Time to Put the Doomed Euro out of its Misery

Jeremy Warner

Europe can’t accept that the economics of the single currency condemn it to failure.

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If you can fight your way through the dirt storms of Madelia, Minnesota, you may be able to find the future of renewable energy

By Maggie Koerth-Baker

Smithsonian.com, April 06, 2012

In the middle of the Minnesota prairie sits Madelia, a town of a little more than 2300 people that is surrounded on all sides by miles upon miles of brown soil, tilled into neat rows. If you flew there in an airplane, Madelia would look like a button, sewn into the middle of a patchwork quilt—each farm divided into fields shaped like squares and circles, bordered by pale yellow gravel roads and by the narrow strips of bright green grass that grow alongside creeks and drainage ditches.

When the residents of a town such as Madelia think about the future of energy, the solutions they come up with are unsurprisingly centered on the land and what it can grow. In Madelia, however, those solutions look a little different from what you might expect. When Madelians imagine the future of energy, they don’t see prairie dotted with big ethanol refineries, where corn grown by hundreds of farmers is processed into fuel that will be sold all around the United States. Instead, they’re thinking about something much more local. Madelia is a small town with a big plan to produce fuel made from local materials for local markets. From the native grasses that easily grow in prairie soil to leftover beaks and pieces from a nearby chicken canning factory, anything that can grow within a 25-mile radius of town is fair game.

Why would a generally conservative town, populated by a lot of generally risk-averse farm families, want to stake a decent amount of time and money on the cutting edge of alternative energy? When I traveled to Madelia, I ran headlong into the reason before I’d even reached the town itself. My moment of enlightenment happened a few miles outside the city limits, on the narrow blacktop of Highway 60, when I came very close to driving my car into a ditch.

The wind had started the day full of bluster, and it was positively furious by the afternoon, while the open, empty fields that flanked the highway offered nothing to slow the wind down. This alone wouldn’t have been a big problem. I grew up in Kansas, and I know how to steer a car through a windstorm. The issue was what I could see ahead of me—or, rather, what I couldn’t see. Out of nowhere, a gray cloud rose up to hover over the highway, swallowing semi-trucks and digesting them into sets of disembodied tail lights. I had barely enough time to realize I wasn’t looking at fog before I plunged into the thick of it.

The sun disappeared. Gravel pinged against the car windows. I couldn’t see anything that wasn’t artificially lit. In a panic, I turned on my headlamps just as I drove out the other side of the gritty haze, back into a normal, windy spring day. The “cloud” was made of dirt, and a mile or so up the road, another gray ribbon of it stretched across the horizon. I went through three or four of these dust clouds before I reached the exit for Madelia.

Read the rest here.

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Copper prices sank to their lowest level in three months as investors shed economically sensitive assets on weaker-than-expected growth in China and concerns about Spain’s debt load.

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Yesterday was a lovely day to smell the roses with my grand-kid.

I see the markets tried to mangle my portfolio while i was unable to make any decisions. That is always the dilemma between being a trader and a investor.

At any rate, as I spend time with with my grandson, I wonder in the back of my mind what type of world will he grow up into. The most important lesson for him and all kids is to remember and study history so they can bring forth a world that is not doomed to repeat itself.

This documentary should be  a reminder to all of us about the preciousness of life. 

Cheers on the rest of your weekend!

[youtube:http://www.youtube.com/watch?v=OIHSUJr5jeM 450 300]

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Pyongyang, North Korea (CNN) — The U.N. Security Council met Friday to discuss North Korea’s botched rocket launch amid concerns that the secretive and often unpredictable regime will try to recover from its embarrassing failure with a nuclear test or military move.

“Members of the Security Council deplored this launch,” said U.S. Ambassador to the United Nations Susan Rice, who said she was speaking on behalf of the council. “Members of the Security Council agreed to continue consultations on an appropriate response, in accordance with its responsibilities given the urgency of the matter.”

The rocket broke apart 81 seconds into its launch Friday morning, then fell into the ocean, according to a U.S. official.

The launch drew condemnation from United States and countries in the region, as well as an unusual admission of failure from Pyongyang. The normally secretive regime has previously insisted that failed launches had actually been successful.

