vineri, 3 decembrie 2010

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Government Cyber Attacks Shut Down WikiLeaks Domain Name; Information Wars; Twitter to the Rescue

Posted: 03 Dec 2010 02:23 PM PST

WikiLeaks has moved its site twice already and now its domain name has been shut down because of massive cyber attacks.

In my opinion these coordinated attacks come from government agencies around the world who do not want to be embarrassed by WikiLeaks data. If it's not government agencies, then who is it?

Moreover, and by extension, governments (or whoever is doing this) could shut down any site via these same kind of massive coordinated cyber attacks. If I am correct, data gathered about the success or failure of these suppression efforts will feed into every military contingency plan in the world.

The first casualty of war is the truth, and what better way to shut off the truth than killing internet sites not to one's liking.

With that backdrop, please consider Cyber attack forces Wikileaks to change web address
Whistle-blowing website Wikileaks has been forced to change its web address after the company providing its domain name cut off service.

EveryDNS.net said it had terminated services because Wikileaks.org had come under massive cyber attacks.But Wikileaks has already reappeared using a Swiss web address.

The more of these sites there are, the more difficult it will be to shut Wikileaks down, security analyst Paul Mutton told the BBC.

In France, Industry Minister Eric Besson has called for a ban of Wikileaks on French servers.

In a statement on its website, EveryDNS.net said it had issued a 24-hour termination notice to Wikileaks which ended at 0300 GMT on 2 December.

It said the domain wikileaks.org had become the target of "multiple distributed denial of service (DDOS) attacks".

"These attacks have, and future attacks would, threaten the stability of the EveryDNS.net infrastructure, which enables access to almost 500,000 other websites," it said.

A site as controversial and savvy as Wikileaks has plenty up its sleeve, like the mysterious encrypted file labelled 'insurance', which is believed to have been posted on Bit Torrent and is rumoured to contain all the leaks.

Stephen Sackur will be hosting a special programme debating the effect of the leaks - Wikileaks: Open Secret at 1630GMT on BBC World News & 1930GMT on the BBC World Service
Does anyone seriously think this is not a case of too, little, to late? Moreover, the more governments try to prevent access, the more curious people will become about what is out there. Thus government suppression of data and the news stir that causes, may very well cause interest in WikiLeaks to soar.

I suspect the vast majority of the world's population had no interest in WikiLeaks before, but they might now.

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


Explaining last Month's Jobs Upside Surprise and this Month's Downside Surprise

Posted: 03 Dec 2010 12:18 PM PST

One reason economists are frequently surprise is they have a tendency to extrapolate every economic uptick perpetually into the future yet they seldom do the same for negative news.

I have no idea why this is so, but history certainly suggests that it is so.

Last month, economists were giddy over retail hiring but I commented several times that I did not think it was sustainable. Today Calculated Risk has a very nice chart that shows that to be the case.



It's easier to see what is happening if you unstack the chart. I did not go back to the actual data but I did move the bars around.

Holiday Season Hiring Unstacked



Looked this way, last months seasonal hiring was not that great. I discussed this on November 15, in In Search of 1.1 Million Jobs Claimed by Obama; Where the Hell are They?
151,000 Jobs In October? Really?

Inquiring minds just might be wondering how we created 151,000 jobs in October. As it turns out, about 100,000 of them was a seasonal adjustment, and I am not even talking about the much maligned BLS Birth-Death Model that 10 months out of 12 presumes the economy added jobs that no once can see.

I am talking about regular "seasonal adjustment" factors, and last month was a doozie.

The latest issue of Barrons discusses the The magic of seasonal adjustment.
THE JOBS REPORT FOR OCTOBER was released by the Bureau of Labor Statistics on Friday, and at first blush was surprisingly strong, much stronger, indeed, than expected. Payrolls expanded by 151,000 and the two previous months' were revised upward. But hold the hurrahs.

Happily, the always astute Stephanie Pomboy of MacroMavens provided a quickie explanation:

"The seasonal bar which the payroll data must jump was (inexplicably and dramatically) lowered from prior Octobers."

