Weekly Address: Congress Must Act on "To-Do List"

Your Daily Snapshot for Saturday, May 12, 2012   Weekly Address: Congress Must Act on "To-Do List" President Obama calls on Democrats and Republicans to come together and act on his Congressional “to-do list,” which will create jobs and help restore middle class security.  Watch the President's weekly address: President Barack Obama tapes the weekly address, May 11, 2012. (Official White House Photo by Pete Souza) Weekly Wrap Up Your quick look at this week on WhiteHouse.gov: Congratulating the Wildcats: President Obama welcomed the victors of the 2012 NCAA championship – the University of Kentucky Wildcats – to the White House to congratulate them, despite his original skepticism that they’d take the title. “I had them in the championship game. But in the end, I though, they got all these freshman. These guys are too young,” he said. “But let’s face it, sometimes talent trumps experience.” On the To-Do List: President Obama has put together a To-Do List for Congress, full of initiatives that have bipartisan support and will help create jobs and restore middle class security. The items on the list include eliminating tax incentives to ship jobs overseas and cutting red tape so responsible homeowners can refinance, among others – you can check the full list here. To-Do List Goes to Albany: On Tuesday, President Obama traveled to the College of Nanoscale Science and Engineering’s NanoTech Complex in Albany, New York, where he laid out his to-do list of actions Congress should take before leaving for summer recess. The first item on the To-Do List will help spur American manufacturing, an industry that is growing in upstate New York. “At the very least what we can do right away is stop rewarding companies who ship jobs overseas and use that money to cover moving expenses for companies that are moving jobs back here to America,” the President remarked. “I think…”: In an interview with ABC News, President Obama said, “I think same-sex couples should be able to get married.” His statement came after giving this issue serious consideration, which involved conversations with his family, friends, neighbors and people who work with him at the White House. West Wing Week: Your video guide to everything that's happening this week at 1600 Pennsylvania Avenue. Watch here. Stay Connected Sign up for the Daily Snapshot     Facebook Twitter YouTube Flickr Google+     This email was sent to e0nstar1.blog@gmail.com Manage Subscriptions for e0nstar1.blog@gmail.com Sign Up for Updates from the White House Unsubscribe | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Seth's Blog : Naming things

Naming things

"Over there, by the fire, is that a stick or a snake?"

It turns out that humans have been naming things for a long time. If we know that this is a cheetah, or a grapefruit, we can make intelligent decisions on how to deal with it.

Lately, though, we've been naming more than things. Now we classify ideas and opportunities as well.

Getting smart about naming is at the heart of marketing. Calling every single person a 'customer', for example, is hardly a nuanced way of engaging with the public. Salespeople are especially nuanced at this, but often make mistakes as well. Car salesman are notorious for misnaming women who walk in (spouse instead of primary decision maker).

As an investor, are you misnaming the businesses you look at, mistaking a cliff business for a bootstrappable idea? Dozens of book editors misnamed Harry Potter at first glance, labeling it a 'loser from the slush pile' instead of the most profitable book they were ever offered.

Job interviews are nothing but sessions where we try to put a name on a stranger looking for employment. Is she a superstar in the making or someone we ought to avoid?

Most of all, are you misnaming opportunities and calling them risks instead?

When you are isolated or if the world is stable, your need to name new things goes down, and the world might feel safer as a result. Most of us don't live in that world, so our ability to name things becomes critical.

Just because we're not good at it doesn't mean it's not important.

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Mish's Global Economic Trend Analysis

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• TrimTabs on Debt and Disability Claims: How Much Debt Does it Take to Generate $1 in GDP? Disability Fraud vs. Expiring Unemployment Benefits Revisited
• ECRI Repeats Recession Call Based on Coincident Indicators, Especially Income
• Cash Cow Liquidity Comparison: Where's the Cash and Where's the Debt? A Look at the Top 50 Companies

