Daily Digest

Image by zbigphotography, Flickr Creative Commons

Daily Digest 6/21 - The Great British Trade-Off, Why Young Americans Are Giving Up on Capitalism

Tuesday, June 21, 2016, 11:31 AM

Economy

Senate rejects series of gun measures (jdargis)

Citing a fresh CNN/ORC survey showing vast majorities of Americans from all parties backing restrictions that would prevent individuals on terror watch lists from buying guns, Murphy predicted widespread voter anger in November's congressional contests.

"I don't think democracy allows for this Congress to be do out of step with the American public for long," he said.

The Great British Trade-Off (jdargis)

For specialty food manufacturers across Europe, location equals brand. While Roquefort and gorgonzola cheese might resemble each other in their crumbly texture and unique smell, the former must be made from a specific strand of mold found in the French caves of Roquefort-sur-Soulzon, while the other is produced in the northern Italian regions of Piedmont and Lombardy. If it’s not made in Italy, it’s not gorgonzola.

Home Is Where The Fraud Is (jdargis)

Lisa had a bit more luck when she Googled “U.S. Bank NA as trustee for JPMorgan Mortgage Trust 2007-S2,” the name of the plaintiff on her foreclosure documents. This sent her to the website of the Securities and Exchange Commission, specifically an investor report (known as an 8-K form) for the JPMorgan Mortgage Trust. One paragraph included every party she had become familiar with over the past several months:

Why Young Americans Are Giving Up on Capitalism (jdargis)

Baby boomers tell you there is a way out: a college education has always been the key to a good job. But that doesn’t seem to happen anymore. The college graduates you know are drowning in student debt, working for minimum wage, or toiling in unpaid internships. Prestigious jobs are increasingly clustered in cities where rent has tripled or quadrupled in a decade’s time. You cannot afford to move, and you cannot afford to stay. Outside these cities, newly abandoned malls join long abandoned factories. You inhabit a landscape of ruin. There is nothing left for you.

The Gold to Silver Ratio is Bullish for Both Gold and Silver (Taki T.)

How does the Gold to Silver ratio indicate future prices? Examine the chart (below) of the ratio and silver. You can see a negative correlation between the ratio and the price of silver (gold also but not shown). When gold and silver prices are high, such as in 2011, silver has moved up a much larger percentage than gold, so the ratio drops into the 30 to 50 range. When prices are low, such as in December of 2015, silver has fallen far more than gold so the ratio is high – near or above 80.

10 years after housing peaked, US is more of a renter nation (jdargis)

But the rising rent on their one-bedroom apartment — more than for their three-bedroom rental in Pittsburgh — made it impossible to save enough to buy a home. With their rent going up again, the couple moved to a cheaper suburb in hopes of repaying their student debt and saving for a starter home.

Peak Oil Consumption Dead Ahead But Price is Anybody's Guess (Chris H.)

To begin, I'll focus on the present consumers of 70% of the worlds crude, the OECD+China+Russia+Brazil. And if we check the annual change to their combined 0-64yr/old population (blue line in the chart below), 0-64yr/old population growth has decelerated 90% since the '88 peak and cumulatively turns to outright annual declines by 2019. The annual declines accelerate indefinitely from there. I also show total 0-64yr/old annual global growth (black columns) and 0-64 growth among the RoW or Rest of the World (red line).

How The Brexit Vote Will Impact Oil Prices (Josh O.)

Third, a Brexit will also have currency implications. The uncertainty surrounding the British and European economies will depress the pound and the euro. That will push capital flows into the dollar, strengthening the greenback, which as always, has a depressing effect on oil prices. “If it’s Brexit, then the macro picture would be quite bearish for oil and the dollar will strengthen—that’s a recipe for a correction” for crude oil, Doug King, chief investment officer at RCMA Asset Management, told The Wall Street Journal in an interview. In short, a “Leave” vote will likely cause oil prices to fall this week.

Gold & Silver

Click to read the PM Daily Market Commentary: 6/20/16

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."

8 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4149
Yellen Points to Slow Growth and Low Rates in the Long Run

Yellen Points to Slow Growth and Low Rates in the Long Run

Wall Street Journal - ‎23 minutes ago‎
After seven years of subpar U.S. growth, Federal Reserve Chairwoman Janet Yellen is slowly coming to acknowledge that this could be the new long-run state of the economy, a development that could weigh on interest rates for years to come. Long-run ...
 

Yellen says Fed does have legal basis to pursue negative rates

ForexLive - ‎2 hours ago‎
Yellen said she sees significant shortcomings to negative rates, but insists the Fed does have a legal basis to pursue them. That's important because a recession is coming, eventually. The Fed will need to do more at some point and the market will want ...

 

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
States struggle to deal with radioactive fracking waste
An analysis by the Center for Public Integrity shows that states are struggling to keep pace with this waste stream, relying largely on industry to self-report and self-regulate. States have also been slow to assess and curb risks from exposure to the waste, which can remain radioactive for millennia. Excessive radiation exposure can increase cancer risks; radon gas, for example, has been tied to lung cancer.
 
The four states in the Marcellus are taking different approaches to the problem; none has it under control. Pennsylvania has increasingly restricted disposal of drilling waste, while West Virginia allows some landfills to take unlimited amounts. Ohio has yet to formalize waste rules, despite starting the process in 2013. New York, which banned fracking, accepts drilling waste with little oversight.
 

https://www.publicintegrity.org/2016/06/20/19784/hot-mess-states-struggl...

