Central Perk

duminică, 18 noiembrie 2012

Mish's Global Economic Trend Analysis

Chris Christie Provides Perfect Setup for Saturday Night Live

Posted: 18 Nov 2012 05:38 PM PST

Those looking for late Sunday evening humor can certainly find it in this short YouTube clip of New Jersey governor Chris Christie.

Link if video does not play: Chris Christie on Twinkies
At a recent news conference, Christie was asked a question about Twinkies. He responded ...

"Really, seriously, you're not asking me about Hostess Twinkies are ya? What's the next question? I'm on Saturday Night Live enough. You think you're getting me behind this microphone having me talk about Twinkies? This is a setup man, I know it. You people are the worst. This is a setup. I am not answering questions on Twinkies. No, no, no, no, no, no. It's bad that I even said the work Twinkie from behind this microphone. You are not getting me to do that, no way."

That is so obvious, it almost appears as if Christie was trying to make the opening skit of Saturday Night Live.

In case you are not familiar with the Twinkies story, please consider Hostess to Liquidate if Bakers' Strike Continues Through Thursday; End of Twinkies Hours Away?

The bottom line is the union would not give into demands and the company filed a motion last Friday to liquidate. Shutting down the company will mean the loss of 18,500 jobs (less any jobs picked up by buyers of brands Twinkies, Ding-Dongs, Wonder Bread, Ho-Ho's etc.)

There is plenty of blame to go around, including untenable wages and benefits, leveraged debt, untenable management salaries etc.

However, the enabling factor behind the debt is loose monetary policy by the Fed coupled with fractional reserve lending. Factor in unions and corrupt management and there is no way the company could make it without huge concessions from the union.

Still, it is difficult to have much sympathy for those who vote to have no job in these trying times.

The union will likely see pension benefits slashed by 50% or more when handed over to the Pension Benefit Guarantee Corporation (PBGC). The PBGC is of course US taxpayers who should not have to pick up any of this tab at all (but they will).

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

Nightmare Scenarios for Obama's 2nd Term

Posted: 18 Nov 2012 10:07 AM PST

Last week I was interviewed by Constantine von Hoffman for a CBS news article regarding economic nightmares for Obama's 2nd term.

Calculated Risk was interviewed as well. His nightmare scenario is war, specifically noting the rise of Golden Dawn.

Eight people were interviewed for the CBS article but the organization was maddening. Specifically, there is no way to see all 8 viewpoints of people interviewed at once. You have to click through pages one at a time. I was curious enough to do it, Calculated Risk gave up after the second click.

In a clear effort to generate clicks, articles like this are an extreme turn-off and actually counterproductive. That no readers emailed me with a link to this article says no one bothered clicking through all the pages.

I talked to von Hoffman about numerous things, only one was mentioned in the article. Many of my points were of the nature of things I think should happen (and would benefit the global economy over the long run if they did), but most economists would disagree.

Mish Nightmare Scenario

Not Addressing the Fiscal Cliff
Breakup of the Eurozone
UK exiting the EU
China Growth falls to Zero Because of Rebalancing
Currency Crisis in Japan
Failure to address pension problems in US
Rise of the Neo-Nazi Golden Dawn Party in Greece Leads to War

I mentioned all of those things and more. The first four are things that I actually believe need to happen (and the sooner the better) to prevent a global nightmare!

Unfortunately, most economists want to kick the can down the road still more.

For a discussion of the fiscal cliff, please see Misdiagnosing the Fiscal Cliff; Shrill Voices and Economic Nonsense; Tyranny of Balanced Budgets

A breakup of the eurozone is inevitable in my opinion. For a detailed explanation why, please see Spain's Unpleasant Choice: Accept Lower Wages and Still Higher Unemployment, Leave the Euro and Default.The sooner a breakup happens the better. Delays end up like Greece.

In regards to China, please consider "China Rebalancing Has Begun"; What are the Global Implications? Michael Pettis on China Rebalancing, Chinese Price Deflation, and Spain Exit from Euro; Target 2 Revisited.

