Central Perk: 23 iun. 2011

joi, 23 iunie 2011

Mish's Global Economic Trend Analysis

"Papandreou has Serious Doubts Greek Parliament Will Take Necessary Steps"
Republicans and Democrats Splinter Into Bewildering Array of Factions on Debt Ceiling Limit Demands
Oil Plunges $6 Following International Energy Agency Pledge to Release 60 Million Barrels from Strategic Stockpile
Trichet Admits the Obvious "Risk Signals Are Flashing Red"; Ireland Snubs ECB With Renewed Threat to Bank Bondholders

"Papandreou has Serious Doubts Greek Parliament Will Take Necessary Steps"

Posted: 23 Jun 2011 12:09 PM PDT

Greek finance minister Evangelos Venizelos (the former defense minister appointed to a new post in a cabinet shakeup, and who knows little about finance) is under pressure from labor unions to get a change in austerity measures and under pressure by the EU to not change a thing.

Reuters reports EU tightens squeeze on Greece; banks discuss rollover

Greece's new finance minister grappled with EU and IMF officials over gaps in his austerity plans on Thursday, with European leaders insisting on deep spending cuts and more tax hikes if Athens wants to secure funds and avoid potential default.

Euro zone governments are meanwhile talking to European banks and insurance companies to try to convince them voluntarily to maintain their exposure to Greek debt when their bonds mature, as part of a possible second rescue for Athens.

Greek Finance Minister Evangelos Venizelos met inspectors from the European Commission, European Central Bank and the International Monetary Fund in Athens to try to iron out differences over the current bailout program.

"All conditions must be met," Luxembourg Prime Minister Jean-Claude Juncker told reporters as he arrived for a summit of EU leaders at which Greece's crisis will top the agenda.

"If Greece does what it has to do, we will do what we have to do. This is not a threat. It's just a confirmation that we're continuing our efforts."

While Papandreou has expressed confidence over the June 28 vote in public, Slovak Prime Minister Iveta Radicova said he had voiced uncertainty in a private telephone call on Wednesday.

"Papandreou has serious doubts about whether the necessary steps will pass in parliament," Radicova told the Slovak parliament's European affairs committee.

Once again it's important to remember this pissing in the wind cannot accomplish a thing, but make the size of the default bigger later. Of course, the rating agencies are likely to rule the rollover by banks constitutes a default anyway.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Republicans and Democrats Splinter Into Bewildering Array of Factions on Debt Ceiling Limit Demands

Posted: 23 Jun 2011 11:14 AM PDT

Tick Tock. Each passing day sends the budget impasse closer to the August 2 deadline. Yet with each passing day, conflicting demands make a compromise even more unlikely.

Please consider Congressional leaders increase pressure on group discussing debt-reduction deal

Congressional leaders from both parties made new and competing demands Wednesday in exchange for their votes to raise the nation's debt limit, increasing pressure on a bipartisan group attempting to negotiate a debt-reduction deal with the White House.

Top Senate Democrats, led by Majority Leader Harry M. Reid (Nev.), said they have told Vice President Biden, who is leading the talks, that any agreement on raising the legal borrowing limit must include an effort to boost the flagging economic recovery alongside deep spending cuts sought by Republicans.

The Democrats said they would prefer to see new spending on roads, bridges and other transportation projects; new investment in green energy; or additional resources for job training to show that the party is working to create jobs and lower the nation's 9 percent unemployment rate.

The Democrats' call came on the same day that conservative advocacy groups asked Republicans to sign a pledge saying that they vow to vote against an increase in the $14.3 trillion debt limit without sharp and immediate spending cuts, new caps on annual spending and an amendment to the Constitution that would require Congress to balance the budget.

"Politicians of all stripes, Democrats and Republicans, have spent this country to the brink of insolvency," said Sen. Rand Paul (R-Ky.), who said he would not vote to raise the debt ceiling without winning a balanced-budget amendment.

As negotiators race to produce a bipartisan compromise before an Aug. 2 deadline, the proliferation of demands suggests that any deal could face significant obstacles on the road to final passage. In both the House and the Senate, Republicans and Democrats are splintering into a bewildering array of factions and issuing ultimatums that cannot all be met.

In the Senate, for example, a bipartisan group is pushing for a far more ambitious deal to reduce the debt. That group — led by Budget Committee Chairman Kent Conrad (D-N.D.) — is considering withholding its votes for a long-term debt-limit increase unless it sees far more than the $2 trillion in savings that has been the goal of the Biden talks.

