Daily Digest - November 17

• Stephen King: Gold prices are a dead giveaway
• Million Hit By 'Plague Worse Than Swine Flu'
• Gold At $5000 An Ounce?
• China Slams Fed's Low Interest Rates
• Amendment To Relax Banks' Accounting Standards
• France Urges Inquiry Into Financial Sector Competition Abuse
• America's Newest Land Baron- The FDIC
• The New Flipping: Short Sales
• How Government Created Today's Commercial Real Estate Catastrophe
• Hunger In America At 14 Year High
• Investors Strategize For Fed's Exit From MBS Market
• $10 Billion Evaporates
• Could Pop-Culture Mood Mirror Stock Market Swings?
• Stimulus Jobs "Created" In Congressional Districts That Don't Exist
• UK Minister Warns Bankers About New Rules On Bonuses
• French Bankers Say "Au Revoir" To Guaranteed Bonuses Effective Immediately
• New Swiss Bonus Rules Target Insurers And Big Banks
• UK Pension Fund Deficits Underestimated By £268 billion
• The Year America Didn't Sleep
• The Great Wallop: An End To Chimerica
• China Solar Company Opens First US Manufacturing Plant
• Turning The Wind Power Market On It's Axis
• Hope Floats On Eco-Celebrity's Recycled Plastic Boat

Economy

Stephen King: Gold prices are a dead giveaway (nncita)

The unfortunate reality is that unconventional policies are unconventional because no one really understands how they work. Whisper it quietly, but these policies may be no more than the ultimate economic placebo. Placebos can, of course, work wonders, but their best work is in the mind. Our central bankers are re-inventing themselves for a "new age" economy. They are no longer economic scientists but, instead, mystics who are hoping to persuade the rest of us of their miraculous powers.

Million Hit By 'Plague Worse Than Swine Flu' (hucklejohn)

A DEADLY plague could sweep across Europe, doctors fear, after an outbreak of a virus in Ukraine plunged the country and its neighbours into a state of panic.

Gold At $5000 An Ounce? (M.W.)

Gold remains in focus and its price can still explode higher, writes Martin Hutchinson.

China Slams Fed's Low Interest Rates (M.W.)

U.S. gripes about China's currency policy are now matched by Chinese complaints that the Fed's low interest rates are inflating new asset bubbles. But as President Obama meets Tuesday with Chinese President Hu Jintao, both nations' crisis-fighting policies are having effects far from their own shores.

Amendment To Relax Banks' Accounting Standards (M.W.)

In the midst of what was supposed to be a Congressional push for increased financial regulation and accountability, a powerful coalition of moneyed interests is increasing pressure on Congress to undermine the independence of accounting standards. Banks are pushing for a system that would relax accounting rules in times of economic distress.

France Urges Inquiry Into Financial Sector Competition Abuse (M.W.)

France has called on global regulators to investigate potential competition abuses in the financial sector following successive government bail-outs and industry consolidation. Christine Lagarde, the French finance minister, voiced concerns that some institutions had become too powerful in a market that has been consolidated by banking failures and industry mergers. VIDEO

America's Newest Land Baron- The FDIC (M.W.)

In the past two years, the FDIC has taken over 150 failed banks. In the process, it has seized more than 5,000 houses, subdivisions, buildings, parcels and other foreclosed assets. The current backlog of property stuck on the agency's books, with an appraised value of $1.8 billion, ranges from an $18,700 clapboard home with stained carpets in Birmingham, Ala., to a $1.7 million mountainside lodge with a heated driveway in Steamboat Springs, Colo.

The New Flipping: Short Sales (M.W.)

There's a new breed of property flipper. Some of the real estate flipping today involves the same kind of insider deals and manipulated sale prices that plagued the housing bubble. The FBI recently added short sale flipping, dubbed "flopping" by some mortgage fraud experts, to its list of recognized real estate fraud.

How Government Created Today's Commercial Real Estate Catastrophe (M.W.)

The recent commercial real estate bubble that is now so painfully deflating is actually the grandchild of an earlier commercial real estate bubble.

Hunger In America At 14 Year High (M.W.)

The number of Americans who lacked consistent access to adequate food soared last year, to 49 million, the highest since the government began tracking what it calls “food insecurity” 14 years ago. The increase, of 13 million Americans, was much larger than even the most pessimistic observers of hunger trends had expected and cast an alarming light on the daily hardships caused by the recession's punishing effect on jobs and wages.

Investors Strategize For Fed's Exit From MBS Market (M.W.)

The $5 trillion market for bonds backed by the housing finance companies Fannie Mae, Freddie Mac and Ginnie Mae is in for a shock when the Fed stops buying at the end of the 2010 first quarter.Fed buying, just over $1 trillion so far, has not only played a key role in bringing down mortgage rates and kick-starting the hard-hit housing market, but also boosted returns at some of the world's largest bond funds.

$10 Billion Evaporates (M.W.)

