Daily Digest

Daily Digest 9/16 - Hyperinflation Special Report, Oil Found On Sea Floor, EROEI Of Ethanol

Thursday, September 16, 2010, 9:57 AM
  • Payroll Violations Soar With Down Economy
  • Major Retailers Hurt By Collapse of Consumer Debt-Spending
  • Hyperinflation Special Report
  • IMF Meetings Should Target Double-Dip Risk: Mohamed A. El-Erian
  • The $6 Trillion 401K Grab
  • When Japan Collapses
  • New Perspectives on the EROI of Corn Ethanol
  • Researcher - 'The Oil Is Not Gone'
  • U.S. Farmer Fined $5K For Growing Too Many Vegetables
  • Food And Soil
  • Huge Fish Kill Reported In Plaquemines Parish

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Economy

Payroll Violations Soar With Down Economy (Don B.)

“I’ve even had some of my employees tell me they have been paid in cash,” said Mitchell, president of Citadel Tile and Marble in West Sacramento. “They don’t want to report it because they don’t want to get in trouble. It makes it unfair for those who play by the rules.”

Major Retailers Hurt By Collapse of Consumer Debt-Spending (Rector)

The chart below tells the story that retail CEOs have been ignoring for a decade. Consumer credit has advanced from $1.5 trillion in 2000 to $2.4 trillion today. This 60% increase in consumer debt has allowed workers who have barely increased their earnings to spend like they made a lot more money. This debt-fueled consumption binge led major retailers to expand in order to keep up with the delusional consumers.

Hyperinflation Special Report (RW)

The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.

IMF Meetings Should Target Double-Dip Risk: Mohamed A. El-Erian (Doug)

Many topics are being teed up for next month’s annual meetings of the International Monetary Fund and World Bank in Washington, a gathering that will draw about 190 country representatives. There is a substantial risk of disappointment, one that would be detrimental to the welfare of billions around the world over time.

This risk can and should be minimized. To do so, the natural inclination for complexity must urgently be replaced by focused simplicity. This can be achieved by placing just one question on the agenda: Why are economic policies in industrial countries proving so frustratingly ineffective?

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The $6 Trillion 401K Grab (Davos The Narcissist)

Professor Ghilarducci wrote here about the shortfall's of 401(k)s and IRAs. What Ghilarducci doesn’t mention is that our debt, on and off balance sheet is why workers have retirement savings problems. The average worker toils from January 1 to August 15th to service our debt. This leaves him 138 days of the year to fend for himself. The fact that his wages are circa 1973 doesn’t help him save. The fact that he is paying back looted money with interest doesn’t help him save.

When Japan Collapses (JimQ)

The “nothing bad has happened so far” crowd continues to spout fallacies about the Japanese owning the debt to themselves and their high savings rates as the reason that Japanese debt can continue to grow. About 95% of Japan’s debt is held domestically, which sovereign-debt agencies have said supports the country’s creditworthiness even as borrowings have reached 200% of gross domestic product. In a sign that base is waning, Japan’s public pension fund, holder of 12% of outstanding debt, sold more government bonds than it bought for the first time in nine years. The National Savings rate has declined from 18% in 1980 to 2% today.

Energy

New Perspectives on the EROI of Corn Ethanol (Don B.)

Over the past decade there has been considerable debate on corn ethanol, most focused on whether it is a net energy yielder. The argument is generally that “if the Energy Return on Investment (EROI) of corn ethanol is positive then it should be pursued. On one side are Pimentel (2003) and Patzek (2004) who claim that corn ethanol has an EROI below one energy unit returned per energy unit invested, and on the other side are a number of studies claiming that the EROI is positive, reported variously as between 1.08 and 1.45 (Wang et al. 1997; Wang 2001; Shapouri et al. 2002; Graboski 2004; Shapouri 2004; Oliveira et al. 2005; Farrell et al. 2006; Wang et al. 2007). Even with numerous publications on this issue, disagreement remains as to whether corn ethanol is a net energy yielder.

