Central Perk

duminică, 22 februarie 2015

Mish's Global Economic Trend Analysis

Google Chrome Approaching World Domination?

Posted: 22 Feb 2015 03:54 PM PST

A few moments ago a reader was having difficulty with an ad on my blog. I occasionally get complaints, and most of the recent ones involve non-US ads. The reader said the problem went away when he switched over to Chrome from Internet Explorer.

That got me wondering what browsers people were using to read my blog. Here are the results from a 20-minute, mid-Saturday snip.

Mish Readers by Browser

The above is publicly available on Stat-Counter which tracks my traffic.

If you wish to take a look, click on the "View My Stats" button (not the number) at the bottom of this page.

Since inception I have had over 102 million hits (the number shown).

I switched over to Stat-Counter from SiteMeter long ago, for numerous problems that I still see people complaining about. Stat-Counter keeps track of all kinds of things as does Google Analytics.

Search Engine Traffic

Search engine traffic (if someone found by blog via a search rather than a bookmark) looks like this.

Mish Traffic by Location

Browser War Over?

I did a search for the term "browser war" and discovered this December 19, 2014 ZDNet article: Did the browser wars finally end in 2014?

The modern browser wars began in earnest in 2004, when Mozilla Firefox challenged Internet Explorer's complete and utter market dominance, successfully growing from zero to several hundred million users in less than five years.

Google took over in 2008, introducing its Chrome browser, which caught up with Firefox by 2012.

The fighting might have finally ended in 2014.

Over the past decade, a lot has changed: Mobile devices now outnumber traditional PCs, and the desktop browser has become much less important than mobile web clients and apps. Apple's mobile Safari and Google's Chrome are now major players, Mozilla is in a time of major transition, and Microsoft is still paying for its past sins with Internet Explorer.

And in 2014, all those players seem to have dug in to well-entrenched positions. Here's an end-of-year status report for each one.

Google Chrome: On a Path to World Domination

Google, it turns out, would love to have the dominant market share that Internet Explorer did back in its heyday, without the performance and security nightmares associated with IE.

The company is using a move straight out of the Microsoft playbook from the 1990s, using its dominant free services (Google Search, Gmail, and YouTube, in particular) to push the Chrome browser, and adding capabilities that require Chrome apps, which are designed to create the same type of lock-in that Microsoft's ActiveX enforced in the early days of the Web, minus the horrible security flaws.

If that screenshot reminds you of "Best viewed in Internet Explorer 6," you're not alone.

The strategy seems to be working. While other browsers are remaining flat or declining in share, Chrome is still ascending, albeit more slowly. According to Net Applications, Chrome was in use on 20.6 percent of desktop and notebook PCs and Macs at the end of 2014, up from 16.4 percent at the beginning of the year. At StatCounter, which measures usage, Chrome crossed the 50 percent mark this year and now accounts for more web-based activity than Internet Explorer and Firefox combined.

Internet Explorer: Still No Respect

Microsoft's biggest problem at this point is maintaining compatibility with older IE versions that don't hew to modern standards. This year the company announced plans to drop support for all but the latest version of Internet Explorer, a policy that would bring it into parity with most of its rivals. The trouble is, that policy doesn't take effect until January 2016.

Meanwhile, Internet Explorer is still despised by developers, who rightfully resent having to build in hacks for all those old but still supported versions. Despite the fact that recent versions of Internet Explorer are remarkably standards-compliant, there are still sites that don't work properly in IE, usually because whoever built the site designed it to run on Chrome or Safari and didn't even bother testing it with Internet Explorer.

Mozilla: An Uncertain Future

For the past three years, Mozilla has been living high on the hog, thanks to a search deal with Google that paid $300 million a year for the past three years.

That Google deal expired in November. As the clock ticked down, Mozilla announced a new five-year (U.S.-only) search partnership with Yahoo but pointedly resisted specifying its terms. A look at Mozilla's balance sheet raises questions about its long-term prospects, especially as it tries to move aggressively into the mobile sector with its own Firefox OS.

It hasn't been a great year for Mozilla. In March, Firefox Vice President Johnathan Nightingale publicly threw in the towel on a long and expensive development effort to build a touch-capable Firefox for the Windows 8 Metro interface. That same month, co-founder Brendan Eich became CEO but lasted less than two weeks before resigning over a controversial political donation.

