Central Perk

luni, 11 iulie 2011

Watch Live: Today at 11 a.m. EDT President Obama Holds a Press Conference

Your Daily Snapshot for
Monday, July 11, 2011

Watch Live: Today at 11 a.m. EDT President Obama Holds a Press Conference

At 11 a.m. EDT today, President Obama will speak on the status of efforts to find a balanced approach to deficit reduction.

Watch it live at WhiteHouse.gov/live.

President Barack Obama meets with Congressional Leadership in the Cabinet Room of the White House to discuss the ongoing efforts to find a balanced approach to the debt limit and deficit reduction, Sunday, July 10, 2011. House Speaker John Boehner, left, and Senate Majority Leader Harry Reid are pictured with the President. (Official White House Photo by Samantha Appleton)

In Case You Missed It

Here are some of the top stories from the White House blog.

Watch Live: President Obama Holds a Press Conference Today at 11:00 a.m. EDT
President Obama meets with Congressional Leadership in the Cabinet Room of the White House as part of ongoing negotiations to find a balanced approach to the debt limit and deficit reduction.

South Sudan's Moment of Promise
Check out our special edition of West Wing Week that takes you behind the scenes of the referendum that led to the celebration of an independent South Sudan and President Obama's statement about this important day.

President Obama on the Passing of Elizabeth Anne Ford
President Obama and Vice President Biden release statements on the passing of former First Lady Elizabeth Anne Ford.

Today's Schedule

All times are Eastern Daylight Time (EDT).

11:00 AM: The President holds a news conference on the status of efforts to find a balanced approach to deficit reduction

12:00 PM: The President and the Vice President receive the Presidential Daily Briefing

2:00 PM: The President and the Vice President meet with Congressional Leadership

Indicates events that will be live streamed on WhiteHouse.Gov/Live

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Seth's Blog : Waiting for the fear to subside

Waiting for the fear to subside

There are two problems with this strategy:

A. By the time the fear subsides, it will be too late. By the time you're not afraid of what you were planning to start/say/do, someone else will have already done it, it will already be said or it will be irrelevant. The reason you're afraid is that there's leverage here, something might happen. Which is exactly the signal you're looking for.

B. The fear certainly helps you do it better. The fear-less one might sleep better, but sleeping well doesn't always lead to your best work. The fear can be your compass, it can set you on the right path and actually improve the quality of what you do.

Listen to your fear but don't obey it.

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duminică, 10 iulie 2011

Mish's Global Economic Trend Analysis

Republicans Likely Blew It

Posted: 10 Jul 2011 08:02 PM PDT

On Friday, Boehner announced there was a 50-50 chance of a major budget deal. On Saturday the picture changed dramatically as Boehner abandoned efforts to reach comprehensive debt-reduction deal.

House Speaker John A. Boehner abandoned efforts Saturday night to cut a far-reaching debt-reduction deal, telling President Obama that a more modest package offers the only politically realistic path to avoiding a default on the mounting national debt.

On the eve of a critical White House summit on the debt issue, Boehner (R-Ohio) told Obama that their plan to "go big," in the speaker's words, and forge a compromise that would save more than $4 trillion over the next decade, was crumbling under Obama's insistence on significant new tax revenue.

I do not know what "significant" means because on Friday Boehner had agreed to some revenue increasing measures.

Sunday Debt Talks Abruptly Abandoned

There was supposed to be 5 hours of negotiation today. Instead it made it to the 90 minute mark, at most. MarketWatch reports U.S. debt talks break up early, to resume Monday.

A closely watched meeting between congressional leaders and President Barack Obama to resolve the impasse over the U.S. debt ceiling ended Sunday far more quickly than expected, with no immediate word of progress, according to reports.

The meeting had been projected to last four or five hours, Reuters reported, but subsequent news accounts said the parties met for between 75 and 90 minutes.

Obama Sets 10-Day Deadline, Will Address the Nation

Yahooo Finance reports Obama: 'We need to' work out debt deal in 10 days

Grasping for a deal on the nation's debt, President Barack Obama and congressional leaders remained divided Sunday over the size and the components of a plan to reduce long term deficits. Saying "we need to" work out an agreement over the next 10 days, the president and lawmakers agreed to meet again Monday.

Obama also sought to use the power of his office to sway public opinion, scheduling a news conference for Monday morning, his second one in less than two weeks devoted primarily to the debt talks.

Officials familiar with the meeting said Obama pressed the eight House and Senate leaders Sunday evening to continue aiming for a massive $4 trillion deal for reducing the debt.

But there appeared to be little appetite for such an ambitious plan and the political price it would require to pass in Congress. Instead, House Speaker John Boehner told the group that a smaller package of about $2 trillion to $2.4 trillion was more realistic.

