Daily Digest

Daily Digest - August 2

Sunday, August 2, 2009, 10:48 AM
  • More on GDP Revisions..(Chris's Crash Course Sited and Video on Page!)
  • More on GDP Revisions..
  • Animal Farm - 2009, By Jim Quinn
  • How ALL Systems can Collapse Overnight (Possible Repost, White-paper on page)
  • Unemployment Figures FAR Weaker than Claimed (That link is to the Coming Depression Blog, if you have browser issues there here is the direct link to article)
  • Bear Market Rally
  • Julian Week #31 Bank Failures 5, Total of 69 for year
  • Late Night Fincancial Advice (Repost, Humor, Video)
  • Colonial Deal Collapses, Expresses Substantial Doubt as Going Concern
  • CNBC With Dennis Kneale (7/31, Video)
  • Dr Housing Bubble & Max Keiser, (Video, Starts on the second video)

Economy

More on GDP Revisions...

GDP has now *officially* been negative for five of the past six quarters. And Q1 was revised waaaaay lower, even lower than the *advance* estimate we received in late April, -6.4 vs. -6.3, making Q1 of 2009 WORSE than Q4 of 2008 (at -5.4), the opposite of what had been previously assumed. No green shoots there.

Animal Farm - 2009, By Jim Quinn

Our elected officials are supposed to represent the wishes of the citizens that elected them. They derive their just powers from the governed. In the early days of our Republic, citizens could freely enter the White House without hesitation. Federalist Papers 55 and 56 explicitly promised, without qualification, that there would be one Representative for every thirty-thousand inhabitants. The framers of the Constitution and the Bill of Rights intended that the total population of Congressional districts never exceed 50,000 to 60,000. Currently, the average population size of the districts is nearly 700,000 and, consequently, the principle of proportionally equitable representation has been abandoned. Our elected officials no longer represent the people. They represent the 17,000 corporate lobbyists who spend $3.3 billion per year to “persuade” them what is best for their special interests. This is why a Congressperson can receive 9 to 1 calls from their constituents against a $700 billion banker bailout bill and still vote for the bill. The ideals of our fledgling Republic have been corrupted by politicians who have sold their souls to corporate and banking interests.

Monetary Trends - August 2009

[White-paper on page]

Monetary Trends – August
Each month the St. Louis Federal Reserve issues a report on Monetary trends. August’s (covering the month of July) is below containing the very latest data from the Fed. Frankly, it’s frightening and historic what is happening to our economy – while money is being produced like there’s no tomorrow (for the dollar that may be true), the rest of the story is not for the faint of heart.

How ALL Systems can Collapse Overnight (Possible Repost, White-paper on page)

Unemployment Figures FAR Weaker than Claimed (That link is to the Coming Depression Blog, if you have browser issues there here is the direct link to article)

Don't believe the "green shoot" callers - this report was horrendous and shows continued dramatic contraction in the workforce and economy.

Bear Market Rally

“DAVE ROSENBERG IS AMONG the vanishing breed of die-hards (we confess, in case you haven’t guessed, to being another) who still cling to the notion that stocks’ explosive rise since March is perhaps the mother of all bear-market rallies, but nonetheless still a bear-market rally. The essence of his skepticism — which we happily second — is simply that the economy, contrary to Wall Street’s jubilant insistence, has yet to turn the corner.

Julian Week #31 Bank Failures 5, Total of 69 for year

The FDIC closed five more banks on Friday, and that brings the total FDIC bank failures to 69 in 2009. The following graph shows bank failures by week in 2009.

Late Night Fincancial Advice (Repost, Humor, Video)

Colonial Deal Collapses, Expresses Substantial Doubt as Going Concern

From the WSJ: Colonial Financing Pact Collapses

Colonial BancGroup Inc.'s second-quarter loss widened on big charges and a key financing deal fell through, pushing the company out of compliance with Alabama capital requirements and causing doubts about the company's ability to remain a going concern.
...
In June, the Colonial Bank unit agreed to oversight by the Federal Deposit Insurance Corp. and Alabama Banking Department and to other steps ... a $26 billion institution.

