Daily Digest

Daily Digest 8/3 - Jobs Report Preview, Regulators Sue Banks Over Mortgages, The Next Catastrophic Crunch Will Be Oil

Saturday, September 3, 2011, 12:49 PM
  • Jobs Report Preview
  • Hope, Fear and Insomnia: Journey Of A Jobless Man
  • Federal Regulators Sue Big Banks Over Mortgages
  • In Libya, Former Enemy Is Recast in Role of Ally
  • Before Release, a Hydraulic Fracturing Study for the State Draws Skepticism
  • Has Peak Oil Come To The Non-OPEC World? Maybe
  • The Next Catastrophic Crunch Will Be Oil: Set to hit the USA just like In 2008
  • China Benefits As U.S. Solar Industry Withers

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Economy

Jobs Report Preview (jdargis)

Wall Street analysts have a median forecast of just a 60,000 net gain in nonfarm payroll jobs, about half of the gain from July. The unemployment rate — which comes from a different survey, and reflects the share of people who want work and are actively looking for it but can’t find a job — is expected to remain 9.1 percent.

Hope, Fear and Insomnia: Journey Of A Jobless Man (jdargis)

There was a time, not all that long ago, when the sound of factory whistles could be heard throughout the five boroughs. In the Bronx, there were Farberware, the pot manufacturer, which employed 700 people before shutting down its plant in 1996; Everlast, the boxing glove maker, which closed its operation in 2003; and Stella D’oro, the cookie-and-breadstick bakery that moved to Ohio in 2009. A. L. Bazzini Company, the peanut factory that supplies snacks to Yankee Stadium, will soon be leaving the city, too.

Federal Regulators Sue Big Banks Over Mortgages (jdargis)

“The suits only add to the uncertainty that dogs the industry,” said Mike Mayo, an analyst with Crédit Agricole. “Banks should pay for what they did wrong, but at the same time they shouldn’t be treated as a big piñata that has the effect of delaying the housing recovery. If banks have to pay for loans they made five years ago, are they going to make new ones?”

In Libya, Former Enemy Is Recast in Role of Ally (jdargis)

And while Mr. Belhaj concedes that he was the emir of the Libyan Islamic Fighting Group, which was deemed by the United States to be a terrorist group allied with Al Qaeda, he says he has no Islamic agenda. He says he will disband the fighters under his command, merging them into the formal military or police, once the Libyan revolution is over.

Energy

Before Release, a Hydraulic Fracturing Study for the State Draws Skepticism (jdargis)

A 40-year-old public company with a worldwide staff of about 1,100 people, Ecology and Environment assists governments and companies on renewable energy projects, on pollution control at contaminated sites, and with obtaining permits and environmental approval for natural gas storage facilities and oil exploration projects, including offshore drilling.

Has Peak Oil Come To The Non-OPEC World? Maybe (Duncan S.)

So what’s going on? Is Peak Oil here, at least in the non-OPEC part of the world? Maybe so. “In identifying mega-themes, we have argued that the shift from the 20th to 21st century represents the end of the oil age and the beginning of the global electricity age,” writes Sankey. “The concentration of remaining (abundant) oil reserves into OPEC hands derives an obvious corollary: the end of growth from non-OPEC supply.”

The Next Catastrophic Crunch Will Be Oil: Set to hit the USA just like In 2008 (ScubaRoo)

Another school of thought has it that there are now constraints in production of oil, and prospects of further constraints as oil is currently getting discovered and developed, slower than the rate at which it is being used. Another way of saying that is that the replacement cost, i.e. the cost of finding new oil and bringing it to market, is what determines the correct (i.e. fundamental) price. I would like to emphasize that “replacement cost” is not the cost of pumping oil that has already been found out the ground, it is the cost of finding an equal quantity of oil that hasn’t been found yet, and pumping that to the market.

