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Daily Digest 10/21 - Korea's Declining Growth, Has Market Priced In An 'Earnings Recession'?

Wednesday, October 21, 2015, 8:47 AM

Economy

Greek civil servants call Nov 12 strike over pensions

The left-wing government has passed legislation raising the retirement age, increasing contributions for health care and scrapping most early retirement benefits. It also plans to merge a multitude of pension funds into one and cut back on supplementary pensions.

Budget crisis impacting Illinois residents with disabilities

The Illinois state budget is stripping away the independence of Illinois residents with disabilities. Tomorrow the state is holding a special hearing to review a monthly allowance for people with disabilities. The outcome will affect 300 people in Rock Island County.

Preckwinkle County Budget Aims to Expand Amusement Tax (Cook County)

“The amusement tax, you have to understand, it’s an extension. If you went to the movies or plays, you’ve already paid an amusement tax. But if you were golfing or bowling, maybe you didn’t at least [pay] the county amusement tax. So we’re extending it to things that weren’t covered before,” Preckwinkle said. “We’re not raising it.

Brazil Pension Crisis Mounts as More Retire Earlier, Then Pass Benefits On

In the state of Rio de Janeiro, the authorities had relied on royalties from offshore oil production before oil prices fell sharply in recent months. Officials in Rio are now preparing a bailout to transfer about $500 million from the state treasury to cover this year’s shortfall in the pension system.

Sinosteel to Default on Bonds After Government Said to Help (China)

Government-backed companies aren’t immune, and defaults this year had already included two state-owned enterprises, according to China International Capital Corp. The weakest economic growth in a quarter century has also taken a toll on commodities companies, with coking-coal importer Winsway Enterprises Holdings Ltd. defaulting on dollar notes earlier this year.

Governor Snyder: It'll Take $715 Million to Bail Out Detroit Schools

Governor Snyder said that a package currently in the Legislature aimed at reversing longstanding problems in Detroit Public Schools isn’t a quick fix, but admitted that the state would have to provide 715 million dollars over 10 years to pay off the district’s over half-billion-dollar operating debt while ensuring that schools stay open for 47 thousand Motor City students.

NJ lawmakers run from $194 billion debt for employee benefits

•The total shortfall is nearly six times higher than New Jersey’s total annual budget, currently $33.8 billion. To wipe the liability clean, each household in the state would need to write a check for more than $60,000 per household.

No one believes China's growth, but...

To get a truer sense of what's going on in the China, research firm Sanford Bernstein keeps an eye on sales of movie tickets, cars, mobile phones and Alibaba online transactions. It's weaker, but not bleak. Bernstein estimates third quarter growth was actually 4.1%. Capital Economics says China has stabilized. It puts growth at 4.5%.

Has the market priced in an 'earnings recession'?

Earnings for the S&P 500 (^GSPC) companies are set to have dropped nearly 5% in the third quarter, based on the 60 or so companies that have reported and forecasts for the rest.

Spanish treasury places 2.236 bln euros at negative interest rates

The Spanish treasury placed on Tuesday treasury bills valued at 2.236 billion euros (2.541 billion U.S. dollars) on the market at negative interest rates and registering a demand of more than 8 billion euros.

Lessons for Draghi From a Land of Sub-Zero Interest Rates

Economists recently surveyed by Bloomberg see negative rates continuing into 2017. That’s not necessarily because they expect rates to rise after that, but because their models just don’t go any further.

Manufacturing slump creating ghost towns (China)

The shipbuilding industry is a prime example of how bad things have gotten. China is the world's No. 1 shipbuilder, controlling about 40% of the global market. But the sector is reeling, with orders for the January-September period plunging 70% on the year.

India bank chief calls for IMF action over monetary easing

Rajan, the former IMF chief economist, said in his address that the policies initially encourage growth but the effect quickly wears off, leading to a “musical (chair-like) crisis.”

“We are in dangerous territory,” he said in the speech, which comes ahead of the G-20 summit in Turkey next month.