CNBC With Dennis Kneale (7/31, Video)

Dr Housing Bubble & Max Keiser, (Video, Starts on the second video)

27 Comments

fujisan's picture
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Re: Daily Digest - August 2

WHY IS CNBC VIEWERSHIP PLUNGING? | THE PRAGMATIC CAPITALIST

 

The latest numbers from Nielsen show that CNBC’s ratings have taken quite a hit in the last year.

Despite the most fascinating economic environment of the last 80 years viewers are actually turning their backs on financial TV’s powerhouse network. Why?

 

It’s simple in my opinion. Investors are fed up with being spoon fed the perma-bull outlook. For 10 years now investors have listened to financial news networks feed them the “everything is going to be fine” line. And now,10 years later investors are realizing that everything is not fine. In fact, things are pretty bad. Stocks haven’t budged in 10 years and unemployment is at a 25 year high. Investors are tired of being lied to.
...

Jim Rogers if you follow CNBC or Government Investments advice you'll be Bankrupted

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Re: Daily Digest - August 2

Peter Schiff Vlog 7-31-09 The Recession is over but the Depression is just beginning....

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Separate Corporations from the Government

 Nate's Latest Editorial

Go Nate! Go Nate! Go Nate! Go Nate! Go Nate!

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Re: Daily Digest - August 2

Good Gracious! I took a break from weed whacking to come in and post this. I would highly encourage listening to this. I can't believe I'm hearing this inside the United States of America. I have not had a chance to read the bill or do any research or fact checking.

Link Get interesting at the 5 or 6 minute point.

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Re: Daily Digest - August 2

Sorry Davos but your lik does not work for me?

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Re: Daily Digest - August 2

 Hello iDoctor:

Here are the links, hope they work, take care

 

Select an Audio Format - Part 2
RealPlayer | WinAmp | Windows Media | Mp3

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Re: Daily Digest - August 2

Davos,

I'm typing this to delay my weed whacking...Gary North on Bernanke in panic mode:

http://www.smallgovtimes.com/2009/08/why-bernanke-is-in-panic-mode/

...might want to post in the next Daily...

Happy gardening!

Jeff

 

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Re: Daily Digest - August 2

Holy %#(%><** did I hear that right rationing my end of life counciling???? I thought I already paid for this in advance??? That really would be the end of the world LOL. Really this is over the top. Some body up there is smoking those green shoots again.

Thanks for the fix Davos......sad as it is.

So many Americans are just so lazy they become stupid...thinking Big Govt will take care of me so I don't have to lift a finger for myself???

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Re: Daily Digest - August 2

 Hello iDoctor:

Yup, heck I thought this change would mean someone comes and does mine and Jeff's weed whacking and I'd pay less in taxes. Man! Instead if I get down about it I might get an appointment for depression, lose my right to bear arms and be euthanized. LOL

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Greece to vaccinate all 12 million citizens for Swine flu

http://tvnz.co.nz/health-news/greece-vaccinate-population-swine-flu-2881876

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Re: Daily Digest - August 2

Fed and Fannie created artificial demand for mortgages, helping blow the credit bubble.  Now it looks like we have the Fed following suit: http://www.ft.com/cms/s/0/e84383dc-7f8c-11de-85dc-00144feabdc0.html

Wall Street profits from trades with Fed

By Henny Sender in New York

Published: August 2 2009 23:04 | Last updated: August 2 2009 23:04

Wall Street banks are reaping outsized profits by trading with the Federal Reserve, raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties, officials and industry executives say.

The Fed has emerged as one of Wall Street’s biggest customers during the financial crisis, buying massive amounts of securities to help stabilise the markets. In some cases, such as the market for mortgage-backed securities, the Fed buys more bonds than any other party.

The resulting profits represent a relatively hidden form of support for banks, and Wall Street has geared up to take advantage. Barclays, for example, e-mails clients with news on the Fed’s balance sheet, detailing the share of the market in particular securities held by the Fed.

“You can make big money trading with the government,” said an executive at one leading investment management firm. “The government is a huge buyer and seller and Wall Street has all the pricing power.”

A former official of the US Treasury and the Fed said the situation had reached the point that “everyone games them. Their transparency hurts them. Everyone picks their pocket.”

