Central Perk: 26 oct. 2011

miercuri, 26 octombrie 2011

Mish's Global Economic Trend Analysis

License to Lie: The "Most Transparent Administration Ever" Seeks Law to Respond to Freedom of Information Requests with "Information Does Not Exist"
No Agreement on "Any" Element of a Deal
Grateful for Idiocy, a Pack of Lies, Financial Engineering, Legerdemain, and Trickery; Opposition Leader Rebukes Merkel's Lies and Arrogance of Power
Talks Suspended in Deadlock; German Parliament Approves "Blank Check" on EFSF Leverage; Belgian PM Seeks Firepower Exceeding One Trillion Euros

License to Lie: The "Most Transparent Administration Ever" Seeks Law to Respond to Freedom of Information Requests with "Information Does Not Exist"

Posted: 26 Oct 2011 06:17 PM PDT

The Justice Department of the Obama Administration, the self-proclaimed "most transparent administration ever Proposes Letting Government to Respond to Freedom of Information Requests Denying Existence of the Documents.

A longtime internal policy that allowed Justice Department officials to deny the existence of sensitive information could become the law of the land -- in effect a license to lie -- if a newly proposed rule becomes federal regulation in the coming weeks.

The proposed rule directs federal law enforcement agencies, after personnel have determined that documents are too delicate to be released, to respond to Freedom of Information Act requests "as if the excluded records did not exist."

Jay Sekulow, Chief Counsel of the American Center for Law and Justice, says the move appears to be in direct conflict with the administration's promise to be more open.

"Despite all the talk of transparency, I can't think of what's less transparent than saying a document does not exist, when in fact, it does," Sekulow told Fox News.

Earlier this year, in a case involving the Islamic Council of Southern California brought against the FBI after the plaintiffs learned about the existence of documents denied by the FBI, a federal judge in California expressed great concern about the agency using the internal policy not only in response to the FOIA but to mislead the court.

"The government, cannot, under any circumstance, affirmatively mislead the court. … The court simply cannot perform its constitutional function if the government does not tell the truth," the judge wrote in a stinging rebuke.

A final version of the proposal could be issued by the end of 2011. If approved, the new rule would officially become a federal regulation with the force of law.

Pure Insanity

This proposed law is pure insanity. Wrong accused persons might go to prison or guilty persons purposely protected based on this law.

All that is required is for some government official (possibly protecting himself or his department) to think information is "too sensitive".

The U.S. should be ashamed to even consider such a law.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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No Agreement on "Any" Element of a Deal

Posted: 26 Oct 2011 05:41 PM PDT

Bloomberg reports Impasse on Greek Debt Threatens EU Deal

European Union talks with banks on bondholder losses as part of a second Greek bailout ran aground, dimming the chances for a comprehensive strategy at a summit to stamp out the debt crisis.

A statement issued close to midnight in Brussels by the Institute of International Finance, the bank lobby, said there was no agreement "on any element of a deal."

The outlines of a deal to safeguard banks emerged, centering on a June 30, 2012 deadline for lenders to reach core capital reserves of 9 percent after writing down their sovereign debt holdings, according to a statement after all 27 EU leaders met.

A group of 70 European banks will need to raise 106 billion euros in the next eight months to meet the goal, the European Banking Authority, the banking regulator, said. Greek banks need 30 billion euros; those in Spain need 26.2 billion euros. In France, the need totals 8.8 billion euros and in Italy, it's 14.8 billion euros.

While policy makers and bondholders were converging on a 50 percent writedown of Greek debt, clashes over collateral to underpin the transaction will limit the summit to issuing a mandate for further talks, an EU official said in Brussels on condition of anonymity.

While markets clamor for a signal that the euro area will devote 1 trillion euros or more to combating the crisis, the EU won't be able to produce a number until late November, the EU official said.

Mandate for Further Talks

The only agreement on anything is a mandate for further talks. This is the second summit in four days, and 14th summit in 21 months.

We can hope they talk themselves to death, but at this point that hope seems futile.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Grateful for Idiocy, a Pack of Lies, Financial Engineering, Legerdemain, and Trickery; Opposition Leader Rebukes Merkel's Lies and Arrogance of Power

Posted: 26 Oct 2011 11:42 AM PDT

A few weeks ago everyone knew German Chancellor Angela Merkel lied about leverage to the German Parliament. Nonetheless, and disgustingly, this morning the Bundestag was all too willing to Approve a "Blank Check" for Unlimited EFSF Leverage.

For this, Ambrose Evans-Pritchard says Thank you Germany

Alone among EU leaders, Chancellor Angela Merkel goes to tonight's summit in Brussels with an iron-clad mandate. It is a remarkable moment. Never before – to my knowledge – has a national parliament demanded and held a prior vote on an EU summit accord.

