Daily Digest

Daily Digest 9/3 - Greece Default Worries, Geothermal Power From More Sources, Gulf Oil Spill v.2?

Friday, September 3, 2010, 10:50 AM
  • Why Market Is Now More Certain Than Ever That Greece Will Default, And A European Funding Update
  • Andean board backs Goldcorp bid, Eldorado offer trumped
  • ECB Wellink: 'Irrelevant' If World Economy Sees Small 'Double Dip' In Near Term
  • Rare Earths: Digging In
  • Geothermal Power: Hot Rocks And High Hopes
  • Second Gulf of Mexico Rig Explodes And 'Leaks Oil Into Ocean'
  • Mile-Long Oil Sheen Is Spreading From Burning Oil Platform, Coast Guard Says
  • Fears Growing Over Global Food Supply

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Economy

Why Market Is Now More Certain Than Ever That Greece Will Default, And A European Funding Update (pinecarr)

One of the stealthier developments over the past months has been the ever wider creep in Greek CDS, especially in the longer-dated part of the curve. In fact, everything to the right of the 3 Year point is now wider than it was both on the eve of the Greek semi-default, and just after the announcement of the European Stabilization Mechanism (ESM).



How is it that with so much firepower, better known as free money, thrown at the problem, have spreads not declined? The CFR provides one interpretation, which speculates that once European banks find a firmer footing, that Greece, with the blessing of Europe proper, will be allowed to finally sever its mutated umbilical cord, and default.

Andean board backs Goldcorp bid, Eldorado offer trumped (pinecarr)

As the gold sector undergoes further consolidation, the board at Andean - Australia’s second-largest gold miner - today recommended Goldcorp's cash and scrip offer that values the Perth-based miner at C$6.50 a share, or 2 per cent more than Eldorado's offer.” Note: Newsworthy for DD?

    Crash Course DVDShare the Crash Course with your neighbors: gift them a deluxe edition DVD (NTSC or PAL)

ECB Wellink: 'Irrelevant' If World Economy Sees Small 'Double Dip' In Near Term (Johan V.)

Asked at a press briefing about the likelihood of a "double-dip" recession, Wellink said: "On balance, as far as we can see now, it will go on this recovery process."

"In a sense it will be irrelevant if we get a small fall back," he added.

Energy

Rare Earths: Digging In (jdargis)

Rare earths have become increasingly important in manufacturing sophisticated products including flat-screen monitors, electric-car batteries, wind turbines and aerospace alloys. Over the summer prices for cerium (used in glass), lanthanum (petrol refining), yttrium (displays) and a bunch of other –iums have zoomed upward (see chart) as China, which accounts for almost all of the world’s production, squeezes supply. In July it announced the latest in a series of annual export reductions, this time by 40% to precisely 30,258 tonnes.

Geothermal Power: Hot Rocks And High Hopes (jdargis)

Geothermal power stations can also be found along the “Ring of Fire” around the Pacific, in Indonesia, the Philippines and on America’s west coast. Conventional geothermal power stations worldwide have a total capacity of 10.7 gigawatts (GW) and will generate 67.2 gigawatt hours (GWh) of energy this year—enough to supply power to more than 52.5m people in 24 countries, according to America’s Geothermal Energy Association.

Environment

Second Gulf of Mexico Rig Explodes And 'Leaks Oil Into Ocean' (pinecarr)

Another oil rig has exploded in the Gulf of Mexico, reportedly causing a mile-long slick – just over four months since BP’s Deepwater Horizon catastrophe triggered the worst offshore spill in history.

Mile-Long Oil Sheen Is Spreading From Burning Oil Platform, Coast Guard Says (pinecarr)

A mile-long sheen is now visible where an offshore petroleum platform exploded and burned Thursday off Louisiana, the Coast Guard said.” Note: Interesting contrast in how this event is being reported from different sources

Fears Growing Over Global Food Supply (SolidSwede)

The announcement by Vladimir Putin came as the UN’s Food and Agriculture Organization called an emergency meeting to discuss the wheat shortage, and riots in Mozambique left seven dead.

The unrest in Maputo, in which 280 people were also injured, followed the government’s decision to raise bread prices by 30 per cent. Police opened fire on demonstrators after thousands turned out to protest against the price hikes, burning tyres and looting food warehouses.

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."

5 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4163
Re: Daily Digest 9/3 - Greece Default Worries, Geothermal ...

"BEIJING, Sept 3 (Reuters) - China on Friday offered a rare glimpse into its foreign exchange reserves, confirming that they are overwhelmingly allocated in dollars, while a central banker said the mountain of cash could face depreciation risks."

.................1A) China PBOC Hu Says Developing Econs Face Reserve Asset Losses

"Sept. 3 (Bloomberg) -- Japan’s public pension fund, the world’s largest, will increase asset sales by more than five times to about 4 trillion yen ($48 billion) this fiscal year as payouts rise with the nation’s population aging."

"Sept. 2 (Bloomberg) -- New York’s $124.8 billion pension fund, the nation’s third-largest, reduced the assumed rate of return on its investments to 7.5 percent from 8 percent as it recovers from market losses, Comptroller Thomas DiNapoli said.

DiNapoli, the sole trustee of the pension fund, said state and local government employers’ payments to the fund will increase to about 16.3 percent of payroll in February 2012, from 11.9 percent due in February 2011. The fund covers 1 million current and retired government workers. "

"The fund’s value for the quarter ending June 30 declined to $124.8 billion after investments posted a loss of 4.4 percent, DiNapoli said. The fund was valued at $132.6 billion as of March 31.

