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Daily Digest 2/4 - Whitney to Testify on Muni Call, Weather a Factor in Slow Job Growth, Oil Near $91 in NY
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- Meredith Whitney Called To Testify Before House On Her Muni Call
- Oil Prices: Too Early For A Choke Point
- Growth Of World Hydrocarbon Prices Can No Longer Help Russia
- Reagan for President...of China!
- U.S. Jobless Rate Falls to 9% in January; Payrolls Rise 36,000
- Weather a Factor in Slow U.S. Job Growth
- Oil Near $91 in New York After Falling on U.S. Economy, Supplies
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Economy
Meredith Whitney Called To Testify Before House On Her Muni Call (pinecarr)
According to Charlie Gasparino, the intifada between Meredith Whitney and the rest of the world just got uglier. According to the former CNBCer, the one-time Citi scourge has been called in to testify before the House TARP committee and explain her less than favorable position on munis. From Dow Jones: Meredith Whitney has been called to appear as a witness at an upcoming hearing by the U.S. House TARP oversight subcommittee, Fox Business Network's Charles Gasparino reported Thursday.
Oil Prices: Too Early For A Choke Point (deb)
Tightening efforts in China have had virtually no impact on energy demand, as crude oil imports remain in a strong uptrend as the country transitions to a ‘car economy’. Furthermore, physical demand for oil has started to draw down energy inventories in the OECD countries despite an increase in OPEC production and non-OPEC supply.
Growth Of World Hydrocarbon Prices Can No Longer Help Russia (walter)
At the same time, investments - the guarantee of successful and stable development - continue to decline, despite all of the world market conditions that are favourable to Russia. While in 2006, at 67 dollars per barrel, the influx of capital comprised over 40bn dollars, and in 2007, when a barrel cost an average of 75 dollars, 81bn dollars came into the economy, in 2010 - at oil prices of 85 dollars per barrel, we are seeing an outflow, which the Central Bank and Rosstat [State Statistical Service] appraise at approximately 38bn dollars. This year, oil prices have already reached the mark of 100 dollars per barrel, but predictions for influx of capital and growth of the country's GDP remain sooner in the minus zone.
Reagan for President...of China! (joe)
By promoting domestic growth, a strong currency is welcome, as it dampens inflationary pressures. Commodity prices in local currency go down as the currency strengthens. Given that China is a major importer of commodities, a strong Chinese renminbi will help tame inflationary pressures. China has been reluctant to allow its currency to rise, mostly because of the feared negative impact on exporters. We are not as pessimistic, as our analysis shows that Chinese companies have pricing power: China has long given up competing on price, as the goods and services exported from China are at the higher end of the value chain. Think about it from a U.S. corporation’s point of view: to remain competitive, more outsourcing needs to take place at a time when just about everything is outsourced already. As a result, ever more complex processes are being outsourced. China is best positioned in the world to accommodate complex outsourcing projects.
U.S. Jobless Rate Falls to 9% in January; Payrolls Rise 36,000
Payrolls in construction and transportation, industries most affected by bad weather, dropped in January, while factory employment rose the most since August 1998. Federal Reserve Chairman Ben S. Bernanke is among policy makers still concerned the pickup in growth is failing to revive the labor market quickly, one reason why the Fed said it will continue a plan to add another $600 billion into the economy.
Weather a Factor in Slow U.S. Job Growth
For the unemployed, the slow addition of jobs is increasingly frustrating. “If you want to get there and you’re sitting in an airplane, the fact that the airplane is moving 20 miles faster down the runway doesn’t matter to you,” said Cliff Waldman, economist at the Manufacturers Alliance/MAPI, a trade group. “You want it to take off.” The Labor Department’s monthly snapshot of the job market also included its annual “benchmark revisions,” which suggested that job growth during 2010 was actually lower than originally reported.
Oil Near $91 in New York After Falling on U.S. Economy, Supplies
"U.S. Fed Chairman Bernanke noted that 'it will be several years before the unemployment rate will return to a more normal level,' generating cautious sentiment," Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd., said in a note today. "A firmer U.S. dollar and bearish oil sentiment, after the recent build in Cushing stocks to record levels, weighed on prices."
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"The Federal Reserve’s total assets rose by $25.9 billion to $2.47 trillion as the central bank bought Treasury securities as part of the second round of its quantitative easing strategy.
Treasuries held by the Fed increased by $23.7 billion to $1.14 trillion as of yesterday, according to a weekly release by the central bank today. Mortgage-backed securities held by the Fed and holdings of federal agency debt were unchanged in the week ended Feb. 2.
The central bank has purchased $295.4 billion in Treasuries since Nov. 12 under plans to purchase $600 billion of government debt through June and reinvest proceeds from maturing mortgage debt. "
"Nevada has had the nation's highest unemployment rate since May, and it set a record high of 14.5 percent in December. The state's unemployment insurance trust fund went broke in October 2009, and like many other states, Nevada has been borrowing from the federal government since then to pay benefits.
Cindy Jones, administrator for the Employment Security Division, said Nevada is on track to borrow $890 million by the end of 2011 and $1.08 billion by the end of 2012.
Interest on loans from the federal government is expected to cost $66 million in the upcoming biennium — money Gov. Brian Sandoval recommended be paid out of the state general fund."
"Feb 3 (Reuters) - State and local government budget cuts and tax hikes will be a major drain on the U.S. economy, the chief economist for Moody's Analytics, Mark Zandi, said on Thurday.
