Central Perk: 4 dec. 2010

sâmbătă, 4 decembrie 2010

Mish's Global Economic Trend Analysis

Obama Signs Trade Agreement with South Korea
Euro Infighting Continues as Belgium Breaks Ranks with Germany and France; Pressure Cooker Gauge on Red
Ron Paul Suggests We Need "Fed-WikiLeaks"

Obama Signs Trade Agreement with South Korea

Posted: 04 Dec 2010 09:46 PM PST

It had to happen eventually. By signing a trade agreement with South Korea, President Obama did something I generally support. However, the devil is in the details, so please consider Obama hails South Korea trade as victory for US workers

President Barack Obama on Saturday praised a newly sealed trade deal with South Korea as a landmark agreement that promises to boost the domestic auto industry and support tens of thousands of American jobs.

The pact, which requires congressional approval, would be the largest since the North American Free Trade Agreement with Canada and Mexico in 1994. Obama said the South Korean deal would support at least 70,000 American jobs -- welcome news with the latest unemployment figures showing nearly stagnant job growth. The president said that jobs report showed more needed to be done.

Representatives from both countries broke through a stalemate Friday morning on issues related to the automobile industry.

South Korea would allow the U.S. to lift a 2.5 percent tariff on Korean cars in five years, instead of cutting the tariff right away. Each U.S. automaker could export 25,000 cars to South Korea as long as they met U.S. safety standards; disputes over safety standards had effectively stood as a barrier to U.S. auto exports into Korea. A U.S. tariff on Korean trucks would be phased out and South Korea would eliminate its tariff on U.S. trucks immediately.

South Korean President Lee Myung-bak praised the deal as bringing huge economic benefits to both countries and further boosting the two nations' alliance.

"The accord is significant because it lays the groundwork for a 'win-win' relationship by reflecting the national interests of Korea and the United States in a balanced manner," Lee said in a statement posted on the presidential website.

The overall agreement would eliminate tariffs on more than 95 percent of industrial and consumer goods within five years. The U.S. International Trade Commission estimated that would increase exports of U.S. goods by at least $10 billion. The deal would also open up South Korea's vast $560 billion services markets to U.S. companies.

My one complaint is the deal phases in over 5 years. It should be immediate.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Euro Infighting Continues as Belgium Breaks Ranks with Germany and France; Pressure Cooker Gauge on Red

Posted: 04 Dec 2010 05:17 PM PST

Infighting over the size of the bailout fund has broken out as the Belgian Finance Minister Breaks Rank with German Chancellor Merkel

Belgian Finance Minister Didier Reynders said the euro region could increase the size of its 750 billion-euro ($1 trillion) bailout fund, breaking ranks with German Chancellor Angela Merkel and France's Nicolas Sarkozy.

Reynders told reporters in Brussels that the current cash pool could be increased if governments decide to create a larger fund as part of a permanent crisis mechanism in 2013. "If we decide this in the next weeks or months, why not apply it immediately to the current facility?"

While Sarkozy and Merkel rejected expanding the fund on Nov. 25, European Central Bank President Jean-Claude Trichet yesterday indicated governments should consider just such a move.

The International Monetary Fund also supports increasing the facility after 2013, said Reynders at the end of a week that saw Belgian bond spreads jump to the highest in at least 17 years.

"The difficulty we have is like other countries in Europe: we need to solve the problem of contagion coming from Greece, Ireland and maybe now Portugal," Reynders said. "We don't have any real problem in Belgium for the moment like that."

"The permanent mechanism must be with a huge amount of money -- if you don't organize, you always have speculation if it is enough for one, two or more countries," Reynders said. "For the moment the discussion next week will be about approving the plan for Ireland and then to have some information about the situation in Portugal."

Pressure Cooker Gauge on Red

Would it matter if Trichet announced tomorrow a willingness to extend $20 trillion?

I suggest that if such an announcement mattered at all, it would be in the opposite manner these clowns think. If anything, it would cause an emperor-has-no-clothes moment that would spook the market and crash the Euro.

Greece and Ireland are insolvent. Spain, Portugal, and Belgium are under sever stress. The proper way to alleviate the stress is to admit a need for haircuts on senior bonds, and take those haircuts.

For a discussion, please consider Barbershops Open in 2013, Market Screams for Haircuts Today; European Crisis Spreads to Core as Belgian Bond Yields Surge; Another "Stress Test" Scam

Unfortunately, instead of considering haircuts on senior bonds, ECB president Trichet, Christian Noyer (the governor of the Bank of France), and Belgian Finance Minister Didier Reynder, all insist there will be no haircuts.

