joi, 29 decembrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Race Baiting and Ron Paul: Actions Speak Louder Than Words; Truth is Indeed Powerful

Posted: 29 Dec 2011 07:45 PM PST

When it comes to Ron Paul, many people pretend, with great indignation, that words not even said speak louder than actions. Jonathan Capehart writing for the Washington Post is such a person.

Before explaining further, first let's watch a video.



Admittedly that is a political ad. So what?

Here is the key question: Is there any reason to doubt the events in the video? If so why? Assuming, the video true, is there any reason to believe there is a racist bone in Ron Paul's body? Can the same be said for Newt Gingrich, Mitt Romney, or even Barrack Obama?

Mind you, the video describes an action, one that shows true character at precisely the right time. Sadly, Jonathan Capehart does not give a damn about that, he would rather spread lies and innuendo.

Please consider Ron Paul deserves to be 'blot out'.
The new ad from Revolution PAC is pretty powerful. James Williams, a black man, talks about his efforts to get medical attention for his pregnant white wife at a Texas hospital in the 1970s. The crescendo comes when a young doctor named Ron Paul broke through the indifference of the staff to give them the help they needed. Their baby would be stillborn. And Paul paid their medical expenses. Then Williams extols the virtues of Paul — his honesty and willingness to take on the establishment.
Truth is Indeed Powerful

Yes, Jonathan. The video is indeed powerful. The simple explanation is truth is always powerful. Lies and innuendo aren't.

Nonetheless Capehart prefers to go on spreading innuendo.
Revolution PAC is hoping that a black man coming to the defense of Paul will blot out the controversy surrounding the Texas congressman and the racists statements polluting newsletters bearing his name in the 1980s and 1990s.

Paul, a man who wants to be entrusted with the presidency, owes the American people a clear accounting of how hatred came to be scribbled regularly in publications bearing his name and how he had no knowledge of it. His dismissive disavowal of the matter is beyond inadequate.
Nothing will satisfy Jonathan Capehart. That video proves it. How? Capehart embedded the video in his post.

It matters not to Capehart that Paul did not say the things attributed to him. All that matters to Capehart is that Paul's name was associated with them. If Capehart is looking for racists, he ought to look in the mirror.

Only racists or fools (Capehart is both) can possibly believe that words not even said, are more important than actions!

Nonetheless, I thank Capehart. His article will be seen by thousands, and people will see Capehart for the racist fool he is.

Racist's and fool's minds are already made up. However, everyone else (and this is far more important) will see Ron Paul is not the racist that Capehart portrays him to be.

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.

China to Withdraw Support for Foreign Investment in Autos; Three Reasons China Will Not Be a Boon to Global Auto Sales

Posted: 29 Dec 2011 12:43 PM PST

US and other auto manufacturers banking on increased car sales in China for 2012 have three reasons to be concerned.

  1. Blistering growth in Chinese auto sales is expected to plunge
  2. China is taking efforts to dampen foreign investment in autos
  3. Trade wars

The Wall Street Journal reports China to Damp Foreign Investment in Auto Sector
China will withdraw its support for foreign capital in the country's auto-manufacturing sector in an effort to build up its domestic industry, state media reported late Thursday.

The report from the state-run Xinhua news agency didn't disclose additional details, and it was unclear whether it would impact existing operations by foreign auto makers. U.S. and European auto makers, including General Motors Co. and Volkswagen AG, and Japanese auto makers like Toyota Motor Corp. and Honda Motor Co. have long produced cars in the country through joint ventures with local partners.

Foreign auto makers have played a key role as China has shot up to become the world's No. 1 auto market. After blistering growth, auto sales this year are expected to grow no more than 3%, which would total 18.6 million vehicles, according to the China Association of Automobile Manufacturers, an industry group.

