joi, 24 mai 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Spain Plans to Merge All Nationalized Banks Into Gigantic Bad Bank; Merging Small Cesspools Creates Bigger, Deeper, Smellier Cesspools

Posted: 24 May 2012 12:21 PM PDT

After repeated denials of the creation of a combined "bad bank", Spain's economy minister Luis de Guindos is discussing creation a public body merging all the smaller bad banks into one gigantic bad bank, equivalent to 20% of the entire Spanish banking sector.

Courtesy of Google Translate from Libre Mercado, please consider large public bank under state control.
The Government is considering the possibility of creating a public bank that brings together institutions nationalized by the state, which include BFA-Bankia, Caixa Catalunya and Novacaixagalicia, Europa Press reported financial sources.

The Ministry of Economy examines delaying the auction and Caixa Catalunya Novacaixagalicia, waiting to know the binding offers to be submitted to the process of awarding the Catalan and that, if adopted, will be very tight.

The department headed by Luis de Guindos is aware that the latest sanitation requirements established by the Government through new provisions on healthy property portfolio have cooled the already low interest of potential buyers.

The economy minister said on Wednesday in the House of Representatives that after the nationalization of Bankia has opened a new stage in the Spanish financial sector, and that the Government weigh all alternatives before the next auction.
Merging Small Cesspools Creates Bigger, Deeper, Smellier Cesspool

Bear in mind that Bankia, one of the banks in this cesspool merger was formed on December 3, 2010 as a result of the union of seven failed Spanish financial institutions.

In 2012, Bankia was the third largest lender in Spain and the largest holder of real estate assets at 38 billion euros. Bankia is once again in trouble, along with Caixa Catalunya and Novacaixagalicia.

Allegedly the merger of three cesspools into a bigger, deeper cesspool will make the water drinkable. I have news for Luis de Guindos: It won't.

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


Containment Theory Blows Sky High: German Manufacturing PMI Plunges to 45; French Manufacturing PMI Plunges to 44.4, Sharpest Contraction in 3 Years

Posted: 24 May 2012 10:10 AM PDT

The Pollyannas who thought the European recession would be short, shallow, and contained to the periphery have another thing coming. All three ideas were downright silly as I have long stated.

French Manufacturing PMI Plunges to 44.4, Sharpest Contraction in 3 Years

Markit reports French private sector output falls at sharpest rate for over three years.
Key points:

  • Flash France Composite Output Index drops to 44.7 (45.9 in April), 37-month low
  • Flash France Services Activity Index unchanged at 45.2
  • Flash France Manufacturing PMI falls to 44.4 (46.9 in April), 36-month low
  • Flash France Manufacturing Output Index declines to 43.6 (47.5 in April), 36-month low

Latest Flash PMI® data signalled that the decline in French private sector output accelerated further in May.





Marked declines in activity were recorded in both the manufacturing and service sectors during May. In the former, output decreased at the fastest pace in three years, while in the latter the rate of contraction was unchanged from April's substantial pace.

Lower activity reflected a further marked reduction in new business during May. The latest drop in new work was at a rate broadly unchanged from April's three-year record. Panellists commented on weak market demand, lower client activity levels and economic uncertainty as factors leading to the latest fall in new business. Manufacturers reported a particularly sharp reduction in new orders, with the latest decline the fastest for just over three years.

Outstanding business fell at the sharpest rate since July 2009, with declines recorded in both manufacturing and services. Employment also decreased at a faster pace in May, with the latest drop the sharpest for over two years. Job shedding was broad-based across both sectors, with manufacturers indicating the steeper decline in payroll numbers.
German Manufacturing PMI Plunges to 45

Markit reports German private sector returns to contraction.
German private sector returns to contraction. Manufacturing output falls at sharpest pace for nearly three years, offsetting resilient services growth.

Key points:

  • Flash Germany Composite Output Index at 49.6 (50.5 in April), 6-month low.
  • Flash Germany Services Activity Index at 52.2 (52.2 in April), unchanged.
  • Flash Germany Manufacturing PMI at 45.0 (46.2 in April), 35-month low.
  • Flash Germany Manufacturing Output Index at 44.6 (47.3 in April), 35-month low.

Manufacturers in Germany pointed to a drop in output for the second month running, and the rate of reduction was the steepest since June 2009.