“Scientists, technicians and experts are now looking into the cause of the failure,” North Korea’s official Korean Central News Agency said in a report, which was also read out in a news broadcast on state-run television.

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The U.S. will not go forward with planned food aid for North Korea after the nation’s unsuccessful attempt to launch a long-range missile rocket, the White House said.

“Despite the failure of its attempted missile launch, North Korea’s provocative action threatens regional security, violates international law and contravenes its own recent commitments,” the White House said in a statement condemning the launch.

President Obama has been prepared to engage with North Korea in a constructive manner, the statement said, but he also insists that the country live up to its earlier commitments and international obligations.

North Korea’s much-anticipated rocket launch ended quickly in failure early Friday, splintering into pieces over the Yellow Sea soon after takeoff.

North Korea acknowledged in an announcement broadcast on state TV that a satellite launched hours earlier from the west coast failed to enter into orbit. The U.S. and South Korea also declared the launch a failure.

A senior U.S. official told Fox News the rocket broke apart between 90 seconds and 2 minutes after launching.

Data suggests the rocket broke up in mid-flight inside the Earth’s atmosphere. Officials say the rocket did not fall into any populated areas, suggesting it fell into the ocean.

The rocket likely broke apart between the first and second stages of a three phase process.

“This is just a reminder,” Seoul-based North Korea expert Alexi Lankov told Fox News, “ that Pyongyang hasn’t developed a credible vehicle for a nuclear weapon delivery system.”

Japan’s Defense Minister Naiki Tanaka said, “We have confirmed that a certain flying object has been launched and fell after flying for just over a minute.” He did not say what exactly was launched.

He said there was no impact on Japanese territory from the launch.

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MADRID (AP) — Spanish stocks sank and its borrowing costs rose Friday after the government released data showing the country’s banks borrowed a record €316.3 billion ($415.9 billion) from the European Central Bank in March.

Bank of Spain data showed that ECB lending to the country’s financial institutions almost doubled since February when their reliance was €169.8 billion ($223.3 billion).

Concern is mounting over Spain’s ability to cut its national debt and lift its struggling economy out of recession when unemployment is nearing 23 percent.

The ECB made some €1 trillion in emergency three-year loans to banks in two batches in Dec. and Feb., lifelines to Spain’s troubled banks that find it hard to secure short-term financing elsewhere.

The injection spurred lenders to snap up battered government debt, driving Spanish borrowing costs down. However, the effects of the cheap loans across Europe have since dissipated and Spain is taking the brunt of market distrust.

Some of that distrust is misplaced, said analyst Manuel Escudero, who added that much of Spain’s industrial sector appeared to be riding the crisis instead of heading to a major downturn in output.

“I see much of Spain’s industrial sector beginning to internationalize instead of heading toward stagnation, it has slimmed down and is looking reasonably muscular,” said Escudero who heads Deusto University business school in the northern Basque region.

Klaas Knot, a member of the European Central Bank’s governing council, also said he did not see a need for the ECB to engage in buying up Spanish bonds or launch a third program of low-rate loans to European banks to steady markets.

Knot, said last week’s spike in the interest rate of Spanish government bonds was due to “awkward communication” by its government about its plans for budget cuts.

To boost confidence in its finances, the government last month unveiled an austerity budget with €27 billion ($35.5 billion) in tax hikes and spending cuts this year.

Spain is expected to enter its second recession in three years this quarter, with the country’s central bank forecasting its economy will contract 1.7 percent this year.

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The Heart Attack Tour approaches…

EAST RUTHERFORD, N.J. (AP) — Bruce Springsteen and the E Street Band will bring the Wrecking Ball Tour to the swamps of New Jersey in September.

The New Jersey native added three dates at MetLife Stadium in East Rutherford: Sept. 19th, 21st and 22nd. The tour’s title comes from a song that Springsteen and the group performed in 2009 before the old Giants Stadium was torn down.

Tickets go on sale next Friday.

There’s no sign Springsteen is answering Gov. Chris Christie’s request to help Atlantic City by performing at the new Revel casino on Labor Day weekend.

The tour is slated to play Citizens Bank Park in Philadelphia on Sept. 2.