Note that can-kicking in Greece has led to the rise of the Golden Dawn party. Expect the same to happen in Spain if the agony lasts long enough.

Essentially, my nightmare scenario is more can-kicking exercises until the entire global economy blows up in a currency crisis and radical parties like Golden Dawn gain prominence everywhere, fueling political as well as economic violence.

Addendum

I had war in the Mideast with spiking oil prices as part of my nightmare scenario that I mentioned to von Hoffman. I simply forgot to mention it when I typed this post up earlier today.

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

Seth's Blog : What are professional reviews for?

What are professional reviews for?

I know what they used to be for. A decade ago, there really was no way to tell if a movie, a book or a play was worth your time before you paid up. A professional review could be a valuable signal, a way to save people time and money.

Along the way, professional reviewers also decided that they could alter the culture by speaking up. Since creators of culture are often sensitive to what the critics have to say, establishing critical baselines (particularly when you are a powerful arbiter of what sells and what doesn't) became a real function of the critic.

Today, of course, there's no shortage of cultural feedback. If I want to know what people thought of a bit of culture, it's only a click away. In fact, for the consumer who doesn't want to know (spoiler alert) it's almost impossible to avoid.

With that much feedback to choose from, what purpose do the anonymous book reviews in Publishers Weekly or Kirkus Review serve? Or the long movie reviews in the Times or the short ones in Variety? Or the restaurant reviews in the local paper?

They might be saying, "I have a track record, and if you agree with my past picks, you'll agree with this," which works fine if it's always the same reviewer and we know them by name.

They might be saying, "our publication has a good track record in picking what's going to be popular, so if you're a theater owner or a bookstore, pay heed," except they don't have a good track record, they have a terrible one.

Or they might be saying, "attention actors and directors and writers--we don't like it when you make books and movies that we don't like, and we're going to pillory your work until you stop." Assigning someone who doesn't like an author's work to review the author's next book seems cruel to all involved.

[And sometimes, they're just fun.]

All a long way of saying that if you make something that people are likely to criticize, pay careful attention to which critics you listen to. They probably don't view the world the way you do, and worse, the way your fans do.

Reading criticism just to ruin your day is a waste of your talent.

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sâmbătă, 17 noiembrie 2012

Mish's Global Economic Trend Analysis

Real Estate Sales Collapse in Paris and Ile-de-France; New Home Starts Lowest Since 1998; VAT Hike to Make Matters Much Worse

Posted: 17 Nov 2012 05:13 PM PST

Mainstream media offers little on the stunning collapse of real estate sales in France, notably Paris and Ile-de-France. Via Google translate, please consider Real Estate November 2012: figures for the month. Here are a few translate-unedited snips.

2012 will remain a very bad year for real estate professionals. In this comprehensive figures on the property market in November 2012, discover the sharp decline in real estate sales in Paris and Ile-de-France.

Even in Paris, it becomes difficult to sell a property

Notaries in Paris / Ile-de-France note that even in their region very attractive it becomes difficult to sell a property . Between June and August 2012, it has sold "only" 35,000 existing homes, or 19% compared to the same period in 2011.

Through the preliminary contracts, that is to say, the sales agreement signed but the sale is not yet final, notaries noted an accentuation of the decrease in sales in September 2012. To believe the figures MeilleursAgents which figure barometer advanced compared to the figures of notaries, there are currently -30 to -40% of sales in Paris and the Ile-de-France.

Borrowing rates are low, borrowers are scarce

The mortgage rates continue to fall slightly in November 2012 . That makes 8 months in a row that interest rates fall. Loans for short periods have the largest declines compared to last month.

On loans granted in October 2012, the average rate is 3.37% and the duration of payments is 207 months.

Despite these cheap rates, mortgage demand plunges more now. The Observatory Housing Credit CSA announces -45.8% in October 2012 compared to the same month of the previous year. This accentuates the fall of -30.5% of mortgages in the first 9 months of 2012.

Starts of new homes in the third quarter of 2012 recorded their lowest level since 1998

Only 66,932 new dwelling units have been started in the third quarter of 2012. This is the lowest level seen since the third quarter of 2012. This represents a decrease of 17.3% compared to the same period in 2011.

VAT at 10% instead of 7% for the building in 2014?

The maintenance and renovation of housing more than two years are subject to reduced VAT under certain conditions. After passage of the VAT rate in the building from 5.5% to 7% in 2012, the government expects an increase in the VAT rate to 10% through.

Blazing Stupidity

Hiking the VAT in face of falling demand is blazing stupidity. Apparently a VAT hike is an expectation rather than a done deal, but given other examples of stunning stupidity from France, including tax hikes and the Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It" one should expect no less from French president Francois Hollande.

For more examples of things about to wreck France, please consider "Google Law" Yet Another Warped Policy by Hollande; Government Motors French Style

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

Lagarde Says Greece Deal Should be "Rooted in Reality"; Mish Says Lagarde Should be "Rooted in Reality"

Posted: 17 Nov 2012 09:56 AM PST

Today's case of the "pot calling the kettle is black" comes from IMF chief Christine Lagarde in a warning to Brussels nannycrats and the ECB Greek deal should be "rooted in reality"

An agreement among Greece's international creditors on reducing its large debt pile should be "rooted in reality and not in wishful thinking," the head of the International Monetary Fund said ahead of a tense meeting with European leaders.

"I am always trying to be constructive but I am driven by two objectives," she said in an interview, "to build and approve a program for Greece that is solid, that is convincing today, that will be sustainable tomorrow, that is rooted in reality and not in wishful thinking.

Objectives in Conflict

The problem for the IMF, Germany, the nannycrats in Brussels, ECB, and Greece is the "objective" of keeping Greece in the eurozone is one of the things destroying Greece.

It is wishful thinking that Greece is going to stay in the eurozone. I am all for a large dose of "reality" but the objectives of the Troika and the nannycrats in Brussels does not permit reality.

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

Damn Cool Pics

The Big Bang Theory Flash Mob

Posted: 16 Nov 2012 08:49 PM PST

The set of CBS's hit comedy "The Big Bang Theory" was in for a big surprise when a recent taping came to a halt — and the cast and crew inexplicably broke out into song.

Weekly Address: Working Together to Extend the Middle Class Tax Cuts

Saturday, November 17, 2012

Weekly Address: Working Together to Extend the Middle Class Tax Cuts

In this week’s address, President Obama urges Congress to act now on one thing that everyone agrees on -- ensuring that taxes don’t go up on 98 percent of all Americans and 97 percent of small businesses at the end of the year. On Friday, the President had a constructive meeting with Congressional leaders on finding ways to reduce our deficit in a way that strengthens our economy and protects our middle class, and he looks forward to working together to get this done.

Watch President Obama's weekly address.

President Obama delivers the Weekly Address

In Case You Missed It

Here’s a quick glimpse at what happened this week on WhiteHouse.gov:

Let's Get to Work: Last Friday, the President laid out his strategy for finding the right approach to move the country forward. He stated his plans to reach out to members of Congress, labor and business leaders, and other citizens to gather ideas and input. Standing alongside him in the East Room of the White House was Vice President Joe Biden—and 14 others stood behind him at the podium. Learn more about the 14 people standing behind the President.

Veterans Day: On Sunday, the President, Vice President, First Lady, and Dr. Biden honored our nation's fallen warriors, veterans and military families at Arlington National Cemetery. Together, they laid a wreath to "remember every service member who has ever worn our nation's uniform."

Celebrating Diwali: On Tuesday afternoon, the White House celebrated Diwali, a holiday observed annually by Hindus, Sikhs, Jains, and some Buddhists throughout India and across the world. Known as the "festival of lights," Diwali offers time for both reflection and celebration. South Asian American community leaders, elected officials, entrepreneurs, Administration officials, and Vice President Biden came together on Tuesday to commemorate the holiday. Read the President's statement on the Observance of Diwali here.

