Central Perk

luni, 13 februarie 2012

Spout and scout

Social media has amplified two basic human needs so much that they have been transformed into entirely new behaviors.

Sites have encouraged and rewarded us to spout, to talk about what we're up to and what we care about.

And they've mirrored that by making it easy to scout, to see what others are spouting about.

Please understand that just a decade ago, both were private, non-commercial activities. Now, they represent the future of media, and thus the future of what we do all day.

You're probably doing one, the other or both. Are you making it easy for your peers and customers to do it about and for you?

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duminică, 12 februarie 2012

Mish's Global Economic Trend Analysis

Athens Burning: Tens of Banks in Flames After Athens Passes Austerity Bill
China Instructs Banks to Roll Over $1.7 Trillion in Debt to Avoid Mass Default
Obama Seeks to Prove He is More Like Romney; Obama vs. Romney - What's the Difference?

Athens Burning: Tens of Banks in Flames After Athens Passes Austerity Bill

Posted: 12 Feb 2012 05:30 PM PST

The Financial Times reports Athens passes demanded austerity bill.

Greek lawmakers on Thursday approved a tough austerity package aimed at averting a default, but the vote was overshadowed by violent street protests in central Athens and dozens of arson attacks against shops and banks.

The legislation passed by 199 votes in favour to 74 against, a convincing majority for Lucas Papademos, the caretaker prime minister who has been given the job of pushing through painful reforms demanded by the European Union and the International Monetary Fund in return for a second €130bn bail-out.

Athens Burning: Tens of Banks in Flames

From the Greek Streets reports Athens, the long night of February 12: "burning and looting tonight"

Tens of banks and other buildings are burning across Athens after today's demonstrations. There are huge riots in Thessaloniki and Patra as well. The situation seems to be spiralling out of control. We will try to summarise key developments through the night, below: .....

23.10 GMT+2 It is entirely impossible to estimate the number of people who have taken to the streets in Athens tonight. They are definitely in the hundreds of thousands – there are simply people everywhere.

23.07 GMT+2 The building of Marfin bank (the same building where three bank workers died on May 5, 2010) has been burnt to the ground.

23.05 GMT+2 A gun shop in Omonoia, Athens, has been looted.

23.02 GMT+2 Information about the alleged occupation of the town hall is confirmed: a group of people entered the building, only to be evicted and arrested by riot police a few minutes later.

22.42 GMT+2 The town hall of Athens has allegedly been occupied.

22.40 GMT+2 Police attack and cut off people in the Law school. At least 200 people are trapped inside.

22.30 GMT+2 At least 20 demonstrators and another 30 police have been injured during the day's clashes.

Promises No Longer Suffice

Earlier today Schaeuble warns Greek promises no longer suffice

Greek promises on austerity measures are no longer good enough because so many vows have been broken and the country that has been a "bottomless pit" has to dramatically change its ways, German Finance Minister Wolfgang Schaeuble said.

In a hard-hitting interview with the Welt am Sonntag newspaper, Schaeuble also said it is up to Greece whether the country can stay in the euro zone as part of its efforts to restore its competitiveness.

"The promises from Greece aren't enough for us anymore," Schaeuble said. "With a new austerity programme they are going to first have to implement parts of the old programme and save."

Schaeuble said there was quite a difference between Greece and other euro zone strugglers.

"The Greeks are a special case...The Portuguese government is doing a decent job," he said, adding that Portugal's problem is that the country needs more economic growth.

Greece a "Special Case"?

Give it time and Portugal and Spain will follow. Greece is in an economic depression (as are Spain and Portugal), and things are about to get much worse.

Greece's technocrat Prime Minister Lucas Papademos does not have the support of the people. His support has dwindled to nothing. Moreover, the political parties that passed this bill will not be in power after the next elections (assuming of course there is a next election).

Recall that Papademos is a puppet not voted into office by Greek citizens, but rather an unelected politician forced onto Greeks because he would do what the EMU and IMF want.

Greece is burning in every sense of the word. It is both politically and economically bankrupt yet Europe attempts to extract blood from a dried up turnip.

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

China Instructs Banks to Roll Over $1.7 Trillion in Debt to Avoid Mass Default

Posted: 12 Feb 2012 09:59 AM PST

A few years ago local Chinese municipalities had little debt. Today they have a $1.7 trillion mountain of it, nearly all of it financing economically non-viable projects in the name of "stimulus".