Why Korea’s growth rate keeps declining

A drastic slowdown or even a hard landing seems inevitable for the Chinese economy. Japan’s Abenomics is also getting skeptical looks from financial experts. In addition, the European economy is suffering because of the fiscal problems of Southern European nations. To make the situation worse for Europe, the recent Volkswagen scandal put quite a dent in the German economy. It appears the entire world has entered a downward spiral.

Argentina Black Market Peso Tumbles to Record Ahead of Elections

Argentina’s peso fell to a record in unofficial street markets as demand for safe-haven assets increased before presidential elections this weekend that are expected to bring changes to the country’s monetary policy.

Brazil's inflation approaches 10 percent in mid-October on fuel prices

The unexpected price hike was the latest in a series of increases in government-regulated prices and taxes this year, highlighting how the poor state of Brazil's public finances is fueling inflation and worsening an economic recession.

China's Yuan Advances Most in a Week on Suspected Intervention

A few Chinese banks sold dollars in the onshore currency market, according to two traders who asked not to named. That spurred more lenders to follow suit, one of the traders said. The U.S. Treasury dropped its view that the yuan is significantly undervalued, but said it remains “below its appropriate medium-term valuation,” according to a semiannual report.

Chinese stocks rise on hopes for Beijing easing

Shares in China rallied on hopes that Beijing will ease monetary policy to address the country’s slowest growth in years, but lower oil prices dragged down energy shares, knocking Hong Kong and Australia lower.

Switzerland's Currency Battle May Intensify If ECB Expands QE

Thomas Gitzel, senior economist at Liechtenstein’s VP Bank, predicts the rate could “theoretical” fall as low as minus 2 percent, adding that “holding banknotes is even more expensive.”

Draghi Weighing More QE Gives Hungary Reason to Resume Rate Cuts

As economists predict ECB President Mario Draghi will have no choice but to add stimulus as soon as this year to bolster price growth, some investors say this will give policy makers in Hungary room to embark on their third round of interest-rate cuts since 2012. While the Budapest-based central bank will stand pat Tuesday, easing may resume in the first quarter of 2016, according to investment firm Diofa Alapkezelo Zrt.

Gold & Silver

Click to read the PM Daily Market Commentary: 10/20/15

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."

13 Comments

saxplayer00o1's picture
saxplayer00o1
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Yet more of the same

Bank of Canada maintains key rate, downgrades economic outlook

bnn.ca - ‎1 hour ago‎
The Bank of Canada is downgrading its economic outlook again as the country continues to grapple with the “complex” aftershocks of lower prices for oil and other commodities. As expected, the central bank kept its key overnight lending rate unchanged ...

Japan export growth slows sharply, raising fears of recession

Reuters-11 hours ago
A third quarter contraction would put Japan into recession, following the second quarter's negative GDP result, and could force policy makers to offer further ...

Japan shares lead Asia markets higher on stimulus hopes

La Crosse Tribune-8 hours ago
TOKYO (AP) — Asian stock markets were mostly higher Wednesday as Japan's weak export figures boosted hopes for more central bank stimulus. KEEPING ...
 

European Central Bank mulls more stimulus, wary of euro rise

Glens Falls Post-Star-4 hours ago
FRANKFURT, Germany (AP) — The European Central Bank is edging closer to unleashing more monetary stimulus on top of the 1.1 trillion euros it is already ...

Brazil bounced checks rise to six-year high as consumers struggle ...

Reuters-1 hour ago
... as rising borrowing costs, the fastest inflation in over a decade and a steep recession made it harder for consumers to stay current, credit research firm Serasa ...

Fraser warns on global debt risk

The Australian - ‎13 hours ago‎
Mr. Fraser told a parliamentary committee on economics in Canberra that global debt has risen by $US57 trillion ($78.5 trillion) since 2007, raising the ratio of debt to GDP by 17 percentage points. “I also see the build-up of debt globally as a major ...

Greece's Bailout Costs Could Rise Over Life of Loans, ESM Says

Bloomberg-6 hours ago
Created in 2012, the ESM was the euro area's flagship effort to build a buffer between the currency zone and the sovereign debt crisis that at its height forced five ...

