miercuri, 14 noiembrie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Anti-Austerity Protests Sweep Europe, Sparking Violence; Brussels Blinks, No Further Austerity for Spain; Economic Burnt Toast

Posted: 14 Nov 2012 05:51 PM PST

A wave of protests swept across Europe today. Two-thirds of Spain's commuter trains were shut down. In Portugal, bus and train were suspended across the country. Italy, Greece, and Belgium also saw major protests.

Please consider Der Spiegel report Anti-Austerity Protests Spark Violence
Millions of Europeans joined together in general strikes and demonstrations on Wednesday to protest the strict austerity measures undertaken by their countries. In Portugal and Spain, hard hit by the debt crisis, locals conducted a 24-hour general strike that largely paralyzed public infrastructure, suspending train service and grounding hundreds of flights, in addition to shutting down factories.

Most of the protests remained peaceful, but in Madrid there were some violent clashes between demonstrators and police.

Officials warned the situation could escalate further on Wednesday night, with major protests planned for Madrid and Barcelona. A similar demonstration had also been planned for Portugal's capital city, Lisbon.

Spain: Only one-fifth of long-distance trains ran on Wednesday, and more than two-thirds of commuter train services were cancelled. The strikes also paralyzed airlines, with national carrier Iberia and low-cost company Vueling forced to cancel numerous flights.

Portugal: In Lisbon, subway service ceased. Bus and train service was suspended all across the country. Workers at post offices and schools also went on strike. At hospitals, up to 90 percent of workers walked out for the day.

Italy: The country's biggest union, CGIL, called a four-hour general strike and organized around 100 rallies. In Rome, police clashed with students who threw stones and unsuccessfully tried to rush the government palace. In Turin, protesters threw eggs and smoke bombs at the offices of the local tax authorities. Meanwhile, in Milan, rioting students smashed in windows of banks and the energy company Enel.

Greece: Unions had prepared a protest that ended outside the parliament building. The protests began in the city center on Wednesday morning, with police expecting a relatively modest turnout, after a two-day general strike against the latest austerity measures passed by parliament already took place last week.

Belgium: Rail traffic was affected by workers' strikes, with trains traveling to Brussels hardest hit. German national railway Deutsche Bahn provided a replacement bus service for its high-speed services between Brussels and Cologne. Meanwhile, Thalys, which offers high-speed trains between Paris, Brussels and Cologne, suspended service on the route for the day. "Unless a journey is unavoidable, passengers are advised not to travel today," said a rail spokesperson.

Brussels Blinks, No Further Austerity for Spain

There is nothing like a massive wave of protests to get bureaucrats to blink, and blink the nannycrats in Brussels did.

Please consider No further austerity for Spain, says Rehn
Spain will need no further austerity measures until the end of next year even though it will easily miss its deficit targets, the EU's top economic official announced on Wednesday in the clearest sign yet Brussels is backing away from an austerity-focused crisis response.

The decision, approved by the full European Commission on Wednesday, came on a day that anti-austerity demonstrations by labour unions gripped capitals in several struggling eurozone countries, particularly Spain and Portugal, where schools closed, public transport was brought to a stop and air travel was disrupted.

Mr Rehn cautioned against reading the decision as a eurozone-wide shift in policy, saying Brussels would need to "look at every country case by case". He added that Spain must still do more in 2014, when Madrid is required to get its budget deficit, which was 11 per cent of gross domestic product at the end of last year, down below the EU threshold of 3 per cent.
Vice-Liar-in-Chief

Olli Rehn, EU economic commissioner is clearly singing the tune of "Liar-in-Chief" Jean-Claude Juncker, chair of the eurogroup of finance ministers who once publicly stated "When it Becomes Serious, You Have to Lie".

Economic Burnt Toast

Rehn is lying through his teeth. The decision regarding Spain is a clear shift in policy.

However, it will not matter one iota. Spain and Greece are economic burnt toast. Neither country can possibly survive in the eurozone.

What can't happen, won't. All that remains to be seen is how disorderly the breakup will be.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


Looking Ahead, Spain Worse Than Greece; Only One Realistic Solution

Posted: 14 Nov 2012 01:18 PM PST

Both Greece and Spain are in the midst of huge depressions. The unemployment rate in Spain is 25.8%, in Greece it's 24.4%. Youth unemployment is over 50% in both countries.

Greece is in its 6th year of depression and GDP is down another 7.2%. Expect Spain to follow.

Matthew Dalton, writing for the Wall Street Journal explains Where Spain Is Worse Than Greece
By most measures, Greece's economy is in worse shape than Spain's. Greece has been largely shut off from financial markets for more than two years; yields on its bonds are still sky high. Gross domestic product has fallen nearly 20% over the previous three years. Spain can still borrow from private investors, and its GDP has fallen around 5% during the crisis.

But if you take forecasts from the European Commission seriously, Greece enjoys one formidable advantage over Spain: Its economy is running well below capacity, while the Spanish economy, despite an unemployment rate around 25%, is operating relatively close to full steam.