China Benefits As U.S. Solar Industry Withers (jdargis)

Solyndra and Evergreen in particular suffered because they pursued unusual technologies whose competitiveness depended on their using less polysilicon, the main material for solar panels. That has become less important because polysilicon prices have tumbled more than 80 percent in the last three years as output has caught up with demand.

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7 Comments

littlefeatfan's picture
littlefeatfan
Status: Silver Member (Offline)
Joined: Jul 20 2009
Posts: 141
3E Links, Resources and Cartoons Weekly Summary

 New weekly link, resource and cartoon postings at 

http://3es.weebly.com/   EXTRA CARTOONS AND RESOURCE Links this week

Highlights this week

 

http://www.oftwominds.com/blogsept11/Zeus-debt-forgiveness-9-11.html  Endgame: When debt Is fraud, debt forgiveness is the last and only remedy

http://priceofoil.org/2011/08/31/report-exporting-energy-security-keystone-xl-exposed/  Will the Keystone XL pipieline really provide US energy security? Or just get it out to the global market easier?

http://www.yesmagazine.org/new-economy/the-north-dakota-miracle-not-all-about-oil  North Dakota’s Economic Miracle

http://www.grist.org/article/2011-08-31-the-dilemma-of-growth-as-dramatized-by-the-voices-in-my-head  The dilemma of growth as voices in my head

http://jessescrossroadscafe.blogspot.com/2011/08/time-for-review-economic-power.html  Time for review

http://www.theoildrum.com/node/8317  The Seneca Effect

http://theeconomiccollapseblog.com/archives/25-signs-that-the-financial-world-is-about-to-hit-the-big-red-panic-button  25 signs the financial world is about the hit the Big Red Panic Button

http://gonzalolira.blogspot.com/2011/08/mr-cheneys-victory-lap.html  Mr. Cheney’s Victory Lap

http://www.project-syndicate.org/commentary/taleb1/English#ixzz1Wpwhinni  The Great Bank Robbery - Nassim Nicholas Taleb

http://motherjones.com/tom-philpott/2011/08/monsanto-gm-super-insects  Attack of the Monsanto Superinsects

http://questioneverything.typepad.com/question_everything/2011/08/how-might-humanity-survive-a-radically-changing-world.html  How might Humanity survive a radically changing world

http://blog.chron.com/climateabyss/files/2011/08/txsum11.gif  Something is seriously wrong here CHART

http://www.wnyc.org/shows/lopate/2011/aug/24/chris-hedges-myth-human-progress/  The myth of human progress - Chris Hedges AUDIO interview

http://kunstlercast.com/shows/KunstlerCast_170_Richard_Heinberg-Part-1.html  Kunstler speaks with Heinberg Pt 1

http://kunstlercast.com/shows/KunstlerCast_171_Richard_Heinberg-Part-2.html Kunstler speaks with Heinberg Pt 2

http://globaleconomicanalysis.blogspot.com/2011/08/us-in-recession-right-here-right-now.html  US in Recession Right Here, Right Now

http://www.salon.com/news/opinion/glenn_greenwald/2011/08/29/terrorism  The decade’s biggest scam

 

Mikey1052's picture
Mikey1052
Status: Bronze Member (Offline)
Joined: Dec 8 2008
Posts: 41
Federal Regulators Sue Big Banks over Mortgages

Lets see now the govmit forced and encouraged banks to give mortgages to people with unworthy credit and further enabled the bubble via fannie and freddie. The bursting bubble then resulted in the bailout of the bankers. So now the complicit federal government wants to sue the banks which could potentially bring at least some "back" to the brink of the abyss requiring further bailouts via the federal government...

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
forgiveness is the last and only remedy

http://www.oftwominds.com/blogsept11/Zeus-debt-forgiveness-9-11.html  Endgame: When debt Is fraud, debt forgiveness is the last and only remedy

See...........  I told you first!

