Central Perk: 3 mar. 2015

marți, 3 martie 2015

Mish's Global Economic Trend Analysis

Greecification of Spanish Politics and the Lies of Spain's Ministers
Business Activity Contracts in Japan, Modest Expansion in China; PBOC Rate Cut Seen
Ukraine Hikes Rate to 30%, Requires Corporations to Sell 75% of Foreign Currency Earnings; Miners Not Paid For 3 Months
Chicago's Only Possible Salvation: Bankruptcy - a Name That Cannot be Spoken

Greecification of Spanish Politics and the Lies of Spain's Ministers

Posted: 03 Mar 2015 10:22 PM PST

There's an excellent post on Keep Talking Greece this evening on the simmering feud between Greek prime minister Alexis Tsipras and Spanish prime minister Minister Mariano Rajoy.

Tsipras made a claim that Rajoy's plan is to "wear down, topple or bring our government to unconditional surrender before our work begins to bear fruit and before the Greek example affects other countries… And mainly before the elections in Spain. ... for obvious political reasons".

Spanish foreign minister García Margallo, returned fire with a statement (a lie actually), that "Had Spain not given €32.744 billion to Greece, it could have increased the unemployment benefits by 50 percent or increase pensions by 38 percent."

Theheart of the bickering is the rise of the Spanish political party Podemos to the top of the Spanish polls. Elections are later this year. Pablo Iglesias, the leader of Podemos, and Tsipras are good friends.

Greecification of Spanish Politics

With that backdrop, let's pick up the discussion with a look at the Keep Talking Greece article "Hellenization" of Spanish politics or How PM Rajoy lies about the Greek loan.

It doesn't matter whether SYRIZA and PODEMOs have a lot or just a few things in common. PM Rajoy is concerned that if SYRIZA manages to achieve some austerity relaxation, his days on the Spanish PM's chair are counted.

So what does PM Rajoy do in order to undermine his enemy abroad? He blocks any Greek attempts to reach some concessions by the Euro zone partners, he does his best to crash the slightest hint of a compromise.

I often discussed the Rajoy-SYRIZA conflict with my colleague blogger from Spain Todos Somos Griegos. She had recently published an interesting report and I asked her to translate it in English. Original text in Spanish on Info-Grecia.com.
The slogan "First we take Athens, then we take Madrid" of Alexis Tsipras and Podemos during SYRIZA's pre-election rally is the perfect justification for the Spanish government to block any concession to Syriza in Europe.

During the Eurogroup meeting in February Rajoy had the harshest and most uncompromising stance against Greece, even towards the proposal to dissolve the Troika. Despite the fact that the troika had caused a true humanitarian and economic disaster, Rajoy insisted that Greece must follow the same path, in unprecedented partisan egoism, because any minimal concession to Greece, could serve in the future to Spain and other southern countries.

It's very unfortunate that both the government and the PSOE (Social Democrats) agree that concessions to Syriza can skyrocket the vote to Podemos. [They] have sent to Brussels, separately, a warning: "If the troika made excessive concessions to the reforms demanded Syriza in Greece, the door will open and votes for Podemos can skyrocket at a time crucial for Spain and for the EU."

The People's Party has begun his campaign centered on the idea of "either PP or chaos" (looking like a carbon copy of the one made by his counterpart Samaras in Greece).

In Spanish press: Podemos slogan "Tick Tack" indicating time is running out is being displayed with an picture of Tsipras. Is this the Hispanization of the Greek reality or the Hellenization of the Spanish reality?

Lies about the Spanish Bailout to Greece

Foreign Minister, García Margallo, said that "Had Spain not given €32.744 billion to Greece, it could have increased the unemployment benefits by 50 percent or increase pensions by 38 percent."

The economy minister Luis de Guindos had talked of €26 billion.

In the first Greek bailout through bilateral loans, Spain paid directly €6.6 billion. And this is the real Greek debt to Spain. The second Greek bailout was through the European Financial Stability Fund. Spain is basically guarantor of Greece and it has not taken the loan money to Greece from the pockets of the low pensioners and the poor jobless.

To say it simple: if you're guarantor to someone's loan to the bank 1) the borrower does not owe you 2) you will only be called to pay to the bank if the borrower will be unable to pay back the loan.

