Daily Digest

Daily Digest - January 12

Tuesday, January 12, 2010, 12:00 PM
  • Goldman Sachs's sudden charitable impulse
  • Partners Near Default on Stuyvesant Town
  • America slides deeper into depression as Wall Street revels
  • Study links high debt to faltering economies
  • Federal Reserve Statistical Release
  • AP IMPACT: Road projects don't help unemployment
  • Devaluation Sparks Chaos in Caracas
  • DMV edict: Workers must work "Furlough Fridays"...for free
  • Weekly Summary and a Look Ahead
  • AOL Will Lay Off 1,200
  • US must cut spending to save AAA rating, warns Fitch
  • Jim Rickards interview
  • The Ultimate Shell Game: The Federal Reserve Funds 91% Of 2009 U.S. Deficit
  • What Happens When the Wells Run Dry?
  • Pawlenty seeks disaster declaration in 18 counties

Economy

Goldman Sachs's sudden charitable impulse (nncita)

As it prepares to pay out big bonuses to employees, Goldman Sachs is considering expanding a program that would require executives and top managers to give a certain percentage of their earnings to charity.

Partners Near Default on Stuyvesant Town (E.S)

The owners of Stuyvesant Town and Peter Cooper Village, the sprawling sister complexes overlooking the East River in Manhattan, will miss a $16 million loan payment on Friday, which would put them in technical default on their mortgages, and the 20,000 residents in limbo.

America slides deeper into depression as Wall Street revels (Ben Johnson)

The same Mr Market that bought stocks in October 1987 when they were 25% overvalued on Shiller "10-year normalized earnings basis" – exactly as they are today – and bought them at even more overvalued prices in 2007, long after the property crash had begun, Bear Stearns funds had imploded, and credit had its August heart attack. The stock market has become a lagging indicator. Tear up the textbooks.

Study links high debt to faltering economies (Ben Johnson)

A new report that reviewed 200 years of economic data from 44 nations has reached an ominous conclusion for the U.S. economy: Almost without exception, countries that are as highly indebted as the United States is today grow at sub-par rates.  

Federal Reserve Statistical Release (Ben Johnson)

Consumer credit decreased at an annual rate of 8-1/2 percent in November. Revolving credit decreased at an annual rate of 18-1/2 percent, and nonrevolving credit decreased at an annual rate of 3 percent.  

AP IMPACT: Road projects don't help unemployment (Ben Johnson)

Ten months into President Barack Obama's first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.  

Devaluation Sparks Chaos in Caracas (Ben Johnson)

President Hugo Chávez's decision to devalue Venezuela's bolivar and impose a complicated new currency regime may paper over some growing cracks in the economy, but it is also setting the stage for bigger problems down the road for the country's oil-rich nation and its populist leader.

DMV edict: Workers must work "Furlough Fridays"...for free (Ben Johnson)

"We have lots and lots of work to do. But we didn't dig the hole," said Cliff Brandt. "I'm 66 years old and I came back to work because if I don't, I can't pay for my car . . . Nobody should work and not get paid. I think they used to have a word for it. It's called slavery."

Weekly Summary and a Look Ahead (Ben Johnson)

The current employment recession is the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only early '80s recession with a peak of 10.8 percent was worse). Note: The total jobs lost does not include the annual benchmark payroll revision that will be announced on February 5, 2010. The preliminary estimate is for a downward revision of 824,000 jobs - pushing the total jobs lost over 8 million.

AOL Will Lay Off 1,200 (Nickbert)


AOL spokeswoman Tricia Primrose said today that only 1,100 had volunteered to leave. That means AOL would need to shed up to 1,200 positions to reach its previously announced reduction target of up to 2,300, or about a third of its work force.


US must cut spending to save AAA rating, warns Fitch (nncita)

Fitch Ratings has issued the starkest warning to date that the US will lose its AAA credit rating unless acts to bring the budget deficit under control, citing a spiral in debt service costs and dependence on foreign lenders.

Jim Rickards interview (nncita)

In this interview Jim discusses the the LTCM crisis, the US Dollar and devaluation, gold, central bank gold purchases, misallocation of capital, bank leverage and the dangers we face in the future, the reality of the US situation and comparisons to the Great Depression, the IMF, one world currency, Alan Greenspan, Ben Bernanke and much more. 

The Ultimate Shell Game: The Federal Reserve Funds 91% Of 2009 U.S. Deficit (Ben Johnson

"Keeping it simple: 91% of the budget deficit increase in 2009, under the authority of President Obama, was funded by the... United States. "

Energy

What Happens When the Wells Run Dry? (Nickbert)


What will change – and drastically so – will be the social-economic face of much of the oil producing countries as well as other nations, where overnight tens of thousands of workers will find themselves suddenly unemployed, broke, and with practically no prospects for any future whatsoever. And herewith lies the danger of a social eruption of near Biblical proportions. Think if you will of the ripple effect that would occur if one of the major oil producers stopped producing.