Had this principle been established a long time ago, we might have avoided much of the relentless Treaty creep and EU aggrandizement advanced by secret deals at the Bâtiment Justus Lipsius. Thank you Germany.

Thank you too, judges of the Verfassungsgericht, for giving the Bundestag a veto on EU encroachments on fiscal sovereignty. The court is seemingly the only tribunal willing and able to defend the liberties of European citizens against EU over-reach, and is therefore my supreme court too even as a British citizen.

Opposition Leader Rebukes Merkel's Lies and Arrogance of Power

Pritchard continues ....

Dr Merkel has won her vote. She secured an "own majority" for proposals to leverage the €440bn bail-out fund (EFSF) into the stratosphere, with the support of some very sheepish looking law-makers from posturing Free Democrats and Bavaria's Social Christians.

But what a price she paid. The credibility of her team is shattered. Europe has all but destroyed her, even if she manages to limp on to the next crisis.

As she glowered darkly, speaker after speaker from the Social Democrats (SPD), the Greens, and Die Linke, asked how she could possibly reconcile her plan to leverage the EFSF to €1 trillion or €1.5 trillion (we still don't know how much) with solemn pledges to the Bundestag just three weeks ago that there would be no such leverage.

"Shameless abuse of the truth," was the verdict of SPD leader Frank-Walter Steinmeier. The government had acted "tactically" at every turn, "misled the people", "held back information", "crossed every red line", brought Europe "to its knees" with botched policies, and lied blatantly about EFSF leverage.

"You came here to say there would be no leverage, not three years ago, not three months ago, but three weeks ago. You denied everything."

Die Linke (Left) leader Gregor Gysi was electrifying. "It is the arrogance of power," he began, and never let go.

"Every week you come up with a different story about this crisis."

"We were told there would be no leverage and you have reversed everything in a matter of weeks. Now we learn that the 20pc loss will fall entirely on taxpayers. They alone will pay. That is the decision you are taking."
"Why don't you tell German taxpayers the truth? They are being asked to pay the losses for French banks."

Green leader Jürgen Trittin rebuked Dr Merkel for hiding the true implications of EFSF leverage, particularly the plan to insure the first 20pc of losses on Club Med bonds.

"Why are you shying away from telling the people the truth? You must tell people what this leverage means. You must explain to them what the risk is, and why it is necessary. But you wriggled out of it."

"You came here three weeks ago and said there would be no leverage. This is the sort of thing that unnerves people."

And so it went on, raw red-blooded democracy.

The unpleasant truth is that the EFSF leverage proposals are idiotic, the worst sort of financial engineering, legerdemain, and trickery.

Grateful for Idiocy, a Pack of Lies, Financial Engineering, Legerdemain, and Trickery

Other than the ruling by the German Supreme Court there is nothing to be grateful for. The "unpleasant truth" is Merkel lied to parliament about leverage, which is why the EFSF was approved in the first place. Having secured passage of the EFSF via bald-faced lies, the Bundestag ignored the lies and approved a blank check on the amount of leverage and the method of leverage.

Pritchard notes the EFSF leverage proposals are idiotic, the worst sort of financial engineering, legerdemain, and trickery" and for that he says "Thank you Germany".

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

Talks Suspended in Deadlock; German Parliament Approves "Blank Check" on EFSF Leverage; Belgian PM Seeks Firepower Exceeding One Trillion Euros

Posted: 26 Oct 2011 10:07 AM PDT

Today the German Parliament approved the use of leverage without specifying an amount, thereby giving Chancellor Merkel an effective "blank check" on the amount.

In a nonbinding (on the ECB) resolution, the parliament seeks to halt ECB sovereign bond purchases. Unfortunately, the issue will be up to the ECB to decide, not Germany.

Given Italy has the ECB deck stacked, I would expect the purchases to continue in clear violation of the Maastricht Treaty.

Otherwise, the main news is talks are deadlocked with open issues regarding the size of the haircuts, whether or not the haircuts are voluntary, the amount of EFSF leverage, the size and timing of bank recapitalization efforts, and how much of the new Greek bonds will be insured.

That's a lot of open issues.

Talks Suspended Following Deadlock

Bloomberg reports EU Talks With Banks on Greece Said Deadlocked

European Union talks with banks on bondholder losses as part of a second Greek rescue package are deadlocked and have been suspended, an EU official said.

The EU is seeking voluntary participation by banks, though a forced solution can't be ruled out, the official said in Brussels today on condition of anonymity because the talks are private.

While policy makers and bankers are converging on a 50 percent writedown for Greece's lenders, the disagreement centered on the specifics of the transaction. The dispute focused on how much of the risk of newly issued Greek bonds should be insured, the official said.