Environment

Researcher - 'The Oil Is Not Gone' (Davos)

Miles of oil -- some several inches deep -- remain at the bottom of the gulf, according to a research term. A University of Georgia team took 13 core samples from the bottom of the gulf and found oil in all 13. "The oil is not gone," said marine sciences professor Samatha Joye. "It's in places where nobody has looked for it."

U.S. Farmer Fined $5K For Growing Too Many Vegetables (mizbear)

According to WSB-TV in Atlanta, DeKalb County officials claim Steve Miller violated local zoning laws by growing too many crops on his land.

Food And Soil (Don B.)

Increases in grain production brought about by irrigation and synthetic fertilizer-pesticide inputs have peaked and begun declining. As consumption surpasses production, the world's stocks of stored grain have been falling relative to each year's use. When supply can no longer meet demand, free market price competition may starve the poor.

Huge Fish Kill Reported In Plaquemines Parish (VeganD)

Photographs the parish distributed of the area shows an enormous amount of dead fish floating atop the water.

The fish kill was reported to the Louisiana Department of Wildlife & Fisheries and the cause has not yet been determined, the parish said. The fish were found in an area that has been impacted by the oil from the BP oil spill, the parish said.

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."

12 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...

"U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc.

Bank repossessions climbed 25 percent from a year earlier to 95,364, the most since the Irvine, California-based data provider began keeping records in 2005. Foreclosure filings, including default and auction notices, fell 5 percent to 338,836. One out of every 381 U.S. households received a filing, RealtyTrac said today in a statement.

“We’re on track for a record year for homes in foreclosure and repossessions,” Rick Sharga, RealtyTrac’s senior vice president, said in a telephone interview. “There is no improvement in the underlying economic conditions.” "

.....................1A) US homes lost to foreclosure up 25 pct on year

"Wayne County's $250-million deficit is about to grow even more because the Sheriff's Office is on the verge of overspending by $20.1 million, according to financial estimates to be reviewed by the Board of Commissioners today.

The news is the latest setback for a county unable to reel in a budget shortfall that has been made worse in recent years by declining property values and less revenue sharing.

In the Sheriff's Office, the primary budgetary culprit is the jail, which overspent by $17.2 million.

Undersheriff Daniel Pfannes said the Sheriff's Office simply couldn't provide mandated services, such as running a jail, with a budget that was cut 10% in 2008 and 12.4% in 2009. The reductions eliminated about 800 jail beds, many of which were money-makers because of state funding and payments from other agencies that use the jail, Pfannes said."

"WASHINGTON (MarketWatch) -- The poverty rate rose to 14.3% in 2009, the highest since 1994, up from 13.2% in 2008, the Census Bureau reported Thursday. Last year there were a record 43.6 million people in poverty. Meanwhile, real median household income in 2009 was $49,777, not statistically different from the prior year. Real median income fell 1.8% for family households, and rose 1.6% for nonfamily households. Also, the number of people with health insurance fell to 253.6 million in 2009 from 255.1 million in 2008, the first year that the number of people with health insurance has decreased since 1987, when the government started collecting comparable data. The number of uninsured rose to 50.7 million from 46.3 million."

  • Other news and headlines:

Losses from Fannie Mae, Freddie Mac seizures may near $400 billion

U.S. retirement income deficit: $6.6 trillion

China should cut dollars if U.S. too loose: sovereign fund

Zombie Buildings Shadow Spain's Economic Future

Small Business Can't Get Loans From Bailed-Out Banks in US

Calpers in Talks With Schwarzenegger on $2 Billion Loan for State Budget

U.S. Nuclear Industry Will Remain Ward of the State, as in France, Report Warns

LSU warns of massive layoffs, enrollment decline if budget cuts prevail

Prison cutbacks cutting into public safety (Texas)

Oregon's farm income falls 41 percent

Recession Forcing More US Tribes To Restructure Debt

Mayor outlines cuts to close $100 million gap in '11 budget (Denver)

Speeders could be quick fix to help balance Denver budget

Union: Idling could lead to 1200 layoffs (MD)

The 10 American Industries That May Never Recover

Las Vegas Apartment Market Struggles With Double-Digit Vacancy Rates

Treasury's Tricky Task: Cutting Ties To AIG

City budget shortfall could grow $16 million (Toledo)

