Daily Digest

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Daily Digest 3/7 - Border at ‘Breaking Point,’ Vietnam’s Energy Dilemma About To Become A Crisis

Thursday, March 7, 2019, 11:22 AM

Economy

Median 1-Bedroom Rent In San Francisco Soars To Nearly $3,700 A Month (Adam)

“Though there may be a ton of cash flowing through the city and surrounding areas soon, many of these workers will not immediately invest in a home and may, instead, take their money to both travel and upgrade their rental situation,” the website said.

Elsewhere in the Bay Area, San Jose’s median rent for a one-bedroom was $2,540 (5th highest in the country), while in Oakland it was $2,320 (9th highest).

US trade gap jumped to 10-year high; record gap with China (Adam)

Stephen Stanley, chief economist at Amherst Pierpont Securities, suggested that the trade gap climbed so quickly because importers were rushing to bring their goods into the United States before a planned expansion of tariffs Chinese products on January 1. But the tariff hikes have since been postponed as the administration has cited progress in trade talks with China.

Border at ‘Breaking Point’ as More than 76,000 Unauthorized Migrants Cross in a Month (tmn)

President Trump has used the escalating numbers to justify his plan to build an expanded wall along the 1,900-mile border with Mexico. But a wall would do little to slow migration, most immigration analysts say. While the exact numbers are not known, many of those apprehended along the southern border, including the thousands who present themselves at legal ports of entry, surrender voluntarily to Border Patrol agents and eventually submit legal asylum claims.

Senators Demand Investigation Into Sexual Abuse at Immigrant Children’s Shelters (jdargis)

Last summer, ProPublica reported that police nationwide had received hundreds of calls reporting possible sex crimes at shelters that serve immigrant children. An Arizona shelter worker was sentenced to 19 years in prison after being convicted of molesting seven boys over nearly a year.

Gun Background Checks: How the State Came To Decide Who Can and Cannot Buy a Firearm (Alex)

And then something happened that would forever change American history. Six days before Thanksgiving, on November 22, 1963, President John F. Kennedy was assassinated by Lee Harvey Oswald using a Mannlicher-Carcano rifle purchased from a mail-order catalog. The Kennedy assassination led to the Gun Control Act of 1968, which was specifically intended to keep “firearms out of the hands of those not legally entitled to possess them because of age, criminal background, or incompetence.”

Zuckerberg: Facebook will shift focus to private networks instead of open ones (jdargis)

Zuckerberg positions this and the need for a focus on privacy as realizations he has come to, but they're things budding competitors to various Facebook products and businesses have already been focusing on for years.

Don’t look now: why you should be worried about machines reading your emotions (tmn)

In recent years, technology companies have started using Ekman’s method to train algorithms to detect emotion from facial expressions. Some developers claim that automatic emotion detection systems will not only be better than humans at discovering true emotions by analyzing the face, but that these algorithms will become attuned to our innermost feelings, vastly improving interaction with our devices.

Trump Cancels U.S. Report on Civilian Deaths in Drone Strikes (tmn)

Ned Price, a former intelligence analyst and Obama-era spokesman for the National Security Council who is now affiliated with the National Security Action policy advocacy group, said Trump’s move is "a shortsighted decision that will allow our enemies to be more effective at what they’ve long sought to do."

Residents Say Natural Gas Production Is Marring West Virginia. And the Legislature Isn’t Doing Anything About It. (jdargis)

As natural gas booms around the Marcellus Shale, nearby residents continue to bear the burden of the industry’s growth. Many live with constant light, truck traffic, dust and noise from gas production fueled by horizontal drilling and hydraulic fracturing, or fracking, as the Gazette-Mail and ProPublica chronicled last year. Business groups and the state coal association have argued in court filings that the inconveniences are unavoidable.

Vietnam’s Energy Dilemma Is About To Become A Crisis (Michael S.)

Consequently, to offset both its blockage of developing its own gas resources and to help Vietnam meet its growing energy demand amid stellar economic growth, the country needs to turn to renewables. However, it’s still in the early stages of developing renewable energy sources and needs to introduce more incentive policies to attract more investment, media in the country reported last week, citing both domestic and international experts.

What lessons can be salvaged from Alabama's deadly tornado (tmn)

On a number of levels, these highly destructive — and particularly terrifying — weather events remain enigmatic. While there are suspicions that climate change may be increasing the severity or frequency of tornados, the science around this point is less established than the relationship, say, between planetary warming and sea level rise or the intensity of coastal storms.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/6/19

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

6 Comments

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3310
Important battle being waged today for 200 DMA

There's an important battle going on in the market today.

The S&P 500 cracked below its 200 daily moving average (DMA) this morning and the usual suspects have been trying to undo the damage ever since. A major attempt to rally failed two hours ago, leaving only an hour left for the authorities to 'save the day':

If the S&P closes under its 200 DMA, it would be an important technical indicator of future weakness to come. The massive rally since the beginning of January is very long in the tooth right now and has been flying in the face of a growing parade of awful economic data indicating much of the global economy is falling into recession.