Safari: Apple's House Browser

In the beginning, Safari was introduced on the Mac as a way for Apple to break its dependence on Internet Explorer.

And then a funny thing happened: As mobile devices became more important, mobile Safari on iOS became more important than its older sibling on the Mac. Apple has sold far more iPhones and iPads than MacBooks and iMacs at this point, and sales of mobile devices are continuing to grow faster than Macs.

And Safari is actually being used on those mobile devices. Yes, there are third-party browsers (including Chrome) in the App Store, but they're forced to use the Safari rendering and JavaScript engines, which means Apple has complete control over the web browsing experience.

Opera: Hanging On

For several months this year I've used Opera as my default desktop browser. The experiment was designed to see whether an independent alternative based on the Webkit rendering engine could succeed.

Overall, it hasn't been a completely unsuccessful experiment. There's a lot to like in the new Opera, although a few key features, including the ability to sync bookmarks and passwords, are still missing. More importantly, some sites that were designed to work best with Chrome or Safari fail in mysterious ways in Opera. The failure rate is worse than with Internet Explorer 11, in my experience.

Unfortunately, the most messed-up pages are those I see when I try to use Opera to visit ZDNet. In particular, our new commenting system is almost impossible to use with Opera. That means I either have to use another browser or ... stop reading comments. Decisions, decisions.

It's pretty clear to see where this is headed. Firefox has some major issues. Opera is not in the picture at all, and Microsoft is headed that way.

Addendum

Out of further curiosity, I did a Google Analytics view of readership sessions for the month of December 2014. In December, every country in the world visited my blog at some point except for Turkmenistan and 9 countries in Africa.

Top 10 Visits by Country

Those are sessions. Page hits are about 1.5 times higher.

For all of 2014, every country in the world visited this blog.

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

Tspiras Claims to have "Won a Battle, Not the War"; Greece to Combat Tax Evasion; Illusion Shattered; Another Bailout?

Posted: 22 Feb 2015 11:54 AM PST

On Friday, Prime Minister Alexis Tsipras backed down on nearly every promise made to the Greek electorate except one, to stay on the euro. After so much tough rhetoric, the question is why?

I believe the answer is the Greek primary account surplus vanished, making it impossible to honor all commitments made.

Simply put, Greece had to choose between staying on the euro and honoring the other campaign promises.

Greece Attacks Tax Evasion

On Monday, Greece will submit its reform plan to eurozone officials. At the heart of the deal, Reforms Will 'Combat Tax Evasion'.

Greece will crack down on tax evasion and streamline its civil service in its bid to secure a bailout extension, minister of state Nikos Pappas says.

The government is working on a package of reforms that it must submit to international creditors on Monday. If the reforms are approved, Greece will be granted a vital four-month extension on its debt repayments.

Mr Pappas said the reforms being proposed would take the Greek economy "out of sedation". "We are compiling a list of measures to make the Greek civil service more effective and to combat tax evasion," he told Greece's Mega Channel.

Illusion Shattered

Streamlining civil services will reduce expenses, but it's hardly what the leftist government promised. Combating tax invasion was a campaign promise, so make it two campaign promises kept for those keeping an official score.

Nonetheless, those expecting Tsipras to immediately honor all pledges, just had their illusion shattered.

Reuters reports Greece Readies Reform Promises.

Top Marxist members of Tsipras's Syriza party, a broad coalition of the left, have so far been silent on the painful compromises made to win agreement from the Eurogroup.

But veteran leftist Manolis Glezos attacked the failure to fulfill campaign promises. "I apologize to the Greek people because I took part in this illusion," he wrote in a blog. "Syriza's friends and supporters ... should decide if they accept this situation."

Glezos, a Syriza member of the European Parliament, is not a party heavyweight. But he commands moral authority: as a young man under the World War Two occupation, he scaled the Acropolis to rip down a Nazi flag under the noses of German guards and hoist the Greek flag, making him a national hero.

A government official said Glezos "may not be well informed on the tough and laborious negotiation which is continuing".

The opposition pounced on the climbdown from promises that have raised huge expectations among Greeks. "No propaganda mechanism or pirouette can hide the simple fact that they lied to citizens and sold illusions," said Evangelos Venizelos, leader of the socialist PASOK party.

Friday's agreement merely buys time for Greece to seek a long-term deal with the Eurogroup. Euro zone members Ireland and Portugal have already exited their bailouts, but Greece faces yet another program - on top of bailouts in 2010 and 2011 totaling 240 billion euros - when the extension expires.

