Daily Digest

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Daily Digest 2/13 - Fed Taper Too Little Too Late, Vertical Turbines Boost Power

Thursday, February 13, 2014, 11:22 AM

Economy

The Vampire Squid Strikes Again: The Mega Banks' Most Devious Scam Yet (Mark U.)

All of this was big enough news in itself. But it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is "complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally."

Complementary to a financial activity. What the hell did that mean?

Fed Taper Too Little Too Late (adam)

These indications seem all too familiar in an environment with a highly accommodative Fed. The question is can the Fed reverse its most accommodative policy in history fast enough to prevent another bubble and subsequent bust? The anticipated Fed plan of reducing Quantitative Easing (QE) purchases at $10 billion increments over the next 7 meetings would not end the purchase program until the December 16-17th, 2014 meeting. At this pace by the time QE is phased out, and the zero interest rate tether is released, it might too late to prevent a third bubble in only 20 years. The Fed has a history of not switching to tighter policy aggressively enough after years of overtly easy policy.

Rickards: Fed is always surprised because their models are flawed (Herman J.)

“The Fed will say the policy is data dependent — which it is, that’s true — but the data has been coming in weak,” he tells us. Yet $10 billion in additional tapering in March is baked in the pie because that’s the first meeting [Yellen's] chairing…so she’s not going to walk into the room and tear up policy.” But Rickards says come May, June, July and the data comes in weak, look for a pause. “They’ve been making it up for the last five years and they are going to keep making it up.” But Rickards says come May, June, July and the data comes in weak, look for a pause. “They’ve been making it up for the last five years and they are going to keep making it up.”

Sowing Fear: World War I and the Seeds of Hyperinflation (westcoastjan)

The global glut of money as a result of the financial crisis has evoked painful memories of the great inflation that began with the beginning of World War I in 1914 and ended in chaos in 1923. Each new report on the need for billions in Europe's crisis-ridden countries reignites concerns over the stability of money. According to a poll by the Allensbach opinion research firm, Germans fear inflation even more than life-threatening diseases like cancer.

Europe Considers Wholesale Savings Confiscation, Enforced Redistribution (Wendy SD)

"The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing", the document said." Mobilize, once again, is a more palatable word than say, confiscate. And yet this is precisely what Europe is contemplating.

Could This Baker Solve the Gluten Mystery? (Wendy SD)

In most of what we now know as "whole wheat" bread, some—but not all—of the bran and germ are mixed back in. For Jones, these are inferior products—both in nutrition and taste terms. So he has been working with farmers in the Pacific Northwest to develop wheat varieties that can be milled into flour that's suitable for being baked directly into bread. And it falls to McDowell—who took over the role of the lab's baker from Jones himself last year—to show the world that 100 percent whole-wheat bread isn't just edible, but delicious.

New U.S. farm bill coddles farmers, ignores Canada's plea (westcoastjan)

Take the outrageous story of Washington's hush money to Brazil. It's not one that's widely known in the U.S., probably because it cuts against Reagan's government-is-the-problem narrative.

But it beautifully illustrates the lengths to which Congress will go to coddle and protect certain American businesses, even as Washington accuses other countries, like China or even Canada, of unfair trading when they do the same thing.

Vertical Turbines, Packed Tight, Boost Power (Wendy SD)

The trend in turbine design has been toward taller and bigger, as the wind power industry tries to maximize generating capacity. But researchers from Caltech suggest the developers might be going about it all wrong – they say much shorter vertical-axis turbines, placed in a tight array with each turbine turning in an opposite direction to its neighbors, can be at least 10 times as efficient at capturing the wind power in a given area.

Tepco Hid Record-Level Radiation Data Last July (kelvinator)

Tepco released the data on Feb. 6 showing that the groundwater contained a record 5 million becquerels per liter of radioactive strontium-90. When Tepco reported the data to the Nuclear Regulation Authority last week, it initially claimed that it had only recently compiled the data, NRA sources said. However, the embattled utility later corrected the timing, apparently showing that it had withheld the record readings, the sources said.

Betting on the Next Oil Boom? You're Grasping at Straws (James B.)

Unplanned interruptions in the global oil supply chain last year were about 30 percent higher than in 2013, the U.S. Energy Department said. Much of the problem was blamed on Libya, though sputtering from Kazakhstan's giant Kashagan field played a factor as well. This year could be North America's to lead in terms of secure production, but the story for 2014 is as certain as market predictions themselves.

Fuel gain exceeding unity in an inertially confined fusion implosion (Nate, subscription required)

Ignition is needed to make fusion energy a viable alternative energy source, but has yet to be achieved. A key step on the way to ignition is to have the energy generated through fusion reactions in an inertially confined fusion plasma exceed the amount of energy deposited into the deuterium–tritium fusion fuel and hotspot during the implosion process, resulting in a fuel gain greater than unity. Here we report the achievement of fusion fuel gains exceeding unity on the US National Ignition Facility using a ‘high-foot’ implosion method, which is a manipulation of the laser pulse shape in a way that reduces instability in the implosion.

Heating Bills Reach Record for New Yorkers (James B.)

Cold weather continues to plague U.S. consumers with high costs for heating. The Northeast in particular has been hit hard. Metropolitan New York is now paying record prices for natural gas and heating oil. For the week ending January 31, East Cost stockpiles of distillates, which include heating oil and diesel, dropped to their lowest levels since 1990, according to new EIA data.

Gold & Silver

Click to read the PM Daily Market Commentary: 2/12/14

Provided daily by the Peak Prosperity Gold & Silver Group

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