The report said officials would encourage more foreign investment into environmentally friendly technologies, alternative-fuel cars and other areas with guidelines taking effect Jan. 30. The government will lower foreign restrictions by allowing companies to invest in more sectors and increasing caps on the amount of foreign capital in some areas, the report said.
Clearly China is concerned about growth. So, don't look for efforts by foreign manufacturers to expand production or build new plants in China to be approved.

Moreover, look for tit-for-tat trade wars to heat up in 2012 as noted in China to Impose Anti-Dumping Duties on GM; "Fair Trade" Idea is Self-Serving Scam; Proposal to Stop "Free Sunlight" Gains Support From Mitt Romney.

Should Mitt Romney win the election, expect global trade to collapse in 2013.

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.

Do Blogs Present "News" or "Commentary"? Is there a Difference? Should There Be?

Posted: 29 Dec 2011 10:30 AM PST

Do bloggers present "news" or "commentary"?

The reason I ask is the advertising agency that represents my blog said advertisers were "looking to hear from our publishers on whether or not they break new stories".

Do I break news stories? Is reporting on the news (which is in general what all the economic bloggers do), news in and of itself?

My initial thought was that I comment on the news, not "break news stories". As I look at Calculated Risk, the Big Picture, and even Zero Hedge I would suggest we all primarily comment on the news, although all of us occasionally have major exclusive thoughts.

The criteria, however, which I initially missed was "external news sources crediting my blog".

On that basis, it is crystal clear that Calculated Risk, the Big Picture, Zero Hedge and my blog are news sources. Nonetheless I needed to provide recent citations.

My search turned up many things I was aware of and a few things I was not aware of at all.

Here are some examples I was well aware of in advance.

Known List


Surprise List

I frequently review my hit list as do other bloggers. There are numerous other examples I could cite. I found one big surprise in my search.

Top 10 Blogger Blogs

Please consider the top ten blogspot blogs 2011- blogger powered blogs

The first 9 "blogspot" blogs are Google internal blogs. I was quite surprised to find myself in the list at all. Yet there I am, at #10. I do not know for how long. If Google launches another blog, not long. However, the record shows I did beat out the official Twitter blog and other prominent blogs.
#10 Mish's Global Economic Trend Analysis: Mike Shedlock / Mish is a registered investment advisor representative for Sitka Pacific Capital Management.
Alexa Traffic Rank: 18,583 , Links to Site: 3138

Top Financial Blog Citations

  1. New York Times: NYT 10th Annual Year in Ideas - #1 Idea of the Year 'Do-It-Yourself Macroeconomics'
  2. Time Magazine: Best 25 Financial Blogs
  3. Bloomberg: Financial Blogs: The Best of the Bunch


Still, I return to the initial question. Do bloggers offer "news" or "commentary"? What does Fox News offer? The Wall Street Journal? LA Times?

Look at recent headlines by Time Magazine, the LA Times, CNN, Huffington Post, the Chicago Tribune, and numerous other places that "Ron Paul Walked Out" of an interview with CNN.

The truth is quite different as noted in Ron Paul Did Not "Walk Out" of CNN Interview; Blatantly Biased Headline by Time Magazine; Six Reasons to Vote for Paul


Much of what is presented as "facts" by major news organizations is in reality an infomercial for a slanted point of view. Furthermore, major news stories headlines frequently do not match the article.

Government data is often questionable, and I would be remiss if I failed to point out Jean-Claude Juncker, Luxembourg PM and Head Euro-Zone Finance Minister famously stated "When it becomes serious, you have to lie". In such cases, even if the news reporting is not purposely slanted, an article itself might be, unbeknown by the writer.

So, is anything really news, or is it all commentary? At least with bloggers, everyone understands the score.

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.

Charts of the Day: European Demand Deposits; Global Equity Performance

Posted: 29 Dec 2011 08:38 AM PST

Here are a couple of charts to consider courtesy of Steen Jakobsen, chief economist at Saxo Bank in Denmark.