The central bank’s approach to securities purchases was defended by William Dudley, president of the New York Fed, which is responsible for market operations. “We believe that opting for transparency is a greater good,” he said. “If we didn’t have transparency, we’d be criticised on other grounds.”

However, another official familiar with the matter said the central bank “has heard that dealers load up on securities to sell to the Fed. There is concern, but policy goals override other considerations.”

Barney Frank, chairman of the House financial services committee, said the potential profiteering may be part of the price for stabilising the financial system.

“You can’t rescue the credit system without benefiting some of the people in it.” Still, Mr Frank said Congress would be watching. “We don’t want the Fed to drive the hardest possible bargain, but we don’t want them to get ripped off.”

The growing Fed activity has coincided with a general widening of market spreads – the difference between bid and offer prices – as the number of market participants declines. Wider spreads enable banks, in their capacity as market-makers, to make more profit.

Larry Fink, chief executive of money manager BlackRock, has described Wall Street’s trading profits as “luxurious”, reflecting the banks’ ability to take advantage of diminished competition.

“Bid-offer spreads have remained unusually wide, notwithstanding the normalisation of financial markets,” said Mohamed El-Erian, chief executive of fund manager Pimco in Newport Beach, California.

Spreads narrowed dramatically during the years of the credit bubble.

Brad Hintz, an analyst at AllianceBernstein, said he doubted that spreads would ever return to those levels, a development that could be pleasing to the Fed.

“They want to help Wall Street make money,” he said.

Additional reporting by Brooke Masters in Washington

 

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97 DAYS TO GO

http://jsmineset.com/2009/08/02/97-days-to-go/

Per Jim Sinclair:

"There are 97 days to go before confidence waning enters into the collapse phase.

When the dollar senses this its fall will be violent and quick."

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Re: How all systems can collapse overnight

 I'm just not sure how much I can trust professor Martin A. Armstrong, formerly of Princeton, given that he is currently serving a prison term for bilking Japanese investors.  What do you think?

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Re: Daily Digest - August 2

Jeff  your article was a very good read. I don't really know if it such a good idea to audit the Fed & the Gold reserves or am I missing something? I think it is the right thing to do to keep them honest but who here thinks they have been "honest"?

When they pull the Iron Curtain of secrecy back I would assume the house of cards comes down. Is that a good thing & we all have to start completely over with years of suffering or should we take the medicine now for the good of the future..... but then again you would have to hope the future is less corrupt than we are today. Knowing man kind what are the odds of that LOL?

 

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Re: Daily Digest - August 2

 Here are the notes I made while weed whacking, might be a little off here and there.

Financial Sense News Hour Part 3B - Euthanasia Health Care Bill Real Player, WinAmp, Windows Media Mp3 (Audio, Repost)

  • 1:00 Bill creation
  • 4:30 Health care rationing & Euthanasia
  • 5:30 Utilitarian concepts, Humans bad for planet, Elderly have a duty to die, Columbine HS prototype of Death Education
  • 7:30 Medicare is broke
  • 9:28 Page 425 Government mandate for end of life counseling
  • 11:20 Rationing it for the elderly
  • 11:50 Mandatory government end of life counseling
  • 12:16 page 425, government provides end of life resources
  • 12:53 Doctors to provide end of life order
  • 13:30 John Conyers scoffs at reading this bill that he supports
  • 16:00 8% tax on small business, bill would bankrupt the country
  • 18:30 Mandating mental health standards page 768, requirnment to have counseling for increasing birth intervals between pregnancies (This is the U.S. not China!)
  • 19:50 Science Czar wrote in 1977 planetary regeim that advocated (to wierd to even write, just listen)

Also, we caught up with some old aquantances on the phone, one aquantance we found out has been living in their home for a YEAR and the bank has let them live there - get this - without one single mortgage payment. It is in Florida and this is second hand information, I do not know the institution or the debt to equity ratio, or what type of instrument it is, or if they have a HELOC if they are upside down or rightside up. I know it costs a lender about 80k to foreclose. Maybe the banks figure they can hold onto the 80k and get the grass cut for free, I don't know. But this is something, that if accurate amazes me.