And if state and local governments suffer a string of municipal bond defaults, U.S. economic recovery could be threatened, Zandi warned Congressional lawmakers.
The Senate hearing was called as Republicans in Congress push for cuts in funding to states and local government to shrink the federal deficit and lawmakers fret about the impact this could have on the U.S economy.
Local and state fiscal problems have already prompted investors to dump assets in the $2.8 trillion municipal bond market over the last three months."
Latest Observations:
...............................4A) US unemployment down in January as jobless give up (BBC)
"But the number of people "marginally attached to the workforce" - meaning they were not actively looking but available to work - stood at 2.8 million, up from 2.5 million a year earlier."
Latest Observations:
Other news, headlines and opinion:
Fed chief Ben Bernanke denies US policy behind record global food prices
Barker Says BOE Has Lost Some Credibility on Inflation Bout
Trichet Signals No Rush to Raise Rates Even as Inflation Tops ECB's Limit
Pakistan adds zero to huge debt burden
Treasury to Sell $156 Billion in Debt (Next week)
Pennsylvania schools could lose $1 billion
Greece calls on public sector to work longer hours without a pay rise
Don't Expect Commercial Property Rebound In 2011 - Study (Europe)
Nevada Medicaid Applications Up 60%
Crushed by Medicaid costs, states expand managed care
Fitch downgrades Egypt's debt rating
Moody's Warns Of Possible Downgrades For Nassau County
Audit shows Providence has $57 million budget gap
Bell could start running out of cash in May as deficit grows
California cities top most miserable list
SAN BERNARDINO COUNTY: Pension fund's health raises concern
Unemployment Tax Hike Expected To Fuel Job Loss (SC)
Every day that I see those idiots on Yahoo! Finance spamming and spouting off racist and ideological hatreds and half truths and untruths and "birther" propaganda, is a day that I'm happy to be here.
Poet
The FT ran a particularly silly editorial the other day “Oil under control” (!!??) http://www.ft.com/cms/s/0/6a0473b0-2e44-11e0-8733-00144feabdc0.html (sub req) on how the global economy could manage today’s high oil prices which prompted me to leave a slightly mocking comment (see below) about the newspaper’s staunch refusal to acknowledge peak oil. For my troubles, commenter “RiskManager” (!!??) accused me and others concerned about finite supplies of affordable oil as being OPEC’s “useful idiots”.
I laughed. I cried. It really is hopeless.
Dave Cohen at the Decline of the Empire blog has a typically mordant piece today describing the entrenched attitudes we are up against.
http://www.declineoftheempire.com/2011/02/finite-earth-therapy.html No sub req and an essential daily read to my mind.
The slightly mocking comment wuz:
Events in the economies and financial markets of the developed countries over the past few years hardly inspire confidence that they are able to cope with oil prices at current levels.
This editorial seems to more of the "mustn't frighten the children" (or should that be "advertisers") peak oil denial that is de rigueur for the FT.
The only remedy it failed to mention was the need for another $100 trillion of credit favoured by Davos Man types. After all, the first $100 trillion worked out well...for Davos Man, that is. So, yes indeedy, let's print the oil!
There seems to be an error in the title to the article included in Saxplayer's summary.
Shouldn't it read: "Bernanke to print more than $156 billion next week" ?
I agree with Poet. It is nice to have a place where you can have a calm rational exchange of ideas without resorting to name calling.
Also I have to thank Saxplayer for always sharing a wealth of news stories.
Facts do not cease to exist because they are ignored. -Aldous Huxley
Every day that I see those idiots on Yahoo! Finance spamming and spouting off racist and ideological hatreds and half truths and untruths and "birther" propaganda, is a day that I'm happy to be here.
Poet
I have to agree with that Poet! I am not going to call them idiots, but all of the conspiracy theory as "truth," gratuitously vulgar and just plain immature comments out there on many other sites - that actually have some good posts, just bad comments - makes this site a welcome reprieve! I have found that the most intelligent comments can be found on this site and that says a lot for the tone that has been deliberately set by those that run this site, not to mention Chris' excellent blogs. The decision on this site (was it in 2009?) to bring in moderators and create the controversial topics forum (aka "the dungeon") was a good one. I have to admit that I was somewhat disappointed when those decisions were announced here but I am glad those that run it saw the need; they were right! And Sax Player - can't thank you enough for your daily posts.
Every day that I see those idiots on Yahoo! Finance spamming and spouting off racist and ideological hatreds and half truths and untruths and "birther" propaganda, is a day that I'm happy to be here.
Poet
stay away from the community forums at marketwatch, too...
Here‘s an example of how tight and interlinked the US energy grid is:
The surprising result: no natural gas service in New Mexico. Why?
Because of the rolling blackouts in Texas, compressors in West Texas that send gas to NM shut down, leading to too low a pressure in the gas pipelines that feed several cities.
Gas company explains reasons for gas shortage (video)
20,000 May Be Without Gas In Albuquerque (video)
Governor Declares State Of Emergency (video)
http://crash-watcher.blogspot.com/ A place to consolidate previous posts, explore future scenarios, and share preparation plans for the hard times to come.
I actually got worse. Because there was no gas for heating, people turned to electric space heaters, which then overloaded the grid and caused rolling blackouts in NM as well. Apparently there was quite the run on electric heaters in the state. Most houses are not built for the very cold (subzero) temperatures we had this week. Lot's of frozen water lines and broken pipes. Good thing it's nice today, back up to a balmy 25F.