Meanwhile, the no-taxes message of the Republican Party was underscored Wednesday by Senate Minority Leader Mitch McConnell (Ky.), who ruled out any revenue increase — even if it came through closing tax loopholes — as part of the talks.

"They couldn't even get that done when they owned the government. . . . So, look, taxes aren't going to be raised," McConnell told reporters at a breakfast held by the Christian Science Monitor.

Irreconcilable Differences

Some Democrats want more spending in return for budget cuts. My math says that makes no sense. Meanwhile, Budget Committee Chairman Kent Conrad (D-N.D.) wants more budget cutting, clearly in conflict with most Democrats.

Count Rand Paul as a "no" vote in any case. I would love to see a balanced budget amendment but that is unlikely to be part of any compromise.

Democrats are willing to accept a payroll tax cut as part of the package, but how would that be paid for? Regardless, the idea is a dumb one. It will not do a damn thing to get businesses to hire anyone. Nor would another repatriation holiday.

Indeed, the latter would probably hurt small businesses because none of them have tax shelters like GE and Google.

Financial Chicken

Armageddon will not happen if the debt ceiling is not raised. Unfortunately, in spite of what appears to be irreconcilable differences, some sort of sorry compromise will be worked out.

Expect Republicans to cave-in with counterproductive tax cut sweeteners in this game of Financial Chicken. I hope I am wrong.

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

Oil Plunges $6 Following International Energy Agency Pledge to Release 60 Million Barrels from Strategic Stockpile

Posted: 23 Jun 2011 07:32 AM PDT

A triple whammy hit commodities today and sent the US dollar up sharply against the Euro and other currencies.

Trichet admits the Obvious: "Risk Signals Are Flashing Red"; Ireland Snubs ECB With Renewed Threat to Bank Bondholders
US unemployment weekly claims came in higher than expected
International Energy Agency said 60 million barrels of oil would be released from strategic stockpiles

Please consider Oil tumbles as U.S., IEA release oil stocks

Oil fell sharply on Thursday, with North Sea Brent down more than $6 per barrel, after the International Energy Agency said 60 million barrels of oil would be released from strategic stockpiles to help the global economy.

The announcement comes after OPEC failed to raise production at a meeting on June 8 and despite assurances from OPEC's biggest producer Saudi Arabia that it would lift supplies unilaterally.

"Greater tightness in the oil market threatens to undermine the fragile global economic recovery," the IEA said.

The IEA said it would release 2 million barrels per day (bpd) over 30 days onto the world market to fill the gap in supplies left by the disruption to Libya's output. Libya was exporting about 1.2 million bpd.

Analysts and traders said they had not expected the move:

"I'm really surprised. Everyone's been saying they've got enough stocks. This should keep WTI (U.S. crude) under the $100 (per barrel), but really we want Brent there, and this should help," said Robert Montefusco, broker at Sucden Financial.

Energy Futures as of 2011-06-23 9:30 US Central

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

Trichet Admits the Obvious "Risk Signals Are Flashing Red"; Ireland Snubs ECB With Renewed Threat to Bank Bondholders

Posted: 23 Jun 2011 06:54 AM PDT

On rare occasions ECB president Jean-Claude Trichet will admit the obvious. In contrast, you will seldom hear something like this from the Fed: Trichet Says Risk Signals Are Flashing Red as Debt Crisis Threatens Banks

European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing "red" as the debt crisis threatens to infect banks.

"On a personal basis I would say 'yes, it is red'," Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group's planned "dashboard" to monitor risks. "The message of the board is that" the link between debt problems and banks "is the most serious threat to financial stability in the European Union."

Trichet, who chairs the ESRB, made the remarks as European leaders meet in Brussels to discuss how to stave off a Greek default, while preparing a second bailout. The EU is trying to avoid a repeat of the financial crisis that followed the 2008 collapse of Lehman Brothers Holdings Inc. (LEHMQ) and resulted in European governments setting aside more than $5 trillion to support banks.

While Greek Prime Minister George Papandreou earlier this week won a vote of confidence, bolstering his new government's chances of pushing through austerity measures to secure further financial aid, European finance ministers said earlier this week they would hold off on approving a 12 billion-euro ($17 billion) payment to the country promised for July until passage of the plans to cut the budget deficit and sell state assets.

"European leaders will try and convince Greeks and financial markets when they meet in Brussels today and tomorrow that they have a workable plan to help Athens avoid a debt default," said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. They'll use a "mixture of arm-twisting and moral support" to force Greece to adopt further reform.