Thus in October 2009, the BLS set the bar at 870,000 jobs, similar to the 840,000 it anticipated in October 2008. This year, by contrast, it lowered the bar to 768,000. Mumbo, jumbo, payrolls presented "an upside surprise" of 100,000.
In the Nick of Time

Ignoring 2008, November seasonal hiring was the was the worst going back to 1993 or so. October beats 2002 but only because retailers started seasonal promotions earlier. Hooray.

Inexplicably, the BLS dropped the bar for October seasonal adjustments. This month we see the opposite effect, just in the nick-of-time I might add, to allow this lame-duck Congress time to reconsider extending unemployment benefits.

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


"Economics 101" Video Exposes Keynesian Consumer Spending Fallacy

Posted: 03 Dec 2010 10:34 AM PST

A Center for Freedom and Prosperity Foundation "Economics 101" Video Exposes Keynesian Consumer Spending Fallacy.
"Keynesian stimulus schemes failed under Bush and now they are failing under Obama" said CF&P Foundation President Andrew Quinlan. "This new video hopefully will prevent similar mistakes in the future by helping people understand the importance of growth rather than redistribution."

"Keynesian policy is based on the fallacy that you can become richer by taking money out of one pocket and putting it another pocket, but this is a zero-sum game that appeals to statists and other redistributionists," added Dan Mitchell of the Cato Institute. "Real economic growth occurs when we figure out ways to increase national income, which is why good policy means reducing the burden of government."

Video Summary

Politicians and journalists who fixate on consumer spending are putting the cart before the horse. Consumer spending generally is a consequence of growth, not the cause of growth. This Center for Freedom and Prosperity video helps explain how to achieve more prosperity by looking at the differences between gross domestic product and gross domestic income.

This new video is part of CF&P's Economics 101 video series, which is designed to explain free market concepts, with particular emphasis on reaching students and young people. This is the tenth video in the series.



Other Econ 101 Videos
Mini-Documentaries
Inquiring minds will want to check out some of those videos.

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


After All the Hype, Jobs Up an Anemic 39,000; Unemployment Rises to 9.8%; Quicksand of Stimulus

Posted: 03 Dec 2010 06:56 AM PST

Today the BLS reports that jobs gained a mere 39,000 and the unemployment rate shot up to 9.8%, the highest rate since April.

Private payrolls gained a mere 50,000 compared to expectations of +160,000. Both jobs and the unemployment rate were worse than every single economist estimate which has me noting once again that economists as a group are sure one optimistic lot.

Check out these Grim Job Details courtesy of Bloomberg.
  • Payrolls increased 39,000, less than the most pessimistic projection of economists surveyed by Bloomberg News, after a revised 172,000 increase the prior month, Labor Department figures showed today in Washington.
  • The jobless rate rose to 9.8 percent, the highest since April, while hours worked and earnings stagnated.
  • The unemployment rate was forecast to hold at 9.6 percent, according to the median prediction of 83 economists surveyed by Bloomberg. Estimates ranged from 9.4 percent to 9.7 percent.
  • Overall payrolls were forecast to climb by 150,000, according to the survey median, with estimates ranging from 75,000 to 200,000.
  • Manufacturing payrolls dropped by 13,000 in November, the most in three months. Economists had projected an increase of 5,000.
  • The report also showed an increase in the number of long- term unemployed Americans. The number of people unemployed for 27 weeks or more increased as a percentage of all jobless, to 41.9 percent, the highest since August.
Serious Headwinds in 2011

Two days ago in Challenger Reports Planned Layoffs Highest in 8 Months; ADP Reports Strongest Job Gains in 3 Years; Impact of State Budget Deficits on Jobs I took "the under", guessing the jobs report would disappoint, but admittedly I did so without much conviction.
I don't know what Friday's job number will show, (I am actually slightly inclined to take the under), but regardless of how strong the number is, it would be a serious mistake to extrapolate job growth we see now throughout 2011.
If you missed it, please click on the above link for a detailed list of "headwinds".

Over the past half-year I have held to my position that the highs in unemployment rate are not yet in, and I certainly see no reason to back down from that cal today. We are a mere .3% from matching the high.

BLS November Report

Please consider the Bureau of Labor Statistics (BLS) November 2010 Employment Report.

