Daily Digest

Daily Digest - May 16

Saturday, May 16, 2009, 10:05 AM
  • * * * * Four Stars * * * * Naked Short Selling - Redefining Systemic Risk (Video) (Repost)
  • The real credit crunch (Chart on page)
  • Glen Beck:The Word is Dumping the Dollar (Repost, Video)
  • Will Bilderberg Sink the Economy?
  • A Decline in Retail Sales is a "Surprise"... Really? (Chart)
  • Upside Down
  • Chinese imports could bring GM political troubles
  • Fire Sale:Schwarzenegger to propose selling San Quentin
  • A conversation with Timothy Geithner, Charlie Rose (three types of broad errors of policy and policy both here and around the world. One was that monetary policy around the world was too loose too long. Video) 
  • The ‘Process’ of Rebuilding a Local Food Economy (H/T Suzie)
  • Nassim Taleb: Gold, Copper Could Rally “Massively’ (Video)
  • Unemployment Claims: Continued Claims Surge Past 6.5 Million (Chart)
  • WaPo: Treasury Approves TARP for Insurance Companies
  • Kronicle TV Episode 1 (Video)
  • There’s A Sucker Born…
  • German motorway strewn with notes
  • A few A(H1N1) Links Dr. Henry Niman's Map 5,673 U.S. Cases as of this wrtitng, A(H1N1) Current Timeline, CDC Cases 

Economy

* * * * Four Stars * * * * Naked Short Selling - Redefining Systemic Risk (Video) (Repost)

The real credit crunch (Chart on page)

U.S. commercial paper outstanding fell $81.1 billion to $1.298 trillion for the week ended May 13, ABCP fell to $ 598 billion.

With all the discussion of banks, it's easy to forget that commercial banks intermediated the minority share of credit creation in the boom. Securitization was responsible for the majority, and it is continuing to collapse in breathtaking fashion as particularly illustrated by the fall of both financial and asset-backed commercial paper outstanding.

This is a massive suction of deleveraging pulling down our credit-based economy, amounting to $292bn since the end of October across all types. The rate of decline noticably picked up since the start of April as well, though the data is lumpy, with a $154bn reduction in April and $124bn in just the first two weeks of May.

Glen Beck:The Word is Dumping the Dollar (Repost, Video)

Will Bilderberg Sink the Economy?

Roughly once a quarter, I get together with some leftist professors at Alep restaurant in Montreal. As always, the food was delicious, but Tom Naylor forgot to order the lamb dish, one of my favorites. He did make sure the wine kept flowing so I will forgive him.

It was a full house tonight. Even Robin Rowley, my econometrics and history of economic thought professor at McGill University, showed up and so did Jonathan Nitzan who just finished writing Contours of Crisis II: Fiction and Reality with Shimson Bichler.

There were many other distinguished guests tonight, including Sam Noumoff who will soon leave us to enjoy his retirement somewhere on the coast of Spain (I am so jealous). Presiding over tonight's festivities was our esteemed President, George Archer, a man who knows how to say a lot with few words. El Presidente was at his best tonight, making sure his loyal servants were obedient. He allowed Naylor to have a few of his classic outbursts but nothing too anti-capitalistic.

A long time ago, I use to work with Jonathan and George at the Bank Credit Analyst, a private macroeconomic forecast firm based here in Montreal. Unfortunately, both Jonathan and George are not neo-classical economists so their views were too off course for traditonal macroeconomic forecast firms who believe in the religion of economics.

As for Tom Naylor, well, he has long given up on economic theory saying "it's all a fraud." I think he has given up on humanity as well stating that the "real swine are humans as they took a perfectly clean animal like the pig and mistreated it. Now it's the pigs' revenge."

(More)

A Decline in Retail Sales is a "Surprise"... Really? (Chart)

Upside Down

He graduated from Harvard and was present when Keynesian economics first came to the fore. He lived through World War I, witnessed the founding of the Federal Reserve, the Great Depression, and the establishment of the International Monetary Fund (IMF). He also presided over the New York Federal Reserve Bank. Mr. Exter’s work can be found on the Internet with a simple Google search.

One of his most famous quotes is, “The U.S. and world economies are on the threshold of a deflationary crash that will make the 1930s look like a boom. Gold will be the single best investment to own. Buy it now while it’s still cheap.”

A pyramid is one of the most stable structures ever envisioned by humans. However, Mr. Exter is perhaps most famous for his inverted pyramid of how a debt-based monetary system is constructed.

Chinese imports could bring GM political troubles

The United Auto Workers charged last week that the Detroit automaker intends to almost double over the next five years the number of vehicles it imports to the U.S. from Mexico, South Korea, China and Japan.

"GM should not be taking taxpayers' money simply to finance the outsourcing of jobs to other countries," Alan Reuther, the union's Washington lobbyist, wrote in a letter to U.S. lawmakers.

Fire Sale: Schwarzenegger to propose selling San Quentin

Gov. Arnold Schwarzenegger today will propose selling San Quentin Prison, the Los Angeles Coliseum and other state-owned properties in a bid to raise cash to counter the state's daunting budget shortfall.

He also wants to accelerate the sale of Agnews Developmental Center, the 81-acre facility on the north edge of San Jose that closed its doors in March after 120 years.

The proposal to sell off state assets is part of the governor's revised budget plan being released today. Besides the Coliseum and San Quentin, the properties he's eyeing for sale are the Cow Palace in Daly City, the Orange County Fairgrounds, Cal Expo in Sacramento, Del Mar Fairground, and the Ventura County Fair.

