Daily Digest

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Daily Digest 7/24 - Sea Level Warning Issued, Unemployment Apps Plunge To 42-Year Low

Friday, July 24, 2015, 9:40 AM

Economy

China’s Global Ambitions, With Loans and Strings Attached (jdargis)

Ecuador, with just 16 million people, has little presence on the global stage. But China’s rapidly expanding footprint here speaks volumes about the changing world order, as Beijing surges forward and Washington gradually loses ground.

What You Need to Know About China’s Gold (Tiffany B.)

China now mines more gold than any other country. It has mined more than 2,000 tons of gold since 2009. Much — if not all — of that gold ends up in the People’s Bank of China.

And depending on the month, the country is also the No. 1 or No. 2 gold importer. It has imported well over 3,300 tons of gold through Hong Kong. China has also imported nearly 700 tons from Switzerland since January 2012.

Central Banks Have Shot Their Wad——-Why The Casino Is In For A Rude Awakening, Part I (Joe M.)

So it is worth recounting how we got here. In the first phase, central banks engineered a massive wave of household borrowing and consumption/housing spending in the DM economies which, in turn, ignited an export manufacturing boom in China and among its caravan of EM suppliers. This China/EM export boom eventually over-taxed the world’s existing capacity to supply the raw materials required by a booming industrial economy—hydrocarbons, iron ore, met coal, aluminum, copper, nickel etc.

Push to Lift Minimum Wage Is Now Serious Business (jdargis)

Led by some large labor unions, the movement to make $15 the floor for hourly wages has revealed how deeply divided Americans are on the issue. It has also raised the prospect of much wider variations in how people are compensated for the same basic work in different parts of the country. And it has infuriated companies large and small, which say it compels hard choices between raising prices and firing workers.

Americans' Air Conditioning Habit Is Eco-Friendly (jdargis)

You could argue that if Americans had not migrated en masse from the temperate north to the blistering sunbelt, we would need less energy for climate control. You could argue that, but you'd be wrong. Americans still expend much more energy heating their homes than cooling them. That's actually not that surprising. The difference between the average temperature outside and the temperature that is comfortable inside is generally only 10 to 20 degrees in most of America, for most of the summer. On the other hand, in January, the residents of Rochester, New York -- the cold, snowy, rapidly depopulating area that my mother hails from -- you need to get the temperature up from an average low of 18 degrees (-8 Celsius) to at least 60 or 65. That takes a lot of energy.

Government Pension Cuts Tangled in Patchwork of Legal Rulings (jdargis)

When to retire is one of the most important decisions a worker can make, but as more and more public workers approach that milestone, the certainties that would have once guided their thinking are fading. For decades, public pensions have been portrayed as guaranteed by state laws and constitutions, but lately, that certainty has been turned on its head. As states and cities have taken steps to rein in the cost of their pension plans, they have unleashed a tide of worker litigation, with vexing and sometimes contradictory results.

Applications for unemployment aid plunge to 42-year low (jdargis)

Even so, there are some signs of ongoing weakness in the job market. The unemployment rate fell in June mostly because many of the unemployed stopped looking for work, rather than found jobs. The proportion of Americans working or looking for work fell to a 38-year low.

And average hourly pay was unchanged last month from May. Pay has risen at roughly a 2 percent annual pace since the recession ended in 2009, below the 3.5 percent typical in a healthy economy.

Earth’s Most Famous Climate Scientist Issues Bombshell Sea Level Warning (jdargis)

The science of ice melt rates is advancing so fast, scientists have generally been reluctant to put a number to what is essentially an unpredictable, nonlinear response of ice sheets to a steadily warming ocean. With Hansen’s new study, that changes in a dramatic way. One of the study’s co-authors is Eric Rignot, whose own study last year found that glacial melt from West Antarctica now appears to be “unstoppable.” Chris Mooney, writing for Mother Jones, called that study a “holy shit” moment for the climate.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/23/15

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."

6 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Shanghai Margin Debt Rises Most in Seven Weeks Amid Stock Rally

Headlines:

  1. Shanghai Margin Debt Rises Most in Seven Weeks Amid Stock Rally
  2. Treasury Securities Dealers Accused of Collusion in Lawsuit
  3. Report projects 50% increase in Medicare Part B premiums next year

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

Nothing like investing in a huge bubble ......and doing it on margin!!

What do you think you will be saying when you look back later?

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Posts: 4062
Judge rules Chicago pension reform law is unconstitutional

"In documents for its latest bond sale, Chicago warned the city's already low credit ratings could fall further if the law is voided. Moody's Investors Service in May lowered the city's rating to "junk." Standard & Poor's earlier this month cut the rating to the low investment-grade level of BBB-plus because of a chronic structural deficit."

  1. Federal judge orders Rauner to keep Medicaid money flowing in Cook County
  2. Australia risks losing top investment ranking, Standard & Poor's warns 
saxplayer00o1's picture
saxplayer00o1
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City upside down: How Houston lost control of its wallet

"In large part, the leech on the city’s wallet is legacy payments — specifically, $3.3 billion worth of unfunded pension payments."

While Pew’s numbers showed Arizona’s funding gap growing from 2003 to 2013, the “unsmoothed” numbers – which Matson believes to be a better “reflection of financial health” – show little change.

An analysis using unsmoothed numbers shows the Arizona State system almost 76 percent funded in 2003, not the 99 percent cited by Pew, dropping to just under 73 percent funded in 2013.

 

thc0655's picture
thc0655
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Posts: 1513
A new leading indicator?

I believe I have discovered a new leading indicator for economic collapse: the frequency with which saxplayer posts each day and the total number of articles he links to.  Analyzing now.... Will have to see how this turns out over the next 6 months.

wink

saxplayer00o1's picture
saxplayer00o1
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Posts: 4062
Why Europe Is Drowning Beneath a Tidal Wave of Debt (Newsweek)

Debt cover

 

 

Why Europe Is Drowning Beneath a Tidal Wave of Debt

"But that is not to imply that the world's debts peaked with the financial crisis and are now subsiding. Quite the opposite. In a study published this year entitled Debt and (not much) Deleveraging, the McKinsey Global Institute (MGI) pointed out that the world's debts had carried on growing very rapidly even after the financial crisis. At the end of 2000 as the credit boom gathered pace, the global debt pile stood at $87trn, MGI reported. By the end of 2007 the binge was reaching its peak and global debt had jumped to $142trn – an increase of 63% in just seven years. Then the financial crisis struck, but the rise carried on regardless. Another seven years on at the end of 2014, global debt had grown by a further by $57trn (or 40%) to reach $199trn.

If this sounds worrying, the MGI paper highlighted another reason for concern: the world's debts continue to expand more rapidly than its economic output. In 2000, world debt was 246% of GDP; in 2007, 269%; and by 2014, the ratio had grown another 17 percentage points to reach 286% of GDP. The world is a long way from turning into a larger version of Greece, admittedly, but the direction of travel is clear. Our debts are growing faster than the ability of our economies (at a given level of interest rates) to service and repay them."

  1. World’s Worst Currency Drop Sparks Race to Cut Brazil Forecasts
  2. Brazil’s Real Closes at Weakest Level in 12 Years
  3. Venezuela Bonds Worth Holding to Morgan Stanley as Reserves Fall
pinecarr's picture
pinecarr
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Posts: 2237
Great article on Ecuador, Jeanine!

...Very interesting to read the degree to which Chinese investment and subsequently influence have grown there.  Sounds like a new version of the IMF!

   Thanks for your consistent work at providing those who read the DD with great articles!

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