Daily Digest

Daily Digest - December 24

Thursday, December 24, 2009, 10:37 AM
  • Serious U.S. mortgage delinquencies up 20 percent
  • Sprott Asset Management December Newsletter
  • U.S. local government pension costs exceeds $530 billion
  • Dollar Share of New Reserves Dropped Last Quarter, Barclays Says
  • 2010 AFP Business Outlook Survey
  • Gold Beats All In Decade Of Fear And Greed
  • Our Best Financial Infographics Of 2009
  • What Happens To The US When California Defaults?
  • What Massive Data Consumption Says About America
  • The $75 Future Computer
  • ICE Agents Impersonate Civilians To Arrest Longtime US Residents
  • America's Secret ICE Castles: When There's No Evidence Of Criminal Charges
  • Leave No Special Interest Behind
  • Insurers Can Cherry-Pick Healthy People, Charge 4 Times More For The Rest
  • Using Menu Psychology To Entice Diners
  • Champagnes Below $40 Regain Pop
  • Venezuela, China Sign Oil Deals
  • Chinese Want To "Own" Clean Energy Technology
  • With State And Federal Rebates, Oklahomans Can Get Electric Car For $865

Economy

Serious U.S. mortgage delinquencies up 20 percent (Ben Johnson)

Serious delinquencies among U.S. prime mortgages rose nearly 20 percent in the third quarter from the prior quarter, as the percentage of current and performing mortgages fell for the sixth consecutive quarter, banking regulators said on Monday.

Sprott Asset Management December Newsletter (Joemanc)

As we have seen so illustriously over the past year, all Ponzi schemes eventually fail under their own weight. The US debt scheme is no different. 2009 has been witness to spectacular government intervention in almost all levels of the economy. This support requires outside capital to facilitate, and relies heavily on the US government’s ability to raise money in the debt market. The fact that the Federal Reserve and US Treasury cannot identify the second largest buyer of treasury securities this year proves that the traditional buyers are not keeping pace with the US government’s deficit spending. It makes us wonder if it’s all just a Ponzi scheme.

U.S. local government pension costs exceeds $530 billion (Saxplayer00o1)

U.S. state and local governments face more than $530 billion in unfunded public pension liabilities and most do not have funds set aside to pay for them, a government report showed on Wednesday.

Dollar Share of New Reserves Dropped Last Quarter, Barclays Says (Saxplayer00o1)

Central banks reduced purchases of U.S. dollars in the third quarter, possibly cutting them to a record low of less than 30 percent of new foreign-exchange reserves, Barclays Capital said in a note to clients.

Global central banks probably bought $50 billion in the quarter, out of some $250 billion of reserves that were added in the period through transactions, Barclays said, citing calculations based on data from the International Monetary Fund and U.S. official reports.

2010 AFP Business Outlook Survey (M.W.)

The Association for Financial Professionals has surveyed its members in December in each of the past 6 years to track their outlook of future business conditions. The survey found that significant hiring won’t begin at most U.S. companies until well into 2011, even though the U.S. economy will continue its modest recovery next year. More than 1,000 professionals in finance departments across the U.S. responded to the survey.

Gold Beats All In Decade Of Fear And Greed (M.W.)

Investors who bought gold or commodities at the beginning of the decade should have tripled their money by the time the ball drops in New York’s Times Square on Dec. 31. Stock holders will be poorer.

Our Best Financial Infographics Of 2009 (M.W.)

From bankers to bailouts to taxes and unemployment, the economic downturn provided plenty of fodder for infographics this year and it quickly became part of our mission to produce ‘em to help make sense of it all. Here’s a look back at our best financial infographics of 2009, according to you, our readers.

What Happens To The US When California Defaults? (M.W.)

California is now more likely to default than it is to not default. It is not a certainty, but it is a possibility that is increasingly likely. The realization that a state could default would shock markets every bit as much as when Lehman Brothers failed. Given the precarious state of our economy and the financial sector, another fiscal crisis would be disastrous, with impacts far beyond California’s borders. What would a California default look like?

What Massive Data Consumption Says About America (M.W.)