The sale of those properties would generate upward of $600 million and possibly more than $1 billion for the state, according to a copy of Schwarzenegger's proposal. But proceeds from those sales would not arrive for another two to five years.

Selling the Agnews property would be done within two years.

With its stunning views of the San Francisco Bay, San Quentin has long been eyed for a more lucrative use. Sen. Jeff Denham, R-Modesto, has proposed selling both San Quentin and the Coliseum to generate badly needed revenues for the state.

If voters reject a slate of ballot propositions in a special election Tuesday, as polls indicate they will, the state will face a deficit of $21.3 billion through mid-2010.

A conversation with Timothy Geithner, Charlie Rose (three types of broad errors of policy and policy both here and around the world. One was that monetary policy around the world was too loose too long. Video)  

The ‘Process’ of Rebuilding a Local Food Economy (H/T Suzie)

Inside a plain strip mall just off U.S. Highway 93 in Lolo, Mont., Skip Cleek stands on teal drain boards surrounded by stainless steel sinks, counters, and a vacuum packer as rests his hand on a suitcase-size machine he calls the “coiner.” His baseball cap drawn tight, the ebullient handle-bar mustachioed Cleek boasts the machine can process in excess of 800 lbs of carrots an hour, “if you can feed them in that fast.”

Cleek manages the recently opened Montana Food Products, LLC, the state’s first for-profit contract packaging facility, or “co-pack” in industry lingo. President Ron Oberlander of Florence opened the facility because he wanted a place to process his line of U.S. Omega3 Food products. He also saw a business opportunity in a facility that other food product entrepreneurs could utilize such as the couple who were in making the salsa they sell in area restaurants shortly before my visit.

For folks who want to build a local food economy, the new food processing facility marks a significant step forward.

Despite soaring demand for locally grown food, it remains primarily available only fresh, raw and in season, such as the delicious piles of salad greens, snap peas and summer squash that will soon fill the stalls of the region’s Farmer’s Markets, or as baked goods and jams, products allowed under state regulations to be made without a certified commercial kitchen. But many people would also like to purchase salad dressings for those raw vegetables, sauerkraut to pile on their elk sausage, or frozen Bitterroot Macs to make an apple pie in the winter, all made from locally grown ingredients.

Yet processed local food products like these are practically non-existent in Montana due to a lack of processing and storage facilities. This lack of infrastructure severely restricts what months of the year and what Montana-grown food products Montanans can eat. Expanded food processing facilities like Montana Food Products will help more Montanans eat local food. This is especially true for institutions like Missoula County Public Schools which rely extensively on processed food from a supplier for their students.

“We really are looking at how do we increase the capacity of Montanans to feed themselves,” said Jan Tusick, a leading advocate for local economic development in the food industry.

(More)

Nassim Taleb: Gold, Copper Could Rally “Massively’ (Video)

Unemployment Claims: Continued Claims Surge Past 6.5 Million (Chart)

WaPo: Treasury Approves TARP for Insurance Companies

Update:from the WaPo: Insurance Companies Approved for TARP Money

The Treasury today granted preliminary approval for some of the nation's largest insurance companies to receive capital infusions under the government's Troubled Assets Relief Program, Treasury spokesman Andrew Williams said.

Recipients are Hartford, Prudential, Allstate, Ameriprise, Lincoln National and Principal Financial Group, Williams said.

From Hartford: The Hartford Receives Preliminary Approval For $3.4 Billion Participation In Treasury's Capital Purchase Program (ht jb)

The Hartford Financial Services Group, Inc. (NYSE: HIG - News) announced today that the United States Treasury Department has provided preliminary approval for the company to participate in Treasury’s Capital Purchase Program (CPP) in the amount of $3.4 billion.

Kronicle TV Episode 1 (Video)

There’s A Sucker Born…

Don’t you just know Wall Street does this too?

Just like its rivals for consumers' disposable income, America's $90-billion-a-year gaming and casino industry is significantly driven by database marketing. But gaming customers are very different in one major respect.

While adult patrons of a hit movie, for example, know they will spend about $8 to $10 on a ticket, perhaps buy soda and popcorn and then head home, some casino customers lose huge sums of money while a few others might actually make a profit, especially those who are skilled at games such as blackjack.

Can casino owners more accurately identify and predict which of their regular customers will lose the most money? How often will these customers visit? How will they allocate their bets among slots and tables? By targeting those players, can casinos follow up with a more effective direct marketing campaign?

The questions inspired two Wharton faculty members and a colleague at New York University's Stern School of Business to see if they could develop a mathematical model to identify these most lucrative customers. The three researchers -- marketing professors Raghuram Iyengar and Jehoshua Eliashberg, and Sam K. Hui, a marketing professor at Stern -- say that the answer is an unqualified yes. Indeed, they wonder why casinos aren't already using these tools.

(More)

German motorway strewn with notes

The notes rained down on the fast-moving motorway traffic behind him.
Police closed the road in both directions for half an hour to search for the missing money. All but 3,000 euros was recovered.
The man, 23, was test-driving an Audi convertible near Hanover, and the money was intended to pay for the car.

 A few A(H1N1) Links Dr. Henry Niman's Map 5,673 U.S. Cases as of this wrtitng, A(H1N1) Current TimelineCDC Cases 

2 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - May 16

Have a good weekend, take care

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - May 16

Love that Glen Beck video..funny but true which makes it so sad.

Nouriel Roubini

http://www.cnbc.com/id/30768521

Marc Farber 3 parts

Jim Rodgers

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