Daily Digest

Daily Digest - December 29

Tuesday, December 29, 2009, 10:44 AM

We send our great thanks to all the readers who have been diligently sending in news articles to the Daily Digest. As a reminder, anyone can send a link and excerpt to [email protected] for consideration in the Daily Digest, which is read over 1,000 times each day.

  • James Kunstler: Forecast 2010
  • Top 10 Ethics Scandals Of 2009
  • Feds Probe Banker Allen Stanford's Ties To Congress
  • Ponzi Collapses Nearly Quadrupled In '09
  • Eyes Wide Open And Pedal To The Metal
  • The Rise Of The Preppers: America's New Survivalists
  • Congress Sees Returning To Glass-Steagall
  • Lawmaker Proposes Public Pension Reform Bill
  • Recession Cases Begin Flooding Into Courts
  • Caymans Woo Investors With Immigration Incentives
  • Cell Phone Companies Rush To Sue One Another
  • The Invisible Homeless In The Suburbs
  • Southeast Asia Free-Trade Agreement Begins January 1st

Economy

James Kunstler: Forecast 2010 (Gaborzol)

Forecasting is a nasty job, usually thankless, often disappointing - but somebody's got to do it. There are so many variables in motion, and so much of that motion is driven by randomness, and the best one can do in forecasting amounts to offering up some guesses for whatever they are worth.

I begin by restating my central theme of recent months: that we're doing a poor job of constructing a coherent consensus about what is happening to us and what we are going to do about it.

Top 10 Ethics Scandals Of 2009 (M.W.)

Citizens for Responsibility and Ethics in Washington unveiled its choices for the Top Ten Ethics Scandals of 2009. CREW is a nonprofit organization dedicated to promoting ethics and accountability in government and public life by targeting government officials -- regardless of party affiliation -- who sacrifice the common good to special interests.

Feds Probe Banker Allen Stanford's Ties To Congress (M.W.)

The Justice Department is investigating millions of dollars Allen Stanford contributed to lawmakers over the past decade to determine if the banker received special favors from politicians while building his spectacular offshore bank in Antigua. The ties between Stanford and members of Congress are now the subject of a sweeping federal investigation.

Ponzi Collapses Nearly Quadrupled In '09 (M.W.)

In all, more than 150 Ponzi schemes collapsed in 2009, compared to about 40 in 2008. The 2009 scams ranged in size from a few hundred thousand dollars to the $7 billion bogus international banking empire jailed financier Allen Stanford orchestrated, as well as the $1.2 billion scheme operated by Florida lawyer Scott Rothstein.

Eyes Wide Open And Pedal To The Metal (M.W.)

Say a Big Bank borrows $1 billion at 0.25% from the Fed, and buys Treasuries that pay 5.25%. All a banker needs to do is sit back or play golf, and make $50 million on that $1 billion. Since it’s that easy, why not borrow $200 billion, leverage that 10-fold, buy the $2 trillion in Treasuries, and make $100 billion just for sitting still? The debt gets sold, the White House and media can convince everybody the economy is doing great, and the only sucker in all of it is the taxpayer who’s losing $100 billion a year.

The Rise Of The Preppers: America's New Survivalists (M.W.)

Lisa Bedford is what you might call a modern-day survivalist—or, as she describes it, a "prepper." She owns no camouflage, and she doesn't believe that 2012 will be the end of the world. But like the rest of us, Bedford watched as the housing bubble burst and the economy collapsed. She has friends who've lost their homes, jobs, and 401(k)s. She remembers Hurricane Katrina, and wonders how the government might respond to the next big disaster. And though she hopes for the best, she's decided to prepare her family for the worst.

Congress Sees Returning To Glass-Steagall (M.W.)

Lawmakers in both parties, seeking to prevent future financial crises, are turning to an approach that’s both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking. The McCain-Cantwell proposal has picked up four additional co-sponsors.

Lawmaker Proposes Public Pension Reform Bill (M.W.)

