Daily Digest

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Daily Digest 9/3 - CA's Katrina Is Coming, Don't Make This Gold Mistake

Thursday, September 3, 2015, 9:50 AM


Morgan Stanley issues 'full house' buy alert for stocks (locksmithuk)

Graham Secker, the bank’s chief European equity strategist, said the sell-off over recent weeks is largely driven by emotion and has little to do with the underlying outlook for the world economy.

“Equities remain very cheap relative to government bonds and there remains a lot of liquidity around that is looking for a home,” he said.

Don't Make This Gold Mistake (Tiffany B.)

It was a hassle to go to the goldsmith every time you needed to transact, so the smiths started issuing paper certificates of deposit in various denominations. In theory, every piece of this paper was fully backed by gold stored with a smith somewhere, and you could go get it if you wanted. The certificates derived their value from the underlying value of gold.

People used these certificates to transact — and voila, paper money (and banking) was born.

Armstrong Economics: The Dow (Aaron M.)

Those calling for the end of the world and a 1929 type depression are only looking at the charts. They are clueless as to how everything else is setting up. Nothing is in line for such an event. Keep in mind that event created big government and socialism. This time government is in crash mode, not the private sector. Politicians will do the jumping this time. If the stock market crashed, capital would then run into bonds. Just how low do you think interest rates would go — negative 20%? Come on. This is a 5000-year low in interest rates so we will have to flip out to the upside. There is no choice in this regard.

South African team may have solved solar puzzle even Google couldn't crack (Wendy SD)

It is a problem that has so far stumped even Google’s brainy engineers – how to generate cheap solar electricity using a small-scale array of mirrors to concentrate the sun’s energy. Now a team at a South African university – led by a former Intel strategic planner – believes they have cracked it. Once they have completed a prototype system in October they have big plans for rolling out the technology

Wall Street and the Military are Draining Americans High and Dry (Adam)

The DJIA has gone down 9.5% since the Spring. $6.3 trillion in governmental pension plan money was invested in wall street as of April 1st. Additional government pension plan losses have been, so far this year, $0.6 trillion. As of August 29, 2015, the government in the US owes $7.2 trillion for pensions. Every additional 10% the DJIA drops is another $0.6 trillion in unfunded pension costs that the government has to pay.

West Texas Fracker Uses Toilet Water To Cut Cost (Tom K.)

Water costs in fracking are expensive, but most major firms including Pioneer have been working on improving efficiency on that front. Pioneer’s deal with Odessa has been in the works for a while now and has evolved over time especially as oil prices plummeted.

Cost of Batteries for Electric Vehicles Falling More Rapidly than Projected (Arthur Robey)

Electric vehicle (EV) battery costs have fallen more rapidly than many projections, according to a new survey of battery costs published in Nature Climate Change. Researchers from the Stockholm Environment Institute scoured peer-reviewed journals, consultancy reports, and news items to construct an original data set of EV battery pack cost estimates from 2007 to 2014. Average battery pack costs have fallen 14 percent per year across the industry, which has seen sales volumes double annually in recent years. EV battery packs now cost $410 per kilowatt-hour (kWh) of storage capacity on average (with a 95 percent confidence interval ranging from $250–670 per kWh).

My Chicken of an EV (DennisC)

Rather than focusing on miles per literal gallon of gas, the car also reports MPGe: miles per gallon-equivalent. Reverse-engineering, it uses a conversion of about 33 kWh per gallon of gasoline, which is consistent with the thermodynamic lower heating value of gasoline.

California’s Katrina Is Coming (Wendy SD)

Most of the state’s water is drawn from the Delta, protected by levees that pretty much amount to mounds of dirt, even when compared to infrastructure that infamously failed New Orleans during Hurricane Katrina. Hurricanes don’t hit NorCal, but these levees are alarmingly susceptible to disaster. If enough were to breach—in an earthquake perhaps, or severe El Niño storm—sea water from San Francisco Bay could rush in, tainting the water supply serving two-thirds of the state. The worst-case scenario could cause up to three years of severely curtailed water for most Californians. Even if you’re not a California dreamer, this affects you.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/2/15

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."


