Central Perk

duminică, 21 august 2011

Mish's Global Economic Trend Analysis

Is Germany's Commerzbank in Need of Another Bailout?
Little Resistance as Rebels Enter Tripoli, Rebels Capture Two Qaddafi Sons, Celebration in Streets
Video Content and Blogs by Kids, How Kids See Products, Humor, Politics; Meet the Tweeny Bloggers
Merkel and Sarkozy the "Imperial Couple"

Is Germany's Commerzbank in Need of Another Bailout?

Posted: 21 Aug 2011 05:35 PM PDT

Inquiring minds are looking at a chart of Commerzbank for clues about the health of the bank, if not the entire banking system.

CBK.DE - Commerzbank Weekly

A friend "JMC" writes ...

Hello Mish

In 2009 the German Government put 10 billion Euros into Commerzbank to keep it alive. Its market cap is now far less than the government (taxpayers) put in.

Flashback January 9 2009: German government injects €10bn into Commerzbank

The German government has stepped in to salvage a multibillion-euro merger between two of the country's largest banks, Commerzbank and Dresdner Bank, with a €10bn (£9bn) cash injection.

The announcement, in effect a partial nationalisation of the combined group, came after several days of tense negotiations between executives from the two banks and state officials. "The government just couldn't afford to let this deal fail," one insider said.

Yahoo!Finance now cites CBK.DE market cap as 9.75 Billion. But that is as of June 30, when share prices were 3.18 EU. Now share prices are 1.91 EU so you can lop off about 40% of that market cap, which means after an injection of 10 billion EU, the bank is now worth approximately 5.85 billion EU.

Last week an unidentified bank needed to tap the ECB for $500 million in emergency funds at a penalty rate, something that only happens when liquidity dries up and banks are distrustful of lending to each other, even overnight.

"JMC" wonders if Commerzbank is the bank needing emergency funds. I don't know because the ECB refuses to say. However, note the result. All banks are suspect because the ECB won't say. Actually, all banks are suspect anyway, but hiding problems acts to enhance large and growing distrust.

I have to laugh at the PE of Commerzbank, listed at 2.2. With the collapse in share price, its PE is now under two. This is what's known as a "value trap". Share prices seem attractive at a PE of 10, then 8, then 6, then 4, then 2.

On June 20, I discussed "value traps" in Value Traps Galore (Including Financials and Berkshire); Dead Money for a Decade.

In retrospect, many financials may head to zero. If so, it will not be dead money for a decade, but rather just pain dead money.

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

Little Resistance as Rebels Enter Tripoli, Rebels Capture Two Qaddafi Sons, Celebration in Streets

Posted: 21 Aug 2011 04:39 PM PDT

Rebels claim to have captured two Qaddafi sons and streets erupted in celebration as Rebels Enter Tripoli Meeting Little Resistance.

Rebels surged into the Libyan capital Sunday night, meeting only sporadic resistance from troops loyal to Col. Muammar el-Qaddafi and setting off raucous street celebrations by residents hailing the end of his 42 years in power.

The rebel leadership announced that insurgents had captured two of Colonel Qaddafi's sons, including Seif al-Islam, his heir apparent. The leadership also announced that the elite presidential guard protecting the Libyan leader had surrendered.

While there was no independent confirmation of those developments, the rebels were racing through parts of the city with apparent ease, and NATO and American officials made clear that control of Tripoli, which had been the final stronghold of the longtime Libyan leader, was now in doubt.

Rebel spokesmen said that their fighters had surrounded the Bab al Aziziya compound where they believed Colonel Qaddafi may still be holding out.

Colonel Qaddafi issued a series of defiant audio statements during the night, calling on people to "save Tripoli" from a rebel offensive. He said Libyans were becoming "slaves of the imperialists" and that "all the tribes are now marching on Tripoli."

He claimed to be in the Libyan capital and said he would remain there "until the end." But some rebel leaders said they thought he had already left Tripoli.

Al Arabiya television aired images of Libyans celebrating in central Tripoli and ripping down Qaddafi posters. Huge crowds gathered in Benghazi, the capital of the rebel-controlled eastern part of the country, as expectations grew that Colonel Qaddafi's hold on power was crumbling.