TrimTabs on Debt and Disability Claims: How Much Debt Does it Take to Generate $1 in GDP? Disability Fraud vs. Expiring Unemployment Benefits Revisited Posted: 11 May 2012 09:39 AM PDT In response to 2.2 Million Go On Disability Since Mid-2010; Fraud Explains Falling Unemployment Rate I received a nice email from Madeline Schnapp, Director, Macroeconomic Research at TrimTabs Investment Research. Madeline Writes ... Hello Mish, I loved your disability graph so decided to expand on that theme some more and took a look at the relationship between the trend in disability recipients and the roll off of recipients of emergency and extended unemployment insurance programs. Should we dare say there is a stunning relationship! Enjoy, Best, Madeline Amazing Achievement is Fraud  First consider a few snips from my previous post, then we will take a look at what TrimTabs has to say. In the last year, the civilian population rose by 3,638,000. Yet the labor force only rose by 945,000. Those not in the labor force rose by 2,693,000. In the last month, actual employment fell by 169,000, but the unemployment rate dropped by .1%. That is an amazing "achievement" to say the least. Since Mid-2010 2.2 Million Went on Disability Notice the jump in claims after the recession was allegedly long-over. The timing coincides with unemployment benefits expiring at 99 weeks. Supposedly higher taxes will fix the problem. I say "nonsense". Trim Tabs Weekly Macro Analysis  Please consider snips from the TrimTabs Weekly Forecast for May 8, 2012. A recent post on the popular ZeroHedge financial blog compared the annualized growth in federal debt to the annualized growth in GDP in Q1 2012. ZeroHedge reported that while U.S. government debt rose by $359.1 billion in Q1 2012, the U.S. GDP grew only $142.4 billion. Durden noted that, "It now takes $2.52 in new federal debt to buy $1 worth of economic growth." See Chart Of The Day: Change In Q1 American Debt And GDP The surprising observation prompted us to examine the relationship between growth in debt and growth in GDP from 1975 through 2012. What we found is both astonishing and frightening. From 1974 to 1980, each $1 increase in GDP was accompanied by an increase in debt of between 20 and 47 cents. Since 2009, however, each $1 increase in GDP has been accompanied by a whopping $2.50 increase in debt. At some point, the amount of debt required to generate $1 of GDP will suffocate the economy and trigger another financial shock. In Q1 2012, GDP rose $142 billion, while debt rose $355 billion. In other words, it took $2.50 in debt to generate $1.00 in GDP. We wanted to understand how this relationship compared to those that prevailed in previous decades. The graph below shows our findings. click on chart for sharper image From 1974 to 1980, each $1 increase in GDP was accompanied by an increase in debt of between 23 and 53 cents. Since 2009, however, each $1 increase in debt has been accompanied by a whopping $2.41 increase in debt. At some point, the amount of debt required to generate $1 of GDP will suffocate the economy and trigger another financial shock. Another recent post on the popular Global Economic Trend Analysis blog (hat tip to Mish Shedlock) suggested the recent declines in the unemployment rate were due, in part, to the rapid increase in enrollment in disability because people on disability are no longer counted as unemployed. Please see 2.2 Million Go On Disability Since Mid-2010; Fraud Explains Falling Unemployment Rate In his blog post Shedlock reported, "Since mid-2010, precisely the time million of U.S. citizens used up all of their 99 weeks of unemployment insurance, disability claims have risen by 2.2 million." Mish's observation prompted us to dig a little deeper into the relationship between the number of people exhausting extended and emergency unemployment benefits compared to the increase in disability recipients. What we discovered was interesting, to say the least. click on chart for sharper image From July 2010 to April 2012, the decline in the number of people collecting extended and emergency unemployment benefits was 2.46 million. Over the same time period the number of people collecting disability benefits increased by 2.20 million. We suspect the similarity in the inverse relationship is more than coincidence. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

ECRI Repeats Recession Call Based on Coincident Indicators, Especially Income Posted: 11 May 2012 08:22 AM PDT Once again Economic Cycle Research Institute's Lakshman Achuthan repeats his recession call, this time saying within three months. His call is based on coincident indicators, especially income. According to Achuthan, income growth in the last three months is lower than at the start of any of the last 10 recessions. Link if video does not play: Why U.S. Economy is Heading Back Into Recession Once again I tend to agree with him, yet once again I find some things that sound rather disingenuous. When asked "Can the Federal Reserve do anything about this?", Achuthan responded "no". Specifically Achuthan replied "It's so ironic. We're all free-marketeers. .... the free market has indigenous inherent business cycles which means ups and downs. It's ironic that we think that the Fed or other policies could just stave off a recession". I agree. However, the statement represents one hell of an attitude change as the following flashbacks show. Window of Opportunity Friday, January 25, 2008 ECRI Says There Is A Window of Opportunity for the US Economy The U.S. economy is now in a clear window of vulnerability, given the plunge in ECRI's Weekly Leading Index (WLI) since last spring. Yet there is a brief window of opportunity within that window of vulnerability to avert a recession. That is why ECRI has not yet forecast a recession. .... This is why, having correctly predicted the last two recessions in real time without crying wolf in between, we are not forecasting one yet. ECRI Denial The ECRI laid it on pretty thick, openly mocking the "best advertised [recession] in history" while claiming "This is why, having correctly predicted the last two recessions in real time without crying wolf in between, we are not forecasting one yet." The irony is the recession was about 2 months old at the time. Recession of Choice Friday, March 28, 2008 ECRI Calls it "A Recession of Choice" The U.S. economy is now on a recession track. Yet this is a recession that could have been averted. In January, given the plunge in the Weekly Leading Index, we declared that the economy had entered a clear window of vulnerability. Yet we emphasized the brief window of opportunity within that window of vulnerability for timely policy stimulus to head off a recession. It is a somewhat different story with regard to GDP, because the cyclically volatile manufacturing sector still accounts for 36% of GDP. A mild downturn in that sector should limit the decline in GDP in this recession. Question for Achuthan If it was a recession of choice in 2008 (after the recession already started), why isn't it a question of choice now? Of course, it is entirely possible Achuthan has changed his mind about what is or isn't possible. Then again, is that change of heart a new fundamental belief or simply a necessary statement because his call is now recession as opposed to no recession in late 2007 and early 2008 (while later taking credit for predicting a recession). It is not my intent to keep bringing this discrepancy up, but Achuthan has come out with yet another reason for his call that is dramatically different that what the ECRI has stated before. The key point however is the forecast, and on that score I side with Achuthan. I also side with Achuthan that he Fed cannot do much to stave off recessions. History will show who is correct. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Cash Cow Liquidity Comparison: Where's the Cash and Where's the Debt? A Look at the Top 50 Companies Posted: 10 May 2012 11:35 PM PDT In light of  renewed banter about corporations being flush with cash following Apple's stellar earnings, I thought it would be instructive to take a look at the top 50 companies by market cap in the following ways: Debt and liabilities vs. cash Debt and liabilities vs. cash plus short-term investments Debt and liabilities vs. cash plus both short-term and long-term investments  With thanks to Ross Perez at Tableau Software for compiling the data for my idea, please consider the following interactive graph. Note the ability to change the "cash" metric in the upper right of the graph. Liquidity Comparison Richard Shaw has an excellent article on Seeking Alpha that discusses cash, short-term investments, and long-term investments and what they mean: Comparing Liquidity Of Microsoft And Apple And Both Compared To Other Cash Rich Companies. Bottom line: net cash on hand at the top 50 companies is negative to the tune of $1.479 trillion. If one considers short-term investments to be cash equivalents, then net cash is negative $1.251. Only if long-term investments are included does the number go positive. Clearly there is not as much "sideline cash" as most are led to believe. By the way, the notion of sideline cash is bogus in the first place. No Such Thing As Idle Sideline Cash For those who want a second opinion, John Hussman has written about sideline cash on several occasions. Please consider There's No Such Thing as Idle Cash on the Sidelines. The amount of "sideline cash" has been rising for years and will keep doing so unless money supply contracts. Yet the S&P 500 was clobbered in 2008 and early 2009 anyway. Why? Stock prices rise and fall on sentiment changes every single day, not because money flows into or out of the market. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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Damn Cool Pics

