Daily Digest

Daily Digest - May 28

Friday, May 28, 2010, 10:47 AM
  • Thrill-Ride Thursday - Wednesday Never Happened, Now What?
  • What You Need To Know About The $2.2 Trillion Gulf Economy Being Threatened By The Leak
  • M3 Hysteria and a Look M2, MZM, GDP and PPI
  • Fuhgeddaboutdit Friday: This Week – It Never Happened!
  • India Is Stealing Water Of Life, Says Pakistan

Economy

Thrill-Ride Thursday - Wednesday Never Happened, Now What? (Ilene)

Fast Money got fooled out of their bullish 1:50 positions by 5pm as suddenly they relized the market is controlled by evil computer programs - not exactly news to us and no reason to shake us out of our well-hedged positions. We ignored rumors on China (and we always ignore Steve Ballmer) in chat and those seemed to be the major rumors moving the market lower yesterday.

What You Need To Know About The $2.2 Trillion Gulf Economy Being Threatened By The Leak (Elsur)

Six of America's top 10 shipping ports are on the Gulf Coast, 27% of U.S. crude production comes from the Gulf...

M3 Hysteria and a Look M2, MZM, GDP and PPI (pinecarr)

What I am attempting to get across is that one way or the other, excess financial sector debt is going to be liquidated, either through default, or through inflation, or through a mixture of higher taxes and sluggish growth with a disparity of income that increasingly resembles 19th century serfdom and political instabilty, the rise of demagogues, and some vicious ghosts from the past.

Fuhgeddaboutdit Friday: This Week – It Never Happened! (Ilene)

The Banksters are using accounting tricks, including: Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup that ”have masked their risk levels in the past five quarters by temporarily lowering their debt just before reporting it to the public, understating the debt levels used to fund securities trades by lowering them an average of 42% at the end of each of the past five quarterly periods. “

Well, who cares as long as it makes things look good, right?

Environment

India Is Stealing Water Of Life, Says Pakistan (SteveS)

A group of more than 20 different UN bodies warned earlier this month that the world may be perilously close to its first water war. "Water is linked to the crises of climate change, energy and food supplies and prices, and troubled financial markets," said the report. "Unless their links with water are addressed and water crises around the world are resolved, these other crises may intensify and local water crises may worsen, converging into a global water crisis and leading to political insecurity and conflict at various levels."

Please send article submissions to: [email protected]

16 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - May 28

"May 28 (Bloomberg) -- Credit-default swaps on the sovereign debt of Italy and Spain are heading for their biggest monthly increase amid investor concern that depressed demand for bonds of indebted nations will keep borrowing costs elevated.

Contracts on Greece signal a 45 percent chance the Mediterranean nation will default within the next five years, even after the European Union committed to an almost $1 trillion aid package to ease the region’s budget deficit crisis."

"May 28 (Bloomberg) -- Companies sold the least amount of bonds in a decade this month as concern Europe’s sovereign debt crisis will slow the global economy drove up relative borrowing costs by the most since the aftermath of Lehman Brothers Holdings Inc.’s collapse.

Borrowers issued $61.1 billion of debt in currencies from dollars to yen, a third of April’s tally and the least since December 2000, according to data compiled by Bloomberg. At least 13 companies withdrew offerings, including New York-based retailer Jones Apparel Group Inc. and theater chain operator Regal Entertainment Group."

"May 28 (Bloomberg) -- China’s trade in yuan-denominated gold investment products moves the currency closer toward global acceptance and the country should develop more of them, a central bank official said.

Pricing commodities in the currency “helps China’s goal to internationalize the yuan,” Wang Zhenying, deputy director- general of the Department of Financial Management at the Shanghai office of the People’s Bank of China, said today. “Gold is a good choice to have yuan trading.”

Gold consumption in China, the world’s biggest producer, may double within the next 10 years as supplies fail to keep pace with demand from investors and the jewelry industry,"

"MADRID - Talks with unions and business to overhaul Spain's rigid labour laws are going badly, a government spokesman said on Friday, casting doubt over reforms crucial for reassuring markets of the country's long-term solvency."

.........................4A) Tensions rise as jobless migrants are blamed for the pain in Spain

"The developments jeopardized what progressives in Congress and some members of the Obama administration had described as a life raft for 100,000 to 300,000 teachers and other school personnel whose billions of dollars in stimulus salary subsidies run out this fall.

Outside the Beltway, educators said it wasn't clear how big a hit they would take if more federal money didn't come through.

