Daily Digest

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Daily Digest 6/29 - World Defenseless Against Next Financial Crisis, The Politics Of Oil

Monday, June 29, 2015, 10:56 AM

Economy

The world is defenceless against the next financial crisis, warns BIS (Brett L.)

“Rather than just reflecting the current weakness, they may in part have contributed to it by fuelling costly financial booms and busts and delaying adjustment. The result is too much debt, too little growth and too low interest rates.
"In short, low rates beget lower rates."

Greece in shock as banks shut after snap referendum call (Jason B.)

Prime Minister Alexis Tsipras, who blindsided creditors by calling a referendum on the austerity cuts in the aid package proposed by the creditors, appeared on television on Sunday night to announce capital controls to prevent banks from collapsing.

Their imposition capped a dramatic weekend for Greece that has pushed the country towards a likely default on 1.6 billion euros ($1.77 billion) of International Monetary Fund loans on Tuesday and closer to an exit from the euro currency bloc.

The Wait-for-Google-to-Do-It Strategy (jdargis)

None of this means that we’ve reached a true tipping point when it comes to fiber. The share of the country’s homes connected to fiber lines was still only about 3 percent at the end of 2013. But compared with where the U.S. was just a few years ago, progress has been dramatic. Had Google not chosen to do what it did, we’d probably still be stuck with the lack of investment and slow downloads that were our lot in 2010. As Levin puts it, “I would like to believe that all this happened because we made such a brilliant case for the benefits of abundant bandwidth in the National Broadband Plan. But that’s not the case. Without Google, this would not have happened.”

Land of 1,000 Landfills (jdargis)

n 2006, in preparation for the 2008 Olympics Games, the Beijing city government started clearing up the unregulated landfills, spending a total of 5 billion yuan. But dozens of the sites, including the Changdian facility, are either still being cleared or are waiting for work to start. In many other cities, unregulated landfills continue to expand, posing a major threat to the environment. Experts say the country has more than 10,000 of the sites in urban areas, many of them in use for decades.

The Politics of Oil (Tiffany B.)

These games aren’t being played in a vacuum. They have geopolitical impacts and, ultimately, they will rip through lives here in America. That’s why my team and I will release an investigative video very soon, titled “Oil Games,” in which we will show you how these games threaten to impact your pocketbook, and how certain investors will make a fortune benefiting from what’s to come.

New manufacturing approach slices lithium-ion battery cost in half (Arthur Robey)

This approach greatly simplifies manufacturing, and also makes batteries that are flexible and resistant to damage, says Chiang, who is senior author of a paper in the Journal of Power Sources analyzing the tradeoffs involved in choosing between solid and flow-type batteries, depending on their particular applications and chemical components.

Nature Provides Novel Solution To Energy Storage Problem (Tom K.)

This process can play a major part in improving ‘Phase change energy storage systems’ as it would result in a more efficient flow of energy from renewables, especially solar and wind energy. These kinds of systems are capable of storing and releasing a huge amount of thermal energy while undergoing a phase change like freezing or melting at a steady temperature.

The solidarity fridge: Spanish town's cool way to cut food waste (Wendy SD)

The large white fridge sits prominently on a pavement in Galdakao, a small city on the outskirts of Bilbao. A wooden fence has been built around it, in the hope of conveying the idea that this is not an abandoned appliance, but a pioneering project aimed at tackling food wastage.

Gold & Silver

Click to read the PM Daily Market Commentary: 6/26/15

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."

17 Comments

saxplayer00o1's picture
saxplayer00o1
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Supreme Court Blocks Limits for CO2, Mercury Power Plants

EPA rule overturned. Coal-fired plants off the hook for limiting CO2 and toxic pollution.

http://www.nytimes.com/2015/06/30/us/supreme-court-blocks-obamas-limits-on-power-plants.html

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saxplayer00o1
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Greece won’t make IMF debt repayment Tuesday, Greek official say

"Greece won’t make a debt repayment to the International Monetary Fund due Tuesday, a senior Greek government official said Monday.

Earlier this month, Greece had notified the IMF it plans to bundle its loan repayments falling due this month into one payment of around 1.6 billion euros ($1.7 billion), which is due Tuesday.

The IMF has said that Greece will immediately be in arrears if it fails to make the debt repayment.

