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Daily Digest 5/9 - How The Gov't Will ‘Borrow’ Your Retirement, 95% of Greek “Bailout” Money Went to Banks

Monday, May 9, 2016, 11:08 AM

Economy

Here’s why (and how) the government will ‘borrow’ your retirement savings (reflector)

But even the Fed has limitations. According to its own weekly financial statement, the Fed’s solvency is at precariously low levels (with a capital base of just 0.8% of assets).

And on a mark-to-market basis, the Fed is already insolvent. So it’s foolish to think they can continue to print money forever and bail out the government without consequence.

German Study Proves It – 95% of Greek “Bailout” Money Went to the Banks (reflector)

“Europe and the International Monetary Fund have in previous years mainly saved the banks and other private creditors,” concluded the report, published yesterday in German newspaper Handelsblatt. ESMT director Jorg Rocholl told the financial newspaper that “the bailout packages mainly saved the European banks.”

Obama: TTIP Necessary So As To Protect Megabanks From Prosecution (reflector)

Under TTIP, a megabank fined this way might in turn sue the nation’s taxpayers to restore the megabank’s ensuing loss of profits. If the cheated investors win, taxpayers might thus end up bearing the cheated investors' losses. Under TTIP, the fined company would be arguing that the law under which it had been fined is in violation of TTIP and thus constitutes a violation of that treaty, so that the violating government is obliged to be paying the fine — the law against fraud would itself be violating the fined company’s rights. If the three-arbitrator TTIP panel rules in the megabank’s favor, the government would need to pay the fine it had assessed against the bank, and no appeals court exists for any of these arbitration-panels’ rulings — these rulings are final. Obama and other proponents of that system, which is called ISDS for Investor State Dispute Settlement, say that it’s a more efficient way of handling such disputes. In international commercial affairs, it not only eliminates appeals courts, it gradually eliminates democracy, by fining the government into ultimate submission to these three-person panels of international-corporate-accountable arbitrators.

U.S. Trouble With American Dividends (Tiffany D.)

Now, I don’t believe that the Fed will make the mistake of raising rates three times this year — at best, we will see one rate hike. But, when an investment bank like Goldman is blind to this reality, it tells me the dividend trade — i.e., dumping non-yielding assets for yielding ones — is at its end, and it’s time for investors to look abroad for better yield opportunities.

Russia Offers Free Land to Foreign Pioneers (Arthur Robey)

The Russian lower house Committee for Real Estate and Construction recommended that the State Duma approve the bill in the second reading in a session next week. The parliament already approved the draft in the first reading on December 18, 2015.

Elon Musk's Tesla Strategy: Win Big by Falling Short (jdargis)

What makes Musk's deadline bluffs unusual is that he makes them public and lets investors hold him to account. Take what happened when he dropped his biggest bombshell last week, unveiling what is arguably the most ambitious production timeline in the history of cars. Musk said he plans to go from making about 50,000 electric cars a year to 500,000—by 2018.

Major Banks Shrug Off Concerns Of Bad Energy Debt (Josh O.)

For Morgan Stanley, the dip in earnings was more substantial and yet it too beat expectations, at $0.55 per share versus $0.46 expected by analysts. Wells Fargo, which has the same size exposure to energy as BofA’s, reported a net income of $5.46 billion, down from $5.8 billion for Q1 2015. The average rate of exposure to oil and gas loans of the U.S. banks is 5 percent, the report noted.

All Of A Sudden, Fish Are Dying By The Millions All Over The Planet (Aaron M.)

Millions of fish have washed up dead along a 125-kilometre stretch of the Vietnamese coast in one of the communist country’s worst environmental disasters.

Soldiers have been deployed to bury tonnes of fish, clams and the occasional whale that began dying in early April along the north-central coast, including some popular tourist beaches.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/6/16

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."

11 Comments

Tall's picture
Tall
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Posts: 564
Armed guards protect last water
TIKAMGARH, India, May 9 (Thomson Reuters Foundation) - Authorities in this drought-parched city in central India have deployed round-the-clock armed guards at a river-fed community reservoir to prevent farmers from siphoning the remaining water for irrigation. 
 
With rainfall in Tikamgarh district this year 52 percent below average - the second dry year for the area - water is now available to city residents only sporadically, with fears even that may run out during the peak heat months of May and June, authorities say. 
 
Forty-seven-year-old Suryakant Tiwari, one city resident, said his family and many others now have drinking and household water supplied only once every five days. 
"I have not seen such a condition in my lifetime. Almost every water source in the area has dried up. We don't know how we will survive," Tiwari said. 
 