Paul Moriarty's bill would restrict eligibility to the Public Employees Retirement System by keeping lobbyists and others out. Currently, employees of some 17 private groups are eligible for state pensions. Nongovernment workers already in the system would be allowed to remain.

Recession Cases Begin Flooding Into Courts (M.W.)

The Great Recession may be showing signs of easing, but the legal fallout from the financial troubles may have only just begun. New York State’s courts are closing the year with 4.7 million cases — the highest tally ever — and new statistics suggest that courtrooms are now seeing the delayed result of the country’s economic collapse.

Caymans Woo Investors With Immigration Incentives (M.W.)

The Cayman Islands are promising immigration incentives to keep foreign firms from quitting the Caribbean hedge fund hub, but locals want a bigger share of jobs in the lucrative financial sector.

Cell Phone Companies Rush To Sue One Another (M.W.)

When Nokia, the world’s largest maker of mobile phones, sued Apple, Samsung, LG and eight other competitors within six weeks beginning in October, it said it was conducting a routine defense of its intellectual property. But for cellphone makers and suppliers accustomed to swapping valuable technologies, the suits filed by Nokia were far from standard.

The Invisible Homeless In The Suburbs (M.W.)

You don't see them standing on corners rattling cups for change. You don't see them holding up cardboard "Will Work for Food" signs at busy intersections. They are the thousands of homeless families in the suburbs that shuffle from couch to couch at the homes of friends and relatives, or sleep in cars, shelters, businesses and rundown motels--people who have ended up scratching and clawing for day-to-day existence in the cold shadows of homelessness.

Southeast Asia Free-Trade Agreement Begins January 1st (M.W.)

When the clock strikes midnight on New Year’s Eve, China and 10 Southeast Asian nations will usher in the world’s third-largest free trade area. Trade between China and the 10 states that make up the Association of Southeast Asian Nations has soared in recent years, to $192..5 billion in 2008. The new free trade zone, which will remove tariffs on 90 percent of traded goods, is expected to increase that commerce still more.

22 Comments

saxplayer00o1's picture
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Re: Daily Digest - December 29

"World Gold Council (WGC) data reveals that for the first time in 21 years the world's central banks have been net buyers of gold and China has been the biggest buyer this year, adding 454 tones to bring its central bank reserves to 1,054 tones.

Amid growing concern over the weakness of the dollar, about 28 billion U.S. dollars worth of bullion was bought by central banks this year, based on an average price of 978 U.S. dollars an ounce, according to the WGC.

The biggest buyers have been the emerging economies of China, Russia and India, but smaller countries such as the Philippines, Kazakhstan, Sri Lanka and Mexico have also been shifting their reserves into gold.

The value of the dollar, the default reserve currency for most countries, has fallen as investors have grown cautious about America's huge debt burden and possible inflationary trends."

"Foreign central banks' holdings of U.S. Treasuries and agency debt at the Federal Reserve fell in the latest week, data from the U.S. central bank showed on Monday"

"LOS ANGELES (MNI) - As 2009 comes to a close, California's economy remains severely weakened by the effects of almost two years of recession.

Economists predict that 2010 won't be any better, as the state faces a $20.7 billion dollar budget deficit, some 60-plus legislators seek re-election or look to switch houses and talk of the state defaulting on its debt obligations has sent legislators and public officials behind closed doors to discuss the ramifications.

Not to mention, voters next year will chose a new governor to replace termed-out Gov. Arnold Schwarzenegger. In 2009, lawmakers and the governor labored for much of the year to close $60 billion in deficits, using budget tricks, cutting programs and raising some taxes.

With many of their ideas either having been exhausted, including borrowing local tax revenues, or state employee furloughs that have been challenged in court by labor unions, the pressure of the election will compound the process of approving a new state budget by June 30. "

""Lawmakers are looking for anything they can do as the recession has put a huge hole in their budget," Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., told Market News International. "The economic recovery in California will be a slow next year before getting better in 2011."

