Daily Digest

Daily Digest - December 19

Saturday, December 19, 2009, 11:03 AM
  • The Coming Shortage Of All The World's Most Important Industrial Metals
  • 2010 Food Crisis Means Financial Armageddon
  • Analysts Increasingly Expect Fed To Hike Interest Rates First Half Of 2010
  • Six More Banks Seized, Tally At 140
  • Washington For Sale
  • Gold Bugs Need To Stay Alert
  • China Tightening It's Grip On Precious Metals Market 
  • The Global Debt Bomb
  • The New Hard Times
  • Health Debate Is About Partisanship, Votes, Backroom Deals
  • Americans Return To Financial Sobriety
  • Goldman Gives Up Trying To Profit From People Dying 
  • Goldman's Connections To High-Ranking Officials Across The Globe
  • Major Airlines Slash Holiday Fares 79% To Lure Last-Minute Travelers
  • Societe Generale's Holiday Book Recommendations
  • Christmas Trees For Rent
  • Countries In Misery Have Lots Of Company
  • China Teams With Monks To Kick Off Stock Sale
  • China's Markets Are A Bubble That Will Burst
  • Chinese Businesswoman Gets Death Sentence For $56 Million Fraud
  • Twitter Attacked By 'Iranian Cyber Army'
  • Hackers Steal US And South Korean Military Secrets
  • Iran Invades Iraqi Territory To Seize Oil Field
  • Mexico Calls Out The Troops
  • Thousands Of Greek Workers Strike As Debt Crisis Grows
  • Making Water Literally Out Of Thin Air


The Coming Shortage Of All The World's Most Important Industrial Metals (Ben Johnson, Claire H.)

Gold isn't actually intended to be used in anything. But what about metals that are meant to be used in industrial purposes? In an excellent presentation, André Diederen presents an argument that all of the world's important industrial metals are dwindling, and that despite increasing explortation budgets, our sources of them are becoming rare and more concentrated.

2010 Food Crisis Means Financial Armageddon (hucklejohn)

If you read any economic, financial, or political analysis for 2010 that doesn’t mention the food shortage looming next year, throw it in the trash, as it is worthless. There is overwhelming, undeniable evidence that the world will run out of food next year.

Analysts Increasingly Expect Fed To Hike Interest Rates First Half Of 2010 (M.W.)

Dollar gains on hope for quicker rate hike. Analysts say they increasingly expect the Fed to hike rates in the first half of next year, rather than the second half. The Fed has reiterated its pledge to keep interest rates near zero in its meeting earlier this week, but it detailed the beginnings of a plan to dismantle a number of its extraordinary lending measures in 2010.

Six More Banks Seized, Tally At 140 (M.W.)

Banks in six U.S. states were closed Friday, bringing the total number of failed banks this year to 140, at a cost of over $1 billion to the FDIC. Among the institutions seized by regulators was a so-called "bankers' bank" in Illinois called Independent Bankers' Bank, which had about 450 client banks in four U.S. states.

Washington For Sale: Bill Moyers Interviews Matt Taibbi (Video) (M.W.)

Amidst fading hopes for real reform on issues ranging from high finance to health care, economist Robert Kuttner and journalist Matt Taibbi join Bill Moyers to discuss Wall Street's power over the federal government.

Gold Bugs Need To Stay Alert (M.W.)

A number of analysts say gold could see new highs over the next few years, thanks to the flood of liquidity in the global financial system in the wake of quantitative easing measures around the world. "The right fundamentals for gold ... remain in place and look set to remain in place for the foreseeable future. This makes $3,000 per ounce gold an increasingly likely long-term price target." The precious metal's "more likely to hit $3,000 than $800 in the next two years."

China Tightening It's Grip On Precious Metals Market (M.W.)

The Chinese government now owns 30 times the gold it held in 1990. China will have to purchase gold just to maintain the small gold-to-reserves ratio of 2% that it currently has. Even with the increase in its gold holdings, as 2% of China’s total reserves, gold is still a pittance, mere pocket change. Compare that with the international average of 10.2% held by central banks worldwide and you can understand why China is so eager to catch up.

