miercuri, 6 iunie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


3-Month Petroleum Usage Chart for March, April, May Shows 14 Years of Supply Demand Growth has Vanished

Posted: 06 Jun 2012 06:59 PM PDT

The following chart from reader Tim Wallace shows three-month usage for March, April, May compared to the same three months in prior years.



The chart shows petroleum usage is back to levels seen in 1998. Gasoline usage is back to levels seen in 2002.

This chart is consistent with reports that show petroleum usage in the eurozone is expected to fall to 1996 levels.

For more details and an analysis of tanker rates, please see Oil Tanker Rates Lowest Since 1997 as Demand in Europe Plunges to 1996 Level, Production in US at 13-Year High; IMF Smoking Happy Dope.

14-16 years of petroleum supply demand growth has vanished.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Huge Nannycrat Conflict Coming Right Up; Hollande Lowers Pension Age to 60

Posted: 06 Jun 2012 11:50 AM PDT

The BBC reports France's Hollande to lower state pension age to 60
New French president Francois Hollande has unveiled details of a plan to lower the retirement age to 60 for some workers - a key election pledge.

His predecessor, Nicolas Sarkozy, had faced strong opposition when he raised the retirement age by two years to 62.

The move in 2010 sparked weeks of strikes across the country, mainly by public service workers.

The decision comes as the EU warns that France will struggle to meet its fiscal targets without spending cuts.

Jean-Francois Cope, head of the conservative UMP party, said Francois Hollande was "burying his head in the sand".

Mr Sarkozy's reforms had been welcomed by financial markets and credit ratings agencies concerned about France's ability to cut its debt and deficit levels.

The European Commission warned last week that any changes in the French pension system had to be closely monitored.
Nannycrat Conflict Coming Right Up
The nannycrats in Brussels want to dictate and harmonize everything from tax rates (allegedly Ireland is too low), fiscal policy, immigration policy, work rules, interest rates, retirement age, tariffs, and crop subsidies.

The retirement age in Germany is rising to 67. In France it will be lowered to 60 even though people are living far longer.

Pact for Competitiveness

About a year ago Merkel Blasts Greece over Retirement Age, Vacation
German Chancellor Angela Merkel on Tuesday evening blasted Greece and demanded that Athens raise the retirement age and reduce vacation days. Germany will help, she said, but only if indebted countries help themselves.

"It is also important that people in countries like Greece, Spain and Portugal are not able to retire earlier than in Germany -- that everyone exerts themselves more or less equally. That is important."

She added: "We can't have a common currency where some get lots of vacation time and others very little. That won't work in the long term."

There are indeed significant differences between retirement ages in the two countries. Greece announced reforms to its pension system in early 2010 aimed at reducing early retirement and raising the average age of retirement to 63. Incentives to keep workers in the labor market beyond 65 have likewise been adopted. Germany voted in 2007 to raise the retirement age from 65 to 67 over the next several years.

In January of this year, Merkel proposed a "pact for competitiveness" that would force EU members to coordinate their national policies on issues like tax, wages and retirement ages. A watered-down version of the pact was agreed upon at a summit in March.
Tip of the Nannycrat Iceberg

Retirement age is just the tip of the nannycrat conflict iceberg.

So when is Merkel going to tell Hollande that France should be raising the age to 67? When is Merkel going to tell France that crop subsidies have to end? When is Merkel going to tell Hollande labor reform is needed and there needs to be a provision for firing workers easier?

The equity markets are up today on fluff proposals that Merkel will bend in bailing out Spain, if Spain will relinquish sovereignty on other issues (see Merkel Bends, Equity Markets and Precious Metals Cheer, Bond Market Yawns; Lending to Peter so Peter Can Lend to Paul)

Assuming you believe that shell game will work, what about Ireland's lower tax rate? And pray tell, what about France and this giant step backward on badly needed pension reform?

For more on nannycrats and the nannyzone please see ...



