Daily Digest

Daily Digest 9/18 - What's Really Economically Important, France Ups Retirement Age, The End Of Economic Growth

Saturday, September 18, 2010, 10:59 AM
  • Mish: Myths About "What's Economically Important"
  • Freddie/Fannie Friday - Fat Foreclosure Folios Forecasts Further Falls
  • France Makes Crucial Move to Raise Age of Retirement
  • Warren to Unofficially Lead Consumer Agency
  • China Shifts Away From Low-Cost Factories
  • The Oil Drum: EROI, Insidious Feedbacks, and the End of Economic Growth
  • Venezuela's Economy: Disappearing Dollars

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Economy

Mish: Myths About "What's Economically Important" (hucklejohn)

In a fiat credit-based economy, where credit dwarfs money supply, changes in credit is what's important, not changes in money supply, not nominal changes in prices.

Freddie/Fannie Friday - Fat Foreclosure Folios Forecasts Further Falls (Ilene)

If demand remains weak, Fannie and Freddie could face pressure to take more aggressive steps to hold homes off the market. Fannie, for example, is testing an effort in Chicago where it will rent vacant foreclosures rather than list them for sale. Such a "lease-and-hold" approach could make sense in certain markets where "you believe the supply will take a long time to absorb, but there’s going to be an increase in employment going forward," says Douglas Duncan, chief economist at Fannie Mae.

France Makes Crucial Move to Raise Age of Retirement (jdargis)

Spaniards largely welcomed word that their monarchs are feeling their pain, but anger flared across the border as French lawmakers overcame vocal protests to send to the Senate a sweeping overhaul of the retirement plan, including a highly contested measure to extend working life beyond 60.

The vote in the lower house of parliament was 329-233. The opposition was boisterous, with Socialists shouting ''Resign!'' as the Assembly president cut short debate and thousands of protesters marched outside.

Warren to Unofficially Lead Consumer Agency (jdargis)

he decision, which Mr. Obama is to announce this week, would allow Ms. Warren, a Harvard law professor, to effectively run the new agency without having to go through a potentially contentious confirmation battle in the Senate. The creation of the bureau is a centerpiece of the Wall Street financial overhaul that Mr. Obama signed in July.

China Shifts Away From Low-Cost Factories (jdargis)

Companies here in China’s industrial heartland are toiling to reinvent their businesses, fearing that the low-cost manufacturing that helped propel the nation’s economic ascent is fast becoming obsolete.

Energy

The Oil Drum: EROI, Insidious Feedbacks, and the End of Economic Growth (Don B.)

Economic growth over the past 200 years has correlated highly with energy consumption (Figure 1). Even more telling, since 1970, 50% of the year on year change in GDP in the U.S. is explained by the year on year change in oil consumption alone (Figure 2). This is important because oil consumption per se is rarely used by neoclassical economists as a means of explaining economic growth.

Venezuela's Economy: Disappearing Dollars (jdargis)

The exchange-control board, known as Cadivi, never supplied all the hard currency the economy required (of the $38.4 billion spent on imports in 2009, only $22.3 billion came from Cadivi, for example). But until recently, the government tolerated a parallel foreign-exchange market known as the permuta, which involved trading government bonds. These could be bought in bolívars and sold for dollars, or vice versa, through brokerage houses. The relation between the two prices became the free-market exchange rate.

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3 Comments

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
Re: Daily Digest 9/18 - What's Really Economically ...

‘Peak Oil’ : Jimmy Carter’s Secretary of Energy sounds the alarm (Interview with Robert L. Hirsch) 

James Schlesinger, President Carter’s Energy Secretary, wrote the foreword to a book written by Dr Robert Hirsch, a former US official who predicts a fall of the oil production within 5 years.

Never before has a high-ranking political figure like Schlesinger gave his support to such a prognosis.

The book will be published in the US on October the 1st. Here is an exclusive interview with its author.

What happened after you published your 2005 report on ‘peak oil’ for the US Department of Energy (DoE) ?

The people that I was dealing with said : « No more work on peak oil, no more talk about it. »

jhart5's picture
jhart5
Status: Bronze Member (Offline)
Joined: Jul 25 2009
Posts: 89
Re: Daily Digest 9/18 - What's Really Economically ...

Financial & Emergency Survival

The financial system of the United States is in the early stages of a complete meltdown and the vast majority of Americans are completely unprepared for it. Have you come up with a plan for financial survival when TEOTWAWKI (“the end of the world as we know it”) arrives?

Perhaps you think such talk is alarmist. Well, before we discuss what you should do to prepare, let’s take a look at the state of our financial system

http://vinceseconomicblog.wordpress.com/2010/09/18/financial-survival/

mainecooncat's picture
mainecooncat
Status: Gold Member (Offline)
Joined: Sep 7 2008
Posts: 488
Re: Daily Digest 9/18 - What's Really Economically ...

I think the key take-away from the Hirsch interview is this:

He predicts that production decline will begin sometime in the next 2-5 years.

As far as rate of decline he doesn't specifically predict a number but he says he ran simulations for both 2% and 4% -- though probably because he feels that's a likely range thereby making a de facto prediction I guess. If I remember correctly he said 2% would be difficult and 4% would be catastrophic.

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