No bidders emerge at Willits foreclosure sale

FedEx 1Q profit doubles; will cut 1,700 jobs

US Adopts Tougher Stance on China

Home Price Double Dip Begins (CNBC)

Eaton Vance Shuns Illinois Bonds on Unfunded Pension

Los Angeles County Notices of Default Up 33%; Default Research Blames Unemployment, Economy

Philly Fed Index Rises In September But Remains Negative‎

crash_watcher's picture
crash_watcher
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California state legislature breaks record for latest budget

Another dubious record for CA:

California has broken a record. This year’s budget - whenever the legislature passes it - will be the state government’s latest budget in 30 years.

....

Republicans, who’d agreed to a tax increase, now say that was a onetime deal. Democrats, who agreed to deep cuts in spending, now say they won’t cut that deep again. That leaves few options for closing this year’s $19 billion deficit.

The state controller has warned that he may have to pay the state government’s bills next month with IOUs.

http://www.scpr.org/news/2010/09/16/state-legislature-breaks-record-latest-budget/

 It appears to me that nothing was learned from last year, except for this:

The payment deferral was announced as lawmakers passed a bill to let recipients use state IOUs to pay fees and taxes owed to the government in Sacramento, if the warrants are issued.

The legislation, from Assemblyman Joel Anderson, a San Diego Republican, passed the Senate unanimously. It requires all state agencies to accept registered warrants issued to pay for goods and services. The Assembly unanimously approved the measure in September.

The bill aims to offset the hardship IOUs can impose on those who receive them, Anderson said, citing the experiences some recipients had with last year’s warrants. The most-likely beneficiaries would be vendors who get IOUs for goods and services rendered and must make periodic payroll-tax payments to the state, said Collin McGlashen, a spokesman for Anderson.

http://www.bloomberg.com/news/2010-08-23/california-delays-2-9-billion-school-county-payments-amid-budget-impasse.html

Just how long will vendors providing G&S be willing, or able, to continue doing business with the state like this, year after year?

Hey, I have an idea, why not also pay the legislature in IOUs?  Maybe some new options would become apparent.

Yes, yes, I know... the Assembly would unanimously reject that measure!

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Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...

From cartoonist Eric G. Lewis:

 

Posted by CalculatedRisk on 9/15/2010 02:47:00 PM
saxplayer00o1's picture
saxplayer00o1
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Posts: 4066
National Debt...Ouch!

Treasury Direct Link

====================================================================

The Daily History of the Debt Results

Historical returns from 09/10/2010 through 09/15/2010

The data for the total public debt outstanding is published each business day. If there is no debt value for the date(s) you requested, the value for the preceding business day will be displayed.

( Debt Held by the Public vs. Intragovernmental Holdings )

 

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
09/10/2010 8,942,462,559,419.34 4,499,299,837,737.89 13,441,762,397,157.23
09/13/2010 8,942,553,858,943.34 4,500,889,129,950.06 13,443,442,988,893.40
09/14/2010 8,942,704,712,188.55 4,497,520,786,438.87 13,440,225,498,627.42
09/15/2010 9,007,121,861,472.49 4,490,905,087,664.07 13,498,026,949,136.56
crash_watcher's picture
crash_watcher
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Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...

Davos (The Narcissist),

I hope you do continue to bring attention to your articles posted at other sites.  Please, just don't start referring to yourself in the third person, like this guy:

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jhart5
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Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...

 

Harvard Lobotomies and the Disgrace of the Economics Profession

By Damon Vrabel

It’s worth stepping back on occasion to consider the progress that has been witnessed in particular academic fields. Astronomy took a giant step forward centuries ago when it finally realized the sun was at the center of the solar system. Geology adapted to the fact of a round earth. The continuous evolution of Physics boggles the mind.

Engineering perpetually pushes into new frontiers.

And how does Economics compare?

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Poet
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Posts: 1891
Vote for Best Daily Digest/Saxplayer Article Link Of The Day

I think it'd be fun to have a little poll every day on which article people think are the most worthwhile, insightful, meaningful, stunning even.