"The specter of layoffs is there," said Maryland Department of Education spokesman Bill Reinhard. "The economy has not totally turned around yet.""

"WASHINGTON — The Senate on Thursday approved a nearly $60 billion measure to pay for continuing military operations in Afghanistan and Iraq as House Democrats struggled to round up votes for a major package of business tax breaks and safety-net programs for the long-term unemployed."

..................6A) Sen. Tom Coburn loses bid to offset war bill costs with $60 billion in cuts

"May 27 (Bloomberg) -- Pennsylvania’s capital, Harrisburg, told trustees it won’t make a $3.6 million payment promised for an incinerator project’s debt due June 1, said Finance Director Robert Kroboth.

The city notified the trustee on May 24 it wouldn’t honor its guarantee on the payments, on three series of 2003 bonds issued by the Harrisburg Authority, Kroboth said. Most of the payments will be covered by Dauphin County, a co-guarantor on $3 million of the payments, said Amy Richards, a spokeswoman for the county commissioners.

Harrisburg, a city of 47,000 in the sixth most-populous U.S. state, has considered filing for bankruptcy protection in the face of $68 million in debt payments for the incinerator this year, four times what the city raises in property taxes, according to its budget."

.......................7A) Harrisburg School District's proposed cuts are 'the worst I've ever heard,' former board member says

"Toledo collected about 4.4 percent less from its payroll tax during the first four months of 2010 over the same period last year but the Bell administration Thursday said it is on track to finish the year where it predicted."

GOING DOWN
Total income tax collections for the city of Toledo, in millions:

• 2009 — $141.5
• 2008 — $154.4
• 2007 — $169.7

Collections through April 30, also in millions:

• 2010 — $32.08
• 2009 — $33.56
• 2008 — $37.93

"NEW ORLEANS – A thick, 22-mile plume of oil discovered by researchers off the BP spill site was nearing an underwater canyon, where it could poison the foodchain for sealife in the waters off Florida.

The discovery by researchers on the University of South Florida College of Marine Science's Weatherbird II vessel is the second significant undersea plume reported since the Deepwater Horizon exploded on April 20. The plume is more than 6 miles wide and its presence was reported Thursday."

  • Other news and headlines:

Bankruptcy talk spreads among Calif. muni officials

Argentina Wage Demands Threaten to Fuel Higher Inflation

Rise in inflation is worrying - Cameron (UK)

IMF shows signs of getting tough with Ukraine over deficit, lack of reforms

Japan Unemployment Rate Unexpectedly Rises, Prices Fall Further

Uncertainty over Medicare pay sets doctors on edge

Dubai dealt new blow with DIC debt delay and Worries resurface as Dubai asks for time to pay

Treasury to Sell $79 Billion in Short-Term Securities (Next week)

Another Affordable Housing Default

State pushes ahead with building sale, but concerns mount* (California)

Czechs Vote as Stalemate May Hinder Spending Cuts

'We could go bankrupt by 2019' (Malaysia)

Red Ink from Sea to Shining Sea (Lists the debt of the "six most troubled states")

S&P may cut Rome's A-plus bond rating

Int'l air traffic slumps in April due to impact of volcanic ash: IATA also A second, much larger volcano in Iceland is showing signs that it may be about to erupt

NJ commercial foreclosures continue at same clip as '09

Oakland Police Chief To Consider Massive Layoffs  ("Nearly half of the police department’s sworn officers could face layoffs")

Marin cities' affordable housing threatened by weak real estate market

Majority of Canadians bracing for violent G8/G20 summits

Vacant building tax headed to full city council vote (Baltimore)

Ficano calls off 700 furloughs (Lansing...$105 million deficit)

Sonoma County workers could face double-digit pay cuts (up to 15% cut)

(Poll) How Will You Vote On SF's $412 Million Seismic Upgrade Bond Measure? ($483 budget deficit, and also mentions their 100 year old emergency water supply system that is deteriorating)

Will the Tax Credit Create a Summer Slump? (Real estate)

State Group Estimates 37% of California Foreclosures Involved Renters

gregroberts's picture
gregroberts
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Re: Daily Digest - May 28

Just when you thought it was safe to start expressing your right to free speech, Democrats in Congress are gearing up for a vote on a new piece of legislation to blatantly undermine the First Amendment. Known as the DISCLOSE Act (HR 5175), this bill – written by the head of the Democrats’ congressional campaign committee – is their response to the recent Supreme Court ruling in Citizens United v. Federal Election Commission. In short, the Supreme Court found that the government could not restrict the free speech rights of individuals or other entities wishing to participate in the political dialogue.

free_Speech

http://biggovernment.com/tprice/2010/05/27/bloggers-beware-theyre-coming...

