Daily Digest

Daily Digest 8/9 - World Markets Plunge As Debt Fears Grow, Poland Going Way Of Greece, Exxon To Sell Assets In Indonesia

Tuesday, August 9, 2011, 9:50 AM

  • Don't Shoot the Messenger
  • Poland on its Way to Greece
  • World Markets Plunge As Debt Fears Grow
  • China's Inflation Reaches 37-Month High
  • Markets Tumble Again As China Inflation Adds To Fears
  • Australian Sharemarket In 'Amazing' Rally Into Positive Territory
  • NZX Drops 9%, No Relief In Sight
  • U.S. Ripple Effect Small Compared To Egypt's Economic Woes
  • Bond Market shrugs off S&P downgrade – Equities reel and Commodities get sold
  • ExxonMobil to Sell Gas Assets in Indonesia
  • Chemical Spill Fear After Dike Breached
  • Still Living With Radiation Fear
  • Don't Worry About a Rise of the Apes: We're Making Them Extinct

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Economy

Don't Shoot the Messenger (Joe P.)

With large-scale bond purchases announced, the ECB is moving closer to how the Fed operates in a crisis. In 2008, then NY Fed President Geithner conferred with Treasury Secretary Paulson whether to "foam" the markets. That referred to massive liquidity injection by buying Treasuries.

Now the ECB may buy bonds of the largest European bond market, the Italian. The ECB has indicated it would sterilize any purchases, i.e. not print money on a net basis.

Poland on its Way to Greece (Austin)

Poland's public debt, but also the citizens' has been growing like an avalanche in the most recent period. Poles' debt increased to 500 billion zloty, but the most important is the dynamics of the increase of the debt. Due to mortgage credits the private debt of the Poles grew from 34.5 billion PLN in March 2005 to the amount of 286 billion PLN in May 2011, so within 6 years, the mortgage debt of the Poles grew by 728%. It is the dynamics of debt increase translates into the dynamics of disposalble income of households.

World Markets Plunge As Debt Fears Grow (pinecarr)

On Monday, China's stock markets encountered a "Black Monday" bout, too, as the Shanghai composite stock index fell by 100 points, as investors were unnerved by the first-ever downgrade of U.S. credit.

China's Inflation Reaches 37-Month High (pinecarr)

The country's Consumer Price Index (CPI), a main gauge of inflation, surged 6.5 percent in July year-on-year, up from a three-year high of 6.4 percent in June, the National Bureau of Statistics (NBS) said on Tuesday.

The stubbornly high inflation rate has been driven by increasing food costs, which rose by 14.8 percent in July from a year ago. The price of pork, a staple food in China, soared by nearly 57 percent in July.

Markets Tumble Again As China Inflation Adds To Fears (pinecarr)

Shares in Asia dropped again, as inflation figures from China added to investors fears for the world economy, following the panic-selling which ripped through trading floors yesterday.

Australian Sharemarket In 'Amazing' Rally Into Positive Territory (pinecarr)

By late afternoon, the benchmark S&P/ASX 200 index was up 0.5 per cent to 4006.7; having earlier fallen as much as 220 points to a new intraday two-year low of 3765.9 as the bear market tightened its grip.

"We're seeing a classic 'short covering' relief rally now as traders aggressively look to take profits on their short positions," IG Markets analyst Ben Potter said in a note.

NZX Drops 9%, No Relief In Sight (pinecarr)

New Zealand has experienced a third day of bloodletting on the sharemarket with the NZX now down 9%.

U.S. Ripple Effect Small Compared To Egypt's Economic Woes (pinecarr)

Egypt is among the markets that have done this numerous times before; according to Kandil, however, the Egyptian pound cannot withstand further depreciation.

“Depreciating the pound in the name of competitiveness is not good, we’ve already depreciated it,” she said. “The biggest challenge in Egypt is the inflation rate at this time, depreciating the pound would worsen the situation.”

Bond Market shrugs off S&P downgrade – Equities reel and Commodities get sold (pinecarr)

It would seem that gold is finally getting the due respect it deserves after being constantly harangued as “no safe haven” by far too many talking heads who confuse liquidity driven issues with fundamentals.