For today, my vote is...

When Japan Collapses
http://theburningplatform.com/blog/2010/09/15/when-japan-collapses/

Although history does not repeat itself, it does rhyme. And Japan is about 5 to 10 years ahead of us... Just so scary. Look at their consumer debt going down because people are afraid to spend, stimulus spent on useless infrastructure determined by bureaucrats and private/political interests rather than on enduring money-saving or money-generating ventures, etc.

And elderly people starting to cash in Japanese bonds to pay for retirement living so their pension fund has sold more gov't bonds than purchasd, and the government spends 60% of tax revenue on debt service. Kinda  like our Baby Boomers are starting to try to to cash on in their stocks, homes, and Social Security...

Poet

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Davos
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Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...

Davos submitted that Damon Vrabel link to tomorrows DG....(humor intended for Crash_Watcher)

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Davos
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Re: Vote for Best Daily Digest/Saxplayer Article Link Of ...
Poet wrote:

I think it'd be fun to have a little poll every day on which article people think are the most worthwhile, insightful, meaningful, stunning even.

For today, my vote is...

When Japan Collapses
http://theburningplatform.com/blog/2010/09/15/when-japan-collapses/

Although history does not repeat itself, it does rhyme. And Japan is about 5 to 10 years ahead of us... Just so scary. Look at their consumer debt going down because people are afraid to spend, stimulus spent on useless infrastructure determined by bureaucrats and private/political interests rather than on enduring money-saving or money-generating ventures, etc.

And elderly people starting to cash in Japanese bonds to pay for retirement living so their pension fund has sold more gov't bonds than purchasd, and the government spends 60% of tax revenue on debt service. Kinda  like our Baby Boomers are starting to try to to cash on in their stocks, homes, and Social Security...

Poet

Jim Quinn ROCKS!

This quote JC wrote in that article should be shoved up Krugman's Keynesian pie hole sideways. Agree it was the best read on the net I saw today.

Only a partisan economist/columnist from an Ivy League University with a Nobel Prize could look at the following two charts and conclude that the Japanese Government failed to revive the Japanese economy over the last twenty years because they spent far too little on fiscal stimulus. Japanese government debt as a percentage of GDP was 52% in 1989, prior to their real estate and stock market crash. Today it stands at 200% of GDP.

middleclassamerican's picture
middleclassamerican
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Posts: 19
Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...
jhart5 wrote:

 

Harvard Lobotomies and the Disgrace of the Economics Profession

By Damon Vrabel

It’s worth stepping back on occasion to consider the progress that has been witnessed in particular academic fields. Astronomy took a giant step forward centuries ago when it finally realized the sun was at the center of the solar system. Geology adapted to the fact of a round earth. The continuous evolution of Physics boggles the mind.

Engineering perpetually pushes into new frontiers.

And how does Economics compare?

 

It does not...Astronomy, Geology and Physics are fields governed by the creator or big bang, take your pick.  But they are not sciences or fields invented by man, they were discovered by man .  Economics, like religion is invented by Man...so it does not compare.  They are simply tools to manipulate.  Great article, Vrabel is on the money...

The only thing you need to know about economics is who controls the money...

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Davos
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Posts: 3620
Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...
middleclassamerican wrote:
jhart5 wrote:

 

Harvard Lobotomies and the Disgrace of the Economics Profession

By Damon Vrabel

It’s worth stepping back on occasion to consider the progress that has been witnessed in particular academic fields. Astronomy took a giant step forward centuries ago when it finally realized the sun was at the center of the solar system. Geology adapted to the fact of a round earth. The continuous evolution of Physics boggles the mind.

Engineering perpetually pushes into new frontiers.

And how does Economics compare?

 

It does not...Astronomy, Geology and Physics are fields governed by the creator or big bang, take your pick.  But they are not sciences or fields invented by man, they were discovered by man .  Economics, like religion is invented by Man...so it does not compare.  They are simply tools to manipulate.  Great article, Vrabel is on the money...

The only thing you need to know about economics is who controls the money...

A tie with Quinns

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 9/16 - Hyperinflation Special Report, Oil ...

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