Daily Digest

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Daily Digest 7/3 - Probation Fees Skyrocket, The Credibility Trap, U.S. Grain Harvest Threatened By Heat Wave

Tuesday, July 3, 2012, 10:57 AM


Fed's John Williams Opens Mouth, Proves He Has No Clue About Modern Money Creation (Ernest W.)

First, here is our rule of thumb to determine if someone who talks about money, inflation or monetary policy has even a vague clue of what they are talking about: do a text search for the words: repo, shadow banking, collateral, collateral-chains, rehypothecation, or deposit-free money creation. If not one of those terms appears anywhere, feel free to toss the reading material right into the trash.

Top 10 Warning Signs of A Global End Game (David B.)

With the simultaneous slowdown in U.S. and Europe, China has become a major market for business and corporations to rely on for revenue and growth. However, economic data coming out of China has gone from bad to worse as Europe’s crisis seriously hurt China’s heavy export-reliant economy. Chinese manufacturing indexes slipped to 48.4 in June, a seven-month lows, as overseas orders dropped (See Chart Below), while Chinese Yuan also had its biggest quarterly decline in 7 years.

The (other) deleveraging: What economists need to know about the modern money creation process (Ernest W.)

A Hong Kong hedge fund may get financing from UBS secured by collateral pledged to the UBS bank’s UK affiliate – say, Indonesian bonds. Naturally, there will be a haircut on the pledged collateral (i.e. each borrower, the hedge fund in this example, will have to pledge more than $1 of collateral for each $1 of credit).

Greek Idiots Attack Microsoft Building (Tom S.)

What is clear is the Greek economy is in a heap of trouble, and a thriving company like Microsoft is only there to help. Not sure trying to drive it out of business is such a sharp plan.

Why Do Bankers' Seem to be Uniquely Immune to Punishment? (Thomas C.)

In thinking about this manipulation issue further, and the events of the past few weeks, it would not surprise me overmuch if some day in the not too distant future we wake up to the news that the CFTC, the SEC, the Justice Department, the FSA, and the Banks have agreed to a settlement in some major market, perhaps the metals market, as a result of an official investigation. There will be record fines, and the regulators will claim victory.

Credibility Trap: Silver and Financial Markets Are Manipulated, But So What? (Jesse)

What really "knocks one's socks off" is the general admission and conclusion beginning around minute 9 of this video that the banks are manipulating the financial and commodity markets, with silver specifically mentioned. And the panel accepts it as 'oh well, that's the banking system.' That's just the way things are and if you don't like it, well then tough luck for you.

Poor Land in Jail as Companies Add Huge Fees for Probation (VeganD)

“With so many towns economically strapped, there is growing pressure on the courts to bring in money rather than mete out justice,” said Lisa W. Borden, a partner in Baker, Donelson, Bearman, Caldwell & Berkowitz, a large law firm in Birmingham, Ala., who has spent a great deal of time on the issue. “The companies they hire are aggressive. Those arrested are not told about the right to counsel or asked whether they are indigent or offered an alternative to fines and jail. There are real constitutional issues at stake.”

FOFOA: Interview (Thomas C.)

Three weeks ago Vivek Kaul contacted me requesting an interview for the Daily News and Analysis (DNA), an English newspaper published out of six centers in India including Mumbai and Bangalore. The interview comes out today (Monday morning) in India. You can download the pdf here. Below is the interview just as it appears in the paper. (They always include a caricature made from a photo of the interviewee which is why he mentioned something about me refusing to be photographed.

France Gives "Fairness Doctrine" Details; Will Tax Millionaires At 75% (adam)

The good news is that with the entire world set to adopt 100%+ taxes on "wealthy" individuals as defined arbitrarily by Ph.Ds, there will be no place to hide. Which incidentally is just the first step toward what we warned back in September 2011 will happen: a 30% tax on all financial assets. Everywhere.


Heatwave threatens US grain harvest (Ben Johnson)

The combination of low subsoil moisture, which is a reflection of the lack of precipitation that we had during the winter, together with the very hot weather that we’re seeing right now could spell a pretty disastrous scenario for corn and soyabeans,” said Hussein Allidina, head of commodities research at Morgan Stanley.
The outcome is critical to global food prices and the agribusiness industry because the US supplies almost half of global corn exports and a third of soyabean exports. Demand for both has risen as consumers in emerging countries eat more meat.

Graphene Can Improve Desalination Efficiency by Several Orders of Magnitude, Can Do Pretty Much Anything (Jason C.)

Desalination might sound boring, but it’s super important. Around 97% of the planet’s water is saltwater and therefore unpotable, and while you can remove the salt from the water, the current methods of doing so are laborious and expensive. Graphene stands to change all that by essentially serving as the world’s most awesomely efficient filter. If you can increase the efficiency of desalination by two or three orders of magnitude (that is to say, make it 100 to 1,000 times more efficient) desalination suddenly becomes way more attractive as a way to obtain drinking water.

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."


saxplayer00o1's picture
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Poet's picture
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Dear Person Seeking a Job: Why I Can't Hire You

(Note: Cross-posted to Other News, Articles, Or Links Of Interest.)

A really good article from the employer's point of view, about hiring. Well worth reading. By the brilliant, out-of-the-box thinker, Charles Hugh Smith:

Dear Person Seeking a Job: Why I Can't Hire You (July 3, 2012)
"The sad truth is that it's costly and risky to hire anyone to do anything, and "bankable projects" that might generate profit/require more labor are few and far between. The overhead costs for employees have skyrocketed. So even though the wages employees see on their paychecks have stagnated, the total compensation costs the employer pays have risen substantially."


"I hope you now understand why so many businesses only want to work with contract labor/ self-employed people: having employees no longer makes financial sense for many small enterprises. What makes sense is paying someone a set fee to accomplish a set task, and that's it, the obligation of both parties is fulfilled. If the task isn't completed, then the fee isn't paid.

"Revenues just aren't steady enough in many cases to support a permanent employee. When the work comes in, then contract labor is brought in to get the work done. When it's done, they're gone, and all their overhead costs are theirs."

One thing he didn't mention was, sometimes you're not as cheap as the other guy across town... or across the world.


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Charles Hugh Smith

Glad you mentioned this, Poet.  I read it last night and feel it is one of Charles' best efforts.


Damnthematrix's picture
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yeah right...

"What is clear is the Greek economy is in a heap of trouble, and a thriving company like Microsoft is only there to help. Not sure trying to drive it out of business is such a sharp plan."

Believe that, and you'll believe anything......  Micro$oft is only there for one reason and one reason alone: MAKE MONEY!  And, as we all know, there's only one way to make money, that's to print it.....

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IBM IN Greece

Come on! IBM is not and never has been a non-profit enterprise. It is a business! Businesses are in business to make money not to give product or service away. That does not mean that the products and services it offers are not worth the money or do not serve some purpose. This is the stupid assumption so many people make, that they are there to take money without offering anything in return and with the added assumption that the Greek population is so stupid that they would let them do it. Get real!

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