Environment

Pawlenty seeks disaster declaration in 18 counties (bklement)

Some farmers lost more than 30 percent of their crop to the weather. Crops affected by the bad weather included corn, soybeans, sugar beets, sunflowers, blueberries and barley.

37 Comments

saxplayer00o1's picture
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Re: Daily Digest - January 12

"Jan. 11 (Bloomberg) -- California may delay paying some bills in March because the most-populous state projects it will have less cash than the cushion it likes to maintain, an official in Governor Arnold Schwarzenegger’s budget office said.

The balance in the state’s cash accounts will decline to about $1.7 billion by the end of March, below the $2.5 billion minimum that budget officials prefer, H.D. Palmer, a Department of Finance spokesman, said today in a phone interview from Sacramento. The office is looking at ways to lift the balance to the minimum, including putting off paying some bills, he said.

“It’s like overdraft coverage,” Palmer said. “It’s a prudent cushion.” "

"The plan is to have revenue from the fee dedicated to deficit reduction and to cover the amount that the Treasury Department estimates it will lose from TARP, which is $120 billion. Details will be contained in the fiscal 2011 budget that Obama will submit to Congress next month, the official said."

"The state is $5 billion behind in paying its bills and nearly $1 billion is owed to school districts.

Only the state of California is as worse off financially as Illinois, lawmakers said.

“At this point we need to look at every possible avenue to raise cash before we go bankrupt,” said state Sen. Rickey Hendon, D-5th Dist.

The overall deficit has ballooned to $13 billion, which includes indebtedness of $775 million to public universities and community colleges."

"The Treasury estimated net losses on its $700 billion bailout program at $68.5 billion for the fiscal year ended September 30, 2009."

"The Treasury in November said TARP's ultimate cost estimate had been reduced to about $141 billion from $341 billion earlier in the year. Further reductions in the final cost estimate could aid the Obama administration as it faces pressure to produce a new budget that starts to show deficit reductions."

"Jan. 12 (Bloomberg) -- Government of Singapore Investment Corp., manager of more than $100 billion of the city-state’s foreign reserves, reported losses from its investment in Manhattan’s largest residential enclave.

Tishman Speyer Properties LP and BlackRock Inc. said on Jan. 8 they missed a bond payment tied to their $5.4 billion purchase of the 80-acre property, which includes Stuyvesant Town and Peter Cooper Village apartments. Missing the payment puts the property on course to become the second-largest default in a commercial mortgage-backed security in the U.S."

...........5A) Other investors  (In case this link doesn't work, here it is on a Google news search)

"The other investors included pension funds such as the Florida State Board of Administration and the California Public Employees' Retirement System or Calpers, as well as US mortgage finance companies Fannie Mae and Freddie Mac - which own the biggest portion of the debt, according to a Bloomberg report."

(Google News search link for more info)

"The French budget deficit increased to EUR 143.3 billion at the end of November 2009, the Budget Ministry reported Tuesday. During the corresponding period of 2008, the shortfall was EUR 66.6 billion."

"Michael Waxman, spokesperson of the Safe and Secure Internet Gambling Initiative said that it's simply common sense “to replace [UIGEA] with a framework that regulates a thriving underground marketplace to protect consumers and collect billions in otherwise lost revenue.” "

"Arizona's state buildings -- including the capitol, the governor's office, the state hospital and state prisons -- go on sale today as the financially pressed state tries to raise money to plug a $4.5 billion deficit.

The state hopes to raise $732 million, The Arizona Republic reports."

"Zandi called the 65 percent ratio of U.S. debt to gross domestic product "barely manageable" and said it could threaten economic health and curb consumer spending in the long term.

A value-added tax on consumer goods is the most efficient way for the government to raise money, Zandi said, but conceded that could hurt retailers.

"Pick your poison," Zandi said, predicting there would eventually be a VAT tax in the United States, as in most other advanced economies."

"Efforts by U.S. banks to help distressed homeowners have focused mainly on temporary fixes such as interest-rate reductions that may only put off the day of reckoning, despite policy makers wanting them to do more.

Banks may be forced to resort to a remedy they’ve been trying to avoid – principal reductions – as another wave of foreclosures looms and payments on risky loans rise, Bloomberg BusinessWeek magazine reports in the Jan. 18 issue."

"The 25 percent plunge in residential real estate prices from their 2006 peak has left homeowners underwater by $745 billion, according to research firm First American CoreLogic – a number that tops the government’s $700 billion bailout for banks."

"The foreclosure crisis is likely to deepen this year in part because payments on many adjustable-rate mortgages are set to balloon. Unless there’s a sharp recovery in property values or a change in lenders’ willingness to cut principal, at least 7 million borrowers currently behind on their payments will lose their homes, Goodman estimates."

"As of last month, there were more than $170 billion worth of commercial properties in default, foreclosure or bankruptcy, according to Real Capital Analytics.

Las Vegas, Detroit and Miami had the biggest share of distressed properties.

Grubb & Ellis projects the number of sales will climb up to 30 percent from last year, which would be the smallest annual increase in the last 10 years. Sales were down last year more than 90 percent from the peak in 2007. The firm sees prices declining as much as 20 percent this year."