The Institute of International Finance, which lobbies on behalf of 450 financial firms, yesterday proposed investors make a larger writedown than the 40 percent the group offered last week, said two people with knowledge of the talks. The European Union is calling on investors to forfeit as much as 60 percent, a person familiar with the talks said last week.

To safeguard banks' finances, EU leaders will set a deadline of June 30, 2012, for banks to have core capital reserves of 9 percent after writing down their holdings of sovereign debt, according to a draft statement prepared for the summit.

The reserves must be of the "highest quality," according to the document obtained by Bloomberg News. Lenders are expected first to tap private sources to make up any capital shortfall and "should be subject to constraints regarding the distribution of dividends and bonus payments until the target has been attained." The document doesn't give an estimate of total capital EU banks must raise to comply with the rule.

Germany's Parliament Approves EFSF Leverage

ForexLive reports Germany's Lower House Of Parl Approves EFSF Leverage Models

Germany's lower house of parliament, the Bundestag, on Wednesday approved with a large majority the broad outlines agreed to at the EMU leaders' summit last weekend to enlarge the capacity of the European Financial Stability Facility (EFSF) without extending the guarantees underpinning the E440 billion fund.

Of the 596 parliamentarians present, 503 voted for the motion, 89 against it and four abstained.

In the motion, the Bundestag states that after the EFSF's capacity has been enlarged "there is no necessity for the ECB to continue the secondary market program (SMP)" of bond purchases.

On Tuesday, Chancellor Angela Merkel said that Germany does not agree with a paragraph in the draft communique for today's European summit that says the ECB is to continue its non-standard measures.

"Germany does not accept this sentence," Merkel told reporters. "We are negotiating at the moment to get a statement from the European Central Bank on what it plans to do and then we will take a position on that."

The Chancellor stressed that Germany "wants to see in the wording [of the communique] much more clearly what the European Central Bank wants to do…in order to prevent the misunderstanding that politics are expecting something of the ECB."

Leverage Approved, Amount Open

Note the open issues in just those few paragraphs. There is no agreement on the amount of leverage, the method of leverage (the SIV model vs. the Insurance Model), or what the role of the ECB will be going forward.

It was the "blank check" provision that had the market giddy at the open, even though the greater the leverage, the quicker this mess is going to blow sky high.

Belgian PM Seeks Firepower Exceeding 1 Trillion Euros

Yahoo! Finance reports Belgian premier: bailout fund needs more than euro1bn

The prime minister of Belgium says the eurozone's bailout fund should have a firepower of more than euro1 trillion ($1.4 trillion) to prevent the currency union's debt crisis from spreading.

Yves Leterme said Tuesday "I think that effectively, it has to be able to intervene a good deal beyond euro1 trillion."

He was heading into a crucial emergency summit of European leaders in Brussels.

At the summit, the leaders will seek to set up a complicated scheme to give the euro440 billion bailout fund more leverage, reduce Greece's massive debt and strengthen banks across the continent.

Throwing Money with Leverage Never Solves Problems

Throwing money around with leverage has never in history permanently solved any problems but that does not stop Monetarist and Keynesian clown fools from trying.

Regardless, talks are so contentious now over resolution of all these issues they have been suspended. Bear in mind, these are easy issues compared to treaty changes that would allow ECB printing, eurobonds, fiscal unity, etc.

Whatever agreement is worked out (or forced upon Germany) is sure to cause serious resentment starting immediately. Moreover, the next set of meetings down the road on treaty changes (or still more leverage after this is quickly used up), will make this suspended meeting look like a birthday party in comparison.

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

Damn Cool Pics

Japan Builds World’s First Spherical Flying Machine
Celebrities In Fat Suits
The World's Largest Pumpkin, Carved into Zombies by Ray Villafane
Video Games of the Past and Present
Star Trek is Just Around the Corner (infographic)
Halloween Light Show 2011
Berlin’s Festival of Lights 2011
Kiira Korpi - The Most Beautiful Figure Skater in the World

Japan Builds World’s First Spherical Flying Machine

Posted: 26 Oct 2011 05:29 PM PDT

The world got a first glimpse of the "world's first spherical flying machine" back in June this year, but its maker, Japan's Ministry of Defense, decided it's time to showcase it publicly a few days ago in Tokyo. And as you can see in the video embedded below, their ball drone is pretty awesome.

The drone can stand still in mid-air, fly vertically and horizontally through narrow spaces at up to 60km/h, and (which is very cool) keep on moving when it hits the ground or a wall. Thanks to three gyro sensors in its body, the machine can keep also flying even if it's hit by an obstacle.

Source: DigInfo TV

Celebrities In Fat Suits

Posted: 26 Oct 2011 04:54 PM PDT

From Tom Cruise to Eddie Murphy to Gwyneth Paltrow, these stars have all donned fat suits. Photos of celebrities who used a fat suit for their roles.