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Re: Daily Digest - August 2

 

http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html

Warning: Oil supplies are running out fast

 

Catastrophic shortfalls threaten economic recovery, says world's top energy economist

By Steve Connor, Science Editor
 

Monday, 3 August 2009

 

The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

 

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.

In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

"The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he said.

There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields.

The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.

"If we see a tightness of the markets, people in the street will see it in terms of higher prices, much higher than we see now. It will have an impact on the economy, definitely, especially if we see this tightness in the markets in the next few years," Dr Birol said.

"It will be especially important because the global economy will still be very fragile, very vulnerable. Many people think there will be a recovery in a few years' time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices," he told The Independent.

In its first-ever assessment of the world's major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was "patently unsustainable", with expected demand far outstripping supply.

Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.

In most fields, oil production has now peaked, which means that other sources of supply have to be found to meet existing demand.

Even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030, Dr Birol said.

"It's a big challenge in terms of the geology, in terms of the investment and in terms of the geopolitics. So this is a big risk and it's mainly because of the rates of the declining oil fields," he said.

"Many governments now are more and more aware that at least the day of cheap and easy oil is over... [however] I'm not very optimistic about governments being aware of the difficulties we may face in the oil supply," he said.

Environmentalists fear that as supplies of conventional oil run out, governments will be forced to exploit even dirtier alternatives, such as the massive reserves of tar sands in Alberta, Canada, which would be immensely damaging to the environment because of the amount of energy needed to recover a barrel of tar-sand oil compared to the energy needed to collect the same amount of crude oil.

"Just because oil is running out faster than we have collectively assumed, does not mean the pressure is off on climate change," said Jeremy Leggett, a former oil-industry consultant and now a green entrepreneur with Solar Century.

"Shell and others want to turn to tar, and extract oil from coal. But these are very carbon-intensive processes, and will deepen the climate problem," Dr Leggett said.

"What we need to do is accelerate the mobilisation of renewables, energy efficiency and alternative transport.

"We have to do this for global warming reasons anyway, but the imminent energy crisis redoubles the imperative," he said.

Oil: An unclear future

*Why is oil so important as an energy source?

Crude oil has been critical for economic development and the smooth functioning of almost every aspect of society. Agriculture and food production is heavily dependent on oil for fuel and fertilisers. In the US, for instance, it takes the direct and indirect use of about six barrels of oil to raise one beef steer. It is the basis of most transport systems. Oil is also crucial to the drugs and chemicals industries and is a strategic asset for the military.

*How are oil reserves estimated?

The amount of oil recoverable is always going to be an assessment subject to the vagaries of economics – which determines the price of the oil and whether it is worth the costs of pumping it out –and technology, which determines how easy it is to discover and recover. Probable reserves have a better than 50 per cent chance of getting oil out. Possible reserves have less than 50 per cent chance.

*Why is there such disagreement over oil reserves?

All numbers tend to be informed estimates. Different experts make different assumptions so it is under- standable that they can come to different conclusions. Some countries see the size of their oilfields as a national security issue and do not want to provide accurate information. Another problem concerns how fast oil production is declining in fields that are past their peak production. The rate of decline can vary from field to field and this affects calculations on the size of the reserves. A further factor is the expected size of future demand for oil.

*What is "peak oil" and when will it be reached?

This is the point when the maximum rate at which oil is extracted reaches a peak because of technical and geological constraints, with global production going into decline from then on. The UK Government, along with many other governments, has believed that peak oil will not occur until well into the 21st Century, at least not until after 2030. The International Energy Agency believes peak oil will come perhaps by 2020. But it also believes that we are heading for an even earlier "oil crunch" because demand after 2010 is likely to exceed dwindling supplies.

*With global warming, why should we be worried about peak oil?

There are large reserves of non-conventional oil, such as the tar sands of Canada. But this oil is dirty and will produce vast amounts of carbon dioxide which will make a nonsense of any climate change agreement. Another problem concerns how fast oil production is declining in fields that are past their peak production. The rate of decline can vary from field to field and this affects calculations on the size of the reserves. If we are not adequately prepared for peak oil, global warming could become far worse than expected.