A Democratic official familiar with the session said House Majority Leader Eric Cantor, R-Va., was especially adamant that any deficit reduction package could not contain tax increases and that any new tax revenue would have to be used to pay for other tax benefits.

Obama and the congressional leaders met in the Cabinet Room of the White House for the rare Sunday session. Most appeared in casual Sunday clothes, with open-collared shirts underneath blazers.

When a reporter asked, "Can you work it out in 10 days, sir?" Obama replied, "We need to."

Earlier, White House Chief of Staff Bill Daley said in a television interview that Obama would not "walk away from a tough fight."

"Everyone agrees that a number around $4 trillion is the number that will ... make a serious dent in our deficit," he said.

Geithner cautioned that a package about half the size of the one Obama prefers would be equally tough to negotiate because it, too, could require hundreds of billions in new tax revenue -- anathema to Republicans. Lawmakers said that previous bipartisan talks, led by Vice President Joe Biden, identified a fraction of cuts that would be needed even for the more modest packages.

Even so, Boehner insisted the smaller proposals had more realistic chances of passing. One would call for about $2 trillion in deficit reductions, most accomplished through spending cuts that have been identified but not signed off on by the Biden group.

"I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase," Boehner said.

Disgusting Turn of Events

This turn of events is disgusting. A $2 trillion deal will do absolutely nothing to solve a long-term debt problem.

$2 trillion sounds significant but it is a scant $200 billion a year deal, probably back-loaded at that, while the deficit is $1.4 to $1.6 trillion.

$4 trillion is barely a down payment. Moreover (and again we do not know the details because they were private), but it has been reported that Obama agreed to substantial Medicare and Social Security changes.

This deal fell apart over "significant" revenue raising proposals. Pray tell what is significant? Again, this is a case of not knowing the details, but I do not consider $1 trillion over 10 years, very significant. It is a mere $100 billion a year.

I do not like tax hikes, but we are talking peanuts here. Moreover, Obama's proposal on Medicare and Social Security had Nancy Pelosi howling so loudly that Obama held a private meeting with her.

Anything that has Pelosi that upset, is probably a good deal. When will there be another chance to rein in Medicare?

Once again I am making assumptions because no one has yet revealed what was on the table, but from where I sit, (guessing at proposals), Republicans blew it.

How to Tell if the Deal is a Good One

I wish to emphasize what I said in Boehner says Chance of Budget Deal in Few Days "Maybe 50-50", NYT says Sides Still Far Apart; How to Tell if the Deal is a Good One

Budget Deficit Math

The budget deficit is somewhere between $1.4 and $1.6 trillion a year. Cutting $2 trillion over 10 years is not even a down payment for what needs to happen. Heck, $4 trillion is barely a reasonable down payment.

I much prefer a $4 trillion deal than a $2 trillion one. Then regardless of what the deal is, I would slash another $2 or $3 trillion over 10 years out of defense spending.

Any deal that hits $4 trillion probably will include some small tax hikes. So be it. The ratio of 3-to-1 or 3.5-to-1 budget cuts vs. tax hikes seems like a reasonable compromise to me.

Republicans should take the opportunity to slash $8 trillion ($800 billion a year) out of the deficit if Democrats are willing to stick to those ratios I mentioned.

How to Tell if the Deal is a Good One

The deal will not be a good one if it is all back loaded. Nor will it be a good deal if it cuts less than $4 trillion. We need huge cuts this year and every year forward, not back-loading that may never happen.

Slashing $400 billion would have Krugman whining. Slashing $800 billion would have Krugman and the Keynesian clowns howling like mad.

In general, the louder Krugman howls, the better the deal it will be.

Helping Cities, States, Municipalities

Unfortunately, what I proposed above does nothing for states. Cities, states and local governments need relief as well. The way to help cities and states is to kill collective bargaining for public unions and scrap Davis-Bacon.

Those two acts will lower costs, spur hiring, and reduce layoffs. Unfortunately, those actions do not appear to be under discussion.

Republicans Blew It

There are many things Republicans could have asked for in return for tax hikes. Among there are ending collective bargaining and scrapping Davis Bacon. Had they done that, Democrats may have walked out of the talks and not the other way around.

Instead, had Democrats agreed to my proposal, cities and states would be far better off and Republicans still would have had reductions in Medicare and Social Security in hand.

Thus, Republicans had a no-lose opportunity staring them in the face and kicked it down the drain for ideology that may come back to haunt them.

Three-Fourths of a loaf is better than no loaf at all. Unless there is a major turn of events, Republicans blew it.

