Central Perk

miercuri, 2 martie 2011

Behind the Scenes Video: The Motown Sound

Your Daily Snapshot for
Wednesday, March 2, 2011

Behind the Scenes Video: The Motown Sound

Go behind the scenes with John Legend during the production of "In Performance at the White House: The Motown Sound". This celebration at the White House brought together recording artists to perform classic Motown hits in the East Room.

Watch the video.

Seth's Blog : Jumping the line vs. opening the door

[You're getting this note because you subscribed to Seth Godin's blog.]

Jumping the line vs. opening the door

Every morning, the line of cars waiting to get onto the Hutchinson River Parkway exceeds 40. Of course, you don't have to patiently wait, you can drive down the center lane, passing all the civilized suckers and then, at the last moment, cut over.

Drivers hate this, and for good reason. The road is narrow, and your aggressive act didn't help anyone but you. You slowed down the cars in the lane behind you, and your selfish behavior merely made 40 other people wait.

This is a different act than the contribution someone makes when she sees that everyone is patiently waiting to enter a building through a single door. She walks past everyone and opens a second door. Now, with two doors open, things start moving again and she's certainly earned her place at the front of that second entrance.

Too often, we're persuaded that initiative and innovation and bypassing the status quo is some sort of line jumping, a selfish gaming of the zero sum game. Most of the time it's not. In fact, what you do when you solve an interesting problem is that you open a new door. Not only is that okay, I think it's actually a moral act.

Don't wait your turn if waiting your turn is leaving doors unopened.

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marți, 1 martie 2011

Mish's Global Economic Trend Analysis

Oil Prices are Double-Edged Sword; Peak Everything?
Collective Bargaining Bill Heads for Passage in Ohio
China Holdings of US Treasuries Revised Up 30%; An Unsustainable Model

Oil Prices are Double-Edged Sword; Peak Everything?

Posted: 01 Mar 2011 12:28 PM PST

Jeff Rubin, former Chief Economist at CIBC World Markets for twenty years, explains Soaring Oil Prices A Double-Edged Sword in the Middle East.

Why is the Arab world convulsing with social and political unrest when triple digit oil prices should be bringing enormous wealth to the region? The answer may be that the link between energy inputs and food prices suddenly makes soaring oil prices a double-edged sword in the world's largest food importing region.

Egyptians are about to find out that it is a lot easier to eradicate your local dictator than feeding your population. The crush of poverty is felt under the weight of a population of 80 million people who live in a country where average annual rainfall is less than two inches and where only 3% of the land is arable. Aside from a narrow strip along the life-sustaining Nile River, Egypt is basically an inhospitable desert.

Yet the population of Egypt has tripled to 80 million today from 27 million in the early 1960s. While the birth rate for an average Egyptian woman has fallen from six children to just over three, it still fuels more than 2% annual growth in the population. At this pace, Egypt's population will double to 160 million by 2050.

But the country is already importing 40% of its food supply and 60% of its grain. Even a brutally repressive regime like Hosni Mubarak's still spent 7% of the country's GDP on food and energy subsidies. Can a replacement regime afford to spend more?

Not likely, particularly when the country's oil production peaked in 1996 and has subsequently declined by 30%. Oil exports are down 50% thanks to strong demand for its subsidized fuel.

The problem facing Arab countries today is higher oil prices feed directly into higher food prices. While oil may be massively subsidized in the Middle East, it's not in major grain exporting countries such as Canada, Russia and Australia that Arab nations increasingly count on for their food supply.

From the diesel fuel that runs tractors and combines to the power needed to pump water through irrigation systems, modern agriculture is one of the most energy intensive industries. And the Middle East is the largest food importing region of the world. As the price of oil goes up, so does the price of food imports.

Egypt's problems feeding runaway population growth is not unique to the region.. They are in evidence throughout the Middle East given the masses now out in the streets in Libya, Algeria, Yemen, Jordan and Bahrain demanding regime change. Could Saudi Arabia be next?

Population growth in the Middle East is rapidly outstripping the carrying capacity of the land. Democratic reform may be what is on the protestors' lips but demographic reform is at the heart of the region's problems.