"A new commercial real estate study shows apartment rental vacancies are at a 30 year high nationwide.

Some property owners say they have not changed their policies in years. Others say they are willing to adapt to help tenants find a place to call home.

If you've thought about renting, this could be the time to do it."

"Richard Parkus, Deutsche Bank commercial real estate analyst, believes this is just the tip of the iceberg. He predicts enormous losses and a large number of banks failing as a result of the declining commercial real estate market.

As tenants go bankrupt, downsize, or invoke their escape clauses, commercial real estate property owners have begun to feel the serious effects of the economy. By the end of 2010, the national vacancy rate is expected to reach 18.5 to 19 percent, the highest recorded since 1986. "

"Fresh off major acquisitions of rivals, drugmakers Pfizer Inc. and Merck&Co. are each planning to eliminate hundreds of jobs.

According to reports, Pfizer will eliminate nearly 1,200 jobs, including 680 in Pennsylvania, 400 in New Jersey, and 116 in Rockland County, N.Y. Meanwhile Merck will cut 500 jobs in New Jersey."

"Officials are projecting next fiscal year's deficit could top $100 million. "We are still in very difficult economic times, as is the state of California," Sheriff John McGinness said."

(If you click on the link above read some of the comments)

"US trade deficit jumps to 10-month high as improving economy pushes up demand for imports"

...........16A) Comment at Nathan's Economic Edge about the part in the report about China

"Chinese imports up 46%? Riiight. Here’s the latest Baltic Dry Shipping Index, wake me up when it has made a new high:"

"From tuition waivers for Native Americans to housing certain juvenile delinquents to funding pensions for school employees, Michigan unlawfully imposed more than $2 billion in unfunded mandates last year on local units of government, a newly released report says.

That 87-page report by the Legislative Commission on Statutory Mandates says the practice is clearly unconstitutional, but a series of reforms are needed to address the issue."

"Jan. 12 (Bloomberg) -- Job openings in the U.S. fell in November, a sign employers are reluctant to expand staff even as payroll reductions waned from earlier last year.

Openings declined by 156,000 to 2.42 million, the Labor Department said today in Washington. The number of unfilled positions was down 50 percent since peaking in June 2007. "

"Thousands of homeowners who have been making payments on interest only mortgages are in for a rude shock this year. Their monthly payments are about to rise 15 percent on average, forcing many into default and foreclosure.

Fitch Ratings today forecast that $47 billion worth of prime and Alt-A Interest only loans are due to recast this year to require full principal and interest payments, placing additional stress on U.S. homeowners.

Over the next two years, a total of $80 billion of prime and Alt-A loans, and a total of $50 billion Subprime loans are due to recast.

According to Managing Director Roelof Slump,”60-day delinquency rates have rise over 250 percent in the 12 months following previous recasts for prime and Alt-A loans.”

Recasts typically have a significant impact on loan performance."

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Re: Kick Off to WWIII

I posted some time ago: Upcoming Knock Down Dragout in the Middle East

In that post was an article about the immense and immediate funding for a new 'Bunker Buster Bomb'

http://abcnews.go.com/Politics/us-preparing-bomb-iran/story?id=8765343

 

On the 10th of this month an article was published: 

U.S. To Store $800 Mil in Emergency Gear in Israel

http://www.forward.com/articles/123141/

 

I think the US and Israel are prepping for an attack on Iran. Its not a stretch IMHO to imagine this would set off a chain reaction of side taking and lead to a full scale grab for oil, a final showdown for who gets the remainder of the worlds oil suppies. I think this has been in the works for sometime and is now going to be realized.

 

 

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Re: Kick Off to WWIII

Johnny

Glad to see you are not one of those doom and gloomers that do not post here. LOL. I happen to agree with you.  I think it will all go down within 6 mos. All any strategist has to do is look at a map and see we are in Vietghanistan (ht MH) and Iraq. Well guess where Iran (the fourth largest producer of oil) is?  This is a game of geopolitical tic tac toe. But hey we are making the world safe for democracy. This is really not an Empire in it's death throes, nah. We are the most altruistic country to ever A Bomb a civilian population. All divergent opinions welcome after answering the question of : Why don't we invade Tibet and liberate the Tibetans?

V

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Re: Kick Off to WWIII

All divergent opinions welcome after answering the question of : Why don't we invade Tibet and liberate the Tibetans?

They don't have oil or any natural resource we want.  

Gloom, Doom and Kaboom coming soon.

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Re: Daily Digest - January 12
Quote:

All divergent opinions welcome after answering the question of : Why don't we invade Tibet and liberate the Tibetans?

They don't have oil or any natural resource we want.  

Gloom, Doom and Kaboom coming soon.

And/or it'd be an advertant subjegation of China's soverignty which would lead to significant violence between our nations.

Not that I don't support liberating Tibet - I do. I'd much rather see them free to live without fear than deal with anything  in the Middle East, but I think there is more "strategery" than just resources in our descision not to go in, guns-a-blazing to aid the Tibetians.

