Daily Digest

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Daily Digest 10/8 - Big Food Strikes Back, Great Pacific Garbage Patch Larger Than Ever

Saturday, October 8, 2016, 11:30 AM

Economy

This Was the Week the World Got Really Anxious About Globalization's Future (jdargis)

Citing the rising anti-trade sentiment, analysts from Bank of America Merrill Lynch warned that "events show nations are becoming less willing to cooperate, more willing to contest," and a backlash against inequality is likely to trigger more activist fiscal policies. Looser government spending in developed countries—combined with trade protectionism and wealth redistribution—could reshape global investment strategies, unleashing a wave of inflation, the bank argued, amid a looming war against inequality.

Deutsche Bank is latest victim of America’s bullying regulatory tactics (reflector)

For example, foreign banks who did not comply with US sanctions, irrespective of what they privately thought of them or the diplomatic stance of their home countries, faced massive fines. They could, in theory, refuse to pay these fines. But they risked being locked out of the dollar-clearing market, which, given that the greenback is the world’s reserve currency, effectively means being locked out of the global financial system. Not so much a carrot-and-stick approach; more like stick-and-stick.

How U.S. Torture Left Legacy of Damaged Minds (jdargis)

After enduring agonizing treatment in secret C.I.A. prisons around the world or coercive practices at the military detention camp at Guantánamo Bay, Cuba, dozens of detainees developed persistent mental health problems, according to previously undisclosed medical records, government documents and interviews with former prisoners and military and civilian doctors. Some emerged with the same symptoms as American prisoners of war who were brutalized decades earlier by some of the world’s cruelest regimes.

Big Food Strikes Back (richcabot)

A spokesman for the American Council on Science and Health, a chemical-industry front group, called the Obamas “organic limousine liberals,” warning that organic farming would lead to famine and calling on the first lady to use pesticides in her garden — evidently whether she needed them or not. The Mid-America CropLife Association wrote a letter to the president suggesting that, by planting an organic garden, his wife had unfairly impugned conventional agriculture. A minor skirmish, perhaps, but also a shot across the bow.

I Listened To A Trump Supporter (richcabot)

I disagree with her choice, but I understand why she rejects Clinton so fiercely, and why she’s been swept up in Donald Trump's particular brand of right-wing populism. I feel that on the left, it’s increasingly easy to ignore these people, to disregard them, to write them off as racists, bigots, or uneducated. I think that’s a loss for everyone involved, and that sometimes listening can help you to at least understand why a person is making the choices they make, so you can work on the root causes. For her, the root cause isn’t racism. In fact, I remember her as one of the only people in the area who proudly hired black workers, in a place where that was a huge issue. She fought over that choice.

If gold gets below $1,250 an ounce, start buying: Goldman (lambertad)

“Indeed, we would view a gold selloff substantially below $1,250/oz as a strategic buying opportunity, given substantial downside risks to global growth remain, and given that the market is likely to remain concerned about the ability of monetary policy to respond to any potential shocks to growth,” said the Goldman team.

'Great Pacific Garbage Patch' is worse than thought (LesPhelps)

Ocean Cleanup's founder Boyan Slat called the refuse a "ticking time bomb because the big stuff will crumble down to micro-plastics over the next few decades if we don’t act." Fish and other marine life eat the micro-plastics, passing them up the food chain.

The patch measures about 1.3 million square miles, with the heart of it spanning about 386,000 square miles. The UN says it is growing so quickly, it can be seen from space.

Insanely Bad Summer Drought is Decimating New England Farms (jdargis)

In the agriculture space, New England has been hit very hard. According to the NOAA, crop losses in Massachusetts alone this year have exceeded $13 million, with corn suffering the most. A loss of feed has also required ranchers to buy feed from outside their own farms for livestock, a huge added expense that could make the difference between a profitable year and a loss year. Root crops, like beets and carrots, dried out while still tiny, and water-reliant spring and summer crops like beans showed huge losses. With such an extreme drought, some farmers have been forced to choose which crops to allow to die.

Gold & Silver

Click to read the PM Daily Market Commentary: 10/6/16

Provided daily by the Peak Prosperity Gold & Silver Group

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16 Comments

pinecarr's picture
pinecarr
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Posts: 2212
Rob Kirby on Reluctant Preppers

Among the topics discussed:

Deutsche Bank failing, can’t pay its fines, Germany won’t bail it out.

“As goes Deutsche Bank, so goes Europe & the rest of the world”?

Germany is pivoting towards the East, US is sending a message in return.