Oil and the End of Globalization

Jeff Rubin left his position at CIBC World Markets to write a book and promote his ideas.

I have not yet read Why Your World Is About To Get A Whole Lot Smaller , so I cannot specifically endorse it.

However, I can say that understanding the implications of peak oil and booming population growth in the Mid-East, India, and Asia, in conjunction with aging demographics in the Western economies and Japan are crucial to understanding major investment themes and world economic growth assumptions.

I have long held the position that perpetual 7 -10% growth assumptions for China are impossible because of peak oil constraints.

Yet China bulls persist. They see the growth, but not the fraud or the malinvestment it takes for China to achieve those growth estimates.
I talked about fraud in China as well as unsustainable growth on a number of occasions.

Here are a few links.

Speculation, Investment Scandals, Fraud, and China's Hard Landing; Miracle of Chinese High-Speed Rail will be Reduced to Dust; Peak Oil Doomsday Clock

Implosion of the China "Fabric City" Frenzy

10 Signs of Speculative Mania in China

Email from a Chinese on China's Real Estate Bubble

Peak Everything?

My friend BC writes ...

If one wants to identify a single underlying causal factor for "Peak Everything" and the global intractable structural effects flowing from it, population overshoot is it. However, population growth is the last taboo subject no one dares discuss because, frankly, there is only one highly unpalatable solution.

Peak Oil is increasingly a hot topic of late (the point of mass-social recognition is nearing, or here). Yet, peak oil exports from oil-producing countries is the next milestone to await, as these countries now face exploding populations of hungry young men in need of employment from domestic investment and efforts to prevent per capita output from collapsing.

Net energy returns per capita are already collapsing for many or most of these countries at or near peak oil production, with the oil they produce needed to supply not only the US and EU but the runaway growth of demand in China-Asia and increasingly their own populations.

In Egypt, per capita oil production has collapsed nearly 50% since '96, and 33% since 2000. A similar situation occurred in the US, except it took 25 years in the US compared to Egypt's 14.

At the current trend, assuming no increasing rate of deceleration, by '16-'22 Egypt's per capita oil production will have fallen 60-70%, which puts the country on course for certain collapse.

What we are seeing today with the uprising and overthrow of the Egyptian government is just the first phase of a collapse that will likely be replicated throughout North Africa, the Mid-East, Central Asia, and eventually to parts of India, China, Indonesia, and elsewhere in the world where population overshoot is now extreme and net energy per capita is falling or collapsing.

A little known fact is that Mexico's oil production is down 25-30% from the peak in '03-'04, which is an average rate of decline of 5.4%/yr. and 6.5%/yr. per capita. This translates into a 33% per capita decline in oil production in just 6 years, a rate of decline that actually exceeds Egypt's per capita rate of decline of oil production.

This rate of decline of production has cut Mexico's exports roughly by 35% since the export peak. At the trend rate of oil production and domestic consumption, Mexico could become a net oil importer as soon as '15-'18. And Mexico is the second-largest supplier of imported oil to the US behind Canada.

Consider, then, where per capita oil production, net energy, and GDP are headed in Mexico, and what it implies for countries of Central and parts of South America, as well as potential increasing immigration to the US from Mexico.

This is grim information to ponder, which should be no surprise why few want to address it.

Those are sobering thoughts indeed. History suggests massive conflicts if the above analysis is anywhere close to being correct.

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

Collective Bargaining Bill Heads for Passage in Ohio

Posted: 01 Mar 2011 09:13 AM PST

A collective bargaining bill is headed for vote today in Ohio. Unlike the bill in Wisconsin, the Ohio proposal will cover police and fire workers. Unfortunately it has been watered down a bit to gain needed support from several Republicans.

The New York Times reports Ohio Set to Vote on Ending Public Union Rights

The Ohio Senate is expected to consider a revised version of a bill to end collective bargaining on Tuesday, and union members gathering outside the Statehouse here Tuesday morning said they were bracing for the worst.