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saxplayer00o1
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Re: Daily Digest - May 28

 

"The Pittsburgh pension fund's unfunded liability grew 2.4 percent during the last quarter, to about $696.6 million, according to figures released today.

Since Dec. 31, the plan's assets increased from $287.5 million to about $293 million.

However, the fund's liability has topped $989.5 million, according to the latest calculation, performed in 2009.

The fund was 29.6 percent funded March 31, down from 32 percent Dec. 31."

"PACOIMA — Local leaders, residents and housing activists launched a campaign Thursday to crack down on foreclosed homes that have been allowed to deteriorate and blight their communities.

They vowed to press authorities to enforce a new city law that would impose a $1,000-a-day fine on banks and other lenders that allow foreclosed properties to fall into disrepair.

"We are here to let the community know that they have this important tool to use against the banks," City Councilman Richard Alarc n told a news conference in front of a Pacoima home that was taken over by gang members after the bank foreclosed on the property earlier this year. "

"GRAPHIC: About 21 percent of the state workforce is old enough to retire at 55 right now, according to statistics presented at Wednesday's Assembly Accountability and Administrative Review hearing. The graph shows that an even higher percentage of managers and supervisors are 55 or older."

Calretirement

  • A couple more headlines:

80% Favor Auditing the Federal Reserve

North Korean General Warns of ‘All Out War’ at Press Conference

 

......................Enjoy the long weekend! I'll be out tomorrow and won't be posting. The other couple of days

may be good for playing with the cat, working on those hot sax riffs, showing off that new pen trick, or just chatting with someone. (small language warning on that last one)

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Re: Daily Digest - May 28
gregroberts wrote:

Just when you thought it was safe to start expressing your right to free speech, Democrats in Congress are gearing up for a vote on a new piece of legislation to blatantly undermine the First Amendment. Known as the DISCLOSE Act (HR 5175), this bill – written by the head of the Democrats’ congressional campaign committee – is their response to the recent Supreme Court ruling in Citizens United v. Federal Election Commission. In short, the Supreme Court found that the government could not restrict the free speech rights of individuals or other entities wishing to participate in the political dialogue.

free_Speech

http://biggovernment.com/tprice/2010/05/27/bloggers-beware-theyre-coming...

 

I strongly disagree with the premise that legal entities such as corporations and limited liability companies have Constitutional rights, such as free speech, equal to that of individuals.  It is a Frankenstien interpratation of the Constitution.  And, I hope that something is done to reverse the Supreme Court's decision.

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Re: Daily Digest - May 28
gregroberts wrote:

Just when you thought it was safe to start expressing your right to free speech, Democrats in Congress are gearing up for a vote on a new piece of legislation to blatantly undermine the First Amendment. Known as the DISCLOSE Act (HR 5175), this bill – written by the head of the Democrats’ congressional campaign committee – is their response to the recent Supreme Court ruling in Citizens United v. Federal Election Commission. In short, the Supreme Court found that the government could not restrict the free speech rights of individuals or other entities wishing to participate in the political dialogue.

The Citizens United case was one of the worst reasoned SC opinions since Korematsu (allowing arbitrary detention of American Japanese during WW2)... unrestricted corporate expenditures/contributions to political campaigns has been one of the biggest threat to equality, justice and progress in this country. I don't know the details of this bill proposed, but it's about time they came up with something to address that horrendous SC decision. If it restricts the ability of bloggers to voice their opinions, then that should definitely be fixed, but I'm not inclined to believe a Georgia Republican's spin about that...

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printfaster
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Re: Daily Digest - May 28

In short, the Supreme Court found that the government could not restrict the free speech rights of individuals or other entities wishing to participate in the political dialogue.

Good to see that the right to freely assemble and petition government has not yet been abridged yet.  Once you go down the road of defining what entities outside of government cannot assemble, you have prepared the way to imprison or kill your citizens for their thoughts, religious beliefs, race and opinions.

There are so many people out their that think you should have no rights because you disagree with them.  I am in support of stupidity, because it truly is the most fundamental right.  Take that away and you have a prison state with other "less stupid" people telling you what do.  The "best and brightest" are the most dangerous group in society because they know better than you, what is good for you, and they think that without any questioning.