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Subsidence issues in California?

On the California article, isn't subsidence (caused mainly by groundwater extraction) an additional issue in California? The image below gives an idea of the issue, the numbers on the pole indicate the year where the ground surface was at this level. Adding a declining surface to the mix doesn't seem to be helping much...

Not sure how large (or localised) an issue this is, but scanning the article (maybe I missed it?) it didn't seem to be mentioned.


Source: https://en.wikipedia.org/wiki/Subsidence

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Central Banks At Play

ECB Cuts Growth Forecast, Saying It's Ready to Expand Stimulus if Needed

New York Times - ‎55 minutes ago‎
The big challenges for the central bank include the threats to price stability in the eurozone and in export markets, as well as pressure on eurozone interest rates because of action under consideration by the Federal Reserve in the United States. Mr ...



IMF Calls on World Central Banks Not to Raise Rates

TheStreet.com-6 hours ago
The International Monetary Fund (IMF) called on the world's central banks not to raise interest rates, putting more pressure on the Fed ahead of the U.S. central ...

IMF: China slowdown could keep global interest rates low
In-Depth-The Guardian-20 hours ago


IMF calls for Fed to delay rate rise

The Australian Financial Review-8 hours ago
Federal Reserve chair Janet Yellen may need to delay a rate rise due to the ... is always a risk, and is one reason the US Federal Reserve may be forced to keep ...

Shrinking currency reserves to slow tightening of global monetary ...

Sydney Morning Herald-17 hours ago
Each means central banks are either paring their reserves to offset an exit of ... In the words of Deutsche Bank strategist George Saravelos and colleagues, ...

Australia's Surprise Retail Sales Slide Adds to Economic Gloom

Wall Street Journal-9 hours ago
The worry now is that the weakness in retail sales will have continued into the following month, which would add pressure on the central bank to cut interest ...

Ringgit Falls on Concern Data to Show Further Reserve Depletion

Bloomberg-12 hours ago
The reserve holdings have fallen 19 percent this year to $94.5 billion and data on Friday for the last two weeks of August may show the extent of central bank ...


India rate cut becoming a question of when, not if, for Rajan

Chicago Tribune - ‎19 hours ago‎
Commercial banks have reduced lending rates by as much as 65 basis points this year, compared with 75 basis points for the central bank. "We have grown more confident of our standing call that lending rate cuts hold the key to growth," Indranil Sen ...

Slowdown in China might push interest rate rise in May  (UK)

Belfast Telegraph - ‎Sep 2, 2015‎
But at an annual get-together of central bank bosses in Jackson Hole, Wyoming, Bank of England governor Mr Carney said that the current concerns over China were outweighed by the "ongoing domestic strength" of the UK market, credible policy and an ...

BOJ's Kiuchi Says Core Inflation Unlikely to Reach 2% in Year ...

Wall Street Journal-10 hours ago
TOKYO—Bank of Japan Governor Haruhiko Kuroda's toughest critic on the policy board said Thursday that the central bank will likely fail to achieve stable 2% ...

Yuan Effect Chokes Egypt as Trades Signal Pound Peg Is Too High

Bloomberg-7 hours ago
Egypt's central bank has kept the pound's dollar peg steady for three months as it fights to curb inflation in a country where almost half of the population lives ...

Korea Reserves Fall for Second Month in Sign of Won Intervention

Bloomberg-13 hours ago
South Korea's foreign-exchange reserves dropped for a second month in August, a sign the central bank likely intervened to stem a slide in the won.

Low-Income Workers See Biggest Drop in Paychecks

CNBC-3 hours ago
... is the last one before Federal Reserve policy makers meet in mid-September to decide whether to go ahead with or delay their long-telegraphed move to raise ...


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Japan government FY2016/17 budget request hit record $852 billion - sources

Reuters UK - ‎3 hours ago‎
Of the total budget requests, debt-servicing costs accounted for a record 26.0543 trillion yen, due to ballooning public debt, and non-debt-servicing spending reached 76.3556 trillion yen. The Ministry of Finance will scrutinise the budget requests and ...