Note: within a few minutes of posting I added the word "likely" to the title. We still do not know how this will end, but I do not like the looks of it now.

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

EU Calls Emergency Meeting on Italy; Don't Worry "It's a Coordination, Not a Crisis"; Short Sellers Blamed; Junckeritis Spreads

Posted: 10 Jul 2011 09:34 AM PDT

In case you missed it, the European debt crisis escalated in Portugal and spread to Italy last week. Here are a few articles if you missed them.

Italian Yields Hit 9-Year High, Spreads Record High vs. Germany; Italy's Finance Minister in Rent Scandal

Michael Pettis Warns of "Virulent Political Turn Against Euro", Adds Clarification to "Gold's Honest Discipline"

ECB Suspends Collateral Rules for Portuguese Debt, Hikes Rates .25; Trichet Says "No" to Selective Default, Market Yawns

In response, the EU does what it always does.

Blame Short Sellers
Declare an Emergency Meeting
Deny there is an Emergency Meeting

Don't Worry "It's a Coordination, Not a Crisis"

Taking an overdone play straight out of the Jean-Claude Juncker "lie when it gets serious" handbook, European Council President says "It's a coordination, not a crisis meeting."

That is all you need to know to determine a full blown crisis is underway in Italy.

Please consider EU calls emergency meeting as crisis stalks Italy

European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reflecting concern that the crisis could spread to Italy, the region's third largest economy.

European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region's finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.

Van Rompuy's spokesman Dirk De Backer said: "It's a coordination, not a crisis meeting." He added that Italy would not be on the agenda and declined to say what would be discussed.

Shares in Italy's biggest bank, Unicredit Spa, fell 7.9 percent on Friday, partly because of worries about the results of stress tests of the health of European banks that will be released on July 15. The leading Italian stock index sank 3.5 percent.

The market pressure is due partly to Italy's high sovereign debt and sluggish economy, but also to concern that Prime Minister Silvio Berlusconi may be trying to undermine and even push out Finance Minister Giulio Tremonti, who has promoted deep spending cuts to control the budget deficit.

"We can't go on for many more days like Friday," a senior ECB official said. "We're very worried about Italy."

Monday's emergency meeting will precede a previously scheduled gathering of the euro zone's 17 finance ministers to discuss how to secure a contribution of private sector investors to the second bailout of Greece, as well as the results of the stress tests of 91 European banks.

Italian Emergency "Coordination" Supersedes Emergency "Coordination" in Greece, Portugal, Spain

The first thing to do in any crisis, before there is time for further "coordination" is to blame short sellers and speculators for the crisis.

True to form, Italy Hurt by 'Irrational Speculation,' Hoyer Tells La Stampa

Italy was the victim of "irrational speculation" in the financial markets last week, German Deputy Foreign Minister Werner Hoyer told La Stampa, saying the country can balance the budget by 2014 and its banks are sound.

Finance Minister Giulio Tremonti "wants to have a balanced budget in 2014, an ambitious but fair goal," Hoyer told La Stampa. "For this reason, I can't see any excuse for irrational speculation of any kind."

Junckeritis Spreads

The proclamation from Hoyer that "Italian banks are sound" gives a strong indication of something most knew anyway: "They aren't."

Thus, it is all too obvious that Hoyer is inflicted with the highly-contagious Junckeritis virus, now rapidly spreading across the EU.

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

SEOmoz Daily SEO Blog

How Google+ Affected Social Shares and +1 Adoption Rates

Posted: 10 Jul 2011 04:41 AM PDT

Posted by dohertyjf

Google announced the +1 button in March much to the enthusiasm and confusion of webmasters and SEOs the world over. "What's the point?", people asked. "Why should I +1 a site? Should I implement it on my site?"

It seems the answer now is clear, with the launch of the Google+ "social experiment" last week that has kept me from getting work done as Google continues innovating and brilliantly drawing me back to Plus everytime that little notification indicator turns red.

I'm not here to talk about that though, because we've put together a bit of data for you today about +1 integration and social sharing statistics. This post originally was conceived by Tom Critchlow and I before Google+ was launched, so it has gone through some iterations.

We wanted to get outside of our typical SEO circles though and see how the general public is adopting the button. To keep things interesting, I also gathered some well-trafficked SEO sites and their social numbers. What I have done is gathered the Technorati Top 100 sites and their RSS feeds. Then I pulled their 20 most recent blog posts (both before and after Plus was announced) and grabbed their +1, Twitter, and Facebook share data thanks to an awesome script by Tom Anthony.

The data got interesting pretty quick. Here are our findings.