Energy

ExxonMobil to Sell Gas Assets in Indonesia (pinecarr)

U.S. energy giant ExxonMobil said on Monday that it was selling its stake in a cluster of natural gas assets in Indonesia that have been at the heart of a long-running human rights lawsuit.

Environment

Chemical Spill Fear After Dike Breached (pinecarr)

Towering waves whipped up by tropical storm Muifa breached sea defenses protecting a petrochemical plant near a northeastern coastal city on Monday, raising fears of a toxic spill, before the breaches were plugged with thousands of tons of rocks and concrete slabs.

Still Living With Radiation Fear (pinecarr)

In Fukushima city, authorities now estimate aerial exposure of 5.4 to 13.6 millisieverts per year-not counting, critics point out, any internal exposure from food or dust contaminated with radioactive isotopes. Fears were fuelled when a recent test showed small amounts of radioactive substances in the urine samples of all of the 10 children surveyed.

Don't Worry About a Rise of the Apes: We're Making Them Extinct (Jeff B.)

Why? Because—thanks largely to us—there are so few of them. The World Wildlife Fund (WWF) estimates that there are at most 500,000 great apes left living in the wild—about the population of Fresno.

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."

18 Comments

saxplayer00o1's picture
saxplayer00o1
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rjs
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link trouble

Still Living With Radiation Fear = lhttp://www.kuwaittimes.net/read_news.php?newsid=MTAwMzYxMzU0OQ==NK

link doesnt work because of "lhttp" but even without the l, it just goes to a blank page; so here's a google search on it

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SailAway
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FED Full statement

If you haven't read it yet, here is today's FED statement:

http://www.federalreserve.gov/newsevents/press/monetary/20110809a.htm

 

Release Date: August 9, 2011

For immediate release

Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected.  Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up.  Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed.  However, business investment in equipment and software continues to expand.  Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity.  Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions.  More recently, inflation has moderated as prices of energy and some commodities have declined from their earlier peaks.  Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.  The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate.  Moreover, downside risks to the economic outlook have increased. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further.  However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent.  The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.  The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.  The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability.  It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.

Voting against the action were: Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who would have preferred to continue to describe economic conditions as likely to warrant exceptionally low levels for the federal funds rate for an extended period.

 

 
 
Last update: August 9, 2011
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Riots in the UK
I’m watching the news on BBC 24 about the riots in the UK.  As an expat Brit, I am watching this with a lot of interest.  Societal breakdown has always been a fear of mine and hearing stories from my Brother in law about the trouble in Croydon (South of London), the police really seem to have lost control.  As Celente says, “when people loose everything, they loose it”, certainly, the consent of the people to police has been lost.  I don’t condone this behaviour, however, the media seems to be portraying these rioters as unemployed lay-about criminals, but this seems to be an over simplification with graduates, youth workers, unemployed etc etc also being on the street in so far as I can tell.
 
 
I fear this will get worse!!
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Re: FED Full statement

I would to know what Bernanke really thinks right now. I wonder if he still believes in Keynesianism. I wonder if he still thinks its going to work, and I wonder if he has chronic diarrhea?

Yes I already read the Onion post.

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Steinbeck's Lennie as the real uncle Sam

 Nothing is as it seems.   Remember the mean old USA consuming more than its share of resources?  Is it possible during part of the post  WWII period we were actually the big dumb somewhat violent sucker in the world poker game?  The USA spent its bank account of oil,high quality minerals and topsoil.  As a side effect America helped many of the hangers-on recover from the war. It is a slightly different was of looking at the American empire,not the wise old uncle,not the GI Joe.

Now,looking around the table, there is at least one other patsy, OPEC, willing to trade their magic resource for paper. We debate how long that will last.  If they cash out will we be wondering who is the new sucker?  There is a rule of thumb for that.

Is it possible to suddenly get smarter?  Maybe not just the risk/reward of Afghanistan, but the huge opportunity costs. Maybe Bernanke choosing one mandate and doing it well.