Mike

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
This will be a interesting

This will be a interesting week with so much news coming out of Europe. Watch out for Sept 7th as the German Supreme Court comes down with a decision on the bailouts. Im betting that they will side with the Eurocrats but you never know in this wild period of time. Also the WSJ reported that Greece is toast and with 72% 1 year yields they are pretty much already in default. My poor fellow Greeks will have a hell of a decade to deal with. At least many greeks own their homes outright and the ones in the villages will fare ok. Now the city dwellers may end up going hungry, as they have in the past.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Total US Debt Passes Debt Ceiling...

Deja Vu All Over Again: Total US Debt Passes Debt Ceiling... In Under One Month Since Extension

 
Remember when one month ago the US, to much pomp and circumstance, not to mention one downgrade,  announced a grand bargain raising the debt ceiling from $14.294 trillion to something much higher, with a stop gap intermediate ceiling of $14.694 trillion, or $400 billion more.
 
Well, as of today, or less than a month since the expansion, total US debt is at $14.697 trillion.
 
Yep - the total debt is again over the ceiling, which means the US debt increased by $400 billion in one month. Score one for fiscal prudence. And while the total debt subject to the limit is still slightly less, at $14.652, one week of Treasury auctions and will be time for Moody's to justify again why the US is a quadruple A credit.
 

 
Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Not So Fast, Mikey1052

Mikey1052

I think the situation is a lot more complex, one that your one-liner blame spin instead attempts whitewash. While partially true, we musn't  forget that...

1. It doesn't really address the various different causative and contributing factors that led to the housing/credit bubble and still-ongoing collapse in the United States, which was itself part of a worldwide housing bubble that also simultaneously affected Ireland, the U.K., Spain, and other parts of the world. That's a seemingly worldwide coordination of "govmit force" worthy of a conspiracy theory, isn't it?

2. More importantly, banks were deliberately hiding information from investors in mortgage-backed securities - investors including Fannie Mae and Freddie Mac. Top executives of Clayton Holdings testified that, when they were hired by the banks to do due diligence on mortgages, some 28% didn't meet underwriting guidelines. The banks often waived the loans anyway, and didn't pass that information on to investors - who would either have backed out, or demanded additional discounts - nor to rating agencies - who wouldn't have given AAA ratings to the highest tranches of those mortgage-backed securities otherwise. (Clayton Holdings even offered to share information with the ratings agencies, but they declined, knowing what would happen if they took the information.) But of course, that didn't stop the banks from demanding deep discounts from the mortgage loan originators based on the same failure to meet underwriting standards.

It'd be like if I bought pesticide-laden coffee from you, and demanded a deep discount from you because it was pesticide-laden. Then told my certifier and customers it was organic, and charged a premium for it. Certainly there was no "govmit force" there.

3. Lastly, if the very people creating, packaging, and selling the crappy loans were themselves calling the products they were selling "NINJA" (no-income-no-job-no-assets) loans and "Neutron Bomb" (kills the people, leaves the buildings intact) loans, that they know these were bad, dishonest loans in the first place. Certainly there was no "govmit force" there.

In the end, we have government forces, fractional reserve banking and the Federal Reserve with an easy money policy, profiteering bankers always looking towards quarterly numbers and year-end giant balloon bonuses, and borrowers some who knew they were unqualified - all at fault for their own actions. Mostly motivated by basic human greed.

In the end, I think the suits will be settled to the banks' advantage. Like the previous Fannie and Freddie suits were settled, for a mere few billion to the $100 billion exposure (like a slap on the wrist) - unlike another suit where Bank of America had to pony up more cash, like $8 billion for $56 billion in exposure.

Poet

Mikey1052 wrote:

Lets see now the govmit forced and encouraged banks to give mortgages to people with unworthy credit and further enabled the bubble via fannie and freddie. The bursting bubble then resulted in the bailout of the bankers. So now the complicit federal government wants to sue the banks which could potentially bring at least some "back" to the brink of the abyss requiring further bailouts via the federal government...

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1447
Bipoler

the USA government gives with one hand and takes with the other from the same entity, in this case, Banks.   I can only think this will end very badly as nothing makes sense and the mother of all panics is now more liklely.

 

 

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