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Indian Dubstep [Video] Posted: 10 May 2012 10:55 PM PDT This new video shows Gerardam, a group that consists of two brothers Gerard, introducing what they call "Indian dubstep." Among some of their more notable additions to the style are what they've dubbed Hair Tutting and Shoulder Blade Tutting. Johnnathan writes: I liked DUBSTEP the moment I listened to it because, it suited very well with the style of dance that I am most comfortable with! Therefore I decided to compose an Indian version of DUBSTEP.

Kowloon Walled City - The Most Densely Populated Land in the World Posted: 10 May 2012 10:26 PM PDT Originally a Chinese military fort, Kowloon "Walled City" in Hong Kong was the most densely populated land in history, containing 50,000 residents within 6.5 acres. From the 1950s to the 1970s, it was controlled by Triads and had high rates of prostitution, gambling, and drug use. Taken by Canadian photographer Greg Girard in collaboration with Ian Lamboth the pair spent five years familiarising themselves with the notorious Chinese city before it was demolished in 1992. Photographer credit: Greg Girard and Ian Lambot Via Dailymail

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An idea that helps all of us

Good afternoon -- Right now, refinancing a home mortgage can be confusing and costly -- but it doesn't have to be that way. And that's why President Obama is asking Congress to make things simpler for responsible homeowners as part of his To-Do List for lawmakers. All over the country, there are Americans who bought houses before the financial crisis, and they're locked in at high interest rates. Despite staying current with payments, they can't refinance at today's rates, which are historically low. This issue affects you, even if you have a good rate, or don't have a mortgage at all. Lower monthly payments mean lower foreclosure rates, helping property values in your community. And more money in people's pockets helps to move our economy forward and create jobs. By improving this process, responsible folks who work hard will be able to feel a little more secure in their finances and a little more secure in their homes. Watch one of President Obama's economic advisers explain how in this quick video: Lowering the interest rate on your mortgage should be an idea that makes sense for both Republicans and Democrats. Outside the halls of Congress, paying a mortgage isn't a partisan, political issue. President Obama has done what he can to make refinancing simpler, but unless Congress acts, there's a limit to how much we can help responsible homeowners. Nothing will help to change the debate more than Americans across the country joining the conversation. We saw your impact a few months ago when Congress finally extended the payroll tax cut, keeping an average of $40 in everyone's paycheck. Now it's time to for more action – this time to help homeowners all over America. So I'm asking you to talk to people about this refinance proposal and the other ideas on the To-Do List. You can find more info about them on WhiteHouse.gov: http://www.whitehouse.gov/todolist Thank you, David David Plouffe Senior Advisor to the President P.S. -- If you're on Facebook or Twitter, consider posting the video. I bet you'll get a surprising response from your network. Most people don't track the day-to-day in Washington closely, but all of us know people who would love to refinance their mortgages.      This email was sent to e0nstar1.blog@gmail.com. Unsubscribe | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111