The lie about the Spanish loan to Greece is becoming central to the People's Party. Deputy Secretary of Studies and Programs of PP, Gonzalez Pons, said the same nonsense in a press conference. "What is worst is that Spain lent to Greece €26 billion, while 26 million people in Spain could have benefited from this money. I don´t advocate that we don't pay. I support the return. We still need this money."

Fact is that Spain never gave all this money to Greece, it only runs the risk of being a guarantor. And these loans shall be returned in a period of 15-30 years anyway.

Adding Up the Numbers

First let's take a look at the numbers as discussed in Revised Greek Default Scenario: Liabilities Shifted to German and French Taxpayers; Bluff of the Day Revisited.

Dr. Eric Dor, director of IESEG School of Management in Lille has the following numbers.

Bilateral loans: €6.65 billion
EFSF: €18.113 billion
Target2: €5.394 billion
SMP Bond Holdings: €2.587 billion
Total: €32.744 billion

Foreign Minister, García Margallo has the total on the nose, but only €6.65 billion was a loan. The rest was a guarantee that could not be spent. Without a doubt Margallo knows the rest were not loans and is thus purposely telling a lie.

The €26 billion mentioned by economy minister Luis de Guindos appears to be roughly bilateral loans plus EFSF plus SMP.

Conspiracy Charges

I commented on the conspiracy charges in Greece Accuses Spain and Portugal of Conspiracy; 3rd Greece Bailout Discussion Under Way for €30-50 Billion.

Spanish Prime Minisiter Mariano Rajoy is making a big mistake. Spain can use debt relief. And the citizens of Spain want debt relief.

By taking a hard stance in favor of Berlin, Rajoy adds fuel to the rise of Podemos. Siding with Germany is the wrong thing to do if Rajoy wants to win reelection.

Playing with Fire

Tsipras is a close friend and political ally of Pablo Iglesias, the former political science lecturer who founded Spain's anti-establishment Podemos movement.

Podemos is currently in the lead in Spanish polls. Elections are later this year.

Recall that the Podemos "Economic Manifesto" Calls for Debt Restructuring, Spain to Abandon the "Euro Trap".

"Spaniards should be aware that it is physically impossible that they can pursue policies that meet the national interest, within the euro as it is designed. The euro was conceived as a real trap, but nowhere is it written that people have to accept it ." said Iglesias.

Also consider Incredible Populist Positions in Podemos' "Economic Manifesto".

An anti-austerity, anti-euro party is leading in the polls. Podemos has an excellent chance of winning the election and putting together a coalition.

The next set of Spanish polls will be very interesting. It's possible the charges by Tsipras unite a rally behind Rajoy. But if not, it's all over for the current prime minister.

Addendum

Reuters reports Juncker says no talks in the euro zone for a third Greek bailout. Why Reuters would even bother posting a denial like that is the question on my mind.

Recall that Jean-Claude Juncker, former Luxembourg PM and former Head Euro-Zone Finance Minister is famous for saying "When it becomes serious, you have to lie".

Third Bailout Discussions or Not?

Economy Minister Luis de Guindos said third bailout talks are underway.

Juncker said they are not underway. Jeroen Dijsselbloem, who chairs the euro zone finance ministers' group said the same thing. Spokeswoman Simone Boitelle joined the deniers with this statement "Euro zone finance ministers are not discussing a third bailout."

It's possible that Juncker, backed up by two others, is actually telling the truth. Known liars don't always lie.

If so, the only possible conclusion is that Spain's, Economy Minister Luis de Guindos lied when he stated such discussions were underway.

Given that a key campaign pledge of Syriza was no more bailouts, and given the other lies by Spanish officials for political purposes, I think we know who's lying and why, even if such discussion will become necessary in the next four months.

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

Business Activity Contracts in Japan, Modest Expansion in China; PBOC Rate Cut Seen

Posted: 03 Mar 2015 06:57 PM PST

Markit has new reports out today on service activity in China and Japan.

The former shows a bit of growth, the latter contraction. Because the reports are diffusion indices that give no weighting to the size of the companies reporting, one must look at these reports with a broad brush.

Japan Business Activity Contracts

The Markit Japan Services PMI shows service sector business activity contracts in February.