The Global Debt Bomb (M.W.)

Make no mistake; the developed world is drowning in debt and there are only two possible outcomes.

The New Hard Times (Video) (M.W.)

Memories from the Great Depression seem more relevant today than ever. The New York Times is starting a series of video conversations about that painful past and the uncertain future.

Health Debate Is About Partisanship, Votes, Backroom Deals: Schieffer (M.W.)

The debate isn't about health care. It's about politics. Republicans don't know what's in the bill, but they are showing their opposition by trying to slow it down. Democrats don't know what's in the bill either, but they're trying to counter off the Republican slowdown by putting the Senate on a 24-hour schedule. What we're seeing here is the legislative process at its very worst.

Americans Return To Financial Sobriety (M.W.)

This was the year of the return to financial sobriety — if you judge such things by the nation’s personal savings rate.

Goldman Gives Up Trying To Profit From People Dying (M.W.)

In 2007 Goldman launched a "mortality index" based on the thought that they could profit from the upcoming mass-aging of the baby boomer generation. If someone sells their policy and then dies, the investor collects that person's death benefit. Now Goldman is getting out of the business enitrely. It was never a huge business anyway, and this has the added benefit of being good for PR.

Goldman's Connections To High-Ranking Officials Across The Globe (M.W.)

The pervasive connections of Goldman Sachs in the US government has caused many to look closer at the reach of Goldman's tentacles. Vanity Fair compiled a list of high-ranking officials in governments across the globe who have significant links to the bank, as well as current Goldman personnel who have held noteworthy positions in politics. Even vigilant Goldman watchdogs may spot a few unfamiliar names on the list.

Major Airlines Slash Holiday Fares 79% To Lure Last-Minute Travelers (M.W.)

American, United, Delta, Northwest, US Airways, Frontier, AirTran, and Midwest Airlines are waiving their holiday advance-purchase requirements. Consider an American flight between Dallas and NY. On Wednesday, it sold for $1,858 roundtrip. A day later, the price had been slashed to $388. Delta's Atlanta to Seattle no-advance purchase airfares were priced at $1,198 before diving to as low as $258 roundtrip.

Societe Generale's Holiday Book Recommendations (M.W.)

If anyone needed a reminder that Christmas and New Year holidays are almost here, Societe Generale has provided a seasonal reading list for those with a fixation about investment and economics.

Christmas Trees For Rent (M.W.)

Mr. Martin’s idea, enabled by a rotten economy that made his free time greater and his potential labor pool deeper, is now manifest in his new business delivering live, potted Christmas trees that are taken away once the toys have been unwrapped and the New Year’s confetti has been swept away.

Countries In Misery Have Lots Of Company (M.W.)

The unfortunate leader in a misery index cited by Moody’s is Spain, but Britain and the United States are not far behind.

China Teams With Monks To Kick Off Stock Sale (M.W.)

The famed fighting monks of China's Shaolin Temple plan a foray into modern finance.The local government entity in charge of managing the 1,500-year-old Buddhist temple's tourism-related assets plan to join with China Travel Service in a venture that will seek to raise up to 1 billion yuan ($146.4 million) in a share listing on either a mainland market or in Hong Kong.

China's Markets Are A Bubble That Will Burst (M.W.)

The nation’s real estate and stock markets are a “bubble” that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said in an interview today. “China’s asset markets are a Ponzi scheme,” said Xie. “Property is heading for one huge bust that will take a year and a half to unfold.”.

Chinese Businesswoman Gets Death Sentence For $56 Million Fraud (M.W.)

A Chinese businesswoman was sentenced to death for cheating investors out of $56 million — the latest case in the country's struggle against widespread corruption.

Twitter Attacked By 'Iranian Cyber Army' (M.W.)

Twitter was attacked Thursday night by a group calling itself the "Iranian Cyber Army." The hackers, who took over Twitter's website for several hours, left a message that seemed to threaten the U.S. The hacking comes just months after Twitter played a major role in exposing the Iranian government's harsh crackdown on demonstrators following the elections in Iran.