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Citing their “enduring love for Google” and desire to “prevent outside parties from taking over or unduly influencing our management decisions,” Sergey Brin and Larry Page have just tightened their grip on the company they founded and dressed it up as a share split.

Technically, existing shareholders will see their $650 stock split in half come June, only the new half won’t be a mirror image of the old half, since it will have had the voting rights gutted out of it and plunked on the already overflowing plates of the duel billionaires at the top.

Perhaps the most laughable line of the announcement, which accompanied Google’s (GOOG) first quarter earnings results, came from Chief Legal Officer David Drummond, who masterfully soft-sells investors that this is going to happen and there’s nothing you can do about it like this: “Given that Larry, Sergey, and Eric control the majority of voting power and support this proposal, we expect it to pass.”

You don’t say.

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Around the country, state and local fiscal pictures are starting to look better. Tax revenues rose in every state in 2011, and while states continue to have structural budget gaps to close, this year’s gaps are a small fraction of the ones states were dealing with in 2009 and 2010. But one big problem continues to show little improvement– unfunded pension liabilities.

Measured on a market value basis, these unfunded liabilities (combined with those for retirees’ health care) exceed $4 trillion, which is more than the total amount of bond debt outstanding from states and localities. And because of the way pension accounting works, most states and local governments can expect to see continued sharp rises in required payments into pension funds at least through 2014. While most parts of states’ fiscal pictures are improving, this one continues to deteriorate.

In 2010, the pension problem prompted Meredith Whitney to warn of an impending spate of state and local defaults, as governments struggle with promises they can’t afford to keep. But in practice, we are seeing that states are treating payments to bondholders as job one. It’s rare for debt service to make up more than a few percentage points of a state’s budget, meaning that there is little to gain from stiffing bondholders, while there is a lot to lose. I expect no general obligation bond defaults by states and only a smattering by localities, hardly something that will amount to a crisis.

Last year, when the small city of Central Falls, Rhode Island entered receivership, the state passed a law to move bondholders to the front of the priority list for payment, making it essentially impossible for municipalities to default on bond debt. Meanwhile, the state enacted an aggressive pension reform that both cut benefits that workers can earn in the future and froze cost of living adjustments– effectively reducing the benefits that current workers and even retirees had earned in the past. It didn’t matter that Rhode Island is a state with politically powerful unions; a loss of access to the bond markets was far scarier to state lawmakers than anything the unions could do.

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WASHINGTON (AP) — The Obama administration said Friday it is creating a multi-agency working group to coordinate federal oversight of hydraulic fracturing and other natural gas drilling techniques.

The working group, headed by White House energy adviser Heather Zichal, includes representatives of about a dozen agencies that oversee various aspects of drilling. Natural gas production has boomed in recent years as drillers use new techniques to gain access to wells that were hard to reach in the past.

Hydraulic fracturing, also called fracking, involves blasting mixtures of water, sand and chemicals deep underground to stimulate the release of oil or natural gas. Another technique is horizontal drilling.

Critics, including the industry and congressional Republicans, have accused President Barack Obama of having a double standard — saying he supports gas drilling on the one hand, but cracking down on it with the other.

The Interior Department is expected to issue new rules in the next few weeks on natural gas drilling on public lands.

Meanwhile, the Environmental Protection Agency is poised to regulate air pollution from oil and gas wells and has pursued tighter rules on wastewater from drilling operations.

Zichal and other officials were scheduled to meet Friday with industry groups, including the American Petroleum Institute and the American Gas Association.

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NEW YORK (Reuters) – Wall Street was on track to end the week lower on Friday as the rising cost of insuring Spanish debt against default increased worries about Europe’s financial health, sparking a selloff in financial stocks.

In early afternoon trading, the S&P 500 was down 1.4 percent for the week so far – a drop that would represent the benchmark index’s worst weekly percentage decline of the year – if the market closes at or near current levels.

The S&P financial sector index (REU:^GSPFI) fell 1.7 percent despite earnings from JPMorgan Chase & Co (NYS:JPM – News) and Wells Fargo & Co (NYS:WFC – News) that beat Wall Street’s expectations. JPMorgan shares slid 2.7 percent to $43.64. Wells Fargo shares fell 2.2 percent to $33.27.

