Daily Digest 7/19 - A "Much Bigger Collapse" Imminent, The Servant Economy
“The California Public Employees’ Retirement System (CalPERS) is the biggest public pension in the country. It is also deeply underfunded. Depending on the measure used, they have just 55-75% of money needed for future expenses while 80% is considered the minimum to be safe. Their return is currently less than 99% of big pension funds.
On March 12, CalPERS voted to lower their expected return from 7.75% to 7.5%, ignoring the advice of their own chief actuary that it should be 7.25%. More than a few investment professionals consider a projected rate of 7.75% to be unrealistically high in these times and question whether 7.25% is realistic."
“From a greenhouse point of view, it would be better to replace coal electrical facilities with nuclear plants, wind farms, and solar panels, but replacing them with natural gas stations will be faster, cheaper, and achieve 40 percent of the low-carbon-fast benefit,” Cathles writes in the study. “Gas is a natural transition fuel that could represent the biggest stabilization wedge available to us.”
Jeff Faux: "The Servant Economy" (woodman)
An economist describes the financial decline of the middle class and why he believes neither political party will stop it.
Jeff Faux of the Economic Policy Institute argues Americans are in denial. Everyone knows, he says, but no one faces up to the fact that the United States can no longer afford to have subsidized unregulated markets, be the world’s global power and provide a steadily rising standard of living. One of these is possible, maybe two, but not all three, according to Faux. No group -- and certainly no politician of either party -- is addressing this new reality, he contends. Despite public posturing to the contrary, it’s America's middle class that will be sacrificed on this current path. Please join us for a conversation with Jeff Faux on why he believes we’re moving from a service to a servant economy.
As the Fed responds with more aggressive QE to prop up banks, in addition to maintaining historically record low debt carrying costs to Treasury, investors will most likely come to realize that the Fed has become powerless to affect any positive outcome to the crisis. More jobs will be lost, tax revenue to the Treasury will fall, and deficits will soar even higher than the $1.5 trillion deficit expected for fiscal 2013.
“In the absence of detailed inventory records, we attempted to locate property using information contained in invoices," the audit states. “However, despite the assistance of recipient officials familiar with the premises and knowledgeable about the purchases made, we were unable to locate 20 of the 37 equipment items sampled.
“The missing items were valued at approximately $500,000,” the audit states.
In earlier production practices, where companies “stepped out” production wells away from the original producers, and in this way gradually extended the knowledge of the size of the field, reserve growth over time was a normal development. However, with the large size of the fields in Saudi Arabia, and the need to maintain operational pressure during production, Aramco (as JoulesBurn has clearly shown) rings their fields with water injection wells that drive oil to the central high point of the reservoir and slowly migrates the producing and injection wells towards that centre as the field is drawn down. This practice precludes the incremental increase in reserves over time, since the field boundaries are constrained and as the wells reach the central part of the reservoir (the crest of the anticline) a clear definition of the closing days of the field becomes more evident.
Many of Greenland's southern glaciers have been melting at an unusually rapid pace. The Petermann break brings large ice loss much farther north than in the past, said Ted Scambos, lead scientist at the National Snow and Ice Data Center in Boulder, Colo.
If it continues, and more of the Petermann is lost, the melting would push up sea levels, he said. The ice lost so far was already floating, so the breaks don't add to global sea levels.
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