Technorati Top 100 Stats

Since we were interested to find the rate of +1 adoption by the Technorati Top 100, we pulled the numbers before Google+ was launched and after. I removed the Gawker sites since their RSS feed is all-encompassing and skewed the numbers terribly. Here are the numbers for the other 95 Technorati sites:

Technorati Top 100 +1 Stats

The numbers changed thus: Pre Google+, only 22 had implemented the +1 button. After the launch of Google+, that number increased to 25. 22 of the sites had +1s, but 8 of those sites did not have the +1 button implemented! These were predominately technology sites, which is no surprise, but also two LA Times blogs (The Opinionator and L.A. NOW) as well as entertainment site TMZ. Takeaway: If you own or have a client who owns a technology, opinion, or entertainment site, you should implement the +1 button.

Average +1s per article, Pre and Post Plus Launch

Average +1s Per Article

As you can see, the average number of +1s per article for the Top 100 almost doubled. The number of +1s per SEO article also increased by about 30%. It is not surprising that SEO sites have more +1s than the Technorati Top 100 on average, but the increase is especially interesting given the next two charts.

Average Facebook Shares per Article and Ratio of Plus to FB Shares

Here are the average shares from the Technorati sites as well as SEO sites:

We must note that the Facebook share numbers went down for the Technorati sites, but increased for the SEO sites. One possible explanation for the SEO sites is that SEOs were sharing Google+ news on Facebook, but this is simply a hunch and not proven. Here is the most interesting statistic I found, the ratio of +1s to Facebook shares on the Technorati sites:

The number was cut almost in half. Perhaps we could guess preliminarily that the launch of Google+ has adversely affected the amount of information shared on Facebook? With the rise of the number of +1s and the decrease in Facebook shares, as shown by the last graph, I think this could be a safe assumption, at least with this limited data set. This graph might also support this hypothesis:

This graph shows that before Google+ was launched, there were 2 Facebook shares for every tweet given to articles on the Technorati Top 100. Post Google+ the ratio is almost even, with tweets being more prevalent than Facebook shares!

What do we do with this data now?

There are certainly some takeaways from the data presented. There are certain niches where it makes sense for us as SEOs to encourage our clients to implement certain sharing features. On other sites, especially in dodgier or more regulated industries, social share buttons do not make as much sense. One of the most interesting bits of information that came out of the data was the number of sites that have +1s, but do not have the button implemented on their site.

10 Technorati sites without the button have +1s; and
all of the SEO sites I looked at have +1s, even though only 2/3 have implemented the button.

Based off these discoveries, I'd recommend that if you have an SEO site, it should have a +1 button. Even if +1s do not count for rankings at this point, they are displayed in the SERPs and therefore probably help with click-through rates. If +1s are used for rankings in the future, which I am not convinced of but still remains a possibility, then you will be one step ahead of the curve. Also, if you or a client has a site in one of these niches, you should probably have a +1 button on your site:

Technology
Opinion (Political or other)
Celebrity gossip

This discovery is also interesting because it means that people +1d these from the SERPs, which is something we all wondered how we would do, and more importantly if people would do it. It appears that people do. I think this discovery reinforces that we as webmasters/SEOs (we are often both, after all) need to find ways to track social engagement around our sites. If we see engagement, we need to encourage it. Google has recently helped us accomplish this goal by adding +1 tracking to Analytics.

I'd love to hear your thoughts. Oh, and you can Follow @dohertyjf if you want.

Happy Optimizing!

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Seth's Blog : When did you get old?

When did you get old?

At some point, most brands, organizations, countries and yes, people, start talking about themselves like they're old.

"We can't stretch in that direction," or "Not bad for a 60 year old!" or "I'm just not going to be able to learn this new technology." Even countries make decisions like this, often by default. Governments decide it's just too late to change.

The incredible truth is this: it never happens at the same time for everyone. It's not biologically ordained. It's a choice. It's possible to put out a hit record at 40, run a marathon at 60 and have your 80 year old non-profit change its business model. It's not as easy as it used to be, but that's why it's worth doing.

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sâmbătă, 9 iulie 2011

Mish's Global Economic Trend Analysis

Permanently High Plateau Theory Touted for Australia Housing; Real Estate Agents Refuse to Disclose Sale Prices
Boehner says Chance of Budget Deal in Few Days "Maybe 50-50", NYT says Sides Still Far Apart; How to Tell if the Deal is a Good One
China's Inflation Hits 6.4%, Food Prices Soar 14.4%; Chinese Central Bank Downplays Soaring Costs; BRIC Inflation High Across the Board

Permanently High Plateau Theory Touted for Australia Housing; Real Estate Agents Refuse to Disclose Sale Prices

Posted: 09 Jul 2011 11:43 PM PDT

At the height of every boom, bullish clowns inevitably come out of the woodwork touting the "permanently high plateau" prices will not drop much theory.