"Once you get them into the safe space for the next four months, there'll be another set of discussions which will effectively involve the negotiation of a third program for Greece," Irish Finance Minister Michael Noonan said on Saturday.

Troika by Any Other Name Smells Just as Bad

Six days ago in Greek Negotiations and Philosophical Questions I asked Does "Troika" by any other name stink as bad?

My answer was "Beauty is in the nose of the beholder. But logically, the answer is yes."

Keep Talking Greece has some interesting Excerpts from a Statement Made by Glezos.

"Renaming the Troika into Institutions, the Memorandum of Understanding into Agreement, and the lenders into partners, you do not change the previous situations as in the case renaming meat into fish.

The people voted in favor of what SYRIZA promised: to remove the austerity which is not the only strategy of the oligarchic Germany and the other EU countries, but also the strategy of the Greek oligarchy.

Some argue that to reach an agreement, you have to retreat. First: there can be no compromise between oppressor and oppressed. Between the slave and the occupier is the only solution is Freedom.

But even if we accept this absurdity, the concessions already made by the previous pro-austerity governments in terms of unemployment, austerity, poverty, suicides have gone beyond the limits."

Third Bailout Coming

On February 11, I discussed the need for a third bailout in Third Greek Bailout? Another €53.8 Billion Needed? Primary Account Surplus Revisited.

That explains the comment made by Irish Finance Minister Michael Noonan yesterday. "Once you get them into the safe space for the next four months, there'll be another set of discussions which will effectively involve the negotiation of a third program for Greece."

"Won a Battle, Not the War"

Will Tspiras finally draw a line in the sand or will he accept another €53.8 Billion crammed down his throat?

I think so. But before he can do so, Greece needs to have a solid primary account surplus. That explains why the heart of his reform program involves a crackdown on "tax evasion" and cutting civil service.

To default on the Troika and stay in the eurozone, Greece must have a primary account surplus. Tsipras has a four month window to achieve that.

War Postponed Four Months

In context, the battle was to stay on the euro. The war was postponed for four months. In the interim, Tsipras needs to keep his coalition intact.

Once again, I do not care for the leftist policies of Syriza. But the citizens of Greece have suffered enough and are better off defaulting as soon as they can. That requires a primary account surplus.

On Friday German finance minister Wolfgang Schäuble rubbed Greek capitulation in Tsipras' face with his comment "The Greeks certainly will have a difficult time to explain the deal to their voters. As long as the programme isn't successfully completed, there will be no payout."

Let's see what happens four months from now.

With roles reversed and Schäuble playing the witch, I envision Tsipras' silently saying "All in good time my little pretty, in good time".

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

Seth's Blog : The trolls inside

The trolls inside

The worst troll is in your head.

Internet trolls are the commenters begging for a fight, the anonymous critics eager to tear you down, the hateful packs of roving evil dwarves, out for amusement.

But the one in your head, that voice of insecurity and self-criticism, that's the one you need to be the most vigilant about.

Do not feed the troll.

Do not reason with the troll.

Do not argue with the troll.

Most of all, don't litigate. Don't make your case, call your witnesses, prove you are right. Because the troll knows how to sway a jury even better than you do.

Get off the troll train. Turn your back, walk away, ship the work.

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sâmbătă, 21 februarie 2015

Mish's Global Economic Trend Analysis

"Prepare for Full-Scale War" says Ukraine Deputy Foreign Minister: "With What?" asks Mish; Ukraine Lie of the Day

Posted: 21 Feb 2015 01:25 PM PST

I have been sitting on close to a dozen videos describing the massive damage in military equipment in the latest separatist surge.

For a description, but no videos, please see Debaltsevsky Under Rebel Control, Boiler Remains; What's Next?

I saw no need to post videos because to me it was pretty obvious this was a repeat of the devastating defeat of Ukraine last August in the Battle of Ilovaisk in which Ukrainian forces refused an offer to exit encirclement by leaving behind equipment.

Ukraine Lie of the Day

Today Ukrainian "Antiterrorist Operation" spokesman Andrei Lysenko says Since 2015 Ukraine Destroyed Nearly 3,000 Militants.

I have no idea how many separatists were killed, but the rest of the claim in the body of the article is preposterous.