Hackers Steal US And South Korean Military Secrets (M.W.)

South Korea's military said Friday it was investigating a hacking attack that netted secret defense plans with the US and may have been carried out by North Korea. The latest case came months after hackers launched high-profile cyberattacks that caused Web outages on prominent government-run sites in the US and S Korea. Affected sites included the White House.

Mexico Calls Out The Troops (M.W.)

Faced with ever-worsening drug cartel violence, Mexican President Felipe Calderon is turning to elite navy troops to help reignite his floundering army-led drug war.

Thousands Of Greek Workers Strike As Debt Crisis Grows (M.W.)

The financial turmoil engulfing Greece intensified today as thousands of workers backed by militant trade unions went on strike, and international confidence in the economy plummeted following a second downgrading of its creditworthiness in as many weeks. Greeks took to the streets to protest austerity measures that the EU deems crucial if the country is to avoid financial collapse.


Iran Invades Iraqi Territory To Seize Oil Field (M.W.)

Iran staged an invasion of Iraqi territory on Friday as it established tank positions around an oilfield north of Basra raising fresh fears for Middle East stability. Oil experts believe Iran is attempting to deter investment in Iraq's oil industry by targeting fields that are to be auctioned to foreign oil companies.


Making Water Literally Out Of Thin Air (M.W.)

This compact countertop device provides membrane-filtered, UV-purified, and treated water literally by making it out of thin air. Using the company's patented Aquovate technology, the M18 converts ambient atmospheric water vapor into potable water by treating it with advanced purification techniques.


saxplayer00o1's picture
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Posts: 4261
Re: Daily Digest - December 19

"It now expects losses of 3.8 percent on loans underlying 2005 prime- jumbo bonds, with estimates of 8 percent for 2006 securitizations, 10.9 percent for 2007 debt and 12.3 percent for 2008 securities.

The revisions were prompted by “the rapidly deteriorating performance of jumbo pools in conjunction with macroeconomic conditions that remain under duress,” Moody’s said."

"Moody’s also said it expects the U.S. government’s effort to curb foreclosures to be less effective than it previously expected because the programs have “failed to gain traction.”"

"Gold at $3,000 an ounce would turn world to a "terrible place," says one analyst

HONG KONG (MarketWatch) -- Several analysts predict a rise in gold prices to dizzying heights in the next two years, but if those forecasts prove true, even gold bugs will need to stay alert to ensure that gains in the metal aren't overwhelmed by losses on other parts of their portfolio.

That's because the economic conditions under which one would expect gold to thrive resemble an investor's nightmare -- possible hyperinflation, collapse of the U.S. dollar or a surge in yields on Treasurys -- may be conditions under which other asset classes such as fixed income and equities could take a major hit."

"Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that "at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time."

Add the unfunded portion of entitlement programs and we're at 840% of GDP.

The world has not seen such debt levels in modern history. This debt is not serviceable. Imagine that total debt is 557% of GDP, without considering entitlements. The interest on the debt will consume all the tax revenues of the country in the not-too-distant future. Then there will be no way out but to create more debt in order to finance the old debt.

It assures a period of economic devastation"

"The incoming city controller said a consultant's report makes it clear that Harrisburg must be declared a distressed city under state law.

"It seems like Act 47 is imminent," said Dan Miller, city controller-elect. "Probably the sooner we get there, the better. We have to make real cuts. That's it. There's hard choices to make."

Act 47 is the last line of defense before a city files for Chapter 9 bankruptcy. Under Act 47, a municipality works with the state Department of Community and Economic Development to create a fiscal plan while state loans help maintain basic city services. The loans must be repaid. "

" Colorado revenues fell by an additional $40 million over the past three months, bringing this year's shortfall to $601 million.

Budget officials told state lawmakers Friday the recession appears to be over in Colorado, but the economic recovery will be long and rocky.

Previous forecasts showed the state would have a $560 million shortfall this fiscal year. A budget shortfall of $1.5 billion is predicted for next year unless lawmakers take quick action when they convene in January."

