Daily Digest

Daily Digest - Apr 12

Sunday, April 12, 2009, 11:02 AM
  • New jobs, new trend (H/T Fred)
  • Farming the sun with the world's largest solar plant (Graphic)
  • #77 at Amazon - I'm surprised it isn't in the top ten!
  • Fix CNBC (Video)
  • Cramer on Frontline (Video)
  • House of Cards (Bear Stearns Book) on TDS
  • Week 16 Bank Failure #22
  • Week 16 Bank Failure #23
  • Federal Tax Receipts Off 28 Percent YoY
  • Federal budget deficit sets March record $192.3B
  • The Tax Capital of the World
  • House of Cards (Bear Stearns Book) on TDS (2 videos)
  • FSN April 11, 2009
  • China foreign exchange reserves at $1.954 trillion
  • Social Security Bomb About To Explode (H/T CM)
  • I've Got Friends In Low Places (H/T Doug) 

Economy 

New jobs, new trend (H/T Fred)

Silagy said building the plant will require 400 workers, all of whom he expects will be employed through local contractors, an important perk in an area where the unemployment rate hovers around 12 percent and the building industry is the primary economic engine.

One contractor, Kraft Construction, is especially interested. Kraft is already helping Regenesis of California build a $17 million, 2-megawatt solar farm at Florida Gulf Coast University that will provide 16 to 18 percent of the school's power.

"This county wasn't built by waiting on people from other places in the country to come in and help us," said Ray Atkinson, a business developer with Kraft. "We've got the horsepower in the local community. We've gotta get 'em on the job before they move out of town."

This is not the only town FPL has targeted for solar technology.

The Babcock project falls in line with three others in Florida: a 75-megawatt plant in Martin County; a 25-megawatt plant in DeSoto County; and a 10-megawatt plant in Brevard County.

U.S. Rep. Tom Rooney, R-Palm Beach Gardens, whose district includes the Babcock area, praised the partnership between Kitson and FPL.

"It's hard to imagine what the world is going to look like when the fossil fuels run out, but Babcock is going to give us that first look," Rooney said.

While only a half-dozen jobs will remain to run the solar facility once construction is done, Kitson hopes the project will be one of the first steps in diversifying a local economy so dependent on construction and tourism. Maybe, Kitson said, the innovation can help attract a company such as SunPower - the Northern California firm manufacturing the solar panels for Babcock - to locate a satellite office in the region.

"We've already started some conversations with solar companies," Kitson said, declining to name any. "A lot of it is overseas, and we need to bring it to America. The key is attracting companies that want to use Babcock as a living laboratory." 

Farming the sun with the world's largest solar plant (Graphic)

#77 at Amazon - I'm surprised it isn't in the top ten!

Fix CNBC (Video)

Cramer on Frontline (Video)

House of Cards (Bear Stearns Book) on TDS

Week 16 Bank Failure #22

Cape Fear Bank, Wilmington, North Carolina, was closed today by the North Carolina Office of Commissioner of Banks, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Federal Savings and Loan Association of Charleston (First Federal), Charleston, South Carolina, to assume all of the deposits of Cape Fear Bank.

Week 16 Bank Failure #23

New Frontier Bank, Greeley, Colorado, was closed today by the State Bank Commissioner, by Order of the Banking Board of the Colorado Division of Banking, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Greeley (DINB), which will remain open for approximately 30 days to allow depositors time to open accounts at other insured institutions. ...

Federal Tax Receipts Off 28 Percent YoY

The U.S. federal budget deficit rose to a record $956.8 billion in the first six months of the fiscal year, the Treasury Department reported Friday.

In March, the deficit widened to $192.3 billion from $48.2 billion in March 2008. Outlays rose 41% to $321.2 billion from $227 billion, while receipts dropped 28% to $129 billion from $178.8 billion.

The Tax Capital of the World

Like the old competition to have the world's tallest building, New York can't resist having the nation's highest taxes. So after California raised its top income tax rate to 10.55% last month, Albany's politicians leapt into action to reclaim high-tax honors. Maybe C-Span can make this tax competition a new reality TV series; Carla Bruni, the first lady of France, could host.

They can invite politicians from the at least 10 other states that are also considering major tax hikes, including Oregon, Illinois, Wisconsin, Washington, Arizona and New Jersey. One explicit argument for the $787 billion "stimulus" bill was to help states avoid these tax increases that even Keynesians understand are contractionary. Instead, the state politicians are pocketing the federal cash to maintain spending, and raising taxes anyway. Just another spend-and-tax bait and switch.

Federal budget deficit sets March record $192.3B

WASHINGTON (AP) - The Treasury Department said Friday that the budget deficit increased by $192.3 billion in March, and is near $1 trillion just halfway through the budget year, as costs of the financial bailout and recession mount.

Last month's deficit, a record for March, was significantly higher than the $150 billion that economists expected.

House of Cards (Bear Stearns Book) on TDS (2 videos)

China foreign exchange reserves at $1.954 trillion

BEIJING (AP) - China's central bank said Saturday that its foreign exchange reserves rose 16 percent year-on-year to $1.9537 trillion by the end of March.

China's reserves, already the world's largest, increased by $7.7 billion in the first quarter - $146.2 billion less than the same period last year, the People's Bank of China said in a notice on its Web site.

Social Security Bomb About To Explode (H/T CM)

From a budget-busting perspective, last year where the US government had a $73 billion Social Security surplus to spend, this year it will be a paltry $16 billion and next year it will be a number indistinguishable from zero. It is hard to overstate the importance of this shift.