Eight months after President Obama began prodding the nation's banks to increase their small business lending, the loan numbers continue to drop.The 22 banks that got the most help from the bailout programs cut their small business loan balances by a collective $10.5 billion over the past 6 months. Three of the 22 banks make no small business loans at all. Of the remaining 19 banks, 15 have reduced their small business loan balance since April, when the Treasury department began requiring the biggest banks receiving TARP funding to report monthly on their small business lending.

Could Pop-Culture Mood Mirror Stock Market Swings? (M.W.)

The idea linking culture to stock prices is surprisingly simple: The population essentially goes through mass mood swings that determine not only the types of music we listen to and movies we watch, but also if we want to buy or sell stocks. These emotional booms and busts are followed by corresponding swings on Wall Street, says Matt Lampert, research fellow at the Socionomics Institute, a think tank associated with well-known market researcher Robert Prechter.  

Stimulus Jobs "Created" In Congressional Districts That Don't Exist (M.W.)

There’s Arizona’s 15th Congressional District, where 30 jobs have been saved or created with just $761,420 in federal stimulus spending, according to Recovery.gov. Arizona only has eight House seats. So the $34 million that Recovery.gov tells us was spent in the state’s 86th district is equally incredible. Another gem: More than $36 million in stimulus funds spent between the 69th and 99th districts of the Northern Mariana Islands -- a self-governing US territory that gets only one (non-voting) representative in the House.

UK Minister Warns Bankers About New Rules On Bonuses (M.W.)

Bankers who are not prepared to forgo controversial contracts that flout new rules on bonuses should get out of the mainstream industry, Lord Myners has declared. The City Minister fired a warning shot ahead of the Queen’s Speech tomorrow, which will outline plans to forbid guaranteed bonuses and other pay deals. Lord Myners, in an interview with The Times, said: “People who are not willing to subordinate their own egos to the stability of their companies or the financial system probably shouldn’t carry out activities in deposit-taking banks.”

French Bankers Say "Au Revoir" To Guaranteed Bonuses Effective Immediately (M.W.)

Banks in France, including non-French ones, will no longer be allowed to offer guaranteed bonuses to traders and other staff under new rules. Under the government decree, which takes effect immediately, bonus payouts will be spread over at least three years, and will be clawed back either in part or entirely if the transactions on which the bonus was calculated turn out to be less profitable than thought at the time of the award. For large bonuses, at least 60% of the total must be deferred. And, for all variable bonuses, at least half of the total must be in stock rather than cash.

New Swiss Bonus Rules Target Insurers And Big Banks (M.W.)

Switzerland's largest banks and insurers will have to defer the bulk of managers' bonuses and better match pay to performance under new rules aimed at curbing risky investments. The new rules placed Switzerland in a growing group of countries moving the focus of compensation away from a short-term culture blamed for the financial crisis towards longer-term sustainable profitability. "Remuneration schemes can create false incentives which may lead to inappropriate risks being entered into, threatening the business and profitability of a financial institution and, at the end of the day, its stability."

UK Pension Fund Deficits Underestimated By £268 billion (M.W.)

Lloyds Banking Group and Royal Bank of Scotland, the state-backed lenders, are among a raft of large European companies underestimating the size of their pension deficits by a combined €300bn (£268bn) Other companies include British Airways, Barclays, BT Group, GlaxoSmithKline and HSBC. 31 companies had underestimated their deficits by 40% or more, with UK firms among the worst offenders.

The Year America Didn't Sleep (M.W.)

America didn’t just lose money in the Crash -- America lost a lot of sleep. One in three Americans is experiencing a sleep disorder due to economic concerns. Astonishingly, these findings have been little discussed in the professional academe or in the public sphere. 

The Great Wallop: An End To Chimerica (M.W.)

The Chimerican era is drawing to a close. Yet there is a strong temptation for both halves of Chimerica to keep this lopsided partnership going. Despite much talk of the need to reduce global imbalances, the biggest imbalance of all persists.

Energy

China Solar Company Opens First US Manufacturing Plant (M.W.)

China's Suntech Power Holdings announced its first American manufacturing plant. The facility will begin production by next October. Suntech's move may soften criticism from U.S. lawmakers worried that low-cost factories in China will snare new green manufacturing jobs before they even have a chance to take root in the U.S.

Turning The Wind Power Market On It's Axis (M.W.)

Green Wave Energy and investors are banking on the unconventional design of its microturbines that can generate energy by capturing breezes from any direction. Among its secret weapons: An 11-foot-tall, blazingly white, nearly indestructible prototype generator that produces as much as 11 kilowatts of electricity using gusts of wind. The fiberglass contraption could make homespun, do-it-yourself wind power a reality.

Environment

Hope Floats On Eco-Celebrity's Recycled Plastic Boat (M.W.)

David de Rothschild talks about his most dramatic adventure yet: He's readying a sailing vessel made entirely of recycled plastic for an 11,000-mile journey west into the Pacific. One key stop: a massive, floating plastic junkyard in the middle of the ocean that is the direct result of mankind's polluting ways. For de Rothschild, the Expedition combines adventuring with activism.