Central Perk

marți, 6 decembrie 2011

Mish's Global Economic Trend Analysis

12 of 26 Economists in Financial Times Survey See Probability of Eurozone Breakup at 20 to 30 Percent; What are the True Odds?
ECB Ready to Push Boundaries on Interest Rates and Bond Purchases; One Size Fits Italy
Eurozone Treaty Changes to be Finalized in March, Then a Vote in May, Then Country-Specific Referendums, Then?

12 of 26 Economists in Financial Times Survey See Probability of Eurozone Breakup at 20 to 30 Percent; What are the True Odds?

Posted: 06 Dec 2011 11:47 AM PST

Financial Times Deutschland says the key to whether or not the Eurozone holds together depends on Bundesbank president Jens Weidmann.

Will he or won't he go along with ECB president Mario Draghi's hint that the ECB is about to purchase more sovereign debt.

Via Google Translate, please consider Everyone looks at Weidmann

Twelve of 26 economists see the probability of a breakup of the euro zone at 20 to 30 percent. From the perspective of ten economists, the risk is ten percent. Anna Grimaldi, the Italian bank Intesa Sanpaolo sees a 40 percent chance and John Greenwood of Invesco investment company rates the probability at 70 percent.

At the other extreme are Anders Matzen at Swedish Nordea Bank, which estimates the probability of survival of monetary union to 95 percent, and Ulrich Kater from Deka Bank who sets the value at 99 percent.

Most economists indicated that they were convinced that the position of Weidmann will be crucial in deciding whether the ECB more than at present to save the euro is taking. "The attitude of the Bundesbank to the program for the purchase of government bonds is more important than their normal attitude to monetary policy, since the program moved to the edge of the contractual mandate," said Torge Middendorf from WestLB.

Not So Simple

Certainly a huge feud between Weidmann and Draghi will not help. However, that is not the only issue. The German supreme court can step in at anytime and demand a voter referendum.

The UK can and probably will single-handily torpedo the treaty changes proposed by Merkel and Sarkozy.

According to the Washington Post, British Prime Minister David Cameron said he did not intend to "pass any powers from Britain to Brussels." He noted that if the treaty changes suggested by Sarkozy and Merkel require such a transfer, he would have to call a national referendum to approve them.

Will UK voters pass that referendum? I see a zero percent chance of that. Then what?

Please see Eurozone Treaty Changes to be Finalized in March, Then a Vote in May, Then Country-Specific Referendums, Then? for further discussion.

Ireland, Germany, or Finland may also torpedo the agreement.

Moreover, voters in Spain, Portugal, or Greece may eventually (and correctly) say to hell with all this austerity just to pay back French and German banks.

To repeat what I have said several times:

Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected.

What are the True Odds?

A few months ago, economists would have pegged the probability close to zero percent. The shift of 14 economists to 20% or greater probability is a significant shift in the right direction.

It's important to remember that economists are a perpetually optimistic lot. Ironically, a breakup is likely before economists agree it will happen.

Taking everything into consideration, the probability the Eurozone stays intact is arguably 15 percent at best.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

ECB Ready to Push Boundaries on Interest Rates and Bond Purchases; One Size Fits Italy

Posted: 06 Dec 2011 10:28 AM PST

Get ready for record low interest rates in Europe as ECB ready to push boundaries of crisis role

A Reuters survey of 73 analysts showed a 60-percent chance the ECB will cut rates by 25 basis points to a record low of 1.0 percent -- a floor it previously reached during the financial crisis in 2009. It cut rates by a similar amount in November.

New ECB President Mario Draghi reinforced expectations for a rate cut last week when he said the bank had a responsibility to ensure inflation did not undershoot its target of just below 2 percent, not just to stop it exceeding it.

Markets have taken it to heart. Three-month Euribor futures -- one of the main gauges of market expectations -- point to rates being be cut this month and then even further.

The case for a cut is supported by the euro zone economy teetering on the brink of recession. With the ECB increasingly concerned about falling consumer prices, further cuts may be in the offing even if the ECB has never cut rates below 1 percent before -- not even after the collapse of Lehman.

Draghi made his comments a day after the world's major central banks took emergency joint action to provide cheaper dollar funding for starved European banks.

This was the latest in a slew of actions aimed at propping up European banks, which are struggling with the fallout from the debt crisis, such as higher capital requirements and rising tension in the interbank money market.

Banks are increasingly turning to the ECB and the recent jump in overnight deposits at the ECB has highlighted the freeze in interbank lending markets.

Sources have told Reuters that the ECB is looking at extending the term of loans it offers banks to 2 or even 3 years to try to prevent the euro zone crisis precipitating a credit crunch that chokes the bloc's economy.

One Size Fits Italy

Under ECB president Jean-Claude Trichet, ECB actions were best described as "One Size Fits Germany and France". Under Draghi, ECB policy has morphed into "One Size Fits Italy".

Central banks say and do what they want when they want. Eurozone inflation remains at 3 percent, for 3 consecutive months. So where did this concern for falling prices come from?

It certainly did not come from Eurozone price data. Rather it came from the desire of Draghi to help Italian bonds. That also explains Draghi's comments to the European Parliament last week, that the ECB could take stronger action to fight the crisis if European leaders agree on tighter budget controls.

Tighter budget controls will not be realistic of course, but the illusion will give Draghi the cover he wants to buy more Italian bonds.

The can-kicking exercise continues. So does the ticking of the clock before the market once and for all decides it has enough of proposals that do nothing.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Eurozone Treaty Changes to be Finalized in March, Then a Vote in May, Then Country-Specific Referendums, Then?

Posted: 06 Dec 2011 12:54 AM PST

On December 8 Merkel and Sarkozy will have reached a 6-point agreement requiring ratification of a new treaty.

However, details will not be finalized until March. At that time, if all goes to plan (and it won't), a vote by all 27 EU nations will take place. If that fails (and hopefully the UK torpedoes it), various aspects of the treaty might still be ratified by (and apply only to) the 17-member Eurozone nations.

However, fiscal rules will still require individual referendums in Ireland and in my opinion Germany. Got that?

Eurointelligence writes That „comprehensive agreement" in full

Angela Merkel and Nicolas Sarkozy essentially agreed on the German position. These should be embedded in a New Treaty, and they have asked Herman van Rompuy to put those proposals formally on the agenda for the Dec 8 and 9. Here is a summary of the six most important decisions taken. As so often, the newspapers cover only a short subset.

Automatic sanctions. In case of non-compliance with the deficit rule, countries are subject to automatic sanctions, which will require a majority of 85% to overturn.

Golden Rule: All EU member states, but in particular the eurozone, should subject themselves to uniform debt limits. The ECJ will adjudicate in case of a dispute, and should have the right to declare national budgets illegal.

Private Sector Participation will follow the rules of the IMF. The PSI agreement on Greece remains valid, but is a unique case that should not be repeated;

Germany and France want the ESM to start end-2012.

The heads of state and government meet once a month as the eurozone's economic government.

There shall be no eurobonds.

These proposals indeed require substantial treaty change, but we are surprised that this could be concluded so quickly, given the necessary procedures, and their own implantation record. A change in the EU treaties would require a convention, unless the European Parliament were to decide to wave its rights in this respect.

Given that these proposals entail a transfer of sovereignty, national referendums in Ireland and possibly other countries may be required. While there are possibilities for the eurozone to adopt its own set of policies, points 1 and 2 (which are the main element of the fiscal agreement) require a full treaty change, to be ratified by all 27 members (even if the provisions are only implemented in respect of the eurozone).

We suspect therefore that Sarkozy agreed to these measure in the full knowledge that this will never be implemented. If you subtract the treaty change proposals, one is left with a shallow agenda.

Also, newspapers reported that Merkel gave up PSI. That is not true. The position is now that the IMF rules will be applied, which are not all that different. CACs will also remain in the ESM treaty.

Shallow Agenda or No Agenda at All?

Ambrose Evans-Pritchard weighs in with Zilch again from Merkozy

No fiscal union, no Eurobonds, no ECB as lender of last resort – yet. Just the usual blather and a revamped Stability Pact (Fiskalunion).

Yawn.

Merkel seems to have backed off on demands that budget breaches will be justiciable before the European Court, so the Treaty chatter is mostly Quatsch, bêtises, and eyewash.

This Merkel climb-down makes it less likely that she will give in on real rescue measures, so why the market exuberance in Italy? Beats me.

Private investors will not have to face further haircuts after Greece (if you believe anything they say on this subject) but that was already the case. Nothing further to add at this stage.

Will 27 Nations Sign on the Dotted Line?

Those treaty changes may sound good on paper, but what is the likelihood these treaty changes pass? The Washington Post chimes in with Sarkozy, Merkel call for new E.U. treaty to address debt crisis

Under growing pressure from nervous financial markets, the leaders of France and Germany reached a difficult compromise agreement Monday to seek mandatory limits on budget deficits among debt-laden European governments.

If adopted by other nations in the union, the deal would mean drastic cuts in European budgets. It would also spell the end of three decades of overspending that helped finance a cozy social protection system envied by much of the world.

Although France and Germany represent the core of the European Union, it is far from certain that the rest of the group's 27 nations will go along at a crucial European summit scheduled for Thursday in Brussels. The deal could face significant opposition from those reluctant to surrender national sovereignty over fiscal policy.

"This package of measures is a proof of our absolute determination to guarantee a stable euro," Merkel said at a joint news conference with Sarkozy in Paris.

The Franco-German accord is to be outlined in a letter to E.U. leaders Wednesday and voted on at the special summit conference the next day, making this a make-or-break week for the ideal of European unity. Sarkozy said the hope is that all 27 E.U. nations will adhere to the plan. But he said it could also move forward with consensus from only the 17 countries that have adopted the euro as their common currency.

The swift schedule for the treaty change is unheard of in the history of the European Union, which is notorious for slow-moving bureaucracy and endless bickering among governments at all-night conferences at the union's Brussels headquarters.

The deficit limits — a "golden rule" of 3 percent of gross domestic product — would be enforced by elected leaders of the European Community acting with a supermajority of 85 percent, according to explanations provided by Sarkozy and Merkel at the news conference. The E.U. leaders would rule on any government cited as overspending by the European Court of Justice, they added.

In a suggestion of the debate still to come, British Prime Minister David Cameron said he did not intend to "pass any powers from Britain to Brussels." He noted that if the treaty changes suggested by Sarkozy and Merkel require such a transfer, he would have to call a national referendum to approve them.

Would the UK voters agree to this in a referendum? Ireland? Germany? Austria? Netherlands?

I think the answer is no. So what is left in this much ballyhooed great compromise between Merkel and Sarkozy?

Here is the compromise in case you missed it.

Merkel gets the "no eurobond" position she wants
Sarkozy gets the "no bondholder haircuts except Greece" position he wants.

This proposal solves absolutely nothing. For some reason the market seems to love "nothing" these days. Don't expect that to last.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

[Fast Blog Finder] Can NoFollow links hurt you?

And should you comment on NoFollow blogs? I'm sure like other Fast Blog Finder users you asked yourself these questions more than once.

To help you decide, I did a case study to see if NoFollow links are counted and if it's worth your efforts to post comments on NoFollow blogs.

The case study was updated and it's still topical.

Click this link to read about my case study:

http://www.fastblogfinder.com/can-nofollow-links-hurt-you/

And did you know that you can load your own list of blogs in Fast Blog Finder Gold edition, determine the blog type and post comments on those blogs?

Julia Gulevich
G-Lock Software
julia@glocksoft.com

P.S From my next email you'll learn what traps are waiting for you on DoFollow blogs and why you should be careful when commenting on them.

Company info:

G-Lock Software, Level 5, 369 Queen Street, Auckland, NZ.

You can modify/cancel your subscription via the link below:
http://glockdb.com/u?xemail=ZTBuc3RhcjEuYmxvZ0BnbWFpbC5jb20

Damn Cool Pics

No Pants Subway Ride 2011

Posted: 05 Dec 2011 08:39 PM PST

In New York, On Sunday, January 9th, 2011 at 10th Annual No Pants Subway Ride had over 3,500 participants, spread out over six meeting points and ten subway lines.

The No Pants Subway Ride is annual event staged by Improv Everywhere every January in New York City. The mission started as a small prank with seven guys and has grown into an international celebration of silliness, with dozens of cities around the world participating each year. The idea behind No Pants is simple: Random passengers board a subway car at separate stops in the middle of winter without pants. The participants do not behave as if they know each other, and they all wear winter coats, hats, scarves, and gloves. The only unusual thing is their lack of pants.

The Chromatic Typewriter

Posted: 05 Dec 2011 03:58 PM PST

Washington-based painter Tyree Callahan replaced the letter keys on a 1937 Underwood Standard typewriter with color pads and hue labels to create a functional painting typewriter, dubbed the Chromatic Typewriter. The typewriter was submitted to the 2012 West Prize competition, a yearly prize voted on by popular opinion.

We Can’t Wait: Historic Fuel Standards and More Efficient Buildings

Tuesday, December 6, 2011

We Can’t Wait: Historic Fuel Standards and More Efficient Buildings

We can’t wait on Congress to act – and so this month the Administration has continued to move forward and create a more secure energy future for America.

Last Friday, President Obama joined former President Clinton to announce a $4 billion, joint private and public sector effort to improve the energy efficiency of 1.6 billion square feet of commercial and industrial property – an extension of the Better Buildings Initiative and another investment in clean energy. As the President said, “making our buildings more energy efficient is one of the fastest, easiest and cheapest ways for us to create jobs, save money, and cut down on harmful pollution. It is a trifecta.”

In addition, to build upon the success of landmark national fuel standards, the Administration also proposed a second phase of historic fuel efficiency and greenhouse gas standards for model year 2017-2025 cars and trucks. As consumers pocket increased savings at the pump and we reduce our nation’s dependence on oil, the President continues to deliver on his commitment to building a 21st century clean energy economy.

These actions represent just a snapshot of the Administration’s efforts to promote clean energy. For more information on events and announcements, check out the November highlights below.

Highlights

We Can't Wait: President Obama Announces Nearly $4 Billion Investment in Energy Upgrades to Public and Private Buildings
The President, alongside former President Clinton, announced nearly $4 billion in combined federal and private sector energy upgrades over the next two years as part of the Better Buildings Initiative.

We Can’t Wait: Obama Administration Proposes Historic Fuel Economy Standards
Building on President Obama’s historic national program, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT) formally unveiled their joint proposal to set stronger fuel economy and greenhouse gas pollution standards for model year 2017-2025 passenger cars and light trucks. When combined with other historic steps this Administration has taken to increase energy efficiency, this proposal will save Americans over $1.7 trillion at the pump, over $8,000 per vehicle by 2025. Taken together, these actions will also slash 6 billion metric tons in greenhouse gas emissions over the life of the programs.

We Can't Wait: Navy and USDA Announce Largest Ever Government Purchase of Biofuel
U.S. Navy Secretary Ray Mabus and Department of Agriculture Secretary Tom Vilsack announced that the Defense Logistics Agency (DLA) signed a contract to purchase 450,000 gallons of advanced drop-in biofuel, the single largest purchase of biofuels in government history.

EPA Proposes Changes to Clean Air Act Standards for Boilers
The Environmental Protection Agency (EPA) announced proposed changes that achieve extensive public health protections through significant reductions in toxic air pollutants, including mercury and soot, while increasing the rule’s flexibility and addressing compliance concerns. These standards will avoid up to 8,100 premature deaths, prevent 5,100 heart attacks and avert 52,000 asthma attacks per year in 2015. As a result, EPA estimates that for every dollar spent to cut these pollutants, the public will see $12 to $30 in health benefits.

Clean Air and Electricity Delivery
We can have clean air and reliable electricity at the same time. That’s the clear conclusion from a new report by the Department of Energy (DOE) released earlier this month. This confirms what the United States has always experienced in the 40 year history of the Clean Air Act – namely, the ability to safeguard public health without compromising the ability to keep the lights on in communities across the country.

Task Force Releases Final Strategy for Gulf Coast Ecosystem Restoration
Continuing the ongoing commitment to the Gulf coast, the Gulf Coast Ecosystem Restoration Task Force released its final strategy for long term ecosystem restoration following extensive feedback from citizens throughout the region. With the release of the final strategy, the Task Force marks the beginning of the implementation phase of the strategy by announcing new initiatives, including $50 million in assistance from the U.S. Department of Agriculture’s Natural Resources Conservation Service to help agricultural producers in seven Gulf Coast river basins improve water quality, increase water conservation and enhance wildlife habitat.

Significant Leasing Reform will Spur Commercial, Residential and Renewable Energy Development on Indian Lands
The Obama administration announced new rules that make home building easier, and pave the way for solar and wind energy projects, for Indian Country.

2012 Annual Fuel Economy Guide
The Department of Energy (DOE) in association with the Environmental Protection Agency (EPA) released the 2012 Annual Fuel Economy Guide, providing consumers with information that can help them choose a more efficient new vehicle that saves them money and reduces greenhouse gas emissions.

Get Updates

To learn more about the President’s vision for a more secure energy future, please visit WhiteHouse.gov/energy.

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How Much Do SEO Consultants & Agencies Charge? A Survey that Needs Your Help

Posted: 05 Dec 2011 03:03 PM PST

Posted by randfish

In the past few months, a number of folks have brought up this old blog post of mine on SEO pricing. The now 4-year-old content there is in dire need of refreshing, but I don't think that my personal opinion and experience are of acceptable quality to make for a compelling, useful update. Thus, I've created the following survey.

If you own, manage or work at a consultancy/agency in the SEO or adjoining+overlapping fields, your participation is tremendously appreciated.

Create your free online surveys with SurveyMonkey, the world's leading questionnaire tool.

The results from this survey will be made available to everyone in a blog post that will replace the old one in the next week. Company names and websites will be removed to help protect the privacy of those who've participated (and we're not asking for any highly sensitive items like revenues or client lists).

It's my hope that this new resource can help agencies and consultants as they compare their prices to the distributions of others as well as helping buyers of SEO and inbound marketing services get a sense for the common cost structures associated with the field.

Thanks for your contribution!

p.s. As you might imagine, changing a survey that's been published and collected results is very hard. However, if you have feedback about the survey format or suggestions to improve it, we'll definitely take those into consideration for our broad industry survey, which we'll be launching again in early 2012.

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Giving Everyone a Fair Shot

Your Daily Snapshot for
Tuesday, Dec. 6, 2011

Giving Everyone a Fair Shot

Today President Obama will speak at Osawatomie High School in Kansas about the choice we face as a country-- to allow too few to do well while too many struggle to get by, or to give everyone a fair shot.

Watch President Obama speak at 1:55 p.m. EST on WhiteHouse.gov/Live.

This is a make-or-break moment for the middle class. Congress only has 25 days left to take action and extend the payroll tax cut before taxes go up by $1000 dollars on the typical American family.

Seth's Blog : Getting serious about the attention economy

Getting serious about the attention economy

First, to restate the obvious:

Attention from those interested and able to buy is worth more now than ever before. Companies like Google, Amazon, Daily Candy, Netflix, Target, and on and on traffic in attention. It's their primary asset. Individuals are also valued and respected in large measure by the quality of attention and trust they earn from their publics.

So, if that's so obvious, why are we so cavalier about it?

If someone stood in front of your office and lit $100 bills from your petty cash kitty on fire, you'd call the cops. But people at work waste the attention of their peers and your customers/prospects at the drop of a hat.

Every interaction comes with a cost. Not in cash money, but in something worth even more: the attention of the person you're interacting with. Waste it--with spam, with a worthless offer, with a lack of preparation, and yes, with nervous dissembling, then you are unlikely to get another chance.