Falling Currencies Raise Debt-Service Fears Across Africa

Bloomberg-9 hours ago
Nigeria, Africa's biggest economy and oil producer, had external debt ... Those on a $1 billion security due in April 2024 for copper-rich Zambia rose to 10 ...

China's Bond Market Presents False Sense of Security

Wall Street Journal-7 hours ago
Despite a weakening economy and rising debt levels, the spread between the ... 23% in the first eight months of the year, to 501.6 billion yuan ($78.81 billion).

Forced Asset Sales Seen as Banks Squeeze Canada Oil Companies

Bloomberg-1 hour ago
The Standard & Poor's/TSX energy sub-index has lost about C$85 billion ($64 billion) ... U.S. dollar debt of Canadian high-yield energy companies has lost 6.4 ...

Chicago Faces Day of Fiscal Reckoning

Bloomberg-20 hours ago
Chicago is facing a $426 million budget shortfall next year and needs to pay down a $20 billion debt to its workers' retirement funds that's left it with a lower ...

School Protesters Force Chicago Mayor Rahm Emanuel To Shut ...

Huffington Post-14 hours ago
A group of protesters caused Chicago Mayor Rahm Emanuel to shut down a budget meeting on Wednesday evening after he refused to answer their questions ...

Christie Administration Seeks Financial Advisor for State ...

NJ Spotlight-11 hours ago
... the state is in the final year of a five-year, $8 billion transportation-spending ... debt -- unless the tax is increased or some other funding option is agreed on.

Poverty Pays for Small-Dollar Lenders in Chicago

Chicago Reporter-18 hours ago
Three of the biggest names in the multi-billion dollar business are Americash ... repayment plans after borrowers have been in debt for more than 180 days.

FT: Malaysia's economic vulnerability casts shades of 1997 financial ...

Malay Mail Online-11 hours ago
Relying on credit to sustain growth, HSBC said Malaysia's total debt is ... billion (RM402.6 billion), down from US$106.4 billion back at the end of May, said FT.

Brazil's economic troubles threaten to spill over into Peru -finmin

Reuters-17 hours ago
Brazil's economy is slipping into a recession that is on track to be the country's ... "That has a direct impact on Peru because of economic links but also because ...

EconomyBrazil's economic outlook getting worse - Barclays

Financial Times-5 hours ago
The economic backdrop in Brazil hasn't captured the same attention that China's has, but it's deteriorating. And a weak second quarter showing in which GDP ...

Foreign equity outflows in Brazil jump to 2-year high in August

Reuters-21 hours ago
Net outflows from the São Paulo Stock Exchange reached 3.314 billion reais ($880 ... "To the extent that signals from China continue to feed uncertainty and the ...

EMERGING MARKETS-Brazil currency hits 2002 low on budget jitters

Reuters-20 hours ago
SAO PAULO, Sept 2 Brazil's currency tumbled to its weakest level since 2002 on Wednesday as expectations of a growing fiscal deficit fed fears that the country ...

Brazil 10 Year Government Bond (Now yields almost 14.6 %)

Emanuel Said to Plan Property-Tax Increase for Chicago Pensions

Bloomberg-26 minutes ago
... than any big U.S. city except Detroit, which went through a record bankruptcy. ... The company manages about $30 billion in municipal bonds, including some ...

Russia's $100 Billion Pension System Is a Dangerous Zombie. Part 1

Institute of Modern Russia-19 hours ago
... Russia's pension system faces annual deficits of more than $50 billion in the ... private pension funds, which often achieve higher returns than the government.

Anglers could be on the hook for Pennsylvania's public pensions

Watchdog.org-7 hours ago
It's no big fish story: Pennsylvania's growing public pension obligations could soon hook anglers ... It'd be enough to cover pension costs, but not much more.

China's Currency Flight: Why Beijing Is Cracking Down On Wealthy Chinese Who ...

International Business Times - ‎4 hours ago‎
“The one thing that people are focusing more on is the money coming out of China, in both capital flight and capital outflow,” China pundit and author Gordon Chang told International Business Times. “In other words, both the money people are taking out ...

New Jersey scrapheap rises as China reels

Salt Lake Tribune-9 hours ago
"You would need something such as a truly huge stimulus coming out of China" to get a big pickup in scrap demand, said Bret Tauben, a vice president at ...