The unemployment rate edged up to 9.8 percent in November, and nonfarm payroll employment was little changed (+39,000), the U.S. Bureau of Labor Statistics reported today. Temporary help services and health care continued to add jobs over the month, while employment fell in retail trade. Employment in most major industries changed little in November.

Unemployment Rate - Seasonally Adjusted


Bear in mind, were it not for millions of people allegedly dropping out of the labor force over the last year, the unemployment rate would be over 11% right now.

Nonfarm Payroll Employment - Seasonally Adjusted


Note the effect of temporary census hiring earlier this year. For all the hype about the improving economy, there has only been one decent jobs report all year. It was last month, and no doubt influenced by heavier than normal retail seasonal (temporary) hiring.

Establishment Data



click on chart for sharper image

Highlights

  • +39,000 jobs
  • -5,000 construction jobs
  • -13,000 manufacturing jobs
  • +65,000 service providing jobs
  • -28,100 retail trade jobs
  • +53,000 professional and business services jobs
  • +30,000 education and health services jobs
  • +11,000 leisure and hospitality jobs
  • -11,000 government jobs
Note: some of the above categories overlap as shown in the preceding chart, so do not attempt to total them up.

Index of Aggregate Weekly Hours

Production and non-supervisory work hours fell by .1 to 33.5 hours. Average hourly earnings were flat at $19.19.

BLS Birth-Death Model Black Box

For those unfamiliar with the birth/death model, monthly jobs adjustments are made by the BLS based on economic assumptions about the birth and death of businesses (not individuals).

Birth Death Model Revisions 2009



click on chart for sharper image

Birth Death Model Revisions 2010



click on chart for sharper image

I am actually shocked to see birth-death adjustments not only back in the solar system, but also back on planet earth. I cannot recall the last negative number in any month but January or July.

Birth/Death Model Methodology

The big news in the BLS Birth/Death Model is the BLS is going to move to quarterly rather than annual adjustments.

Effective with the release of January 2011 data on February 4, 2011, the establishment survey will begin estimating net business birth/death adjustment factors on a quarterly basis, replacing the current practice of estimating the factors annually. This will allow the establishment survey to incorporate information from the Quarterly Census of Employment and Wages into the birth/death adjustment factors as soon as it becomes available and thereby improve the factors.

For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey

In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.

It is possible that the BLS model is now back in sync with the real world. Moreover, quarterly rather than annual adjustments can only help the process.

Please note that one cannot subtract or add birth death revisions to the reported totals and get a meaningful answer. One set of numbers is seasonally adjusted the other is not. In the black box the BLS combines the two coming out with a total. The Birth Death numbers influence the overall totals but the math is not as simple as it appears and the effect is nowhere near as big as it might logically appear at first glance.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Household Data
  • The number of unemployed persons was 15.1 million in November. The unemployment rate edged up to 9.8 percent; it was 9.6 percent in each of the prior 3 months.
  • The number of long-term unemployed (those jobless for 27 weeks and over) was little changed at 6.3 million and accounted for 41.9 percent of the unemployed.
  • The civilian labor force participation rate held at 64.5 percent in November, and the employment population ratio was essentially unchanged at 58.2 percent.
  • The number of persons employed part time for economic reasons was little changed over the month at 9.0 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
  • About 2.5 million persons were marginally attached to the labor force in November, up from 2.3 million a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
In January 2010 the number of people working part time for economic reason was 8.3 million. 11 months later the total has gone up by 700,000.

Table A-8 Part Time Status



click on chart for sharper image

There are now 8,972,000 workers whose hours may rise before those companies start hiring more workers, about where we were a year ago. The number is down from last month but massively higher than the reported 8,300,000 reported in January.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.



click on chart for sharper image

Grim Statistics

The official unemployment rate is 9.8%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

It reflects how unemployment feels to the average Joe on the street. While the "official" unemployment rate has held steady, at an unacceptable 9.8%, U-6 is much higher at 17.0%

Recap and Reflections

41.9% of unemployed have been out of work for 27 weeks or longer, 59% have been out of work 15 weeks or longer.