Such a theory is presented in the Herald Sun although one might not quickly spot it because of the headline Decade of pain for Melbourne's property market

The good news for homeowners is that AMP Capital chief economist Shane Oliver and Grattan Institute program director Saul Eslake - the ANZ's chief number cruncher for close to 14 years - say Victoria will avoid a US-style property crash which saw prices plunge by 30 per cent.

Instead, house prices will continue their single-digit slide into 2012 before stagnating for five to 10 years as wages catch up with a median house price which has climbed 133 per cent since 2000.

"We are facing a situation where we are just spinning the wheels for up to 10 years until incomes catch up with property prices," Mr Oliver said. "You could have a five to 10-year period where you have prices rise before they come off again and basically track sideways within a range."

Totally New Paradigm, Permanently High Plateau

That does not sound like a decade of pain, nor is it a "bleak" outlook. Rather, it's none other than the entirely laughable "Totally New Paradigm, Permanently High Plateau" theory.

Flashback March 26 ,2005: It's a Totally New Paradigm

Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that "South Florida is working off of a totally new economic model than any of us have ever experienced in the past." He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.

"I just don't think we have what it takes to prick the bubble," said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90's. "I don't think prices are going to fall, and I don't think they're even going to be flat."

"I look at this as a short-term investment," said Mr. Farquharson, 36, who works for a venture capital firm, "and plan to unload it as soon as things look dangerous."

Now there's a laugh. By the time it looks dangerous will there be anyone looking to buy?

Talk of "new paradigms" or "new economic models" has been associated with every major bubble in history, typically near the peak. Wasn't it just 5 short years ago that Greenspan proclaimed the "productivity miracle" and everyone was counting "clicks" on dot coms as the "new economic model"?

Just as soon as I finished writing this post, I found a new quotation to add.
It's perfect.

Gregory J. Heym, the chief economist at Brown Harris Stevens, is not sold on the inevitability of a downturn. He bases his confidence in the market on things like continuing low mortgage rates, high Wall Street bonuses and the tax benefits of home ownership.

"It is a new paradigm" he said.

Scroll back up and take a look at that first chart again. Current talk of "New Paradigms" and "New Economic Models" should tell you exactly where we are and where we are ultimately headed.

Flashback June 7, 2005: It's time to shift the arrow

Yes, Mish readers I am pleased to announce that housing has now reached "A permanently high plateau". I offer the following quotes from a New York Times article as evidence:

"I think we don't expect prices to continue to rise at this pace, however, we don't see a bubble bursting either," he said. "I don't recall a real estate bubble ever bursting that wasn't preceded by bad economic conditions or some dramatic shock, and nobody is predicting any of that right now."

"The interesting thing we're seeing is, it's a very stable, brisk market," said Steven B. Schnall, the president of the New York Mortgage Company, a mortgage lender. Mr. Schnall pointed to continued low interest rates as the most important factor in the market. "I don't see prices continuing to skyrocket," he said. "They've reached a very high level and this almost appears to be a new normal, and interest rates are helping that."

Flashback ...
"Stock prices have reached what looks like a permanently high plateau."--Irving Fisher, esteemed economist, October 1929

Flashback November 01, 2005: Thoughts on Housing Construction

Many seem to thing that housing will plateau and there is no fear of a real slump. At the top of the list in believing the "permanently high plateau" theory is David Seiders, the chief economist for the National Association of Home Builders. According to Seiders, single-family starts numbered about 1.6 million, in 2004. He expects another record this year, even as the industry begins to hit "the plateau we've been watching and waiting for."

Also chiming in on the permanently high plateau theory is Erik Bruvold of the San Diego Regional Economic Development Corp. in the San Diego News article Housing economists raise yellow flag over San Diego.
Mr. Bruvold predicted a flattening in prices rather than a dramatic falloff. Already, the inventory of homes on the market is growing and sales prices are lower than asking prices. "I think we've hit a plateau," Bruvold said. "I would not refer to it as a turning point."

David Berson chief economist of Fannie Mae and David Seiders, chief economist for the National Association of Home Builders also seem to be giving some credence to the "plateau theory". "Prices are so high that at some point there is the possibility people may simply decide it's too expensive to move there," Berson said. "Alternatively, prices may simply slow for a period of slow or no price gains."
No one seems to be as optimistic as the Toll Brothers according to the New York Times article Closing Ground.
At the moment, Toll controls enough land for nearly 80,000 houses. Its competitors, which tend to build lower-priced houses on smaller lots, have even larger accumulations. K. Hovnanian has land for more than 100,000 houses. Pulte Homes holds 350,000 sites. Still others - Lennar, Centex Homes, D. R. Horton, KB Home - control hundreds of thousands as well. And all of them are in ferocious pursuit of more.

