Central Perk: 14 iul. 2011

joi, 14 iulie 2011

Mish's Global Economic Trend Analysis

Bernanke Interferes in Fiscal Policy Yet Again, This Time Hoping to Place the Blame on Congress Rather than the Fed
Miller, Coors Beer Sales Completely Shut Off in Minnesota as Result of Licensing Snafu Before Government Shutdown
Utah School Board Offers Teachers a Take-It-Or-Leave-It Offer; My Very Brief Experiences as a Union Member
Business Inventories Rise 17th Consecutive Month; Will Sales Follow?
Weekly Unemployment Claims Exceed 400,000 14th Consecutive Week, Hurt by Slowdown in Minnesota; A Look at Population Adjusted Claims
Retail Sales Laugh of the Day: "Falling Gas Prices Held Back Retail Sales"; Weakest Performance Since July 2010 ; Auto Sales Mirage

Bernanke Interferes in Fiscal Policy Yet Again, This Time Hoping to Place the Blame on Congress Rather than the Fed

Posted: 14 Jul 2011 10:50 PM PDT

After bitching and moaning on numerous occasions about Congress interfering in monetary policy, Bernanke repeatedly plunges headlong into fiscal policy, hoping to place the blame for the next collapse on anyone other than the Fed.

Please consider Bernanke warns spending cuts could derail recovery

Federal Reserve Chairman Ben Bernanke warned on Thursday that overzealous cuts to government spending in the short term could derail a shaky recovery and said a debt default could wreak financial havoc.

"I only ask ... as Congress looks at the timing and composition of its changes to the budget, that it does take into account that in the very near term the recovery is still rather fragile, and that sharp and excessive cuts in the very short term would be potentially damaging to that recovery," Bernanke told the Senate Banking Committee.

On the second day of delivering the Fed's semiannual monetary policy report to Congress, Bernanke renewed his warning that a United States debt default would be devastating for the U.S. and global economies.

"It would be a calamitous outcome," Bernanke said. "It would create a very severe financial shock that would have effects not only on the U.S. economy, but the global economy."

Failure to raise the debt limit in time would constitute a "self-inflicted wound" to the economy, he added.

Bernanke has warned Congress on excessive budget deficits, warned Congress on reducing deficits too quickly, and warned Congress about not hiking the debt ceiling.

The only things Bernanke has not warned Congress about are motherhood, apple pie, and piss poor decisions by the Fed micro-managing the economy to death.

In short, Bernanke is looking to absolve himself and the Fed of blame when this whole mess blows sky high once again.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Miller, Coors Beer Sales Completely Shut Off in Minnesota as Result of Licensing Snafu Before Government Shutdown

Posted: 14 Jul 2011 07:29 PM PDT

The state of Minnesota failed to process submitted license renewals for Miller and Coors beer products before the government shutdown.

As a result, state officials have informed Miller and Coors that beer sales for all their products must stop. Worse yet, the distributors are told to come up with a plan to take their products off the shelves.

To further show you how asinine this setup is, the licensing fee is a mere $30 for each of 39 brands involved, a grand total of $1170.

Please consider Shutdown Puts Beer Sales on Ice in Minnesota

The state shutdown means Miller-Coors will have to stop selling beer in Minnesota.

State officials have told the company, it must come up with a plan to remove it's 39 brands of beer from shelves and in bars in a matter of days. The company failed to renew its brand license with the state before the shutdown. Each alcohol brand needs to pay a 30 dollar brand license fee. That fee is good for 3 years.

Without the license, Miller-Coors cannot sell in the state.

How much is the state going to lose in tax revenue? How much will stores lose in sales? Some things are so asinine you have to stop and shake your head at the stupidity of it all. This is one of those things.

Only a bureaucrat who deserves to be fired would dream of issuing an ultimatum like that to Miller and Coors.

The first thing the state should shut down is the idiots who made that ruling.

