Central Perk: 18 nov. 2012

duminică, 18 noiembrie 2012

Mish's Global Economic Trend Analysis

Chris Christie Provides Perfect Setup for Saturday Night Live

Posted: 18 Nov 2012 05:38 PM PST

Those looking for late Sunday evening humor can certainly find it in this short YouTube clip of New Jersey governor Chris Christie.

Link if video does not play: Chris Christie on Twinkies
At a recent news conference, Christie was asked a question about Twinkies. He responded ...

"Really, seriously, you're not asking me about Hostess Twinkies are ya? What's the next question? I'm on Saturday Night Live enough. You think you're getting me behind this microphone having me talk about Twinkies? This is a setup man, I know it. You people are the worst. This is a setup. I am not answering questions on Twinkies. No, no, no, no, no, no. It's bad that I even said the work Twinkie from behind this microphone. You are not getting me to do that, no way."

That is so obvious, it almost appears as if Christie was trying to make the opening skit of Saturday Night Live.

In case you are not familiar with the Twinkies story, please consider Hostess to Liquidate if Bakers' Strike Continues Through Thursday; End of Twinkies Hours Away?

The bottom line is the union would not give into demands and the company filed a motion last Friday to liquidate. Shutting down the company will mean the loss of 18,500 jobs (less any jobs picked up by buyers of brands Twinkies, Ding-Dongs, Wonder Bread, Ho-Ho's etc.)

There is plenty of blame to go around, including untenable wages and benefits, leveraged debt, untenable management salaries etc.

However, the enabling factor behind the debt is loose monetary policy by the Fed coupled with fractional reserve lending. Factor in unions and corrupt management and there is no way the company could make it without huge concessions from the union.

Still, it is difficult to have much sympathy for those who vote to have no job in these trying times.

The union will likely see pension benefits slashed by 50% or more when handed over to the Pension Benefit Guarantee Corporation (PBGC). The PBGC is of course US taxpayers who should not have to pick up any of this tab at all (but they will).

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

Nightmare Scenarios for Obama's 2nd Term

Posted: 18 Nov 2012 10:07 AM PST

Last week I was interviewed by Constantine von Hoffman for a CBS news article regarding economic nightmares for Obama's 2nd term.

Calculated Risk was interviewed as well. His nightmare scenario is war, specifically noting the rise of Golden Dawn.

Eight people were interviewed for the CBS article but the organization was maddening. Specifically, there is no way to see all 8 viewpoints of people interviewed at once. You have to click through pages one at a time. I was curious enough to do it, Calculated Risk gave up after the second click.

In a clear effort to generate clicks, articles like this are an extreme turn-off and actually counterproductive. That no readers emailed me with a link to this article says no one bothered clicking through all the pages.

I talked to von Hoffman about numerous things, only one was mentioned in the article. Many of my points were of the nature of things I think should happen (and would benefit the global economy over the long run if they did), but most economists would disagree.

Mish Nightmare Scenario

Not Addressing the Fiscal Cliff
Breakup of the Eurozone
UK exiting the EU
China Growth falls to Zero Because of Rebalancing
Currency Crisis in Japan
Failure to address pension problems in US
Rise of the Neo-Nazi Golden Dawn Party in Greece Leads to War

I mentioned all of those things and more. The first four are things that I actually believe need to happen (and the sooner the better) to prevent a global nightmare!

Unfortunately, most economists want to kick the can down the road still more.

For a discussion of the fiscal cliff, please see Misdiagnosing the Fiscal Cliff; Shrill Voices and Economic Nonsense; Tyranny of Balanced Budgets

A breakup of the eurozone is inevitable in my opinion. For a detailed explanation why, please see Spain's Unpleasant Choice: Accept Lower Wages and Still Higher Unemployment, Leave the Euro and Default.The sooner a breakup happens the better. Delays end up like Greece.

In regards to China, please consider "China Rebalancing Has Begun"; What are the Global Implications? Michael Pettis on China Rebalancing, Chinese Price Deflation, and Spain Exit from Euro; Target 2 Revisited.

Note that can-kicking in Greece has led to the rise of the Golden Dawn party. Expect the same to happen in Spain if the agony lasts long enough.

Essentially, my nightmare scenario is more can-kicking exercises until the entire global economy blows up in a currency crisis and radical parties like Golden Dawn gain prominence everywhere, fueling political as well as economic violence.

Addendum

I had war in the Mideast with spiking oil prices as part of my nightmare scenario that I mentioned to von Hoffman. I simply forgot to mention it when I typed this post up earlier today.

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

Seth's Blog : What are professional reviews for?

What are professional reviews for?

I know what they used to be for. A decade ago, there really was no way to tell if a movie, a book or a play was worth your time before you paid up. A professional review could be a valuable signal, a way to save people time and money.

Along the way, professional reviewers also decided that they could alter the culture by speaking up. Since creators of culture are often sensitive to what the critics have to say, establishing critical baselines (particularly when you are a powerful arbiter of what sells and what doesn't) became a real function of the critic.

Today, of course, there's no shortage of cultural feedback. If I want to know what people thought of a bit of culture, it's only a click away. In fact, for the consumer who doesn't want to know (spoiler alert) it's almost impossible to avoid.

With that much feedback to choose from, what purpose do the anonymous book reviews in Publishers Weekly or Kirkus Review serve? Or the long movie reviews in the Times or the short ones in Variety? Or the restaurant reviews in the local paper?

They might be saying, "I have a track record, and if you agree with my past picks, you'll agree with this," which works fine if it's always the same reviewer and we know them by name.

They might be saying, "our publication has a good track record in picking what's going to be popular, so if you're a theater owner or a bookstore, pay heed," except they don't have a good track record, they have a terrible one.

Or they might be saying, "attention actors and directors and writers--we don't like it when you make books and movies that we don't like, and we're going to pillory your work until you stop." Assigning someone who doesn't like an author's work to review the author's next book seems cruel to all involved.

[And sometimes, they're just fun.]

All a long way of saying that if you make something that people are likely to criticize, pay careful attention to which critics you listen to. They probably don't view the world the way you do, and worse, the way your fans do.

Reading criticism just to ruin your day is a waste of your talent.