The Dalai Lama has, through his own charm and genuine kindness, allied the world to his side of the cause.
This war can be won without fighting.

Just some thoughts.
Aaron

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Re: Daily Digest - January 12

"Recession or No Recession, State Tax Revenues Remain Negative," -  Rockefeller Institute - Another Double-Digit Decline in Third Quarter 2009; Weakness Extends to End of Year - 18pp pdf - Overall State Taxes and Local Taxes - During the third quarter of 2009, total state tax collections as well as collections from two major sources — sales tax and personal income — all declined for the fourth consecutive quarter. Overall tax collections in the July-September quarter fell by 10.9 percent from the same quarter of the previous year.1 We have compiled historical data from the Census Bureau Web site going back to 1962. Both nominal and inflation adjusted figures indicate that the first three quarters of 2009 marked the largest decline in state tax collections at least since 1963. (see chart - comparison to past recessions)

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Re: Daily Digest - January 12

[Ed. note: Unacceptable]

Aaron

Normally I would not call attention to mis-spelled words on a forum but you used some words I am not familiar with.

I understand when we sit down to write posts sometimes our minds fail to link up with our fingers. In this instance however I was completely flummuxerated. I along with Merriam Webster's college dictionary were at a loss as to the meaning of advertant. Also I could not find subjegation.

I take it soverignty is meant to be sovereignty.

I have my dictionary right next to my computer so I can learn the meaning of new words as they come up ( I am always wishing to learn new things) Now my dictionary is only a small one (1574 pages) so I am sure there are many words the editors had to make tough decisions on to leave out. So please let me know what these words mean so I can add them to my meager vocabulary

But I think I got the gist of what it is you were trying to convey, It would seem if we invaded Tibet with all the shock and awe we could muster China would be deeply offended and it would in all likelihood lead to a violent confrontation in which for the first time in a long time, very significant numbers of young Americans would be killed. (This statement is not intended to demean the deaths of young Americans in the past or currently just to put numbers into some kind of perspective as I believe the death of anyone to be very significant) This as opposed to out-manned enemy combatants and civilians. Not to mention it would be very bad form to upset the mortgagee. But since in modern times 1950 would have been a better time since we were already there fighting the Chinese. MacArthur would have loved the opportunity and it might have been an opportune time to use another nuke or two.

As for "strategery" ( a very Limbaughesque term). Our strategery is concerned with the Empire and it's insatiable need for oil. This is demonstrated by the fact that our Legionnaires are only sent into areas where there is a copious amount of OIL. which is why we are not in Darfur. Why we did not go into Rwanda or any other number of places we could have gone to make the world safe for Democracy. Now Tibet has a large amount of minerals of great value as does Rwanda but we are no longer interested in those as we no longer need them since we no longer make anything requiring them,

As for the Dalai Lama using charm and genuine kindness to win the support of the world I heartily agree. Of course it also helps that the rest of the world knows he is right.

At any rate Aaron we have gotten somewhat off the topic.

It is all about the knock down drag out in the Middle East and the geography lessons the American sheeple are getting.

We will be In Iran shortly looting it's oil and artifacts .......just my opinion.

V


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Re: Kick Off to WWIII

US, Israel accused of assassinating nuke scientist

By Middle East correspondent Anne Barker and wires

Blown up on the street: Iranian nuclear scientist Professor Masoud Ali Mohammadi (AFP)

Iran is blaming the United States and Israel for the assassination of a nuclear scientist who was killed in a bomb attack on a Tehran street.

Professor Massoud Ali Mohammadi, a lecturer at Tehran university, died when a bomb strapped to a motorcycle was triggered by remote control outside his home in the northern Tehran neighbourhood of Qeytariyeh, state media said.

A witness said the explosion was a "strong blast breaking windows in neighbouring houses and cars".

Iran's foreign ministry said the killing had all the hallmarks of foreign involvement.

"One can see in preliminary investigations signs of evilness by the triangle of the Zionist regime [Israel], America and their mercenaries in Iran in this terrorist incident," foreign ministry spokesman Ramin Mehmanparast said.

"Such terrorist acts and the physical elimination of the country's nuclear scientists will certainly not stop the scientific and technological process but will speed it up," he added.

Tehran's chief prosecutor implicated US and Israeli intelligence services.

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Re: Pawlenty seeks disaster declaration in 18 counties

And then a day later this http://wcco.com/local/corn.crop.minnesota.2.1421427.html

Minn. 2009 Corn Crop Largest Crop On Record

ST. PAUL, Minn. (AP) ―Minnesota's corn farmers produced their largest crop ever in 2009.

New figures from the U.S. Department of Agriculture on Tuesday say Minnesota's corn production is estimated at 1.25 billion bushels, breaking the previous record of 1.19 billion bushels set in 2005.