Sven Henrich does an excellent job summing up what's at stake in this recent interview:

As Charles Hugh Smith just mentioned to me, if the tomorrow's jobs report comes in gangbusters, that could be the green light the Fed needs to resume tightening (as Wolf Richter warns is not as unthinkable as many currently expect) and, boy, would that shock the market negatively.

All in all, this is an important -- possibly pivotal -- time for the markets. We'll be watching them closely here.

Specifically, I'm watching them using our newly re-designed Today's Markets page, which I must say I'm really appreciating as a real-time dashboard for market activity.

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3310
Spiking the close

Man - are they ever trying to spike the close in these last few minutes.

They've nearly got it back up to the 200 DMA....

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 6111
A massive push to the close...

Problem:  The close is seven minutes away and the S&P 500 is seven points below the 200 dma.

Solution:

That last spike...man, somebody really had to own stocks in a hurry there, eh what?  ;)

But, despite all that, the 200 dma is at 2750 and it closed below that...so...failure?  Or was that a success?  Who knows anymore...

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3310
Missed It By *THAT* Much...

Well, it proved a nail-biter to the very end; but the S&P did indeed close BELOW its 200 DMA.

Though, in the last few minutes of trading, it looked like the rescue attempts would succeed. But they just couldn't quite muster enough oomph to get things back to the critical purple line:

What will tomorrow bring?

No one knows for certain. But a lot of technical analysts warn that with the 200 DMA now breached, much of the unfilled gaps that the S&P made on the way up over the past two months are going to start to get filled.

Uncletommy's picture
Uncletommy
Status: Platinum Member (Offline)
Joined: May 4 2014
Posts: 682
Bumping along the bottom?

Can Dave stockman be that far off the mark, or is he just confirming the inevitable direction the S & P is heading? Recession is an almost guaranteed result. Are these Friday bump-ups just a confirmation of what's in store for us and starting to develope right before our eyes? Sure wish I wasn't such a Cassandra on this, but hard assets and cash appear to be strong options, now.

". . .Where we stand today is on the precipice of the next stock market unwind, which the key point that I make in the book is that, that triggers the new form of recession. In other words, 40 years ago when the fed let things get out of hand and allowed credit in the business system and the household sector to expand too rapidly, housing market would get red hot or capital goods market would get over heated... It would step in, raise interest rates. That would curtail credit in the main street economy. The economy would start to wobble, the market would see that coming, and the stock market would go down in response to an emerging and latent recession.

Now today, I think it’s the opposite. What happens today is when these tremendous bubbles that are created by the fed finally fracture, it triggers in the C-Suites, corporate headquarters of American companies, a panic effort to keep the stock price up and their option packages whole by these sweeping restructuring plans that involve huge layoffs, inventory liquidation, writing off of allegedly bad assets, writing off of the enormous hundreds of billions of goodwill that’s created during the boom phase with all of this unproductive M&A activity that goes on.

The crash triggers the C-Suite liquidation, we’ve seen that twice now this decade. That brings about a recession that no one sees coming. That’s why I’m pretty confident that before we get to November 2020 there will have been another sequence just like 2008 and 2009. Except this time without any dry powder left, it’s very unlikely in my view that there will be a quick snapback in the financial market and that the stock averages will remain bumping along the bottom for years and years to come. Once it’s clear the fed can’t rescue the market quickly like it did after March 2009, I think you’re going to be in a totally different ballgame. . . 

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 6111
Stockman might be too optimistic
Uncletommy wrote:

The crash triggers the C-Suite liquidation, we’ve seen that twice now this decade. That brings about a recession that no one sees coming. That’s why I’m pretty confident that before we get to November 2020 there will have been another sequence just like 2008 and 2009.

Except this time without any dry powder left, it’s very unlikely in my view that there will be a quick snapback in the financial market and that the stock averages will remain bumping along the bottom for years and years to come. Once it’s clear the fed can’t rescue the market quickly like it did after March 2009, I think you’re going to be in a totally different ballgame. . . 

I could support that view, but it may be more dire than that.  Think of a bowling ball going down steps.  Everything is fine for a while and then - THUNK! - another step is clunked down.

Then things are stable for a while before - THUNK! - another step down.

To hold this view one imagines that stocks and bonds and paper currency aren't real wealth after all but merely markers...claims on wealth.  One further imagines that net energy is winding down and its replacements are not being conducted with a view of EROEI taking the commanding lead.  Instead, various pet projects, poorly thought through "feel good" green projects, and political agendas are advanced.

Because the fiscal and monetary authorities have zero understanding of and/or appreciation for energy and resources, they jsut don't get it and their efforts at re-stoking economic activity are almost entirely randomly helpful or harmful, like a monkey pressing on the keyboard during an operating system install.

It takes a finely tuned and very complex economy to get energy out of the ground and to every crevice of activity.  With the loss of confidence in the idea that the future will always be larger and brighter than the past, a lot of debt financing goes away, and with it go big chunks of all that complex activity.

A mature and sophisticated culture could manage that reasonably well, but that doesn't apply here.

Instead, each and every constituent is going to fight firecely for their wedge of the economic pie to remain in place, regardless of whether or not that activity is really necessary or helpful to the larger direction in which everything needs to head.

This is what happens without a guiding narrative, and an accompanying strategy. 

So it may well be that the next clunk down is but one of many stair steps down that we face.

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