Daily Digest

Daily Digest - July 25

Sunday, July 25, 2010, 10:27 AM
  • China Calls Our Bluff
  • Mauldin: Some Thoughts on Deflation
  • Mortgage Securities It Holds Pose Sticky Problem for Fed
  • Economy Set For Triple Whammy, Admits Bank Chief
  • Aging Transit Systems Face Budget Crunch
  • Oil Giant Fined for Shipping Sludge to Ivory Coast
  • Rig Returns to Well Site as Storm Dissipates

Economy

China Calls Our Bluff (Claire H.)

America's biggest creditor - China - has called our bluff. As the Financial Times notes, the head of China's biggest credit rating agency has said America is insolvent and that U.S. credit ratings are a joke

Mauldin: Some Thoughts on Deflation (JRB)

It seems that not everyone is ready to join the deflation-first, then-inflation camp I am currently resident in. So in this week’s letter we look at some of the causes of deflation, the elements of deflation, if you will, and see if they are in ascendancy. For equity investors, this is an important question because, historically, periods of deflation have not been kind to stock markets. Let’s come at this week’s letter from the side, and see if we can sneak up on some answers.

Mortgage Securities It Holds Pose Sticky Problem for Fed (Rector)

Holding the securities could cost the Fed a lot of money and hamper its ability to fight inflation, while selling the securities could drain needed money from the still-weak economy.

Economy Set For Triple Whammy, Admits Bank Chief (Damnthematrix)

In an interview with The Independent, the Bank's chief economist, Spencer Dale, said that he did not expect inflation to return to its 2 per cent official target before the end of next year, about a year later than previously hoped, partly because of the hike in VAT to 20 per cent from January announced in the Budget.

Aging Transit Systems Face Budget Crunch (jdargis)

It would take $77.7 billion just to get the country’s public transit systems into shape, according to a report released last week by the Federal Transit Administration. By comparison, the report stated, the entire amount spent on rehabilitating and reinvesting in public transit nationwide in 2008 was $12 billion to $13 billion.

Environment

Oil Giant Fined for Shipping Sludge to Ivory Coast (jdargis)

The court also found the company guilty of covering up the hazardous nature of the waste when it first tried to unload its unusually toxic slops, which included high levels of caustic soda, sulfur compounds and hydrogen sulfide, in the port of Amsterdam. The nauseating sludge was pumped back on board after the company balked at treatment costs, and the ship, the Probo Koala, left with its load.

Rig Returns to Well Site as Storm Dissipates (jdargis)

“We are going to continue to play a cat-and-mouse game,” Thad W. Allen, the retired Coast Guard admiral who is leading the federal spill response, said at a briefing on Saturday. “It’s just one of the things we have to manage.”

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

11 Comments

batkinso's picture
batkinso
Status: Member (Offline)
Joined: Apr 6 2009
Posts: 8
BP, Deepwater Horizon and the Armageddon Scenario

http://english.pravda.ru/world/americas/23-07-2010/114356-deepwater_armageddon-0

For a start, it appears that the Ocean bed has been ruptured, it appears that dangerous levels of methane gas are being released (methane storms wiped out nearly 100% of life on Earth already twice before, and the source was the same geographical area), it appears that the sea-bed is starting to collapse, it appears that the well is breaking up.

Methane gas bubbles wiped out the planet’s life-support systems twice (the Permian extinction event 251 million years ago and the Late Paleocene Thermal Maximum 196 million years ago). Both came from beneath the Gulf of Mexico, where BP drilled the world’s deepest well.

The same source claims that the three tell-tale signs are present in the Gulf of Mexico, pointing towards an impending catastrophe: “the appearance of large fissures or rifts splitting open the ocean floor, a rise in the elevation of the seabed, and the massive venting of methane and other gases into the surrounding water”.

It appears all that worry about armageddon, the "new world order", the second coming of Christ, the coming of the 12th Imam, and aliens was a waste of time. It's quite likely BP has triggered the end of human life on earth.

  

 

dave s's picture
dave s
Status: Bronze Member (Offline)
Joined: Feb 20 2009
Posts: 56
Re: BP, Deepwater Horizon and the Armageddon Scenario
batkinso wrote:

 

It appears all that worry about armageddon, the "new world order", the second coming of Christ, the coming of the 12th Imam, and aliens was a waste of time. It's quite likely BP has triggered the end of human life on earth.   

You can stop reading this article at the top of page 2, where one of the "experts" claims GOM oil is abiotic.  As has been stated before on this forum, go to The Oil Drum for editorialized information on the spill. 

idoctor's picture
idoctor
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Posts: 1731
Re: Daily Digest - July 25

idoctor's picture
idoctor
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Posts: 1731
Re: Daily Digest - July 25

lightningben's picture
lightningben
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Posts: 4
Upside Down - The Land That The GFC Forgot... For now...

I know there are people who think Australia is upside down, but when it comes to financial news and almost everything related to the Crash Course it seems we are living in a world that literally is upside down.

