Central Perk

duminică, 20 aprilie 2014

Mish's Global Economic Trend Analysis

Japan Trade Deficit Largest in History; Imports Soar, Exports Barely Up In Spite of Collapsed Yen
Glen Greenwald Wins Pulitzer Prize for Exposing NSA Spy Scandal; His Reaction on Video; My Reaction: Greenwald and Snowden are Heroes
"Low Inflation has Positive Impact and Helps Spain's Competitiveness" Says Economy Minister

Japan Trade Deficit Largest in History; Imports Soar, Exports Barely Up In Spite of Collapsed Yen

Posted: 20 Apr 2014 10:37 PM PDT

Those who think a collapsing currency are a sure-fire way to increase exports need to rethink their beliefs.

Despite a falling Yen, Japan Posts Largest-Ever Trade Deficit.

The gap between the value of Japan's exports and that of its imports grew by more than two-thirds in the 12 months through March, to Y13.7tn ($134bn), according to government data released on Monday. It was the third consecutive fiscal year of deficits, the longest streak since comparable records began in the 1970s.

Toyota, Hitachi and other large Japanese companies have enjoyed soaring profits as a result of the weaker yen, which has fallen by a fifth against other major currencies since November 2012.

But the improvement has come less from increased exports than from flattered exchange rates on overseas sales. Japanese export volumes have barely risen and the yen value of goods shipped to foreign markets has increased much more slowly than the value of imports.

Exports actually declined slightly by volume in January-March compared with the previous quarter, by 0.2 per cent on a seasonally adjusted basis, according to calculations by Credit Suisse, even as imports grew by 4.5 per cent.

A steady outflow of Japanese manufacturing jobs to lower-cost countries and declining competitiveness in some sectors, such as consumer electronics, has limited the power of a cheap yen to lift exports.

Overall Japanese exports increased 0.6 per cent by volume last fiscal year, Monday's data showed, leading to a 10.8 per cent rise by value in light of the weaker yen. Imports rose 2.4 per cent by volume and 17.3 per cent by value.

Energy Imports

Japan has 50 nuclear reactors. Every one of them is offline. Abe wants to bring them back online, but the Financial Times reports "analysts think that at most 12-15 of the reactors will ultimately be restarted."

Abenomics

A falling Yen and rising energy imports, coupled with a slowdown in China and tax hikes in Japan suggest Abenomics is going to be a dismal failure unless the goal is to goose stock prices rather than goose the economy.

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

Glen Greenwald Wins Pulitzer Prize for Exposing NSA Spy Scandal; His Reaction on Video; My Reaction: Greenwald and Snowden are Heroes

Posted: 20 Apr 2014 08:28 PM PDT

A big round of well deserved applause for Glen Greenwald is in order for willing a Pulitzer Prize for public service. Greenwald says the announcement was "really gratifying."

Please consider Glenn Greenwald Reacts To Pulitzer Prize

Glenn Greenwald told CNN's Brian Stelter on Sunday that receiving the Pulitzer Prize for public service was "really gratifying."

On Monday, Greenwald and other journalists at The Guardian and The Washington Post were awarded the Pulitzer for their reporting on the National Security Agency. The big question as the awards approached was whether the Pulitzer Prize committee would recognize their work, and they did just that.

On Sunday's "Reliable Sources," Greenwald told Stelter that he was having lunch with his phone on the table when the announcement came, and described his reaction.

"I think there was an expectation that the committee had to recognize the reporting in one way or another, and the question was going to be how," said Greenwald. "To learn that it was the public service award and that it was given to The Guardian and to The Washington Post for the work that we had done was really gratifying, because I think that is the ideal that we always tried to fulfill, which is doing the reporting in public service."

Congressman Peter King, like other critics of Greenwald, reacted to the news less kindly, calling the win a "disgrace." When asked about King's condemnation of the award, Greenwald said it was "an enormous badge of honor." He compared it to the reactions of those who called for prosecuting Daniel Ellsberg and The New York Times for releasing the Pentagon Papers.

Greenwald and Snowden are Heroes

Glen Greenwald and Edward Snowden are heroes. Those looking for cowardly disgrace can find in in the reactions of President Obama, Senator John McCain, Congressman Peter King, and numerous other legislators who have no idea what the constitution even says.

In the above video, Pulitzer Prize winner Glenn Greenwald joins Brian Stelter for an exclusive interview.

Congratulations to Greenwald, the Guardian, and the Washington Post.