 

Before I become a doom and gloomer on "Peak Food", I would like someone to tell me how many farmable acres we have set aside in the CRP (Conservation Reserve Program).  Growing up in a farming community there were numerous people that enlisted in the CRP program and quit farming so they could just sit back and get a check from the USDA for doing next to nothing.  I'm not saying that the program is wrong, but I would like to know how many more acres there are available to be farmed. 

Also on a regional note, there had been a HUGE push for bio-diesel in the state of MN.  This drove farmers to maximaze profits by planting corn (when oil was surging in price, along with corn prices on the speculation of bio-diesel).  This can only lead to bumper harvests of corn...farmers  will speculate what they will make the most money on and plant that crop, as long as their soil is capable of growing it.

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Re: Daily Digest - January 12
V wrote:

Aaron

Normally I would not call attention to mis-spelled words on a forum but you used some words I am not familiar with.

I understand when we sit down to write posts sometimes our minds fail to link up with our fingers. In this instance however I was completely flummuxerated.

Errrr....  V, that's flummoxed

Advertant of course should have been spelled advertent.....  that's a typo surely.

Subjegation should have been spelled subjugation...  surely another typo

I take it soverignty is meant to be sovereignty.  Yes V......  another typo.  You never make typos?

V wrote:

We will be In Iran shortly looting it's oil and artifacts .......just my opinion.

V, before you attack other people's spelling, you should ensure yours is perfect!

it's is short for it is.  The possessive case ot the word it is in fact spelled its.  NO Apostrophe.  I see this all the time, but unlike you, I don't expect perfect english from anyone....  especially Americans!

Mike

 

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Re: Daily Digest - January 12
 
[Most Recent USD from www.kitco.com]
 
So this wasn't caused by an increase in the US Dollar.
Note that it started just after London closed.
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Re: Daily Digest - January 12
By Ambrose Evans-Pritchard Last updated: January 12th, 2010

I have felt rather lonely after suggesting in my New Year Predictions that Japan is dangerously close to blowing up on its sovereign debts, with consequences that will be felt across the world.

My intended point — overly condensed  — was that 2010 will prove to be the year that Japan flips from deflation to something very different: the beginnings of debt monetization by a terrified central bank that will ultimately spin out of control, perhaps crossing into hyperinflation by the middle of the decade.

So it is nice to have some company: first from PIMCO’s Paul McCulley, who said that the Bank of Japan should buy “unlimited amounts” of long-term government debt (JGBs) to lift the country out of a “deflationary liquidity trap” and raise the souffle again.

His point is different from mine, in that he discerns deflation “as far as the eye can see”. But in a sense it is the same point. Once a country embarks on such policies, the game is nearly up. The IMF says Japan’s gross public debt will reach 227pc of GDP this year. This is compounding at ever faster speeds towards 250pc by mid-decade.

The only reason why this has not yet blown up is because investors (mostly Japanese) have not yet had the leap in imagination required to understand their predicament, and act on it. That roughly is the argument of Dylan Grice from Societe Generale in his latest Popular Delusions note released today. “A global fiasco is brewing in Japan.”

Japan’s deficits are already within the hyperinflation “red flag” zone identified by historian Peter Bernholz (”Monetary Regimes and Inflation” .. the Bible on this subject). As you can see from the charts below, prices start to spiral into the stratosphere once the deficits as a share of government expenditure rises above a third and stays there for several years.

japandebt

japandebt2

The Bernholz range for the five hyperinflations of France, Germany, Poland, Brazil, and Bolivia over the centuries is surprisingly wide, from 33pc to 91pc. Japan has been in the that range almost continuously for the last eight years. The US joined the party in 2009. Japan’s Bernholz index will rise above 50pc this year for the first time, meaning that it will have to borrow more from the bond markets than raises in tax revenue. You see the problem.

We all know that Japan has been racking up debt for Two Lost Decades, yet the sky has refused to fall. Borrowing costs have slithered down to 1.36pc on 10-year JGBs and under 1pc on shorter debt, though they are not as low as they were .. nota bene. This seeming defiance of gravity has emboldened the Krugmanites and Keynesian prime-pumpers to call for a repeat in the US, UK, and Europe. There lies a great danger.

Mr Grice said Japan was able to pull off this feat only because its captive saving pool was large enough to cover the short-fall, and because the Japanese people continued to be reassured by the conjurer’s illusion that all was well. This cannot continue.

The country tipped into outright demographic decline in 2005. Households have already stopped adding to their stock of JGBs. As the aging crisis accelerates, the elderly are running down their assets. The savings rate will soon crash below zero.

Japan can turn to foreign investors to plug the gap, or course, but at what price? If yields reached UK or US levels of 4pc, debt costs would soak up nearly all the budget, leaving nothing for schools, roads, the police, or salaries for the Ministry of Finance. “I doubt there is any yield that international capital markets can find acceptable that will not bankrupt the Japanese state,” he said.

Note too that the Japanese will also have to run down their holdings of US Treasuries, currently $750bn or 10pc of the entire stock of US Treasury debt, as well as selling a lot of Gilts and Belgian bonds.