Also see my original post on the "nannyzone" written June 2, 2011, nearly one year ago today: Trichet Calls for Creation of European "Nanny-State" and Fiscal "Nanny-Zone"

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Merkel Bends, Equity Markets and Precious Metals Cheer, Bond Market Yawns; Lending to Peter so Peter Can Lend to Paul

Posted: 06 Jun 2012 08:59 AM PDT

German Chancellor Angela Merkel has worked out a deal with Spain to rescue its banks. Global equity markets and commodities, especially gold and silver, have cheered the news.

However, the bond market has let out a big yawn. The yield on Spanish 10-year treasuries dropped less than 3 basis points to 6.281%, hardly a sustainable rate.

Please consider Germany finalizing face-saving aid deal for Spain
While Berlin remains firm in its rejection of Spain's calls for Europe's rescue funds to lend directly to its banks, the officials said that if Madrid put in a formal aid request, funds could flow without it submitting to the kind of strict reform program agreed for Greece, Portugal and Ireland.

Instead, Spain would only have to agree to new conditions tied to the reform of its banking sector. Berlin is also exploring the possibility of funneling aid to Spain's bank rescue fund FROB to reinforce the message that it is the country's banks and not its public finances which are at the root of its problems.


Berlin is certainly shifting positions. Last week, it signaled it supported granting Spain an extra year to cut its deficit to the EU's 3 percent of gross domestic product threshold, having previously held fast to the notion that austerity drives should not be diluted.

Merkel has also sent the message that she is open to Europe-wide supervision of the banking sector, albeit as a "medium-term" goal, one element of a proposed "banking union" to break the vicious circle of interdependence between Europe's financial institutions and its sovereigns.

But she must tread carefully. Some of her political allies and leading conservative newspapers have come out strongly against other aspects of a banking reform, including the idea of a Europe-wide deposit guarantee scheme.

Multiple sources said the German finance ministry was exploring the possibility of channeling EU aid directly to Spain's Fund for Orderly Bank Restructuring (FROB), but that this would only work under the ESM, which is due to come into force next month.
Lending to Peter so Peter Can Lend to Paul

Got that? Germany is not willing to lend money directly to Spanish banks, but is willing to lend to the FROB so the FROB can lend to Spanish banks.

Eurointelligence explains EFSF to lend directly to the FROB
This would be a straight-forward loan by the EFSF to the FROB, and this loan would raise the Spanish state's debt. The only relief would come in the form of lower ESM interest rates as opposed to the market interest rates Spain has to pay right now. We doubt that this scheme will have a sustained effect on Spanish spreads.
Any Effect?

Did this sleight-of-hand, shell-game proposal have any effect? Not to the bond market unless you count the small rally in yields from about 6.66% to 6.28% ahead of the news with almost no follow-through today.

While the equity markets are once again willing to settle for ridiculous fluff and promises, the bond markets and gold are not impressed.

How Big is the Sinkhole?

How much money does the FROB need? Estimates range from 30 to 70 billion more euros on top of 80 billion euros of taxpayer money already  wasted.

I suspect the real answer is at least triple the high-end estimate given massive unrealized real-estate losses and the imploding Spanish economy. Whatever the external audit by the IMF shows, figure it to be a lowball estimate designed to make things look better than they really are.

This ploy may be face-saving for Spain but it will cost German and Spanish taxpayers still more money and it will be face-losing for Merkel. 

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Congratulations to Governor Walker in Winning Recall Election; Message From FDR on Public Unions

Posted: 06 Jun 2012 02:33 AM PDT

Congratulations to Wisconsin governor Scott Walker who became the first governor in US history to win a recall vote.

The New York Times reports Walker Survives Wisconsin Recall Vote
Gov. Scott Walker, whose decision to cut collective bargaining rights for most public workers set off a firestorm in a state usually known for its political civility, easily held on to his job on Tuesday, becoming the first governor in the country to survive a recall election and dealing a painful blow to Democrats and labor unions.

Mr. Walker soundly defeated Mayor Tom Barrett of Milwaukee, the Democrats' nominee in the recall attempt, with most precincts across the state reporting results. The victory by Mr. Walker, a Republican who was forced into an election to save his job less than two years into his first term, ensures that Republicans largely retain control of this state's capital, and his fast-rising political profile is likely to soar still higher among conservatives.