The proposed "solution" of course is to roll the debt over, while adding still more to the debt mountain, hoping things will get better.

Please consider China tells banks to roll over loans

China's stimulus response to the global financial crisis saddled its provinces and cities with Rmb10.7tn ($1.7tn) in debts – about a quarter of the country's GDP – and more than half those loans are scheduled to come due over the next three years.

Since the principal on many of the loans is not repayable, banks have started extending maturities for local governments to avoid a wave of defaults, bankers and analysts familiar with the matter told the Financial Times. One person briefed on the plan said in some cases the maturities would be extended by as much as four years.

Extending Maturities to Avoid Default

A few more details emerge in China extends loans to avoid mass default

A mountain of debt is coming due and the principal is unpayable, so governments have agreed to extend maturities. This could be a description of a bail-out package for Greece. Instead, it is what China is doing to prevent scores of provinces and cities from defaulting on bank loans.

The flaws in China's fiscal system were savagely exposed during the global financial crisis when Beijing introduced a stimulus package that was largely implemented by local governments.

Lacking sufficient funding and prohibited from even borrowing money because of past excesses, provinces and cities created thousands of financing vehicles to get around the rules and raise capital in the quickest way possible. They tapped state-owned banks which, encouraged by Beijing, were happy to oblige with enormous loans.

From relatively little debt at the start of 2008, local governments finished 2010 owing Rmb10.7tn ($1.7tn). The national auditor has reported that more than a third of that debt will have matured by the end of this year.

"We are not talking about a cash flow problem. We are talking about a big cash shortfall problem," said Zhu Ning, deputy director of the Shanghai Advanced Institute of Finance.

Critics have pointed to dangers in the loan rollover plan. Repayment delays will hinder banks' lending abilities. Some bad loans will simply be prolonged instead of recognized. Problems will remain concealed.

Standard & Poor's has warned the extension would be a "backward step" for the Chinese banking sector that could "shake investors' confidence".

Eventually China Will Print to Cover the Losses

Most of these loans will never be paid back. Eventually China will just print money to make the banks solvent.

For more on the folly of loans to State Owned Enterprises (SOEs) from a Michael Pettis email, please see China Financial Markets: When Will China Emerge From the Global Crisis?

Pettis is working on getting his site back up at another service provider. The outage may be provider related rather than state related as I first suspected.

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

Obama Seeks to Prove He is More Like Romney; Obama vs. Romney - What's the Difference?

Posted: 12 Feb 2012 12:54 AM PST

Inquiring minds are reading Obama budget seeks to boost trade enforcement, ratchet pressure on China

President Barack Obama's new budget proposal will ask Congress to devote millions of dollars for a new trade enforcement center and more U.S. inspectors in China as the administration takes aim at unfair trade practices abroad, a senior administration official said Saturday.

It's all part of Obama's focus on boosting U.S. manufacturing and exports as he tries to win over voters and improve the economy in this election year.

Romney talks tough on China

CNN reports Romney talks tough on China

Calling the country a "cheater," Romney promised to impose a variety of trade restrictions if China doesn't comply with intellectual property laws and allow its currency to float freely in foreign exchange markets.

"I'll clamp down on the cheaters, and China is the worst example of that," he said as he presented his top ideas for job creation in Las Vegas.

"If they cheat, there is a price to pay," he added. "I don't want a trade war, but I don't want a trade surrender either."

Obama vs. Romney - What's the Difference?

If you like Obamacare, then vote for Romney or vote for Obama. It really does not matter. If you support war-mongering then vote for Obama or vote for Romney, it really does not matter. On Mideast policies, it does not matter. On trade, it does not matter.

Other than a small number of social issues like abortion, it simply does not matter.

If you want a change, then vote for Ron Paul. Otherwise, let birth control and abortion be your guide because otherwise (as I have said repeatedly) President Obama and Mitt Romney are Nearly One and the Same!

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

Seth's Blog : The sad irony of selfishness

The sad irony of selfishness

More often than not, the selfish person is insecure, fearful and filled with doubt. The selfishness springs from his belief that this is his only good idea, his last dollar, his one and only chance to avoid failure. "I need this, not you," he says, because he truly believes he's got nothing else going on, no other chance, no hope.