“This might very well precipitate other government funding crises. At the very least I’d expect it to trigger an international bond market rout scary enough to spook all other asset classes. So maybe we should all be concerned that Japan is in the hyperinflationary range. And if so, maybe we should think a little more carefully about how Western governments consider their debt burdens. Maybe Japan’s will be the crisis that wakes up the rest of the world,” he said.

Will it happen, this week, this month, this year, or will Tokyo keep the illusion of solvency going for years longer? Who knows. Japan is an endlessly mystifying society. But as Mr Grice puts it, if you are sitting on a tectonic fault line, expect an earthquake.

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Re: Pawlenty seeks disaster declaration in 18 counties

 40% of the cost of growing corn is energy  – US agribusiness is the process of turning petroleum and natural gas into feed or food...it would seem converting crops back to diesel for running the tractors would be a case of chasing your own tail...

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Re: Daily Digest - January 12

Mike,

Thanks for that.
I apologize in advance for my spelling errors.
Currently, I'm balancing being a full time student with all the other aspects of girding for an economic collapse, so I frequently decide a quick post that directs attention to subject matter is more important than grammar.

I'll save the grammar meticulicity for English. ;)

RJS,

It reminds me of an old Mantra about humans, youth and wealth:
"We spend our youth amassing money, then spend our money to regain our lost youth".

It doesn't make sense. 

Cheers,

Aaron 

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Re: Kick Off to WWIII

Well the have some cool monestaries. At an average of 15,000 ft above sea level, it would be some tough breathing.

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Re: Kick Off to WWIII

Well they have some cool monestaries. At an average of 15,000 ft above sea level, it would be some tough breathing.

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Re: Daily Digest - January 12

[Ed. note: Unacceptable]

Hi Mike

Oh by  the way Santa left a present here for you. It is a sense of humor. Let me know when you are in the states I'll give it to you

I did not attack anyone. I noted some obvious mis-spellings and words I had no idea of. I also stated I usually did not point out spelling errors as it goes with the territory. I would like to understand what Aaron says as I read almost all his posts. I have given up reading much of yours

So since you are the resident genius perhaps you could save me the time and energy of lifting the ten pound dictionary and tell me what advertent means as on my spellcheck it comes up as a mis-spelling. Please since you are so well informed explain the sentence (with the correct English) to this American. 

BTW Mate Merriam seems to think that english should be English but I don't expect perfection from anyone myself and especially people from OZ

I apologize for the misuse of it's I assure you it won't happen again ..............as it's a pain in the ass having these little tete a tete' s with you. LOL

V

PS i hope I didn't not leave you flummuxerated.


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Just for the record, Tibet does have oil

Just for the record, Tibet does have oil, and I ran into this 2006 headline stating China would like Tibet to be invaded for its oil:

China invites oil firms to join invasion of Tibet

 

The Chinese government is to woo foreign companies such as BP and Shell to explore for oil in Tibet.

The controversial move follows a failure by the partly state-owned PetroChina to realise Beijing's hopes that the disputed land could quickly become a major source of fuel for energy-starved China.

http://www.guardian.co.uk/business/2006/may/30/china.oilandpetrol

So maybe an invasion of Tibet isn't too far off.  Still our own coastal areas might be easier to invade if we are looking for oil.

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Re: Daily Digest - January 12

V

"it'd be an advertant subjegation of China's soverignty" (sic) is what Aaron wrote......

Now, advertent means heedful, or to be attentive; have regard

Subjugation means:
1. to bring under complete control or subjection; conquer; master.
2. to make submissive or subservient; enslave.

So whilst that sentence is a bit heavy handed, and I had to think twice about what it meant, I understood it to mean that the West's invasion of Tibet would be a bad idea....! Thanks for the sense of humour..... see, it works!

Now you don't need a ten pound dictionary, there's a perfectly useful one at http://dictionary.reference.com/ that lurks in your computer all the time, and is waaaay better than spellcheck which always underlines the word spellcheck....!

Mike
Resident Genius

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Re: Daily Digest - January 12
Damnthematrix wrote:

it's is short for it is.  The possessive case ot the word it is in fact spelled its.  NO Apostrophe.  I see this all the time, but unlike you, I don't expect perfect english from anyone....  especially Americans!

R U joking or just a n00b?  All the l33t peeps kno that Amerikuns use XLNT english. 

.... thats rite, U has just been pwned! 

(this post has been brought to you by Generations X and Y... making the world just a little dumber, one fractured, twisted word at a timeWink)

- Nickbert

 

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V
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Re: Daily Digest - January 12

[Ed. note: Unacceptable]

Thanks Mike Resident Genius

I feel much better now..................of course it could be the Prozac

V

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Re: Kick Off to WWIII
V wrote:

All divergent opinions welcome after answering the question of : Why don't we invade Tibet and liberate the Tibetans?

No no no, the question is : Why not invade Iceland, now that McDonald has closed their branch there?

