Daily Digest

Daily Digest 3/4 - California's $600 Billion Sinkhole, Lingering U.S. Winter and Ukrainian War Could Spark Perfect Gasoline Storm

Tuesday, March 4, 2014, 10:57 AM

Economy

Who Is Provoking the Unrest in Ukraine? A Debate on Role of Russia, United States in Regional Crisis (Hugh K)

Russia is vowing to keep its troops in the Ukrainian region of Crimea in what has become Moscow’s biggest confrontation with the West since the Cold War. Ukraine’s new prime minister, Arseniy Yatsenyuk, said Russian President Vladimir Putin had effectively declared war on his country. Concern is growing that more of eastern Ukraine could soon fall to the Russians. Earlier today, Russian troops seized a Ukraine coast guard base in the Crimean city of Balaklava. On Sunday, the new head of Ukraine’s navy defected to Russia. To talk more about the crisis in Ukraine, we speak to Yale University history professor Timothy Snyder.

This Gold Model Calculates Prices Between 1971 & 2017 (Deviant Investor)

Gold persistently rallied from 2001 to August 2011. Since then it has fallen rather hard – down nearly 40%. This begs the question:

What happens next?

Marc Faber: “Emerging Economies Will Submerge Soon; Higher Gold Demand To Follow” (Herman James)

“When I compare,say, gold shares and the price of gold to the S&P, the S&P is up substantially since 2011, and gold is down substantially…When I look around at asset prices such as real estate, bonds, equities, paintings, collectibles, vintage cars, I think the price of gold is actually one of the few assets that are relatively cheap.”

California's $600 Billion Sinkhole (thc0655)

That obligation functions exactly like a zero-coupon bond. In both cases, cash payouts are promised for the future, though insufficient provisions are made to meet that obligation. In both cases, the single, final payment is many times the debt.

Some money has been set aside for teacher pensions in California but not nearly enough, and the state is already short $80 billion. But that is merely the value of the liability today. Unless cash is set aside, the shortfall will continue to grow zero-coupon style -– until it reaches more than $600 billion when the debt comes due in 2043.

Wall Street Has Found Its Latest Dangerous Financial Product, Activists Warn

Housing and consumer activists warn that Wall Street is about to crash the housing market -- again.

The activists said they are particularly concerned about the growing number of companies looking to issue bonds backed by rental properties -- bonds that a coalition of groups described as "eerily like" those mortgage-backed securities that helped fuel the last housing bubble.

Energy

Lingering U.S. Winter and Ukrainian War Could Spark Perfect Gasoline Storm

The extreme winter weather pounding the eastern half of the United States is keeping many drivers at home. That means less demand along with lower prices at the pump compared to last year. Unless something gives, however, geopolitical issues in Ukraine could spell trouble for consumers, AAA said Monday.

AAA reported a national average price for a gallon of regular unleaded gasoline in the United States of $3.46, a price that's 17 cents higher than the same time last month but 30 cents less year-on-year. The national average price for Monday, however, is the highest since Sept. 24 and marks the 24th straight day of increases.

Chevron Wins U.S. Ruling Calling Ecuador Judgment Fraud (Wendy S. Delmater)

Chevron Corp. (CVX) won a U.S. judge’s ruling that a multibillion-dollar pollution judgment issued in Ecuador was procured by fraud, making it less likely that plaintiffs will collect the $9.5 billion award.

U.S. District Judge Lewis Kaplan in Manhattan said today that the second-largest U.S. oil company provided enough evidence that plaintiffs secured the 2011 judgment on behalf of rain forest dwellers in the country’s Lago Agrio area by bribing a judge and ghostwriting court documents. Kaplan oversaw a seven-week nonjury trial over Chevron’s allegations.

Capturing Methane Possible at Little or No Cost

The oil and gas industry can capture leaking methane gas at little or no cost over the long-term, according to a new study by the Environmental Defense Fund and ICF International Inc. The study suggests that leaking methane, which is a potent greenhouse gas, can be reduced by improved technology and equipment. The industry has resisted such a move because of its costs, but the study finds that the $2.2 billion cost would be offset by the capturing and selling the natural gas that is currently leaking.

Environment

Climate scientists want to interact more directly with the public (Arthur Robey)

Climate scientists need to interact more directly with the public through blogs and social media, researchers from the University of Bristol, the University of Reading and the Met Office argue in a commentary in this week's Nature Climate Change. 

Dr Tamsin Edwards of Bristol's Cabot Institute and colleagues believe that scientists should engage in 'many-to-many' communication with the public on platforms like blogs and social media sites, where they can present their research frankly and directly to the public. 

Sea Otters Rebound from Exxon Valdez Disaster  (Wendy S. Delmater)

Nearly a quarter of a century after the Exxon Valdez disaster dumped 11 million gallons of oil into Alaska's Prince William Sound, sea otter numbers have rebounded to levels seen before the spill, the U.S. Geological Survey announced recently with a new study.

Sea otters (Enhydra lutris), found along the Pacific coasts of North America and Northeast Asia, are one of more than 20 types of animals that make their home near the shore affected by the March 1989 oil spill. The disaster occurred in prime sea otter habitat, according to the USGS study. The oil "drastically reduces" the ability of the otters' fur to provide insulation, the report said.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/4/14

Provided daily by the Peak Prosperity Gold & Silver Group

Climate scientists need to interact more directly with the public through blogs and social media, researchers from the University of Bristol, the University of Reading and the Met Office argue in a commentary in this week's Nature Climate Change.

Read more at: http://phys.org/news/2014-03-climate-scientists-interact.html#jCp

6 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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HughK's picture
HughK
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Posts: 760
Europe's reliance on Russian natural gas: Infographics

Hi,

Here are two infographics that show Europe's reliance on Russian natural gas:

 

Source: Europe's Energy Security: Options and Challenges to Natural Gas Supply Diversification - U.S. Congressional Research Service

Time2help's picture
Time2help
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HughK's picture
HughK
Status: Platinum Member (Offline)
Joined: Mar 6 2012
Posts: 760
Because denial is not just a river in Africa

But, apparently, Sevastopol is not a thing more than a warm-water seaport.

Markets may have made Putin blink: Pro

 

jtwalsh's picture
jtwalsh
Status: Gold Member (Offline)
Joined: Oct 1 2008
Posts: 263
Good Stuff

HughK:

Thanks for the charts.  They clearly illustrate some of the complicated underlying currents in this situation. Being able to visualize makes much more of an impact on my brain than just reading text.

JT

Shrinky Dad's picture
Shrinky Dad
Status: Member (Offline)
Joined: Apr 18 2010
Posts: 2
Climate scientists want to interact more directly with the publi


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