Why is that an advantage? According to the commission, it means that the Greek unemployment rate should fall sharply if the economy starts to recover again, without causing inflation. Spain faces a much more difficult situation. If the structure of its labor market doesn't change, the commission's analysis suggests that a nascent economic recovery in Spain could be hampered by labor shortages that would spark wage inflation.

Greece faces similar problems, but they are less serious, according to the commission's analysis. Yes, the "government-borrows-money-and funds-consumption" model of growth won't be available to Greece anymore. But it didn't endure the same private-sector credit bubble that hit Spain during the previous decade.

The differences between Greece and Spain can be seen in several economic metrics published by the commission. There is the output gap, or the difference between actual GDP and potential GDP (as a percentage of potential GDP). The figure is a whopping 13% for Greece but just 4.6% for Spain.

Then take a look at the commission's estimates of the so-called non-accelerating wage rate of unemployment (NAWRU) in Greece and Spain. This is the unemployment rate below which the commission believes the inflation rate starts to rise. It's also known as the "natural rate" of unemployment. The natural unemployment rate for Greece is around 14.8%; it is 21.5% for Spain. This despite unemployment rates around 25% in both countries.

Spain's structural budget deficit is somewhat smaller than its actual deficit (6.3% of GDP vs. 8%), because of the country's weak economy. But most of the deficit is still "structural," according to the commission, a disturbing thought in a country where 25% of the workforce is unemployed.

And because the euro zone's new "Fiscal Pact" requires countries to bring their structural deficits under 0.5% of GDP, Spain still has a lot of government austerity to endure before the cutting is done.
Only One Realistic Solution

I do not subscribe to the concept of a "natural rate of unemployment". Nonetheless, if even half of what Dalton writes is true, Spain is in a world of hurt.

I do think Dalton hits the target on structural issues and that puts an unsolvable problem on the Spanish government that is struggling mightily to not subject itself to Troika-imposed austerity measures in return for a bailout.

Eventually Spain, like Greece will see the light. The only way out of this mess is to leave the euro and simultaneously undertake structural reforms.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


Windows 8: Why Bother?

Posted: 14 Nov 2012 10:56 AM PST

I do not review technology much because too many others do so much better than I can.

Here is an interesting point of view from Bloomberg news columnist Rich Jaroslovsky who reviews Microsoft Corp.'s new Windows 8 operating system. The opinions expressed are his own.



His conclusion is that unless you have a specific need for touch-screen and mobile devices it's not worth it.

Moreover, Jaroslovsky points out the steep learning curve (not a particular concern of mine as it only has to be learned once) and peculiarities such as having to deal with two different browsers, one for touch screen applications and one for the desktop.

The normal windows desktop is hidden and must be launched from the start screen.   

I have no touch-screen applications on my computer and have no idea when or if I will ever have them. For what I do, touch screens would be more of a hindrance.

Windows 8 starts faster than 7 but that is the only advantage I see for me, and it's a small one. My computer runs constantly and I seldom boot.

Why Bother?

Addendum:

Reader "DH" writes ...
Hello Mish

I completely agree windows 8 as one to skip for most people.

I have two windows machines for charting.  One runs Windows 7 the other, Windows 8. (All the rest are Macs and iPads)

I will upgrade the Windows 7 machine to 8 for one reason only. Boot speed. It's up in seconds.

However, the metro interface in 8 is so bad, that I almost went back to 7.

I was going to switch back until I found the opensource classic shell start menu at http://classicshell.sourceforge.net

It makes Windows 8 behave like XP or 7. Microsoft will get no businesses to adopt 8 until they back off of metro.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


European Industrial Production Plunges 2.3 Percent; Greece GDP Plunges 7.2 Percent

Posted: 14 Nov 2012 09:46 AM PST

Inquiring minds investigating the collapse in Europe note Euro-Zone Industrial Production Declines Steeply
Industrial production in the 17 countries that use the euro fell sharply in September as weak output across both the core and peripheral economies added to expectations for a poor third quarter gross domestic product print Thursday.

Data from the European Union's statistical agency Eurostat showed industrial production fell 2.5% on the month in September, That was the largest fall since January 2009 and compares with August's 0.9% increase. On the year, output dropped 2.3% after a 1.3% decline in August.

The data were weaker than expected as economists surveyed by Dow Jones Newswires last week had expected a 2.0% monthly fall and a 2.1% decline in annual terms.

Energy output fell 1.8% in September compared with August, the biggest fall since an 8.4% drop in March of this year, while a 2.8% month-on-month decline in production of non-durable consumer goods was the steepest since January 2000.

And, Eurostat said that a drop in car production across France and Germany saw both countries post monthly output falls of 2.7% and 2.1%, respectively. The fall in French output was the steepest since January 2009, while the drop in German production was the biggest since November last year.