Kyser cautioned that the threat of the state defaulting on its billions of dollars in bond debut has become a distinct possibility. "

"He also warned that if the state defaults it would "freeze the market immediately for any government debt coming out of California."

Bill Watkins, executive director the Center for Economic Research and Forecasting at California Lutheran University in Thousand Oaks, Calif., agreed and urged state officials to begin discussions with the Obama administration and the Federal Reserve in case California defaults on its debt.

"In my opinion, California is now more likely to default than it is to not default," Watkins wrote in an economic forecast released Dec. 16. "

"A study of foreclosure postings by Foreclosure Listing Service Inc. indicated a 108 percent increase from 2008 in commercial real estate foreclosures in the Austin area.

The service reported that 851 postings were filed on commercial properties in 2009. Last year, there were 410 listings.

George Roddy Sr., president of Foreclosure Listing Service, said he expects commercial foreclosures to remain at the current level — or perhaps higher — throughout 2010."

"About $650 billion in banks' boom-time CRE loans are coming due over the next four years, with more than $150 billion maturing in 2010. About 43% of the loans due next year exceed the current value of the properties they cover, Foresight said. The percentage of underwater loans due in 2011 is 60%, and the figure rises for each year thereafter."

"The Moody’s/REAL Commercial Property Price Index measured a 1.5 percent decline in prices in October. The National All Property Type Aggregate Index now stands 36.4 percent below the level seen one year ago. The peak in prices was reached two years ago, in October 2007, and prices have since fallen 43.7 percent."

"In a financial report to stockholders, Sturm, Ruger & Co., Inc., one of the nation's leading gun manufacturers, stated production grew 69.3 percent when comparing the first quarter of the 2009 calendar year to the same time in 2008. The report says production also increased 25.6 percent in first quarter of 2009, compared to fourth quarter 2008.

"It was a very busy year," said Ken Jorgensen, the company's director of media relations. "We tried our hardest to keep up with demand." "

(Bose George, Keefe, Bruyette & Woods)

""The more obvious reason is that the shares have no long-term value and that no executive would accept unvested shares of the companies as part of their compensation package," the analyst said.

"This reinforces our view that the common shares will eventually trade to zero," George concluded. "The companies will never be able to repay the government." "

"SAN FRANCISCO (MarketWatch) -- The government's decision to provide unlimited support to Fannie Mae and Freddie Mac probably presages more aggressive action to prop up the U.S. housing market."

"The loss of the 4,700-employee New United Motor Manufacturing Inc. plant might be only the vanguard of painful times. Without NUMMI, companies that provide products, supplies or services for the vehicle factory could be forced to shut their doors in turn or to scale back operations.

At least 1,000 jobs — primarily in the Bay Area and Central Valley — are expected to be erased because of cutbacks planned by NUMMI suppliers.

"Our whole family is going to be laid off if we can't find something new," said Deborah Anderson, co-owner of Lafayette-based Supplier Link Services, which provides on-site inspection services for NUMMI."

"NEW YORK, Dec 28 (Reuters) - The U.S. government sold $44 billion in two-year debt on Monday in an auction that attracted tepid demand amid a year-end slowdown that may bode ill for the rest of this week's bond sales."

"CHICAGO (Dow Jones)--Falling interest rates will force U.S. companies to spend more on their pension plans next year, eroding corporate profits already under pressure from an ailing economy.

What is known as the discount rate, which is applied to the present value of pension-plan assets to lower companies' future pension obligations, is expected to decline by as much as 30% next year because of lower interest rates on the corporate bonds used as the benchmark for the rate.

"The lower the rate, the more you owe," said Stephen Marshall, head of the asset-allocation group for consultancy Wilshire Associates.

The higher pension expenses are coming at a particularly bad time for companies that have been resorting to cost reductions to meet investors' profit expectations amid sluggish customer demand.