Thirty-four gigabytes doesn't sound impressive for a new computer these days, but when you realize that's the amount of information the average American "consumes" each and every day, it's staggering. If you add up all the words consumed by Americans, it would be the equivalent of covering the continental US and Alaska in a 7-foot-high stack of Dan Brown novels. The report's authors calculated not only Internet consumption, but all flows of data delivered to people from print and TV.

The $75 Future Computer (M.W.)

MIT professor Nicholas Negroponte's non-profit effort aimed at putting cheap educational laptops into the hands of developing world schoolchildren, is working on an upgrade to its "hundred-dollar laptop." Early designs for the revamped PC reveal a minimalist slate of touch-powered electronics that drops practically every feature of a traditional computer except its 8..5-by-11-inch screen. It aims to make its tablet PC highly durable, all plastic, waterproof, half the thickness of an iPhone and use less than a watt of power, despite an 8gb processor.

ICE Agents Impersonate Civilians To Arrest Longtime US Residents (M.W.)

Immigration and Customs Enforcement agents regularly impersonate civilians --OSHA inspectors, insurance agents, religious workers--in order to arrest longtime US residents who have no criminal history. Guatemalans in the Boston area are seeing spies infiltrating factories, buses with tinted windows taking away co-workers, and men with guns grabbing their neighbors. Julia, 26, arrested in an ICE raid, told her story in interviews with Professors Brinton Lykes and Dan Kanstroom of Boston College's Post-Deportation Human Rights Project.

America's Secret ICE Castles: When There's No Evidence Of Criminal Charges (M.W.)

"If you don't have enough evidence to charge someone criminally but you think he's illegal, we can make him disappear." Those chilling words were spoken by James Pendergraph, then executive director of ICE, at a conference of police and sheriffs. Also present was Amnesty International's Sarnata Reynolds, who wrote about the incident in the 2009 report "Jailed Without Justice."

Leave No Special Interest Behind (M.W.)

There's no reason why Americans should pay a premium for the pharmaceuticals that people in other countries pay less for. No reason other than our broken system surrendering to the special interests. From start to finish, the insurance and drug industries -- and their army of lobbyists -- had control over the process that resulted in a bill that is reform in name only. As we approach the end of Obama's first year in office, this public subsidizing of private profit is becoming something of a habit. It is exactly what the White House did with the banks.

Insurers Can Cherry-Pick Healthy People, Charge 4 Times More For The Rest (M.W.)

Health bill could make crisis worse. What we've got now isn't health care reform, it's a reshuffling of the deck chairs on the Titanic. It is tragic to see the promise from Washington this year for genuine, comprehensive reform ground down to a seriously flawed bill that could actually exacerbate the health care crisis and financial insecurity for American families, and that cedes far too much additional power to the tyranny of a callous insurance industry. It would be better if Congress passed no reform legislation, rather than the current proposed bill.

Using Menu Psychology To Entice Diners (M.W.)

In the world of menu engineering and pricing, a dollar sign is pretty much the worst thing you can put on a menu. Tabla is just one of the many restaurants around the country that are feverishly revising their menus. Pounded by the recession, they are hoping that some magic combination of prices, adjectives, fonts, type sizes, ink colors and placement on the page can coax diners into spending a little more money.

Champagnes Below $40 Regain Pop (M.W.)

If you can afford to spend $30 to $40 a bottle on Champagne, more or less the entry-level price nowadays, you may find yourself with some seriously good wine. This has not recently been the case. The base price for good Champagne was more than $40 last year. Cheaper bottles tended to be a desultory lot. But in a tasting of 20 Champagnes, priced under $40 each, the wine panel was pleasantly surprised by the elegance that we found among our favorites.

Energy

Venezuela, China Sign Oil Deals (M.W.)

The China National Offshore Oil Corporation will help Hugo Chavez develop the Boyaca 3 oil block in the Orinoco-belt, a large heavy-crude basin in Eastern Venezuela. The move is part of Venezuela's efforts to increase oil sales to China to 1 million barrels per day. The China National Petroleum Corporation also moved forward by securing access to another oil block in the Orinoco region that could eventually produce 400,000 barrels of oil per day.

Chinese Want To "Own" Clean Energy Technology (M.W.)

China says it spends about $9 billion a month on clean energy development. The government plans to make renewable energy account for 15% of its fuel by 2020. "The Chinese want to own the technology for this next revolution in new technology — clean energy. When the oil runs out, China will be in a strong position."