Nene Gives Gloomy South African Budget as Protests Erupt

Bloomberg-39 minutes ago
“The expectation that the public debt-to-GDP ratio will stabilise over the coming years looks optimistic,” William Jackson, senior emerging-market economist at ...

China Bonds Drop as Rally Seen Losing Steam Without More Easing

Bloomberg-12 hours ago
China's 10-year sovereign bonds fell for the first time in three days amid speculation their rally this month can't be sustained unless the central bank eases ...

China's Overheated Bond Market Showing Strain for Local Bankers

Bloomberg-16 hours ago
Chinese bankers say a debt-driven bond market rally is starting to show the same ... to borrow money for one day doubled in the past year to a record 2.1 trillion ...
Leverage in China's bond market at record high
The Australian Financial Review-17 hours ago
Explore in depth (3 more articles)

Britain's debt swells by another £78bn in September to staggering ...

Express.co.uk-4 hours ago
BRITAIN'S debt pile grew by another £78.8billion in September to stand at a huge £1.524trillion, as George Osborne is now on track to overshoot his borrowing ...

Venezuela sees 85 percent inflation this year, 60 percent next

Reuters-12 hours ago
The budget calls for spending of 1.55 trillion bolivars, Marco said, equivalent to ... which has spurred investor concerns of a potential default on foreign debt.

Saudis Risk Draining Financial Assets in 5 Years, IMF Says

Bloomberg-5 hours ago
Saudi Arabia accumulated hundreds of billions of dollars in the past decade to help the economy absorb the shock of falling prices. The kingdom's debt as a ...
Mark Cochrane's picture
Mark Cochrane
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Appreciate the air you breathe

This is the region of my ongoing research. Today the pollutant levels reached the absurd level of 3740, more than 12 times the supposed top end of the scale that is hazardous to human health. It is no better for the orangutan or other species immersed within the smoke soup either. Visibility was 10-20m today. These smoke plumes are impacting millions of people now and have been ongoing for more than 2 months, likely with another month to go.

South East Asia haze: Deadly cost of Indonesia's burning land

The Indonesian health ministry says hundreds of thousands of people are now suffering from respiratory illnesses after breathing in hazardous smoke caused by peatland fires.

 

The fires, often started to clear forest for plantations, have been burning for weeks, sending heavy haze across the region.

The city of Palangkaraya in Central Kalimantan has been one of the hardest hit areas. The Pollution Standard Index, which measures air pollution levels, has reached more than 2,000 at times - anything above 300 is considered hazardous to health.

 

Doug's picture
Doug
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MH-17 - Chris nailed it

https://consortiumnews.com/2015/10/20/mh-17-case-old-journalism-vs-new/

Quote:

A devil-may-care approach to Internet-sourced material has been particularly striking when it comes to the case of the shoot-down of Malaysia Airlines Flight 17 over eastern Ukraine on July 17, 2014. It has now become de rigueur on the part of the West’s mainstream news outlets to tout the dubious work of a British Internet outlet called Bellingcat, which bases its research on photographs and other stuff pulled off the Internet.


Quote:

So, Higgins and Bellingcat moved on to the mystery surrounding MH-17, where again the Obama administration rushed to a judgment, pinning the blame on the Russians and ethnic Russian rebels in eastern Ukraine who were fighting the U.S.-backed regime in Kiev.

Though again hard evidence was lacking – at least publicly – Official Washington and its many minions around the world formed a new “group think” – Russia’s President Vladimir Putin was responsible for the 298 deaths.

Quote:

But there were problems with this version, including the fact that – as reflected in a “government assessment” from the Director of National Intelligence released on July 22, 2014, (or five days after the crash) – U.S. intelligence listed other weapons allegedly provided by the Russians to the ethnic Russian rebels but not a Buk anti-aircraft missile system.

In other words, two days after the Post cited a U.S. official claiming that the Russians had given the rebels the Buks, the DNI’s “government assessment” made no reference to a delivery of one, let alone three powerful Buk batteries.

And that absence of evidence came in the context of the DNI larding the report with every possible innuendo to implicate the Russians, including references to “social media” entries. But there was no mention of a Buk delivery.