Greece’s bailout program is due to expire Tuesday and eurozone finance ministers on Saturday rejected Greece’s request for an extension. "

======================================================

Just some Monday sarcasm: Remember our friend, Christine Lagarde demanding the cuts to Greek pensions? She and the IMF seem to have made a bad bet on Greece that would cost the IMF $1.7 billion. Any ideas on where to get back some of that money?

Time2help's picture
Time2help
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Schade

Griechenland ist kaput.

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saxplayer00o1
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Italy will not follow Greek downturn, promises finance minister

"Italy’s finance minister sought on Monday to reassure Italians that they would not be following in Greece’s footsteps, saying that the European Central Bank (ECB) would stop any contagion in its tracks."...............

 

"“The situation today is totally different than it was three years ago. We still, of course, have a huge public debt, but it is sustainable,” said Antonio Villafranca, a senior research fellow at the ISPI thinktank in Milan, pointing to the “relatively low” spread between Italian and German government bonds."

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Time2help
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"I promise"
saxplayer00o1 wrote:

"Italy’s finance minister sought on Monday to reassure Italians that they would not be following in Greece’s footsteps, saying that the European Central Bank (ECB) would stop any contagion in its tracks."...............

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Tall
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US now has more Spanish speakers than Spain

The report says there are 41 million native Spanish speakers in the US plus a further 11.6 million who are bilingual, mainly the children of Spanish-speaking immigrants. This puts the US ahead of Colombia (48 million) and Spain (46 million) and second only to Mexico (121 million).

Among the sources cited in the report is the US Census Office which estimates that the US will have 138 million Spanish speakers by 2050, making it the biggest Spanish-speaking nation on Earth, with Spanish the mother tongue of almost a third of its citizens.

http://www.theguardian.com/us-news/2015/jun/29/us-second-biggest-spanish-speaking-country

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Time2help
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Re: US now has more Spanish speakers than Spain

Es la verdad. Tambien hablo español.

(Edit: US markets close in one hour.  Dow down 282 at the moment. Shouldn't someone BTFD?)

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Complacency Not Cracking...Yet

IMO, complacency continues to reign here in virtually all the bond, stock and commodity markets I’m looking at (tho not Puerto Rican bonds or Chinese stocks, etc). Gold has gone nowhere, stocks are doing a normal “let’s pretend we’re scared” pullback as the “buy the dip” (what dip?) calls go out from Morgan Stanley and others. As per the EU narrative I described a couple of weeks back, the (German?) idea of forcing a change of the Greek gov’t either directly in parliament or by a hail-mary popular vote is seen to be running down the rails right on time. Confidence in the endless idiot-savant abilities of central banks to buy up whatever might show a risky drop looks like it remains the main theme in the action overall for now, I’d say. 

I’m not a big Grateful Dead Head, but I like a lot of their music and went to see their final big Bay Area “Fare Thee Well” bash under the stars at a packed “Levi Stadium” in San Jose, California last night. Trey Anastasio from Phish was in Jerry Garcia’s spot on vocals and guitar and Bruce Hornsby on piano. The music would have blown the roof off the place, if it had one, while dead heads across the age spectrum danced in place and group-hugged from the field to the nose-bleed seats. It was a classic California scene as the sun went down on a warm evening, yellow-brown hills in the distance and a big moon hung above, with three humongous flags flying in the breeze rolling in from the Pacific at one end of the stadium: US flag, California flag and a Rainbow flag. 

Supposedly, Steve Job’s widow, Laurene Powell and other Silicon Valley royalty were there, many likely in the giant stand-alone building of high-priced suites on one side of the field. My friend and I once met with Laurene’s “Personal Assistant” in charge of “philanthropic gifts” to try to shake loose some of Stevie’s funds for a documentary. Nice person and meeting but no dice, in that case.

On the long drive back home, I had on Bloomberg radio around midnight and they were excitedly reporting on markets in Asia and starting to open in Europe as though the Greek bank holiday was the Superbowl and the big game was just getting started. A lot of the reporters in far flung capitals had British accents. 

There was a lot of attention to the fact that, for years, the right bet had been to bet on whatever side central banks were on – “you don’t want to go up against them.” – with many saying the EU and investors are already looking beyond the referendum next weekend to “what’s next?” after Greece votes to suck it up and take whatever scraps the EU tosses it. One guy said in the (they thought) lower probability event of a Grexit, it really might destabilize the Euro, since it was supposed to be an irrevocable union, and then, potential other exits must be priced in. I was surprised that Allianz Chief Economic Advisor Mohammed El Erian is apparently now putting Grexit at 85% in the next few weeks and causing a big contraction. Seems too high a likelihood to me, but, of course, could happen.

