Daily Digest

Image by antwerpenR, Flickr Creative Commons

Daily Digest 5/23 - Corporate Profits And Market Crashes, Can $20K Houses Save the American Dream?

Friday, May 23, 2014, 10:12 AM

Economy

Broke and Broken? The Psychological Effects of Poverty (Martha W.)

For the more than 40 million Americans in poverty, everyday life is a struggle — buying food, going to school, getting a job. And for a great many of them, what most people think of as simple tasks are also difficult. Let’s explore the picture of poverty in the U.S. and the psychological and physical toll it takes.

$200 Million Could Curb Pension Cuts in Detroit (jdargis)

On Thursday, some House Republicans who had expressed reluctance at devoting state money to the troubled city seemed satisfied with additional measures that give state officials new oversight of Detroit’s spending, and said a settlement now would most likely cost Michigan less than a protracted bankruptcy. And Democrats, who dominate politics in Detroit, said the city’s 20,000 retirees needed the state support, even if it came with strings attached, including a financial review commission with authority over the city’s budget choices in the future.

Corporate Profits and Market Crashes (Adam)

So, what do we learn from the above? Corporate profit margins have served, historically, as a decent leading indicator for major market peaks and recessions; however, as usual, one indicator alone should not be used as a timing tool (especially given the potential lag of almost 5 years in the longest case: 1982-1990 period).

Can These $20,000 Houses Save the American Dream? (Amanda)

Our goal was to design a market-rate model house that could be built by a contractor for $20,000 ($12,000 for materials and $8,000 for labor and profit)—the 20K House, a house for everybody and everyone. We chose $20,000 because it would be the most expensive mortgage a person receiving today’s median Social Security check of $758 a month can realistically repay. A $108 monthly mortgage payment is doable if you consider other monthly expenditures. Our calculations are based on a single house owner, because 43 percent of below-poverty households in Hale County are made up of people living alone. That translates to a potential market of 800 people in our county.

Brian Williams Scores Edward Snowden's First American Television Interview (scornaby)

Snowden's decision to talk to Williams marks a potentially major turning point in his long-running press campaign. In the year since he leaked NSA documents and revealed his identity, the level of his interactions with the media has grown steadily, but he had yet to sit down for a television interview with an American network journalist.

NBC News has a partnership with First Look Media, the group that employs Greenwald.

Agreement for South Stream construction in Serbia to be concluded soon (Wendy SD)

South Stream is Gazprom's global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic meters across the Black Sea to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks. The first gas will be supplied via South Stream in late 2015. The gas pipeline will reach its full capacity in 2018.

Competing Visions for Russia’s Economic Future (jdargis)

President Vladimir V. Putin just struck a major gas deal with China, but the first profits will not flow for years. European and American financing is drying up while the crisis in Ukraine unfolds, and Russia’s own businesses and wealthy individuals are sending money abroad. With oil prices flat and the flight of capital from Russia, the International Monetary Fund projects that Russia’s economy will grow a meager 0.2 percent this year.

China’s Oil Giant At Center Of Corruption Probe (James S.)

Grins were on the faces of China National Petroleum executives this week as they celebrated a blockbuster 30-year deal for Russian gas. It was a good day for CNPC, the state-owned colossus at the center of China’s oil and gas webs and one of Eurasia’s biggest energy investors. For some, however, those grins could soon turn to grimaces, because the deal comes against a backdrop of a series of high profile corruption investigations by the state, and CNPC has been caught in the dragnet. A former CNPC chairman is currently under investigation and a top executive of CNPC subsidiary PetroChina has just been arrested.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/22/14

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."

4 Comments

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1449
Re: Corporate Profits and Market Crashes

Corporate Profits (ex-items, accounting rigging) and Margin Debt at historic high (adjusted for inflation) point to another bubble.  But there are bubbles also in all debt, housing, and junk loans.  The next crash will be like none other.

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4169
saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4169
saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4169

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments