Daily Digest

Daily Digest - June 28

Monday, June 28, 2010, 9:48 AM
  • Toronto In Lockdown As G20 Protesters Clash With Police
  • Mauldin: The Risk of Recession
  • RBS Tells Clients To Prepare For 'Monster' Money-Printing By The Federal Reserve
  • Liz Ann Sonders Cheers Us Up, Those Terrible Unions, Greed is not Good and This is Theft
  • Bailout Tally (and Subsidization) Report
  • From CNBC Business Journalist to Critic of Bankers on MSNBC
  • Couldn't Help But Be Moved


Toronto In Lockdown As G20 Protesters Clash With Police (pinecarr)

Canadian government accused of barring non-mainstream reporters from summit” (hat-tip to nakedcapitalism.com who posted the link to this article)

Numerous reports suggest that Canada's border guards have been refusing entry to reporters covering the G8 and G20 summits for non-mainstream news sources.

Two reporters from Chicago Indymedia were reportedly accused of being protesters and denied entry. Reporters from WeAreChange were detained for at least four hours by border officials before being denied entry. A reporter from the InfoWars news site was also denied entry. Two activists from CodePink were also barred from entering Canada.”

Mauldin: The Risk of Recession (JRB)

I am on record as saying I think there is a 50-50 chance we slip back into recession in 2011, as I think the economy will soften in the latter half of the year and a large tax increase in 2011 (from the expiring Bush tax cuts) will tip us into recession.

This was not based on data, but rather on research which shows that tax cuts or tax increases have as much as a 3-times multiplier effect on the economy. If you cut taxes by 1% of GDP then you get as much as a 3% boost in the economy.

RBS Tells Clients To Prepare For 'Monster' Money-Printing By The Federal Reserve (SolidSwede, joemanc)

We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable," he said in a note to investors.

Liz Ann Sonders Cheers Us Up, Those Terrible Unions, Greed is not Good and This is Theft (Ilene)

I very much liked Liz Ann Sonders’ take on the markets, she not only has a nice video presentation but there’s a slide show to go with it so kudos to Schwab for providing some very serious value to their clients. Liz has coincident indicators (#6) going up nicely and makes an excellent point about where we are in the norms of recessions past (#8 which is based on recessions between 1950-2010 and annualized Q/Q % change for real GDP.

Bailout Tally (and Subsidization) Report (Davos)

Chart(s) on page.

From CNBC Business Journalist to Critic of Bankers on MSNBC (jdargis)

All this from a man who, until recently, hosted a stock-picking show on CNBC, the cable personification of Wall Street. Now Mr. Ratigan, who labels himself a taxpayer advocate, rails against the “vampire” banks who “have assumed control of our government.”

“It’s like being the guy who was running the casino, and then having an awakening and realizing that the casino is what’s killing the country,” Mr. Ratigan said in an interview last week.


Couldn't Help But Be Moved (Davos)

I was invited the following week to go behind “enemy lines.” They gave me, of all people, security clearance to go into the base of operations meetings in Venice, Louisiana eight days in. Open door invitation to sit like a fly on the wall. Can you believe it? It’s really going on. They also gave me security clearance to go up to the Homer Incident Command Post which is over the entire region of Louisiana. I’ve been in Coast Guard planes all the way out to the site itself. Helicopters. Boat rides. I have been everywhere that anybody could ever want to go to get an inside look at what’s really going on.

Please send article submissions to: [email protected]


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Re: Daily Digest - June 28

"World business leaders see a growing risk that the eurozone could break up in the next three years, according to research by the Economist Intelligence Unit commissioned by RBC Capital Markets, published on Monday.

Half of the 440 chief executives and heads of banks questioned say there is a greater than 50 per cent chance of one or more countries leaving the eurozone by 2013 because of the deepening problems of debt in the 16-nation bloc. More than a third (36 per cent) see at least a 25 per cent chance of a complete breakup over the same period."

"June 28 (Bloomberg) -- Central banks and governments should consider withdrawing extraordinary measures to avoid skewing investment decisions and delaying companies’ recording of losses, the Bank for International Settlements said."

"The Greek crisis also underscored the risk that governments may no longer have the resources to support their banking systems should they need it, the BIS said.

Less Maneuver Room

“The events coming out of Greece highlight the possibility that highly indebted governments may not be able to act as buyer of last resort to save banks in a crisis,” the BIS said. “If the debt of the government itself becomes unmarketable, any future bailout of the banking system would have to rely on external help.” "

..................2A) European Banks May Face `Significant Refinancing Pressures', BIS Says

"Rich western countries had fired all the fiscal bullets at their disposal and there was nothing left in the kitty to salvage their economies if they sank into recession again as feared, former Development Bank of Southern Africa CEO Ian Goldin warned yesterday.