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

"Low Inflation has Positive Impact and Helps Spain's Competitiveness" Says Economy Minister

Posted: 20 Apr 2014 12:06 PM PDT

Luis de Guindos, Spain's Economy Minister, sings the praises of low inflation.

Via translation from El Economista, please consider Economy Minister Says Deflation Has "Positive Impact".

James Daniel, Spain's mission advisor to the IMF, said that inflation close to zero in the country increases the burden of debt and real interest rates and difficult to reduce unemployment.

Daniel's words contradict the perception Luis de Guindos, the Spanish Minister of Economy and Competitiveness, who also said today at a press conference that low inflation "is having a positive impact" and help the country's competitiveness.

Guindos noted noted that, far from being a threat, "the low level of inflation is allowing Spain win competitiveness."

However, he recognized that low inflation could become a "problem" if it lasts "long" and affects the process of deleveraging in the Spanish economy. The minister expects inflation to fluctuate in the coming months at around 0.5%.

Guindos had it correct until that last sentence. Low inflation, or deflation is never a problem. Rather the buildup of debt that cannot be serviced is the problem.

Since the buildup of debt is the problem, inflationary solutions that encourage people and businesses to expand debt cannot possibly be the solution.

Falling wages have had a positive effect on Spain's competitiveness, so much so that France is bitching about the invasion of Spanish builders undercutting French firms in price.

For discussion, please see Deflation Will Return: Europe First, Then US; Global Supply Arbitrage.

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

Seth's Blog : "How do I get rid of the fear?"

"How do I get rid of the fear?"

Alas, this is the wrong question.

The only way to get rid of the fear is to stop doing things that might not work, to stop putting yourself out there, to stop doing work that matters.

No, the right question is, "How do I dance with the fear?"

Fear is not the enemy. Paralysis is the enemy.

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sâmbătă, 19 aprilie 2014

Mish's Global Economic Trend Analysis

Illinois Madness Never Stops; House Committee Wants Taxpayers to Spend $100 Million on Barack Obama Library

Posted: 19 Apr 2014 12:27 PM PDT

Illinois is broke. Its public pension plans are the most troubled in the nation.

Illinois passed massive "temporary" tax hikes to fix the pension problem, but that did not make a dent in the problem.

Nonetheless, ideas to waste more taxpayer money are always on the table. Here's a recent example.

$100 Million for Barack Obama Library

Today, the Illinois Policy Institute reports by email ...

An Illinois House Committee wants taxpayers to pay $100 million for a Barack Obama library. Somehow, House Speaker Michael Madigan thinks this is an appropriate use of funds despite the state's more than $100 billion pension crisis and $6.6 billion in unpaid bills.

In accepting hefty taxpayer dollars for this venture, President Barack Obama is setting himself apart from his recent predecessors, former presidents Bill Clinton and George W. Bush.

Clinton's library, located in Little Rock, Ark., was funded solely through private donations, according to the Clinton Foundation. Clinton's "$165 million facility was built entirely through private funds. It's just a fact," said Jordan Johnson, a spokeswoman for the Clinton Foundation.

Likewise, Bush's library, located at Southern Methodist University in Dallas, was also funded through private donations.

The Barack Obama Foundation, tasked with planning the development of Obama's presidential library, has yet to determine the site of the future library. In fact, the foundation's board of directors is receiving proposals through June 16 and does not intend to announce its final decision until 2015. The Illinois House Committee's $100 million proposal will now go to the full House.

On its website, the Barack Obama Foundation defines its mission as developing a presidential library that "reflects President Obama's values and priorities throughout his career in public service." Interestingly enough, the first value listed is "expanding economic opportunity." But more than 600,000 Illinoisans woke up today and didn't have a job to go to, and thousands more face underemployment. To them and many others, it's clear the president has fallen short on accomplishing his goal of "expanding economic opportunity" to the Land of Lincoln, where he launched his political career as a state senator 18 years ago.

Obama's staff expects the library to cost $500 million or more. And the costs won't stop there. The day-to-day operations and maintenance of the United States' 13 presidential libraries cost taxpayers $75 million in fiscal year 2013 alone.

This figure strikes an interesting contrast. Illinois politicians, who are demanding that we extend the 2011 tax hike so that "draconian" spending cuts in public and human services do not go into effect – are attempting to subsidize a monument in dedication to the legacy of the most prolific fundraiser in history – on the backs of poor and middle-class families in Illinois.

