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Daily Digest 1/29 - Greece Pivots Towards Russia, Oil Is Behind A Lot Of Wars

Thursday, January 29, 2015, 10:48 AM

Economy

Greece Begins The Great Pivot Toward Russia (pinecarr)

Europe, for one, will be most displeased that Greece has decided to put its people first in the chain of priority over offshore bidders of Greek assets. Most displeased, especially since the liquidation sale of Greece is part of the Greek bailout agreement: an agreement which as the Troika has repeatedly stated, is not up for renegotiation.

Greece: Phase One (jdargis)

Syriza was set up by several different organizations in 2004, as an electoral alliance. Its biggest component was Alexis Tsipras’s party Synaspismos — initially the Coalition of the Left and Progress, and eventually renamed the Coalition of the Left and of the Movements — which had existed as a distinct party since 1991. It emerged from a series of splits in the Communist movement.

European counter-terror plan involves blanket collection of passengers’ data (pinecarr)

The proposal, seen by the Guardian, describes itself as a “workable compromise” between European interior ministers, who want to see its swift adoption for all flights within Europe as well as flights in and out of Europe, and the European parliament’s civil liberties committee, which blocked the plan nearly two years ago.

Education Moment: The Man with 26 Million Students (pinecarr)

Zach is hardly the Davos type – he apologises when using buzzwords such as “intersection” and uses sarcastic air quotes when talking about the WEF’s “new digital context” slogan – but he is a vivid example of a “skills gap” victim, albeit a first-world one.

“When I was looking for internships in my junior year, at companies like Goldman Sachs and McKinsey, I realised that nobody I was going to college with had any skills that would be relevant in that context,” he says

Crisis in European Union (Tyler K.)

The second steep drop in the price of oil is threatening to trigger the next debt crisis in emerging countries from fracking, much as the fall in housing prices triggered the subprime crisis in 2008 that in turn spread to fragile debt markets all around the world.

But shortly thereafter, I discovered the geopolitical cycle that goes back for two centuries and it’s even more critical as it most affects the valuations or the price-earnings ratios of stocks and all financial assets by 50% or so in adverse cycles.

Ebola outbreak: Virus mutating, scientists warn (jdargis)

It's not unusual for viruses to change over a period time. Ebola is an RNA virus - like HIV and influenza - which have a high rate of mutation. That makes the virus more able to adapt and raises the potential for it to become more contagious.

"We've now seen several cases that don't have any symptoms at all, asymptomatic cases," said Anavaj Sakuntabhai.

$2,000 Scrabble (westcoastjan)

100 times the cost, for half the experience.

New England Growing More Dependent On Natural Gas (Evan K.)

New England may avoid a spike in natural gas prices this winter, but the region is becoming increasingly dependent on the fuel, ensuring that price spikes in future years are not out of the question. A year ago, the polar vortex brought several bouts of low temperatures and heavy snow to the northeast, causing demand for heating and electricity to jump. Temporary shortages in natural gas flows due to pipeline constraints led spot prices to shoot up. Prices at Algonquin Citygate, a marker for the Boston area, hit an all-time high of $77.595 per million Btu (MMBtu) on January 23, 2014. Thus far, this winter has been milder, and record levels of natural gas production in 2014 have restored inventories, lowering the chance of a repeat in price spikes. And in the short-term at least, there is another reason that New England likely won’t see the dramatic price spikes this winter: more imported liquefied natural gas (LNG).

Yes, Oil Is Behind a Lot of Wars (jdargis)

Civil wars such as the ongoing Syrian conflict are more and more the dominant form of armed conflict, and as such scholars have offered a variety of explanations as to why they happen—from post-colonial disagreements to El Niño, along with old standbys like ethnic conflicts. That said, students of war have said relatively little about why other countries intervene, and whatever explanations do exist often emphasize the history of a particular conflict, say, the 1978 Vietnamese invasion of Cambodia, rather than develop a broader theory of intervention. When researchers do look at intervention, the focus is on security or humanitarian concerns. It's rare for researchers to focus on economic considerations.

Want to Avoid Oil's Gloom? Turn to the Sun, Says Outsider Nick Hodge (Kevin J.)

While some celebrated shale oil as a "boom," Nick Hodge derided it as a "Ponzi scheme." Today the shale sector quivers before the specter of falling oil prices, and the oil majors that have invested heavily in shale may be humbled. Hodge argues that nuclear energy is about to reassert itself, and that solar power is on the verge of becoming a major energy source.

Gold & Silver

Click to read the PM Daily Market Commentary: 1/28/15

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."

10 Comments

saxplayer00o1's picture
saxplayer00o1
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sand_puppy's picture
sand_puppy
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Is Tsipras a Secret PP Member? ;-)

Just kidding of course.  But this sounds like themes laid out in countless podcasts here.

Alexis Tsipras' Open Letter To Germany: What You Were Never Told About Greece

In 2010, the Greek state ceased to be able to service its debt. Unfortunately, European officials decided to pretend that this problem could be overcome by means of the largest loan in history on condition of fiscal austerity that would, with mathematical precision, shrink the national income from which both new and old loans must be paid. An insolvency problem was thus dealt with as if it were a case of illiquidity.

My party, and I personally, disagreed fiercely with the May 2010 loan agreement not because you, the citizens of Germany, did not give us enough money but because you gave us much, much more than you should have and our government accepted far, far more than it had a right to. Money that would, in any case, neither help the people of Greece (as it was being thrown into the black hole of an unsustainable debt)....  The combination of gigantic new loans and stringent government spending cuts that depressed incomes not only failed to rein the debt in but, also, punished the weakest of citizens turning people who had hitherto been living a measured, modest life into paupers and beggars. The collapse of incomes pushed thousands of firms into bankruptcy boosting the oligopolistic power of surviving large firms. Thus, prices have been falling but more slowly than wages and salaries, pushing down overall demand for goods and services and crushing nominal incomes while debts continue their inexorable rise.

