Daily Digest

Daily Digest 7/26 - Deadlocked On Debt Ceiling, A Visualization Of U.S. Debt, BP Profits Miss Forecast

Tuesday, July 26, 2011, 9:46 AM
  • A ‘Unique Opportunity’ on the Debt Ceiling, Lost
  • Recession Study Finds Hispanics Hit the Hardest
  • Jim Rogers: "The US Has Already Lost Its AAA Status...I Am Short The US Bond Market As We Speak"
  • Deadlocked
  • A Visualization Of United States Debt
  • UK GDP figures show slower growth of 0.2%
  • BP Profit Misses Forecasts
  • Japan: angry Fukushima citizens confront government 

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A ‘Unique Opportunity’ on the Debt Ceiling, Lost (jdargis)

The difference between that attempted “grand bargain” and what Congress is coming up with is not just a matter of dollars. Mr. Obama and Mr. Boehner did tentatively agree to more than $3 trillion in savings over 10 years — at least hundreds of billions more than is called for in the fallback plans now bandied about in Congress to clear the way for a vote to increase the $14.3 trillion borrowing ceiling by next Tuesday.

Recession Study Finds Hispanics Hit the Hardest (jdargis)

“It’s a very stark reminder of the high share of minorities who live at the economic margins of this country,” said Paul Taylor, executive vice president of the Pew Research Center and an author of the report. “These data really show their economic vulnerability.”

Jim Rogers: "The US Has Already Lost Its AAA Status...I Am Short The US Bond Market As We Speak" (adam)

While there is nothing new in the just released Jim Rogers interview with the WSJ, it is always refreshing to hear him tell the truth, which is, of course that "the US has already lost its AAA status. Who cares what Moody's say." As for the response: "The market looks ahead: this is not the first time that the market has dealt with the fact that the US is bankrupt." As for his proclivity to buy long term US debt: "I wouldn't lend money to the US in US dollars for 30 years at 3%, or 4%, or 5% or you name the interest rate.... I shorted it June 10. I am short the US bond market as we speak." Great stuff as usual.

Deadlocked (Ilene)

One line of reasoning from the “no tax hikes” crowd is the inaccurate premise that the very wealthy, the top 0.1%, are job creators. If they’re the “job creators,” it might be in the public interest to protect them from excessive taxation - thereby allowing these top 0.1% to spend money on creating jobs. This is incorrect. The overwhelming majority of U.S. jobs are ‘created’ by ordinary Americans when they spend their paychecks. Consumer spending drives about 70% of our GDP. When average Americans are struggling with high unemployment, which recently popped back up to 9.2%, they are reluctant to spend money on anything beyond basic necessities. The broader U6 unemployment number - which includes the underemployed and “discouraged workers” - is 16.2%.

A Visualization Of United States Debt (Phil H.)

One Trillion Dollars - When the U.S government speaks about a 1.7 trillion deficit - this is the volumes of cash the U.S. Government borrowed in 2010 to run itself. Keep in mind it is double stacked pallets of $100 million dollars each, full of $100 dollar bills. You are going to need a lot of trucks to freight this around.

If you spent $1 million a day since Jesus was born, you would have not spent $1 trillion by now...but ~$700 billion- same amount the banks got during bailout.

UK GDP figures show slower growth of 0.2% (Michael S.)

"The positive news is that the British economy is continuing to grow and is creating jobs," said Mr Osborne.

"And it is positive news too that at a time of real international instability we are a safe haven in the storm."


BP Profit Misses Forecasts (jdargis)

BP reported a profit in the second quarter Tuesday, saying higher oil and gas prices had made up for lower production and rising costs.


Japan: angry Fukushima citizens confront government (guardia)

When asked by one person at the meeting about citizens’ right to live a healthy and radioactive-free life, Local Nuclear Emergency Response Team Director Akira Satoh replies “I don’t know if they have that right.”

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Spanish, Italian Borrowing Costs Soar


"Philippine Secretary of Finance Cesar Purisima said U.S. failure to reach a debt deal is causing a "loss of confidence" in the dollar and could "accelerate the search for an alternate reserve currency."

With no credible alternative to the dollar, however, "in the short run gold and oil prices will go up. In case of default, they'd go through the roof," Mr. Purisima said in a telephone interview."

"Spain's short-term cost of borrowing climbed to three-year highs at an auction on Tuesday, showing strong EU action on Greece last week has failed to cap worries that Europe's debt crisis could still spread.

Spain sold 2.9 billion euros ($4.16 billion) of 3- and 6-month Treasury bills, though demand was lower and yields on both issues were higher than at the last of the regular sales in June. "

"On Tuesday, the Treasury sold 750 million euros of 3-month bills at an average yield of 1.899 percent compared to 1.568 percent at the previous auction and at a bid-to-cover ratio of 6.3 after 9.5 in June.

Spain also sold 2.14 billion euros of 6-month bills, with the average yield rising to 2.519 percent, the highest since Dec. 2010, from 1.776 percent in June, while the offer was 2.2 times subscribed after 3.8 times at the last auction"

"Italy sold the targeted €7.5 billion in six-month T-bills and €1.5 billion in zero coupon notes maturing April 2013. The average yield on the T-bills rose to 2.269% from 1.988% June 27. The yield on the zero coupon notes rose to 4.038% from 3.219%. "

"Leaders in Alabama's most populous county are expected to decide this week whether to file the largest municipal bankruptcy in U.S. history.