The company expects to grow by 20 percent for the next two years and then will strive for 15 percent annually after that. Those estimates suggest that the company's expected production of around 8,600 houses this year will expand to at least 15,000 houses by 2010. Individual Toll developments now range in size from a few dozen to 3,000 houses.
"Why can't real estate just have a boom like every other industry? Why do we have to have a bubble and then a pop?" asked Toll.

....

This cycle will not be any different. I do expect some home builder bankruptcies out of this mess but it is not easy to predict which ones.

Here is what the housing evidence suggests:

Homebuilders are clearly ignoring business cycles, affordability issues, tightening credit, and liquidity concerns. Money has been too easy for too long for anyone to understand what might happen in a liquidity crunch.
Homebuilders will keep buying more and more land and adding more and more to housing inventory in a foolish attempt to grow 20% every year fighting for "market share" right at the peak of the boom.
No one seems to see or believe the devastating consumer led recession that is staring them in the face. It's simply "build or die".
People will likely borrow to buy this housing bubble until lending literally seizes up.

I believe we can now answer Toll's question: "Why can't real estate just have a boom like every other industry?"

My answer is "Patience Mr. Toll, you will, and it will end up looking a lot like the telecom bust of 2000 as well."

We are now hearing exactly the same nonsense out of Australia.

Agents Withhold House Price Data

Please consider Agents Withhold House Price Data

MELBOURNE real estate agents and vendors are increasingly withholding or manipulating data provided to the Real Estate Institute of Victoria, prompting calls for the mandatory reporting of all property sales to protect consumers.

A Sunday Age investigation has found that 27 per cent of all auction results published by the industry body in June were missing critical information - including the sale price, passed-in price or the reserve. Many auctions were not reported at all, distorting clearance rates that are used by buyers and sellers to gauge market strength.

Nearly one in five properties sold at auction are now reported to the REIV with the price marked ''undisclosed'' - a significant increase from last year's property boom, up from 11 per cent then to 18 per cent now.

The investigation also revealed that 43 per cent of properties scheduled for auction in June had no published quote range, further frustrating buyers' attempts to obtain basic information.

Last month, agency RT Edgar sent a newsletter to clients warning there was a ''serious question mark'' over media reporting on the market because many agents were withholding sale prices and passed-in results.

REIV head Enzo Raimondo defended the institute's voluntary reporting methodology, saying the ''small increase'' in the number of undisclosed results did not affect the integrity of the system.

''It is not the role of the REIV to force home owners to publicly declare the amount for which their homes sell. If a person really wants to know the price for which a home sells, they can attend the auction,'' Mr Raimondo said.

Favorite Comments From the Article

Moral of the story? Don't buy now. Wait. And with every day that passes take comfort in knowing that property investors and RE agents are dying the death of a million cuts (with every month, comes more news of further price falls)

"If a person really wants to know the price for which a home sells, they can attend the auction,'' Mr Raimondo said." Bit of a childish, simpleton's response there, Mr Raimondo. As head of the REIV your attitude only serves to underscore your industry's dodgy reputation.

Dear Real Estate Buffoons

Prices are falling whether you disclose them or not
Not disclosing prices makes people mistrustful and rightfully so. That will hurt, not help sales

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

Boehner says Chance of Budget Deal in Few Days "Maybe 50-50", NYT says Sides Still Far Apart; How to Tell if the Deal is a Good One

Posted: 09 Jul 2011 03:02 PM PDT

Conflicting stories from Reuters and the New York Times suggest one thing for certain: The sides are at least still talking. However the miserable jobs report on Friday complicates matters. Democrats now want more stimulus, and stimulus will add to the deficit.

Reuters reports Boehner says chance of budget deal "maybe 50-50"

Speaker of the House of Representatives John Boehner told his Republican members on Thursday that chances of reaching a budget deal within the next few days "was maybe 50-50," a party aide said.

"Whether or not it happens is really dependent on whether they (Democrats) continue to insist on tax hikes" over Republican objections, the aide said. Boehner offered his assessment at a closed-door meeting with members shortly before White House talks with President Barack Obama and other congressional leaders.

Interestingly, the New York Times says Boehner has agreed to some tax hikes but Republicans and Democrats Still 'Far Apart' on Debt, 2 Sides Will Seek Broader Cuts

Though the president and Congressional leaders did not close wide gaps on the issues of spending cuts or new tax revenues, officials briefed on the talks said, they emerged with a consensus to aim for the biggest possible deal — one resulting in up to $4 trillion in savings — and a recognition of the dire consequences of not acting before Aug. 2, when the government will lose its authority to borrow.