On top of shrinking discount rates, most corporate pension plans are still saddled with severe losses on investments in 2008. Despite robust stock-market returns this year, the 340 companies in the Standard and Poor's 500 Index with defined-benefit pensions are expected to finish the year with a combined pension-funding shortfall of about $250 billion. "

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Trade, Transportation, and the Chinese Finger Trap

The Oil Drum December 29, 2009

One of the central underpinnings of neo-classical economics is trade. And one of the central tenets of trade is the Ricardian theory of comparative advantage. Trade (in theory) benefits both parties because both are better off after the exchange. But our international trade system has, by baby steps, become completely dependent on twin enablers: crude oil and credit. By air, water, land or rail, petroleum accounts for 95% of all transportation energy. As we move up the complexity chain in the products that make up our daily lives, are we moving further into a Chinese finger trap where there is no backing out?

This post will examine the theory of international trade and the hierarchy of goods transport, production and consumption. It is quite possible that in the next decade, the increase in price (or the decreasing availability) of oil and financing, will offset the benefits of many types of trade.

The pursuit of economic efficiency, through increasingly diverse and extensive global trade has glossed over two important facts which this post will examine: 1) higher oil prices in long distance transport must at some point exceed (economically or otherwise) the benefits achieved from some trade and 2) a complex global trade system is gradually but pervasively decreasing the ability for localities, regions and nations to be self sufficient – so many of our supply chain inputs are imported that continued increase in oil price/affordability will resurrect import substitution policies, not only for less developed countries, but for the US and rich nations as well ....

More :-

http://www.theoildrum.com/node/6077#more

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Cynicus Economicus The Close Of 2009

As 2009 comes to an end, where does the UK economy stand? As is common practice at this time of year, I thought a review (and commentary) might be appropriate.

There is some good news. It seems that UK households have finally realised that they actually need to save money, and that they are preparing for tougher times ahead. Of course, some of the Keynesian discussion about how bad it is to save in a recession being trotted out, but even the Times is dismissing this concern:

[referring to the Keynes argument] But that does not not appear to be the case here. Instead, all the evidence points to the savings ratio improving simply because of a number of the most heavily indebted households paying down their borrowings, along with a of minority of households overpaying their mortgages. That in itself does not necessarily jeopardise growth prospects — such as they are — for 2010 and is probably worth celebrating in that it confirms a long-overdue recognition from many consumers that they were too far in debt.

One of the curiosities in the figures is that hotels and retailers have reported a 0.7% growth in spending, which is puzzling in light of the switch to savings. However, that people are paying down debt is positive, but a question remains as to where those that are saving (rather than paying down borrowing), may be going. With low interest rates, are savers taking large risks?

The remainder of the news is not so positive. The latest rating agency to express concern about the fiscal situation of the UK is Fitch:

International ratings agency Fitch on Tuesday urged Britain, amongst other nations, to put forward "more credible" plans aimed at reducing state debt or risk "pressure" to its top credit ratings.

The UK is rated 'AAA' by Fitch, meaning the agency has the highest confidence in their ability to repay borrowings.

Fitch said in a report published on Tuesday that "all major 'AAA' sovereign governments need to articulate more credible and stronger fiscal consolidation plans during the course of 2010."

Fitch added that such action was necessary "to underpin confidence in the sustainability of public finances over the medium-term and the commitment to low and stable inflation."

 

Should the UK be alarmed? According to an article on the BBC, the UK should not:

 

No wonder leading credit ratings agencies have expressed concern and suggested the UK's AAA rating - reserved for only the very safest borrowers - is under threat, sparking widespread hysteria in the media that UK debt is spiralling out of control.

Reading some headlines, you might even be forgiven for thinking UK plc is on the verge of going bust.

But are the UK's debt levels really that bad when compared with other leading developed economies?

 

The article goes on to show a chart, which identifies the high level of debt in other developed economies, as if this were to suggest that UK debt levels are OK. It is a curious argument that is put forward in various forms by many commentators. It is like a person who is about to go bankrupt pointing to their neighbour and suggesting that their neighbour has borrowed even more than themselves, so that means that they will not themselves go bankrupt. Of course, their neighbour might be earning more in relation to their debts, might be better able to cut their expenditures, might have borrowed from family rather than the bank and so forth. Also, there is the possibility that their neighbour will go bankrupt too. It is, in other words, a simplistic and complacent point of view.