Key points

Service sector activity falls, while new business remains just inside growth territory
Input price inflation eased at Japanese services firms
Business sentiment strengthens

Japan Composite PMI

Summary

Latest data highlighted a general weakening of business conditions in the Japanese service sector. Activity contracted, while new orders growth slowed to a marginal pace. Subsequently, service sector providers reduced workforce numbers for the first time in eight months. Meanwhile, inflationary pressures eased, as input prices rose at a slower rate. The headline seasonally adjusted Business Activity Index posted at 48.5 in February, down from 51.3 in January, thereby signalling worsening business conditions at Japanese services providers. Although only moderate, the rate of contraction was quicker than the average since the increase in the sales tax was implemented in April 2014.

Reports of weaker demand conditions and a decline in activitiy subsequently led service sector providers to cut their staff numbers for the first time since June 2014 in February. Although only fractional, the decline in employment levels was quicker than the long-run series average. Meanwhile, manufacturers continued to hire staff, although at a fractional pace. Inflationary cost pressures eased at Japanese services companies in February, as input price inflation slowed to the weakest rate in 28 months.

The negative side of the depreciation of the yen was still felt at Japanese manufacturers, as purchasing costs rose sharply due to a steep hike in raw material prices. Output charges, on the other hand, declined for the first time since August 2014, but at only a slight pace.

Modest Expansion in China

The Markit HSBC China Services PMI shows business activity growth at five-month high.

Key Points

Manufacturers and service providers both see stronger expansions of business activity and new orders
Job creation slows at service providers, while manufacturers cut staff numbers fractionally
Sharp decline in input prices in manufacturing sector contrasts with solid increase in service sector cost burdens

China Composite PMI

Summary

HSBC China Composite PMI ™ data (which covers both manufacturing and services) pointed to a further increase in Chinese business activity in February, thereby extending the current trend to 10 months. Though modest, the rate of expansion quickened to a five-month high, with the HSBC Composite Output Index posting at 51.8 in February, up from January's recent low of 51.0.

February data signalled divergent trends with regard to unfinished workloads, with back logs falling at service providers, but rising at manufacturers. That said, outstanding business declined only slightly in the service sector, offsetting a slight increase at the start of the year. Overall, backlogs of work rose marginally at the composite level. Service sector cost burdens rose solidly over the month, with the rate of inflation picking up to a four-month high in February . In contrast, manufacturers continued to benefit from the recent fall in global oil prices, and signalled a further sharp reduction in average input costs.

At the composite level, input prices fell moderately. Average selling prices set by service providers rose marginally in February, offsetting a slight reduction at the start of the year. Meanwhile, prices charged by manufacturers continued to decline, albeit at a weaker rate. Chinese service sector companies remained optimistic towards future activity growth in February. That said, the degree of overall positive sentiment weakened slightly since January's 10-month peak.

PBOC Rate Cut Seen

Growth in China, assuming one believes the reports is expected to be seven percent this year. It appears as if the tread-water PMI mark in China delivers such growth.

Nonetheless, Bloomberg reports PBOC Seen Cutting Again as China's Economy Slows, Survey Shows.

The People's Bank of China will cut benchmark deposit and lending rates again next quarter as the economy slows, according to economists surveyed by Bloomberg.

The median forecast is for a deposit rate of 2.25 percent and a lending rate of 5.10 percent in the April to June period, the survey of analysts from March 2 to March 3 showed. That's 25 basis points lower on both from the previous survey.

China's leaders are gathered in Beijing this week where they'll map out policies on state-owned enterprises, the environment, and deliver the nation's budget. Premier Li Keqiang is expected to announce a 2015 economic growth goal of about 7 percent, down from last year's 7.5 percent.

"The economy remains in a downturn," Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong, wrote in a March 3 note. "Deflation pressure still lingers and we expect will prompt further policy easing."

Hu forecasts one more interest-rate cut in the second quarter and three more reductions to banks' reserve ratio requirements this year.

The PBOC announced a cut of a quarter percentage point each in the benchmark lending and deposit rates on Saturday. A day later, a factory gauge for February signaled contraction for a second month, underscoring the need for looser policy.

Reflections on China

It's interesting that various indicators in China routinely go in and out of contraction, yet China constantly delivers growth that would make the rest of the world envious.

Chinese growth is certainly overstated, but not because of any PMI reports.

Rather, shadow bank lending of dubious quality adds to GDP (but shouldn't). Malinvestments of all sorts add to GDP (but shouldn't). And finally, pollution (not factored in at all), should subtract from GDP.