The instruction manual says the cooker will explode if the pressure is too great, yet Trichet, Noyer, and now Reynder keep increasing the pressure. The longer they attempt to walk this irresponsible line, the more the pressure will build.

How much more pressure the cooker can take is anyone's guess, but the gauge is clearly in the red zone and the cooker is liable to explode at any time.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Ron Paul Suggests We Need "Fed-WikiLeaks"

Posted: 04 Dec 2010 03:20 PM PST

This is a quick post on the need for more transparency at the Fed. I will have more on Ron Paul including a Congressional email campaign early next week, when more will see it.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Your Weekly Address: Tax Cuts and Unemployment Insurance

Your Daily Snapshot for
Saturday, Dec. 4, 2010

Your Weekly Address: Tax Cuts and Unemployment Insurance

With President Obama visiting troops in Afghanistan, Vice President Biden says Congress must extend both the middle class tax cuts and unemployment insurance for the sake of those families and the broader economy.

Watch the video.

Weekly Wrap Up

A quick look at the week of November 29th, 2010:

Quote: “Some people ask whether America’s best days lie ahead or whether our greatness stretches back behind us in the stories of those who’ve gone before. And when I look out at all of you, I know the answer to that. You give me hope. You give me inspiration. Your resolve shows that Americans will never succumb to fear. Your selfless service shows who we are, who we always will be -- united as one people and united as one nation -- for you embody and stand up for the values that make us what we are as a people,” said President Obama to the troops at Bagram Air Base during a surprise visit to Afghanistan.

West Wing Week: “Sharp Elbows” Watch the video.

Reasons to DREAM: Here are 10 reasons why Congress needs to pass the DREAM Act.

“A New Dialogue”: The President is optimistic tone following a meeting with bipartisan Congressional leaders. Watch the video.

White House Christmas: See how the White House gets into the holiday spirit -- 19 Christmas trees, 97 volunteers, 40,000 pipe cleaners and much, much more. Also, don’t miss a time-lapse video that captures the making of the Official White House Christmas Tree.

2 Million: The number of Americans who lost their unemployment insurance when it expired this week. A reality that the President called, “A potential tragedy for those individual families,” if the program is not extended.

Your Voice at the UN: Ambassador Rice wants the world’s decision-makers to hear what issues matter to you. Find out how you can shape the debate at the next Security Council meeting.

DADT: The President asks Congress to repeal Don’t Ask, Don’t Tell. Read his statement on the DOD report, plus a round-up of newspaper editorials supporting the repeal of DADT.

Chu Answered: Energy Secretary Steven Chu answers your questions on innovations in clean energy as part of Tuesday Talks. Watch the video.

Heads of States: President Obama and Vice President Biden speak to newly-elected governors. Watch the video.

“The People’s House”: First Lady Michelle Obama kicks off the holiday season by welcoming military families to the White House to preview the holiday decorations. Watch the video.

White House, Red Ribbon: President Obama commemorates World AIDS Day. Watch the President’s message and see a photo of the red ribbon that adorned the White House’s North Portico.

Hanukkah, Oh Hanukkah: President Obama, Vice President Biden and the First Lady celebrate the 2nd night of Hanukkah with friends and leaders from the Jewish community. Watch the video.

@PressSec: Press Secretary Robert Gibbs answers your questions from Twitter in another installment of First Question.

A New START: President Obama and General Colin Powell push for the ratification of the New START nuclear treaty with Russia. Watch the video.

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Seth's Blog : The world's worst boss

[You're getting this note because you subscribed to Seth Godin's blog.]

The world's worst boss

That would be you.

Even if you're not self-employed, your boss is you. You manage your career, your day, your responses. You manage how you sell your services and your education and the way you talk to yourself.

Odds are, you're doing it poorly.

If you had a manager that talked to you the way you talked to you, you'd quit. If you had a boss that wasted as much as your time as you do, they'd fire her. If an organization developed its employees as poorly as you are developing yourself, it would soon go under.

I'm amazed at how often people choose to fail when they go out on their own or when they end up in one of those rare jobs that encourages one to set an agenda and manage themselves. Faced with the freedom to excel, they falter and hesitate and stall and ultimately punt.

We are surprised when someone self-directed arrives on the scene. Someone who figures out a way to work from home and then turns that into a two-year journey, laptop in hand, as they explore the world while doing their job. We are shocked that someone uses evenings and weekends to get a second education or start a useful new side business. And we're envious when we encounter someone who has managed to bootstrap themselves into happiness, as if that's rare or even uncalled for.

There are few good books on being a good manager. Fewer still on managing yourself. It's hard to think of a more essential thing to learn.