Daily Digest

Daily Digest 8/27 - Joblessness In America, Banks Switch to Renmibi For Trade, Oil In Greenland

Friday, August 27, 2010, 9:55 AM
  • Bernanke: The Economic Outlook and Monetary Policy
  • Banks Back Switch To Renminbi For Trade
  • Joblessness In America: A Stickier Problem
  • U.S. Economy Slowed to 1.6% Pace in 2nd Quarter
  • CNBC And The Rally Killers
  • Who Rules America?
  • The Great Deleveraging Lie
  • Regulating Finance: Killing Them Softly
  • Black Stuff In A Green Land
  • Acrimony Behind the Scenes of Gulf Oil Spill
  • Brazil's Agricultural Miracle: How To Feed The World

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Bernanke: The Economic Outlook and Monetary Policy (adam)

ach of the tools that the FOMC has available to provide further policy accommodation--including longer-term securities asset purchases, changes in communication, and reducing the IOER rate--has benefits and drawbacks, which must be appropriately balanced. Under what conditions would the FOMC make further use of these or related policy tools?

Banks Back Switch To Renminbi For Trade (Ben Johnson, Davos)

The phenomenon will accelerate Beijing’s drive to transform the renminbi from a domestic currency into a global medium of exchange like the dollar and euro.

Chinese central bank officials accompanied StanChart bankers on a roadshow to Korea and Japan in June. The bank held similar events in London, Frankfurt and Paris.

Joblessness In America: A Stickier Problem (jdargis)

This focus on stimulus is understandable. America’s economy is still operating well below its potential and there is little doubt that most of the rise in unemployment is the direct result of this. But unemployment is high for other reasons too—ones largely neglected in the current debate. Thanks to the scale and nature of the housing and financial bust, the labour market has almost certainly become less efficient at matching the supply of jobseekers with the demand for workers.

U.S. Economy Slowed to 1.6% Pace in 2nd Quarter (jdargis)

The government lowered its estimate of economic growth in the second quarter to an annual rate of 1.6 percent, after originally reporting last month that growth in the three-month period was 2.4 percent.

The revision is a significant slowdownfrom the annual rate of 3.7 percent in the first quarter and 5 percent in the last three months of 2009.

CNBC And The Rally Killers (Ilene)

The current corporate rate of 35 percent is higher than that in many other developed countries. But Congress has larded the code with so many deductions and loopholes — including a dollar-for-dollar credit for taxes paid to foreign governments and generous deductions for depreciation and debt financing — that the effective rate paid by most companies is below 22 percent, lower than in most developed countries.

Who Rules America? (Ilene)

In Robert Frank’s excellent book “Richistan,” he points out that “The wealthy weren’t just getting wealthier — they were forming their own virtual country. They were wealthier than most nations, with the top 1% controlling $17 trillion in wealth. And they were increasingly building a self-contained world, with its own health-care system (concierge doctors), travel system (private jets, destination clubs) and language. (”Who’s your household manager?”) They had created their own breakaway republic — one I called Richistan.”

The Great Deleveraging Lie (JimQ)

Total credit market debt peaked at $52.9 trillion in the 1st quarter of 2009. It is currently at $52.1 trillion. The GREAT DE-LEVERAGING of the United States has chopped our total debt by 1.5%. Move along. No more to see here. Time to go to the mall. Can anyone in their right mind look at this chart and think this financial crisis is over?

    Crash Course DVDThe deluxe Crash Course DVD, with special features not available on the web (NTSC or PAL)

Regulating Finance: Killing Them Softly (jdargis)

Here, they have done a good job of resisting the banking lobby and demonstrating that if put in place gradually, higher capital levels will only dent the economy a little now, and boost it in the long term. The final rules are due in November and will probably call for banks in normal times to carry core capital of at least 10% of risk-adjusted assets. This would be enough to absorb the losses most banks made during 2007-09 with a decent margin for error.


Black Stuff In A Green Land (jdargis)

Several hundred miles north in Baffin Bay, Greenpeace eco-warriors seeking to halt offshore oil exploration in the Arctic faced down a Danish warship. The government hotly contests Greenpeace’s claim that, because oil degrades far more slowly in freezing waters, a Mexican Gulf-style oil spill would mean calamity for the fragile environment. “Our safety standards are the highest in the world,” says Henrik Stendal, chief geologist at the Government Bureau of Minerals and Petroleum.

Acrimony Behind the Scenes of Gulf Oil Spill (jdargis)

The official death of the now-notorious Macondo well in the Gulf of Mexico is expected after Labor Day, with the completion of a relief well. Whether the four-month effort to kill it was a remarkable feat of engineering performed under near-impossible circumstances or a stumbling exercise in trial and error that took longer than it should have will be debated for some time.


Brazil's Agricultural Miracle: How To Feed The World (jdargis)

Even more striking than the fact of its success has been the manner of it. Brazil has followed more or less the opposite of the agro-pessimists’ prescription. For them, sustainability is the greatest virtue and is best achieved by encouraging small farms and organic practices. They frown on monocultures and chemical fertilisers. They like agricultural research but loathe genetically modified (GM) plants. They think it is more important for food to be sold on local than on international markets. Brazil’s farms are sustainable, too, thanks to abundant land and water. But they are many times the size even of American ones.

