Daily Digest

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Daily Digest 10/23 - The Last Days Of The Growth Story, The Plastic In Your Beer

Thursday, October 23, 2014, 10:41 AM

Economy

The Last Days Of The Growth Story (Don R.)

Most of us have heard of the seven stages of grief. Shock, Denial, Anger, Bargaining, Guilt, Depression, Acceptance. Where are we in our journey through these stages when it come to the financial crisis, and to growth? There’s only one stage that even remotely sounds right: Denial. We’re not even close to Anger yet, not when it comes to the larger population.

We simply deny that something has really changed. And even if you wish to claim that it hasn’t, no-one can deny the possibility that it has. Still, that is exactly what happens. Denial, everywhere you look.

Detroit With a Boardwalk (jdargis)

Four of its 12 casinos have closed in the last year, including the Revel, the newest and glitziest, despite a $260 million, taxpayer-funded gift courtesy of Gov. Chris Christie. A fifth, the Trump Taj Mahal, is on the brink. The gaming industry—proponents never call it gambling—has lost nearly 8,000 jobs since the beginning of the year and its revenue, which hit a high of $5.2 billion in 2006, is down nearly 50 percent. Add to that the city’s $65 million budget shortfall, pending layoffs of as many as 300 city workers and a tax base in free fall.

Poverty and class: the latest themes to enter the US banned-books debate (westcoastjan)

The US has a longstanding tradition of books being challenged on sometimes spurious grounds (often, but not always from the conservative right) even while the first amendment of the constitution protects “access to ideas as well as free speech”. There are numerous organisations, including the ALA and National Coalition Against Censorship (NCAC) that contest such moves, still, there’s something unsettling about the recent manifestation of complaints on socio-economic grounds.

Permanent Damage to US Economy-Michael Snyder (pinecarr)

What do you look out for as a warning sign of the next calamity? Snyder says, “When there is a financial crisis, all of a sudden, banks don’t want to lend. They don’t want to lend to each other, and they don’t want to lend to anyone else. Credit freezes up, and our financial system is based on debt and the flow of money from the banks lending it to the rest of us. I believe we will have a brief period of deflation before the response by the Federal Reserve and the federal government, where we are going to then have tremendous inflation through the roof.”

Bond funds stock up on Treasuries in prep for market shock (thc0655)

Matt Toms, head of fixed income at New York-based Voya Investment Management, said he has cut exposure to corporate bonds in favor of mortgage-backed securities, for example. In particular, he has reduced corporate debt issued by U.S. financial companies because of their exposure to the weak European economy. He sees mortgage-backed bonds as more U.S.-centric because they are backed by the ability of American homeowners to make good on their monthly mortgage payments.

Dollar Strength Does Not Bode Well for U.S. Overseas Companies (Tyler K.)

As our dollar strengthens, revenues from these other countries become worth less to Boeing. But its cost structure is unlikely to change significantly during the short term. If you keep your input costs the same and receive fewer revenues, your profit margins are going to shrink — and ultimately, Boeing will end up with a smaller bottom line.

In other words, Boeing is losing profit just by the strength in the dollar.

Meanwhile, This Is Who Is Quietly Buying All The Cheap Oil (pinecarr)

With the US Shale Oil industry up in arms, Venezuela screaming, and Russia awkwardly quiet (as the Ruble slides with the falling oil price stabilizing domestic inflows), the 'secret' Saudi-US oil deal that pressured prices for crude down to $80 (18-month lows today) has 'hurt' a lot of the world's producer nations. However, as Bloomberg reports, there is one nation that is very grateful. The number of supertankers sailing toward China’s ports surged to a nine-month high as over 80 very large crude carriers (VLCCs) - the industry’s biggest ships - sail toward the Asian country’s ports. At an average of 2 million barrels each, the 160 million barrels will help refill China's 727 million barrel SPR which it started in 2012.

Massive coal field discovered in China's Xinjiang (Alan W.)

Hami Prefecture is one of the five major coal bases in Xinjiang, with an estimated reserve exceeding 570 billion tonnes. In recent years, a dozens of state-owned energy enterprises have moved to tap the coal resources there, steering coal power and increasing Hami's strategic status in China's energy industry.

Abengoa celebrates grand opening of cellulosic ethanol plant (nimsdf)

Every gallon of cellulosic ethanol produced and used to fuel our vehicles reduces the impact of harmful greenhouse gas emissions by greater than 60 percent as compared to conventional gasoline," Moniz said. "The department is committed to supporting innovative technologies, from an early idea in the lab to a full, commercial-scale source of clean energy. As part of the administration’s all-of-the-above approach to homegrown American energy, the production of cellulosic ethanol creates economic opportunities for rural communities, helps diversify our energy portfolio, and moves us closer to a low-carbon energy future.

Plastic Bits Found Floating Around In 24 Out Of 24 Samples Of German Beer (jdargis)

This particular study is especially new, but it’s not encouraging. Every single sample of beer tested was found to have contaminants, ranging from microplastics to bits of glass to skin to at least once, a basically complete dead bug. Super gross! The theory is that these contaminants could have worked their way into the beer via the water supply; a good portion of these contaminants were small enough to get through the mesh filters used by the brewers.

Gold & Silver

Click to read the PM Daily Market Commentary: 10/22/14

Provided daily by the Peak Prosperity Gold & Silver Group

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