Jane McEnaney
Manager of Government Affairs

Illinois Madness Never Stops

In March, House Speaker Michael Madigan proposed 3% surcharge on income over $1 million

Also this year, progressives argued for a blank check proposal for more tax hikes. For details, please see Picking-Your-Pocket Numbers: How Much More Will You Pay?

Now the legislature wants to waste $100 million for a Barack Obama Library.

In Illinois, the madness never stops.

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

Seth's Blog : Saying 'thank you' in public, three times

Saying 'thank you' in public, three times

Earlier this year, I launched two ongoing classes on Skillshare:

One is on the thinking necessary to invent and launch a new business

and the other is for marketers of all kinds.

I'm grateful to everyone who has posted a kind review, launched a useful new project or shared the course so far...

But mostly, I want to thank the people at Skillshare: the software does exactly what they promised, and they're kind and a delight to work with.

Yesterday, Typepad was assaulted by a DDOS attack that brought the service to its knees. The team there really rose to the occasion, communicated clearly and honestly and got this blog up and running quickly. I've had this blog hosted by them for a decade or so, and despite the cool kids telling me I have to move it, I like the fact that the software does just what they say and that they're kind and a delight to work with.

And finally, did you know that you can subscribe to this blog, for free, by email and RSS? The email is handled daily and flawlessly by Feedblitz. It does what it's supposed to, and Phil is kind and a pleasure to work with.

Sometimes, the biggest, flashiest, most annoying services aren't the best way to build something that works. I'm grateful to these organizations and those like them that show up regularly and make things work. Thanks.

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Easter and Passover Greetings

Featured

Weekly Address: President Obama Offers Easter and Passover Greetings

In this week's address, the President offers his warmest greetings as millions of Americans celebrate Easter this Sunday and recounts the Passover Seder he hosted at the White House earlier this week, joining Jewish families around the world in their celebration. The President looks forward to taking part with his family in the hope and joy of the Easter season and reminds all Americans, no matter their faith, of the common thread that binds us.

Click here to watch this week's Weekly Address.

Weekly Wrap Up

A Moment of Silence for Boston

On Tuesday, the President, along with some of his senior advisers, observed a moment of silence to mark the one-year anniversary of the Boston Marathon bombing.

On Wednesday, the President, Vice President, and the Secretary of Veterans' Affairs greeted the servicemen and women participating in the Wounded Warrior Project's Soldier Ride.

Before cheering on the Warriors, who will travel 58 miles from Washington, DC to Friendship, MD over four days, the President told the group and the crowd filled with members of the military and their families, "you inspire me with your courage, your resolve, your resilience, your tenacity, your optimism. It makes me proud to be your Commander-in-Chief.”

READ MORE

8 Million Americans

President Obama dropped by the White House Briefing Room yesterday to make a big announcement about the Affordable Care Act.

8 million Americans have signed up for private health insurance through the Marketplace. Yup, 8,000,000. And the ACA has helped millions more get covered: 3 million young adults gained coverage by being able to stay on their parents' plans, 3 million more people enrolled in Medicaid and the Children's Health Insurance Program, and 5 million people enrolled in plans outside the Marketplace. All in all, that's more than 19 million people getting covered -- not too shabby.

READ MORE

The @VP, on Instagram

Instagram just got better: The Office of the Vice President just joined the social network.

READ MORE

As always, to see even more of this week's events, watch this week's episode of West Wing Week:

WATCH NOW

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Seth's Blog : They're your words, choose them

They're your words, choose them

You've seen the signs:

ABSOLUTELY NO CREDIT CARDS.

NOT RESPONSIBLE FOR LOST OR STOLEN ITEMS.

BATHROOMS FOR PATRONS ONLY.

Guess what? There's no legal requirement that signs have to make you sound like a harsh jerk in order to carry weight or to inform the public.

To keep our prices as low as possible, we only accept cash. The good news is that there's an ATM next door.

Careful! We'd like to watch your stuff for you, but we're busy making coffee.

Our spotlessly clean restrooms are for our beloved customers only, so come on in and buy something! Also, there's a public bathroom in the library down the street.

In fact, you might find that when you speak clearly and with respect, you not only communicate more effectively, but people are less likely to blame you when something goes wrong.

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vineri, 18 aprilie 2014

Mish's Global Economic Trend Analysis

"Insatiable" Idiocy from the Economist on What to Do About Russia; Warmongers Can't Think

Posted: 18 Apr 2014 03:33 PM PDT

In "Insatiable" the Economist says "The cost of stopping the Russian bear now is high—but it will only get higher if the West does nothing".