Federal Reserve Chairman Ben S. Bernanke downplayed the risk of a Greek default on U.S. banks, telling reporters yesterday that the impact would be "very small." With "very few exceptions, the money-market mutual funds don't have much direct exposure to the three peripheral countries which are currently dealing with debt problems," he said.

Trichet's Game

While honesty is appreciated for honesty's sake, I rather suspect this is simply Trichet's way of warning the Greek parliament to "play ball" exactly as he wants and pass the austerity measures the ECB, IMF, and EU demand.

Thus, Trichet deserves zero credit for his apparent honesty.

Ireland Snubs ECB

Bloomberg reports Ireland Snubs ECB Effort to Avoid Meltdown With Threat to Bank Bondholders

Ireland opened a new front in the drive to restructure debt on the euro area's periphery, adding to the European Central Bank's concerns as it tries to head off another wave of financial turmoil.

Irish Finance Minister Michael Noonan said yesterday that senior bondholders should share in the losses of Anglo Irish Bank Corp. and Irish Nationwide Building Society, reversing a policy of protecting owners of senior securities. The ECB is against imposing losses on investors. President Jean-Claude Trichet said on Feb. 7 that haircuts aren't part of a plan to reduce Ireland's debt load.

Ireland's about-face on bondholder involvement in its banking crisis comes as European lawmakers struggle to settle a dispute over how to avoid a Greek sovereign default. While German Finance Minister Wolfgang Schaeuble said last week that Europe's biggest economy insists on the participation of the private sector, his French counterpart Christine Lagarde has ruled out any action that constitutes a "credit event," backing the ECB's view.

"Noonan must be kidding," said Klaus Baader, an economist at Societe Generale in London

Let's Hope Noonan Not Kidding

We should all hope that Noonan is not kidding. Indeed, Noonan should take advantage of the situation now and ask for 60% haircuts on all senior bonds not just a pissy 3 billion Euros.

Iceland told the EU and IMF where to go. Ireland should do the same.

What will Trichet do? The answer is throw another hissy fit. The correct response to Trichet's hissy fit is to threaten default and threaten to leave the Euro.

Who really has the upper hand here? The answer is Ireland, and Ireland should use it, starting with a nice slap in the face to Trichet, the ECB, the EU, and the IMF.

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

Damn Cool Pics

Chinese College Student's "Washing Machine"
The 50 Most Googled Women on the Web
Courtney Stodden, The 16-Year-Old Bride
The World's Scariest Job
Should you invest in the Grouponzi IPO?
Balding Celebrities

Chinese College Student's "Washing Machine"

Posted: 23 Jun 2011 04:25 PM PDT

A short video that recently spread on the Chinese internet featuring one Chinese college student's "creative" method for "automatically" washing his clothes using two water faucets. In China, many people still handwash their laundry.

The 50 Most Googled Women on the Web

Posted: 23 Jun 2011 03:12 PM PDT

According to Coed Magazine, which compiled a list for the 50 Most Popular Women on the Web, Lady Gaga is the most popular woman online based on Google searches and statistics.

Who would have thought that Justin Bieber will be included in the list of 50 most popular women on the Internet. Among the 50 most talked about women in Internet Justin Bieber is on the list and is making the number 2 on the list. Well, nobody can deny its popularity, and I think there's something to say about his fame, if it can really add to the list of best looking women.

