors in the smoke filled room.  Maybe throw in a hunk of pork or two while they're at it.  Too bad for him the electorate didn't go along with him last November.

As somebody once said - "Insanity is doing the same thing over and over and expecting a different result".  After four decades of that, it's time for Reich and his cronies to head for the pasture.

 

 

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Woodman
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speakcat wrote: I don't get
speakcat wrote:

I don't get it.  We need to raise the debt limit to keep from going broke and defaulting.?    We are already borrowing 40% of every dollar we spend.  If we need to borrow more money, are we not already broke?  If you have it to spend, you do not need to borrow.  And as far as defaulting, how would owing more money make the U. S. less likely to default?  I don't get it.

I think the lenders don't care how much we borrow as long as we service the debt and keep rolling over maturing debt into more debt.   But that Greek moment must come sooner or later when we can't keep up the game.

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karsa
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greece - temporary deafult

Just came across this not sure if its already been posted. Be interesting to see the ramifications though

 

http://www.zerohedge.com/article/greek-bonds-collapse-ecbs-nowotny-announces-bank-will-compromise-agree-temporary-greek-defau

 

Not quite sure how you default temporarily though

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saxplayer00o1
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