"According to operational information and data provided by our scouts, since the beginning of 2015, in Debaltsevo area, the Ukrainian military killed 2,911 militants and Russian military. More than 40 tanks, 30 armored combat vehicles, about 30 multiple rocket launchers."

In addition, since the establishment of the cease-fire, that is, from February 15, we neutralized 868 militants, 8 tanks, 11 armored combat vehicles and four multiple rocket launchers.

Tour of Carnage

Does anyone in Ukraine or elsewhere believe the horse hockey by Andrei Lysenko?

If 3,000 rebels are dead, can we have some images? What about images of tanks destroyed? Images of anything?

If there were destroyed separatist tanks, satellites would pick that up.

Let's take a brief video tour of the actual carnage. Here is a short 1:32 video showing a destroyed tank, captured equipment and a Nazi helmet.

Link if video does not play: On the former UAF Position we Found a German Helmet with Swastika. That video may have an annoying 15-second ad.

Here is a 4:16 video whose title roughly translates as Ukrainian Media Officer and Recon Team Meets Fate in Debaltsevo.

Tank Battle Video

Here is an 11:28 video that describes "Details of the Tank Battle on the Night of February 18"

This video starts out slow. You may wish to fast forward to the 2-minute mark. It does not get really interesting until the four minute mark when you see more destroyed Ukrainian tanks and other equipment. You also see captured stockpiles of weapons. The heart of the video is the 4 to six minute mark but more destroyed vehicles around the 7 minute mark and another destroyed tank towards the end.

Abandoned Tanks

Let's assume for a second the Ukrainian forces managed to destroy a tank or two. If it pleases you, assume three or five

Check out this video of abandoned Ukrainian tanks, other vehicles, and munitions.

The announcer at the beginning ends in about 15 seconds. Some of the footage repeats but around the 3:00 minute mark or so it gets interesting for a second time. The video shows an entire Ukrainian army camp abandoned.

No doubt the soldiers wanted to escape on foot with their lives. Again some of the footage repeats so it's difficult to tell how many times and many angles some of the same equipment appears.

Regardless, we can say the separatists captured many "trophies".

Link if video does not play: "Ghost" Brigade Took Novogrigorovku Towards Artemovskii

I have many more of these, from many locations, some showing gruesome bodies. In the above horse hockey, it's as if Andrei Lysenko is describing Ukrainian losses not separatist losses.

Jacob Dreizin comments ...

Politicians and generals in Kiev have been making up statistics on rebel casualties and "Russian tanks crossing the border" (and denying their own losses) since day one. However, it's clear now that the Anglo-American press is finally wising up to this. Although they are not yet wise enough to attempt an aggregate total for Ukrainian KIA to date. I estimate this at 6000 since April 2014 as an absolute minimum. This is about 4-5 times higher than the "official" tally from Kiev. That's my minimum estimate. I suspect the real figure is 1000 or 2000 higher. This does not include those too seriously wounded to ever return to front-line duty, which may be another 50% of the total dead. In addition, Ukraine is prosecuting over 1,000 deserters. Those deserters must also be counted as troops lost. As for rebel losses, I estimate 1/4 to 1/3 of the Ukrainian total.

Ukrainian equipment lost in the "Ilovaisk cauldron" and the various mini-cauldrons last summer were replaced from mothballed Soviet-era stocks and to a much lesser extent from new production.

I believe Kiev has finally hit the wall. Its stocks are nearly empty. There's still enough ammo to fight for a few years, but in terms of equipment, Ukraine no longer has anything to replace what it just lost around Debaltsevo, let alone to seriously equip new units coming online.

So all of these new draftees they are now "mobilizing" will have to fight on bicycles. Either that, or American tanks. Or, Kiev will need to ask the rebels for a 3-year ceasefire while it produces enough new equipment from its half-ruined factories. Take your pick.

"Prepare for Full-Scale War"

Jacob's comment came in yesterday. Today we see this headline from Colonel Cassad: Ukraine Deputy Foreign Minister Vadim Pristayko Says Ukraine Prepared for "Full-Scale War."

According to Pristayko, Kiev "Ukraine is no longer afraid to come into conflict with a nuclear power".

Don't like Cassad? OK I have Canadian source. CBC News says Ukraine preparing for 'full-scale war,' says former envoy to Canada.

An envoy to Canada is one thing, and a Deputy Foreign Minister is another. Vadym Prystaiko is now Ukraine's deputy foreign minister. And he is begging Canada for weapons for obvious reasons.

