Daily Digest

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Daily Digest 5/22 - Hard Times In Vallejo, Class Of 2013 Has Largest Debt Ever

Wednesday, May 22, 2013, 9:39 AM

Economy

Bankia compensation qualms signal loss of faith in Spain's banks

Many duped savers at Spanish lender Bankia are shunning a state-supervised compensation scheme in favor of expensive lawsuits, prolonging a mis-selling scandal and complicating efforts to restore faith in the banking system. The disputes over mis-selling at Bankia and other nationalized banks have created a major headache for the government as it tries to take the next step in their rescue, imposing large losses on holders of junior debt.

IMF says Washington cutting budget deficits too quickly

Most economists think the U.S. economy would be growing much more quickly were it not for efforts to shrink the deficit. The U.S. public sector began to tighten its belt in 2011. This year, Washington stepped up its austerity drive, raising taxes in January and enacting sweeping budget cuts in March.

Cleveland will double red-light cameras

More than a dozen Ohio cities use traffic-enforcement cameras. Cleveland collected nearly $6 million from them last year.

China Starts Unit to Diversify Reserves From U.S. Debt, WSJ Says

The new operation, which will focus on private equity, real estate and other assets, is an effort by China’s foreign-exchange reserves manager to diversify away from U.S. government debt, the newspaper reported.

In post-bankruptcy Vallejo, services few, times hard

Angry at personnel and pension cuts, the police chief announced that police would no longer respond to burglaries, prompting many residents to loathe cops almost as much as they hated city officials.

Class of 2013 has largest debt ever

The average student loan debt for borrowers who are graduating in 2013? A hefty $30,000.But the Wall Street Journal reported Saturday that they aren't likely to hold the "most indebted ever" title for much longer because rising tuition and the cost of student loans will see them pass it on to the class of 2014 — just like the class of 2013 inherited it from the class of 2012.

Officials tinker with lights, produce more ticket fines (Florida)

A reduction by fractions of a second in the duration of a yellow light yields substantial revenue for the red-light camera operator, according to a study by researchers at Texas A&M University. Perhaps that is the reason why statewide red-light revenue is expected to increase in 2013, from $100 million in recent years to $120 million.

Chicago-area pension funding gap jumps to $32 billion: report

The Chicago-based Civic Federation said Tuesday the funding gap for 10 Chicago-area public pension systems widened by 16.7 percent to $32 billion in fiscal 2011 from the year, warning of service cuts or tax hikes to bridge the gap.

ICE Joins CME Warning of Splits in Global Derivatives Rules ($633 trillion)

The CFTC and Securities and Exchange Commission are leading U.S. efforts to revamp oversight of the $633 trillion global swaps market after unregulated trades helped fuel the 2008 credit crisis.

Gold & Silver

Click to read the Gold & Silver Digest: 5/21/13

Provided daily by the Peak Prosperity Gold & Silver Group

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13 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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cmartenson's picture
cmartenson
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Posts: 5568
I stand corrected...
saxplayer00o1 wrote:

Bernanke Says Premature Fed Tightening Would Endanger Recovery

And here I thought it was debt levels being too high, malinvestment enabled by unaturally cheap money, and poor leadership on the monetary and fiscal fronts that were the danger.

phecksel's picture
phecksel
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Posts: 204
cmartenson wrote: And here I
cmartenson wrote:

And here I thought it was debt levels being too high, malinvestment enabled by unaturally cheap money, and poor leadership on the monetary and fiscal fronts that were the danger.

Chris, there you go thinking again!  Remember, the great depression was caused by not enough money.  BB legacy is going to be MOAR money and saving the entire world's economy.

/sarc

thc0655's picture
thc0655
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Joined: Apr 27 2010
Posts: 1512
More of the same

Yes, Chris, and that's why I think you're exactly right in today's piece "Four Signs."  You wrote, My best guess is that all this ends in a pretty horrific market crash (Phase I), which will be followed by even larger, more desperate, and unusual central bank actions (Phase II) that will initially set the stage for what seems like a recovery but which ultimately terminates in the most inescapable currency crisis of modern times, if not human history (Phase III).

And, After this next big down pulse, the central banks will have a very important decision to make. Toss in the towel on the idea that they can print up an actual recovery, or double down and try it all again. Which path they choose will decide everything about your/our future.