“There are so many things playing into the decline today and although I am not turning bearish, I am telling our clients that they should take a more defensive stance,” said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin, Texas.

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No article necessary. Just look at it.

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Read here:

After months of hysteria about rising oil and gas prices, this week brought some seemingly welcome news for Americans seeking relief at the pump.

First, the International Energy Agency (IEA) declared the “cycle of repeatedly tightening fundamentals…has been broken,” citing rising global supply of over 1 million barrels per day in the first quarter.

Second, China reported first-quarter GDP of 8.1%, its slowest in three years and below expectations. A slowdown in the world’s second-largest importer of energy would put downward pressure on crude prices.

Third, Saudi oil minister Ali al-Naimi said the kingdom is “not happy about” persistently higher oil prices and is “determined to see a lower price and is working towards that goal.” Naimi reiterated the kingdom’s pledge to use its spare capacity to bring down prices, if necessary, and said there are no supply shortages in the global market, Reuters reports.

These developments occurred ahead of this weekend’s talks between Iran, the United States, France, Russia, China, Britain and Germany, from which the world is hoping for a diplomatic (vs. military) solution to Iran’s nuclear ambitions.

As if on cue, this week has brought a series of stories — in The Wall Street Journal, CNN, MSNBC and other major outlets — about prospects for a near-term peak in energy prices.

But don’t believe the hype about lower prices, says Jan Stuart, head of energy research at Credit Suisse, who sees “the balance of risks to the oil price as being firmly to the upside.”

While West Texas Crude is down 5.6% from their February highs, there is “a real risk these oil prices will go right back up again,” Stuart says. “The speculative froth, if there is any, may be coming off. The hysteria may be dissipating. But underlying supply and demand firmly shows things are tightening and should be getting tighter not looser going forward.”

Fundamental Risk to Oil Prices

Plainly speaking, the IEA is either wrong or “using the wrong data” in its forecasts, according to Stuart, a former IEA analyst.

On the demand front, Stuart sees approximately 750,000 barrel per day more than the IEA, believing the agency is underestimating demand from both emerging markets and mature economies like the U.S. and Japan.

Critically, U.S. consumers have shown an ability to absorb gasoline prices near $4 per gallon, which Stuart attributes to an improving employment picture and rising personal income, which is up 3.6% on a year-over-year basis. “People are better able to afford to pay a little more for gas,” he says.

On the supply front, while the IEA sees non-OPEC production with room to grow about 700,000 barrels per day, Credit Suisse sees only 200,000 barrels of additional capacity.

As for OPEC, “the Saudis no longer have it in their power to flood the market,” Stuart says. Brent crude — the international benchmark — has only come down $5 from its 2012 peak despite 6-weeks of Saudi pronouncements about raising exports and “jabbering” from the U.S. and Europe about releasing strategic reserves, he notes.

Beyond the fundamentals of supply and demand, Stuart is not very optimistic about prospects for “peace and stability” breaking out in the Middle East.

Judging by recent history and the rhetoric on both sides, “it would come as surprise” if Iran were serious about “negotiating away its nuclear options” and the U.S. was serious about “embracing relations with Tehran,” he says.

In addition, Stuart sees risks of supply disruptions in “numerous countries,” including Iraq, Libya, Nigeria, Algeria, Venezuela and Russia, as we discuss in the accompanying video.

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In Play

On the Wires 

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Delinquencies continue to fall. This is certainly a good thing….source.

From JPMorgan’s quarterly slide presentation, the latest on consumer credit delinquencies.

 

Read more: http://www.businessinsider.com/the-state-of-consumer-credit-in-one-huge-slide-2012-4#ixzz1rv5twuCk

 

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Krugman points out some key things now that the smoke has cleared…..

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Cory Booker writing himself a tremendous history….

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$0.13 for Friday the 13th…..

conference call @ 7:30am

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The article is about trading up, but the firstparagraph opens with middle to higher incomes buying Este Lauder and Dunkin Doughnuts. My bad, but I never considered EL or Dunkin as a trade up….down and out perhaps.

Full article

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