The President's News Conference: On Wednesday, the President held a news conference to answer questions about his plans for the next four years. He emphasized his commitment to help American families and small businesses get back on track:

I've got a mandate to help middle-class families and families that are working hard to try to get into the middle class. That's my mandate. That's what the American people said. They said: Work really hard to help us. Don't worry about the politics of it; don't worry about the party interests; don't worry about the special interests. Just work really hard to see if you can help us get ahead -- because we're working really hard out here and we're still struggling, a lot of us.

Watch the full news conference here.

President Obama's New York Visit: On Thursday, the President traveled to New York to assess the storm damage of Hurricane Sandy, and meet with survivors in Staten Island coping with the recovery process. President Obama praised the first responders, volunteers and sanitation workers who are working tirelessly to help residents get back on their feet, saying they exemplify what America is all about:

During difficult times like this, we're reminded that we're bound together and we have to look out for each other. And a lot of the things that seem important, the petty differences melt away, and we focus on what binds us together and that we as Americans are going to stand with each other in their hour of need.

Congressional Leadership at the White House: Today, the President hosted the Democratic and Republican leaders from both the House of Representatives and the U.S. Senate for talks on the economy—and how to prevent a tax increase on a the middle class. Senate Majority Leader Harry Reid, House Speaker John Boehner, House Minority Leader Nancy Pelosi and Senate Minority Leader Mitch McConnell met with the President for more than an hour and emerged optimistic about the potential for agreement. Watch a video from the meeting here.

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Seth's Blog : Freedom in a digital world

Freedom in a digital world

For a long time, there was alignment between what we wanted when it came to privacy and what was possible for the government to do. We relished our privacy and got used to the freedom to act anonymously at the same time that the government and marketers really couldn't keep track even if they wanted to.

In the pre-internet world, there was just no way to imagine a useful database of every citizen's fingerprints. The thought that a store would know every item you've ever purchased (and not just at their store) was crazy. Freedom from intrusion existed largely because the alternative was impossible.

Today, of course, we know that we can sequence the DNA of every resident and put it in a database. We can install so many cameras in a city that just about every corner is under surveillance. We can even wire cars so that they give themselves tickets when the driver is speeding. And yes, marketers already know about which websites you've visited recently.

Which leads to a series of questions that we're not asking.

Should there be speed limits? If so, should a violation depend on the bad luck of getting caught by a random cop on a random road (maybe)? Or should it be automatic?

Should drunk driving be permitted? If not, why not have a breathalyzer in every car, so that a simple puff of air is necessary to start the car? What if the insurance company gave you a big discount if you opted in?

Should everyone, even the presumed innocent, be required to put their DNA in a databank so that violent criminals are much more likely to be found? If not, who should have their data shared? How many innocent people behind bars could we free (and guilty parties could we catch?)

Should the government be able to sift through bank records looking for money laundering behavior? What about seeking out trends in tax records or cell phone calling patterns?

Should we take advantage of technology to allow us to trace every bullet and know what gun it was fired from?

One argument is that those with nothing to hide are already being surveilled in countless ways, and we probably ought to make laws to get those that would hurt the rest to be included.

The other argument is that all surveillance is too much, and it should be permitted to wear a clown mask into a bank and there ought not to be speed limits.

As usual, we're going to end up somewhere in between, but like all things the Net breaks, this one is going to take a long time to catch up to what's already happening.

In the meantime, I wish we were asking more questions.

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duminică, 18 noiembrie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : What are professional reviews for?

What are professional reviews for?

More Recent Articles

sâmbătă, 17 noiembrie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Weekly Address: Working Together to Extend the Middle Class Tax Cuts

Seth's Blog : Freedom in a digital world

Freedom in a digital world

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duminică, 18 noiembrie 2012

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