Ukraine's deputy foreign minister says he is preparing for "full-scale war" against Russia and wants Canada to help by supplying lethal weapons and the training to use them.

In an interview with CBC Radio's The House airing Saturday, Prystaiko says the ceasefire brokered by Germany and France was not holding.

"The biggest hub we ever had in the railroad is completely destroyed and devastated," he told host Evan Solomon about Debaltseve, captured by Russian-backed rebels after the terms were to have taken effect earlier this week.

The former ambassador was in the room during the attempts to broker a political solution with Russian President Vladimir Putin in Minsk.

"Personally I don't trust him," he says. "You look at him and you think, 'Are you serious?'"

[Mish comment: And why the hell should anyone, including Ukrainian citizens trust Ukraine president Petro Poroshenko. Poroshenko has lied about the losses, the civilian casualties, amnesty, constitutional reforms, and damn near everything else. This does not condone Putin. It's a statement that lies are not one sided.

"Nobody knows what is going on in his head. I believe he is becoming very emotional [over the two countries' historic ties]," he suggests, calling Putin's intentions "difficult to predict."

[Mish Comment: I do not pretend to know what is going on in Putin's head. But what the F is going on in Poroshenko's head to not give a damn about willingness to engage a nuclear power? And if anything it's easier to ascertain Putin. He does not want NATO on his back porch any more than Kennedy would allow Russian missiles in Cuba.]

"We don't want to scare everybody, but we are preparing for full-scale war."

What to do in the face of such a threat? For starters, get over your fears, he says.

"What we expect from the world is that the world will stiffen up in the spine a little," he says. "Everybody is afraid of fighting with a nuclear state. We are not anymore, in Ukraine — we've lost so many people of ours, we've lost so much of our territory.

[Mish comment: Prystaiko now begs Canada for weapons.]

"We would like Canada to send lethal weapons to Ukraine," he said. "Weapons to allow us to defend ourselves."

Canada has been helping to train Ukrainian soldiers for the last decade, but it isn't enough, he says. "It wasn't on the level that would help our army [against an] invasion." Ukraine wants weapons, and training to use them, he said.

Prepare for Full-Scale War - With What?

Why is Prystaiko begging Canada for weapons?

Because Ukraine is out of weapons. Ukraine lost masses of weapons last summer in various cauldrons and were pounded again recently.

These idiots in Ukraine do not care how many of their citizens die.

Why should the US or Canada or anyone else care about a civil war in Ukraine? So what if Russia is backing one side. It's none of our business.

And now these jackasses are prepared to up the ante risking war with a nuclear power. They are nuts and Canada would be nuts to give Ukraine weapons.

Flushing Action

Should there be a Maple Leaf on the above leg as well?

War is Over

On January 29, in Conscription of People, Cars, Businesses in Ukraine for Mindless Slaughter; Entire Villages Leave to Avoid Servitude; Hop on the Bus Gus I made these statements:

This War is Over

The Vietnam war ended when public support turned against it, even though fighting continued long after.

The same applies here. The war is over. Hearts and minds have been lost along with the will to fight. Ukraine is split in two, barring a major military intervention by the US.

Even though the war is over, the fighting can continue. How much longer the battles go on now depends on the US and IMF.

The US can fund the bloodshed for a while longer and so can the IMF. US war-mongers may decide no price is too high to pay, even to the absurd point of engaging Russia directly.
The US and IMF can force true peace negotiations on Kiev with a partition or federation of the country. But, what may have been acceptable to the separatists and Russia six months ago may no longer be so.

Either way, Ukraine is never going to be a single country again. Such is the madness of arbitrarily drawing borders with no regard to cultural, political, or religious beliefs.

The war is over. Kiev lost, even with the backing of the US. Let the peace process begin before more lives are lost and more needless destruction occurs.

I believe that was an accurate assessment, and no one else called it.

Not only have the citizens of Ukraine given up the will to fight, Ukraine is out of military equipment and now begs Canada and the US for some.

For what? Why?

Ukraine is never going to be a single 100% united country again. Crimea is gone for good. Of course, Crimea was never really part of Ukraine in the first place.

There is still hope for a loose federation with what remains. But that requires 100% guarantees of amnesty and constitutional reforms.

Meanwhile, if the US and Canada send more weapons, so will Russia.

The US and Canada should both tell Ukraine, as did Chancellor Merkel, "the solution is political not military".