More:-

http://cynicuseconomicus.blogspot.com/

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Re: Daily Digest - December 29

http://www..pbs.org/nbr/headlines/US_Private_Jobs_Public_Pensions_NJ/index.html

(link error: note the double dot in the url)

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Daily Digest - Trucking in a world of hurt

Anyone else see the news about the trucking industry?  We are in some serious trouble with the trucking industry going bankrupt.  And the derivatives are going to bring these companies down.  The big boys have bets that will pay off big if the company goes bankrupt.  What is wrong with this picture.  This seems like big news to me, but not much press or worry from the MSM or markets.  The largest trucking company in America is on the verge of bankruptcy .... crazy tims we are living in..

http://www.businessweek.com/news/2009-12-29/yrc-extends-bond-swap-deadline-to-avert-bankruptcy-update1-.html

http://www.handyshippingguide.com/shipping-news/us-freight-news--arrow-trucking-and-yrc-worldwide-woes-continue_1085

Any one else have any information on this situation?  I just stumbled on it this morning.

 

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NJ Lawmaker Proposes Public Pension Reform

Hi rjs,

I noted your dilema with the 'url' on your link and corrected it :-

Monday, December 28, 2009, 5:48 PM EST
By ANGELA DELLI SANTI | Associated Press Writer
The Associated Press

 

A New Jersey lawmaker is planning to introduce legislation that would bar nongovernment workers from enrolling in the state's taxpayer-funded pension system.

Assemblyman Paul Moriarty's bill would restrict eligibility to the Public Employees Retirement System by keeping lobbyists and others out.

Currently, employees of some 17 private groups are eligible for state pensions.

"Why should the taxpayers pay even $1 to someone who is not a state employee, but a lobbyist who is trying to get special favors," asked Moriarty, D-Turnersville.

More:-

http://www.pbs.org/nbr/headlines/US_Private_Jobs_Public_Pensions_NJ/index.html

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Re: James Kunstler: Forecast 2010

Thanks Gaborzol,

a very good read!

cipher

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Re: Daily Digest - Trucking in a world of hurt

Hi memorrison, real interesting stuff re our trucking woes!  

Yes, others here are noticing this problem too.  M.W. (Swt Melissa),who has been helping out a lot on the Daily Digest, posted this article a few days ago, on the Daily Digest for Dec. 21st:

http://www.truckline.com/Newsroom/Trucks%20Are/When%20Trucks%20Stop%20America%20Stops.pdf

It's really an incredible article by the American Trucking Associations (ATA), summarizing a number of dimensions of our comfortable lives that would be negatively impacted if the trucking industry was disrupted. They include:  the Food Industry, Healthcare, Transportation, Waste Removal, the Retail Sector, Manufacturing, Banking & Finance, and others.  It's an eye-opening read!

I'm with you; problems rocking the trucking industry make me nervous!  I see trucking as one of those "load bearing beams" of the US economy as we know it.  So watching that tremble and flex under the weight of potential bankruptcy gets my attention.  And it makes me think it would be a good idea to have that conversation with my husband about expanding from the new garden to goats and chickens as well, real soon!  This is one of those times when Chris's advice of "better a year early than a day late" comes to mind!

Thanks,

pinecarr

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Re: Daily Digest - Trucking in a world of hurt

I believe concerns about the trucking industry are valid.  It seems to have a couple of common links with other failed or failing entities.  Namely, unions, underfunded pensions and derivatives.  How do you feel about a nationalized trucking industry because it was "too important to fail"? 

Considering the way Arrow handled their closing, I would imagine that plenty of these folks are a little irritated.  Is a trucker's strike really out of the realm of possibility?