The significance of this missing link is hard to overstate. At the time eastern Ukraine was the focus of extraordinary U.S. intelligence collection because of the potential for the crisis to spin out of control and start World War III.

Quote:

Instead, in the days after the MH-17 crash, I was told by a source that U.S. intelligence had spotted Buk systems in the area but they appeared to be under Ukrainian government control. The source who had been briefed by U.S. intelligence analysts said the likely missile battery that launched the fateful missile was manned by troops dressed in what looked like Ukrainian uniforms.

Quote:

The Post did observe what has been one of my repeated complaints — that the Obama administration is withholding the U.S. intelligence evidence that Secretary of State John Kerry claimed three days after the shoot-down had identified the precise location of the launch.

Yet, the subsequent U.S. silence on that point has been the dog not barking. Why would the U.S. government, which has been trying to pin the shoot-down on the Russians, hide such crucial evidence – unless perhaps it doesn’t corroborate the desired anti-Putin propaganda theme?

Quote:

So, the chances of getting duped must be taken into account when dealing with unverifiable sources of information, a risk that rises exponentially when there’s also the possibility of clever intelligence operatives salting the Internet with disinformation. For the likes of psy-ops innovator Lansdale and propaganda specialist Raymond, the Internet would have been a devil’s playground.

Which is one more reason why President Barack Obama should release as much of the intelligence evidence as he can that pinpoints where the fateful MH-17 missile was fired and who fired it. [For more on this topic, see Consortiumnews.com’s “NYT Plays Games with MH-17 Tragedy.”]

I encourage reading the whole article.  It is a lesson in how the internet is used for propaganda and the special obligation that people who use the internet for their news have to sift through the BS for the nuggets of truth.

 

 

 

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sand_puppy
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By Deception, We Wage War

Doug's post above raises an important question foundational to ALL of the other discussions here:

How do we evaluate the accuracy and truthfulness of an information source?

 

Time2help's picture
Time2help
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Rhymes with frog
sand_puppy wrote:

How do we evaluate the accuracy and truthfulness of an information source?

Edgar Allen Poe wrote:

"Believe only half of what you see and nothing that you hear."

Cornelius999's picture
Cornelius999
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Oxygen

Maybe in your subject area Mark, I'm wondering, what with the pollution of the seas, and the warming effect on plant species which are inching northwards, each which I believe provides 50% of earth's oxygen, is it too soon or too difficult to detect a reduction? ( in oxygen )

Doug's picture
Doug
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sand_puppy wrote: Doug's post
sand_puppy wrote:

Doug's post above raises an important question foundational to ALL of the other discussions here:

How do we evaluate the accuracy and truthfulness of an information source?

Good question.  I don't think there are any hard and fast rules.  But, as the article suggests, I would go with the old line investigative journalists.  Did they source and double check their sources?  Are their objective facts consistent?  If there is science involved, is it peer reviewed?  Have they covered the ground in detail? Carefully crosscheck their narrative to see if the story hangs together.  Ask the questions that the article or source doesn't answer, and if they did answer them, try to confirm.  Did they question their assumptions?

Even if you do all these things on the internet, you still may be misled.  One thing I look for is to see if an internet source cites only other internet sources.  An internet source might be a guy who hasn't showered in a week, sitting around in his skivvies in his mother's basement.  These guys can create endless loops of misinformation.  Unfortunately, I've found a lot of them on prepper and doomster websites.  Check the website's history to see how well their stories hang togethr over time.  Oh yeh, consistent with Dave F's suggestions, I've stopped reading PM booster websites.

With the MH-17 story, I've looked for evidence from any point of view.  What stands out is the lack of evidence supporting the MSM and US gov't stories.

Of course, all of this requires a lot of work, but if its important to you, take the time.

Mark Cochrane's picture
Mark Cochrane
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The oxygen problems lie below

Cornelius999

Whenever we create Carbon dioxide (CO2) in our fossil fuel burning we are effectively stripping oxygen (O2) from the atmosphere so we are reducing atmospheric oxygen by the amount we are raising CO2. Luckily CO2 is a trace gas measured in parts per million while oxygen makes up 21% of the atmosphere (parts per hundred) so the impact is minimal. However, the impact on plant life worldwide may also impact oxygen creation rates but to date has not been measurable in effect to my knowledge. We've got a very large pool of oxygen built up so it would take a while to be of any significant impact.