Unlike similar legislation in Wisconsin, which exempts police officers and firefighters, the Ohio bill includes them — and is controversial for that reason.

But Republicans say the legislation that seeks to eliminate long-held union prerogatives are part of broader austerity measures intended to reduce crippling budget deficits, of which public employee pensions have played a growing role.

In Wisconsin, the political divide was expected to only widen on Tuesday as Gov. Scott Walker prepared to announce his budget proposal, which is expected to cut $1 billion in aid to local government over two years.

By early Tuesday, critics of Mr. Walker were already gathering, as they have for two weeks, outside the Capitol. Security was tight, and only some people were allowed to enter. Mr. Walker, a Republican whose proposal to cut collective bargaining rights for public workers and increase their pension and health care contributions has set off a firestorm here, will present his budget in the state Assembly chambers. Some Democrats were already predicting that the cuts in his new budget might lead to still more protests, more disagreement, more of a split in this state's Republican-dominated Capitol.

In his two-week-long standoff with Democrats and state employee unions, Mr. Walker has pressured 14 Democratic state senators, who have fled the state, to return to deal with what he says are important fiscal deadlines that would otherwise pass this week and harm the state.

But the Democrats are staying put, in Illinois, to avoid a quorum and thus stall a proposal by Mr. Walker that would strip public employee unions of nearly all their collective bargaining powers, allow publicly owned power plants to be sold with what critics say is little guarantee of fair value, and give the governor's appointees what public health advocates describe as expansive new powers to limit health care coverage for lower-income residents.

The NYT article failed to point out the details or recent compromises that have watered down the bill.

As originally proposed the bill effectively ended all collective bargaining rights for all public unions. Unfortunately that will not pass. A recent revision to gain key votes will allow bargaining for wages only, not benefits. It also places a no-strike clause.

This is not perfect. Perfect is getting rid of public unions entirely. However, it is a good start.

In Wisconsin, Governor Walker will begin laying off workers unless legislators playing hooky in Illinois return to Wisconsin to vote. It is good to see governor Walker hold firm.

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

China Holdings of US Treasuries Revised Up 30%; An Unsustainable Model

Posted: 28 Feb 2011 11:06 PM PST

Annual revisions released Monday show that China's holding of US treasuries is 30% greater than reported just weeks ago.

I am not surprised given that persistent rumors of China dumping treasuries made little mathematical sense from a balance of trade standpoint. Instead, I suggested China was accumulating treasuries via trading desks in the UK. We now see that is precisely the case.

Please consider China's holdings of US debt jump 30 percent

China, the biggest buyer of U.S. Treasury securities, owns a lot more than previously estimated.

In an annual revision of the figures, the Treasury Department said Monday that China's holdings totaled $1.16 trillion at the end of December. That was an increase of 30 percent from an estimate the government made two weeks ago.

China was firmly in the top spot as the largest foreign holder of U.S. Treasury debt even before the revisions. But the big increase in Chinese holdings could ease fears that Chinese investors might begin dumping their U.S. holdings. Such a development could send U.S. interest rates rising. That would slow America's economic recovery and increase Washington's costs for financing the $14.3 trillion national debt.

China and Britain were the countries with the biggest revisions in the new report.

The amount of U.S. Treasury securities held by Britain fell to $272.1 billion in the new report. That's a drop of $269.2 billion from the last monthly report which put the Britain's holdings of U.S. debt at $541.3 billion. The holdings of the two countries often show big revisions when the annual report is released.

The reason for the change is that Chinese investors who purchase their Treasury securities in London are often counted as British investors. The more detailed annual report does a better job of tracking the countries in which investors reside as opposed to the location where investors make their purchases.

Even with the revision, Britain remained the third largest holder of U.S. Treasurys.

Japan had the second highest foreign holdings, totaling $882.3 billion at the end of December. The revision was only slightly below the original estimate.

The total foreign holdings of Treasury debt stood at $4.44 trillion at the end of December, according to the new report. That's up 1.5 percent from the estimate made two weeks ago. About two-thirds of U.S. Treasurys owned overseas are held by foreign governments and central banks.