Banks are highly interconnected: difference between DB & Top 5 American banks is mostly just who they report to.

US Banks under Fed, US regulators allow unsavory behavior in the name of national security.

US picking a war in Syria - going up against Putin, not in the interest of American people, who’s pulling the strings?

Only serving globalist cause.

TechGuy's picture
TechGuy
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Posts: 351
"Deutsche Bank failing, can’t

"Deutsche Bank failing, can’t pay its fines, Germany won’t bail it out."

Either there will be a bailout by the ECB or by Germany. I recall than a few weeks before Lehman collapses Bernanke said "there will absolutely be no bailouts" with in 48 hours of the Lehman collapse Bernanke said the Fed was going to guarantee the $23 Trillion US bond market and started handing out bailouts faster than candy on halloween. They will wait until the markets begin to crash before taking action because they can't change their tune, until there is a crisis underway. Once the crisis begins it also aids in gov't seizing greater authority. and to run bigger deficits. 

"Germany is pivoting towards the East, US is sending a message in return."

Hardly. Germany is still moving toward war with Russia, and continues to back the US on its war in the middle east, refugees. However, Turkey and the Phillipines are definately distancing themselves from the US. Since Germany is still reliant on NATO for its defence, its not going to distance itself from the US. 

"US picking a war in Syria - going up against Putin, not in the interest of American people, who’s pulling the strings?"

With failing economies in the West & Asia, The EU, US and Chinese, need to distract the public from domestic issues and press for external threats. This is standard practice for socialist gov'ts. Socialism propaganda is that the gov't will take care of the people. When this fails, they need to another narrative before the people begins to realize they been had. The war on Terriorism is the primary driver to promote a different narrative. War also provides the excuse to run deep budget deficits, increase production, remove liberties, and obtain resouces from foriegn lands.

 

reflector's picture
reflector
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germany
TechGuy wrote:

"Germany is pivoting towards the East, US is sending a message in return."

Hardly. Germany is still moving toward war with Russia, and continues to back the US on its war in the middle east, refugees. However, Turkey and the Phillipines are definately distancing themselves from the US. Since Germany is still reliant on NATO for its defence, its not going to distance itself from the US. 

 

germany is of two minds.

much of its rulership, such as merkel, are staunchly pro-us and pro-eu puppets, unfortunately, and this stance is killing germany.

however, its captains of industry feel that the russian sanctions are highly damaging to germany and helps no one but the usa, they would like to end sanctions and re-establish trade with russia, who has been a big trading partner of germany.

as far as "reliant on nato for its defence", defence against whom? is germany threatened by anyone at this time? nato is a boat-anchor around germany's neck, sinking it to the bottom of the baltic sea.

TechGuy's picture
TechGuy
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Posts: 351
reflector wrote: "as far as

reflector wrote:

"as far as "reliant on nato for its defence", defence against whom? is germany threatened by anyone at this time?"

But of course those Russians! /sarc. The US promotes anti-Russian propaganda in order to keep the EU (under its wing) as well as selling US made arms to the EU (example the F-35). There is significant number of people employeed in NATO or providing services & equipment to NATO that would prefer to keep NATO alive. NATO should have disappeared at the end of the Cold war, but always managed to find another mission to keep itself alive.  

NATO also promotes IRAN as a threat to the EU (thus need to build missile bases in Poland).NATO other mission is the war on terrorism, which largely self-inflicted, so NATO can continue to justify its existence. 

reflector wrote:

"nato is a boat-anchor around germany's neck"

No argument from me. 

 

sunsandsea's picture
sunsandsea
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DB - Questions for TechGuy or other Members

A quick message for TechGuy and other Members

 

A. When the markets starts crashing how long do you think Germany Bundesbank or ECB will wait before they jump in and save DB?

 

B. Do you think there will be a bail-in first regarding DB?

 

C.  Even though DB may be saved, do you think some of Europe's other zombie banks may be allowed to fall or do you think they will all be saved?

 

Appreciate your thoughts and comments.

 

Beat wishes 

 

 

davefairtex's picture
davefairtex
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Posts: 4681
DB resolution

My guess about DB -

I think this will happen in stages.

DB will first try to raise money on its own.  That will probably work to an extent, but it might turn DB into a $5 stock.  This will kick the can down the road.

