Central Perk

luni, 4 iulie 2011

Honoring their service with ours


	Good morning, This Independence Day, I hope you’ll join me and my family in recognizing both our brave men and women in uniform and their families for everything they do to protect our country and our way of life. We know that when our troops are called to serve, their families serve right along with them. For military kids, that means stepping up to help with the housework and putting on a brave face through all those missed holidays, bedtimes and ballet recitals. For military spouses, it means pulling double-duty, doing the work of both parents, often while juggling a full-time job or trying to get an education. That’s why, a few months ago, Dr. Jill Biden and I started Joining Forces, a nationwide campaign to recognize, honor, and serve our military families. Our troops give so much to this country and they ask us for just one thing in return: to take care of their families while they’re gone. So we’ve put out a call to action. We’re urging all Americans to ask themselves one question: What can I do to give back to these families that have given so much? To answer that question you can go to JoiningForces.gov and learn more about how you can get involved. And you can get started right now through Operation Honor Card by pledging to spend a certain number of hours serving military families in your community. Our motto for Joining Forces is very simple: Everyone can do something. We've met folks in every corner of the country who are stepping up and helping out in their own small ways in their neighborhoods and in their communities. They’re popping over to rake the leaves, or bringing a family a home-cooked meal, or offering to babysit. And I know that if we each do whatever we can, if we all join forces, we can show military families across this country that we have them in our hearts, we have them in our prayers, and we always have their backs. Happy Independence Day! Sincerely, First Lady Michelle Obama P.S. Today, my husband and I will welcome troops and their families from across the country to the White House for a special USO concert and a great view of the fireworks on the National Mall. You can watch the whole thing live on WhiteHouse.gov/live starting at 7 p.m. EDT.

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Seth's Blog : Give and get

Give and get

The stability, power and longevity of a tribe is directly related to the way it is treated by its members.

When many of them seek to take, to enrich themselves and to find a loophole or advantage, the group is weakened.

Culture and management are not the same thing--when we strengthen our organization, when we encourage and respect our fellow employees, management follows. Group up, not top down.

Society and government are not the same thing either. The tribe we get is the tribe we build.

I don't think we can abdicate our responsibilities within a tribe to the leader.

The opportunity is simple: the more each individual gives, the more each of us end up getting.

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duminică, 3 iulie 2011

Mish's Global Economic Trend Analysis

Case for a Balanced Budget Amendment; Charts of the Day: Transfer Payments (Medicare, Medicaid, Food Stamps, etc.) vs. Total Government Receipts

Posted: 03 Jul 2011 07:59 PM PDT

Inquiring minds are investigating Personal Transfer Receipts.

Personal current transfer receipts are benefits received by persons for which no current services are performed. They are payments by governments and businesses to individuals and nonprofit institutions serving individuals.

Personal Current Transfer Receipts Examples

Medicare
Medicaid
Food Stamps
Social Security
Unemployment Insurance

Personal Current Transfer Receipts

Note that transfer receipts are nearly $2.4 trillion.

Federal Government Receipts

Ratio of Personal Transfer Receipts to Federal Government Receipts

Notes

Nearly every dime of federal government receipts goes to personal transfer payments.
Between 1960 and 1970, personal transfer payments were 30-35% of federal government receipts.
From 1980-2000 the percentage fluctuated between 50% and 65%.
If (when) the economy slips back into recession personal transfer payments will exceed 100% of federal government receipts.

Given personal transfer receipts take up nearly 100% of federal government receipts, in theory, there should be no room for anything else, including wars, roads and bridges, and wages of federal employees.

Unfortunately, the government wastes money on wars, wastes money on bureaucracies that should not exist, and overpays on roads, bridges, and infrastructure (because of Davis-Bacon, collective bargaining, and prevailing wage laws).

The only way to remedy this is with an iron-clad, no-exceptions, balanced budget amendment.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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China Bought More Treasuries Than Disclosed, Perhaps Illegally; Nuclear Dollar Dumping Theory Revisited

Posted: 03 Jul 2011 07:42 AM PDT

Not only did China buy more treasuries than disclosed, it did so in violation of treasury auction rules.