None of the above is factored in.

I don't know and cannot guess China's true GDP, but without a doubt, China's GDP is overstated and slowing. The entire world is slowing.

By the way. Rate cuts are precisely the wrong thing to do. There is no need for a "looser policy". China needs to rebalance and rate cuts prolong the status quo of over-dependence on housing and infrastructure.

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

Ukraine Hikes Rate to 30%, Requires Corporations to Sell 75% of Foreign Currency Earnings; Miners Not Paid For 3 Months

Posted: 03 Mar 2015 03:23 PM PST

In an effort to arrest hyperinflation and general panic over rising food prices, Ukraine's Central Bank Hikes Benchmark Rate to 30 Percent.

Ukraine's central bank will raise its benchmark refinancing rate to 30 percent from 19.5 percent, the head of the central bank said on Tuesday, as the bank tries to rein in rocketing inflation and persistent currency weakness.

The new interest rate, which comes into effect on Wednesday, is the highest for 15 years.

Central bank chief Valeriia Gontareva said in a media briefing that the decision was taken because the bank saw the "threat of inflation had risen strongly due to negative consequences from currency market panic".

The bank will also extend a rule obliging companies to sell 75 percent of their foreign currency earnings among other measures to help stabilise the hryvnia, which Gontareva said she hoped would return to a level of 20-22 to the dollar "quickly".

Interbank Trading

There is no "threat of inflation", there is inflation. In light interbank trading, the quote ranged from 24.50 to 25.00 UAH/USD compared to 30.01 on February 26.

With all the restrictions, and gimmicks, it's hard to call this a market.

Corporations Must Sell 75% of Foreign Currency Earnings

In addition to the rate hike, NBU Extends Rule Mandating Sale of 75% of Foreign Currency Earnings.

The national Bank of Ukraine extended the requirement for mandatory sale of 75% of foreign exchange earnings, said the head of the National Bank of Ukraine Valeria Gontareva on Tuesday.

"Our decision, Resolution No. 758, do not change. The mandatory sale of 75% of foreign exchange earnings remains," said Gontareva.

Recall that in November 2012, the NBU introduced mandatory sale of foreign exchange earnings for exporters. In August 2014, the NBU has obliged them to sell 100% of foreign exchange earnings. In September 2014, the NBU reduced the requirement to 75%.

Miners Block Road Due to Lack of Payment for Three Months

Ukraine is so broke it has not been able to pay miners at state-owned mines. Please consider Rebellious Miners Blocked the Road Lviv-Kovel"

The movement on the inter-regional highway from Lviv to Kovel was paralyzed: The road was blocked by striking miners, demanding payment of wage arrears.

Local officials who came out to talk just shrug and say the financial problems miners face is impossible to solve.

Miners Protest in Kiev

Also consider Miners of Western Ukraine Announced an Indefinite Strike in Kiev.

Among the strikers at the Verkhovna Rada [Ukrainian Parliament] are many workers from Western Ukraine, in particular, seven buses with miners from the Lviv region.

At the Verkhovna Rada and the Cabinet of Ministers, five hundred miners protested. They hit their helmets on the ground, and insist someone in authority speak with them.

Miners demand salary arrears for three months and state budget planned subsidies to the coal industry. Outraged miners from Lviv and Volhynia announced an indefinite strike.

Miners Forced Into Army

Want to get paid? Join the Army.

In the Volhynia region of Ukraine, sent 800 Miners Sent Draft Notices.

Miners in Western Ukraine who threatened a large-scale rebellion over a three-month salary delay were drafted into the army.

Eight hundred miners-rebels from Volhynia received the notice which the military commandants carried straight to the mine.

A miner from Novovolynsk said "It's worse now than in the 90s. People starved then, but there was no war. Now there is a complete ruin".

Black Market Rates

Reader John whose sister lives in Lviv, has not heard from her for a few days. Thus, I cannot say how the black market has responded to the miner protests or the rate hike to 30%.

Hopefully within a couple days I will have the street exchange rates to post.

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

Chicago's Only Possible Salvation: Bankruptcy - a Name That Cannot be Spoken

Posted: 03 Mar 2015 12:08 PM PST

Is the Chicago pension system so messed up and union work rules so entrenched the only way to change either of them is bankruptcy? I think so.