Samuel

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Re: Kick Off to WWIII

Quite Guardia I missed that one

V

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Re: Worthy Additions to the Daily Digest

 

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Re: Daily Digest - January 12

I know it's an unpopular opinion, but I really don't think this war is as much about oil as it is demographics.
Not just because McDonalds folded =D

If you look at the positions we've taken and we're holding, there had to be some analyst input... some strategic advantage to taking Iraq and Afghanistan - two nations which have not much to do with one another.

Iraq: Secular, Relatively Modern dictatorship with a big name "bad guy" at the helm. Moderate population with largely modern ideals with regards to women and economics. Slightly outdated with regards to torture policy. Generally dicey government, inept military and no real leadership.

Afghanistan: Provincial, theocratic and tradition based under influence of radical fundementalists and Pakistan's Zhee Generation supply arms and manpower.

This is all about creating a stable base of power in the middle east - a region with the fastest growing population in the world. Hotbed of radical anti-Americanism.

We took Iraq strategically - it fell easy, and would stay under Western Influence if it wasn't for Syria, Iran and Saudi Arabia. We'd have a population which, by in large, is thinking, moderate and educated.  It'd give us a foothold in the region, able to launch strikes against future adversaries and would secure a legitmate oil trading partner. Put some bucks in Dick Cheney's pocket while we're at it.

Afghanistan would actually put a dent in the operational capability of Al Q'aeda, considering most "legit" Islamic Republics operate under the cover of night. Sending their fundies out to places like Afghanistan to arm up and mobilize to fight the Jihad, whilst saying publically "We decry and detest this radicalism".

It's not all economics... some of it is trying to be a step ahead.
Especially considering Iran sits opposite Pakistan: Largely moderate, educated population with sympathy towards the West and liberty in general and a totally ass-over-tea-kettle radical government.
Staging insurrection might not be a bad idea really.

Anyway, this is just my .02 - take it for what it's worth, which is exactly nothing =)

Cheers,

Aaron

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Re: Daily Digest - January 12

Off topic, but intriguing: Major lift off of military jet fighters from Coronado (San Diego) right now. Very unusual, as I live just under the flight path and have never seen anything like this...

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Re: Daily Digest - January 12

Aaron,

I think Afghanistan may simply be a decoy that allowed us to establish a petroleum-supply  time buffer in Iraq by enabling a population to have rights to their own oil and, thus, they have an interest in keeping it flowing; that is to say:

1. 1 - 5 years from now(post peak oil), Iraqi oil could have been the XMbbl/day that Saddam could have cut off in order to throw the U.S. into chaos; he would have done so: could there ever have been a more perfect moment in history for an egomaniac (not unlike Blankfein and Geithner) to exercise supreme power and demonstrate just how Great and God-like he was--Allah's chosen one: "I destroyed America from my den!" (Blankfein: "I am doing God's work." There's someone who needs to be "taken out" for the safety of the nation!!!)

2. by re-vesting the oil rights with the general population, the U.S.  will now have a more stable source of imports, as the Iraqi people think a bit differently than Saddam and have no God complexes--on average--that will outwiegh their immediate concern for little Mohammed's need for a new tricycle and his older sister's need for a new Ipod;

3. It's an extension on the U.S. lifestyle, but it isn't a solution...; thus, expect other potential chokepoints' People's  to be "liberated"; I'm not sure Chavez-ians  will be one of them, as he has enough concern for the average peasant (I use that term in an economic sense), that I doubt he would Saddam-ize the states with his oil card--but that doesn't mean that some Cheney wack-alike isn't behind the scenes telling Obama that "Chavez will bring  us down!"

4. Afghanistan is a decoy? Probably; and it keeps the MIWS complex owners in whores, Porches, and Saferooms...

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Re: Daily Digest - January 12
Headless wrote:

Off topic, but intriguing: Major lift off of military jet fighters from Coronado (San Diego) right now. Very unusual, as I live just under the flight path and have never seen anything like this...

Maybe on their way to Haiti?

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Re: Daily Digest - January 12

Hello all,

I would like to say "thank you" to everybody for their admirable restraint in not responding to some clear provocation on this thread.

Sincerely,
Jason, moderator

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Re: Daily Digest - January 12

Jason,

Making your life/job easier is one of my new years resolutions ;)

Cheers,

Aaron

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Re: Daily Digest - January 12

Off topic, but intriguing: Major lift off of military jet fighters from Coronado (San Diego) right now. Very unusual, as I live just under the flight path and have never seen anything like this...

Which way were they going? East or West? Smile

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Re: Daily Digest - January 12

Regarding the AP article noted in the DD on unemployment not affected by stimulus, I sense that assessment is true.  Mish commented on it here today.

http://globaleconomicanalysis.blogspot.com/2010/01/measuring-effect-of-stimulus-if-you.html

I've been involved in job reporting for projects I've engineered funded with stimulus money; it's a joke, and an extra administration involved is wasted money and effort that will never provide a return on investment.  Everybody I talk to agrees but we all still seem to play along to get the money.

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January 12 Re #26 Aaron

Re: #26 Aaron

"This is all about creating a stable base of power in the middle east - a region with the fastest growing population in the world. Hotbed of radical anti-Americanism."