European Demand Deposits



Clearly capital flight is taking place in a major way in Greece and an important if relatively minor (for now) way in Italy.

Global Equity Performance



click on chart for sharper image

Don't expect the same degree of out-performance from US equities in 2012.

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.

Mish 2012 Predictions; 2011 Year in Review with Max Keiser

Posted: 29 Dec 2011 01:23 AM PST

Shortly before Christmas I did a video discussion of 2011 with Max Keiser with a look-ahead to a few ideas for 2012.



Link if video does not play: On the Edge with Mish Shedlock

Part of the discussion was a recap of some of my call for 2011 as noted in Mish 2011 Predictions Review

Looking ahead to 2102, I see a continuation of the same themes, but a few new ideas as well.

Ten Themes for 2012

  1. Severe European Recession as the sovereign debt crisis escalates: Austerity measures in Italy, Greece, Spain, and Portugal plunges all of Europe into a major recession. Spain and Portugal will follow Greece into an outright depression.
    2.  
  2. Political Crisis in Europe: French President Sarkozy loses to socialist challenger Francois Hollande. German Chancellor Angela Merkel's coalition collapses. The Merkozy agreement is either modified to do virtually nothing or is not ratified at all. This chain of events will not be good for European equities or European bonds.
    3.  
  3. Relatively Minor US Economic Recession: The US will not avoid a recession in 2012. Retail spending ran its course with the tail-off into Christmas of 2011. The Republican Congress has little incentive for fiscal stimulus measures in 2012 so do not expect any. However, with housing already limping along the bottom in terms of construction and investment (not prices), a US GDP decline will not be severe. The US may see a recession even if GDP barely drops. Certainly the US recession will be far less severe than the recession in Europe and Australia.
    4.  
  4. Major Profit Recession in US: Profit margins in the US will be torn to shreds as businesses will be unable to reduce costs the same way they did in 2008 and 2009 (by shedding massive numbers of employees).
    5.  
  5. Global Equity Prices Under Huge Pressure: Don't expect the same degree of reverse decoupling of US equities we saw in 2011. The US economy will be better than Europe, but equities globally will take a hit, including the US. Simply put, stocks are not cheap.
    6.  
  6. Fiscal Crisis in Japan Comes to Forefront: Japan's fiscal crisis and debt to the tune of 200+% of GDP finally matters. The crisis in Japan will start out as a whimper not a bang, but will worsen as the year wears on. If Japan responds by monetizing debt, not a remote possibility at all, Japanese equities will massively outperform in nominal and perhaps even in real terms. "Real" means "yen-adjusted", not "inflation-adjusted" terms.
    7.  
  7. Few Hiding Spots Other than the US Dollar: US treasuries and German bonds were safe havens in 2011, but with yields already depressed don't expect huge gains. Expect to see a strengthening of the US dollar across the board against all major currencies. Moreover, cash (one the most despised asset classes ever), may outperform nearly everything, even if the dollar goes virtually nowhere. Hiding places will be few and far between for much of 2012.
    8.  
  8. US Public Union Pension Plans Under Attack: States finally realize the need to rein in pension plans much to the dismay of public unions. Social and economic tensions in the US rise.
    9.  
  9. Regime Change in China has Major Ramifications: China will start a major shift from a growth model dependent on housing and infrastructure to a consumer-driven model. The transition will not be smooth. Property prices in China will collapse and commodity prices will remain under pressure.
    10.  
  10. Hyperinflation Calls Once Again Will Look Laughable: Unless there is a major disruption in the Mideast (which I do not rule out by any means), oil prices will drop and food prices will follow. If so, we will once again see silly talk from the Fed about preventing "unwelcome drops in inflation". As always, the deflation key is not prices at all but rather credit and credit marked-to-market. Expect credit in all forms to come under attack and expect junk bonds take a hit as well. By the way, regardless of what happens to oil prices, hyperinflation calls will look silly.

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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