When the Treasury Department revamped its rules for participating in government bond auctions two years ago, officials said they were simply modernizing outdated procedures.

The real reason for the change, a Reuters investigation has found, was more serious: The Treasury had concluded that China was buying much more in U.S. government debt than was being disclosed, potentially in violation of auction rules, and it wanted to bring those purchases into the open - all without ruffling feathers in Beijing.

Guaranteed Bid

The United States sells its debt to investors through auctions that are held weekly - sometimes four times per week - by the Treasury's Bureau of the Public Debt, in batches ranging from $13 billion to $35 billion at a time. Investors can buy the bonds directly from the Treasury at auctions, or through any of the 20 elite "primary dealers," Wall Street firms authorized to bid on behalf of customers. The Treasury limits the amount any single bidder can purchase to 35 percent of a given auction. Anyone who bought more than 35 percent of a particular batch of Treasury securities at a single auction would have a controlling stake in that batch.

By the beginning of 2009, China, which uses multiple firms to buy U.S. Treasuries, was regularly doing deals that had the effect of hiding billions of dollars of purchases in each auction, according to interviews with traders at primary dealers and documents viewed by Reuters.

Using a method of purchases known as "guaranteed bidding," China was forging gentleman's agreements with primary dealers to purchase a certain amount of Treasury securities on offer at an auction without being reported as bidders in that auction, according to the people interviewed. After setting the amount of Treasuries the guaranteed bidder wanted to buy, the dealer would then buy that amount in the auction, technically on its own behalf.

The practice kept the true size of China's holdings hidden from U.S. view, according to Treasury dealers interviewed, and may have allowed China at times to buy controlling stakes - more than 35 percent - in some of the securities the Treasury issued.

The Treasury department, too, came to believe that China was breaching the 35 percent limit, according to internal documents viewed by Reuters, though the documents do not indicate whether the Treasury was able to verify definitively that this occurred.

Guaranteed bidding wasn't illegal, but breaking the 35 percent limit would be. The Uniform Offering Circular - a document governing Treasury auctions - says anyone who wins more than 35 percent of a single auction will have his purchase reduced to the 35 percent limit. Those caught breaking auction rules can be barred from future auctions, and may be referred to the Securities and Exchange Commission or the Justice Department.

At the beginning of 2009, Treasury officials began discussing the issue of guaranteed bidders, with a focus on China's behavior, internal documents seen by Reuters show. The culmination of their efforts was a change to the Uniform Offering Circular published on June 1, 2009 that eliminated the provision allowing guaranteed bidding.

In the first auctions conducted after guaranteed bidding was banned, a key metric rose sharply: the percentage of so-called indirect bidders, those who placed their auction bids through primary dealers. Indirect bidders are seen as a proxy measure for foreign central bank buying, because foreign central banks most often bid through primary dealers. With the elimination of the guaranteed bidder provision, far more buyers were put in this class in reports to the Treasury Department.

Direct vs. Indirect Bidding Comparisons Invalid

As a result of the rule change, comparisons of direct and indirect bidding now to a few years ago are invalid. Foreign governments were buying more US debt before than they disclosed.

Sadly, the article perpetuated widely spread nonsense regarding China dumping of US debt:

"If the Chinese sold their Treasuries all at once, it could undermine U.S. markets and the economy by driving interest rates higher very quickly. Scenarios of this sort have been discussed in Washington defense-policy circles for at least a year now. Not knowing the full extent of these holdings would make it even more difficult to assess China's political leverage over U.S. finances."

The irony was China was buying more than disclosed, while the fear was otherwise. China can still be accumulating more US debt than disclosed via the secondary markets and possibly via foreign markets.

Secret Treasury Buying

Flashback January 21, 2011: China Secretly Buying US Treasuries Via UK Accounts? Trade Deficit Math; "Hot Money" Math

Floyd Norris at the Wall Street Journal thinks China May Be Masking Its Purchase of U.S. Securities

Who Is Buying US Debt?

Here are two charts from the graphic: Who Buys U.S. Debt?

China

Foreign Buyers and Sellers

Trade Deficit Math

The two charts above are not believable for a mathematical reason that Norris did not explicitly state: When the US runs a deficit, some other nation must (as a function of pure math) accumulate US assets. Those assets could be dollar reserves, treasuries, investments in US companies, US property, or US equities.

One humorous aspect of all this alleged selloff of US treasuries by China is the hyperinflationist rant "China is Dumping Treasuries" when the reality is that China is likely accumulating US dollars or US treasuries a function of trade deficit math.

My one quibble with Norris' article is his statement "If China has been buying through money managers, it may be easier at some point for it to begin selling Treasuries through the British channel without others understanding where the selling pressure is coming from."

While technically true, please remember the math. Were the US to start running trade surpluses with China, then China certainly would be an outright seller of treasuries or US$ reserves. How likely is that?

China's Treasury Holding Revised up 30%

On March 1, 2011, I noted China Holdings of US Treasuries Revised Up 30%

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.

Silly Rumors Surface Constantly

Nonetheless, rumors circulate consyantly that China is dumping treasuries or soon will dump treasuries causing soaring interest rates or hyperinflation in the US.

Nuclear Dumping Theory Revisited

For a detailed rebuttal to the silly "nuclear dumping" theory and belief China and Japan will refuse to buy US debt or hold US dollars, please see ...

Should China Dump Dollars for Commodities? What about the "Nuclear Option" of Dumping Treasuries? Can Global Trade Collapse?

Hyperinflation Nonsense in Multiple Places

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Seth's Blog : Bad poetry

Bad poetry

There's a lot of it.

One reason: it's easy to become a poet. Easy to announce you're a poet, easy to get a pencil and a paper, easy to publish your work online.

There's a lot of bad tweeting, bad marketing, bad facebooking, bad emailing and bad music now as well. No barrier certainly leads to a lack of selectivity.

Surprisingly, though, amid the bad art, we actually find more good art. A barrier to entry isn't the only thing that improves quality. Sometimes it's sufficient to let artists do their work without a gatekeeper.

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sâmbătă, 2 iulie 2011

Mish's Global Economic Trend Analysis

Union-Busting is a "Godsend"; Elimination of Collective Bargaining is the Single Best Thing one Can do for School Kids

Posted: 02 Jul 2011 08:25 PM PDT

Congratulations to Governor Scott Walker for sticking to his guns. The state of Wisconsin is far better off because of it. So are taxpayers. Most importantly, so are the school kids.

Please consider Union curbs rescue a Wisconsin school district

"This is a disaster," said Mark Miller, the Wisconsin Senate Democratic leader, in February after Republican Gov. Scott Walker proposed a budget bill that would curtail the collective bargaining powers of some public employees. Miller predicted catastrophe if the bill were to become law -- a charge repeated thousands of times by his fellow Democrats, union officials, and protesters in the streets.

Now the bill is law, and we have some very early evidence of how it is working. And for one beleaguered Wisconsin school district, it's a godsend, not a disaster.

The Kaukauna School District, in the Fox River Valley of Wisconsin near Appleton, has about 4,200 students and about 400 employees. It has struggled in recent times and this year faced a deficit of $400,000. But after the law went into effect, at 12:01 a.m. Wednesday, school officials put in place new policies they estimate will turn that $400,000 deficit into a $1.5 million surplus. And it's all because of the very provisions that union leaders predicted would be disastrous.

In the past, teachers and other staff at Kaukauna were required to pay 10 percent of the cost of their health insurance coverage and none of their pension costs. Now, they'll pay 12.6 percent of the cost of their coverage (still well below rates in much of the private sector) and also contribute 5.8 percent of salary to their pensions. The changes will save the school board an estimated $1.2 million this year, according to board President Todd Arnoldussen.