This means several things. Instead of $703 billion coming in over the next 10 years, the current (overly optimistic) projection calls for only $83 billion. This means at least another $620 billion in fresh borrowing will have to occur.

More importantly, this means that the United States eventual date with bankruptcy has been moved forward by about 8 years or so. It also means that instead of being some future problem, a few administrations down the road, it is a near certainty that the current administration will have to confront some very difficult funding decisions that will be forced by the inability to borrow enough to pay for everything.

I've Got Friends In Low Places (H/T Doug)

I have to admit that Fed actions announced at the last FOMC meeting very much took me by surprise. Point being, I did not expect the Fed to begin monetization so soon. But surprised I should not have been. Not by a long shot. To be honest, Fed monetization of Treasury debt was inevitable in the current cycle. The recent global capital flow and realized/expected Treasury issuance numbers over the last half-year really tell the whole story quite elegantly. So although there has been plenty of ranting and raving about Fed monetization, myself included, I think it's much more important to our forward investment decision making to simply address this fact objectively and unemotionally. The Fed really had no other choice. Moreover, as we'll discuss, this is the beginning of monetization actions by the Fed. They're just getting warmed up. THE issue now is not the monetization itself, but rather how monetization will influence investment risk and opportunities. I'll divide up in sections the highlight points I believe tell the story of the need for the Fed to monetize and why they will not be able to stop any time soon.

12 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Apr 12

Hello and Happy Easter and Happy Passover and Happy Spring:

Same old stuff in the news today. Comedy Central takes over for CNBC and reports some financial news - the right way. For me, that is where the humor is, commedy, a bunch of slackers picking up the slack of the bottom calling missleaders/cheerleaders.

Along that vein, I was able to catch hour two of the FSN broadcast today - quite a coincidence - the author interviewed lambasted the cable news networks for their collective failure and put Cramer in almost the dim light I shed him in. The bottom line of that hour was we should be irate at how they are messing up the economy with their fix and that a Nobel prize winning economist has already explained why stimulus is just a temporary mask.No love loss for Bernanke in this interview.

Week 16 and we have bank failures 22 and 23. Colorado was a big one. Tax receipts are off 30% - gee I know what that will mean, in GD1 they had tax rates of 85%.

At least the pictures this time around will be color for our kids. Now there is progress to be proud of 80 years later.

f?id=49e099074b54376300e5a1c4&maxX=400&maxY=308

Take care 

RubberRims's picture
RubberRims
Status: Silver Member (Offline)
Joined: Nov 22 2008
Posts: 145
Re: Daily Digest - Apr 12

Goldman Sachs is attempting to shut down a dissident blogger who is extremely critical of the investment bank, its board members and its practices. The bank has instructed Wall Street law firm Chadbourne & Parke to pursue blogger Mike Morgan, warning him in a recent cease-and-desist letter that he may face legal action if he does not close down his website. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5137489/Goldman-Sachs-hires-law-firm-to-shut-bloggers-site.html

They would like some respect, the host needs to choose his words more diligently.

I have herd better drivel, but watch because it has some entertainment value at the beginning and the end.

Now through the actions of Goldman Sachs this website has had mammoth amounts of attention, goldmansachs666.com I have to say this site was interesting reading.  

RR

 

SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Good Morning, Sunshine!

billy-bob's picture
billy-bob
Status: Member (Offline)
Joined: Mar 15 2009
Posts: 8
Re: Daily Digest - Apr 12

Davos:  Right on about Comedy Central / Stewart / Colbert.   They are doing real news posing as very funny entertainment.   They also provide a nice foil to CNBC's schlocky advertising / marketing propaganda posing as news.

Thanks & keep up the great work!

hucklejohn's picture
hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
Barron's Interview with William K. Black

Check out http://www.financialarmageddon.com/2009/04/too-naive.html

Here is another interview with ex-bank regulator Professor William K. Black.

Arthur Vibert's picture
Arthur Vibert
Status: Silver Member (Offline)
Joined: May 16 2008
Posts: 116
Re: Daily Digest - Apr 12

Funny.

In reality, I think the cow is dead.

Arthur

SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Re: Daily Digest - Apr 12
Arthur Vibert wrote:

Funny.

In reality, I think the cow is dead.

Arthur

Pay no attention to the man behind the curtain.  Wink

markf57's picture
markf57
Status: Bronze Member (Offline)
Joined: Aug 25 2008
Posts: 62
Re: Daily Digest - Apr 12

I watched an interview with William Black on "The Journal". I was very enlightening.

 

I liked his correlation to a plane crash.

 

It appears that that plan is the prop up consumer confidence at any and all costs. Isn't that the core of a ponsi scheme?

One1776's picture
One1776
Status: Bronze Member (Offline)
Joined: Jan 24 2009
Posts: 52
Re: Daily Digest - Apr 12
RubberRims wrote:

Goldman Sachs is attempting to shut down a dissident blogger who is extremely critical of the investment bank, its board members and its practices. The bank has instructed Wall Street law firm Chadbourne & Parke to pursue blogger Mike Morgan, warning him in a recent cease-and-desist letter that he may face legal action if he does not close down his website.

Freedom of speech at it's greatest.....NOT!!! As I see it this is a fine line, a corporation in a freemarket can attempt to
quiet a voice as they are not constitutionally bound (not that they should do
anything), but isn't Goldman owned in part by the federal
government? So the federal money is paying lawyers to silence a private
citizen. Does anyone else see it this way?

 

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