Dear readers, I understand that, behind your 'demand' that our government fulfills all of its 'contractual obligations' hides the fear that, if you let us Greeks some breathing space, we shall return to our bad, old ways. I acknowledge this anxiety. However, let me say that it was not SYRIZA that incubated the cleptocracy which today pretends to strive for 'reforms', as long as these 'reforms' do not affect their ill-gotten privileges.

Thetallestmanonearth's picture
Thetallestmanonearth
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Posts: 320
re: Is Tsipras a Secret PP Member? ;-)

I've often wondered who in the halls of power secretly reads this site and those like it.  Wouldn't that be cool to know that we have the ability to impact the thinking of those making major geopolitical decisions?  Everyone talks about the hundredth monkey, but the first 99 never get any credit at all.  I'm happy just to be counted amongst a group that grappling with the big challenges facing our future ignored by most.  Maybe eventually we'll reach that tipping point where the conversations here really do have an impact on policy.

Tall's picture
Tall
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Rent to Own: Wall Street’s Latest Housing Trick

At a conference on housing finance last month, a collection of investors described their innovative "rent-to-own" products.

Rent-to-own schemes have long exploited the poor. Naturally, marketers address that problem with euphemisms. Today, it's called lease purchase. The arrangements work in myriad permutations, but the basic deal is that a person rents a home and pays for an option to buy it at a later date.

All the panelists hailed the product, calling it a "yield enhancer" that would increase profits. In a standard lease, one panelist explained, the owner covers costs like taxes, maintenance cost and insurance. With lease purchase, the renter pays those expenses. And it's easier to evict because the occupant has only a rental agreement. It's not a foreclosure proceeding against an owner, after all.

http://www.propublica.org/thetrade/item/rent-to-own-wall-streets-latest-...

cmartenson's picture
cmartenson
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Posts: 5570
Yes, that letter is a breath of fresh air
Thetallestmanonearth wrote:

I've often wondered who in the halls of power secretly reads this site and those like it.  Wouldn't that be cool to know that we have the ability to impact the thinking of those making major geopolitical decisions?  Everyone talks about the hundredth monkey, but the first 99 never get any credit at all.  I'm happy just to be counted amongst a group that grappling with the big challenges facing our future ignored by most.  Maybe eventually we'll reach that tipping point where the conversations here really do have an impact on policy.

I agree that the new Greek minister's letter reads like a breath of fresh air.  It is full of common sense and basic math.

He uttered the most obvious of all statements that has yet to pass the lips of any Fed or ECB official, namely that you cannot "solve" an issue of insolvency with more liquidity.

I am now firmly rooting for his agenda and hope that at least he can inject some reality into the conversations over there in Europe.  It would be a start at least.

Isn't it a wonder that something so simple - stating the truth - could be so refreshing?  Unusual even.

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
What does the industry have to hide?

Two young children in Pennsylvania were banned from talking about fracking for the rest of their lives under a gag order imposed under a settlement reached by their parents with a leading oil and gas company.

The sweeping gag order was imposed under a $750,000 settlement between the Hallowich family and Range Resources Corp, a leading oil and gas driller. It provoked outrage on Monday among environmental campaigners and free speech advocates.

The settlement, reached in 2011 but unsealed only last week, barred the Hallowichs' son and daughter, who were then aged 10 and seven, from ever discussing fracking or the Marcellus Shale, a leading producer in America's shale gas boom.

The Hallowichs' lawyer, Peter Villari, told the court he had never seen a gag order imposed on children in his 30 years of practicing law, according to the released transcript.

http://www.theguardian.com/environment/2013/aug/05/children-ban-talking-...?

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
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Posts: 5071
open letter from Greek PM

I totally agree as well, the guy is just writing the truth, and the writing is clear and persuasive, at least to me.

And after reading the paper written by the main Syriza economist proposing the debt settlement conference, I think these guys have it pretty well dialed in, both problem definition as well as a reasonable framework for a solution.

Trouble is, the paychecks (and future retirement opportunities) of the current raft of politicians depends on them not understanding the essence of this problem.

I'm really not a fan of Communism, simply because it just doesn't work at large scale, but these guys are speaking truth that nobody else dares to say.  Perhaps over time, more people will start doing it.  I sure hope so.

I can really see why the Communists/Nazis did well in the old days.  The rest of the political options were so corrupt that they were the only ones left to speak something approaching truth about the issues of the day.  They had no power, so they had nothing to lose.

What a fascinating time to live through.  I read about history, wondered how it could possibly ever really happen that way, and now I'm living through it myself.

SingleSpeak's picture
SingleSpeak
Status: Gold Member (Offline)
Joined: Nov 30 2008
Posts: 496
Dejavu all over again

Steen Bocian, chief economist at Danske Bank, said in a note. "The rate cut emphasizes once again that the fixed-exchange rate policy will be defended. This defense will go on as long as necessary," he said.

Hum, didn't Switzerland say that they were going to defend their peg also a few months ago?

SS

SingleSpeak's picture
SingleSpeak
Status: Gold Member (Offline)
Joined: Nov 30 2008
Posts: 496
Dave, you're more of an optimist

than I am. I would have left off the last word in this sentence.
 

What a fascinating time to live through.
 

SS

pinecarr's picture
pinecarr
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Posts: 2237
WInd-farm lesson learned (humor)

http://www.telegraph.co.uk/news/matt/

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