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US Economy in 2009-The numbers tell the whole story

http://www.minyanville.com/articles/2009-stock-market-debt-real-estate-d...

Kevin Depew's statistics for 2009

 

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Study shows CFCs, cosmic rays major culprits for global warming

His conclusions are based on observations that from 1950 up to now, the climate in the Arctic and Antarctic atmospheres has been completely controlled by CFCs and cosmic rays, with no CO2 impact.

“Most remarkably, the total amount of CFCs, ozone-depleting molecules that are well-known greenhouse gases, has decreased around 2000,” Lu said. “Correspondingly, the global surface temperature has also dropped. In striking contrast, the CO2 level has kept rising since 1850 and now is at its largest growth rate.”

In his research, Lu discovers that while there was global warming from 1950 to 2000, there has been global cooling since 2002. The cooling trend will continue for the next 50 years, according to his new research observations.

As well, there is no solid evidence that the global warming from 1950 to 2000 was due to CO2.

http://insciences.org/article.php?article_id=8012

http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6TVP-4XVC4M5-1...

The Cloud Mystery 1/6

This 53-minute documentary offers an alternative explanation for climate change that is based upon a relationship between cosmic rays, the sun and the earth’s clouds.

Because the findings contridicted the so-called “scientific consensus” that CO2 was responsible for climate change, the author of this study was unable to get his work published in a scientific journal.  This is the same corrupt peer review process exposed in ClimateGate that is leading to censorship of studies that contradict the C02 theory.

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Re: Daily Digest - December 29

Re: Kunstler's forecast. He really is a terrific writer. I particularly like this paragraph.

Quote:

I'm also not convinced that so-called "emerging markets" are places where money will dependably earn interest, profits, or dividends. Contraction will be everywhere. I even think the price of gold will retrace somewhere between $750 and $1000 for a while, though precious metals will hold substantial value under any conditions short of Hobbesian chaos. People flock to gold out of uncertainty, not just a bet on inflation. My guess is that gold and silver will eventually head back up in value to heights previously never imagined, and it would be wise to own some. I do not believe that the federal government could confiscate personal gold again the way it did in 1933. There are too many pissed off people with too many guns out there - and I'm sure there is a correlation between owners of guns with owners of gold and levels of pissed-offness. A botched attempt to take gold away from citizens would only emphasize the impotence of the federal government, leading to further erosion of legitimacy.

The whole article is a good read.

Doug

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Re: Daily Digest - December 29

Check out the comments section at the bottom of the "The Rise Of The Preppers: America's New Survivalists" post. 

We are all a bunch of nuts....

 

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Re: Daily Digest - December 29
mooselick7 wrote:

Check out the comments section at the bottom of the "The Rise Of The Preppers: America's New Survivalists" post. 

We are all a bunch of nuts....

Of course Sociology 101, deviants are not to be trusted and are actively dangerous (NOTE: Deviant meaning behavior that is not the common norm).

Add in to that for many years the Media has skewed perceptions of "Survivalists" and has successfully generated fear/anxiety/distrust of people who prepare for a disaster. Of course the probability that a disaster will occur at any single point on the Globe is 100% given enough time eludes most people, and they then cede their survival mechanisms to the incumbent establishment. From Katrina and other examples, we can see how well that survival mechanism worked.

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Re: Daily Digest - December 29

Pinecarr and MarkM -  thanks for the response - I did not see the post from the 21st.  On one hand I am shocked this is not reported more in the financial media and then on the other hand, I am not shocked.  It really is amazing how Arrow handled the situation and it looks like YRC may not be handling it any better.  These articles coupled with the information about the ports and shipments (both inbound and outbound) do not show an improving economy.  Our economy is on the brink and the powers that be have brought (or should I say bought it$$) back from the brink last year.... but can not sustain the stimulus needed to keep it going.....   If that bomber was successful, we may be seeing a different situation right now.... Something is going to set the ball in motion, just not sure what that catalyst will be..