Addendum:

No sooner than I made this post than I see there is an agreement to end the shutdown. Regardless, it does not change the absurdity of the bureaucratic dunderheads in Minnesota that made the initial ruling.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Utah School Board Offers Teachers a Take-It-Or-Leave-It Offer; My Very Brief Experiences as a Union Member

Posted: 14 Jul 2011 03:08 PM PDT

Congratulations go to the Ogden, Utah school board for their Take-It-Or-Leave It Contract Deal to the teachers' union.

Teachers employed by the Ogden School District will get letters over this holiday weekend, informing them they have 20 days or fewer to sign a new contract or they will lose their jobs.

After months of contract negotiations with the teachers' association, the school district announced Thursday that it will bypass the representative body and offer a take-it-or-leave-it contract deal to its individual teachers.

The letters sent to teachers end with the words: "Please note that should we not receive your signed contract by 4:00 p.m. on July 20, 2011, we will declare your current position open for hire."

District Superintendent Noel R. Zabriskie said his word of choice to describe the school board's decision, and the features of the new contract, is "bold."

Doug Stephens, president of the Ogden Education Association, one of the organizations representing teachers in negotiations, said he is shocked.

"It is unprecedented in the state of Utah," Stephens said. "It's crazy. No school district or school board has ever done this before. This is a horrible thing."

Under the new contract, teachers who sign will receive a 2.93 percent increase in salary, with 1.6 percent a cost-of-living raise. The raise money will come from the district's rainy day fund.

The Ogden School District plans to phase out pay steps, a widely used system that rewards teachers with pay increases based on the number of years worked.

Zabriskie said the board's five main goals in decision making were: no increase in taxes, no increases in class size, no reductions in the school year, no reduction in personnel (except where categorical funding was reduced), and no reduction in student programs.

Email From Jeremy Peterson, Utah House of Representatives

Jeremy Writes ...

The local paper hates the idea as you can read from the amount of ink they gave to the union boss to trash the idea in the article. If you watch the video you can see that the Superintendant and board have taken a bold and much needed move. The Union folks are hating this.

The teachers don't currently have a contract and the new contract states that they will be transitioning to performance pay over a 6 year period. Unlike past contracts which have lasted years, the new contracts are year-to-year. Teachers who don't respond in the next three weeks will have their positions posted as "For Hire". This is a bold and courageous move forward.

Best Way to Deal With Public Unions

At long last, someone is dealing with public unions the way they should be dealt with (assuming they need to be dealt with at all which they don't). It would be better to get rid of them.

Mish Union Experiences

I have had many jobs in private industry. In not one of those jobs was I ever presented with anything other than a take-it-or-leave-it offer that unions are whining about.

I was actually a union member twice (not public unions), for short periods of time. The first was while working for a grocery store in Danville, Illinois, in high school. I became a union member more or less by accident. The store I worked at was bought out by a union store.

Because I was one of the best grocery baggers and fastest checkout clerks the store had, I worked the heavy traffic shifts such as Saturday afternoon instead of Saturday evening.

After the union came in, those who could not bag or run a register half as fast as I could got Saturday afternoon and I got stuck with Friday and Saturday evening because of seniority rules. I quit and went to another store.

My second experience with unions lasted precisely 3 days. I was hired by Lauhoff Grain Company in Danville and three days later the union went on strike over a lousy 10 cent an hour disagreement and that was that. I was never called back.

Unions Benefit the Weak and Punish Those With Skills

Unions punish those with skills in favor of those who put in their time. Unions benefit the weak at the expense of taxpayers and the strong.

Things are far worse in public unions because no one ever speaks up for the taxpayer.

Skilled Teachers Have Nothing To Fear

The more talented someone is, the more they should loathe unions.

It is in the vested interest of no one to get rid of highly skilled teachers. Likewise, it is in the vested interest of everyone except for union organizers and poor workers, to offer raises and promotions based on merit rather than longevity.

Thus, talented teachers have nothing to fear and everything to gain from a merit system. Sadly, most of them don't realize it.

Worse yet, school kids are negatively impacted by union pay, impacted by the inability to get rid of poor teachers, and negatively impacted by all sorts of union complexities.

For more on the benefit of getting rid of collective bargaining of teachers, please read Union-Busting is a "Godsend"; Elimination of Collective Bargaining is the Single Best Thing one Can do for School Kids.