If that were to happen, and especially if the IMF demanded a ceasefire before agreeing to more funding, the fighting would end tomorrow.

You cannot fight war with no money, no arms, and no will of the people. Realistically, the war is over. You may prefer the term "decided" instead of "over". Regardless, all the US and Canada can do at this point is prolong the misery.

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

Seth's Blog : Mass production and mass media

Mass production and mass media

We invented televisions so marketers would have a way to run TV ads. We have magazines so marketers can run magazine ads.

Make no mistake: mass media exists because it permits mass marketers to do their job.

Mass production, the ability to make things cheaply, in volume, demanded that we invent mass marketing--it was the only way to sell what was being made in the quantity it was produced.

The internet, though, was not invented so marketers could run internet ads.

And, at the same time, mass production is being replaced by micro production, by the short run, by customization, by the long tail.

Just in time, mass media is going away too.

Mass marketers don't like this and they often don't even see it. They're struggling to turn Snapchat and Twitter and other sites into substitutes for TV, but it's not working, because it's an astonishing waste of attention.

The Ed Sullivan Show existed to sell Jello to everyone. Today, there's no everyone, and certainly no media channel that can sell everyone, cheap, to the folks who market Jello.

This is an ongoing challenge for mass marketers, and the opportunity of a generation for everyone else.

For fifty years, TV and TV-thinking was the shortcut. Make average stuff for average people (by definition = mass) and promote to every stranger within reach. It worked.

But mass is fading, fading faster than our desire to be mass marketers is fading. The shortcut doesn't work every time now, and the expectation that success is the same as popularity is still with us.

Fifty years ago, producers and marketers got smart. They saw the miracle of mass marketing and they adopted it as their own. They amped up mass production and bet on the masses.

The smart creators today are seeing the shift and doing precisely the opposite:

Produce for a micro market.

Market to a micro market.

When someone wants to know how big you can make (your audience, your market share, your volume), it might be worth pointing out that it's better to be important, to be in sync, to be the one that's hard to be replaced. And the only way to be important is to be relevant, focused and specific.

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vineri, 20 februarie 2015

Mish's Global Economic Trend Analysis

Lacy Hunt on Financial Repression; Deleveraging Not
Bailout Blueprint: Deal or Capitulation? ECB Prepares for a Greece Exit from Euro Zone
Spotlight Japan: Inflation Barely Positive, Consumer Spending Down, Exports Up, Growth Slowing; Record Streak of Bad Weather

Lacy Hunt on Financial Repression; Deleveraging Not

Posted: 20 Feb 2015 12:30 PM PST

In another of his series on Financial Repression, Gordon Long of Market Research and Analytics interviewed Dr. Lacy Hunt, Executive Vice President of Hoisington Investment Management Company.

Previously Lacy Hunt was with the Federal Reserve in Dallas. He was also the chief economist for the largest bank in Philadelphia, and the chief economist for HSBC (at the time the largest bank in the world).

Hoisington manages over $5 billion for pension funds, endowments, insurance companies and others. Hunt has been with Hoisington for 19 years.

link if video does not play: Lacy Hunt on Financial Repression

Lacy describes financial repression as "a superficial attempt to deal with the excessive indebtedness that grips the global economy, not just the US, but Europe, Japan, the United Kingdom, and even now China and the emerging markets."

"In my opinion will not work," says Hunt.

"Monetary Policy is not the solution here. There are Fiscal Policy solutions but they require shared sacrifice, strong leadership (something we don't have in the US or Europe - no one has).

"Basically what we are trying to do is to solve an extremely over-indebted situation domestically and globally by taking on more debt and aggravating the problem. Rather than bringing us closer to the return of the normal business cycle, they are pushing it all further and further into the future."

2015 Parallels to Currency Wars of 1920s and 1930s

First, there is a global problem with debt and slow growth, and no country is immune.
Second, the economic problems now, like then, are more serious and are more apparent outside the United States. However, due to negative income and price effects on our trade balance, foreign problems are transmitting into the U.S. and interacting with underlying structural problems.
Third, over- indebtedness is rampant today as it was in the 1920s and 1930s.
Fourth, competitive currency devaluations are taking place today as they did in the earlier period. These are a combination of monetary and/or fiscal policy actions and also, with floating exchange rates, a consequence of shifting assessments of private participants in the markets.