The irony, of course, is that selflessness (not selfishness, its opposite) is precisely the posture that leads to more success. The person with the confidence to support others and to share is repaid by getting more in return than his selfish counterpart.

The connection economy multiplies the value of what is contributed to it. It's based on abundance, not scarcity, and those that opt out, fall behind.

Sharing your money, your ideas, your insights, your confidence... all of these things return to you. Perhaps not in the way you expected, and certainly not with a guarantee, but again and again the miser falls behind.

(This is part of what Sasha's generosity day experiment is about.)

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sâmbătă, 11 februarie 2012

Mish's Global Economic Trend Analysis

“Student Loan ‘Debt Bomb"; Obama's Misguided Proposal and Mish's Two-Point Alternative Proposal

Posted: 11 Feb 2012 11:11 AM PST

It's interesting to watch some of the terms bandied about in headline news. For example, the LA Times headline reads S&P says student loan debt could be next financial bubble.

Next? Could Be?

What with the word "next"? Also what's with the words "could be"? Without a doubt student loans are in a bubble and have been for many years. The source of the problem, as it always is with financial bubbles, is cheap money, loans to nearly anyone, and in the case of student loans, no way to discharge the debt, even in bankruptcy.

From the article ...

"Student-loan debt has ballooned and may turn into a bubble," S&P said. "There are more defaults and downgrades for some student loan asset-backed securities."

Federal and private student-loan debt is approaching $1 trillion and surpassed credit-card debt for the first time in 2010, according to Mark Kantrowitz, publisher of FinAid.org, a college grant and loan website. Under U.S. law, student-loan debt -- unlike credit-card borrowings -- can rarely be discharged in bankruptcy court.

President Barack Obama last month proposed linking federal aid to a college's ability to control tuition costs. The plan calls for increasing campus-based aid only for schools that limit tuition-cost increases and penalizing those that don't.

The Next "Debt Bomb"

The Huffington Post says Student Loans Could Be America's Next "Debt Bomb"

Growing numbers of Americans are finding themselves bankrupt, with their college diplomas partially to blame.

Slightly more than 80 percent of bankruptcy attorneys say the number of their potential clients with student loan debt have increased "significantly" or "somewhat" in the past three to four years, according to a survey by the National Association of Consumer Bankruptcy Attorneys. And there's little hope those debtors will get out of their obligations; 95 percent of bankruptcy attorneys surveyed said that very few student loan debtors will be discharged from their loan as a result of undue hardship.

"Take it from those of us on the frontline of economic distress in America: This could very well be the next debt bomb for the U.S. economy," William E. Brewer, Jr., president of the NACBA said in a statement accompanying the survey.

With so many college graduates burdened with so much debt, the potential for bankruptcies is huge. Nearly 25 percent of bankruptcy attorneys said they've seen potential student loan client cases surge by 50 to more than 100 percent, according to the NACBA survey. That despite the number of Americans that filed for bankruptcy overall falling last year, according to The New York Times.

Americans that graduated college with loans in 2010 owe an average of about $25,000 -- a five percent boost from the year before, according to The Project on Student Debt. In addition, because they faced an unemployment rate of 9.1 percent upon graduation they're at a disadvantage when it comes to paying back the loans.

4 of 5 Bankruptcy Attorneys Report Major Jump in Student Loan Debtors Seeking Help

Inquiring minds may be interested in a link to Student Loan Survey taken by the National Association of Consumer Bankruptcy Attorneys (NACBA).

The NACBA survey of 860 bankruptcy attorneys nationwide found that:

More than four out of five bankruptcy attorneys (81 percent) say that potential clients with student loan debt have increased "significantly" or "somewhat" in the last three-four years. Overall, about half (48 percent) of bankruptcy attorneys reported significant increases in such potential clients.
Nearly two out of five of bankruptcy attorneys (39 percent) have seen potential student loan client cases jump 25-50 percent in the last three-four years. An additional quarter (23 percent) of bankruptcy attorneys have seen such cases jump by 50 percent to more than 100 percent.
Most bankruptcy attorneys (95 percent) report that few student loan debtors are seen as having any chance of obtaining a discharge as a result of undue hardship.

