Daily Digest

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Daily Digest 2/11 - The Big Picture of Problems and Solutions, Could Gas Drop Below $1/Gallon?

Thursday, February 11, 2016, 11:49 AM

Economy

Clueless Fed? (Axel M.)

"The Fed doesn't have a clue!" - I allege that not only because the Fed appears to admit as much (more on that in a bit), but also because my own analysis leads to no other conclusion. With Fed communication in what we believe is disarray, we expect the market to continue to cascade lower - think what happened in 2000. What are investors to do, and when will we reach bottom?

S&P 500 ends flat; Fed sees risks but unlikely to reverse course (richcabot)

"The market was strong (early in the day) because Janet Yellen confirmed the fact the Fed would go very slow on rate hikes because the economy was showing some signs of sluggishness," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

Carlyle unveils $200 million share buyback, earnings miss forecast (richcabot)

The market for high-yield bonds and loans, the lifeblood of buyout deals, has almost ground to a halt as banks struggle to sell them. Banks also are lending fewer of the riskiest junk-rated loans that fund buyouts, further tightening financing conditions.

It was against this backdrop that Carlyle renegotiated the terms of its buyout of data storage business Veritas from antivirus software maker Symantec in January by reducing its purchase price to $7.4 billion, from the original $8 billion.

Ya Gotta Have A Plan (reflector)

Instantly, the stock markets, the bond markets, the housing markets and the whole consumerism-besotted, gimme-gimme-gimme economy would explode gloriously up, up, upward! Soaring to wondrously preposterous valuations under the deluge of all these new dollars! Dow 36,000 here we come! An economic miracle!

Global Economic And Banking Collapse On Deck (PBD)

All eyes are focused on Deutsche Bank. Rightly so, for the most part. “As you said, Deutsche Bank is blowing up” (Dr. Paul Craig Roberts in an email to me this morning). It was reported this morning that the bank’s CEO released a memo to employees in which he assured the “troops” that everything was fine. Most people do not remember this but I’ve been cursed with a great memory for certain details. Jimmy Kayne, the CEO of Bear Stearns, when Bear blew up gave the same type of pep talk to Bear employees shortly before Bear was flushed down the toilet. Reaching even further back in the annals of epic corporate fraud induced collapses, Ken Lay gave the exact same kind of pep talk to his people right before Enron collapsed.

With A Gloomy Start To 2016, A Bust Seems Just Around The Corner (Taki T.)

Markets have corrected substantially since the beginning of the year as most of the gains of the past two years have been erased. According to Bloomberg, 40 out of the largest 63 markets have dropped over 20%! The image below shows the performance of markets word-wide since their last peaks. Most markets are in a bear market phase or at best are experiencing a market correction. The world is red!

The Physics of Energy and the Economy (reflector)

In fact, the effects of not having enough energy flows may spread more widely than the individual plant or animal that weakens and dies. If the reason a plant dies is because the plant is part of a forest that over time has grown so dense that the plants in the understory cannot get enough light, then there may be a bigger problem. The dying plant material may accumulate to the point of encouraging forest fires. Such a forest fire may burn a fairly wide area of the forest. Thus, the indirect result may be to put to an end a portion of the forest ecosystem itself.

House bill would kill state, local bills that aim to weaken smartphone crypto (Yoxa)

"It's very clear to me that the people who are asking for a backdoor encryption key do not understand the technology," he added. "You cannot have a backdoor key for the FBI. Either hackers will find that key or the FBI will let it get stolen. As you saw, it the [Department of Justice] just got hacked. The [Office of Personnel Management] got hacked multiple times. If our federal government cannot keep 20 million extremely sensitive security records, I don't see how our government can keep encryption keys safe."

As Donald Trump Wins, Mainstream G.O.P. Is Left to Muddle On (jdargis)

Former Representative Thomas M. Reynolds of New York, who led the Republicans’ campaign committee in the House of Representatives from 2003 to 2006, said there would ultimately be room in the Republican race for just one candidate besides Mr. Trump and Mr. Cruz. The New Hampshire outcome, he said, will most likely leave the traditional Republican candidates fighting among themselves. “For the establishment, it’s almost like a hockey fight,” Mr. Reynolds said. “And the gloves are off and the refs can’t get in the middle of it.”

Could Gasoline Drop Below $1 Per Gallon? (Josh O.)

Oklahoma appears to be enjoying the cheapest gasoline in the country. According to GasBuddy’s website, the cheapest gas right now can be found in Oklahoma City, where one station was selling gas for $1.09 per gallon on February 9. A 7-Eleven in Norman, OK sold gas for $1.10 per gallon on the same day.

Geoff Lawton on the Big Picture of Problems and Solutions (Aaron M.)

Why are live stock essential to repair the damage to our eco systems? Why are humans necessary to repair the same damage? Today we look at not our own individual survival but the survival of our ecosystems and way of life.

Unsafe Lead Levels in Tap Water Not Limited to Flint (richcabot)

The Environmental Protection Agency says streams tapped by water utilities serving a third of the population are not yet covered by clean-water laws that limit levels of toxic pollutants. Even purified water often travels to homes through pipes that are in stunning disrepair, potentially open to disease and pollutants.

Gold & Silver

Click to read the PM Daily Market Commentary: 2/10/16

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."

3 Comments

DennisC's picture
DennisC
Status: Gold Member (Offline)
Joined: Mar 19 2011
Posts: 320
The Physics of Energy and the Economy

I enjoy reading Gail's articles.  One of my favorite sections from this latest posting:

When new debt is issued, there is no real matching with future energy flow. For example, will the wages of those taking on debt to pay for college be sufficiently high that the debtors can afford to have families and buy homes? If not, their lack of adequate income will be one of the factors that make it difficult for the prices of commodities to stay high enough to encourage extraction.

One of the issues in today’s economy is that promises of future energy flows extend far beyond what is formally called debt. These promises include shareholder dividends and payments under government programs such as Social Security and Medicare. Reneging on promises such as these is likely to be unpopular with citizens. Stock prices are likely to drop, and private pensions will become unpayable. Governments may be overthrown by disappointed citizens.

 

Mark Cochrane's picture
Mark Cochrane
Status: Diamond Member (Offline)
Joined: May 24 2011
Posts: 1227
Where is Saxplayer?

Hopefully just off on a rightly deserved vacation, else the number of links to articles being posted on the global meltdown would be monumental the last few days...

Come back soon.

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Online)
Joined: Jul 30 2009
Posts: 4169
Thanks Mark Cochrane

The schedule should be about back to normal by next week.

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