Later, top lawmakers and Congressional officials said that they thought a narrow opening existed for a far-reaching agreement, and that the next 48 hours and the Sunday meeting would prove pivotal. If an acceptable package cannot be agreed upon, they predicted a fallback plan in the range of $2 trillion or more, based on the earlier negotiations overseen by Vice President Joseph R. Biden Jr.

With the White House and the lawmakers promising not to divulge details of the talks, the specifics of an eventual deal were not yet clear. But Mr. Obama has put popular entitlement programs like Medicare and Social Security on the table, while Speaker John A. Boehner has signaled for the first time his openness to up to $1 trillion in new revenues. The money could presumably be raised through closing loopholes but would also probably require changes to the tax code that would have to be worked out later.

The prospect of cuts in health care benefits and Social Security has alarmed Democrats. On Thursday, Representative Nancy Pelosi, the House Democratic leader, said she wanted to give the president room to negotiate a broad agreement but would resist efforts to tie the deal to Social Security.

"Do not consider Social Security a piggy bank for giving tax cuts to the wealthiest people in our country," Ms. Pelosi said to reporters on Capitol Hill after the meeting. "We are not going to balance the budget on the backs of America's seniors, women and people with disabilities."

The White House took pains on Thursday to play down reports that Mr. Obama was open to substantial cuts in Social Security benefits as part of a deficit-reduction deal. The press secretary, Jay Carney, said that the president had vowed in his State of the Union address in January to put Social Security on a firmer footing, and that he would not place the subject off limits in negotiations to reduce the deficit.

Among the proposals is an adjustment to the price index that measures cost-of-living increases, which would whittle its payments to recipients over time.

Mr. Obama, seated between Mr. Boehner and the Senate majority leader, Harry Reid of Nevada, told the lawmakers he would not sign an interim deal, only one that extended through the 2012 election.

Then he surveyed the eight leaders about their preference for three deals of different sizes — the largest being up to $4 trillion in deficit reduction over the next decade, according to aides briefed on the discussion.

Six of the eight expressed their support for the biggest deal, the aides said. But Representative Eric Cantor, the House majority leader, and Senator Jon Kyl of Arizona, the ranking Republican on the Senate Finance Committee, favored the midrange $2 trillion, voicing doubts about how they could sell a $4 trillion deal to their rank and file, officials said, since it would involve tax increases.

Jobs Report Muddies Picture

Bloomberg reports Democrats Press Obama to Include Stimulus in Debt Deal After Jobs Report

Democrats pressed for some form of economic stimulus in the debt deal President Barack Obama is negotiating with Republicans following a U.S. Labor Department report yesterday showing job growth slowing.

Senator Charles Schumer of New York, the chamber's third- ranking Democrat, called for an "immediate jolt" to the economy by extending and enlarging a one-year payroll-tax cut that's set to expire Dec. 31. He asked for action "as quickly as possible by including it in the final debt-limit agreement."

Jared Bernstein, until recently Vice President Joe Biden's chief economic adviser, predicted the White House would step up efforts to include in the debt deal additional infrastructure spending or a new temporary payroll tax reduction.

Republican presidential candidate Mitt Romney said the "abysmal jobs report confirms what we all know -- that President Obama has failed to get this economy moving again."

Former Utah Governor Jon Huntsman, also a Republican presidential candidate, said "extremely anemic job creation" demonstrates "we need free-market, pro-growth policies to spark a wave of job growth."

Another temporary payroll tax cut will not create any jobs. No one will hire anyone for a promise of lower taxes.

Budget Deficit Math

The budget deficit is somewhere between $1.4 and $1.6 trillion a year. Cutting $2 trillion over 10 years is not even a down payment for what needs to happen. Heck, $4 trillion is barely a reasonable down payment.

I much prefer a $4 trillion deal than a $2 trillion one. Then regardless of what the deal is, I would slash another $2 or $3 trillion over 10 years out of defense spending.

Any deal that hits $4 trillion probably will include some small tax hikes. So be it. The ratio of 3-to-1 or 3.5-to-1 budget cuts vs. tax hikes seems like a reasonable compromise to me.

Republicans should take the opportunity to slash $8 trillion ($800 billion a year) out of the deficit if Democrats are willing to stick to those ratios I mentioned.

How to Tell if the Deal is a Good One

The deal will not be a good one if it is all back loaded. Nor will it be a good deal if it cuts less than $4 trillion. We need huge cuts this year and every year forward, not back-loading that may never happen.

