Daily Digest

Daily Digest 7/24 - Wall St. Makes Fallback Plans, The Debt Crisis And The War Cycle, Nuclear Only Part Of Japan's Problems

Sunday, July 24, 2011, 9:42 AM
  • Wall St. Makes Fallback Plans for Debt Crisis
  • Wall Street And The Debt Ceiling: Unthinkable?
  • The Debt Crisis and the War Cycle
  • Debt Talks Collapse: Blame Boehner Or Blame Obama, No One Is Happy
  • Euro Zone Leaders Clinch Rescue Plan for Greece
  • The Relationship Between Hunger And Petroleum Consumption
  • Fukushima crisis: Nuclear only part of Japan's problems
  • To Nullify Lead, Add a Bunch of Fish Bones

Crash Course DVDInsightful analysis on the Three E’s. Take home a Special Edition DVD today. (NTSC or PAL)

Economy

Wall St. Makes Fallback Plans for Debt Crisis (jdargis)

On Wall Street, Treasuries function like a currency, and investors often use these bonds, which are supposed to be virtually fail-proof, as security deposits in their trading in the markets. Now, banks are sifting through their holdings and their customers’ holdings to determine if these security deposits will retain their value. In addition, mutual funds — which own billions of dollars in Treasuries — are working on presentations to persuade their boards that they can hold the bonds even if the government debt is downgraded. And hedge funds are stockpiling cash so they can buy up United States debt if other investors flee.

Wall Street And The Debt Ceiling: Unthinkable? (jdargis)

Some fear that a default could cause a 2008-style crunch in repo markets, with the raising of “haircuts” on Treasuries leading to margin calls. The reality would be more complicated. For one thing, it’s not clear that there is a viable alternative as the “risk-free” benchmark. One banker jokes that AAA-rated Johnson & Johnson is “not quite as liquid”. In a flight to safety triggered by a default, much of the money bailing out of risky assets could end up in Treasury debt. Increased demand for collateral to secure loans could even push up its price.

The Debt Crisis and the War Cycle (pinecarr)

Many books have been written in recent years on the problems facing us due to our nation’s enormous debt. Indeed, many more could be written before the full scope of the debt problem and its consequences have been exhausted. One of the best books I’ve read which describes the debt problem in its simplest and most fundamental terms was written by one Richard Hoskins, entitled War Cycles/Peace Cycles.

I recently had the privilege of speaking with Mr. Hoskins about this, his most famous book, which was first published in 1985. His book anticipated by many years the infamous credit crisis of 2007-2008. Hoskins’ intimate knowledge of U.S. monetary and economic history, as well as that of his native Virginia, makes him uniquely qualified to analyze our nation’s current monetary and economic problems since, in his words, “The things that are going to happen in the future have already happened in the past.”

Debt Talks Collapse: Blame Boehner Or Blame Obama, No One Is Happy (jdargis)

If you look to Washington for compromise in which each suffers some pain to get a mutually beneficial result, then you should credit the president for doing more than the Republicans. To anyone who has reported on this process over the last few months and in the fevered past few days, it was clear that Democrats were going to be taking the bigger hit to the things they cared about. Obama didn't even want spending reductions tied to the debt limit vote. The Tea Party changed the national political conversation. To catch up with the country's desire to cut spending, the president offered Republicans $3 trillion in cuts including offering to trim entitlements. His base, which includes people who think cuts of any kind are suicide, was furious at the size and kind of what Obama was offering.

Euro Zone Leaders Clinch Rescue Plan for Greece (jdargis)

The deal would also provide substantial debt relief for Ireland and Portugal. And by giving the main European rescue fund increased powers to assist countries that have not been bailed out — like Spain and Italy — leaders are betting that the program, described by some as a new Marshall Plan for Europe, will serve as a firebreak against the contagion that has threatened to engulf some of the region’s largest economies.

The Relationship Between Hunger And Petroleum Consumption - Part 4 (Crash_Watcher)

Parts 1 and 2 looked at the relationship between the global hunger index (GHI) and per capita petroleum consumption, and, part 3 looked at the relationship between per capita petroleum consumption and BMI.

Here in Part 4, I examine the relationship between the food supply energy for individual countries, as estimated Food and Agriculture Organization of the United Nations, and per capita petroleum consumption.

Fukushima crisis: Nuclear only part of Japan's problems (jdargis)

In terms of its energy supply, Japan is isolated, having no interconnections with neighbouring countries. The national transmission system is divided into two separate frequency areas - the 60 hertz (Hz) western system and the 50 Hz eastern system. Although the two areas are interconnected using three frequency converters, the total shared capacity is comparatively small (roughly 1 GW). Thus the east of Japan, which includes Tokyo and the tsunami-hit areas, has faced serious power shortages.

To Nullify Lead, Add a Bunch of Fish Bones (jdargis)

The principle is straightforward, said Victor R. Johnson, an engineer with Civil & Environmental Consultants Inc. “The fish bones are full of calcium phosphate,” he said. “As they degrade, the phosphates migrate into the soil.” The lead in the soil, deposited by car exhaust from the decades when gasoline contained lead or from lead-based paint residue, binds with the phosphate and transforms into pyromorphite, a crystalline mineral that will not harm anyone even if consumed.