Economist: Mr Putin has used the Ukrainian crisis to establish some dangerous precedents. He has claimed a duty to intervene to protect Russian-speakers wherever they are. He has staged a referendum and annexation, in defiance of Ukrainian law. And he has abrogated a commitment to respect Ukraine's borders, which Russia signed in 1994 when Ukraine gave up nuclear weapons. Throughout, Mr Putin has shown that truth and the law are whatever happens to suit him at the time.

Mish: What a bunch of one-sided hypocritical nonsense. The US and EU have shown the that truth and the law are whatever happens to suit them at the time. The US has a drone policy that has killed or injured thousands of innocent victims, including children. The US had no pretext for invading Iraq but did so anyway. Warmongers now sabre-rattle Iran. The EU removed elected leaders in Greece and Italy and replaced them with technocrats. The US fomented events in Ukraine by helping overthrow Viktor Yanukovych. President Ronald Reagan promised Russia NATO would stay away from Eastern Europe. Apparently it's OK for citizens to overthrow the elected government in Ukraine in violation of the constitution, but it's not OK for citizens in Crimea to do the same. Russia did not take a bite out of Ukraine as depicted by the Economist. Rather, a section of Ukraine voted overwhelmingly to return to Russia. Once again, I am not proposing two wrongs make a right, rather I am proposing this is none of our business.

Economist: The West needs to show Mr Putin that further action will be costly. So far, its rhetoric has marched far ahead of its willingness to act—only adding to the aura of weakness. Not enough is at stake in Ukraine to risk war with a nuclear-armed Russia. And European voters will not put up with gas shortages, so an embargo is not plausible. But the West has other cards to play. One is military. NATO should announce that it will hold exercises in central and eastern Europe, strengthen air and cyber defences there and immediately send some troops, missiles and aircraft to the Baltics and Poland. NATO members should pledge to increase military spending.

Economist: Another card is sanctions, so far imposed on only a few people close to Mr Putin. It is time for a broad visa ban on powerful Russians and their families. France should cancel the sale of warships to Russia. A more devastating punishment would be to cut Russia off from dollars, euros and sterling. Such financial sanctions, like those that led Iran to negotiate over its nuclear programme, would deprive Russia of revenues from oil and gas exports, priced in dollars, and force it to draw on reserves to pay for most of its imports. They would be costly to the West, especially the City of London, but worth it. Impose them now, and give Mr Putin reason to pause. Do any less and the price next time will be even higher.

Not Our Battle

For starters, this is not our battle. Moreover, Europe is tired of our heavy meddling in it. (see European Countries Resent US Hectoring Tone).

If Crimea prefers to associate with Russia rather than the Ukraine, it is absolutely none of our business. Let the people involved, sort it out for themselves.

Warmongers Can't Think

France cutting off military sales to Russia would hurt France and help Russia - No one needs any more military junk. Pray tell tell what does Russia need warships for? Indeed, the idea is so silly, Russia should cancel the orders right now.

Putting missiles in Poland and Baltics is counterproductive. Precisely what problem would that address?

Here's the irony: The Economist says "Not enough is at stake in Ukraine to risk war with a nuclear-armed Russia." OK. Then what are the missiles for?

At best, the proposal is waste of money all around. And who is going to pay for it?

Further proving that warmongers cannot think, The Economist notes "European voters will not put up with gas shortages, so an embargo is not plausible." Amusingly, the Economist then continues with proposals to cut Russia off from dollars, euros and sterling, as if Russia would not retaliate.

If extreme sanctions are put on Russia, then Russia will cut off all gas to Europe and likely default on all foreign denominated bonds.

How come idiots cannot see consequences of their proposals? Because they are idiots, that's why. No one wins from idiocy. Unfortunately, idiocy abounds.

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

Ukraine Accord Broken Already; Key Uninvited Group to Peace Party Doesn't Like the Deal; Reflections on Hubris

Posted: 18 Apr 2014 01:27 PM PDT

Immediately after the 4-player Ukraine accord announcement yesterday (See Ukraine Talks End in Accord; What About the Key Missing Player?) I commented ...

Lots of Questions

This accord raises more questions than answers.

Did anyone consult the separatists?
Who is going to enforce the agreement?
Is there a single voice, or even a small group of voices who can speak for the separatists?