So does Dennis Byrne who wrote on his blog today Chicago's Only Salvation: A Detroit-Like Bankruptcy.

This is a guest post from Byrne.

Chicago's Only Salvation: A Detroit-Like Bankruptcy

Wait, I thought only the Republican Party was being torn asunder by a rift between the establishment middle and the fringe. That impression was nailed down, again, last week by the embarrassing fracture among House Republicans over funding for the Department of Homeland Security.

But don't forget last Tuesday's Chicago primary in which incumbent Rahm Emanuel, the so-called establishment candidate, was forced into a runoff election for mayor with progressive Cook County Commissioner Jesus "Chuy" Garcia.

Observers on the right and left expect that Garcia's unexpected success bodes well for progressives and is bad for moderate, establishment Democrats. That includes "centrist" (I don't necessarily agree with the label) and president-in-waiting Hillary Clinton.

They see an uprising among progressives that'll energize the drive to draft the far-left Sen. Elizabeth Warren, D-Mass., to challenge Clinton. Suggesting that a national movement is afoot to cleanse the Democratic Party of centrist heretics, they also point to the election of New York Mayor Bill ("I'm a progressive, don't call me liberal") de Blasio. Others said last year's election of labor-backed Ras ("We are the mayor") Baraka as Newark, N.J., mayor energized progressives.

Locally, left-wing Democrats have draped their mantle over the shoulders of Garcia. That's happened even though, after reading his answers to the Tribune's Candidate Questionnaire, I wouldn't call him the perfect progressive. The Illinois branch of MoveOn.org (the left's noisy equivalent of the right's tea party) endorsed Garcia. The Chicago Teachers Union and assorted progressive activists credit themselves for Garcia's unexpectedly strong showing and their successes in several alderman races.

So, yes, there is a fissure within the Democratic Party, between the establishment types and progressives.

So what? Frankly, I don't care about whatever splits are ripping apart whatever political party. More important than political process is the substance of the issues — the incredible, shrinking city of Chicago.

At least give Emanuel credit for trying to confront the city's calamitous deficits and debt. Give Garcia and his supporters a thumbs down for not only failing to try to provide some realistic, convincing answers, but for wanting more of the same policies that are sinking the city and the schools.

How dare Emanuel close down 50 Chicago schools! Keep them open, but don't ask how to pay for them. How dare Emanuel face the real problem of government labor costs! Pretend that the Chicago Public Schools don't have to find $688 million in pension payments in fiscal 2016. Hey, get rid of those red light cameras; they're only there to make a bundle of money for the city! Jump on Emanuel for finding sneaky ways to increase revenues without raising property taxes. Applaud Garcia when he promises no property tax increases.

In this, progressives are true to form. Pain avoidance is a priority. More and costly programs are desperately needed. Instant gratification trumps the long-term common good. Saving for our children's future is inconsequential.

Emanuel and Garcia, the latter especially, are criticized for not coming up with a better solution. Few commentators have great ideas, either. The problems have become too mind-boggling. Turning over all the tax increment financing, or TIF money, that has been salted away won't do it. New and higher taxes will fall short. Promises of "operating more efficiently" are hollow. The idea of a state bailout from nearly bankrupt Illinois is preposterous. Don't even look to Washington.

There's a reason no one is putting forth a realistic solution: There is none.

Chicago is too far in over its head to dig itself out. The only solution is the one whose name may not be spoken: bankruptcy.

It worked in Detroit. Last December, it emerged from what was the nation's largest municipal bankruptcy after about 17 months of court supervision. Ironically, under bankruptcy, the city's homicide rate, the highest in its history, dropped 18 percent, The New York Times reported. Police average response time dropped to less than 18 minutes, from 58 minutes. Replacement of the city's streetlights — of which 40 percent failed to work — is in the offing. Detroit isn't out of the woods yet, but it's in a better place now than when there appeared to be no hope, none at all.

Rip Chicago's finances out of the hands of the connivers, special interests and political opportunists and give them to a court-appointed manager to oversee the necessary reorganization. Start with Chicago Public Schools and, if necessary, throw in the entire stinking mess, called city of Chicago.

Might as well include the state of Illinois, too.

End Guest Post

Byrne is a Chicago Tribune contributing op-ed columnist and author of forthcoming historical novel, "Madness: The War of 1812." Byrne is also a reporter, editor and columnist for Chicago Sun-Times and Chicago Daily News.