Once a major event occurs, then DB will expire, since it won't be able to pay off all those derivative bets.  There will be a run on the bank.  At that point, I'd guess there would be a partial bail-in: bondholders (COCOs) would get converted, but depositors will be left intact.  (I think its unlikey that Germany zeros them out).  Also, Germany probably takes ownership of DB via nationalization.  Its not a rescue if you wipe out the shareholders, convert the bonds, and seize the company.

Lastly, depending on the derivative exposure and to whom, Germany might well simply unilaterally reneg on the entire derivatives book.  It all depends on the price tag.  That which cannot be paid, won't be.

Bottom line: eventual nationalization, partial bail-in, shareholder wipeout, depositors protected (although foreign depositors might be treated differently), and potential derivative book mulligan.  "No more derivatives."

 

pinecarr's picture
pinecarr
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Worst Crash of All Coming-Mike Maloney

From Greg Hunter's USA WatchDog:

Gold and silver expert Mike Maloney has been producing an internet series called “The Hidden Secrets of Money.” His latest is episode seven in this ongoing series, and it gives a stark warning about “The USA’s Day of Reckoning.” Maloney explains, “Watch episode seven if you want to see the future.  I was very accurate in predicting the crash of 2008 and the consequences of it.  I believe the rest of my predictions that did not come true have not come true—yet.  They are about to.  Episode seven is the USA’s day of reckoning. . . . It’s going to be devastating for most people. . . . I believe there is going to be an enormous wealth transfer. It is up to every individual whether that wealth is transferred away from them or towards them.  Sometimes the wealth transfer goes from 100 people to one or 1,000 people to one.  This time, it’s going to be hundreds of thousands to one.  There are going to be very few big winners and a whole lot of losers.”

The biggest problem? Maloney says it’s debt, and lots of it.  Maloney contends, “The world is awash in debt.  The first crash in 2000 was a stock market crash.  In 2007 and 2008, we had a stock market and real estate crash and implosion.  In 2016 or 2017, we are going to be having stocks, real estate and bonds all crashing because this is a perfect convergence.  Ben Bernanke created an extra 400% of base currency to the money supply.  This crash is going to be deflationary, and it will be true deflation.  That is because of the psychology behind it. . . .  Our monetary system cannot stand deflation.  If you go into deflation, it is possible for the currency supply to go into a deflationary implosion. . . .  The entire world always has to go deeper and deeper and deeper into debt to keep this Ponzi scheme of a monetary system going.  If we don’t, it implodes. . . . This next crash is going to be devastating because it will be stocks, real estate and bonds (all at the same time).  This is going to be the worst crash of all.

thc0655's picture
thc0655
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Cop fears using gun, hospitalized by crazed criminal instead

http://www.zerohedge.com/news/2016-10-07/ferguson-effect-chicago-officer-afraid-use-her-gun-despite-being-beaten-she-feared-h

...it should come as little surprise to our readers that a female police officer in Chicago has been hospitalized after being "severely beaten" by a violent criminal primarily because she was afraid to use her firearm because of the national backlash she may have faced as a result.  The encounter happened yesterday on Chicago's violent West Side when cops responded to a car accident.  The attacker, apparently under the influence of drugs, launched a brutal attack against responding officers that resulted in three cops being hospitalized.  Per ABC:  

"She thought she was going to die. She knew that she should shoot this guy, but she chose not to, because she didn't want her family or the department to have to go through the scrutiny the next day on national news," Supt. Johnson said.

"It is terrible. It is total disregard for law enforcement. They put their lives forward every day for us and to see somebody do this, to pummel the police officer is terrible. It is a terrible thing," business owner Louie Rainone said.

 
 
 

Of course, this story won't get the kind of national media attention it deserves because it doesn't really fit the narrative that cops are "implicitly biased."

This officer didn't hesitate, but his suspect was white so maybe he concluded (with good reason) no big fuss would be made over shooting a white suspect (who later turned out to be unarmed).  

http://www.policeone.com/officer-shootings/articles/228808006-Prosecutor-rules-fatal-Vt-OIS-justified-video-released/

That was suicide by cop.  Suspect was probably tired of going to prison (and being addict to heroin).

 

Time2help's picture
Time2help
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IMF Panel on Globalization

Thank you socio/psychopaths. This will end well.

http://money.cnn.com/video/news/economy/2016/10/07/imf-panel-globalizati...

TechGuy's picture
TechGuy
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Posts: 351
" When the markets starts

" When the markets starts crashing how long do you think Germany Bundesbank or ECB will wait before they jump in and save DB?"

I don't know. My guess is when the crisis causes contagion resulting bankruptcies or near backruptcies of other important companies.