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Dylan Ratigan, Mad as Hell: His Epic “Network” Moment

 We’ve got a real problem…this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t doing it, republicans aren’t doing it, an entire integrated system, bankingtrade and taxation, created by both parties over a period of two decades is at work on our entire country right now.

http://www.dylanratigan.com/2011/08/09/dylan-ratigan-mad-as-hell-his-epic-network-moment/

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fogettaboutit
fogettaboutit wrote:

 We’ve got a real problem…this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t doing it, republicans aren’t doing it, an entire integrated system, bankingtrade and taxation, created by both parties over a period of two decades is at work on our entire country right now.

http://www.dylanratigan.com/2011/08/09/dylan-ratigan-mad-as-hell-his-epic-network-moment/

I LOVE Dylan Ratigan.  He is the ONLY person in the MSM who is even close to getting the real problems that face us.  He might not be fully aware of the three Es, but he is delivering more meat and truth than anyone else in the MSM.  I don't catch his show often becuase of it's early afternoon time slot here on the west coast, but everytime I do I am so pleased that someone is in the MSM is trying to inform people about the REAL core problems that we face.  I am surprised he hasn't been yanked from the airwaves a long time ago. It will be interesting to see what MSNBC does after he unleashed his anger and frustration on this show.  I posted a comment on his webiste in full support of what he had to say today and encourage all of you to check it out and post a supporting comment if you agree.

Maybe it's time for us to send him a BUNCH of copies of The Crash Course so that he can expand his knowldege and maybe start informing people about the 3 Es! 

I would vote him into any political office if he was so inclined to run.  Matter of fact, since I am done with Obama and don't see anyone else currently on the list of presidential challengers I can support, I am now officially planning to write in Dylan Ratigan for President in 2012!

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Fireworks
fogettaboutit wrote:

 We’ve got a real problem…this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t doing it, republicans aren’t doing it, an entire integrated system, bankingtrade and taxation, created by both parties over a period of two decades is at work on our entire country right now.

http://www.dylanratigan.com/2011/08/09/dylan-ratigan-mad-as-hell-his-epic-network-moment/

I'd be more impressed if I didn't think it was a deliberate ploy to boost ratings.  He knows full well that everything has to go through Congress and the President can't start a bank.  That rant was gibberish.

Travlin 

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www.thestar.com/news/article/

www.thestar.com/news/article/1036919--customers-fume-as-gas-stations-run-dry

 

Drivers looking to fuel up at Toronto gas stations Tuesday found the pumps dry — a phenomenon that some experts say will become more familiar in the future.

Shell stations across the GTA displayed “No Gas” signs after a delay at their refinery in Sarnia caused supply shortages.

But McTeague warns of future calamity, saying that the current supply system is just meeting demand.

“There is no slack in the system,” McTeague said. “And what if a refinery is incapacitated for a serious length of time? It could be the end of days for drivers.”

Just like that. Are we going to see rapidly escalating shortages now? It's like we were rubber necking at this finacial disaster while we drove off a cliff. Is this serious?

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Travlin wrote: fogettaboutit
Travlin wrote:
fogettaboutit wrote:

 We’ve got a real problem…this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t doing it, republicans aren’t doing it, an entire integrated system, bankingtrade and taxation, created by both parties over a period of two decades is at work on our entire country right now.

http://www.dylanratigan.com/2011/08/09/dylan-ratigan-mad-as-hell-his-epic-network-moment/

I'd be more impressed if I didn't think it was a deliberate ploy to boost ratings.  He knows full well that everything has to go through Congress and the President can't start a bank.  That rant was gibberish.

Travlin 

It sounds like you've become jaded and understandably so.  I think the guy is probably more worried about even having a show after he basically shouted from the hilltiops something that many of us already know-- that the money masters in the banking industry are extracting the weath of the nation AND that our political system must be fundamentally reformed to have any shot at solving the many huge problems that we face.  This is NOT news that the powerful people at the top of the food chain want to be disseminated via any mass media outlets.

And yes, the POTUS may not have the power to do the things he suggested, but he does have the power to level with the American public regarding the fundamental truth that many of us already understand--  that our politicians are bought and paid for and nothing will improve for the general public at large unless we reform our political system immediately and get the special interests and their money out of politics.

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You’re right – in part

[quote=Will]

It sounds like you've become jaded and understandably so.  I think the guy is probably more worried about even having a show after he basically shouted from the hilltiops something that many of us already know-- that the money masters in the banking industry are extracting the weath of the nation AND that our political system must be fundamentally reformed to have any shot at solving the many huge problems that we face.  This is NOT news that the powerful people at the top of the food chain want to be disseminated via any mass media outlets.