Right or wrong, I had two distinct feelings listening to the radio: 1) That the motivations and basis for trading in the markets these days is hugely herd oriented and inadequate – downright flimsy. And therefore, that one morning the markets will likely wake up to find they’re suddenly deer in the headlights of a major event, suddenly feeling hugely vulnerable. 2) That Monday really wasn’t going to be that day, and maybe it still won't happen for a little bit. It may take a confluence of events – maybe the Puerto Rican bond sitch + China + Greece + ? (other debtor revolts) might eventually get things rolling.

  1. It’s interesting to listen to El Erian’s view that a “Graccident” is likely already underway now, though. He says now that capital controls are in place, it matters less whether Greeks "want" to stay in the Euro than whether they can; my take away is he’s saying that, given the bad blood between Greece and the EU and the massive contraction coming in Greece from capital controls, it’s going to be really tough emotionally and practically to find a way to put Greece back on life support within the European Monetary Union system.  If so, that may cause market destabilization to increase.

    http://www.bloomberg.com/news/articles/2015-06-29/el-erian-sees-85-grexit-odds-with-massive-contraction-coming

    Seems worth considering – and surprising no one else seems to be talking about it.

 

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Tall
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Sustainable living

No good models for sustainable living exist in the developed world.

"Can the descent from consumerism and growth be prosperous? Can we turn our overlapping crises into opportunities? These are the defining questions of our time."

http://www.resilience.org/stories/2015-06-29/if-everyone-lived-in-an-ecovillage-the-earth-would-still-be-in-trouble

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Cashin: If Greece can leave quietly...

Art Cashin, UBS: If Greece can leave quietly...

Perhaps Italy, Portugal, Spain and Germany could leave quietly as well?

Perhaps we should all just "leave quietly"...

 

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White House says it expects Greece to keep commitments

"The Obama administration said Monday it wants Greece to live up to its commitments, while lawmakers said austerity demands should stay on Athens and the U.S. government should protect American taxpayers from any exposure as Greece edged closer to a default. "

"Tsipras told state television: "If the Greek people want to proceed with austerity plans in perpetuity, which will leave us unable to lift our heads ... we will respect it, but we will not be the ones to carry it out."

The 40-year-old premier, speaking as thousands of Greeks rallied in central Athens in support of a "No" vote, urged voters to throw out the deal. "

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Time2help
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Wenatchee hits 109F (43C), new record temp, wildfire breakout

So a possible 120F at Sunharbor?  That's 48.9C for those counting.

Remember to drink lots of water.

And keep that "go bag" at the ready.

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Doug
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flashback

I happened to live near Kennewick in eastern Washington when the high temp of 118 was recorded. According to local thermometers it got up to 116. It was hot, but triple digits were not uncommon. A group of friends and I walked down to the Columbia River to go swimming that day.

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Time2help
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Current Conditions for Washington: Streamflow

Current Conditions for Washington: Streamflow (USGS)

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Arthur Robey
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The Spread.

48.9C? That will melt the butter. No Schadenfreude.

The old and the young will die. A&E will be busy. Let us hope their air conditioning keeps working.

So it has been officially denied that Italy will default. Perhaps someone cleverer than me might be so kind as to explain how the "spread" is going to save Italy? Please hurry, as this dirty old man's mind cannot control itself.

 

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saxplayer00o1
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Fitch downgrades Greek banks to 'Restricted Default'
  1. Fitch downgrades Greek banks to 'Restricted Default' after government imposes capital controls
  2. Editorial: Illinois and Chicago aren't Greece. They just act that way.
  3. Drought Conditions Cause Central Valley Homes To Sink Into The Ground
  4. Europe's Populists Rally To Greece's Side

"But nowhere do expressions of solidarity with Syriza resonate as much as in Spain, where Podemos is seen as a credible threat to the ruling conservative government. While Spain’s austerity policies have won it plaudits from eurozone leaders, they have proven less popular at home. Podemos has taken advantage of dissatisfaction with the country’s high unemployment rate to win mayoral races in Barcelona and Madrid, Spain’s two largest cities. The two wins could portend a victory in general elections later this year. "

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