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GMAC bailed out again
Quote:

The Treasury Department plans to announce as early Wednesday afternoon that it will give GMAC Inc. around $3.5 billion in additional capital, sources told The Detroit News.

Detroit-based GMAC and the Treasury Department have been in talks for months to finalize the amount of money the company would receive. The Treasury Department said earlier this year it would invest up to $5.6 billion more in GMAC -- on top of $13.4 billion GMAC has received over the last year.

I'm surprised the Feds didn't try to hold off on this announcement until Thursday night when no one would be watching, again. Maybe they have a bigger bailout coming up this week?

http://www.detnews.com/article/20091229/AUTO01/912290421/1148/Treasury-plans-to-inject-around-$3.5-billion-into-GMAC

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Re: Daily Digest - December 29

Dr Doom predicts rise in US shares

By finance reporter Sue Lannin for AM

http://www.abc.net.au/news/stories/2009/12/30/2782635.htm?section=justin

One of the world's most bearish investors has made positive noises about the US share market and the greenback.

Asian based investor Marc Faber is known as Dr Doom and predicted the Asian Financial Crisis.

Despite his usually pessimistic stance, Mr Faber is optimistic about the outlook for US shares.

He believes investors will keep putting their money into equities because of the low returns on cash and US Treasury bonds.

Dr Faber has told Bloomberg that people should stay away from US Treasury bonds because of near zero interest rates in the US and the huge budget deficit.

"Eventually the Government in the US will have no other option but to print [money] massively in order to finance the growing fiscal deficit," he said.

"I think the worst investments, this we have to keep in mind in the long run, will be US Treasuries and cash, which have no return at the present time."

Marc Faber thinks the low returns for cash and rising inflation may prompt investors to keep buying equities.

"We could also have for a change a strong US dollar or a rebounding dollar and, at the same time, an outperformance of the S and P [Standard and Poor's 500 share index] vis a vis emerging markets," he added.

"This is one reason I'm moderately positive about equities is that this money may go into leveraged plays."

The S and P 500 has jumped almost 70 per cent this year, but others are not so certain about such a rosy outlook.

Canadian hedge fund manager, Eric Sprott, is predicting the S and P 500 will give up most of this year's gains and fall back to its March lows.

Justin Urquhart Stewart, from Seven Investment Management in London, is cautious about the outlook for global share markets.

"We may well see this momentum carry on for a little while yet, but you have but it into perspective," he said.

"The global economy has been on steroids for the past nine months and on that basis it's hardly surprising that equity markets have shot away."

He says there has been "a dash for trash" by investors, but the big challenge facing the world will be what happens when stimulus spending by governments fades away.

"The big question is going to be for 2010 is what happens when we come off the drugs and we take away the steroids?"

"Are we going to be in a position to actually still see the global economy growing overall and are we going to see the equity markets sustain their levels and sustain their growth."

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Re: Study shows CFCs, cosmic rays major culprits for global ...
ERODSTA wrote:

His conclusions are based on observations that from 1950 up to now, the climate in the Arctic and Antarctic atmospheres has been completely controlled by CFCs and cosmic rays, with no CO2 impact.

“Most remarkably, the total amount of CFCs, ozone-depleting molecules that are well-known greenhouse gases, has decreased around 2000,” Lu said.

That's very difficult to believe, because CFC has an atmospheric lifetime of over 100 years, and CFC have not been emitted for 100 years yet, so how could any reduction be possible?

ERODSTA wrote:

Because the findings contridicted the so-called “scientific consensus” that CO2 was responsible for climate change, the author of this study was unable to get his work published in a scientific journal.  This is the same corrupt peer review process exposed in ClimateGate that is leading to censorship of studies that contradict the C02 theory.

What if publication was refused on the ground it's all BS...?

Mike

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Re: Study shows CFCs, cosmic rays major culprits for global ...
Damnthematrix wrote:
ERODSTA wrote:

His conclusions are based on observations that from 1950 up to now, the climate in the Arctic and Antarctic atmospheres has been completely controlled by CFCs and cosmic rays, with no CO2 impact.

