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Daily Digest 3/28 - The Next Perfect Banking Storm, Gold And The Insanity Index

Monday, March 28, 2016, 10:09 AM

Economy

The Next Perfect Banking Storm (jdargis)

New Basel rules aimed at reducing the leeway banks currently enjoy on how they account for risk will come into effect over the next two years. The regulations imposed after the global financial crisis already require banks to set aside more capital for every dollar they lend, depending on a borrower's credit standing. The trouble is, global regulators left the decision on creditworthiness mostly to the banks themselves. A 2013 Basel study found variations of as much as 20 percent in the risk weighting attached to similar assets.

The Fed Needs To Get A Clue (Tiffany D.)

In its latest meeting, I saw a continuation of a pattern that we at The Sovereign Society have followed for some time. It’s a pattern that our investment director, Jeff Opdyke, saw as so important that he shared it with a small group of readers last weekend — and I want to share it with you today.

Why does the United States keep killing #2 in ISIS? (jdargis)

If you a leader of a terror group, do you really want a well-defined #2 who is a focal alternative and who can move to overthrow you? Or do you prefer seven competing #2s, with somewhat unclear status, whom you can play off against each other, or make compete against each other, and offer various sticks and carrots and promotions of influence against each other?

And let’s say that one of these #2’s is killed. How will the United States report this? “One of seven #2’s has been killed”? Or perhaps the easier to communicate and more important sounding “We have taken out number two.”

Gold, the Misery Index, and Insanity (GE Christenson)

What we need for this decade, instead of a Misery Index, is an Insanity Index based on measures than indicate how out of balance, crazy, unsustainable, and dangerous our current fiscal and monetary world has become.

Oil Enthusiasts Stay Out of Rally Led by Shrinking Bearish Bets (cmartenson)

As crude has soared more than 50 percent since Feb. 11, the number of bets on increased prices has barely budged. Instead, the upward pressure on prices appears to have come from traders cashing out of bearish wagers at an unprecedented pace. The liquidation of short positions during the last seven weeks covered by data from the U.S. Commodity Futures Trading Commission was the largest on record.

New catalyst is three times better at splitting water (cmartenson)

Scientists have been searching for an efficient way to store electricity generated by solar and wind power so it can be used any time -- not just when the sun shines and breezes blow. One way to do that is to use the electrical current to split water molecules into hydrogen and oxygen, and store the hydrogen to use later as fuel.

Las Vegas Streetlights To Be Powered By Pedestrians’ Footsteps (Josh O.)

The basic idea behind the lights is simple. The lights are power by kinetic pads installed into the surface area in front of the lights (sidewalks, and potentially in the future roads). As people walk on the pads or even cars and bicycles drive over them, the kinetic energy from the pads is transformed into electric energy that powers the lights. Solar panels on top of the lights help to provide additional power and motion sensors ensure that the lights are only operating when needed. The lights also include various sensors to monitor air quality, water detection, traffic patterns, and video surveillance.

Bloomberg Carbon Clock (cmartenson)

In the 800,000 years before industrialization, the CO2 level hovered around 280 ppm. But the 20th century saw a sharp increase that continues today. The CO2 level is now around 400 ppm. The danger zone? 450 ppm, which we may hit by 2040. Beyond that, the warming Earth and its inhabitants will likely experience extreme weather events, increased sea-level rise, and their consequent ecological and economic impacts.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/25/16

Provided daily by the Peak Prosperity Gold & Silver Group

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5 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Repost Of Today's News

Japan's negative rates a looming headache for central bank

Reuters-10 hours ago
But in the two months since the BOJ announced it was imposing a negative interest rate, JGBs have become a volatile commodity, with prices swinging wildly as ...

Japan Seen Stuck With Negative Yields on 70% of Bonds for 2016
Bloomberg-Mar 27, 2016

China bank profits flat-line as bad debts continue to soar

Reuters-5 hours ago
Non-performing loans (NPLs) reached a 10 year high of 1.27 trillion yuan ($195 ... The central bank is also preparing to let banks accept debt-for-equity swaps to ...

Muni-Bond Funds Burned Chasing Yield With Wood-Pellet Bankruptcy

Bloomberg-5 hours ago
After selling almost $300 million in municipal debt since 2013, it defaulted on some ... $3.7 trillion municipal market that finances industrial-development projects, ...

Atlantic City, Bracing for Takeover, Sees Camden as Cautionary Tale

WNYC-6 hours ago
The city's casino tax base has tumbled from $20 billion when Christie got into ... Atlantic City government and its schools are now running a combined deficit ...

 

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1429
3 for 3?

We have had massive crash before 2000 and 2008 election.   What say 2016?

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
We are too slow
In the last century, this has already climbed by 1°C. In Paris in December 2015, 195 nations agreed on a global plan to limit global warming to a figure no more than 2°C above the long-term average for most of human history.
 
This will be difficult, according to Glenn Jones, professor of marine sciences at Texas A&M University in the US. “It would require rates of change in our energy infrastructure and energy mix that have never happened in world history and that are extremely unlikely to be achieved,” he says.
 
In 2015, the world installed the equivalent of 13,000 five-megawatt wind turbines. But to contain global warming to a figure less than 2°C nations would have to ramp up renewable investment by 2028 to the annual equivalent of 485,000 such wind turbines.
 
http://www.truthdig.com/report/item/the_world_is_not_converting_to_renewable_energy_fast_enough_20160328
 
robie robinson's picture
robie robinson
Status: Diamond Member (Offline)
Joined: Aug 25 2009
Posts: 1148
One of the PP folk

posted an opinion arrived at by observation and calculation, that if society would return to technology of about 1875...

Do any recall?

best get your mare/mule/oxen... 

asparagus for breakfast wrapped a a yard egg crepe

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 367
"We have had massive crash

"We have had massive crash before 2000 and 2008 election. What say 2016?"

It likely depends on what the Fed Does, In both instances (2000 & 2008) the Fed raised rates significantly. as I recall after the Y2K-greenspan Put, the Fed increased rates to about 6.25% in  Feb 2000. In 2007, Benanke, ended the Housing-Greenspan Put, and started raising ratesrates topped at 5.25% in Aug 2008. So far rates are close to Nil. If the Fed does go ahead and increase rates further it will likely cause a crash. If the Fed lowers rates, or restarts QE, then probably no crash this year.

That said, since Jack Lew took over, and dumped Bernanke, the Fed has been on a tighting cycle (tappering and ended QE, and the 25 bps hike in Dec).

My guess is that the Fed stays put until there is a market correction. When the correction dips low enough, I think the Fed would ease to avoid a crash. 

 

 

 

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