Interest Rates

Regarding interest rates, Lacy says "The downward pressure on global economic growth rates will remain in place in 2015. Therefore record low inflation and interest rates will continue to be made around the world in the new year, as governments utilize policies to spur growth at the expense of other regions."

Three Problem Types of Debt

Borrowing to finance daily living needs
Debt that leads to bankruptcy
Worst type of debt is where excess debt creation inflates asset prices. And that only leads to economic instability.

"Good debt" to Lacy is debt that yields an income stream sufficient to pay back principal and interest.

Deleveraging Not

"The world now has $35 trillion more debt today than in 2007. We are not in the age of deleveraging; We're still in the age of leveraging up. Unfortunately, the overleveraged condition is virtually everywhere in the world."

Thanks to Lacy Hunt for taking the time to share his thoughts.

Mish on Financial Repression

Gordon Long interviewed me on the subject of financial repression in October of 2014.

I describe financial repression as "a set of fiscal and monetary policies for the expressed benefit of the ruling class: politicians, banks, and the already wealthy, at the expense of everyone else."

You can find a synopsis and play the interview here: Gordon Long Video Interview of Mish: Topic - Financial Repression (and How to Defend Yourself From It)

Long also interviewed Dr. Marc Faber. On Long's Financial Repression Website, you can see all the interviews in this series.

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

Bailout Blueprint: Deal or Capitulation? ECB Prepares for a Greece Exit from Euro Zone

Posted: 20 Feb 2015 11:11 AM PST

Bailout Blueprint: Deal, Capitulation, or Neither?

At the 12th hour Finance Chiefs Draw Up Greek Bailout Blueprint.

Negotiations led by Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup of 19 eurozone finance ministers, have produced a common communiqué on the extension of Greece's €172bn bailout, according to a eurozone official.

The text was produced after nearly five hours of bilateral talks between Mr Dijsselbloem and key ministers, including Yanis Varoufakis, Greek finance minister, and Wolfgang Schäuble, his German counterpart. The eurozone official also said Mr Dijsselbloem was in direct contact with Alexis Tsipras, Greek prime minister, during the talks.

The text must now be presented to all 19 eurozone ministers for approval. "It will be fast," said the official.

According to a Greek government official, the new text was also agreed by the three institutions that monitor the country's bailout: the European Commission, the European Central Bank and the International Monetary Fund.

Mr Varoufakis had earlier insisted that Greece had made sufficient concessions to reach a deal to extend the bailout for six months after it expires next week and predicted that he and his 18 eurozone counterparts would reach an agreement.

He said Athens had "gone not an extra mile [but] an extra 10 miles" in its proposal for the extension, submitted to eurozone leaders on Thursday, adding it was now the turn of other ministers to meet Greece "not half way, but one-fifth of the way" to reach a deal.

Mr Varoufakis and a group of German-led eurozone countries are locked in a stand-off over the conditions of a bailout extension, with Berlin insisting the new Greek government agree to the terms of the existing bailout before it engages in negotiations over any changes in the programme.

Mr Tsipras's government has refused, saying it was elected to end the current bailout, but has made significant concessions, agreeing to ask for an extension with some loopholes that would give it some leeway to negotiate terms.

Speaking after a meeting in Paris, the leaders of both France and Germany said they remained committed to keeping Greece in the EU's common currency, but Angela Merkel, the German chancellor, added that Mr Varoufakis' request needed to be changed before it would be acceptable.

"There is a need for significant improvements in the substance of what is being discussed so that we can vote on it in the German Bundestag, for example next week," Ms Merkel said, standing next to her French counterpart, François Hollande.

Is there a deal? Does it need to be changed?

ZeroHedge reports according to Capital.gr, the preliminary agreement covers the following points:

4 not 6-month extension
no completion of current program
no new austerity measures
no unilateral actions

If that's really the deal, then Greece bought time to speed up tax collections. In turn, that would strengthen its hand four months from now when this process starts all over.

As I pointed out previously, as long as Greece has a primary account surplus, it can stay on the euro.

I have wondered if tax collections had shrunk so much ahead of Syriza's victory that it no longer has a primary account surplus.

ECB Prepares for a Greece Exit from Euro Zone

Meanwhile, Spiegel reports ECB Prepares for a Greece Exit from Euro Zone

The European Central Bank is preparing for the event that Greece leaves the euro zone and its staff are readying contingency plans for how the rest of the bloc could be kept intact, German news magazine Spiegel reported in a preview of its magazine.