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Chicago vs Venezuela

If you think it's bad now in Chicago, just look at the current news from Venezuela. Both are in economic collapse.
Who in their right mind would move to either of these places in their current condition? The better question is why anyone would stay.

11 people shot dead, including 11-year-old boy, since late Tuesday in Chicago

Chicago Tribune - ‎Sep 2, 2015‎
At least 11 people have died and 14 others have been wounded in separate shootings in Chicago since late Tuesday, including the accidental shooting of an 11-year-old boy, police said. In the latest fatal shooting, a 39-year-old man was killed and a ...

Police: Two dead, 10 wounded in Tuesday shootings across Chicago

Chicago Sun-Times - ‎17 hours ago‎
Tuesday's first shooting left two men wounded in the Heart of Chicago neighborhood at 1:52 a.m. The men, both 23 years old, were sitting in a vehicle at a stop light in the 2300 block of South Damen when a gold vehicle pulled up and someone inside ...


  1. Dozens of Venezuelans shot by police amid crime crackdown

    U.S. News & World Report-Aug 31, 2015
    In this Thursday, Aug. 20, 2015 photo, people walk near a factory where Aragua State police officers killed four men execution-style in Maracay, Venezuela.
  2. Story image for venezuela crime from Reuters

    Livid over crime, some Venezuelans resort to mob justice

    Reuters-Sep 1, 2015
    Venezuela's state prosecutor's office said it had not issued a statement on ... Authorities have also accused foreign media of exaggerating crime in Venezuela.
  3. Story image for venezuela crime from Reuters

    Lynchings on the rise in crime-ridden Venezuela

    Reuters-Sep 1, 2015
    Frustrated with high levels of crime, some Venezuelans are taking matters into their own hands, delivering mob justice. △ Hide Transcript. ▷ View Transcript.




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OT the "settled mare" gets a trim

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Gentrification of universities

Tricked out student housing equals big developer profits

This article on the high-end student housing points to a trend in the gentrification of universities, which, in many cases, have become like the Midwestern state school in my hometown in Missouri: less selective in terms of many requirements, but much more financially selective, as states have cut university budgets and the schools have increased tuition massively in response.  (The low interest rates and less-than-discriminate federal student aid have also pushed tuition up, of course.)

Back home, they're building lots of slapdash student housing around the downtown in order to appeal to freshmen who won't put up with sharing a small dorm room with a roommate, but instead expect a private apartment, with a parking garage and their own parking space. We've watched a major increase in the expectations that students have about their standard of living since I was a kid.  So, while some of the so-called digital natives now consume fewer real goods as they consume more virtual services, the digital natives on the higher end of the socio-economic ladder are still first-rate consumers:


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Syria: Climate Stress, Drought, Farm Collapse, Civil War

Syria has become quite a hot-spot in the last weeks coming onto my radar, at least.  Mother Jones posts a pictorial explanation of what is happening in Syria with climate change, causing prolonged drought, displacing rural farmers, who enter the cities destitute, and become a part of the uprising against the leadership. 


The cartoons are well written.  Here is one part of the cartoon:

Does anyone with knowledge of this region have any input on the accuracy of this explanation?

How bad a dude is Assad?  (I know that when the military is getting ready to invade there is always an effort to demonize the leader of the country to be invaded.  Is that what is happening here?  Or is he really as bad a jerk as this depicts?)

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Europes Refugee Issue is Heating Up

The total numbers of displace persons is starting to worry some.  It sounds like the Hungarians are getting a bit freaked out.

Europe is facing the most serious refugee crisis since the end of the second world war.

In response, EU leaders are acting in very different ways. Angela Merkel, the German chancellor, has taken the humanitarian high ground, declaring that her country will receive up to 800,000 asylum applicants this year and confronting the anti-immigrant voices in her country. By contrast, David Cameron seems to be taking a mean approach, strictly limiting the number of refugees Britain will receive.

One blogger suggested:  Let the refugee's in and give them a direct train ticket to Brussels. 

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Masses of Refugees Catching the Monsoon winds to India

Just kidding. 

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