Steve Connor, Science Editor

 

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Re: Daily Digest - August 2

Hello Patrick:

I saw that a few hours ago and posted it on tomorrows blog. What really struck me was that Drudge had picked up on it. It was up top on their page - so it is likely the one of the first times they are hearing of peak oil. None the less, it was surprising to see in the "semi mainstream media".

Take care.

PS after listening to the health care audio I am seriously thinking of becoming your neighbor!!!

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Re: How all systems can collapse overnight

Hello Ben:

It troubles me to read stuff written from the clink. I have just read a little on what he allegedly did. If I recall they held him for (I want to say) for seven years with no trial. I think that is criminal. The HF trading seems a lot more criminal. The using tax dollars to bail out banks for doing stupid loans seems a lot more criminal. Calling a bill health care when it could impose abortion, birth or euthanasia seems really, really criminal. Stating earnings of 12.6 trillion when you earn 4.2 trillion less seems more criminal.

But I know what you mean, I get the eeby jeebies just looking at the address and the typewritten pages, the same questions run through my mind, I just try to keep it open because a lot of what the guy says comes to pass. If it didn't I wouldn't post it.

Take care

PS I think Jim Quinn said what I was saying much more eloquently. Animal Farm - 2009, By Jim Quinn

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Re: Daily Digest - August 2

1.6 Trillion Dollar Euthanasia Health Care Plan to Bankrupt the U.S. Fix Medicare

[See page for all the rest...]

  • Sec. 1233, Pg. 425-426, Lines 22-25, 1-3 - Government provides approved list of end-of-life resources, guiding you in death. 
  • Sec. 1233, Pg. 427, Lines 15-24 - Government mandates program for orders for life-sustaining treatment (i.e. end of life). The government has a say in how your life ends. 
  • Sec. 1233, Pg. 429, Lines 1-9 - An “advanced care planning consult” will be used as patient’s health deteriorates. 
  • Sec. 1233, Pg. 429, Lines 10-12 - “Advanced Care Consultation” may include an ORDER for end-of-life plans - from the government. 
  • Sec. 1233, Pg. 429, Lines 13-25 - The government will specify which Doctors (professional authority under state law includes Nurse Practitioners or Physician’s Assistants) can write an end-of-life order. 
  • Sec. 1233, Pg. 430, Lines 11-15 - The government will decide what level of treatment you will have at end of life, according to preset methods (not individually decided).
  • Sec. 1308, Pg. 494-498 - The government will cover Mental Health Services including defining, creating and rationing those services. 
  • Sec. 1401, Pg. 502 - Center for Comparative Effectiveness Research Established. Big Brother is watching how your treatment works.
  • Sec. 1401, Pg. 503, Lines 13-19 - The government will build registries and data networks from YOUR electronic medical records. “The Center may secure directly from any department or agency of the United States information necessary to enable it to carry out this section.” 
  • Sec. 1401, Pg. 503, Lines 21-25 - The government may secure data directly from any department or agency of the US, including your data. 
  • Sec. 1401, Pg. 503, Lines 21-25 - The “Center” will collect data both “published and unpublished” (that means public & your private information). 
  • Sec. 1401, Pg. 506, Lines 19-21 - An “Appointed Clinical Perspective Advisory Panel” will advise The Center and recommend policies that would allow for public access of data.
  • Sec. 1711, Pg. 764 - The government will require preventative services - including vaccinations (no choice). 
  • Sec. 1713, Pg. 768 - Government-determined Nurse Home Visitation Services (Hello union paybacks). 
  • Sec. 1713, Pg. 768, Lines 3-5 - Nurse Home Visit Services – Service #1: “Improving maternal or child health and pregnancy outcomes or increasing birth intervals between pregnancies.” Compulsory ABORTIONS? 
  • Sec. 1713, Pg. 768, Lines 11-14 - Nurse Home Visit Services include determinations of economic self-sufficiency, employment advancement and school-readiness. 
  • Sec. 1714, Pg. 769 - Federal government mandates eligibility for State Family Planning Services. Abortion and government control intertwined. 
  • Sec. 1733, Pg. 788-798 - Government will set and mandate drug prices, therefore controlling which drugs are brought to market. (Goodbye innovation and private research.) 
  • Sec. 1744, Pg. 796-799 - Establishes PAYMENTS for graduate medical education. The government will now control your doctor’s education. 
  • Sec.1751, Pg. 800 - The government will decide which Health Care conditions will be paid. Say “RATION!” 
  • Sec. 1759, Pg. 809 - Billing Agents, clearinghouses, or other alternate payees are required to register. The government takes over private payment systems too.
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Re: Daily Digest - August 2

Yeah Davos.  Nothing in that article is news to anyone here.  The news for us is that it appeared on Drudge, at the tope of the page, no less!.