The ECB declined to comment on the report, Reuters reported.

The German magazine also reported that the ECB was pushing Athens to introduce controls on the movement of capital.

Earlier this week, the European Central Bank denied a report in a German newspaper that it wanted Greece to introduce capital controls to stem the outflow of deposits from its banks.

Germany΄s finance minister was hostile to Athens΄ proposal this week although the government softened its tone on Friday as euro zone finance ministers raced to break the deadlock.

I suspect the ECB has been preparing for Grexit for months, and that helps explain the hard stance of Germany.

Deal or not? Capitulation by Greece or not? More negotiations in 4 months? If the latter, Greece bought some time to get back to (or strengthen) its primary account surplus.

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

Spotlight Japan: Inflation Barely Positive, Consumer Spending Down, Exports Up, Growth Slowing; Record Streak of Bad Weather

Posted: 20 Feb 2015 01:18 AM PST

Inquiring minds are looking at the latest inflation reports from Japan for clues in the success or failure of Abenomics and prime minister Shinzu Abe's stated goal of two percent inflation.

In December, Japanese inflation fell to 0.5% despite massive economic loosening, a 1% rise in industrial production, and a dip in the unemployment rate to 3.4%, the lowest since 1997.

Today Reuters reports Japan January Inflation Seen Easing, Factory Output Up.

Japan's core inflation is seen slowing for a sixth month in January while factory output is expected to rise, underlining the policy challenge facing the Bank of Japan as it strives to speed up economic growth and achieve its 2 percent price target.

Stripping out the effects of a sale tax hike, the nation's core consumer price index (CPI) - excluding volatile fresh food but includes oil products - is forecast to have increased 0.3 percent year-on-year last month, a Reuters poll showed.

The Bank of Japan is counting on exports to help offset the still-weak private consumption, and for weak oil prices to spur companies to spend more, helping the economy gather speed after last April's sales tax hike tipped it into recession.

The nation's factory output is seen jumping 2.7 percent in January from the previous month, the poll showed. In December, output increased 0.8 percent on-month, after a 0.5 percent fall in November.

Household spending is expected to have fallen 4.1 percent in January from a year earlier partly due to bad weather, down for a tenth straight month, the poll showed. And retail sales are set to fall an annual 1.3 percent last month, down for the first time in seven months.

Record Streak of Bad Weather

Household spending is down 10 straight months, partially die to bad weather. Is that a record streak of bad weather or what?

Those are forecasts of course, but with expectations of a 4.1% decline in spending, I will go out on a limb and guess the report is at least in the ballpark.

Markit Manufacturing PMI Suggests Growth Slowing

Markit claims the Japan Manufacturing PMI shows "solid production growth" but that is not my takeaway from looking at the data.

The February "Flash" Manufacturing PMI is 51.5, down from 52.2 last month and is the slowest since July 2014.

Manufacturing output is at 52.7, the same as last month, supposedly "solid" growth. Check out the summary.

Slower Growth

PMI
New Orders
Employment
Output Prices - In Actual Decline
Input Prices - Increase Slower

The big positive is an increase in export orders but the chart does not look too impressive.

GDP and Export Discussion

Every country wants a weaker currency to boost exports relative to imports. It's mathematically impossible. If Japan succeeds dramatically, it will be at the expense of some other country. Take your pick: USA, Germany, China.

Recall that exports add to GDP while imports subtract from GDP. If Japan is once again exporting more cars and technology to the US, and if the US is exporting less due to the rising value of the US dollar, where does that put US GDP?

And what about the possibility China enters a beggar-thy-neighbor scheme to lower the yuan to compete with Japan.

None of this sits very pretty for upcoming US GDP reports or for various trade retaliations.

I wonder if this is what's really on the Fed's mind when the Fed minutes surprised the markets with statements on being patient (See Patience is a Virtue, Unless It's Not)

More than likely, such thoughts give the Fed too much credit because history shows they are totally clueless.

Regardless, Japan is once again on the verge of price deflation in spite of Abenomics. That's a good thing actually for the Japanese consumer, but few see it that way.

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

Damn Cool Pics

How Game of Thrones Characters Look Based On The Books Vs TV

Posted: 20 Feb 2015 12:09 PM PST

Various artists have created some amazing artwork recreating "Game of Thrones" characters based on how they're described in the books. Which depiction do you like better, the books or the TV show?

Joffrey Baratheon