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Synthetic fabric clothes poisoning our oceans and food supply
New studies show that alarming numbers of tiny fibers from synthetic fabrics are making their way from your washing machine into aquatic animals. The first time professor Sherri Mason cut open a Great Lakes fish, she was alarmed at what she found. Synthetic fibers were everywhere. Under a microscope, they seemed to be “weaving themselves into the gastrointestinal tract”. Though she had been studying aquatic pollution around the Great Lakes for several years, Mason, who works for the State University of New York Fredonia, had never seen anything like it.
 
 ...on average, synthetic fleece jackets release 1.7 grams of microfibers each wash. It also found that older jackets shed almost twice as many fibers as new jackets. The study was funded by outdoor clothing manufacturer Patagonia, a certified B Corp that also offers grants for environmental work.
 
“These microfibers then travel to your local wastewater treatment plant, where up to 40% of them enter rivers, lakes and oceans,” according to findings published on the researchers’ website.
 
https://www.theguardian.com/environment/2016/jun/20/microfibers-plastic-pollution-oceans-patagonia-synthetic-clothes-microbeads
 
 
TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 420
Re:Senate rejects series of gun measures

Another case of Look over there, to distract the public from the real problem. We have immigration policy that imports people from the world's most violent regions. Americans are going to need access to Firearms to protect themselves from pending violence. 

Of course Obama has been the best Firearms salesmen of the Century. Just Rememeber that every political agenda results in the complete opposite effect:

War on Drugs: Increase drug use and lower cost for illegal drugs

War on Terrior: Does anyone believe we are winning?

Gun Control: Cities with the most Gun Control happen to have the highest gun related crimes. Remove legal ownership of firearms, means that only criminals will have access to crime. They take advantage knowing the public isn't armed and can use guns with little risk (since the public is disarmed). 

 

 

Also US homicide rate is now at a 51 year low.

FBI: US Homicide Rate At 51-Year Low

http://www.zerohedge.com/news/2016-06-16/fbi-us-homicide-rate-51-year-lo...

pyranablade's picture
pyranablade
Status: Silver Member (Offline)
Joined: Nov 8 2010
Posts: 206
Hambone says peak oil....

What his whole article is about is population of 15-64 year-olds is going down worldwide so oil demand is at a peak. I suppose that is a good thing -because peak cheap oil "production" has already occurred.

Must be a smart dude to understand all 'o them fancy graphs and charts, but is he barking up the right tree?

 

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5733
I doubt it...
pyranablade wrote:

What his whole article is about is population of 15-64 year-olds is going down worldwide so oil demand is at a peak. I suppose that is a good thing -because peak cheap oil "production" has already occurred.

Must be a smart dude to understand all 'o them fancy graphs and charts, but is he barking up the right tree?

...his biggest oversight is that he's not looking at per capita oil consumption.  

Yes, there could be a demographic hole to fill, but I'd be a lot more worried about the impact of this hole on financial assets in the west than on oil globally.

Let's look at India for example.  India's demand growth for oil has been robust and will continue to be robust for a very long time, unless prices spike a whole lot:

(Source -FT) 

At 1.25 billion people, India currently ranks #165 on the oil per capita list at just 2.65 barrels per day (per thousand people) or .0026 bbl/day/capita.

China clocks in at a far more robust 7 barrels per day per thousand (or .007 per capita):

(Source - Indexmundi)

So let's go wild and imagine that both of these countries would like to be at least as developed as, say, Mexico and consume .018 barrels per day per capita.

Well, that simple calculation means that we have incremental daily consumption globally of (1.2 billion plus 1.3 billion) * (.018 - .0026 + .018 - .007) = 65.9 million barrels per day of new, incremental consumption.  

Considering that the world is only producing ~90 million barrels per day today, I think we can safely say those two countries will not be making it to Mexico's consumption levels.

If they want to get to US consumption proportions of .065 barrels per day, well then the new daily incremental demand would be 300 million barrels per day, or more than 3x higher than existing global production.  That isn't going to happen either.

Consuming oil is just so desirable and so wonderful for the inhabitants of a given country that it's really not at all useful to hold current per capita numbers constant and then just apply a demographic overlay.  You have to take into account where those countries are in the development cycle.

To me it's a pretty safe bet to say that demand for oil is not gong away any time soon.  All you have to do to appreciate this view is to try and drive somewhere during the rush hours in any city anywhere in the world.

[note above edited in response to Mark_BC's comments below)

Mark_BC's picture
Mark_BC
Status: Gold Member (Offline)
Joined: Apr 30 2010
Posts: 483
Chris I think there is a

Chris I think there is a mistake in the numbers. They are per thousand people. Globally the entire world only consumes 30 billion barrels a YEAR. But the point is correct that to bring up the rest of the world to even remotely close to western consumption rates would require unattainable oil production rates. I argue it's zero sum. If China and Asia become wealthy in a new financial system with all their gold and factories, then westerners will necessarily have to be poor because there isn't enough oil and / or energy for everyone.

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5733
Right you are
Mark_BC wrote:

Chris I think there is a mistake in the numbers. They are per thousand people. Globally the entire world only consumes 30 billion barrels a YEAR. But the point is correct that to bring up the rest of the world to even remotely close to western consumption rates would require unattainable oil production rates. I argue it's zero sum. If China and Asia become wealthy in a new financial system with all their gold and factories, then westerners will necessarily have to be poor because there isn't enough oil and / or energy for everyone.

Good catch Mark, thanks.

I edited the above to reflect the right numbers and think I have them right this time...

The bottom line is that even nudging India and/or China up the consumption curve would require a huge expansion of existing world output....which isn't going to happen.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments