Mish's Global Economic Trend Analysis

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• One Hell of a Round Trip: Chinese Stocks Crash 8.45%, Give Up 60% Gains This Year
• Another Asia-Pacific Equities Bloodbath
• Huge Glut in European Dairy Cows and Milk Coming Up

One Hell of a Round Trip: Chinese Stocks Crash 8.45%, Give Up 60% Gains This Year Posted: 23 Aug 2015 10:25 PM PDT Chinese stock plunged another 296.55 points today (8.45%) to 3211.20. The market was once up over 60% on the year in June, but is now negative. $SSEC Shanghai Index click on chart for sharper image I added that last red bar because Stockcharts reflects last Friday. One Hell of a Round Trip From 3264 to 5178 to 3211 is one hell of a round trip, especially for a stock market index. Bloomberg notes State Support Fails to Stop Rout. More than 750 stocks fell by the daily 10 percent limit on the Shanghai Composite. Economic growth slowed to 6.6 percent in July, according to Bloomberg's monthly GDP tracker. Stocks on mainland bourses traded at a median 61 times reported earnings on Friday, according to data compiled by Bloomberg. That's the most among the 10 largest markets and more than three times the 19 multiple for the Standard & Poor's 500 Index. Yuan positions at the central bank and financial institutions fell by the most on record last month, a sign capital outflows have picked up. Crash Explained Please consider the Vox article China's Latest Stock Market Crash, Explained. China's stock market had a debt-fueled boom, followed by a crash Between June 2014 and June 2015, China's Shanghai Composite index rose by 150 percent. A big reason for the stock market rally was that a lot of ordinary Chinese people began investing in the stock market for the first time. More than 40 million new stock accounts were opened between June 2014 and May 2015. And many have been buying stocks with borrowed money. The Chinese government used to strictly limit this practice, but over the last five years the government gradually relaxed those regulations. Earlier this year, the authorities became concerned that the stock market's rise had become unsustainable. So they began to tighten limits on debt-financed stock market speculation. The stock market peaked in June and then began to fall quickly. That caused regulators to change their minds again. In early July, they made aggressive efforts to push stock prices back up. Those efforts seemed to work for a few weeks, as the market rose and then stabilized. But now it seems that even July's extraordinary actions — which included ordering companies to buy their own stock and banning some executives from selling — weren't enough to prevent further declines. True Origin of Crash What Vox failed to mention is the boom was fueled by ridiculously loose monetary policy, culminating with a massive real estate boom followed by an equity bubble with kids who did not even graduate from high school, buying stocks on margin. US equities and corporate bonds are also in a huge bubble. There are so many bubbles that one has to be nearly blind to not see them. Mike "Mish" Shedlock 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.

Another Asia-Pacific Equities Bloodbath Posted: 23 Aug 2015 06:57 PM PDT Another Asia and South Pacific equity bloodbath is underway this evening (morning or afternoon to those areas). Here is a chart from roughly 8:30 PM central. click on chart for sharper image Mike "Mish" Shedlock 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.

Huge Glut in European Dairy Cows and Milk Coming Up Posted: 23 Aug 2015 11:59 AM PDT Spain is truly going off the deep end in numerous areas lately. As noted previously, citizens have received huge fines for being disrespectful of police (See Progression of the Police State Spanish Style; Law of Simmering Social Pots). In another recent example, a citizen was fined for posting on Facebook, the image of a police car parked illegally. Today, let's discuss dairy cows. There are so many dairy cows in Spain that farmers have not been able to make any money. There is a glut of milk. The government solution, amazingly, is to Give 300 Euros Per Cow to Farmers With Insufficient Profitability. The Minister of Agriculture, Food and Environment, Isabel García Tejerina, announced on Saturday that the Ministry will grant direct aid of 300 euros per cow for those farms that are selling milk below profitability. The measure will benefit 2,500 to 3,000 farms according to estimates by the Ministry. Tejerina is "working at full speed" to prevent milk being sold at prices that are unprofitable. Too Many Cows, Too Much Milk Any rational person would suggest there are too many dairy cows and perhaps too many farms. But instead we see articles like this one from El Confidencial: Do you buy milk at less than 60 cents? This is what you're doing to farmers. The prices in the dairy sector have plummeted in recent months by the combination of several factors. Historically Europe produces more milk than it consumes and therefore dependent on international markets to survive. Especially Asians. And China has stopped buying milk in recent months. To this must be added the effects of Russia's veto imports of fresh products. The result is that the European market does not absorb all the milk generated and there is an excess of 'stock' that brings down prices. Milk quotas also come into play. Since Spain joined the European Union countries production was limited in order to avoid surpluses. In particular, Spain had a limit of 6.5 million tonnes of milk annually. To this system, countries like the Netherlands, UK and Germany have greatly increased their production, creating fierce competition for the Spanish market. Keep in mind that a 12% market share in our country is in the hands of the French giant Lactalis. "What you buy below 55 cents indirectly causes the closure of farms", points out Andoni Arriola Garcia, spokesman for COAG (Coordinator of Organizations of Farmers and Ranchers). "They are using the deregulation of the market to offer the farmer a ruinous prices," said García Arriola. Count the Cows Mind you, closure of farms is precisely what needs to happen (given the inane sanctions on Russia). By country, here is a Dairy Cows Count for every country in the EU. As of 2013, Spain has 857,000 cows. Assuming there are no more cows in Spain now than in 2013, the cost of the guarantee would be €257,100,000. Pity the Farmers? Instead of blaming farmers for producing too much milk, and instead of blaming inane sanctions on Russia, the government and news outlets blame people for paying too little for milk. "This is what you are doing to farmers," states the inane headline on El Confidential. Given there is already a glut of milk and cows, guaranteeing a profit on cows is a 100% surefire way to ensure the glut further expands. In a free trade setup, unprofitable farms would go out of business, but there would also not have been a ridiculous set of sanctions on Russia in the first place. Mike "Mish" Shedlock 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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Seth's Blog : Looking for change in all the wrong places

Looking for change in all the wrong places

If you're doing something important, you're working to make change happen.

But change is difficult, often impossible. Are you trying to change your employees? A entire market? The attitude of a user?

The more clear you can be about the specific change you're hoping for (and why the people you're trying to change will respond to your actions) the more likely it is you'll actually achieve it.

Here are two tempting dead ends:

a. Try to change people who are easy to change, because they show up for clickbait, easy come ons, get rich quick schemes, fringe candidates... the problem is that they're not worth changing.

b. Try to change people who aren't going to change, no matter what. The problem is that while they represent a big chunk of humanity, they're merely going to waste your time.

       

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Mish's Global Economic Trend Analysis

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Sweet Deals and Cookie Crumbles; Sugar, Sugar Posted: 22 Aug 2015 07:24 PM PDT Nearly every week I receive emails from readers asking me to explain my stance against tariffs. The typical claim I hear is that we need tariffs to preserve jobs. I respond that tariffs don't protect jobs, they cost jobs. Take steel for example. Yes, tariffs will save a few hundred or a few thousand steel manufacturing jobs. But at what cost? US car manufacturers have to pay more for steel as do US manufacturers of any product that contains steel. And consumers have to pay more. That's money consumers would otherwise spend elsewhere but cannot. Get Me the Hell Out of Here I recently spoke of manufacturing leaving Chicago. Indeed, six corporations fled in July, and another business did so in August. I mentioned the companies in my August 13 post Get Me the Hell Out of Here. One of the companies that fled Illinois was Mondelez International, maker of Oreo Cookies. Back in May, WGN noted Oreos Maker to Decide between Chicago, Mexico for New Investment. Chicago is competing with Mexico to land a plant that makes Oreos and Chips Ahoy cookies. Mondelez International Plans to invest $130 million to put up four new manufacturing lines that would make Nabisco cookies and crackers. The company is starting talks with its labor unions here in Chicago and says it will base its decision on a variety of factors. The company's plant at 73rd and Kedzie has more than 1,000 union members. Chicago Unions, Illinois Taxes, Sugar Dealing with Chicago unions and Illinois taxes is bad enough. The decision to leave Chicago was sound enough on that basis alone. And poof ... 600 to 1,000 jobs will vanish. There is another aspect of the deal that has not been discussed much: sugar tariffs How the Cookie Crumbles Please consider How US Sugar Policies Just Helped America Lose 600 Jobs. The manufacturer of Oreo cookies recently announced plans to move production of Oreos from Chicago to Mexico, resulting in a loss of 600 U.S. jobs. This should be a wake-up call to defenders of the U.S. sugar program and other job-destroying trade barriers. The leading ingredient in Oreos is sugar, and U.S. trade barriers currently require Americans to pay twice the average world prices for sugar. Sugar-using industries now have a big incentive to relocate from the United States to countries where access to their primary ingredient is not restricted. If the government wants people making Oreo cookies and similar products to keep their jobs, a logical starting point would be to eliminate the U.S. sugar program, including barriers to imported sugar. This obvious connection between the lost jobs and sugar quotas was missed by many observers. According to one online comment: "This is why tariff[s] on products coming to U.S must be raised." According to a 2006 report from the government's International Trade Administration: "Chicago, one of the largest U.S. cities for confectionery manufacturing, has lost nearly one-third of its SCP manufacturing jobs over the last 13 years. These losses are attributed, in part, to high U.S. sugar prices." For example, The Bakery, Confectionery, Tobacco Workers and Grain Millers Union consistently has opposed free trade agreements with sugar-producing countries like Australia, Brazil, and Mexico—the kind of trade deals that just might protect their members' jobs. Sweet Deals As I have stated, tariffs costs jobs. Yet we hear asinine cries to "raise tariffs" to protect jobs. Such sweet deals preserve a few jobs (in this case of overly expensive sugar production that is really far better suited to the tropics), at the huge expense of any manufacturer in the US that needs sugar. Net-net sugar tariffs have cost the US countless jobs. And in the sweet deal Obama worked out in the Trans-Pacific Partnership protects among other things sugar. For details please Obama's Trans-Pacific Partnership Fiasco vs. Mish's Proposed Free Trade Alternative; How Will TPP Function in Practice?   Legacy Skills and Capital; Sugar and Steel; Turning TPP to TP Mish's Proposed Free Trade Agreement To call TPP a "free trade" agreement is ridiculous. An excellent free trade agreement would consist of precisely one line of text. I propose "All tariffs and all government subsidies on all goods and services will be eliminated immediately." Sugar vs. Sugar Unlike oil, where there are differences between grades, sugar is pretty much sugar. But there are two futures prices. Sugar #11 (the global price), and sugar #16, the US price thanks to tariffs. Sugar #11: $10.44 Sugar #16: $24.50 US sugar costs 135% more than other countries pay! And economic fools, including unions, want more tariffs to "protect US jobs". Sugar, Sugar As some might have expected, I have a musical tribute to this madness. Link if video does not play: Sugar, Sugar - Archies Job Flight Out of Illinois Finally, it's safe to say that inane policies cost Illinois those jobs. And it's equally safe to say they fled Illinois to Mexico rather than to another state because of inane tariffs. High Fructose Corn Syrup For icing in the cake, please note that sugar tariffs and corn support are behind the use of high fructose corn syrup in US manufactured candy, cookies, and crackers instead of sugar. Still like them tariffs? Mike "Mish" Shedlock 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.