Of course, Wisconsin unions had offered to make benefit concessions during the budget fight. Wouldn't Kaukauna's money problems have been solved if Walker had just accepted those concessions and not demanded cutbacks in collective bargaining powers?

"The monetary part of it is not the entire issue," says Arnoldussen, a political independent who won a spot on the board in a nonpartisan election. Indeed, some of the most important improvements in Kaukauna's outlook are because of the new limits on collective bargaining.

In the past, Kaukauna's agreement with the teachers union required the school district to purchase health insurance coverage from something called WEA Trust -- a company created by the Wisconsin teachers union. "It was in the collective bargaining agreement that we could only negotiate with them," says Arnoldussen. "Well, you know what happens when you can only negotiate with one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.

Now, the collective bargaining agreement is gone, and the school district is free to shop around for coverage. And all of a sudden, WEA Trust has changed its position. "With these changes, the schools could go out for bids, and lo and behold, WEA Trust said, 'We can match the lowest bid,'" says Republican state Rep. Jim Steineke, who represents the area and supports the Walker changes. At least for the moment, Kaukauna is staying with WEA Trust, but saving substantial amounts of money.

Then there are work rules. "In the collective bargaining agreement, high school teachers only had to teach five periods a day, out of seven," says Arnoldussen. "Now, they're going to teach six." In addition, the collective bargaining agreement specified that teachers had to be in the school 37 1/2 hours a week. Now, it will be 40 hours.

The changes mean Kaukauna can reduce the size of its classes -- from 31 students to 26 students in high school and from 26 students to 23 students in elementary school. In addition, there will be more teacher time for one-on-one sessions with troubled students. Those changes would not have been possible without the much-maligned changes in collective bargaining.

A tip of the hat to the Washington Examiner for an excellent article.

Taxpayers are better off.
School kids are better off
Class sizes are down
Struggling school districts now have a budget surplus

Teachers' unions did not want this of course. Why? Because they are blatant liars that's why. There is not a damn thing unions do for kids. Every action by public unions is for public unions and no one else.

The results are in. Elimination of collective bargaining is one of the best things, if not the absolute best thing one can do for school kids. There is no other rational way of looking at this.

We need national right-to-work laws, elimination of prevailing wage laws, and the end of all public union collective bargaining as soon as possible.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Preposterous Statements - Jim Rogers: "No Food at Any Price"; Barton Biggs: " U.S. Needs Massive Infrastructure Program"

Posted: 02 Jul 2011 07:52 AM PDT

It does not help your case when you make absurd statements to support your views. All it does is damage your credibility. Here are a couple of completely unrelated viewpoints that will show what I mean.

"No Food at Any Price"

Speaking on food shortages, Jim Rogers says Global Agriculture Supply Worsening May Spur Food Shortages

The global agriculture supply situation has worsened and a failure to boost food production fast enough to meet demand may lead to shortages, said investor Jim Rogers, chairman of Rogers Holdings.

"We've got to do something or we're going to have no food at any price at times in the next few years," Rogers said in a Bloomberg Television interview with Rishaad Salamat today in Singapore. "I still own agriculture. If I found something to buy, I would buy it."

Rogers likes agriculture. Maybe he's right, and maybe not. However, the notion "We've got to do something or we're going to have no food at any price at times in the next few years" is one of the more blatantly absurd things regarding food shortages that I have ever heard.

US has record grain forecasts. Even if you do not believe those forecasts, the US is going to have a good crop. How does that translate to "no food"? The short answer is "it doesn't".

Many reported shortages are weather-related. Some "alleged" shortages are not shortages at all, but unavailability because of government price controls. The rest of the "shortage" problem is higher prices caused by speculation and/or rampant inflation in China and India.

The idea there will be no food at any price is absurd. There may not be food available at government mandated prices, but that is certainly not what Rogers said.

"U.S. Needs a Massive Public Works Program"

Barton Biggs Says U.S. Needs a Massive Public Works Program

Don't expect the economy to perk up any time soon.