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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Re: Daily Digest 8/27 - Joblessness In America, Banks ...

"Pittsburgh's municipal pension funds lost $17 million in the stock market during the second quarter, leaving them with just 27.5 percent of what's needed to cover their obligations.

The city has four months -- until Jan. 1 -- to raise that number to 50 percent and avoid a state takeover of the funds, which were worth $272.1 million as of June 30, the city's pension consultants said Thursday."

"California simply cannot solve its budgetary problems without addressing government-employee compensation and benefits."


"As former Speaker of the State Assembly and San Francisco Mayor Willie Brown pointed out earlier this year in the San Francisco Chronicle, roughly 80 cents of every government dollar in California goes to employee compensation and benefits. Those costs have been rising fast. Spending on California's state employees over the past decade rose at nearly three times the rate our revenues grew, crowding out programs of great importance to our citizens. Neglected priorities include higher education, environmental protection, parks and recreation, and more.

Much bigger increases in employee costs are on the horizon. Thanks to huge unfunded pension and retirement health-care promises granted by past governments, and also to deceptive pension-fund accounting that understated liabilities and overstated future investment returns, California is now saddled with $550 billion of retirement debt.

The cost of servicing that debt has grown at a rate of more than 15% annually over the last decade. This year, retirement benefits—more than $6 billion—will exceed what the state is spending on higher education. Next year, retirement costs will rise another 15%. In fact, they are destined to grow so much faster than state revenues that they threaten to suck up the money for every other program in the state budget."

"TUCSON (KGUN9-TV) - Tightening the budgetary belt has police departments across the country cutting back on the serve part of to "protect and serve".

For instance, in Tulsa, Oklahoma officers will no longer investigate larceny, fraud or car theft cases.

In Norton, Massachusetts, the police department's web site tells people to expect delays or no response to non-priority calls and in Oakland, California, the loss of officers has led to a don't call us, we might call you approach to the public.

Oakland police are asking people to file reports online in cases such as theft, vandalism, identity theft and even violations of court ordered custody.

The Oakland City Council says it had to cut the police budget to help shore up a $31.5 million deficit.

The City of Tucson has a $32 million deficit, and is predicting cuts in some form or fashion if you, the voters don't pass a tax bump in November.

The city of Tucson has been struggling to balance the budget for several years.

Police and fire are by far the biggest part of the budget.

TPD has not stopped responding to burglary calls, as Oakland and other cities have but there's a real possibility of cuts in what police can afford to do for you.

Tucson Police already have about 130 officer slots they don't have the money to fill.

Tucson's City Manager says the department may have to lay off about 220 officers unless voters pump up the budget by approving a half cent boost in the sales tax.

If that doesn't happen will city leaders allow Tucson to follow the lead of cities like Oakland where if you have a burglary, police simply tell you to fill out a report?"

"The number of individual investors who have a bullish outlook on the stock market for the next six months plunged to 21 percent, from 30 percent last week, according to a widely followed sentiment survey.

What's more, this is the lowest weekly reading from the American Association of Individual Investors since a March 2009 level of 19 percent, which occurred just before the S&P 500 collapsed to a 12-year low of 676."

  • Other news and headlines:

Chances of Double Dip Now Over 40%: Roubini

Bailed-out German banks post PIGS-related losses

Pimco's El-Erian Says Economic Data `Alarming,' New Stimulus May Not Work

Kan Says Japan Ready to Take 'Bold' Currency Action

Ranks of Underwater Borrowers Decline, Thanks to Foreclosure

Central Valley awash in worthless homes (California)

Spain May Defer at Least EU200 Million of Tax Revenue

Newark submits plan to eliminate nearly 1000 city jobs

Sovereign Credit-Default Swaps Head for Record Monthly Increase in Europe

Downtown Albany building doesn't sell at auction

Ireland's `Vicious Circle' Leaves Banks Facing Higher Debt Cost

Atlantic City may shut down if state denies request to waive budget cap, consultant says

City of Fresno Faces $12 Million Budget Shortfall (California)

Financial concerns continue for Honolulu

Lee County cutting costs to the bare essentials

Suburban schools question Quinn's tax swap call (Illinois)

Tough choices for state's unemployment fund (Wisconsin  "the unemployment fund’s debt was nearly $1.5-million-dollars and growing")

Rising pension costs sink city's budget (Santa Barbara)

Citi Says QE2 Would Be End-Game For The USD

idoctor's picture
Status: Diamond Member (Offline)
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Posts: 1731
Re: Daily Digest 8/27 - Joblessness In America, Banks ...

britinbe's picture
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Joined: Dec 28 2008
Posts: 381
Re: Daily Digest 8/27 - Joblessness In America, Banks ...
idoctor wrote:

Telling that this is on the BBC.  I think there is an element of gloating by the BBC as to how the US has gotten it wrong.  Never the less, the fact that this is on a generally conservative/traditional media channel is very telling

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