Election Runoff

In an election runoff, mayor Rahm Emanuel faces Jesus "Chuy" Garcia. The Chicago Tribune endorses Rahm Emanuel.

One can quibble over Emanuel's accomplishments. And Emanuel certainly has his faults as the Tribune noted in an endorsement.

He failed to end Chicago's crippling dependence on borrowing.
He continued Daley's practice of issuing taxable bonds, stretching debt payments far into the future.
He pushed a $900 million borrowing plan through the City Council nearly three years after being elected.
He has been slow to respond to public outrage over that scandal-ridden traffic camera program.

Jesus "Chuy" Garcia

When asked about the Chicago's pension crisis, Garcia's non-solution is even more problematic. Consider three statements made by Garcia in the Tribune's Candidate Questionnaire.

This is a problem we created together as a City, and it is a problem that will require everyone's participation to resolve. That said, I do not support cutting benefits for current retirees.
I believe in the right of collective bargaining and the important social policies that it reflects, and I would prefer to negotiate such changes with the elected union leadership.
I do not support a property tax rise to fund pensions, because I know too many families – and especially senior citizens -- who are already struggling to pay their existing tax bills.

Garcia also wants to put more police on the street.

Garcia's solution apparently involves magic because it maintains benefits and adds police officers without hiking taxes, at least property tax hikes. Nowhere does Garcia explain how he pays for his position.

Simply put, Garcia is in Fantasyland.

The Problem and The Solution

Even with Chicago's recent financial reforms and spending curbs, there's a $300 million hole in the 2016 budget and a $550 million balloon payment for police and fire pensions due next year. The Chicago Public Schools system faces an unfunded pension obligation of more than $9 billion.

The problem is debt and untenable pension promises.

Someone needs to step up to the plate and admit the obvious:

Pension promises need to be cut.
The only way to cut pension benefits in a court-approved manner is bankruptcy.

Nothing else works. Unions will fight every other attempt, just as they have done now.

Say the Word!

Bankruptcy is the word no one wants to say, but eventually bankruptcy will be thrust upon Chicago.

Detroit would have been in recovery years ago had it taken that action years ago. Instead, every mayor of Detroit fought bankruptcy for a decade or more after it was perfectly obvious that bankruptcy was in the cards.

Every delay made matters worse.

Hopefully Chicago will not suffer the same sad fate of delay after delay accompanied with crumbling infrastructure.

Pension Plan Review

For more on the sorry state of Illinois pension plans, please see ...

For a look at pension plans in general, PIMCO founder Bill Gross (now with Janus Capital) says There's Too Much Debt, Too Many Zombie Corporations, and Low Interest Rates Destroy Pension Systems.

Conclusion

Byrne has it correct. Chicago's only possible salvation is bankruptcy. Let's admit the problems and the solution before more damage is done.

The Illinois legislature needs to permit bankruptcy because that is the only conceivable solution, not just for Chicago, but for numerous Illinois cities afflicted with untenable pension plans.

Delay means more problematic tax hikes accompanied with business and personal flight.

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

Damn Cool Pics

GYM 101 [Infographic]
This Massive Rhino Saved A Zebra That Was Stuck In The Mud
Quokka Selfie Is Cutest Trend In Australia Right Now
This Guy Landed The Easiest Date Ever Thanks To His Car
North Korea’s Leader in Action

GYM 101 [Infographic]

Posted: 03 Mar 2015 12:23 PM PST

This infographic from My Fitness Boutique is a helpful guide for those who may be new to going to the gym. It gives some starting points on what to expect from an initial gym experience.

Click on Image to Enlarge.

This Massive Rhino Saved A Zebra That Was Stuck In The Mud

Posted: 03 Mar 2015 12:03 PM PST

This small zebra foal thought its life was over as it awaited a slow death. Luckily a brave rhino came to the rescue and plucked the zebra foal right out of the mud.

Quokka Selfie Is Cutest Trend In Australia Right Now

Posted: 03 Mar 2015 10:17 AM PST

The quokka is on of Australia's cutest creatures and they're often referred to as the happiest animals on Earth. These creatures are so happy in fact that they have no problem taking selfies with total strangers. Taking selfies with quokkas is quickly becoming Australia's newest trend.