“There is absolutely nothing left to fire,” Mr Goldin, director of Oxford University’s James Martin 21st Century School, told a gathering at the Fortune-Time-CNN Global Forum.

There was a high risk of a double- dip recession, made all the more dangerous as most governments did not have any more ammunition to deal with it, he said."

"June 28 (Bloomberg) -- Italy faced weaker demand today at a sale of 3- and 10-year bonds worth 7 billion euros ($8.65 billion), pushing yields on its traded debt higher.

The government auctioned 3.5 billion euros of securities maturing in 2020 with investors bidding 1.29 times the amount of 10-year debt on offer, that’s down from the 1.37 times at the May 28 sale. Italy also sold 3.5 billion euros of three-year bonds with a bid-to-cover ratio of 1.39 times, lower than the 1.52 times at the previous sale. "

"(Reuters) - Japan's sovereign rating may face downward pressure over the next couple of years if the government fails to stick to its plan for fixing public finances, Moody's Investors Service said on Monday.

Japan set ambitious targets to rein in its debt last week but also said these goals could not be met even under its rosiest growth scenario, the latest sign that the government may have to push through contentious tax hikes."

"LONDON (MarketWatch) -- Embattled U.K. energy giant BP Plc said Monday the costs of cleaning up the oil spill in the Gulf of Mexico have soared to $2.65 billion, an increase of $300 million from the company's estimate last Friday. "

"June 28 (Bloomberg) -- Italian, French and Spanish bonds fell on weaker demand at European auctions offering a total of 10.7 billion euros ($13 billion) of debt.

The drop increased the extra yield investors demand to hold the nations’ 10-year debt rather than benchmark German bunds."

"June 28 (Bloomberg) -- Illinois plans to add $900 million in Build America Bonds as soon as this week to the $755 million in securities it has sold in June as the cost of insuring the state’s debt against default reached a record high.

The cost of an Illinois credit-default swap has more than doubled since April 5 to a record high last week of 360 basis points, or $360,000 to protect $10 million of debt, according to CMA DataVision.

The state paid a premium of 79 basis points on 10-year general obligation debt over top-rated tax-exempts June 25, or 4 basis points more than at the start of the month. A basis point is 0.01 percentage point."

...................8A) Illinois ranks high in 'underwater' homes

"ROCKFORD — More than 450,000 of the 2.2 million mortgages in Illinois have negative equity — meaning the homeowners owe more on their houses than what they’re worth on the open market, according to business analytics company CoreLogic.

Illinois ranks 12th on CoreLogic’s list of states with the highest percentage of “underwater” mortgages."

.....................8B) Stimulus money runs dry for Illinois road builders

"Oregon's trends mimic those in about 45 other states, says Mike Griffith, a senior policy analyst at the Education Commission of the States. Nationally, school districts are making deeper cuts that are increasing class sizes and eliminating popular programs. Some school systems are on the brink of insolvency.

Griffith said there is no doubt that the past three years have been the worst period for state and school district budgets in 50 years.

"The Recovery Act kept the floor from falling through," Griffith said. "Now that money is gone. This year's budget is worse than the last, and there are no federal dollars to make up the difference." "

  • Other news and headlines:

Obama Says US Deficit-Cutting Goals Match G-20 Targets

Pimco Says Aquino Needs to Reduce Philippine Deficit

US promises $136 million in climate aid to Indonesia

Surging China Debt May Weaken Growth, Limit Stimulus

UAE banks could face more loan impairments

Paterson's budget agenda is rejected (New York)

Congress blasts Medicaid hole in states' budgets

Leu Drops to 7-Month Low, Stocks Fall on Romania Loan Concern

Poland Seeks Bids for Enea as Deficit-Trimming State Asset Sales Continue

With the clock ticking, Sacramento set to blow another budget deadline

Bond Distress Rises as Default Forecasts Vary: Credit Markets

The Third Depression (Paul Krugman)

States' budget crises threaten to 'destroy social fabric' of the US

JAG's picture
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A Tribute Video For The Automatic Earth

After hearing a recording of one of her more recent presentations, I was inspired to create a tribute video for the work of Stoneleigh and Ilargi at The Automatic Earth

Hope you like it....Jeff

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Re: Daily Digest - June 28

To help someone suffering from a hangover from too much beer, Krugman would give them champagne. 

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Re: A Tribute Video For The Automatic Earth

Wow... you are very talented Jag... well done tribute.  I had the good fortune to see Nicole Foss (Stoneleigh) speak in Rhinebeck, NY several months ago, and she is indeed authoritative and inspiring.  She and Ilargi (who does most of the writing on the Blog) do a great job and I consider them (TAE) amongst my daily must read list.  