And yes, the POTUS may not have the power to do the things he suggested, but he does have the power to level with the American public regarding the fundamental truth that many of us already understand--  that our politicians are bought and paid for and nothing will improve for the general public at large unless we reform our political system immediately and get the special interests and their money out of politics.

[/quote]

Will

You’re right that he exposed the fundamental truth that must not be spoken.  Then he ruined it by speaking nonsense that discredited himself and his earlier message.  Too bad.

I don’t agree on the second point.  He can’t level with the people without losing every democrat as well as the republicans.  Without  their support he might as well go back to teaching.  Besides, people will remember he is also a politician and start looking harder at his campaign contributors.  Many of the biggest are in the financial sector.

Yes, I am jaded on politics and government.  They’ve never been good, but I’ve been around long enough to see how much worse they have become.  Thanks for your thoughts.

Travlin

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fogettaboutit
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Gibberish

 

Travlin said: "I'd be more impressed if I didn't think it was a deliberate ploy to boost ratings.  He knows full well that everything has to go through Congress and the President can't start a bank.  That rant was gibberish."

Not to start a dialogue on this public forum but just in Dylan Ratigan's defense - he has consistently been  speaking the truth - I don't think he is after ratings. As to the infrastructure bank, I do not believe he was saying the President should "start the bank," I believe he was simply saying that the President should lead that effort. 

http://en.wikipedia.org/wiki/National_Infrastructure_Reinvestment_Bank

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I agree it's Gibberish

However for a much different reason.  Why is it that people can acknowledge and complain about how money in politics is the problem and then go off and advocate more of the same.

The problem is that issues that should be handled by either individuals,  private sector, or local governments have been taken over by the federal government.  This means relatively few people have control over very large pots of money.  Of course this results in massive lobbying to try and grab a piece of the pie.

How about instead of trying to stop this fundamentally natural behavior we instead reduce government (particularly a large federal government) and let local governments and individuals deal with issues.   That makes it much less appealing for money to flow into the politics since there is no longer a large potential payoff.  If you have to lobby 1,000 cities versus a few key congressman to get your favorite regulation/tax break/law passed it won't happen.

And even if you don't believe the above, it doesn't matter. As resources (money/energy) become scarce, we will be living and governing much more local.  A large bureaucracy takes a lot of resources to maintain control.  So I say start dismantling now in an organized fashion or be forced to do it quickly later.  I believe Chris would say, this is a problem now, soon to be a predicament.

 

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Agree with you rhare

 (and it is late enough to monopolize today's digest.) However, the vast majority of the world's population is beyond self-responsibility and self-sufficiency... Unfortunate but true. Therefore, we must at least acknowledge the corruptness of the system and support those in the mainstream who will help the clueless masses,. DR is one of the few. (Notwithstanding the principles of Objectivism) It is selfish of those who are beyond looking to governments for help to shut out the public figures who are telling the truth.

 

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The fleas have Apes.

Apes extinct?

We have  lots of them.

 

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The president is more

The president is more "bought" than any member of Congress.

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Living easy and cheaply - perhaps not so clueless?
forgettaboutit wrote:

However, the vast majority of the world's population is beyond self-responsibility and self-sufficiency... Unfortunate but true. Therefore, we must at least acknowledge the corruptness of the system and support those in the mainstream who will help the clueless masses

I believe people in general are much more resilient than you give them credit.  After all, those that suckle heavily from the government teat have found the simplest way of living.   While it will be an unpleasant experience, most will find ways to survive if that teat is removed - just as young animals do when weaned.  

I also believe calling people clueless masses is a bit arrogant.  It degrades people and assumes a superior role - we see a lot of that coming out of our politicians and I believe is inherent in Progressive attitudes.  It's the "I need to tell you how to live" either because you are "too stupid" or "it's for the greater good" attitude.

Even if you don't agree with my Libertarian view points, which will be better, a gradual weaning or going cold turkey when resources run out?  While I'm glad some in the MSM are begining to pull back the curtain, I find the solution of always more government intervention a poor path to travel.

 

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