Mish's Global Economic Trend Analysis

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• Pissing and Moaning Over 1.875% of the Budget
• Addicted to the Nanny State; Politicians are Like Pushers
• March LPS Mortgage Monitor Report: 30% of Loans in Foreclosure have not made a Payment in Over 2 Years

Pissing and Moaning Over 1.875% of the Budget Posted: 29 Mar 2011 10:21 PM PDT Democrats and Republicans are horn-locked in a debate about whether budget cuts should be $30 billion or $60 billion. Senate Majority Leader Harry Reid, says President Barack Obama's offer to accept a total of $30 billion in spending cuts for 2011 is "clearly in the same ballpark" with what House Republican leaders asked for. The pathetic debate lingers on. Please consider Budget Negotiations Stall Amid Charges of Inaction as U.S. Shutdown Looms Republicans and Democrats in Congress traded charges over which party is stifling agreement on budget cuts needed to avert the first U.S. government shutdown in 15 years. With no accord in sight on legislation to extend government spending past April 8, Senate Majority Leader Harry Reid, a Nevada Democrat, accused Republican leaders of trying to placate an "extreme minority" of their party by spurning an offer to reach a deal. President Barack Obama's offer to accept a total of $30 billion in spending cuts for 2011 is "clearly in the same ballpark" with what House Republican leaders initially sought before their rank-and-file demanded deeper reductions, Reid said. "Are they afraid to tell the extreme Tea Party members of their caucus that they're trying to find common ground with Democrats?" Reid asked yesterday at his weekly news conference. Pathetic Performance by Both Parties Quite frankly this is a pathetic performance by both parties. Moreover, I will flat out state the Republicans have only themselves to blame. By offering a piss poor budget reduction of a mere $60 billion, they now look like the bad guys for not meeting the Obama half-way at $30 billion. Just the Math Maam Please do the math. $30 billion is a mere 1.875% of the budget. That is what everyone is pissing and moaning over. If Republicans had any balls, and they clearly don't, they would have proposed cutting the budget by $300 billion. Then, a compromise at $150 billion would have been a mere 9.375% of the deficit. It is is bad enough to argue over 9% of the budget, so what does it mean to bicker over 1.875% of the budget? What it means is that neither party has the balls to fix a damn thing. It also means the Republicans can blame themselves for being placed in this absurd position. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Addicted to the Nanny State; Politicians are Like Pushers Posted: 29 Mar 2011 01:27 PM PDT Here is an email from reader Buck Novak in response to Misguided Views of Libertarian Economics and the Alternative "Regulation" Model Buck writes ... Hello Mish I find it interesting that people who hate big corporations embrace the ever-growing nanny state. The reality is the nanny state is nothing but a gigantic corporation that hires those who would not be hired in the private workforce at prices far more than they are worth. In many respects, government is no different than big business. Governments, like business want to grow. Bureaucrats always want more employees and bigger budgets. The difference is the nanny state is run by politics not by profit. It is run for a political agenda. If you want a perfect example of a corporation too big to succeed, it's the government. Take a look at those protesting in Wisconsin, Illinois, Ohio and elsewhere. Who is protesting government cuts? Why it's government employees. They protest for their benefit, not the benefit of the public at large and they want government to use even more force to take what it needs. What does it take to stop the madness? The Ever-Growing Nanny State Through a process of extortion, coercion, and vote buying, a population too dumb to figure out what is really going on becomes addicted to the nanny state. The only ones who benefit are the politicians and the nanny employees. They are in bed with each other. Unfortunately, misguided souls buy into the propaganda of the politicians and the public unions and clamor for more "nannyism" even though the process makes slaves out of everyone. Students are especially prone to supporting the nanny state in return for student loans that make those same students debt slaves for life. For more on the slavery aspect of public unions and collective bargaining advocates, please see Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You! Collective Bargaining neither a Privilege nor a Right There is one major difference between private business and the nanny business. Huge mistakes will eventually force big businesses out of business. However, the bigger the mistakes of the nanny state, the faster it grows. The current $1.6 trillion deficit should be proof enough. Stopping the Madness What does it take to stop the madness? It takes people willing to be involved. It takes leadership from Congress. It takes politicians willing to stand up to the public unions whose mission it is to addict everyone on nanny drugs. There is one other thing that would crash the nanny state: Force of the market. Greece is the perfect example. Unless we want to become like Greece, we must take action to halt the nanny state now. Politicians are Like Pushers Public union employees and those addicted to the nanny state need an ever-increasing "fix". They are like drug addicts, and politicians are like pushers. Think about drug addicts willing to do anything for their daily fix. Addicts will coerce, bribe, or steal to get what they want. Public unions are no different. Those not addicted are not equally motivated. Indeed, no one is as motivated as a drug addict in need of a fix. Like pushers, politicians supply the "fix" in return for votes. Thus, overcoming inertia of the nanny state and its addicts is difficult. I commend those like New Jersey Governor Chris Christie, Senator Rand Paul, Congressman Ron Paul, and Wisconsin Governor Scott Walker for their efforts to rein in the nanny state. It's not an easy process. Those addicted to the nanny state are willing to do anything to get their fix. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

March LPS Mortgage Monitor Report: 30% of Loans in Foreclosure have not made a Payment in Over 2 Years Posted: 29 Mar 2011 02:57 AM PDT Inquiring minds are reading the March 2011 LPS Mortgage Monitor. There is a bit of good news in the report. Delinquent and Non-Current Rates are improving. However, the rates are still exceptionally high historically. Also, some of the foreclosure data is skewed by moratoriums and reworked loans. On the other hand, option ARM foreclosures have increased dramatically over the last six months and 30% of loans in foreclosure have not made a payment for at least two years. 47% of those in foreclosure have not made a payment for at least 18 months. Charts and Comments from the LPS Report Delinquencies remain about twice the 1995-2005 average, foreclosure inventories are 7.8 times historical "norms". 30% of loans in foreclosure have not made a payment in over 2 years. February Month-End Data: Conclusions Delinquency rates resumed their decline after an increase in January and foreclosure inventories remain stable, slightly below historic highs. Delinquencies continue to improve as new problem loan rates decline and cure rates increase. Foreclosure start declines and foreclosure suspensions are reducing the upward pressure on inventories caused by foreclosure sale moratoria. An enormous backlog of foreclosures still exists with overhang at every level: There are three times the number of loans deteriorating greater than 90+ days delinquent as compared to foreclosure starts. There are also three times the number foreclosure starts vs. foreclosure sales. Foreclosure inventory levels are over 30 times monthly foreclosure sale volume. There are 42 pages of charts and tables in the report. Inquiring minds will want to take a closer look. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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