"The state probably will borrow about $20 million early next year to keep its unemployment trust fund solvent, as it deals simultaneously with a seasonal dip in taxes from employers and Tennessee's still-high rate of joblessness.

The latest projections for the fund show it running out of cash sometime in the first three months of next year, leaving a shortfall that would not be covered until April, despite a tax increase passed last spring."

"Faced with an unemployment insurance fund that could go bankrupt because of the recession, Gov. Martin O'Malley's administration on Thursrday proposed tapping into federal funds in a move that also could require businesses to pay substantially more per employee.

The governor's plan is to pursue a bill to seek $126.8 million in federal stimulus money to stave off bankruptcy and reduce employers' financial obligation by $83 million."

"The Pension Benefit Guaranty Corp., which would take over the plans, said the three plans sponsored by Van Buren, Mich.-based Visteon are underfunded by about $544 million. The PBGC would be liable for about $444 million in unfunded guaranteed benefits.

The plans have about 21,000 participants."

Nelson, D-Neb., said he made his decision after winning fresh concessions to limit the availability of abortions in insurance sold in newly created exchanges, as well as tens of million in federal Medicaid funds for his home state.Wink

....................9A) Nelson Says He Will Support Health Bill, Become 60th Yes Vote

"Like the $1 trillion measure passed Nov. 7 by the House, the Senate plan would require all Americans to get health coverage or pay a penalty."

(The link was posted by Mish, along with a lot of info about what it means)

Boomer41's picture
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Re: Daily Digest - December 19

"Making water literally out of thin air" should be entitled Making Water Out of Electricity. This thing is just a glorified de-humidifier which turns 1 kWh of electricity into half a gallon of water. Not much help for the environment.

idoctor's picture
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Re: Daily Digest - December 19


Mikey1052's picture
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China says the world does not have money to buy more US Debt




hucklejohn's picture
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Re: China says the world does not have money to buy more US ...

Below is the link to "2010 Food Crisis Means Financial Armageddon."


It is the same material.  I don't know the reason why the title is different.

speakcat's picture
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Posts: 9
Re: Daily Digest - December 19

Hyper inflation would destroy the savings,  finances and lives of American citizens.  Of that there is no doubt, and that the average American would take the brunt of that inflation.  Deflation would accomplish a different level of destruction but still on the backs of average Americans.  There is another option that would fall more on the backs of the rich and other U.S. debt holders.  It is by defaulting on the debt.  But we all know that default will be the absolute last resort but possibly may be unavoidable.  How about a default without "defaulting"?  Solve the debt problem without destroying our egos at the same time.  The U.S. gov't tells all creditors that we owe you $xxxx dollars.  We find that we will no longer pay interest on our debts.  (Congress just passed a new law to that effect).  So, You have 2 choices:  either we pay the full amount we owe you over the next 30 years and remember, we will not be paying interest.......or.......we will pay you $xx in the next 2 years.  Those are your choices.  Pick one!  This would put the financial load on the ones who could affort to finance Americas debt orgy.  Other countries would obviously do the same thing to us.  A lot of "paper money" would go away.  The financial load would fall on the big debt holders as opposed to the average citizen.  All we would need to then was to keep the U.S. gov't from TARPing or bailing out those poor big debt holders.  Would the average citizen ultimately suffer by this method of debt allevement.  You bet!  But if would fall more on the big money debt holders.

By the way, don't you with that Bernie Madoff had had a potential death sentence for his crimes?  Maybe it is something we need to think about for the big  money thieves.

Headless's picture
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Posts: 363
Re: Daily Digest - December 19

Speakcat said:

"By the way, don't you with that Bernie Madoff had had a potential death sentence for his crimes?  Maybe it is something we need to think about for the big  money thieves. "

With 350,000,000 guns in the U.S., you can be fairly assured that once the real collapse begins, the death sentences on bankers and other theives (already convicted by the High Court of American Common Sense) will be imposed.


idoctor's picture
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Posts: 1731
Re: Daily Digest - December 19

guardia's picture
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Posts: 592
Re: China says the world does not have money to buy more US ...

"does not have money" ... these guys never heard of a printer? Tongue out

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