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

Business Inventories Rise 17th Consecutive Month; Will Sales Follow?

Posted: 14 Jul 2011 09:16 AM PDT

Yahoo Finance reports Business stockpiles rose for 17th month in May

Businesses added to their stockpiles for a 17th consecutive month in May. But sales fell for the first time in nearly a year, a sign that many companies could be forced to trim supply levels if the economy weakens.

The Commerce Department says business supply levels grew 1 percent in May. Sales fell for the first time in 11 months. It was the worst showing for sales since June of last year.

May's rise in inventories pushed total stockpiles to $1.51 trillion. That's up more than 14 percent from the recent low of $1.32 trillion reached in September 2009, when businesses were slashing inventories to control costs in the wake of the deep recession.

Inventories rose at all levels of business. Stockpiles held by manufacturers rose 0.8 percent. Inventories held by wholesalers rose 1.8 percent.

Retailers only increased their stockpiles 0.4 percent. That small rise reflected a 0.7 percent increase in inventories of autos and auto parts and declines in inventories of furniture and building materials. Clothing stockpiles increased 1 percent and inventories of stores such as Wal-Mart and Macy's rose 0.5 percent.

Report Consistent With ISM

The above report is consistent with the latest Manufacturing ISM numbers.

Please consider Manufacturing ISM Weaker Than it Looks; Digging Into the Numbers; Inventory Restocking Accounts for Much of the Rise

Manufacturing at a Glance

click on chart for sharper image

Inventory Replenishment

For all the excitement over the 1.8 point rise, much of it is restocking inventories in the wake of the tsunami.

The PMI is an equally weighted composite of New Orders, Production, Employment, Supplier Deliveries, and Inventories (inputs to Manufacturing). Customer Inventories is tracked separately to add to the overall insights, but is not factored into the PMI.

The effect of inventories is 5.4 divide by five, or 1.08 (1.1) of the overall 1.8 rise as noted by Goldman Sachs.

Other data shows an unmistakable slowing in the global economy.

Manufacturing Scorecard

China on Verge of Contraction
Germany 17-Month Low
Europe 18-Month Low
Italy, Ireland, Spain, Greece in Contraction
US ISM Rises

I am sticking with my previously stated belief that the US ISM was an outlier.

"Manufacturers are gearing up following the Japanese tsunami, expecting a second-half revival that will not come."

Today's sales report suggests just that, as does this month incredibly weak jobs report.

Retail Sales Laugh of the Day: "Falling Gas Prices Held Back Retail Sales"; Weakest Performance Since July 2010 ; Auto Sales Mirage

Payroll Stunner Full "Pathetic" Jobs Report - Many Charts

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

Weekly Unemployment Claims Exceed 400,000 14th Consecutive Week, Hurt by Slowdown in Minnesota; A Look at Population Adjusted Claims

Posted: 14 Jul 2011 08:35 AM PDT

Weekly unemployment claims fell to 405,000 but approximately 11,500 of their reported initial claims are a result of state employees filing due to the state government shutdown.

Please consider the Department of Labor Weekly Claims Report.

In the week ending July 9, the advance figure for seasonally adjusted initial claims was 405,000, a decrease of 22,000 from the previous week's revised figure of 427,000. The 4-week moving average was 423,250, a decrease of 3,750 from the previous week's revised average of 427,000.

Subtracting 11,500 would drop the number to 393,500. That would be a good number on a relative basis, but the 4-week moving average is quite high 2 years into a "recovery".

4-Week Moving Average of Initial Unemployment Claims

Judging from the last two recessions, the moving average of claims remains elevated. However, these numbers are not population adjusted.

4-Week Moving Average Divided by Civilian Labor Force

On a labor force adjusted basis the number of weekly claims is elevated in comparison to the last two recessions but not to the recessions of the 70's and 80's.

However, demographics and demographic trends are so widely different now than then that prior comparisons may be invalid.