With State And Federal Rebates, Oklahomans Can Get Electric Car For $865 (M.W.)

There's plenty of fine print, naturally, but it carries an MSRP of $10,599. The first deduction comes from the federal government and cuts the price by $4,435.. Next, the State of Oklahoma deducts another $5,299 from the starting price for a total rebate of $9,734. And don't forget about the free EV option.

7 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4238
Re: Daily Digest - December 24

"City Council President Eric Garcetti agreed the city needs to save money.

"Bankruptcy could visit Los Angeles in less than 12 months if we don't continue to downsize the workforce, focus on our core issues — public safety and public works, in my opinion — and make some very difficult decisions,'' Garcetti said."

"Based on the latest financial status report, the city is projecting a $406 million deficit in fiscal year 2010-2011."

"But Goldman and other firms eventually used the C.D.O.’s to place unusually large negative bets that were not mainly for hedging purposes, and investors and industry experts say that put the firms at odds with their own clients’ interests.

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”"

"Fannie and Freddie, which were seized by regulators in September 2008, have needed $111 billion in taxpayer money to stay afloat. The news of the chief executives' pay could spark new criticism about the government's numerous bailouts."

"New York Governor David Paterson said he will argue in court that making payments to school districts this month would render the third-most populous U.S. state insolvent.

“We are operating really under a fundamental precept that’s really beyond the law: you can’t spend money that you don’t have,” the governor said at a news conference today at his Manhattan office, responding to a suit challenging his authority to withhold the funds."

 

...................Be back on the 26th.

Tycer's picture
Tycer
Status: Platinum Member (Offline)
Joined: Apr 26 2009
Posts: 617
Re: Daily Digest - December 24

Thanks so much for the Daily Digest and the SaxPlayer addendum.

I appreciate the time and effort y'all put into it.

joemanc's picture
joemanc
Status: Martenson Brigade Member (Offline)
Joined: Aug 16 2008
Posts: 834
Re: Daily Digest - December 24

fyi...the link to China/Green energy is incorrect. Here is the correct link:

http://www.usatoday.com/weather/climate/globalwarming/2009-12-23-china-g...

wawawa's picture
wawawa
Status: Member (Offline)
Joined: Apr 21 2009
Posts: 9
Sprott report

This report by Sprott Asset Management infers that there are PHANTOM buyers of US Treasury that can not actually be identified.   Something very sinister is going on in this country.

 

Really, is there enough money in the world to buy all of new enormous debt issued by US Gov.? Somebody is cooking the books.

 

http://www.zerohedge.com/article/sprott-calls-fed-ponzi-scheme-half-trillion-treasury-purchasers-are-unaccounted

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Sprott report
wawawa wrote:

This report by Sprott Asset Management infers that there are PHANTOM buyers of US Treasury that can not actually be identified.   Something very sinister is going on in this country.

 

Really, is there enough money in the world to buy all of new enormous debt issued by US Gov.? Somebody is cooking the books.

 

http://www.zerohedge.com/article/sprott-calls-fed-ponzi-scheme-half-trillion-treasury-purchasers-are-unaccounted

Makes Kenny Boy Lay and Enron look like %*&@ing choir boys. Realizations happen. This gig will too end.

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Sprott report

Last time I saw charts of US Treasury purchases there was an abnormal amount of Caribbean buyers. 

I would not be surprised if the US government was constructing SIVs in the Caribbean offshore financial centers through which it is funneling treasury purchases. This strategy could effectively disguise its actions and prevent inflation by outsourcing it, if I am not mistaken. 

Any comments on that theory?

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
Re: Sprott report
rht1786 wrote:

Last time I saw charts of US Treasury purchases there was an abnormal amount of Caribbean buyers. 

I would not be surprised if the US government was constructing SIVs in the Caribbean offshore financial centers through which it is funneling treasury purchases. This strategy could effectively disguise its actions and prevent inflation by outsourcing it, if I am not mistaken. 

Any comments on that theory?

 

I understand how this strategy would serve to disquise the action of the FED but I don't see how it would prevent inflation. There still would be more dollars in circulation

Ken

 

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