May data highlighted divergent employment trends across the manufacturing and service sectors. Net job hiring returned to the service economy, but manufacturers signalled the greatest degree of workforce reduction since February 2010.


German private sector input cost inflation was robust and slightly faster than in April, while output charges increased at the sharpest pace since July 2011. The indices measuring inflationary pressures also showed a divergence between manufacturing and services during May.

Manufacturers reported the lowest level of input price inflation for four months, but service providers signalled a much sharper rise in their cost burdens over the month. Moreover, output price inflation in the service economy hit a 14-month high, while factory gate price inflation across the manufacturing sector was the weakest since November 2011.
European PMI Plunges

For a look at the European PMI in general please see Eurozone PMI Disaster - Worst Downturn Since Mid-2009, Manufacturing and Composite at 35-Month Low; Expect Numerous GDP Downgrades, Missed Budget Targets

In  the above link I stated "Europe is in a full-blown recession and for the first time in about a year we did not see any Pollyanna comments from Markit economists. Perhaps the news has sunk in that as I have repeatedly said, this recession will be long and deep and Germany would not escape."

More Pollyanna Comments from Markit

I spoke way too soon. Check out this nonsense from Tim Moore, Senior Economist at Markit on the German PMI report:

"Services growth held its ground during May, highlighting resilient domestic demand, but weakening manufacturing output brought the German economy at large into mild contraction for the first time since last November. The underperformance of manufacturing relative to services has not been as extreme since the low point of the recession in early 2009, with a key driver then as now being a steep downturn in export sales. May's drop in manufacturing production was the steepest in nearly three years, and the current period of falling new orders now almost matches the length, though not the depth, of the contraction in 2008/09.

"Continued service sector growth and job hiring is therefore providing an important counterbalance to manufacturing weakness. May's upturn in service providers' confidence about the year ahead outlook is especially encouraging given the headwinds facing the manufacturing sector and ongoing worries among firms about how the euro crisis will play out.
".

Service Sector Sap

Please, spare me the sap about service sector confidence in the face of severe manufacturing weakness, plunges in new orders, and an overall collapse in the European economy. The German service sector is going to follow manufacturing in due time, probably sooner rather than later.

Every step of the way pollyannas cling to the slightest hope that somehow Germany is going to avoid a recession or will decouple from the European economy. Mathematically it is nearly impossible.

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


Eurozone PMI Disaster - Worst Downturn Since Mid-2009, Manufacturing and Composite at 35-Month Low; Expect Numerous GDP Downgrades, Missed Budget Targets

Posted: 24 May 2012 08:35 AM PDT

Markit Reports Eurozone PMI Suffers Worst Downturn Since Mid-2009
Flash Eurozone PMI

  • Composite Output Index at 45.9 (46.7 in April). 35-month low.
  • Flash Eurozone Services PMI Activity Index at 46.5 (46.9 in April). 7-month low.
  • Flash Eurozone Manufacturing PMI at 45.0 (45.9 in April). 35-month low.
  • Flash Eurozone Manufacturing PMI Output Indexat 44.7 (46.1 in April). 35-month low.

The Markit Eurozone PMI® Composite Output Index fell to a near three-year low in May, according to the preliminary 'flash' reading which is based on around 85% of usual monthly replies. The index fell for the fourth month in a row to 45.9, down from 46.7 in April, to signal the fastest rate of decline of private sector economic activity since June 2009. Output has fallen eight times in the past nine months



Activity fell at the fastest rates for seven months in services (and the second-fastest in 34 months), while manufacturing production dropped at the steepest rate since June 2009. The goods-producing sector posted the stronger overall rate of contraction.

Incoming new business in the Eurozone private sector declined for the tenth successive month in May. Moreover, the pace of contraction was the fastest over this sequence, and the strongest since June 2009. Manufacturers continued to post a steeper drop in new orders than their service sector counterparts. France posted a steeper drop in new business than Germany, while the rest of the Eurozone continued to see a stronger average rate of decline than the 'big-two'.

Reflective of the sustained fall in new workloads, private sector firms in the Eurozone continued to post declining outstanding business mid-way through Q2. The rate of decline was little-changed from April's 33-month record. By sector, manufacturing and services registered broadly similar rates of contraction. The 'big-two' both posted weaker falls in backlogs than the rest of the Eurozone.