The Jefferson County Commission will hold a special meeting on Thursday in Birmingham to decide whether to continue trying to work out a deal with creditors or file bankruptcy over a sewer system debt of more than $3 billion.

The financial crisis has been hanging over the county since 2008, and Commission President David Carrington says it needs to be resolved.

The county has submitted a repayment plan to creditors including JPMorgan Chase to eliminate almost $1.3 billion of the debt, but it's yet to get a response.

The bankruptcy filing would be nearly twice as large as the record one filed by Orange County, Calif., in 1994."

"The troubled maker of BlackBerry phones is chopping 2,000 jobs this week. Research In Motion's (RIMM) cuts, announced Monday, amount to 10.5% of its work force. That's higher than analysts thought, The New York Times reported, leading some to wonder whether the company is worse off than expected.

RIM isn't the only one wielding the ax this summer. Cisco Systems (CSCO) recently announced job cuts of 6,500, rocking a tech sector that had been relatively stable in the recession. Lockheed Martin (LMT) also wants to cut 6,500. Borders is liquidating and laying off thousands of employees in the process.

Each of those layoff announcements is devastating for the families involved. Put them together, and we're starting to see a return of sweeping job cuts that could further erode the fragile economy.

Companies are laying off employees at a level not seen in nearly a year, The Wall Street Journal reports. It couldn't be happening at a worse time, with an unemployment rate stubbornly set at above 9% and an economy that doesn't inspire confidence in anyone."

"US banks have begun making contingency plans for what to do if the US government defaults on its debt or loses its triple-A credit rating, banking sources and analysts said.

But the conventional wisdom on Wall Street is that Washington's feuding politicians will still reach a last-minute deal and avert a default, an outcome that President Barack Obama has warned would be economic "Armageddon".

"The anecdotal evidence I've heard is that folks are beginning to take steps in case it happens," a former Federal Reserve official with extensive contacts in the banking industry told AFP.

Bank of America, Wells Fargo and Citigroup confirmed that they were making plans on how to minimize the damage of a government default or downgrade."

"The Postal Service is considering closing more than one in 10 of its retail outlets.

The financially troubled agency was announcing Tuesday that it will study more than 3,600 local offices, branches and stations for possible closing.

Currently the post office operates more than 31,000 retail outlets across the country, down from 38,000 a decade ago, but in recent years business has declined sharply as first-class mail moved to the Internet. In addition, the recession resulted in a decline in advertising mail, and the agency lost $8 billion last year."

"Home prices in 20 U.S. cities dropped in the year ended May by the most in 18 months, adding to evidence the housing market is struggling.

The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from May 2010, the group said today in New York. The decline matched the median forecast of 32 economists surveyed by Bloomberg News."

  • Other news, headlines and opinion:

IMF urges swift lifting of US debt limit

World watches and hopes U.S. will avoid debt "suicide"

California Seeks $5 Billion Loan as U.S. States Work to Avoid Debt Chaos

U.S. May Have Enough Cash to Delay Aug. 2 Deadline for Default

Rating Cut May Force Student-Loan Security Sales

1,300 state workers to join Florida's unemployment rolls

Virginia faces an $800M shortfall, report says

Bank of Moscow capital adequacy ratio near limit

Begg: Ireland cannot pay debts despite revised bailout

Calpers Joins Pensions Urging U.S. Debt-Limit Deal Warning of Devastation

Dollar Crushed Under Weight Of Debt Concerns (vs Swiss Franc)

Clayton County, Ga. commissioners consider 34 percent increase in property tax rates

Palo Alto adds fee to garbage bills

Beer sales hit by higher taxes, says BBPA (UK)

Beef Tainted by Radiation to Be Recalled in Japan as Contamination Widens

Radiation Driving Japan Corn Cargo to Quarter-Century Low: Freight Markets

Drought Withers Smallest Hay Crop in Century

Strike Contagion Afflicts BHP, Anglo as Miners Seek Bigger Share

Congress deadlocked over debt as default looms


Denny Johnson's picture
Denny Johnson
Status: Gold Member (Offline)
Joined: Aug 13 2008
Posts: 348

For those w PSLV holdings:


PSLV is carrying such a large premium, and is so low on cash holdings indicating a secondary offering may be coming, that I would not buy it now personally at this price in lieu of other ways to play silver for a trade, without the intention of taking physical delivery at some point.

Nate's picture
Status: Platinum Member (Offline)
Joined: May 5 2009
Posts: 605
eat the rich


saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4239
Boehner to rewrite bill after CBO verdict on plan


"House Speaker John Boehner is rewriting his bill to lift the debt ceiling and cut spending after the Congressional Budget Office ruled his plan would have only cut spending by $850 billion over 10 years rather than the $1.2 trillion the Republican sought. The House may end up voting on the bill on Thursday rather than the initially scheduled Wednesday vote. "



socaljoe's picture
Status: Member (Offline)
Joined: Jul 28 2011
Posts: 2

"The overwhelming majority of U.S. jobs are ‘created’ by ordinary Americans when they spend their paychecks"


Unfortunately, most of those jobs are created outside the US.

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