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    Daily Digest – Jan 18

    by Davos

    Sunday, January 18, 2009, 2:44 AM

  • Niall Ferguson on Money, Colbert Nation (Video)
  • Financial crisis – Silly Money, Nov 08 (Humor)
  • 1930s Depression, BBC, White House Coup (Parts 1, 2, & 3)
  • Protesters clash with police in Lithuania
  • Bank Stock, Market Cap 2007 vs. Now (Table) 
  • Obama team weighs government bank to ease crisis
  • Zimbabwe: $100,000,000,000,000.00
  • Will China lead the world into depression? 
  • China’s Economy Faces 2009 ‘Hard Landing,’ Fitch Says 
  • Sector Returns Year to Date
  • Rediscovering Old Habits
  • Scientists worldwide to speak out on population problem

Economy 

Niall Ferguson on Money, Colbert Nation (Video)

Financial crisis – Silly Money, Nov 08 (Humor)

1930s Depression BBC White House Coup (Part 1)

[video:http://www.youtube.com/watch?v=UXGUgFXoRu4&eurl=player_embedded]

1930s Depression BBC White House Coup (Part 2)

[video:http://www.youtube.com/watch?v=UGPb6ulVEK0=player_embedded]

1930s Depression BBC White House Coup (Part 3)

[video:http://www.youtube.com/watch?v=Mav69K2zkgw=player_embedded]

Protesters clash with police in Lithuania

VILNIUS, Lithuania: Violent political protests sweeping parts of Eastern Europe spread Friday to Lithuania, where police fired rubber bullets and tear gas at a rock-throwing mob attacking Parliament.

Fifteen people were injured and more than 80 detained in several hours of street fighting between angry protesters and helmeted riot police.

"We are here today because this government is mocking us," said Liucija Mukiene, a 63-year-old protester in Vilnius. "They are taking away our last money and providing nothing. I am fed up with the lies, corruption and those grinning, fat faces behind the windows of Parliament."

Some 7,000 protesters had gathered outside Parliament on Friday morning to demonstrate against the government’s reforms. The violence started when police pushed away protesters who were demanding to see the parliamentary speaker.

Bank Stock, Market Cap 2007 vs. Now (Table) 

Obama team weighs government bank to ease crisis

WASHINGTON (Reuters) – The incoming Obama administration is considering setting up a government-run bank to acquire bad assets clogging the financial system, a person familiar with the Obama team’s thinking said on Saturday.

The U.S. Federal Reserve, Treasury and Federal Deposit Insurance Corp have been in talks about ways to ease a banking crisis that is once again deepening — and a government-run "aggregator bank" is among the options.

Outgoing Treasury Secretary Henry Paulson and FDIC Chairman Sheila Bair both said on Friday a government bank was one of a number of ideas U.S. regulators had been discussing.

 

Zimbabwe: $100,000,000,000,000.00

Will China lead the world into depression? 

Oh no!

Albert Edwards at Societe Generale has issued another terror alert:

Sell everything. Hide in a bunker with plenty of whisky. The S&P 500 index of US shares is about to crash through its half-century support line to 500.

"Technicals say it is time to bail out. Cut equity expose and prepare for rout. US depression looking likely. While China’s 2009 implosion could get ugly."

Mr Edwards — who is of an "Austrian" persuasion, ie hates excess debt — was one of the very few economists to see this whole crisis coming, and to issue warnings clearly and emphatically (unlike others who now claim to have been seers, but in fact hedged). He said interests rates would be slashed to zero and that bond yields would fall to the lowest in history. All this has occurred.

The key argument is that markets have been sold a pup on the China growth miracle and have massively underestimated the risks for the global FX and trading system as this unravels.

"The Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression…. Do you really trust politicians to "do the right thing"?

Mr Edwards has been tactically bullish on equities since the end of October when the MACD (Moving Average Convergence /Divergence Oscillator) for the S&P 500 broke upwards. This technical indicator broke down again two days ago.