“Most remarkably, the total amount of CFCs, ozone-depleting molecules that are well-known greenhouse gases, has decreased around 2000,” Lu said.

That's very difficult to believe, because CFC has an atmospheric lifetime of over 100 years, and CFC have not been emitted for 100 years yet, so how could any reduction be possible?

I see a potential problem with that lifespan statement.  If that were true, then wouldn't we see the rate ozone depletion continue to get far worse for many more decades?  From what I remembered I thought that the rate of ozone depletion was very recently stabilizing, so I looked it up:  http://en.wikipedia.org/wiki/Ozone_depletion

Quote:

A 2005 IPCC summary of ozone issues concluded that observations and model calculations suggest that the global average amount of ozone depletion has now approximately stabilized. Although considerable variability in ozone is expected from year to year, including in polar regions where depletion is largest, the ozone layer is expected to begin to recover in coming decades due to declining ozone-depleting substance concentrations, assuming full compliance with the Montreal Protocol.

Since it's only been roughly two decades or so since CFC restrictions put into place that would imply a much lower average lifespan for the average CFC molecule and the associated atomic chlorine that reacts with ozone.  The same link does indicate that it takes an average of 15 years for a CFC molecule to reach the upper atmosphere, and that it CAN stay there for up to a century... but that implies a maximum, not an average.  So if we take the IPCC summary at face value, logic would dictate that either the average lifespan is much less or its destructive potential peaks early on.

Now of course that doesn't prove that the publication in question is correct, but it does indicate that maybe we shouldn't dismiss it out of hand either.  I think it merits looking into don't you?  If it turns out to be wrong, well we did our duty in exploring all possible root causes.  And if it turns out to be right, we won't waste valuable time and resources on carrying out the wrong solution.

- Nickbert

 

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guardia
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Posts: 592
Re: Study shows CFCs, cosmic rays major culprits for global ...
nickbert wrote:

I see a potential problem with that lifespan statement.  If that were true, then wouldn't we see the rate ozone depletion continue to get far worse for many more decades?  From what I remembered I thought that the rate of ozone depletion was very recently stabilizing, so I looked it up:  http://en.wikipedia.org/wiki/Ozone_depletion

AFAIU, ozone would come back 100% the next year if we could get all the chemicals out. So, looking at the charts they have there, it doesn't look like the concentration has gone down by any amount. The other thing that doesn't make sense is that there still are a lot of old fridges and air conditioners that use freon, so we still have plenty of CFCs down here to send up there.. (Although they are supposed to be recycled, yeah right..)

Samuel

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TFGC
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Posts: 19
Re: Daily Digest - December 29

Maybe get our friends the Saudis to start accepting T-Bills for oil payment similarly to US dollars? That would get us a quarter to half of this 2 trillion.

Now, let's be clear: it's entirely unclear who the buyer of the $2.06 trillion will be. Not only do the usual suspects, China, Japan, have increasing doubts about amassing USD denominated paper including Treasuries, Japan also plans to be as aggressive a seller as the US.

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guardia
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Posts: 592
Re: Study shows CFCs, cosmic rays major culprits for global ...
guardia wrote:

AFAIU, ozone would come back 100% the next year if we could get all the chemicals out. So, looking at the charts they have there, it doesn't look like the concentration has gone down by any amount. The other thing that doesn't make sense is that there still are a lot of old fridges and air conditioners that use freon, so we still have plenty of CFCs down here to send up there.. (Although they are supposed to be recycled, yeah right..)

Oh, my bad, they do have one chart that shows the global trend of CFCs is down 10%... but that doesn't take into account all the different CFC compounds. I am guessing the "total" chart weights the compounds by their "ozone depletion power", not "greenhouse warming power". The article by Qing-Bin Lu does not clearly distinguish between all these different types of CFCs. Seems like its conclusions are too early for serious considerations, but that's what research is for...

Samuel

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