Daily Digest

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Daily Digest 5/6 - Time to Worry About Stock Market Bubbles, Fungus Affects Coffee Crops

Tuesday, May 6, 2014, 10:02 AM

Economy

America's Essentials Are Getting More Expensive While Its Toys Are Getting Cheap (Wendy SD)

Jordan Weissmann nails it: "Prices are rising on the very things that are essential for climbing out of poverty." The road to upward mobility is uncertain, but we know the checkpoints. Graduating from college—whose sticker price is actually rising faster than its actual cost—correlates with higher employment and richer earnings. Chronically sick children affect parents' mental health, and chronically sick parents hurt a family's well-being. Single moms and dads who can't afford daycare and wind up spending lots of hours watching after their kids have trouble finishing school or establishing themselves in the workforce. Just as the benefits of wealth create a virtuous cycle of behavior, the challenges of poverty start a vicious circle that continues to spin down through multiple generations.

Time to Admit that Gold Peaked in 2011? (Kevinoman0221)

The logic is flawed, however; even if it were true that gold has matched its 1980 peak in inflation-adjusted prices, it would not prove that the top is in this time. This is not the 1970s, the global economy is under very different pressures, and there’s no rational basis at all for saying the top this time has to be at the same or similar level as last time.

That’s even if it were true that gold has matched its 1980 peak—but it hasn’t.

China Is Quietly Profiting From the Russia-Ukraine Standoff: Here's How (HughK)

The escalating standoff between Russia and Ukraine is making both sides a little apprehensive. Russia is far and away the largest supplier of natural gas to Europe, and the pipelines that run through Ukraine are responsible for 34% of all imports. Europe wants to diversify its energy sources exactly because of events such as the ones in Urkaine. For Russia, it will be even harder to find a client as large as Europe. It is the destination for 65% of Russian natural gas exports, and any disruption of that flow could put a pretty big hole in the Russian budget. The most logical step for Russia is to send its gas East, and what better customer than China?

Credit Suisse in talks to pay $1.6 billion to resolve U.S. tax probe: source (jdargis)

Credit Suisse Group AG is in talks with the U.S. Justice Department to pay as much as $1.6 billion to resolve an investigation into the bank's role in helping Americans evade U.S. taxes, a person familiar with the matter said on Monday.

Prosecutors have also been pushing for Credit Suisse to plead guilty in connection with the probe, two people with knowledge of the talks said.

Time to Worry About Stock Market Bubbles (jdargis)

Relative to long-term corporate earnings – and more in a minute on why that measure is important – stocks have been more expensive only three times over the past century than they are today, according to data from Robert Shiller, a Nobel laureate in economics. Those other three periods are not exactly reassuring, either: the 1920s, the late 1990s and in the prelude to the 2007 financial crisis.

AAA: Drivers Should Soon See Relief At The Pump (James S.)

As U.S. gasoline production increases in anticipation of the summer driving season, the American Automobile Association said it is expecting prices at the pump to drop by Memorial Day, May 26. The AAA reported a national average price on May 5 of $3.67 -- about 3 cents lower than what the motor club said was a seasonal high, on April 28.

A Coffee Crop Withers (jdargis)

Big farmers hire fewer workers to pick the ripe coffee cherries that enclose the beans. Smaller farmers go into debt and sell livestock or tools to make up for the lost income. Sales fall at local merchants. Teenagers leave school to work on the farm because their parents can no longer hire outside help. At the very end of the chain are the landless migrant workers who earn just a few dollars a day.

Climate change is clear and present danger, says landmark US report (jdargis)

"Climate change, once considered an issue for a distant future, has moved firmly into the present," a draft version of the report says. The evidence is visible everywhere from the top of the atmosphere to the bottom of the ocean, it goes on.

"Americans are noticing changes all around them. Summers are longer and hotter, and periods of extreme heat last longer than any living American has ever experienced. Winters are generally shorter and warmer. Rain comes in heavier downpours, though in many regions there are longer dry spells in between."

Gold & Silver

Click to read the PM Daily Market Commentary: 5/5/14

Provided daily by the Peak Prosperity Gold & Silver Group

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."

2 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
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Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Meanwhile back in Australia.

There is not a peep about the Ukraine on the news, however we are discussing

  • Male genitalia and
  • Monica Lewinsky has been dragged out of the closet to air her views,

That does it-now I have a fit of the giggles.

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