Titled "Student Loan 'Debt Bomb': America's Next Mortgage-Style Economic Crisis," the companion NACBA paper published today points out:

College seniors who graduated with student loans in 2010 owed an average of $25,250, up five percent from the previous year. Borrowing has grown far more quickly for those in the 35-49 age group, with school debt burden increasing by a staggering 47 percent.
Students are not alone in borrowing at record rates, so too are their parents. Loans to parents for the college education of children have jumped 75 percent since the 2005-2006 academic year. Parents have an average of $34,000 in student loans and that figure rises to about $50,000 over a standard 10-year loan repayment period. An estimated 17 percent of parents whose children graduated in 2010 took out loans, up from 5.6 percent in 1992-1993.
Of the Class of 2005 borrowers who began repayments the year they graduated, one analysis found 25 percent became delinquent at some point and 15 percent defaulted. The Chronicle of Education puts the default rate on government loans at 20 percent.

Obama's Misguided Plan to Fix the Problem

President Obama proposes to "fix" the problem by throwing more money at it. Instead, I propose the problem and solution is two-fold.

Two-Point Problem

Guaranteed loans of any kind are a huge problem. An even bigger problem is guaranteed loans that cannot be discharged in bankruptcy. Schools have every incentive to drive up costs and to make loans to kids who simply do not belong in school at all, as well as to kids whose benefit of education is far less than the cost of education.
Lack of competition. We need more accredited universities that can offer online programs, at far cheaper prices.

Two-Point Solution

Cancel the student loan program in entirety for new students and phase out student loans over the next three years for anyone already in such programs.
Accrediting some online education programs say from India, would certainly go a long way towards massively increasing competition and reducing costs. Obviously some classes need to be hands-on type (lab work), but I am sure that can easily be arranged in conjunction with local colleges.

My proposal would get government out of the student loan business where it does not belong, while increasing free-market competition to dramatically drive down prices.

Obama's solution is to throw more money at the problem.

Recent Rise in Non-Revolving Loans

By the way, the recent reported rise in non-revolving loans was entirely due to a huge rise in student loans, further increasing the size of the problem.

Please take a look at Consumer Credit "Demolishes Expectations" Really? No Not Really! The "Non-Bounce" in Non-Revolving Credit for some very interesting graphs and comments on the rise in student loans.

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

Damn Cool Pics

Sneak Peak at the Greatest Toy in the Universe

Posted: 10 Feb 2012 09:13 PM PST

Jaimie Mantzel is heralding this prototype robot as the "greatest toy in the universe." After watching the video below, you may actually agree with him.

Not only is this 6-legged robot remote control, it's central area can be fitted with several different projectile-shooting modules. The two shown are capable of firing discs great distances, or ping pong balls at varying angles. There also seems to be a dart module that isn't demonstrated.

The only problem is the six legged robot does not have a name, Jamie has reached out to the internet and is asking for suggestions. If he picks your name for the toy he will send you a free one.

Weekly Address: Extending the Payroll Tax Cut for the Middle Class

Your Daily Snapshot for
Saturday, February 11, 2012

Weekly Address: Extending the Payroll Tax Cut for the Middle Class

President Obama urges Congress to extend the payroll tax cut to prevent a tax hike on 160 million hardworking Americans. Back in December, Congress faced this exact same predicament. People all over the country tweeted, emailed and wrote to explain how losing $40 each check would affect them. Ultimately, thanks to your stories, Congress did the right thing and passed a two-month tax cut extension. It’s more important than ever that you make sure your story is part of the debate here in Washington.

Watch the weekly address and tell us what $40 means to you and your family.

President Barack Obama tapes the weekly address in the East Room of the White House, Feb. 10, 2012. (Official White House Photo by Lawrence Jackson)

Seth's Blog : People who know what they're talking about...

People who know what they're talking about...

Almost always talk like they know what they're talking about. That's why it pays to invest more time than you might imagine on the vocabulary, history and concepts of your industry.

Insider language, terms of art, the ability to use technical concepts... it matters.

On the other hand, sounding like you're smart doesn't mean you are.

Necessary but not sufficient.

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luni, 13 februarie 2012

Seth's Blog : Spout and scout

Spout and scout

More Recent Articles

duminică, 12 februarie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : The sad irony of selfishness

The sad irony of selfishness

More Recent Articles

sâmbătă, 11 februarie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Weekly Address: Extending the Payroll Tax Cut for the Middle Class

Seth's Blog : People who know what they're talking about...

People who know what they're talking about...

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luni, 13 februarie 2012

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duminică, 12 februarie 2012

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