Harry Wilson, a Republican and former investment manager who is running against DiNapoli in November’s election, said the changes announced today are too little, too late.

“Honest accounting of pension assets and liabilities would reveal a substantial underfunding” of $30 billion to $80 billion in New York’s plan, he said in a paper published today."

"WASHINGTON—The Treasury will sell $127 billion in securities next week. Details of the offerings (all with minimum denominations of $100):"

....................4A) Treasury to sell $67 bln in notes, bonds

"WASHINGTON (MarketWatch) -- The Treasury Department said it plans to sell $67 billion in notes and bonds next week, including $21 billion in benchmark 10-year Treasurys. The U.S. government said it will also auction $33 billion in 3-year notes and $13 billion in 30-year bonds. The 10-year and 30-year sales are reopenings."

"Second-quarter delinquency rates for loans held in commercial mortgage-backed securities are at the highest level since the Mortgage Bankers Association began tracking the data in 1997.

The MBA also said Thursday that delinquency rates for other mortgage groups "remain below levels seen in the early 1990's, some by large margins."

The association's commercial/multifamily delinquency report showed the delinquency rate for CMBS during the second quarter was 8.22%, which is up from 3.91% in the year earlier and 0.53% in 2008. MBA said the CMBS rate comprises loans 30+ days delinquent, including foreclosures and real estate owned (REO). The first quarter, 30+ day delinquency rate on loans held in CMBS was 6.83%"

CMBS

 

.........................5A) Commercial Real Estate Continued to Struggle in 2nd Quarter

CMBS2

 

" State Sen. Dave Luechtefeld was in session in Springfield earlier this year when he got a call from his secretary back in his district office.

She was calling from her cell phone because the district office phones, which are paid for by the state of Illinois, had been disconnected for nonpayment.

"That was the first time," recalled Luechtefeld, R-Okawville.

His office phones were later cut off again, with the state still months behind in paying for the service. He's now getting renewed threats from the phone company of a third cutoff. "It's laughable," he said, "but it's not."

It's the same story at the district offices of Illinois' elected legislators across the state: Phone, utilities, garbage and rent payments months behind, prompting a monthly flurry of terse late notices and cutoff threats to offices with the state emblem on the doors."

""We have 220,000 vouchers sitting in our office waiting to be paid, because we don't have the money to pay them," said Alan Henry of the Illinois comptroller's office, which is responsible for cutting the checks. Those backlogged vouchers as of this week totaled about $4.5 billion in late bills, which are paid as money becomes available to the state from taxes, fees and other sources."

...........6A) Rising school fees result of state's late payments

"SPRINGFIELD - This school year, many parents across the state are having to pay a little more to send their kids to school.

District officials throughout the state say they have bumped up their fees to account for late state payments to their districts."

"Sept. 2 (Bloomberg) -- The number of Americans receiving food stamps rose to a record 41.3 million in June as the jobless rate hovered near a 27-year high, the government said.

Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 18 percent from a year earlier and increased 1.2 percent from May, the U.S. Department of Agriculture said today in a statement on its website. Participation has set records for 19 straight months.

About 40.5 million people, more than an eighth of the population, will get food stamps each month in the year that began Oct. 1, according to White House estimates. The figure is projected to rise to 43.3 million in 2011."

  • Other news, headlines and opinion:

Nathan's Economic Edge looks at today's employment report

Major Chinese banks' risky loans reportedly rising

Value of California's properties falls 1.8% to $4.4 trillion

Japan Said to View US Opposition as Yen Intervention Obstacle

Athens shops pull down shutters on recovery hopes

Franc surge ups pressure on Hungary

KPERS liability at $7.6 billion (Kansas)

Pathmark to cut 1,000+ jobs, with 300+ layoffs in North Bergen, Fort Lee and Woodland Park.

Santa Clara County expecting an onslaught of property tax appeals "Our volume of appeals is up by 500 percent over what it was last year"

Prescription Drug Use Rose to Include Half of Americans in 2008

Ratings on $55bn muni debt face cut (or use this link and then click on one of matches for that headline)

76 Long Beach police positions likely to be cut, union chief says

EXCLUSIVE-UPDATE 2-Mexico's Pemex may face $115 bln pension gap

More than 400 US Banks Will Fail: Roubini

kemosavvy's picture
kemosavvy
Status: Martenson Brigade Member (Offline)
Joined: Oct 13 2008
Posts: 254
Re: Daily Digest 9/3 - Greece Default Worries, Geothermal ...

Mish on Two Beers With Steve

Website

Direct Download, just right click and select 'Save As'

It is a short episode for Two Beers, only 20 minutes, you may only have time to put one beer down, but well worth a listen.

Steve

bmc's picture
bmc
Status: Member (Offline)
Joined: Sep 1 2009
Posts: 13
Re: Daily Digest 9/3 - Greece Default Worries, Geothermal ...

Thanks for the link Steve.

Considering it's Friday, some might view "you may only have time to put one beer down" as a challenge, LOL.

Not quite the Triple Dog Dare though...

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2239
Silver knocking on the $20 door...

...it's at US$19.86 @ 4:18 EST...

(although gold is down a coupla bucks...)

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 9/3 - Greece Default Worries, Geothermal ...

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