'Real Housewives of New Jersey' star Melissa Gorga

Neil Patrick Harris

Gwyneth Paltrow in Shallow Hal

Martin Lawrence in Big Momma's House

Martin Short as Jiminy Glick

Courteney Cox in Friends

Mike Myers as Fat Bastard in Austin Powers

Tyra Banks on The Tyra Banks Show

Source: thedailybeast

The World's Largest Pumpkin, Carved into Zombies by Ray Villafane

Posted: 26 Oct 2011 04:21 PM PDT

The New York Botanical Garden brought on master food sculptor Ray Villafane to carve zombies out of two giant pumpkins, one of which was the world's heaviest pumpkin weighing 1,818.5 pounds.

The record breaking pumpkin features three creepy monsters bursting out of the huge orange shell, covered in pumpkin guts as they claw their way to freedom. He even has bits of the pumpkin suspended in air by long tooth picks as if they are just climbing their way out of it.

Photo credit: Ivo M. Vermeulen

Video Games of the Past and Present

Posted: 26 Oct 2011 01:59 PM PDT

Most of us remember the good old times, with games back in the day. Even though the graphics were horrible, one could spend hours playing these games. I'm sure we all have great memories of some old games. So anyways, onto the poll, which are your favorites? Do you like old games, or new games better.

Sonic the Hedgehog VS. Sonic Generations

GoldenEye 64 VS. Halo 3

The Legend of Zelda VS. The Legend of Zelda: Skyward Sword

Metal Slug VS. Battlefield 3

Pole position VS. Gran Turismo 5

Mike Tyson's Punch Out VS. Fight Night Round 3

Mario Brothers VS. Braid

Marble Madness VS. Portal

Contra VS. Metro 2033

Mortal Kombat VS. Soul Caliber 5

Star Trek is Just Around the Corner (infographic)

Posted: 26 Oct 2011 01:51 PM PDT

When Star Trek debuted in the 1960′s it exposed people all around the world to a bright future full of high tech gadgets. 45 Years, 6 different television series and 11 movies later, Star Trek has undoubtedly had a large impact on the world around us, inspiring scientist and inventors to develop the technology that shaped their childhood. Sortable.com has taken a look at some of the technology in Star Trek and how close we are to having that technology in every day life.

Source: sortable

Halloween Light Show 2011

Posted: 25 Oct 2011 09:35 PM PDT

The Huffington Post reported this house everything jack o lanterns constructed out of Christmas lights that will sing and bounce the beat during the entire tune.This house is located in Riverside,Ca and is known by millions for their outstanding,entertaining Halloween light shows, including "Thriller, Sandstorm and "Monster Mash."

According to the mastermind's YouTube channel, the light show includes:

4 singing pumpkin faces, tombstones, hand carved pumpkins, strobes, floods and thousands of lights. Most all lights have been changed from incandescent to RGB LED so power consumption is a lot less than previous years.

Berlin’s Festival of Lights 2011

Posted: 25 Oct 2011 08:47 PM PDT

The seventh annual Festival of Lights took place in Berlin, Germany. Beams of bright colors and shapes illuminate more than 50 famous landmarks and spaces, including Brandenburg Gate, Berlin Cathedral and the radio tower.

From October 12 to October 23, Berlin's Festival of Lights makes for some spectacular sights in the German capital. The longer autumn nights are the best time to put the city in the spotlight. The open-air gallery starts every night at 7pm and lasts until midnight.

The Berlin cathedral is seen as it is illuminated during the Festival of Lights in Berlin on Wednesday.

Source: Fabrizio Bensch / Reuters

Source: Thomas Peter / Reuters

Source: Jensa Kalaene / EPA

Source: Thomas Peter / Reuters

Source: Reuters / Tobias Schwarz

Source: Reuters / Fabrizio Bensch

Source: Reuters / Thomas Peter

Source: Reuters / Fabrizio Bensch

Source: Reuters / Thomas Peter

Source: Reuters / Tobias Schwarz

Source: Reuters / Fabrizio Bensch

Source: Reuters / Thomas Peter

Source: Reuters / Tobias Schwarz

Source: Reuters / Thomas Peter

Kiira Korpi - The Most Beautiful Figure Skater in the World

Posted: 25 Oct 2011 04:27 PM PDT

Widely regarded as the most beautiful woman in figure skating, Finland's Kiira Korpi is also among the most talented and she has the results to prove it. She is the 2007 and 2011 European bronze medalist, 2010 Trophée Eric Bompard champion and a two-time Finnish National Champion (2009, 2011). Furthermore, her father, Rauno Korpi, coached the Finnish women's hockey team to the bronze at the 1998 Winter Olympic Games in Nagano.