"Do you think there will be a bail-in first regarding DB?"

I don't know, but the cyprus bail in has certainly open the door for depositor bail ins. My guess is that if there is a DB bail in, its likely to cause bank runs across all EU banks. which would force the ECB to take action to stop banking runs. Either they could end the bail in or enact measures to prevent people from withdrawing there savings.My guess is that the ECB will do a bailout instead of bail ins. Its possible the start off with bail in, but quickly abandon bail ins and switch to an ECB bailout.

I think the ECB would need to provide a bailout to restore confidence. Until that happens I would think investors and consumers would focus on getting capital out of the EU, consumers would cut back on spending (to make up for saving losses occured by bail ins) and job uncertainty risks. Without a ECB bailout, I think the crisis would drag on for a very long time and likely cause the weak in-debted gov'ts to collapse. I don't think the leadership will let it go that far as all of the gov't leadership and many gov't bureaucrats would be out of a job. The crisis would be the excuse needed to abandon anti-bailout, deficit spending caps, sound money, etc polices.

Its very possible that an EU banking crisis would be the last straw, and pushes forward a breakup of the EU. The whole point of the EU was to provide a stable economic model for member states. 

"Even though DB may be saved, do you think some of Europe's other zombie banks may be allowed to fall or do you think they will all be saved?"

 DB isn't the only large bank on the edge. My guess is that the EU banking crisis might follow the US model, which the weaker banks are forced merge with the more stable banks. For example, in the US, Washington Mutual was merged with JP Morgan, Merril Lynch with Bank of America, and so on. The ECB would buy underwater banking loans and provide liquidity to the merged banks.  I think this is possiblity since the ECB has already begun QE, so it would not be much of a stretch for the ECB to buy underwater assets of failed banks.

What ever happens I think these are probaby outcomes:

1. The EURO will be devalued. it will be near or below par with the US Dollar.

2. the US Dollar will increase in value. Capital is likely to leave the EU and end up in the US. The US slightly higher interest rates and the Fed has the ability to provide US banks with liquidity in a emergency. 

3. Commodity will fall. The crisis will likely reduce the demand for commodities, as consumers worldwide pull back spending until the situation stabilizes. Perhaps Precious metals will increase in value, but I don't expect PMs to breach the 2011 high (at least not soon after the EU crisis unfolds)

I don't have a crystal ball, so don't use anything above as investment advice. I have no capital invested at all and I focusing my time and effort on relocating to a rural region and becoming self-reliant. I am converting my savings into usable assets (land, equipment, tools) to be self-reliant. The investment returns on capital is close to zero and the risks for investments are high even for the lowest risk investments.  I rather own a tractor than to see my hard earned capital get devalved, confiscated or taxed away.

 

Oliveoilguy's picture
Oliveoilguy
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Options on Ammo types?

Just wonder if this female cop who was brutalized had self defense rounds or something less deadly in her service pistol? What about shot-gun type loads that could stop an assailant, but not kill? Is there any discussion or standards on the type of ammo that Law Enforcement carries? Don't know much about this....and would appreciate your expertise.

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duplicate post

.....

thc0655's picture
thc0655
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Police force and ammunition options

Generally, only SWAT-type units carry rounds for any firearm that are meant to be less than lethal: bean bag rounds, rubber bullets, etc.  They also almost always use dedicated weapons to fire those less than lethal rounds.  So they carry a shotgun that is only used to fire specialty rounds, and a separate shotgun that is used only with standard ammunition.  Furthermore, the weapon that fires the specialty rounds is usually marked or painted in some way to distinguish it immediately from the standard weapons (ours are painted orange).  Of course, SWAT can do that (and plenty of other wizardry) because they patrol in trucks and vans that are stocked to the gills with all kinds of specialty equipment.  Officers on patrol usually only have what they carry on their body, or if time permits can unlock a shotgun or rifle from their car.  In the Chicago incident, who would bring a shotgun to an auto accident?   (That's IF Chicago even issues long guns to patrol officers, which I seriously doubt.)  Patrol officers switching out pistol ammo during an incident is never done (most speciality ammo is for shotguns, almost none is for handguns and police don't use any for handguns).  In fact, officers would expose themselves to departmental discipline for even possessing extra ammunition or especially alternative ammunition.  Besides, when stuff goes bad on the street for patrol officers there's no time to do anything but respond instinctively with what you have on your body/belt.  I'm sure the officer referenced in the Chicago incident was already in hand-to-hand combat (and losing) when she contemplated whether to shoot or not.  She certainly didn't have the time or opportunity to change ammunition in her pistol, or go back to her car, grab the shotgun, pump out all the live rounds, and reload with bean bags.  