Trends

Oxygen concentrations are currently declining at roughly 19 per meg per year, or about 4 ppm per year. One "per meg" indicates one molecule out of 1,000,000 oxygen molecules, or roughly one molecule in 4.8 million molecules of air.

Oxygen Depletion

We are occasionally reminded that fossil fuel burning is depleting atmospheric oxygen at a rate of almost 1000 tons per second. There are about 32 million seconds in a year, so that somewhere around 30 billion tons of O2 are being converted to CO2 annually. There are about 1,200,000 billion metric tons of O2 in the atmosphere, so we can keep burning fossil fuels at the present rate for 40,000 years before we run out of oxygen. By then, all of the world's fossil fuel supply will have long since been exhausted. For a more complete, but less detailed, discussion of this topic see Et tu 02 by Wallace Broecker.

If we take the worlds supply of fossil fuel to be 10,000 billion metric tons of carbon, as per http://genomicscience.energy.gov/carboncycle/index.shtml and we oxidize all of it we would get about 37,000 billion metric tons of CO2, and about 27,000 billion metric tons of O2 would have been consumed. Some additional O2 would have also been consumed by oxidation of hydrogen in the (hydrocarbon) fuel, so that roughly 38,000 billion metric tons of oxygen would have been consumed. This is about 3.3 percent of the atmosphere's oxygen. Such a loss would be equivalent to increasing your elevation from sea level to about 330 meters, or about 1100 feet. (link)

Where we do have a very real and much more rapid oxygen problem though is in the oceans. Warmer ocean surface waters hold less oxygen which combined with ocean acidification impacts on the plankton that provide oxygen and reduced overturning of surface and deep waters all spells for less atmosphere in the deeper and surface ocean waters.

A Looming Oxygen Crisis and
Its Impact on World’s Oceans

 published a study in Deep Sea Research in which they compared records of oxygen levels in the tropical ocean from two periods: from 1960 to 1974 and from 1990 to 2008. In some regions, the oxygen levels have gone up, the scientists found, but in most places they’ve gone down. In fact, the area of the global ocean without enough oxygen for animals to survive (less than 70 micromoles per kilogram to be exact) expanded by 4.5 million square kilometers (1.7 million square miles). That’s an area about half the size of the United States.

----

A drop in oxygen may also cause the ocean's bacteria to change. Bacteria that need oxygen will no longer be able to thrive in oxygen-free zones of the ocean. But these dead zones will foster the growth of many species of bacteria for whom oxygen is toxic. Some of these oxygen-hating microbes produce nitrogen compounds that are among the most potent greenhouse gases ever measured. In other words, a drop in oxygen levels could further intensify global warming.

 

Time2help's picture
Time2help
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Did the site...

...just get hacked?

Cornelius999's picture
Cornelius999
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Posts: 373
Wow! Thanks for the

Wow! Thanks for the comprehensive answer Mark. Hope you have a good trip there in SE Asia.

Arthur Robey's picture
Arthur Robey
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Hacked

My first thought. 

Second thought.  "Good.  I hope we have upset some apparatchik."

 

cmartenson's picture
cmartenson
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Not hacked...
Time2help wrote:

...just get hacked?

Just broke a little bit...time to give it a reboot...

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KennethPollinger
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Quantum Updated

Excellent article.  Probably the BEST book that I've ever read on Quantum Physics was:  The Self-Aware Universe, by Amit Goswami.

His Creative Evolution was next, and then his other 4 books.
For a GREAT Introduction please try Self-Aware.
 
Ken
 
 
22quantum1-thumbStandard.jpg

SorryEinstein, but ‘Spooky Action’ Seems to Be Real

idea that Einstein famously rejected. He said quantum theory necessitated “spooky action at a distance,” and he refused to accept the notion that the universe could behave in such a strange and apparently random

October 22, 2015 - By JOHN MARKOFF - Science - Print Headline: " Sorry, Einstein, but ‘Spooky Action’ Seems to Be Real"

 

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