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

Retail Sales Laugh of the Day: "Falling Gas Prices Held Back Retail Sales"; Weakest Performance Since July 2010 ; Auto Sales Mirage

Posted: 14 Jul 2011 07:16 AM PDT

One cannot help but laugh at the first line in the Associated Press article Retail sales up slightly in June after May drop : "Consumers spent more on cars and in big chain stores in June but falling gas prices held back retail sales."

For months on end, everyone has been shouting how rising gas prices have held back retail sales. Today we are told falling gas prices have held back retail sales.

Apparently gas prices hurt retail sales whether they are rising or falling.

Retail Sales Stagnate

Bloomberg reports Retail Sales in U.S. Stagnate as Unemployment Hurts Consumers.

The 0.1 percent increase reported by the Commerce Department in Washington today compared with the median forecast of a 0.1 percent drop in the Bloomberg News survey of 80 economists. Excluding auto sales, purchases were little changed, the weakest performance since July 2010.

Total sales were boosted by an unexpected increase in demand at auto dealers that will not influence figures on consumer spending for the second quarter that the government will publish later this month. Increasing joblessness prompted stores like Target Corp. and Gap Inc. to sweeten discounts to lure customers as a dearth of jobs raises the risk that household purchases will have difficulty picking up for the rest of 2011.

"Consumers are cautious," said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. "There is still pretty slow momentum. It still shows we're in a fragile recovery."

Auto Sales Mirage

Allegedly auto sales are up. I rather doubt they are. Auto sales are counted as soon as cars are shipped to dealers. Inventory stuffing is what is up. It remains to be seen if consumers buy those cars, and at what prices.

Without auto sales, retail sales were flat, following a decline last month. This was a weak set of back-to-back retail sales reports.

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

Damn Cool Pics

Tattooed Marriage Proposal
1940's & 1950's Retro Bikinis
Owling Is the New Planking
Cool And Unusual Bed Designs
Takabisha, the World's Steepest Roller Coaster in Japan
Miss USA: Then and Now

Tattooed Marriage Proposal

Posted: 14 Jul 2011 04:52 PM PDT

By tattooing the words "Monique, will you marry me" on his own thigh, this guy may have pulled off the most memorable marriage proposal of all time.

1940's & 1950's Retro Bikinis

Posted: 14 Jul 2011 04:27 PM PDT

During the 40's and 50's women could only wear a variety of two piece bathing suits, but Hollywood starlets still wanted to pose seductively. If only these women knew that bathing suits would evolve to dental floss.

Owling Is the New Planking

Posted: 14 Jul 2011 04:17 PM PDT

If you're still "planking" you're behind the times, a group of individuals have decided to move on from that practice and they are now practice "owling."

As you may recall planking is the art of laying face down from objects without using your hands and then showing off your skills to the internet, the more dangerous the planking stunt, the better your reputation among other plankers.

Owling on the other hand is the art of crouching like an owl from various objects, once again the harder the owling the better your reputation will be among other owlers.

You can visit the official Owling Facebook page to learn more.

The Original Owling Post

Cool And Unusual Bed Designs

Posted: 13 Jul 2011 08:03 PM PDT

What a way to get some sleep, now i need to get myself some of these too, just in case although I'm not sure if i would be amazed in my dreams. Unusual and creative beds that will make a great addition to any bedroom.

Takabisha, the World's Steepest Roller Coaster in Japan

Posted: 13 Jul 2011 07:23 PM PDT

If you plan to travel to Japan soon and you're not among the faint of heart, you might want to visit the Fuji-Q Highland, an amusement park that just added a very special new attraction: the world's steepest roller coaster. The so-called Takabisha accelerates to 100 km/h, has a 43m drop and a 121-degree freefall.

The Japanese roller coaster beat the former record holder, the Le Timber Drop in France, which measures "just" 113.1 degrees.

Fuji Q Highland invested $37 million in the development of the Takabisha. One ride takes 112 seconds and costs $12.50.

Source: dailymail

Miss USA: Then and Now

Posted: 13 Jul 2011 05:55 PM PDT

Photographer Susan Anderson made some awesome portraits of former beauty queens of the United States of America ranging from year 2010 to year 1953.

"Miss USA 2011" Alyssa Campanella