Farmers have been prohibited from drawing water from reservoirs to irrigate their crops. But Tikamgarh Municipal Corporation officials fear farmers from adjoining Uttar Pradesh state - whose farms border the Bari Ghat dam, fed by the Jumuniya River - are poaching water to try to keep their crops alive. 
http://news.trust.org/item/20160509061041-3lrr7/
 
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saxplayer00o1
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Public Pensions in U.S. Trail Targets as Foreign Stocks Stumble

Public Pensions in U.S. Trail Targets as Foreign Stocks Stumble

Bloomberg-7 hours ago
It's the latest example of how negative interest rates are distorting markets and ... A reliance on cheap finance in container shipping has led to “many negative ...

Even China's Party Mouthpiece Is Warning About Debt

Bloomberg-10 hours ago
The pace of China's accumulation of debt and dwindling economic returns on ... U.S. Treasuries were little changed, with the benchmark 10-year yield at 1.78 ...

Japan's negative interest rates fuel buying and 'carry' trade in Aussie ...

Sydney Morning Herald-8 hours ago
Negative interest rates under Bank of Japan governor Haruhiko Kuroda are believed to have fuelled long positions and by some accounts, a carry trade-style ...

IMF Says Poloz Should Consider Rate Cuts If Economy Falters

Bloomberg - ‎1 hour ago‎
Bank of Canada Governor Stephen Poloz has limited room to cut his 0.5 percent policy interest rate, and it would be “appropriate” to lay out a case for tools such as negative rates, so-called forward guidance about borrowing costs, or major asset ...

College loan debt tops $1.2 trillion

WWMT-TV-27 minutes ago
BOSTON (CBS) - With college loan debt now topping $1.2 trillion, borrowers, lawmakers and employers are taking a closer look at what can be done to lighten ...

 

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saxplayer00o1
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Central States chief warns of insolvency or steeper cuts to pens

"The head of a pension fund serving Teamsters members on Monday warned it may need to enact steeper benefit cuts or go bankrupt in light of a decision by the Treasury Department to reject proposed reductions.

Thomas Nyhan, the executive director of the Central States pension fund, told reporters on a conference call that he wasn’t sure that Central States could make the numbers work after Special Master Kenneth Feinberg refused a request to slash benefits by 22% on average for 270,000 Teamsters members. Among the reasons that Feinberg cited in his rejection letter was the 7.5%-per-year investment return projections made by Central States, which he said were too optimistic."

Time2help's picture
Time2help
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Pacific Northwest snowpack melting at record pace

Pacific Northwest snowpack melting at record pace (Outdoor Society)

Quote:

Back in October of 2015, the endless summer of warm temperatures and sunny days suddenly vanished, replaced by endless, record setting rainfall and a ridiculously healthy snowpack in the Cascade and Olympic Mountains. Skiers and snowboarders rejoiced as their mountains became white and fluffy, while hikers slogged along on muddy, soaked trails. Numerous roads around the state were washed away, trees fell in cities and trails, and the entire Pacific Northwest experienced one of the nastiest winters on record.  We were told that it was good and that the snowpack in the mountains would last well into summer. We were reassured that we had recovered from the historic drought of  2015 and that last winter was our savior.

It seemed that many of the cable media news forecasters thought they were correct and that the snowpack would last a long time. Those of us watching the weather stations around the state’s mountains, knew better. As we monitored the snowpack each week, we were seeing something different.

As the sunny skies returned in April of 2016 and record warmth once again blanketed Cascadia, the snow was melting faster than normal. Actually, it was melting faster it had ever melted since it was being recorded. According to a press release by the USDA, the record high temperatures in April of 2016  set records for snowmelt rates around the region:

April experienced record high temperatures throughout the entire Pacific Northwest, causing much of the remaining snowpack to melt and runoff. Over 80 percent of all SNOTEL sites with at least 15 years of data set all new melt rate records for April. During two separate high-pressure weather systems in April, Snowpack Telemetry (SNOTEL) experienced minimum daily temperatures exceeding 20 degrees above normal. Due to the rapid snowmelt, runoff was above normal and Washington State’s rivers and streams were able (<typo?) to contain it without flooding.

Time2help's picture
Time2help
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Infield starting to fill?

Time2help's picture
Time2help
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A thought

FUCK THIS SYSTEM.

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KugsCheese
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F word
Time2help wrote:

FUCK THIS SYSTEM.

You must be very angry.   Chill out a bit.

ejhr's picture
ejhr
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Posts: 33
retirement savings.

That article about borrowing retirement savings is full of mistakes.

First, the federal government is monetary sovereign. It is not constrained [except by runaway inflation] in being able to buy its debts.   It most certainly does not need to borrow or save dollars.. How stupid is that?Your own money! really!!! 