There is almost no real bad news down here at the minute. Sure, people lost some of their superannuation at the end of 2008 but even it is coming back towards post crash levels.

House prices are still ridiculous, interest rates are reasonable, unemployment is at near record lows etc etc etc...

I feel like I am living a complete lie. All the math and the sensible articles put forth here and elsewhere all point to the same conclusion, that everything should fall in a great big heap, but there is almost nothing down here to point towards it.

This is one of the only articles that I've seen for a while that seems to indicate otherwise but even then it isn't fleshed out:

http://www.theaustralian.com.au/business/abc-chair-berates-economic-con-...

It makes it EXTRAORDINARILY hard to talk about impending financial doom to anyone (wife included)!

ashvinp's picture
ashvinp
Status: Gold Member (Offline)
Joined: Jan 21 2010
Posts: 412
Re: Daily Digest - July 25

lightningben,

Check out this article by Australian economist Steve Keen - http://www.debtdeflation.com/blogs/2010/06/27/there-is-no-gfc/

I think it will do a good job in addressing your sense of Australia being "upside down" or untouched by the 2008 global financial crisis... for now!

idoctor's picture
idoctor
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Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - July 25

 

lightningben's picture
lightningben
Status: Member (Offline)
Joined: Jan 29 2009
Posts: 4
Re: Daily Digest - July 25

Thanks ashvinp,

I've been following Steve's Debt Deflation blog etc for some years now... Great stuff, but yet to play out.

He is one of only a handful, if that, in Australia trying to speak up against what he foresee's coming.

Still, the whole thing seems very surreal right at the present moment.

girlflower's picture
girlflower
Status: Member (Offline)
Joined: Nov 9 2008
Posts: 15
Re: Daily Digest - July 25

Dear all,

I hv a question to ask: do you all think the way the real estate prices in Singapore has gone up is sustainable? Singaopore has one of the fastest "growing" real estate prices in the world and Asia, according to some articles I read :(

Thanks,

Girlflower 

MikeJE's picture
MikeJE
Status: Member (Offline)
Joined: Dec 27 2008
Posts: 13
The dangers of over powerful lobbyists.

This article taken from the Telegraph here in the UK:-

 

http://www.telegraph.co.uk/finance/comment/liamhalligan/7908516/Obama-si...

 

An exract below.

 

 

"Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes," Obama boomed at the schmaltzy signing ceremony, amid bursts of applause.

 

"These reforms will put a stop to a lot of the bad loans that fuelled this debt-based bubble," the President gushed to America and the rest of the world. "This bill also empowers consumerse_SLpsdelivering the strongest consumer financial protections in history."

It would be reassuring if we could agree with Obama, concluding that Dodd-Frank will help to prevent the next systemic crisis and associated bail-out of "too-big-to-fail" banks. Reassuring, but wrong.

For despite some marginal regulatory improvements, this is no Rooseveltian legislative milestone. Amid the hype and back-slapping of last week's launch, the sad reality is that Dodd-Frank fails to address the fundamental problems that resulted in the sub-prime fiasco and the related damage to not just America, but the entire global economy.

The inherent feebleness of this door-stopping bundle of statute and its lack of desperately needed substance, was brilliantly captured by Laurence Kotlikoff, a highly-respected professor of economics at Boston University. "This law is like being invited to dinner and served pictures of food," Kotlikoff remarked

 

 

Americans are asking about BP lobbying and the freeing of Al Megrahi. I  wouldn't be supprised if they did lobby the UK Govt.. After all that's what big companies do. They do it here and in the rest of the world especially in the USA. There are supposed to be checks and balances in democracies for such lobbying to be lawful and transparent and elected officials to be held accountable for their decisions. If left unchecked some of these mega corporations will eat away the fabric of society like a cancer. US presidents and senators need enormous campaign contributions to run an election campaign. The big corporations are only too willing to make financial donations but they usually want to call in favours when the time comes. This seems to be at the heart of the financial crisis (and possibly contributing to the Gulf oil spill)

America is a great country and the world is generally a better place for it but is it now a model the rest of the world should be following and can we still call it the land of the free?

 

 

Mike

 

 

 

Damnthematrix's picture
Damnthematrix
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Posts: 3998
Re: Upside Down - The Land That The GFC Forgot... For now...
lightningben wrote:

I know there are people who think Australia is upside down, but when it comes to financial news and almost everything related to the Crash Course it seems we are living in a world that literally is upside down.

http://www.theaustralian.com.au/business/abc-chair-berates-economic-con-...

It makes it EXTRAORDINARILY hard to talk about impending financial doom to anyone (wife included)!

My wife's convinced.....  cashed in her superannuation right on 55th birthday last month, and we're spending it to finish our infrastructure here.  Her super, BTW, lost $6000 since the start of the GFFU (Global Financial F$%^ Up!)

Mike on Sunshine Coast QLD

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