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Re: Daily Digest - August 2

Some clues as to where the Treasury demand money is coming from: http://www.bloomberg.com/apps/news?pid=20601083&sid=aucooSmI6UQQ

Bailout Banks Buying Treasuries Help Keep Rates Low (Update1)
 

By Liz Capo McCormick

Aug. 3 (Bloomberg) -- U.S. lenders bailed out by the government are returning the favor by stepping up purchases of Treasuries, helping to temper a rise in borrowing costs.

Bank holdings of U.S. government securities are up 15.6 percent from a year ago, almost double the average annual growth rate of about 8 percent since the Federal Reserve began tracking the data in 1973, according to the Greenwich, Connecticut-based trading and research firm MKM Partners LP. Purchases may accelerate as lenders look for places to park rising deposits as sales of federal agency debt of companies such as Fannie Mae and corporate bonds slow.

continues...

Reflecting their newfound frugalness, Fed data show households more than doubled their holdings of Treasuries in the first quarter, to $643.9 billion from $266.6 billion in the final three months of 2008.

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The Energy Non-Crisis

Its been a few years since I watched this lecture, and I'm sure that it has been posted here at some point, but I think it offers a valuable context to peak oil theory and is worthy of some consideration.

http://video.google.com:80/videoplay?docid=3340274697167011147

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Peak Oil

Regarding the article on peak oil I have a question.  I concur peak oil is here and probably has been here since about 2005-2007.  Matt Simmons has been consistently saying for several years now that we are in an oil crisis, and that the time to go fast on pursuing all energy sources should have been several years ago.  However, recently I have heard much news about the oversupply of oil, that there is so much oil that there is a scramble to find tankers to fill with huge excess inventories of oil.  In fact for several years now I have heard reports of excess inventories.  So what gives?  Is this a long term vs short term issue?  Are excess inventories merely a temporary problem?

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Re: Peak Oil

hucklejohn,

I think it is possible to have passed peak oil and still have excess oil on the market.  Peak Oil is about supply, not demand.  It is about the ability to produce oil to hit a top "flow rate" and decline from there forever.  If demand falls faster than oil production, then there will be an excess of oil on the market.  That doesn't negate the reality of Peak Oil, it just means that for the moment we are consuming less than is being produced and an excess of oil is being accumulated on the market.  However, oil production is still falling, and eventually that excess of oil will be sopped up and we'll be headed much higher in prices.  Don't ask me about timing, that's just the big picture and my 2 cents.

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hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
Re: Peak Oil

Thanks, Patrick.

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hucklejohn
Status: Gold Member (Offline)
Joined: Dec 13 2008
Posts: 281
The Energy Non-Crisis

Thanks JAG for posting the video of Lindsey Williams.  I first saw this about a year ago or so.  I believe his information predicted that TPTB (some nameless group) would bring down the price of oil last year to hurt the Saudis.  Although I do not totally dismiss what Williams has to say I am inclined to think the price of oil came down last year due to the massive deleveraging that took place across all commodities.  Call me ignorant or whatever I have never been able to reconcile the message of Lindsey Williams with that of conventional peak oil views or to dismiss one or the other.  Much of what Lindsey Williams rings true.  Also, I have been sceptical that the huge ups and downs of the oil price over the last few years are explained solely by variations in supply and demand.  

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metalmongrel
Status: Bronze Member (Offline)
Joined: Oct 7 2008
Posts: 38
Re: Daily Digest - August 2

Thank you Davos, there were some excellent articles in Aug 2nd's update.  That "how systems can fail overnight" read was very illuminating; I had never thought to look at the fall of the Roman empire in that way. 

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