 

 

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Re: Daily Digest - May 28

In short, the Supreme Court found that the government could not restrict the free speech rights of individuals or other entities wishing to participate in the political dialogue.

Good to see that the right to freely assemble and petition government has not been abridged yet.  Once you go down the road of defining what entities outside of government cannot assemble, you have prepared the way to imprison or kill your citizens for their thoughts, religious beliefs, race and opinions.

There are so many people out there that think you should have no rights because you disagree with them.  I am in support of stupidity, because it truly is the most fundamental right.  Take that away and you have a prison state with other "less stupid" people telling you what do.  The "best and brightest" are the most dangerous group in society because they know better than you, what is good for you, and they think that without any questioning.

 

 

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saxplayer00o1
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Spain loses AAA rating

 

 Spain Loses AAA Rating at Fitch Amid Deficit Crisis

"The euro fell after Fitch Ratings announced a one-notch cut to Spain's credit rating.

Fitch said Spain's sovereign-credit profile remains "very strong" but sees its government debt reaching 78% of gross domestic product by 2013. It cited labor market "inflexibility" and said restructuring of regional and, local banks will hinder Spain's adjustment.

"Fitch's downgrade is a spanner in the works after a brief rally in risk this week, and I think it does set us up for a reversion to risk aversion next week," said Mike Moran, senior foreign exchange strategist at Standard Chartered Bank in New York. "It's a reminder of the enormous fiscal challenges facing southern Europe." "

"May 28 (Bloomberg) -- The U.S. House approved legislation to extend unemployment insurance, restore some tax breaks and raise taxes on managers of buyout funds and other investment partnerships.

Lawmakers voted 215-204, largely along party lines, for the legislation costing about $112 billion. The Senate plans to consider the plan during the week of June 7 after lawmakers’ Memorial Day recess."

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Re: Daily Digest - May 28

Just when you thought it was safe to start expressing your right to free speech, Democrats in Congress are gearing up for a vote on a new piece of legislation to blatantly undermine the First Amendment. Known as the DISCLOSE Act (HR 5175), this bill – written by the head of the Democrats’ congressional campaign committee – is their response to the recent Supreme Court ruling in Citizens United v. Federal Election Commission. In short, the Supreme Court found that the government could not restrict the free speech rights of individuals or other entities wishing to participate in the political dialogue.

Oh Greg, you didn't!  Fanning political flames in the DD!  Say it ain't so.

I'll give my two cents here, since you started it and I can't resist.  First, my background credentials.  I was born and raised in a Red state.  I am an attorney in Washington State that previously represented, among other big businesses, the responsible parties in oil spills (e.g., BP).  I do not do any plaintiffs work and do not typically identify with plaintiffs.  I belong to the local gun range and have a concealed carry permit.  In short, I'm not someone who thinks corporations are evil or who picks and chooses between the Constitutional Amendments I think "apply" and the Constitutional Amendments I don't care for so scoff at as the ill-conceived nonsense of previous generations.

The Supreme Court's decision that you mention above is completely devoid of all merit.  The issue was not the free speech rights of individuals.  The issue was whether Congress can legitimately limit the campaign donations of corporations to politicians.  That issue had been previously decided twice before.  Once back in the 1990s in Austin v. Michigan CoC and again in the early 2000s in, I believe, McConnell (sp?) v. FEC.  The "precedence" from those Supreme Court cases was that Congress could legitimately do so.

The Supreme Court overturned that precedence and ruled for the first time that corporations essentially have the same rights you and I do.  However, because they can neither go to bed hungry nor have a son drafted and killed on the battlefield, I have to strongly disagree.  They have such rights as we the people deem it convenient for them to have for the proper functioning of our economy.  Nothing more or less.

My opinion:  Your first amendment rights were abridged by this decision, not protected. 

Edit:  I forgot to add this little tidbit I quickly looked up for my own fun.  The 2008 presidential campaign is estimated to have cost, in total, $2.4 billion.  That number represents 5.3% of Exxon's 2008 net profits.  Let that sink in.

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Re: Daily Digest - May 28

Don't miss the three Steve Wynn video on this page!!

http://www.cnbc.com/id/37392344

 Steve Wynn says Americans are afraid. He’s just angry.