Industrial production in Portugal fell 12.0% on the month in September, the biggest fall since records began in 2000 and was due primarily to strike action that month. And, Ireland's 12.6% monthly drop in output was mainly driven by a drop in activity in the pharmaceutical sector, Eurostat said.
Greece GDP Plunges 7.2 Percent

Reuters reports Greece sinks deeper into depression in third quarter
Greece's economic slump deepened in the third quarter, with output shrinking 7.2 percent on an annual basis as the debt-laden country heads into its sixth year of depression and struggles to meet its bailout targets.

The contraction was deeper than the second quarter's 6.3 percent drop and follows the passage of a tough 2013 budget by Prime Minister Antonis Samaras's government that is expected to continue to smother growth for most of next year.

Since 2009, the Mediterranean state's economic decline - which Samaras has dubbed Greece's "Great Depression" - has wiped a fifth off economic output and sent unemployment to a record high, putting one in four Greeks out of work.

The reading could point to an even grimmer outlook, analysts said, because it was offset by better-than-expected returns from the country's vital tourism sector, which accounts for a fifth of Greece's 215 billion euro economy.

Spain is also in recession, and fellow austerity-hit Portugal's contraction deepened in the third quarter, with export growth slowing and domestic demand hit by an austerity programme imposed under the country's international bailout.

Portugal's economy shrank 3.4 percent year on year, National Statistics Institute INE said on Wednesday, accelerating from the previous quarter's revised 3.2 percent drop.
Little to add other than things will get much worse. Expect France and Germany to take a big economic dive as well.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


Damn Cool Pics

Damn Cool Pics


Driving in Russia [Video]

Posted: 14 Nov 2012 05:04 PM PST


A mesmerising compilation of head-ons, near misses, fly-bys, rear-endings and rage from the country where apparently every car has a dashcam, courtesy of master-compiler Twisternederland.


The Longest Tree Top Walk in the World

Posted: 14 Nov 2012 04:39 PM PST

At 144 feet high, the longest tree top walk on the planet resides at the Bavarian Forest National Park in Neuschonau, Germany. The walk is intended for any nature lovers who are feeling adventurous. The path is actually 1,300 meters long (0.8 miles), and it culminates with a 44 meter high tree tower that is built around and above 3 giant, old 38 meter fir trees.






































Via twistedsifter


Venice Submerged by Record Flooding

Posted: 14 Nov 2012 04:02 PM PST

The canals of Italy's famous city of Venice have been drenched by heavy rain, sending water levels soaring to near record highs.

With a metre-and-a-half of water, 80 per cent of Venice was flooded at the peak of high tide. The flooding could see the water levels rise up to two metres above sea level.


























































How to Build Your Brand Online [Infographic]

Posted: 14 Nov 2012 03:43 PM PST

In an age where technology has a tight grip on well…everything, it is important to stay on top of current business tactics and trends. It's the 21st century, the Age of the Internet — solely advertising your business in the local newspaper and phone book are not going to cut it anymore.

Today, businesses must establish a powerful presence online in order to attract customers near and far. A website creates personal connections with customers by establishing loyalty through brand awareness. Websites allow businesses to put all of their information in one place, making it easy for customers to stay in touch with your products or services.

Check out the infographic below for more information about how a website can help your business!

Click on Image to Enlarge.
Via: FreeWebsite


College Basketball Game Played On An Aircraft Carrier

Posted: 14 Nov 2012 12:21 PM PST

This weekend's Battle on the Midway between Syracuse and San Diego State was a pretty good basketball game, but led to some amazing photographs.










































Via Buzzfeed


Lipstick Testing Lab

Posted: 14 Nov 2012 12:04 PM PST

During the last Century, the laboratory testing of lipsticks used to involve a group of volunteer women who all participated by kissing one lucky random bald man. Looks like he's in another world.














Twins in the Classroom [Infographic]

Posted: 14 Nov 2012 10:47 AM PST

If you think you're seeing double, you're right. The rate of twin births in the U.S has skyrocketed—rising 76 percent from 1980 through 2009 and still rising. As more twins enter school every year, teachers and parents work together to create the best educational environment for multiple-birth children. The most basic question that arises among parents and teachers when twins enter school: Should twins be placed in separate classrooms or allowed to be in the same class? Compelling arguments abound on both sides of the issue. Some experts and parents feel that because of the strong bond most twins develop, it could be traumatizing to separate them during the school day. Others believe that separating twins allows them to foster a stronger sense of self identity. A solution that works for one set of twins won't necessarily work for another.

While some school districts have policies forbidding the placement of twins in the same class, others don't. A law was passed in North Carolina last year leaving the final decision of whether or not to place twins in the same or different classes up to the parents, and other jurisdictions have similar laws in place. Some parents still don't have a choice when considering whether or not their twins should be placed in separate classes, but for those that do have a choice, there are some key points to take into consideration. Learn more about twins in the classroom in our infographic.

Click on Image to Enlarge. Twins in the Classroom
Courtesy of: Online Schools