My bet is that they will not toss in the towel, because that would mean they’d have to personally and professionally eat crow and stand by as markets cleared, GDPs collapsed all the way back to their non-debt-fueled actual output, unemployment skyrocketed, government budgets were destroyed, and social unrest spiked.

If the choice is between the possibility of inflation later on or the reality of pain today, the all-too-human choice made throughout history is to accept the possibility of future inflation.

This means that the next act is likely to include even more massive printing and an expansion of central bank balance sheets that could easily be ten times higher than current levels.

I'm not an economist or mathmetician, but I am a student of human nature and behavior.  THEY aren't going to change their nature, admit their sins, and do the right thing when the crisis hits.  They're going to do more of the same, just much bigger.  I'm waiting for them to send me a refund check for all the taxes I've paid over the last 10 (or 20 or 30) years.  That'll be my sign:  Spend the whole refund on gold, sell our house, resign our jobs and head for the hills!

"MAY THE ODDS BE EVER IN YOUR FAVOR!"   (Hunger Games)

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Mind Fest in Chicago.

Can anybody be in Chicago July 19-21? Hilton Chicago hotel?

The World Future Society are having a artificial intelligence conference called "Faster Than You Think."

 

SingleSpeak's picture
SingleSpeak
Status: Gold Member (Offline)
Joined: Nov 30 2008
Posts: 496
Whatever "Most Economists Think "...

it would be wise to do the opposite. Their advice is killing us. angry

 

Cottarelli said a slower pace of fiscal consolidation should be accompanied by a long-term plan to keep the budget sustainable as America’s population ages and demands more government services like health care and pensions.

Most economists think the U.S. economy would be growing much more quickly were it not for efforts to shrink the deficit. The U.S. public sector began to tighten its belt in 2011. This year, Washington stepped up its austerity drive, raising taxes in January and enacting sweeping budget cuts in March.

SS

FreeNL's picture
FreeNL
Status: Silver Member (Offline)
Joined: Mar 27 2013
Posts: 112
I dont believe the crash will

I dont believe the crash will be as bad as people think.

you gotta have some skin in the game to lose and lets face it, 80-90% of the stock market is owned by very few people.

i believe the stock market will accomplish actually destroying itself at some point simply by dissociating itself from the common people.

To be brutally honest, i think it needs to be destroyed so we can enter into an era of public government controlled banking.  

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1982
It's not just a few people, Free NL

Those "very few people" are sadly important to our whole economy. The stock market crash of the Great Depression only affected " a few people" directly, but the indirect effects were widespread. People/investors no longer trusted investents/banks. Lost pension funds. Lost savings. People cannot purchanse things, the whole ecomony tends to spiral down. So no one was investing in businesses and jobs evaporated. Deflationay sprial. Lack of trust in the economy or the market, Companies that used the stock market to finance their job-making companies could not find anyone to invest in expansion, critial maintenence projects, or to change thier product line to be more competitive. More jobs were lost.

The biggest change is that back then most Americans were farmers. Now, they think food comes from a supermarket. It's why I am so adamant about getting people to garden.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1323
Government controlled banking is what we have today...
FreeNL wrote:

To be brutally honest, i think it needs to be destroyed so we can enter into an era of public government controlled banking.

What do you think it is now?  The entire banking system is government controlled, or should I say government sponsored.  Do you think we would be in the shape we are today if it wasn't for governments forcing people to use the chosen currency?  How about if we actually had some competition?  I agree it needs to die, but putting in just another corrupt government controlled system to force you with threat of violence to use it doesn't seem like a good solution.

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2766
Getting ugly in Japan

Wonder what Kyle Bass is thinking right about now...

Japanese Stocks Halted; Plunge 1500 Points To Close Down 7.3% - Biggest Drop In 26 Months

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
The Long Fuse.

Has the fire on the fuse reached the detonator?. This might be where the paper model of the world blows up.

 I shall walk around with my fingers in my ears today.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Yesterminute's news.

30% of tax revenues now go towards paying interest on Japan’s debt, which is approaching 240% of debt/GDP. If interest rates hit 2.8% then 100% of tax revenues will go towards paying interest on debt. In other words: lights out.

From Murry Dawes pen at Money Morning.

I hope that like me he woke to a restless dream, for when he wakes he will be in a nightmare.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1323
Changing the rules....

We often hear on this site that the rules will be changed....

City Changes Parking Signs Then Issues Tickets To Cars That Had Been Parked Legally

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