The result raised broader questions about the strength of labor groups, who had called hundreds of thousands of voters and knocked on thousands of doors. The outcome also seemed likely to embolden leaders in other states who have considered limits to unions as a way to solve budget problems, but had watched the backlash against Mr. Walker with worry.

Voters went to the polls in droves, and some polling places needed extra ballots brought in as long lines of people waited. One polling location was so swamped, state officials said, that it found itself using photocopied ballots, which later had to be hand-counted. The final flurry of television advertising — with Mr. Walker outspending Mr. Barrett seven to one — seemed to have little impact on the outcome. Nearly 9 in 10 people said they had made up their minds before May, according to exit poll interviews.

Liberal fools and union sympathizers in Madison, Milwaukee, and the extreme Northwestern part of the state voted for the recall, but overall the county vote was 60-12 in favor of Walker.



For an interactive map of percentages, please see Wisconsin Recall Election Results

Public unions survive by coercion, threats, bribes, and vote buying. Cities and states are broke as a result. Even FDR agrees.

Message From FDR

Inquiring minds are reading snips from a Letter from FDR Regarding Collective Bargaining of Public Unions written August 16, 1937.
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.

The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.

A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.
For more on public union slavery, coercion, bribery, and scapegoating please see ...


Finally, actual Wisconsin results prove Union-Busting is a "Godsend"; Elimination of Collective Bargaining is the Single Best Thing one Can do for School Kids

It's time to implement national right-to-work laws and put an end to public union collective bargaining nationally.

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


Damn Cool Pics

Damn Cool Pics


Your Favorite Drinks Photographed Under a Microscope

Posted: 05 Jun 2012 05:44 PM PDT

In his series 'Fingerprints of Drinkable Culture', photographer William LeGoullon who looks at the world's top five most-consumed man-made beverages (tea, beer, coffee, wine and cola) as scientific specimens.

About his series, he writes:
'My latest works express my fascination with beverages, the variety of methodical processes through which we craft them, and the detailed makeup of each liquid we drink. Stemming from my work as both an artist and as a barista and bartender, my interest is in concocting a recipe of beverage culture, art, and science with regard to what we as humans consume. I am continually inspired by observing what has been left behind and the clues that inspire examination. In this series, I treat the world's top five most consumed man-made beverages like scientific specimens, allowing each liquid sample to dry before photographing them using a microscope. The resulting images provide us with a chance to analyze these fingerprints of drinkable culture as an act of art consumption.'

Coffee


Tea


Wine


Wine


Cola


Beer


Coffee


Espresso


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


Boston Car Crashes from the 1930s

Posted: 23 May 2012 11:48 AM PDT

Some photographs of Car Accidents happened in the 30s in Boston.

These photographs taken in Boston in the '30s show us that there were just as many reckless drivers back in good old times as there are on the roads now.










































































The Secret Side of Military Spending [Infographic]

Posted: 23 May 2012 11:29 AM PDT

The United States military budget rose for 11 consecutive years, going from $354 billion in 2001 to $721 billion in 2011. That's an increase of 104%. While 2012's proposed budget signals the first decline in military spending in over a decade, it is a drop in the bucket and if the past is any indication, actual spending will surpass the budget and once again take us into record territory.

Click image to see a larger version.

Via OME


Glowing Text Installations

Posted: 22 May 2012 10:12 PM PDT

South Korean artist Lee Jung created and photographed this gorgeous series of text-based light installations.




















Via Booooooom


The Internet In 2015 Is The Down Of The Zettabyte Era [Infographic]

Posted: 22 May 2012 11:09 AM PDT

Today we live in a world of petabytes and exabytes but according to the latest findings from the Cisco Visual Networking Index (VNI), we'll need to add the term "zettabyte" to our vocabulary by 2015.

So, how much exactly is a zettabyte?

A zettabyte is roughly 1000 exabytes. To place that amount of volume in more practical terms, an exabyte alone has the capacity to hold over 36,000 years worth of HD quality video…or stream the entire Netflix catalog more than 3,000 times. A zettabyte is equivalent to about 250 billion DVDs.

The infographic below is an excellent representation of how much internet will grow in 2015?

The credit goes to Cisco who compiled these excellent stats into an amazing infographic.

Click image to see a larger version.

Via Cisco