Central Perk: 5 apr. 2014

sâmbătă, 5 aprilie 2014

Mish's Global Economic Trend Analysis

Brussels Says "No" to France Proposal for Deficit Target Leniency

Posted: 05 Apr 2014 07:07 PM PDT

Francois Hollande's new government is of to a shaky start.

The European Commission told Manuel Valls, Hollande's new Prime Minister to "be more like Spain", and impose more austerity to meet deficit targets. The irony of course is that Spain has failed at least three times to meet repeatedly watered-down deficit targets.

Via translation from El Pais, please consider EC Says No to Valls Deficit Request.

The flamboyant French Prime Minister, Manuel Valls, asked the European Commission to grant him leniency on meeting deficit targets in exchange for reforms, cuts to public spending, and tax breaks. Valls received yesterday the Commission response: No. No way. There will be none of that.

German Finance Minister, Wolfgang Schäuble, suggested that France had been given leeway twice already, and a third time could be counterproductive. The vice president even Economic Affairs Commission Olli Rehn, yesterday got out the glove and categorically ruled out more time to Paris.

"An extension of the deficit targets for France would be justified only if there are negative surprises. And there is nothing like that on the horizon. The eurozone is in full recovery, "he told Reuters. That view is shared by President José Manuel Durão Barroso and Jean-Claude Juncker.

Rehn cited as models for France to countries that have made reforms, such as Germany and more recently, Ireland, Latvia and even Spain, although in three cases the results still leave much to be desired.

In April, Paris must send their tax plans to Brussels. And that's when the mess really starts.

Olli Rehn's notion that the eurozone is in full recovery is of course laughable. As for negative surprises, expect to see plenty of them.

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

Australia's House Prices 'Flashing Red', Debt to Income at Record Level

Posted: 05 Apr 2014 09:09 AM PDT

Australia's housing bubble is back in full swing. Prices rose almost 11 percent over the past year to record levels in absolute terms and near-record levels as a share of household income. Prices in Sydney rose 15 percent.

Household debt as a percent of income surpassed the previous record.

WAtoday reports Australia's house prices 'flashing red', debt to income ratio at record levels.

Australian household debt has hit a record 177 per cent of annual disposable income while housing valuations are "flashing red", according to Barclay's chief economist, Kieran Davies.

"House prices now equate to 4.3 times annual income and 28 times annual rent, both within a fraction of their historic highs," Mr Davies said.

Home Prices to Income

Household Debt as Percent of Income

In March RBA governor Glenn Stevens warned "we need to be alert to the possibility that the past year of strong rises in dwelling prices leads people to assume that this is the norm".

"Were such an assumption to lead to increasing speculative activity, accompanied by a renewed increase in household leverage with all the associated risks to the housing market ... that would be unwelcome," Mr Stevens said.

That home prices and debt-to-income are back up at record levels is a sign that speculation is already back in full swing already.

Is there any central bank governor anywhere that can spot speculative bubbles before they burst? Apparently not.

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

The President’s Budget Ensures Opportunity for All Hardworking Americans

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Weekly Address: The President's Budget Ensures Opportunity for All Hardworking Americans

In this week's address, the President highlighted the important differences between the budget he's put forward -- built on opportunity for all -- and the budget House Republicans are advocating for, which stacks the deck against the middle class.

Click here to watch this week's Weekly Address.

Weekly Wrap Up

7.1 Million Americans: Covered

The numbers don't lie -- the Affordable Care Act is working. By the end of open enrollment on March 31, 7.1 million Americans had signed up for coverage.

In a Rose Garden speech, President Obama celebrated the news. "The bottom line is this: under this law, the share of Americans with insurance is up and the growth of health care costs is down, and that's good for our middle class and that's good for our fiscal future."

Spring is definitely here as the White House Kitchen Garden is growing again. First Lady Michelle Obama invited local students to join her for the sixth-annual planting of the garden earlier this week, making sure the White House will have a fresh crop of healthy fruits and vegetables in the months ahead.

The First Lady started planting the garden in 2009 to start a nationwide conversation on healthy eating and, according to a report released by the National Gardening Association, 2 million more households are engaging in community gardening now than in 2008 -- a 200 percent increase.

The President traveled to Ann Arbor, Michigan on Wednesday to speak to a crowd filled with University of Michigan Wolverines about his March Madness bracket, a famous local deli named Zingerman's, and, of course, the importance of raising the national minimum wage.

"Nobody who works full-time should be raising their family in poverty, right? If you're working, if you're responsible, you should be able to pay the rent, pay the bills," said President Obama. "But... all across the country you can work full-time on the minimum wage and still be in poverty."

READ MORE

Team USA Stops by the White House

U.S. Olympians and Paralympians who competed in Sochi earlier this year visited the White House this week, spending time touring the grounds, playing with Bo and Sunny, and hearing from the President and First Lady.

Read on to watch the President and First Lady's remarks to the athletes and to see some of Team USA's tweets and Instagram posts.

Are you a social butterfly? Do you have kids ages 5-13? Want to visit the White House? The 136th-annual White House Easter Egg Roll is just around the corner, and you are invited.

READ MORE

As always, to see even more of this week's events, watch this week's episode of West Wing Week:

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Seth's Blog : Search vs. discovery

Search vs. discovery

They're not the same, in fact, they couldn't be much more different.

Search is what we call the action of knowing what you want and questing until you ultimately find it. Duckduckgo is a search engine that is mostly invisible--tell it what you want, here it is.

Discovery, on the other hand, is what happens when the universe (or an organization, or a friend) helps you encounter something you didn't even know you were looking for. (I had originally typed find but then replaced it with encounter. Search is such a dominant paradigm that we use search-related words even when we don't intend to.)

Amazon and Google have done an incredible job of providing the answer to search. It's not obvious, though, that we've made nearly as much progress in helping people discover ideas, hidden gems, friends, opportunities, places, important issues or the truth (about anything).

Are you working to help your clients, patrons, customers and colleagues find what they already know what they want? Or teaching and encouraging them to find something they didn't know they needed?

Seems like a huge opportunity.