#50 Blake Lively - 47,800,000 Results

#49 Marilyn Monroe - 47,900,000 Results

#48 Cheryl Cole - 49,700,000 Results

#47 Carrie Underwood - 50,500,000 Results

#46 Kelly Clarkson - 51,400,000 Results

#45 Hillary Clinton - 51,400,000 Results

#44 Scarlett Johansson - 52,700,000 Results

#43 Michelle Obama - 52,900,000 Results

#42 Natalie Portman - 53,100,000 Results

#41 Nicole Scherzinger - 56,400,000 Results

#40 Penélope Cruz - 57,200,000 Results

#39 Chelsea Handler - 57,800,000 Results

#38 Hilary Duff - 58,500,000 Results

#37 Ciara - 58,800,000 Results

#36 Ke$ha - 61,600,000 Results

#35 Kylie Minogue - 62,700,000 Results

#34 Vanessa Hudgens - 62,400,000 Results

#33 Emma Watson - 67,500,000 Results

#32 Jessica Simpson - 69,100,000 Results

#31 Kristen Stewart - 71,300,000 Results

#30 Jennifer Aniston - 71,400,000 Results

#29 Ashley Tisdale - 71,600,000 Results

#28 Fergie - 73,700,000 Results

#27 Jessica Alba - 79,500,000 Results

#26 Kate Middleton - 81,300,000 Results

#25 Sarah Palin - 90,100,000 Results

#24 Mariah Carey - 107,000,000 Results

#23 Christina Aguilera - 111,000,000 Results

#22 Megan Fox - 118,000,000 Results

#21 Oprah Winfrey - 124,000,000 Results

#20 Angelina Jolie - 134,000,000 Results

#19 Paris Hilton - 145,000,000 Results

#18 Taylor Swift - 159,000,000 Results

#17 Lindsay Lohan - 173,000,000 Results

#16 Avril Lavigne - 175,000,000 Results

#15 Adele - 177,000,000 Results

#14 Selena Gomez - 179,000,000 Results

#13 Beyonce - 195,000,000 Results

#12 Miley Cyrus - 207,000,000 Results

#11 Jennifer Lopez - 214,000,000 Results

#10 Madonna - 230,000,000 Results

#9 Kim Kardashian - 232,000,000 Results

#8 Shakira - 239,000,000 Results

#7 Katy Perry - 263,000,000 Results

#6 Britney Spears - 277,000,000 Results

#5 Nicki Minaj - 296,000,000 Results

#4 Cher - 340,000,000 Results

#3 Rihanna - 384,000,000 Results

#2 Justin Bieber - 496,000,000 Results

#1 Lady Gaga - 578,000,000 Results

Courtney Stodden, The 16-Year-Old Bride

Posted: 23 Jun 2011 12:43 PM PDT

Love is a weird thing: You never quite know when and where cupid's arrow might strike. Take, for example, the recent nuptials of Doug Hutchison, a 51-year-old actor best known for a recurring role on Lost, to (allegedly) 16-year-old Courtney Stodden. The mother of 16-year old Courtney did consent which is the only reason the wedding is legal.

A model at age 12, Courtney signed with the John Casablanca modeling agency, and from there entered the world of Donald Trump's Miss Universe pageant at age 15. She was Miss Ocean Shore WA, USA and represented her city in the Miss Washington pageant.

Courtney is also a pop singer with three original songs called We Are America, Crazy, and Car Candy.

Doug Is An Actor Who You Might Recognize As That Creepy Guy From "Lost"

Or That Creepy Guy From "The Green Mile"

Or That Creepy Guy From "The X-Files"

The World's Scariest Job

Posted: 23 Jun 2011 11:13 AM PDT

While some people would find it unbearable to go anywhere near the edge of a cliff, these Chinese workers are building a 3ft-wide road made of wooden planks on the face of a mountain that's thousands of feet high. Once finished, it is hoped sightseers will flock to here to edge along and admire the views.

The 'road' - the width of a dinner table - they're assembling is on Shifou Mountain in Hunan Province and stands vertical at 90 degrees without any slopes or alcoves. What's more, these workers from China's eastern Jiangxi Province toil away on it with what appear to be few if any safety measures.

Source: telegraph.co.uk

Should you invest in the Grouponzi IPO?

Posted: 23 Jun 2011 11:07 AM PDT

On the heels of filing its $750 million initial public offering, online coupon startup Groupon is under heavy scrutiny from critics.

Until recently, most people praised Groupon for its simplistic business model and its incredible growth, which some have called the fastest of any company to date.

Groupon lets users purchase steeply discounted deals from local merchants. Discounts range anywhere from 30 to 80 percent off the regular sale price on food, trips, drinks at a local bar, etc. Groupon takes half of the money from every deal sold, which is a pretty easy way to bring in a lot of money without having to get creative.

But the Chicago-headquartered company is still running at a loss despite the astonishing revenue growth, which went from $94,000 in 2008 to $713 million in 2010, according to the filing. Groupon has consistently lost money every quarter since launching except for one — the first quarter of 2010, when it brought in an $8 million profit. Comparatively, it lost $146.5 million in the first quarter of 2011.

Click to Enlarge.

Source: onlinemba

Balding Celebrities

Posted: 22 Jun 2011 07:50 PM PDT

These celebrities went from a full head of hair to being bald. Some of them probably had such a extreme haircut because they were going bald anyway, some because it was required for a movie roll, and some just to make a statement. Regardless of the reason they sure look different.

Eddie Murphy