Private sector employment in the Eurozone declined for the fifth successive month in May. The rate of job shedding was close to April's 26-month record, but modest overall. This reflected a return to workforce growth in Germany, albeit at a marginal rate. Jobs were cut for the third month running in France, and for the twelfth consecutive month outside the 'big-two' on average.

Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said: "The flash PMI indicated that the Eurozone downturn gathered further momentum in May, with business activity and new orders both falling at the fastest rates for just under three years. "The survey is broadly consistent with gross domestic product falling by at least 0.5% across the region in the second quarter, as an increasingly steep downturn in the periphery infects both France and Germany.
Full-Blown Recession

Europe is in a full-blown recession and for the first time in about a year we did not see any Pollyanna comments from Markit economists.

Perhaps the news has sunk in that as I have repeatedly said, this recession will be long and deep and Germany would not escape.

Expect Numerous GDP Downgrades, Missed Budget Targets

All GDP estimates from the Eurozone to-date have been pure bunk. Expect numerous downgrades after this disastrous report. If countries are to meet debt-to-GDP targets still more austerity measures will be forthcoming which will mean more layoffs, higher unemployment, and lower revenues.

In short, Spain, France, Italy will find it impossible to meet budget targets as the recession picks up steam.


Containment Theory Blows Sky High

For a look at just released PMI reports from Germany and France, please see Containment Theory Blows Sky High: German Manufacturing PMI Plunges to 45; French Manufacturing PMI Plunges to 44.4, Sharpest Contraction in 3 Years

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


Damn Cool Pics

Damn Cool Pics


Homemade Magnetic Levitating Bed

Posted: 24 May 2012 11:25 AM PDT

Reddit user with the nickname 'mememetatata' built this awesome levitating bed using plywood and hockey puck sized rare earth magnets. With $1,000, he built this floating bed that can comfortably sleep one person upto 250 pounds due to the fact that two people would make the rig collapse.

Building the frame of the levitating part of the bed. Fits a twin sized mattress. It's 74 inches long and 38 inches wide.


Another angle


Put in the slats that will keep the magnets in place


Put the magnets in and closed it up


Highly technical drawing of one of the corners of the main thing


Making the frame of the lower platform. It is 8 feet long and 7 feet wide


Another angle


Due to bad packaging in the magnet shipment, two of the magnets got stuck together. This is incredibly bad news because there are several hundred pounds of force holding these together now. After a lot of raging and angrily emailing the company that I got the magnets from, I realized that a rubber glove I was handling the magnets with was stuck between them. It provided a gap of around 2mm. I used scissors to pry this open and stick successively larger things inside.


Got a pen in (I taped around the pen so that the splinters wouldn't get everywhere if the pen shattered, which it did ;D)


Three pens and a spacer


Two spacers and a pen


I was worried that the pens would fall out and I would lose all of my prying progress, or that all of my spacing would fall out and they would be entirely stuck together with no gap, in which case they would be entirely and impossibly stuck together (many hundreds of pounds of force holding them together, these are solid neodymium rare earth magnets the size of hockey pucks). I used screws, which since they are magnetic, stood no chance of falling out! They also worked pretty well to prop them apart.


Two spacers


I stomped on the spacers to jam them and a pen in. I then replaced the pen with a third spacer and got them unstuck!


Slight damage. Essentially only aesthetic. Tests I did confirmed that the magnets were for all intents and purposes entirely functional.


Finishing up the base.


Put it all together. Steel cable tethers the top bed to the bottom base. Had to do some math to determine how long the cable needed with how high I calculated that the bed would float. I got this stabilization system (and most of the idea of the bed!) from this bed which is a much larger scale, much more expensive version http://www.youtube.com/watch?feature=player_detailpage&v=hgI5jSC3NwY#t=94s


View underneath the platform


The steel cable goes into the platform where it is attached and screwed in.


Complete bed! Although I haven't yet put on the trim and nice looking parts, or put on a clear coat of paint to make it shinier/cleaner looking.


Sexting and the College Student [infographic]

Posted: 24 May 2012 10:25 AM PDT

For most college students, sexting is no big deal. In fact, as many as four out of five engage in sexting. But sexting can lead to more than just embarrassment -- it can lead to legal consequences, especially if a minor is involved. The problem with sexting doesn't end there. It has become an epidemic among college students, which can lead to other problems too.

Click image to see a larger version.

Via BCO


Seth's Blog : A book/gadget list for late spring

A book/gadget list for late spring

I hope you'll find a gem or two.

Here it is.



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