Slashing $400 billion would have Krugman whining. Slashing $800 billion would have Krugman and the Keynesian clowns howling like mad.

In general, the louder Krugman howls, the better the deal it will be.

Helping Cities, States, Municipalities

Unfortunately, what I proposed above does nothing for states. Cities, states and local governments need relief as well. The way to help cities and states is to kill collective bargaining for public unions and scarp Davis-Bacon.

Those two acts will lower costs, spur hiring, and reduce layoffs. Unfortunately, those actions do not appear to be under discussion.

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

China's Inflation Hits 6.4%, Food Prices Soar 14.4%; Chinese Central Bank Downplays Soaring Costs; BRIC Inflation High Across the Board

Posted: 09 Jul 2011 09:17 AM PDT

Those looking for price inflation can easily find it if they open their eyes and look at the much beloved BRICs, Brazil, Russia, India, and China, as opposed to where everyone is looking, which is to say the United States.

MarketWatch reports China's June inflation rises 6.4%

Monthly data released by the National Bureau of Statistics of China showed the consumer price index for June climbed 6.4 % from the same period the year before. Many economists had expected the rise to be between 6.2% and 6.4%.

That increase compared with a 5.5% jump in May, which was itself the fastest rise in CPI since a 6.3% increase in July 2008.

Chinese Central Bank Downplays Soaring Costs

Like all central banks react when they don't want to react, PBOC chief suggests not to overreact to inflation

China's central bank chief Friday suggested markets shouldn't over react to a large rise in year-on-year inflation for June, saying that month-on-month figures are a better gauge of prices.

"It's better to use month-on-month inflation (data)...seasonally adjusted and annualized," said People's Bank of China Gov. Zhou Xiaochuan.

"In China, we use the year-on-year inflation figure without seasonal adjustment: that's the problem," Zhou told a financial conference. "You always try to think about the base effect."

Nonsense From Zhou

As long as you are comparing the same month to the same month a year ago, there is no price comparison distortion. The "base effect" is zero. Month by month comparisons without seasonal adjustments are flawed.

Middle Class Inflation Woes Hit Russia

The Financial Times reports Inflation severs Russia's material comforts

While the collapse of communism in the 1990s destroyed most Russians' standard of living, something resembling a middle class began to appear again between 2000 and 2008, as real incomes doubled and oil revenues kept wages and pensions well ahead of inflation.

However, since the onset of the economic crisis in 2008, real incomes have been stagnating as wages have been frozen – while inflation gallops on.

Since the onset of the economic crisis in 2008, which saw gross domestic product fall 8 per cent in 2009, wages in most sectors have been frozen, while inflation, temporarily damped by the crisis, has now picked up. In the first quarter of 2011, real wages fell 2.9 per cent, driven by higher inflation than expected.

While official inflation for the year sits at a little more than 9 per cent, many think this statistic is fudged. "I think the real inflation rate is being understated by official statistics," says Sam Greene, a professor of political science at the Moscow-based New Economic School.

Over the past five years, official statistics show prices rising 62 per cent but most Russians feel much greater increases.

"The middle class is splitting in two," says Mikhail Chernysh, head of the social mobility section of the Russian Academy of Sciences Institute of Sociology. "One part is in danger of falling out of the middle class, while the other part is gaining.

"Getting into the middle class is very difficult in Russia and once you are there, it is hard to stay."

India Hikes Rates 10 Times in 16 Months to Combat Inflation

Asia Times reports India Maintains Inflation Fight

The Reserve Bank of India (RBI), the central bank, has raised interest rates for a record 10th time in 16 months, grimly continuing its efforts to choke inflation by checking money flow.

But belt-tightening, the RBI has decided, remains one of the critical ways to tackle inflation, which rose to 9.06 % in May, up from 8.66 % in April.

"High input prices, rising finance costs and global uncertainties are adding to negative sentiments ... and a high interest rate environment will most certainly put brakes on new investments," Associated Chambers of Commerce and Industry of India president Dilip Modi told Agence France-Presse.

RBI governor Duvvuri Subbarao is unimpressed by such pleas, declaring in a statement that the immediate priority was to kill inflation, not to feed growth.

Note: The above link may trigger unwanted popups.

Credit Crisis in Brazil

On July 5th I posted an email from a Brazilian reader regarding inflation in Brazil. Please see Credit Crisis in Brazil: Consumer Loan Rates Hit 47%, Defaults Soar, Debt Service Tops 50% of Disposable Income for details.

Otavio, my Brazilian reader thinks Brazil's currency, the Real is "extremely overvalued". I agree for the reasons he gave.

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

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