If the separatists are acting on their own, then unless Russia or someone else can convince the separatists to lay down their arms, the accord may break down.

Separatists are the key players in this crisis, but it does not appear they were even invited to the table.

Ukraine Accord Broken Already

Here we are, one day later and the Financial Times reports Ukraine: The 'War Without War' that Rumbles On

In Geneva on Thursday the US, the EU, Russia and Ukraine agreed steps aimed at reducing the tensions. But that agreement is already in danger of unravelling as separatists in the big eastern city of Donetsk refuse to evacuate their headquarters. Any violence risks creating the pretext for a Russian invasion.

While the government in Kiev and much of the west stresses its desire to integrate with Europe, the east remains firmly anchored to Russia by language, culture and history. Many companies are also oriented eastward, above all those working in its Soviet-era agricultural, metallurgy, pipe-making and defence industries – all of strategic importance to Moscow.

"The Russian market is very important, especially for the older, heritage economy," says Gennadiy Chyzhykov, president of the Ukrainian Chamber of Commerce, who is from Donetsk, now capital of the self-styled "republic" where activists claim to lead the anti-Kiev protests. "We export mainly raw materials and semi-finished goods to Europe, but finished goods, including sweets, to Russia. They share our tastes."

Sentiment

Read that last paragraph above closely. Most of the people in Eastern Ukraine lean towards Russia.

Banning Russian broadcasts, or even forceful military action cannot change that sentiment. Indeed, it can only strengthen it.

Geneva Agreement Does Little to Counter Russian Military Threat

Also consider Geneva Agreement Does Little to Counter Russian Military Threat

Analysts said the fact that US, EU, Russian and Ukrainian foreign ministers managed to agree on a document at all was positive, at a meeting for which expectations had been low.

They agreed illegal armed groups should hand over their weapons, Ukraine should undertake reforms to give more powers to its regions, and a monitoring mission from the Organisation for Security and Cooperation in Europe would be stepped up.

But several steps are difficult to implement, or provide no guarantee that the situation in eastern Ukraine could not escalate. "The wording of the agreement is fine, but when I saw it I immediately thought, how can this actually happen?" said Oleksiy Haran, a Kiev-based political scientist who was visiting Donetsk on Friday.

Most importantly, Russia made no commitment to pull back thousands of troops it has massed on Ukraine's border. The groups which must agree to hand over their weapons, moreover, were not directly represented in Geneva.

Hubris

Please note the extreme hubris of the four parties that agreed to a solution without consulting the views, wishes, and demands of the key group: the separatists.

Addendum: Russia Moves Troops Back to Ukraine Border

Russia confirms that it moved troops back into the border area with Ukraine, according to this link I picked up from ZeroHedge: Russia confirms troops deployed near Ukraine

A Kremlin spokesman confirmed Friday that Russia has built up its military presence on the Ukrainian border, Agence France Presse reported, as the United States warned that Moscow would face tougher sanctions if it failed to abide by a new international deal on Ukraine.

"We have troops in different regions, and there are troops close to the Ukrainian border. Some are based there, others have been sent as reinforcements due to the situation in Ukraine," spokesman Dmitry Peskov told Rossiya 1 television, AFP reported.

In Washington, Susan Rice, President Barack Obama's national security adviser, was quoted by Reuters as saying that Moscow would face tougher sanctions if it failed to abide by a deal arrived in Geneva a day earlier that held the hope of defusing the stand-off in Ukraine.

She warned Moscow would also face sanctions if it moved to send Russian forces into eastern Ukraine. "Those costs and sanctions could include targeting very significant sectors of the Russian economy," Rice told reporters.

Earlier Friday, armed pro-Russian separatists in eastern Ukraine said they were not bound by the conditions of the international deal until the government in Kiev government quit.

Denis Pushilin, the head of the self-declared Donetsk People's Republic, was quoted by Reuters as telling journalists in the regional capital Donetsk that Russian foreign minister Sergei Lavrov "did not sign anything for us, he signed on behalf of the Russian Federation."

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

duminică, 20 aprilie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : "How do I get rid of the fear?"

"How do I get rid of the fear?"

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sâmbătă, 19 aprilie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : Saying 'thank you' in public, three times

Saying 'thank you' in public, three times

More Recent Articles

Easter and Passover Greetings

Seth's Blog : They're your words, choose them

They're your words, choose them

More Recent Articles

vineri, 18 aprilie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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