 “Washington is unpredictable these days,” declares the CEO of Wynn Resorts

[WYNN  83.88    -0.61  (-0.72%)   ]

. “No one has any idea what’s next…the uncertainty of the business climate in America is frightening, frightening to everybody, and it’s delaying the recovery.” (Catch more Steve Wynn's views in the videos below and on CNBC throughout the day).

Wynn
Joe Cavaretta / AP
The Wynn is seen on the north end of the Las Vegas "strip."

Wynn spoke to CNBC in Las Vegas from the new Encore Beach Club opening for the Memorial Day weekend. He created the $69 million pool club and bar area after tearing down a brand new $13 million entrance to the Encore which looked out on Las Vegas Boulevard.

Turns out the view wasn’t good. Across the street are a slew of half finished developments which stalled in the downturn. Wynn didn’t want his guests to see that. “There were going to be 10,000 rooms across the street and they all went bust.” So he changed the whole front of the resort to close it off and create a sensual adults-only escape.

Pool clubs like the one he’s built are the hottest new trend in Vegas. “This generation…they have a different attitude,” Wynn says. “Instead of sitting and watching something, they want to be a part of it…they’re very hedonistic and sensual.”

 

 

As we spoke, scantily clad waitresses in barely-there orange bikinis prepared for one last practice run-through. “They’ll make north of a hundred grand apiece,” annually he says. The jobs pay well, and the tips are great. But wearing those bikinis isn’t easy. “If one of those girls gains two pounds, it goes from being really adorable to not so adorable.” (One other note: he lectures them about wearing hats and sunblock.)

 Wynn is passionate about the prospects for the beach club.

 He’s even more passionate about where this country is headed.

Wynn speaks of “wild, uncontrolled spending,” and “unbelievable, unsustainable debt”. As he plans to split his company headquarters between Las Vegas and Macau, with a bigger emphasis on Macau because of its tremendous profitability, he has no qualms about dealing with the Chinese government.

 

 

“Macau has been steady. The shocking, unexpected government is the one in Washington.”

He’s concerned about the prospect of inflation, of FHA repeating the mistakes of Fannie and Freddie, and the cost to business from the new healthcare law. “We’re on our way to Greece, in the hands of a confused, foolish government,” Wynn says. “It’s got to stop. It’s got to stop.”

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idoctor
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Re: Daily Digest - May 28

Mirror, Mirror on the Wall, When is the Next AIG to Fall?

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Re: Daily Digest - May 28

dave s,

Thank you for the clarification.  Corporations are not people, nor citizens.

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Re: Daily Digest - May 28

New Home Sales Set to Plunge in Former Bubble Markets (Update1)http://www.bloomberg.com/apps/news?pid=20601103&sid=adSkz7WCGd0o

Phoenix Falls

In Phoenix, contracts in the subdivisions surveyed by Metrostudy fell almost 49 percent for the week ended May 24 from the same period a year earlier, Hunter said. More than 8 percent of Phoenix households received a notice of default, auction or foreclosure in 2009, ranking the city the eighth worst in the country, according to Irvine, California-based research company RealtyTrac Inc.

Signed contracts in Metrostudy’s Las Vegas subdivisions dropped 12 percent for the week ended May 24 from a year earlier. They climbed 220 percent in the last week of April, an indication of buyer interest in capturing the tax credit before it ended, Metrostudy said.

Las Vegas had the highest rate of foreclosure filings in the U.S. last year, with 12 percent of households receiving a notice, according to RealtyTrac.

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Re: Daily Digest - May 28
dave s wrote:

The Supreme Court's decision that you mention above is completely devoid of all merit.  .....

Dave,

  Do you mean "void" of all merit?  "Devoid" would imply that you believe there was merit to the case at some point.  Although, it doesn't really matter because you would be wrong in either case.

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Re: Daily Digest - May 28

Do you mean "void" of all merit?  "Devoid" would imply that you believe there was merit to the case at some point.  Although, it doesn't really matter because you would be wrong in either case.

GF, I am definitely grammatically correct.  Unfortunately, I can't just take your word on the issue of whether I am philosophically incorrect.  How about you try to convince me?  We can have an actual battle of logic if you like, and I promise I will be somewhat more challenging than the staged strawmen your apparent hero always enjoyed.  And yes, the comma above is correct, too.

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Eye
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Re: Daily Digest - May 28

" My opinion:  Your first amendment rights were abridged by this decision, not protected. " - dave s

Agreed.  To argue that the contributions made from corporations to political campaigns is a defacto expression of the individual rights of the employees of said corporation is absolute nonsense.

 

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