She does an especially good job of explaining the degree to which we have been taking our earth's, "hydrocarbon inheritance" for granted to drive growth, and how this era will end before we are ready. 

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Toronto Lockdown


1 billion in security and they let the real perps get away.  You just don't get what you pay for these days. Maybe they will get them at the next Bilderberger meeting.


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Re: A Tribute Video For The Automatic Earth
JAG wrote:

After hearing a recording of one of her more recent presentations, I was inspired to create a tribute video for the work of Stoneleigh and Ilargi at The Automatic Earth

Hope you like it....Jeff


Thank you for sharing this. Visually stunning. There are a lot of pictures I haven't seen. And yes, let's remember the regular people of limited means - the ones without the safety nets or the investment portfolios. Update the clothes, and this could be our people in 10 years - White, Black, Asian, Native American, etc.

I didn't realize you were CaptainSheeple on Youtube!

I have a book, Down and Out in the Great Depression: Letters from the Forgotten Man, edited by Robert S. McElvaine. The letters are heartbreaking. Gives you a glimpse behind the thoughts of the people in those pictures.


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Re: Daily Digest - June 28


You knocked one straight out of the park again, didn't you!!!


I found a pdf read online preview of that book for you to share. Click the blue link below : -

Down and Out in the Great Depression: Letters from the Forgotten Man ~ by Robert S. McElvaine


Wikipedia Review

Robert S. McElvaine is Elizabeth Chisholm Professor of Arts and Letters and Chair of the Department of History at Millsaps College in Jackson, Mississippi, where he has taught for thirty-five years. He is the author of seven books and the editor of three.

He is considered one of the world's leading historians of the Great Depression. His first two books on the Depression era have become standards in the field. The Great Depression: America, 1929–1941, which came out in a new edition in 1993 and again in 2009, has been called "the best one-volume overview of the Great Depression." Two of his books have been named among the "Notable Books of the Year" by the New York Times Book Review, and three have been listed among the Editor's Choice "Bear in Mind" books in that publication.

McElvaine's articles and opinion pieces appear frequently in such publications as the New York Times, Washington Post, Los Angeles Times, Wall Street Journal, New York Times Book Review, Newsweek and The Nation. More than 100 of his articles have been published, some 60 of them in major national publications. He has been a guest on approximately 75 television and radio programs, including NBC's Today, ABC World News Tonight with Peter Jennings, NBC Nightly News, National Public Radio's All Things Considered and Morning Edition, PBS NewsHour with Jim Lehrer, BB television and radio, and the Studs Terkel Show. McElvaine is a contributing blogger at The Huffington Post.

Professor McElvaine has served as historical consultant for several television programs, including the seven-episode PBS series The Great Depression. He has received many awards for his teaching, including a silver medal in the national Professor of the Year program of the Council for the Advancement and Support of Education and being named Millsaps College's Distinguished Professor in 2001 and won the Carnegie Endowment Professor of the Year Award in Mississippi in 2002.

~ VF ~


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Re: Daily Digest - June 28

With Illinois following CA, I would not be surprised the 3% income tax pushed up to at least the median tax rate of states nationwide. Those who live in low or no tax income states, what has been your experience with the resliency of the current tax structure in your state?

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Re: Daily Digest - June 28

I finally found some real positive news LOL!Laughing

Stock Values Are 'Better Now,' Big Rally On the Way: Cohen http://www.cnbc.com/id/37982373

The wobbly stock market in 2010 has resulted in attractive valuations that should see a rally of more than 16 percent between now and the end of the year, Goldman Sachs analyst Abby Joseph Cohen told CNBC.

NYSE traders

Commodities, particularly energy, look especially good, as do industrial equipment and information technology stocks, said Cohen, president of Goldman's

[GS  136.66    -3.00  (-2.15%)   ]

Global Market Institute.

She said the firm is sticking with its 1250 projection

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Re: Daily Digest - June 28

Poet and VF,

Thanks for the kind words and the book you mentioned looks very interesting. Thanks for pointing it out and digging up the PDF. Do you have a secret search engine VF? LOL



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Re: Daily Digest - June 28

Ok I am confused....

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Re: Daily Digest - June 28

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Re: Daily Digest - June 28

JAG,  well done...Thank you

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Re: Daily Digest - June 28

JAG the tribute was amazing!  Thank you.

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Re: Daily Digest - June 28

Well done, Jag. Thanks and great music.

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Re: Daily Digest - June 28

I have a suspicion that GS is trying to change their public persona and "get it wrong"  this year.

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