Don't Worry, IMF Says "Premature" to Speak of Chinese Crisis Posted: 22 Aug 2015 10:40 AM PDT Growth in China is slowing rapidly. How rapidly is a subject of much debate. Today, a senior IMF official says 'Premature' to Speak of Chinese Crisis. China's economic slowdown and a sharp fall in its stock market herald not a crisis but a "necessary" adjustment for the world's second biggest economy, a senior International Monetary Fund official said on Saturday. Fresh evidence of easing growth in China hammered global stock markets on Friday, driving Wall Street to its steepest one-day drop in nearly four years. "Monetary policies have been very expansive in recent years and an adjustment is necessary," said Carlo Cottarelli, an IMF executive director representing countries such as Italy and Greece on its board. "It's totally premature to speak of a crisis in China," he told a press conference. He reiterated an IMF forecast for a 6.8 percent expansion in the Chinese economy this year, below the 7.4 percent growth achieved in 2014. "China's real economy is slowing but it's perfectly natural that this should happen ... What happened in recent days is a shock on financial markets which is natural," he added. China's stock markets have fallen more than 30 percent since mid-year. Following a slew of poor economic data, Beijing devalued the yuan in a surprise move last week. Crisis Talk Premature? Is crisis talk premature? The answer depends on what "crisis" means. It may depend on growth estimates as well. While, I concur this is a "necessary" adjustment, necessary does not imply "no crisis".  For example, the US housing crash was a necessary adjustment as well. Another crash or lengthy correction in equities is  coming as well. Does that constitute a crisis? It certainly will to pension plans that are still hugely underwater despite the massive rally in equities globally. And what about the IMF forecast for a 6.8 percent expansion in the Chinese economy this year? That estimate I believe we can all laugh at. Actually, nearly all IMF growth forecasts are laughable. And no one, except apparently the IMF, remotely believes China's stated GDP numbers in recent years. Looking ahead, four percent or even two percent growth are more likely than 6.8 percent (no matter what numbers China officially says). Would four percent growth constitute a crisis? Two percent? It depends on your definition, but it will likely come with a very "necessary" (and steep) correction in global equities and junk bonds. Don't Worry But hey, don't worry yet. Wait until it's universally clear a crisis is underway. Then worry. That's the apparent message from the IMF. Mike "Mish" Shedlock 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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See What The Cast Of Ghostbusters Looks Like 31 Years Later Posted: 22 Aug 2015 09:43 AM PDT It's been 31 years since the original "Ghostbusters" was released and the film is still more popular than ever. Harold Remis has unfortunately passed away but the rest of the cast is still alive and well. See how they look now. Bill Murray Dan Aykroyd  Ernie Hudson Harold Ramis  Annie Potts Rick Moranis William Atherton Sigourney Weaver

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PozzitifonShow: "ШОК! НАЛОЖИЛИ В ШТАНЫ!" and more videos

PozzitifonShow: "ШОК! НАЛОЖИЛИ В ШТАНЫ!" and more videos

Mihai, check out the latest videos from your channel subscriptions for Aug 22, 2015.    Play all      Play all   ШОК! НАЛОЖИЛИ В ШТАНЫ! 4 days ago  •  148,219 views PozzitifonShow   + 2 more   H1Z1 BATTLE ROYALE EM BUSCA DA WIN 1 week ago  •  327 views FPSRoca Barcrest Monopoly Big Event Wilds Free Spins Bonus 6 days ago  •  1,121 views Skint Affiliate Crash Bandicoot (ITA) - PSX - Parte XXVIII 4 days ago  •  29 views InTheNerdWorld   + 3 more   Straight Outta Compton - NWA Movie Trailer - Minnesota Parody 4 days ago  •  4,113 views Chad Wild Clay   + 1 more   Joseph's Coat Technique w/ Stampin' Up Vintage Leaves Card Idea 6 days ago  •  8,761 views stampwithtami.com - Crafting and Card Making from Tami White Дети Сад 5 days ago  •  115 views CLASNA GAMES   + 1 more   كيفية إلتقاط صور السيلفى عن طريق سماعات الهاتف 3 days ago  •  933 views Soft Fun   + 3 more   Should the Defense Interview the Victim in a Court Martial 4 days ago  •  50 views Michael Waddington   + 2 more   Jesus Pranks Wheelchair Man 4 days ago  •  157,961 views Just For Laughs Gags   + 3 more   Want more videos? Visit YouTube for even more! Go to YouTube © 2015 YouTube, LLC 901 Cherry Ave, San Bruno, CA 94066 YouTube sends email summaries like these so you can keep up with your channel subscriptions. If you no longer want to receive these updates, you may edit your preferences here or unsubscribe.

Seth's Blog : After you've done your best work

After you've done your best work

And it's still not enough...

After you've written the best memo/blog post/novel/screenplay you can possibly imagine writing, after you've contributed your pithiest insight or gone on your best blind date...

and it still hasn't worked...

You really have no choice but to do it again. To do your best work again, as impossible and unfair as that seems.

It compounds over time. Best work followed by best work followed by more best work is far more useful and generous than merely doing your best work once and insisting we understand you.

       

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More Recent Articles

• Trends vs. Fads
• Agreeing on the problem
• Glow in the dark
• The interim strategy
• The permanent rules

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