The stock market is higher, but things are not improving, at least in the real economy. The stock market is up, because profits are up. Profits are up because of unsustainable stimulus spending, and because corporations are not hiring.

Moreover, China and India are overheating, and Europe is in shambles.

Looking ahead, there is no driver for jobs. States are in forced cutback mode on account of shrinking revenues and unfunded pension obligations. Shrinking government jobs and benefits at the state and local level is a much needed adjustment. However, those state and local government cutbacks will weigh on employment and consumer spending for quite some time.

Keep in mind that huge cuts in public sector jobs and benefits at the city, county, and state level are on the way. These are badly needed adjustments. However, economists will not see it that way, nor will the politicians.

Last month I said "Retail hiring is not sustainable. Nor is the rise in manufacturing. We might see a few more months of this (or not), but this is highly unlikely to be the start of something big or sustainable. I still expect to see the unemployment rate back up above 10% in this cycle. While today's report may not be as good as it gets, it certainly is close to as good as it gets on a sustainable basis."

The "or not" has arrived already. Perhaps we see good December and January numbers, but apparel sales are not going to drive the economy as noted in yesterday's post SpendingPulse: Retail Sales Led by Apparel, Consumer Electronics and Appliances Down

Quicksand of Stimulus

Courtesy of the Greenspan and Bernanke Fed, we threw the biggest housing party in history. This is the payback. No one in mainstream media will say it but I will: There is much more pain to come, and highly likely in the stock market as well. Solid recoveries are not built on the quicksand of stimulus.

Sticking with a message I said on August 18, 2009 "Expect to see the unemployment rate structurally high for a decade."

Addendum:

Please click on this link for further Explanation of last Month's Jobs Upside Surprise and this Month's Downside Surprise

Also consider 6 Million Benefit-Paying Jobs Vanish in One Year!

Things are much worse than this administration would have you believe.

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


Damn Cool Pics

Damn Cool Pics


Snow Foxes

Posted: 03 Dec 2010 03:42 AM PST

Filmed in a South London garden. Music: Always Breathe by Airport 85.


Pretty Policewoman in Different Countries - Part 2

Posted: 03 Dec 2010 02:49 AM PST

Everyone can think what they want but girls in uniforms with guns - hawtenss ;-)

So here's a set of pictures with lady cops around the world.

Previous Part:
Pretty Policewoman in Different Countries

Austria


Poland






Iraq


Japan


Iran


Malaysia


Netherlands


Singapore


Peru


Pakistan


Israel


England




Chile




China




Dominican Republic


India


Jordan


Norway


South Korea


Philippines


Republic of Yemen


Sweden


Taiwan


U.S.


The Republic of Nicaragua


North Korea


Lithuania


Indonesia


Romania


Hungary


Finland


Cuba


Cyprus


Republic of Zambia


Kuwait


France


Serbia


Algeria


The Republic of Singapore


Canada


Germany


Iceland


Colombia


Egypt


Italy


Ukraine


Russia



Night Clubs in China

Posted: 03 Dec 2010 01:53 AM PST

China has changed a lot in the last 20 years. Even night life in the large Chinese cities doesn't look much different from the night life in the Wesern countries.
























































Australian Man Marries His Dog

Posted: 03 Dec 2010 01:34 AM PST

An Australian man named Joseph Guiso married his five-year-old Labrador named Honey in the city of Toowoomba yesterday evening. He clarified to close friends and family in attendance that "it's not sexual, it's just pure love."


































Source: thechronicle

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10 Exotic Condom Flavors

Posted: 03 Dec 2010 01:13 AM PST

I had no idea about the most of these flavors. Garlic? Must be a joke.

Garlic


Aloe


Coffee


Durian


Menthol


Meron Juice


Paan


Ordinary


Scotch


Vegan Vanilla


Top 10 Most Expensive Cities to Live in 2010 (Infographic)

Posted: 03 Dec 2010 01:10 AM PST

While it is easy to complain about the cost of living in our own backyards, and lament the times when your dollars went further and your cents actually bought something, your home country may not even be in the top 10 cities that are the most expensive in which to live.

More Infographics.

Click to Enlarge.


Source: homeloanfinder