 

China’s Economy Faces 2009 ‘Hard Landing,’ Fitch Says

Jan. 16 (Bloomberg) — China faces an economic "hard landing" and the risk of social unrest with growth slowing to 6 percent or less this year, the weakest pace since 1990, Fitch Ratings said.

James McCormack, the Hong Kong-based head of Asian sovereign ratings for Fitch, gave the estimate in a teleconference today.

That would be less than half of the 13 percent pace that pushed China past Germany to become the world’s third-biggest economy in 2007, according to revised statistics released this week. As many as 4 million migrant workers lost their jobs last year as factories closed and that figure may jump by another 5 million in 2009, according to Credit Suisse AG.

"The 6 percent number is already what we would call a hard landing in China, meaning rising unemployment and the need for an aggressive policy response," McCormack said. "Social unrest is a big unknown."

 

Sector Returns Year to Date

Below we highlight S&P 500 sector performance year to date through about noon today. As shown, just three sectors are underperforming the market so far this year, and the Financial sector is weighing heavily on the overall index’s declines. Energy, Health Care, Technology, Materials, and Utilities have actually held up pretty well.

 

Rediscovering Old Habits

America hasn’t always been a "throwaway society." In the wake of the Great Depression, people learned to scrimp, save, reuse, and repair because they didn’t have much choice.

Through the years, however, people lost their appreciation for getting the most out of what they already owned and got brain-washed into thinking that new is good and old is bad — even if what they had still worked fine.

Now, with economic realities cycling back to where they were many decades ago, people are rediscovering old habits, like choosing to fix damaged items instead of junking them.

 

Environment

 

Scientists worldwide to speak out on population problem (HatTip DamTheMatrix)

The Global Population Speak Out aims to break down the barrier to public discussion of the population-environment link.

Boulder, Colorado – Scientists from around the world have pledged to speak out publicly in February, 2009 on the problem of the size and growth of the human population. Speaking out as well will be environmental and science writers, social activists, and representatives of environmental groups. The event, called the Global Population Speak Out (GPSO), aims to weaken a decades-long taboo against open discussion of population issues.

So far, GPSO has received pledges from scientists and others in 17 countries, all agreeing to speak out during February. Many will do so through the print media. Others are planning interviews, talks, and conferences.

Endorsers of the project include, Stanford University scientists Paul and Anne Ehrlich, Cornell University ecologist David Pimentel, and co-author of The Limits to Growth Dennis Meadows.

Those pledging to speak out include botanist and past president of the American Association for the Advancement of Science Peter Raven, Duke University ecologist Stuart Pimm, University of Delhi professor of community medicine Jugal Kishore, University of Tehran environmental scientist M. F. Makhdoum, and social activists Jerry Mander and Harvey Wasserman.

One of the project’s endorsers, Ohio State University anthropologist Jeffrey McKee, said, "If you look at the key issues and goals of our time — economic prosperity, clean water, sustainable energy, and biodiversity survival — they all have a common denominator. They all point to the need immediately and responsibly to stem the growth of the human population, and to return our population size to sustainable limits."

But, said environmental writer and GPSO organizer John Feeney, "Despite its central role in nearly every environmental problem, many have for years viewed the population topic as politically unpopular. In fact, despite the urgent need for solutions, it’s become taboo to state publicly that population growth must be humanely stabilized and reversed."

He added, "Environmental groups have been reluctant to talk about it because they know it will trigger criticism and may compromise funding. Scientists have hesitated too, knowing any mention of population is sure to stir controversy."

GPSO is designed to make it easier for participants to raise the issue by bringing together a collection of voices so participants know they are not alone in speaking out.

The project grew out of a simple idea, said Feeney. "We wondered, what if a large number of qualified voices worldwide, many of whom might not have emphasized the topic previously, were to speak out on population all at once? With any luck it will nudge the subject closer to the center of public discourse."

Another goal of the event, said Feeney, is to bring new voices to the population issue. "This is a matter of profound importance. There are experts, such as the Ehrlichs, who address it regularly. But we need many more voices. We hope GPSO might help bring a few to the world’s attention. Our hope is that after February it will be a little easier to talk about population and there will be more people doing just that."

 

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