Wrong. It is about creating permanent war. Even Orwell recognised this in "1984" with its backdrop of a state of permanent war. Eisenhower too warned of the Military Industrial Comlex on leaving office

Forget what governments and media have fed to Joe public for the last 8 years - at a primary level the invasion of Iraq was about oil (remember Operation Iraqi Liberation see here one of many citations ); and the invasion of Afghanisthan was about ensuring the security of a proposed  Caspian Sea gas pipeline (major contractor now defunct UNOCAL) - the war was, as allways the result of failure of diplomacy - US diplomacy can be pretty blunt at times - on this occasion along the lines "Either you let us carpet you with gold , or we will carpet you with bombs." The offer wasn't accepted in time. 9/11 was convenient. PERIOD.

At a secondary,  and ultimately more important and sinister level both wars are about maintaining a continuing state of discord, friction, unrest, uncertainty and war in an already fractured and complex political region with most of the world's known energy supplies.

Who ever controls the friction controls the oil.

Seems to me that most of the coups, dictators, phoney regimes, civil wars, national wars, terrorist groups and assinations over the past 40 years in the middle-East have had the hand of the CIA, MI6, KGB or MOSAD - (or all 4 of 'em) somehwere in the glove that pulls the strings.

Brittain fought this 'war' - 'The Great Game' for many, many years against the Russians for control of the 'Northwest Frontier'. (i.e North West of the British Empire in India) - what today we call ... er... Afghanistan. No winners . USSR found same result in 1980s - no win.

This is also largely why USA supports Isreal so strongly - a) to ensure constant friction, b) to maintain closely-linked ties at all levels with a heavily-armed (nuclear since 1970s) geo-strategic (Eastern Med) 'Western' country which is the cause of that friction.

Of course the major benefeciaries of all this are the likes of Haliburton, Carlyle Group, Blackwater etc. and their chums in Wall Street and Aerospace Valley.

Co-incidence that the clever pupets in the WH at the time it all started had side interests in oil (Bush and family), Hardware (Cheney / Haliburton) , politics and power (Perle & Wolfovitz) - just look at all those hardware reconstruction contracts that were put in place before the invasion.

Both wars continue to be an enormous success and are making vast sums of money for a lot of people - petrol at $400 a gallon has got to be good news for someone.

I don't think anyone seriously wants peace or harmony in the middle East - except perhaps those who live there.

We've seen it all before under LBJ and Tricky Dicky.  Fixin' it is the problem...

Groucho

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Re: Daily Digest - January 12

Groucho,

So... you've shown me how we're creating a stable base of power in the middle East...
Wouldn't that make me right?

Cheers,

Aaron

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Re: Daily Digest - January 12

Aaron,

Yep, I guess so - if you look at it that way round. 'permanent instability' is predictable in its instable continuance therefore predictable - and controlable ...up to a point.

So who wins? I suspose the Swiss do pretty well out of it as they've got most of the banks - and GS of course, and all the guys making helicopters - shame (for some) they can be brought down by an AK47 knocked together in a backstreet workshop.

Gas at $400 plus a gallon - and the Marines alone using 800,000 gallons per day! Wow.

No wonder the Soviets gave up in the end.

"Common Wall Street don' t be slow  - War is here 'a go go..."

GMarx.

PS - I was fascinated by the venom shown by some people regarding spelling - and impressed by your calm restraint.

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A. M.
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Re: Daily Digest - January 12

GMarx,

Thanks for the kind words. I'm not always so disciplined, but thanks for the positive reinforcement. 

Insofar as how we gauge what's "right" or "wrong" or who "wins" or "loses", I think that history will be the ultimate arbiter. There are a lot of terrible things going on right now, but we can't let that preclude the good that's been done over the last 300 years that led to this "Frankenstein's Monster" of mismanaged resource and capital.

Modern Medicine and scientific advances, charity and social evolution have all been a part of this ultimate failure - but every society that we look on as great failed under times impartial eye.

With regards to Helicopters and AK-47's, that reminds me of a story...
I was on a training exercise one time with the Army and an NCO I was working with was telling me about a tour he did in Baghdad. He told me that they got tasked to go door to door, and ascend these buildings looking for Kites.

Confused? I know I was.

Apparently, the insurgents operating in the cities would place kits with copper wire as tether atop the buildings>
The thought (and reality) was that when the "little birds" came in to drop SF operators for raids, the copper would rap around the rotor and crash the bird. 25 million a pop, carrying hundreds of millions in human cargo, when you factor in training, investment and so fourth.  

I don't generally like posting stories like this because of OPSEC reasons, but the reality is that technology and millions of dollars can be defeated by a $5 kite and $8 of copper.
Moral of the story: Rely on something more than technological prowess and brute force.

We've lost our benevolence, and as it says in the good book: "With the lowly, there is wisdom".

I wonder how low we will have to stoop to find that wisdom once again...

Cheers,

Aaorn (typo, I pormise) 

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