Daily Digest 12/21 – Massive Debt Wave Could Crash On Developing Countries, The Real Class War

Economy

Alienated, Alone And Angry: What The Digital Revolution Really Did To Us (Adam)

Such arguments, that a rational tech vanguard would spark an emancipatory cycle of national participation, were common at the time. (Though they were not unchallenged.) Katz’s is notable for its relative restraint. “The Long Boom,” an infamous piece published in Wired just three months later, predicted the spread of digital networks “to every corner of the planet” leading to “the great cross-fertilization of ideas, the ongoing, never-ending planetary conversation” that would culminate, by 2020, in “a civilization of civilizations” that would set foot on Mars in species-wide harmony.

Twelve Million Phones, One Dataset, Zero Privacy (JP)

After spending months sifting through the data, tracking the movements of people across the country and speaking with dozens of data companies, technologists, lawyers and academics who study this field, we feel the same sense of alarm. In the cities that the data file covers, it tracks people from nearly every neighborhood and block, whether they live in mobile homes in Alexandria, Va., or luxury towers in Manhattan.

Trump signs $1.4 trillion spending package, averting shutdown (tmn)

Not long after, Trump released his annual budget proposal that would have hyper-charged military spending while dramatically cutting domestic spending, slashing more than 20 percent of funds from the EPA, State Department, and Transportation Department, and abolishing funding for popular programs such as the National Endowment for the Arts, the Corporation for Public Broadcasting and the Special Olympics.

Direct deposits were delayed by Federal Reserve glitch (Sparky1)

As of 10:31 am ET, the Fed reported that all systems were operating normally and technical staff had “resolved the issue.” The central bank said payment files for the business day of December 18 have been completed, although some transaction reports will be delayed.

Massive debt wave could crash on developing countries, World Bank warns (Adam)

After declining during the 2008 global financial crisis, amid very low borrowing costs in just eight years since 2010, debt in these countries climbed to an all-time high of roughly 170 percent of GDP or about $55 trillion.

Much of the growth was incurred by China (equivalent to more than $20 trillion), but Beijing also has become a large lender for low-income countries.

The Real Class War (tmn)

The socioeconomic divide that will determine the future of poli­tics, particularly in the United States, is not between the top 30 per­cent or 10 percent and the rest, nor even between the 1 percent and the 99 percent. The real class war is between the 0.1 percent and (at most) the 10 percent—or, more precisely, between elites primarily dependent on capital gains and those primarily dependent on profes­sional labor.

Manipulating the World Economy – Martin Armstrong (Herman J.)

The second edition of Martin’s seminal work Manipluating the World Economy has just been released. We sat down with Martin for a long interview on economic history and how we got where we are today. We will take questions for Martin on our follow-up interview next month.

Why The “Phase One” Trade Deal Is Impossible, In One Chart (Don R.)

Assuming a similar export mix as in 2017, this would translate into an unprecedented 235% volumetric increase in 2020 US agricultural exports to China over 2019, according to Goldman Sachs. The problem is that while US exports to China had declined sharply in 2018, other nations stepped in, in many cases with long-term bilateral contracts in place ensuring the long-term delivery of ag products from mostly Latin American substitute markets. This, as Goldman points out, means that such an increase in Chinese purchases from the US “would likely be hugely disruptive to global agriculture markets, primarily crowding out Argentine and Brazilian supplies that have taken substantial market share since 2017 due to the trade war and much weaker currencies.”

New York Fed Plans to Throw $2.93 Trillion at Wall Street’s Trading Houses Over Next Month as New York Times Remains Silent (thc0655)

The $2.93 trillion that the New York Fed will funnel to Wall Street over the next month consists of up to $120 billion each weekday in overnight loans through January 14 and $440 billion in term loans ranging from 3-days to 32 days. In addition, during the last week of the year (on Tuesday, Wednesday and Thursday) the Fed will bump up its overnight loan offerings to $150 billion from $120 billion, thus providing an additional $90 billion that week.

“The Fed Was Suddenly Facing Multiple LTCMs”: BIS Offers A Stunning Explanation Of What Really Happened On Repocalypse Day (Thomas R.)

The moves saw the bank’s bond portfolio soar by 50%, and were prompted by capital rules that treated loans as riskier than bonds. And since JPM has been aggressively returning billions of dollars to shareholders in dividends and share buybacks each year, JPMorgan had far less room than most rivals to hold riskier assets, explaining its substantially higher G-SIB surcharge, which indicated that the Fed currently perceives JPM as the riskiest US bank for a variety of reasons.

One of Amazon’s first employees says the company should be broken up (Adam)

Davis’ comments appear to be one of the first times that an early Amazon employee has called for the company to be broken up. Earlier this year, US presidential candidate Elizabeth Warren argued for the same. And both the US House of Representatives and the Federal Trade Commission are scrutinizing Amazon’s business practices to determine if they are anticompetitive, including its dealings with the hundreds of thousands of merchants who are the backbone of Amazon’s unmatched product catalogue.

Why Utah Is Turning Perfectly Good Beer Into Natural Gas (Thomas R.)

The beer ended up at the Wasatch Resource Recovery facility, which produces biogas and bio-based fertilizers and is the only such facility in Utah. Wasatch Resource Recovery processes bad beer, discarded produce, food waste from yogurt makers, and used oil from restaurants to turn them into bio natural gas and fertilizers.

Why Oil Traders Are More Bullish On 2020 (Thomas R.)

Payrolls in November shot up by 266,000, beating analyst expectations of 187,000 new additions, and industrial activity inched up by 1.1 percent last month after a fall of 0.7 percent in October. However, it bears noting here that the expectation-beating November figure was the result mainly of a pick-up in the carmaking industry after the six-week strike of UAW workers for GM.

From Boom To Bust: Permian Shale Towns Face Exodus (Thomas R.)

The EIA forecasted a production increase of 1 million barrels per day in 2020. But in mid-December, the agency said that production in the Permian, for instance, would only increase by 48,000 bpd in January 2020–the smallest increase since July this year. Bakken will see a negligible increase, and Eagle Ford will see a decrease.

Applying physics principle yields grim prediction on hurricane destruction in era of global warming (Roger B.)

Global warming could well lead to hurricanes more powerful than meteorologists currently forecast. A physicist noticed that one of the principles of physics — phase transition — did not appear in the scientific literature of meteorology. Using 60 years of published data, he demonstrated that the destructive power of tropical hurricanes increased linearly and rapidly as water temperature increased. The destructive energy could therefore treble if water temperatures rise by 2 degrees.

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