The U.S. and Europe are set to grow at an anemic pace for the foreseeable future unless the government can step in with an enormous fiscal stimulus, according to a veteran investor.

Speaking exclusively with The Wall Street Journal, Barton Biggs, managing partner at multibillion dollar hedge fund Traxis Partners, painted a bleak outlook for the developed world with only huge government intervention likely to improve things.

On the final day of the Federal Reserve's bond-buying program, Mr. Biggs dismissed a further round of the so-called quantitative easing as a possible solution. It was meant to lower borrowing costs and simulate investment.

Instead, Mr. Biggs, former chief global strategist for U.S. investment banking powerhouse Morgan Stanley, demanded the U.S. government temporarily return to ideas used in the Great Depression as a way to get the country back to higher growth.

"What the U.S. really needs is a massive infrastructure program … similar to the WPA back in the 1930s," he says.

He suggested financing such building through the sale of U.S. Treasuries.

Failure of Japan

It amazes me that apparently bright people can neither think nor see. Biggs is proposing the same medicine Japan tried. Where did it leave Japan? After 20 years of infrastructure projects, Japan has government debt to the tune of 200% of GDP and is still mired in deflation.

Looking Down the Road

Demographics and debt levels now are both far more precarious than they were in the 30's and 40's. Worse yet, Davis-Bacon and prevailing wage laws guarantee government will overpay for what it gets.

What if we tried the idea anyway? What if we fixed everything in 5 years?

The economy would boom for 5 years, then what? How would the US pay back that debt? What would happen to jobs the moment the projects finished? How would our children and grandchildren pay back that debt?

No Painless Solution, No Free Lunch

The very last thing the US needs is a massive infrastructure program paid for via the printing presses. Instead, we need to cut military spending, scrap Davis-Bacon, scrap prevailing wage laws, get rid of government workers, reduce public worker pensions, and get the budget in shape before the US becomes the next Greece.

Will that cause pain? Of course it will. However, Biggs wants a free lunch. If printing money solved problems, Zimbabwe would be the wealthiest nation on the planet.

Biggs Cannot See, Hear, Think

It would help if Biggs could look at Greece, or Spain, or Portugal, or Ireland. Those countries show what happens when debt gets excessive and the bond market takes matters into its own hands.

The logical conclusion is Biggs is cannot see, hear, or think.

Perhaps Biggs is simply talking his short-term book with complete disregard to what his proposal would do to our children and grandchildren, so that he could have one last party.

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

Damn Cool Pics

Bulldog Surfs, Snowboards and Skateboards
Real Names of Cartoon Characters
Velocommerce in India

Bulldog Surfs, Snowboards and Skateboards

Posted: 01 Jul 2011 09:52 PM PDT

This extreme bulldog doesn't care where it goes down, if it involves a board he's ready to shred.

Real Names of Cartoon Characters

Posted: 01 Jul 2011 08:56 PM PDT

Think Comic Book Guy from the Simpsons doesn't have a real name? Think again. Here's a great list of little-known real names for a number of classic cartoon characters.

Scoobert Doo

Sid

Captain Horatio Magellan Crunch

Woody Pride

Kitty White

Edward Bear

Eleanor Abernathy

Jeff Albertson

Barbara Millicent Roberts

Wally

Aloysius Snuffleupagus

John A. Zoidberg

Patricia Reichardt

Gordon Shumway

Milburn Pennybags

Prince Adam

Veritably Clean

Tweety Pie

Ted Shackleford

Poppin' Fresh

Penelope Pussycat

Norville Rogers

Miles Prower

Casper McFadden

Arnold Shortman

Source: buzzfeed

Velocommerce in India

Posted: 01 Jul 2011 11:37 AM PDT

Velocommerce is commerce that is dependent on the bicycle (from the French word 'velo' referring to bicycle). India is a fantastic place to observe velocommerce in action.This project has opened our eyes to this crazy universe of activities, products, services, design, economy and humanity that is mobile using bicycles. The interesting thing about being on a bicycle is that it immediately frees you as an entrepreneur from the shackles of immovable real estate.