Officers have a variety of force options available to them: 1) mere presence in uniform (which intimidates most people into compliance), 2) verbal commands, 3) hands on control holds and strikes, 4) pepper spray, 5) metal or wooden batons, 6) possibly Tasers, and 7) a pistol or revolver.  If the officer doesn't perceive a lethal threat, then s/he chooses some form of force less than a firearm that is appropriate to the threat.  If the threat is potentially lethal, and only if it is potentially lethal, then the only choice is the firearm and the strategy is to shoot (and to keep shooting) to stop the threat as fast and as effectively as possible.   And unlike what most people "learn" while watching TV and movies, all handgun ammunition is surprisingly poor at stopping people with death and destruction in their hearts.  Stopping an enraged and determined attacker, even at close range, can take many more rounds than you would expect: 5, 10 or even 15 hits may be necessary (not counting all the misses).  Most people who stop fighting after being shot with a handgun, stop for psychological reasons, not because they were physically disabled and unable to continue fighting.

All that being said, most modern police departments issue their officers high quality, high velocity, hollow point handgun ammunition designed to stop a lethal threat as fast and as effectively as possible.  That may seem common sense and obvious, but it hasn't always been that way.  There was considerable debate and controversy in the late 70's through the early 90's about issuing officers semiautomatic pistols with 10-17 rounds in their magazines to replace six-shot revolvers, and issuing high velocity hollow point ammunition instead of relatively slow lead round nose or full metal jacket rounds.  So called "high capacity" semiauto pistols were seen as excessive for police work, as opposed to military applications.  Likewise, expanding hollow point ammunition was seen as "cruel" and unnecessarily deadly.  (Try to imagine that while you're being shot at or stabbed!)  In fact, that kind of ammunition is still "illegal" in modern warfare because it's too deadly!  Why are we shooting at them in the first place?  But I digress.

saxplayer00o1's picture
saxplayer00o1
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Small German banks warn on passing on negative rates to customer

Small German banks warn on passing on negative rates to customers

Financial Times-3 hours ago
Germany's savings banks may have to pass negative interest rates on to private customers, the sector's top banker has warned, in the latest sign of the strains ...
 

SNB Can Cut Rates Further If Needed, President Jordan Says

Bloomberg-6 hours ago
For almost two years, the SNB has pursued a twin-pillar strategy of negative interest rates of minus 0.75 percent and a pledge to intervene in currency markets.
 
 

 

Uncletommy's picture
Uncletommy
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Posts: 415
We ARE entering a new world of finance!

Scariest thing I've read in a while. " Charging interest on bank deposits of savers".

“We are in a situation where we are happy about every new customer — but where [as a result of the ECB’s negative deposit rate] if they have deposits we actually ought to turn them away. That doesn’t fit with our core credo,” Mr Fahrenschon said.

“I find the signal that at the end of the year a small businessman shouldn’t be happy about his profits, but instead is punished for them, so dangerous. Psychologically, negative interests make planning ahead and profitability much harder.”

Martin Hellmich, a professor at the Frankfurt School of Finance and Management, said that if interest rates remain unchanged, then negative rates for private customers “will definitely come” in Germany.

“Some banks are already looking to close out their relationships with unprofitable customers to get rid of their deposits,” he said. “Banks that can’t do this will have to take other steps, such as passing on negative rates, including, step by step, to smaller customers.”

Nice going Saxplayer00o1. That should drive the price on land and real estate up. Couple that with jurisdictions heavily taxing purchases by foreign buyers (Canada, for example) and we  may see a more accelerated trend in international investment. The Saudi's have been doing this for years, now, and are securing calories for their water scarce, coddled populations by investing in agricultural infrastructures around the world. Good reading:

https://www.brookings.edu/opinions/saudi-arabias-economic-time-bomb/

Perhaps this is a good thing to divest the avarice of some empire prone governments. Russia has already begun its revitalization by concentrating on one very large chunk of land and looking inward. Gold bugs take note; this could be a good thing for PM's or, perhaps, not so good for their relative value. Just speculating (if you know what I mean; nudge, nudge, wink, wink), as Mr. Putin outlined to Ms. Merkel in a PP post, not so long ago. Worth reviewing and cogent to more than just the Germans!

 

Time2help's picture
Time2help
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Posts: 2697
The "Played" Scenario

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