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."

6 Comments

plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
karmageddon - meh

 

 http://opinionator.blogs.nytimes.com/2011/07/21/carmageddons-big-surprise/

 

 On a more serious point.. imagine the world woke up - the west in particular.. they took the crash course, they decided to slow down on wasting energy and effort and time......

 A 4 day week.. for almost everyone... nearly full employment..  and low-energy leisure for all.

 4 days of energy intensive, but refreshed and productive.. work and a 3 day weekend for family, relaxation, persuing self-sufficiency and resilience.

 http://www.youtube.com/watch?v=SzJY96m3lkg

 

 Ah well.. just a dream..

  More sabbaths needed.. ?

 hey, lets add Friday - please the Orthodox Jews for starters , and maybe everyone else. Even atheists have a work/life  Or mondays.. ? decisions.. decisions..

 http://www.youtube.com/watch?v=PjFoQxjgbrs&ob=av2n

 

 There's a problem.. picture a football stadium, all seated.. one guy stands up for a better view.. (works longer hours)

 the guy behind needs to do just to keep the same view, rinse - repeat..  soon everone's stood up, nobody has a better view.

 and nobody can sit down... without missing the game.

 how to break the gridlock.

Chronic Agitator's picture
Chronic Agitator
Status: Member (Offline)
Joined: Sep 5 2009
Posts: 14
Reduced salary?

 

Plato,

Can I reduce everyone's salary when I reduce their work week?  I'm all for longer weekends---since the great slowdown began everyone is stretching their work to fill the allotted time.

 

plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
umm.. playing utopian central planner.....

 Yep, as long as you employ more and keep the wage bill constant...

 100 ppl on 5 day week -> 125 ppl on 4 day week. More variety, perhaps less efficiency.. but.. happier people.

 This would really only be tenable in the public sector..... lots of private sector work needs to be 24/7 .. eg vets, pest control.. and obviously emergency fire/police/medics.

 basically anything unpredicatable. Where time is *really* of the essence.

 

  Once the public sector took the lead, those private businesses that feed the public sector would naturally follow..

 

 If you think about it.. this one career, one 5 day working week fits all model.. is very inefficient...

 imagine a 2 day a week mini-job as standard.

 

 Say, 2 days construction work, 2 days doing sales/ or clerical, then 3 days free.

 or 2 + 2 + 2 + 1 day free for the workaholics. 

 

 How this would fit into the current debt structure.. fixed mortgage to be paid.. etc.. meh.. tricky.

 

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1323
Utopian fantasy...

Plato1965 and ChronicAgitator,

Sorry, but I think you are delusional thinking it's going to be easier and less work.  It will be exactly the opposite.  You will be working much more trying to prove worth to get the necessities of life - perhaps even tending farms.   We have been lulled into the easy life with surplus energy.  As we start down the energy decline, there will be much more competition for the scarce resources.

Why do you think the rioting is occurring in Greece?  It's because they are learning they might have to work harder and do with less!

ChronicAgitator wrote:

I'm all for longer weekends---since the great slowdown began everyone is stretching their work to fill the allotted time.

You must be working for a government that is unwilling to layoff or cut the hours of those that produce less work for the same amount of money. Soon that too will come to an end.

frobn's picture
frobn
Status: Silver Member (Offline)
Joined: Nov 28 2010
Posts: 184
rhare wrote: Plato1965 and
rhare wrote:

Plato1965 and ChronicAgitator,

Sorry, but I think you are delusional thinking it's going to be easier and less work.  It will be exactly the opposite.  You will be working much more trying to prove worth to get the necessities of life - perhaps even tending farms.   We have been lulled into the easy life with surplus energy.  As we start down the energy decline, there will be much more competition for the scarce resources.

Its worse. With high unemployment comes severe competition for whatever jobs there are resulting in lower and lower wages while the financial elites take more and more of whatever profits there are. We can't continue living on McDonald type jobs where we serve each other hamburgers.

Chronic Agitator's picture
Chronic Agitator
Status: Member (Offline)
Joined: Sep 5 2009
Posts: 14
rhare
rhare wrote:

 

 

ChronicAgitator wrote:

I'm all for longer weekends---since the great slowdown began everyone is stretching their work to fill the allotted time.

You must be working for a government that is unwilling to layoff or cut the hours of those that produce less work for the same amount of money. Soon that too will come to an end.

Rhare, Nope, I'm an all American small time manufacturer that has dropped a lot of gross income (and all net profits) without layoffs.

By gum, I have certainly considered reducing staff. I  have added several people to try to market our way out of this crap.  From where I sit, extremely few people appreciate their jobs and it is becoming harder for me to appreciate them.  It seems to matter not whether they get paid over $100K or $10/ hour, some employees can be hardly worth keeping. 

I am getting old and grumpy and ready to make changes.

I am also Chronically Agitated

 

 

 

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