Thoughts on Dumping Treasuries

Please note the comment in the article: "The big increase in Chinese holdings could ease fears that Chinese investors might begin dumping their U.S. holdings. Such a development could send U.S. interest rates rising. That would slow America's economic recovery and increase Washington's costs for financing the $14.3 trillion national debt."

The odds of China dumping US treasuries are tiny. The last thing China wants to do is put massive upward pressure on the Yuan, and dumping treasuries would likely do just that.

Moreover, please consider the basic math. The US runs a trade deficit, so other countries accumulate dollars. For more on the essential math, please see US Dollar About to Lose Reserve Currency Status - Fact or Fantasy?

Given that dollars held by foreign central banks earn no interest, governments buy other US assets instead, notably US treasuries. Last year China's bought massive amounts of US treasuries via UK banks or brokers.

Unsustainable Model

Although it is relatively easy to explain what is happening and why, it's also important to know the existing global currency hegemony will eventually collapse because the current model is unsustainable.

Countries cannot run massive deficits forever.

However, a global currency crisis does not necessarily start with the US dollar, nor does a crisis necessarily happen any time soon. A major crisis starting with the Euro, the Yen, the British Pound, or the Yuan is at least as likely, and the timeframe can be months or years away.

Whenever it happens, don't be caught without gold.

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

Damn Cool Pics

Drug Submarine Seized by Colombian Navy
Mission Impossible Squirrel
The Magic Roundabout
The Cost of Valentines (Infographic)
75 Incredible "Looking Into The Past" Pictures

Drug Submarine Seized by Colombian Navy

Posted: 16 Feb 2011 10:49 AM PST

This submarine capable of transporting eight tons of cocaine from Columbia to Mexico was seized by the Colombian Army. The submersible is 100 ft. (30 m) long and can travel completely submerged, which makes it practically undetectable. It was located on the southwestern coast of the Colombian Pacific Ocean.

Mission Impossible Squirrel

Posted: 15 Feb 2011 04:17 PM PST

This takes place in England – the owners of the yard added each piece of the Rube Goldberg contraption slowly so that when the squirrel learned one section and got the nuts, they then added the next section.

Finally it ended with what you see on the clip! It took over 2 weeks to get to this point.

The Magic Roundabout

Posted: 15 Feb 2011 01:28 PM PST

The Magic Roundabout in Swindon, England was constructed in 1972 and consists of five mini-roundabouts arranged in a circle. It is located near the County Ground, home of Swindon Town F.C. Its name comes from the popular children's television series The Magic Roundabout. In 2009 it was voted the fourth scariest junction in Britain.

It may be saying something negative about the town if its most notable feature is a traffic junction, but the Magic Roundabout is truly a wonder of the world. And by "wonder" I don't mean "wow" I mean "I wonder why they built such a stupidly complex junction".

You see, the Magic Roundabout is in fact 5 small roundabouts surrounding one large centre roundabout. For the benefit of our non-British visitors I shall do my very best to explain.

In the U.K. we drive on the left hand side of the road, so on approach to a roundabout you give way to traffic coming from the right hand side. You then go clockwise around the roundabout, exiting where you see fit.

The Magic Roundabout complicates matters in that the moment you leave one roundabout you are at the junction of another. So, by aiming right on each roundabout you would actually traverse the central roundabout in an anti-clockwise manner. At least that's the idea.

The Cost of Valentines (Infographic)

Posted: 15 Feb 2011 01:02 PM PST

How do we love Valentine's day? Let us count the ways.
In total, Americans spend approx. $13 billion per year on Valentine's day. 63% of consumers celebrate Valentine's day. On average, each one will spend $120 on Valentine's day gifts. Men spend twice as much as woman.

More Infographics.

Click to Enlarge.

Source: onlineaccountingdegree

75 Incredible "Looking Into The Past" Pictures

Posted: 14 Feb 2011 06:22 PM PST

Imagine how drastic your landscape would be if you altered just one aspect of it. These fascinating pictures merge the past with the present with very impressive results. The contrast in the photos will make you appreciate just how much progress we've made since back then.