Second; The $19 Trillion government debt  is not debt in the sense we usually think. It is a government liability, but the government [see point1 above] does not spend the money. It has no need of it. It's also like calling your savings account a bank debt. Technically true, but we prefer to say it's a savings account, the depositor's point of view.  T-bonds held at the Fed are savings accounts, exactly the same as yours. Repaying these bonds is simply done by returning the bond money back to the investors. 

Private banks, in many countries,[not sure about the USA] are not allowed to touch your deposits, so they cannot "bail-in" when they get in to trouble. It's illegal.

The government also has NO NEED to touch private savings. If it does it is in error. In any case such woeful mismanagement is easily paid back [again, point 1 above]

ejhr's picture
ejhr
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Posts: 33
student loans

There is a simple answer. The monetary sovereign government can provide free education to all the citizens.

If Germany can do it then so can the USA, not to mention Canada, Australia etc.

There is not the slightest problem with government funding. Education is a Good of inestimable value to the society and the economy. It costs the federal government nothing to buy the education debts. Education would one of the least likely fields to create runaway inflation.

If students are not debt burdened as today, they can then contribute to increasing wealth in the economy. They cannot do so if all they earn is just going to banks to repay loans. Since the Boomers are retiring in masse today who will step in to take their place. Well, student debt [+unemployment] is crimping the possibility of say millenials to replace them.

Just another destructive political policy.

reflector's picture
reflector
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Posts: 267
bail ins
ejhr wrote:

 

 

 It's also like calling your savings account a bank debt. Technically true, but we prefer to say it's a savings account, the depositor's point of view.  

yes, but we prefer to delude ourselves in many other ways as well, don't we?

we prefer to think that social security, medicare, pensions will all be there for us when we need them, just like we were promised, right?

we prefer to think the gas pump will always be there full of gas, we prefer to think the grocery store shelves will always be stocked full, we prefer to think that our country are always "the good guys".

if you hand someone some cash with the expectation that they'll give it back to you later, it's a loan.

ejhr wrote:

Private banks, in many countries,[not sure about the USA] are not allowed to touch your deposits, so they cannot "bail-in" when they get in to trouble. It's illegal.

heh, too funny.

but, you're right of course, banks would never do anything illegal.

they wouldn't:

  • create fraudulent mortgages
  • manipulate energy markets illegally
  • manipulate gold and silver and other commodities illegally
  • manipulate LIBOR illegally
  • launder money for violent drug cartels
  • illegally manipulate FOREX (currency) markets

and of course they wouldn't pay relatively small fines to the government, pat themselves on the back, give themselves huge bonuses, and continue with business as usual.

as far as bail-in legislation, i believe it's already been enacted in most western nations:

http://theeconomiccollapseblog.com/archives/january-1-2016-the-new-bank-...

http://sandiegofreepress.org/2015/01/the-bail-in-how-you-and-your-money-...

it's just a question of when bail-ins will occur, not if.

reflector's picture
reflector
Status: Gold Member (Offline)
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Posts: 267
education
ejhr wrote:

There is a simple answer. The monetary sovereign government can provide free education to all the citizens.

If Germany can do it then so can the USA, not to mention Canada, Australia etc.

There is not the slightest problem with government funding. Education is a Good of inestimable value to the society and the economy. It costs the federal government nothing to buy the education debts. Education would one of the least likely fields to create runaway inflation.

If students are not debt burdened as today, they can then contribute to increasing wealth in the economy. They cannot do so if all they earn is just going to banks to repay loans. Since the Boomers are retiring in masse today who will step in to take their place. Well, student debt [+unemployment] is crimping the possibility of say millenials to replace them.

Just another destructive political policy.

ok, i have to ask, are you purposely trolling, or are you a real live, honest to goodness socialist? because i don't meet many.

you do understand that government is not a magical wish-granting fairy that waves its wand and gives free education, healthcare, housing, a car, a tv, and a chicken in every pot by conjuring it out of thin air, don't you?

do you understand that goods and services, including education, have to be provided by real labor, by the work of your fellow human beings?

 

are you going to expect teachers to teach for free because you asked nicely (not likely)?

or will you provide them with a market-based incentive to teach (ugh! how capitalist of you!)

if so, how will that be paid for? are you not suggesting that government should steal from people stealthily, like a thief in the night, by more (probably electronic) money-printing, thus de-valuing the savings of those who work for a living?

don't kid yourself, there's no such thing as a free lunch, someone has to pay for it.

and as far as real education, that already is free, anyone can go to a library, read a book, browse the internet - the wealth of information available today is immense. joining a social club called "college" has nothing to do with education.

and yes i agree with you, student loans are a huge burden on young people, they should be avoided. and the value of a so-called college degree is in most cases questionable.

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