While American officials say they are unsure how the battle for Tripoli will play out, they say they are preparing contingency plans if and when Qaddafi's regime falls to help prevent the vast Libyan government stockpiles of weapons, particularly portable antiaircraft missiles, from being dispersed.

It's now clear the rebels have won, but who are they, and what are their plans?

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

Video Content and Blogs by Kids, How Kids See Products, Humor, Politics; Meet the Tweeny Bloggers

Posted: 21 Aug 2011 11:47 AM PDT

Kids are actively into blogging and producing videos, and some of them are surprisingly good.

Should parents encourage their kinds to pursue such activities? I think so. The future belongs to those willing to do things, not just sit and play video games.

A blog produced by Calvin, my neighbor's son is what got me thinking about this Sunday diversion from my normal tirades about current economic madness. Inquiring minds may wish to check out his blog ReGiz.

Calvin reviews all kinds of products his group of friends might be using. He knows far more about the technology that goes into these devices than I do. He has recently rated products and software such as ...

Calvin wants to work in product design. Certainly reviewing products in his spare time while still in highschool gives him a big edge over those wasting time on video games.

Video by Kids

Calvin directed me to a site by a few of his friends, Andrew, Adrian, and Fernando, three brothers. Calvin writes ...

Andrew and Adrian are twins, along with their brother Fernando, they combine to produce videos. Their ambition is to one day go to school to become movie directors, but in the meantime, they are creating their own movies and shows. They have created two feature length movies which can be found on their youtube account.

They created their first movie when they were 9, and their second when they were 12. They intend to create a third movie this summer, and are holding auditions. I have read the script, and it has dramatically improved over their previous two.

They also do their own monthly web show called Wacky But True in which they examine all of the recent crazy events that go on in today's world.

Superhero Battle 2012!

Here is a movie review by the brothers called Superhero Battle 2012!

Check out the first episode of "The Movie Duo", a show where we tell you the biggest news and answer the biggest questions about movies! In this episode, we discuss which superhero film will get more money and acclaim from critics and audiences alike next year. Will it be The Avengers, Ghost Rider or The Dark Knight Rises?

Please do not make the mistake of comparing these websites and videos to those produced by adults, especially professionals, in regards to blog layout, image quality, ect.

The point is these kids are doing something positive about their future and those are the kids who will have a huge edge up in getting a quality job some time down the road. Looking back to when I was 12-14 I could not imagine doing such things. The products and even the ideas for many of these products did not exist.

Meet the Tweeny Bloggers

Children as young as three are firing up their laptops and connecting, says Susie Mesure in The internet comes of age: Meet the tweeny bloggers

They are the Generation Net, whose toddler years have spawned countless mummy blogs, whether they liked it or not. Now, they're getting their own back. Children as young as three are turning to blogging to tell their side of the story.

The growing army of child bloggers is tackling subjects from politics to new toys, while improving their literacy skills. The interest has triggered a debate on the wisdom of giving children free rein online, as social networking sites aimed at pre-teens soar in popularity.

The prospect of making money online – research last week found that 10 YouTube stars, including one 16-year-old, earn more than £65,000 a year from their share of its advertising revenue – is adding to the allure, even if child bloggers are more likely to be posting links to YouTube than collecting fat cheques from the video-clip sharing site.

Sonny To – eight when he started TotallySonny is among those who already find blogging rewarding. "People send me things and I review them," he says. Headphones, a new cereal and a toy owl are among the products that Sonny has blogged about. Now nine, he claims he got into blogging for more than just free stuff. "My mum was getting loads of traffic on her blog and it seemed like fun. Blogging has also made my writing much better and I have learnt how to explain things properly. It has made me much more confident."

Maelo Manning, who turned 11 last week, says she likes to air her views. So much so that she has two blogs – after all, they are free to set up. "It's fun to say stuff about what you're thinking, especially about politics." Her Lib demchild blog (Libdem Child's) dispels the notion that politics is just for grown-ups, and she made some cogent points about the lack of affordable childcare in one recent post, which she used to bemoan Westminster Council's decision to shut a free play scheme.

She keeps to relatively lighter subjects at Life of a Blooming Child so-called because she finds it "lovely that adults think children are blooming. I hear them talking about this all the time, as in: 'Why is that blooming child doing that?' " Despite being relatively new to blogging, Maelo already has hundreds of readers from as far afield as the US, Australia and Russia.

Although Sonny and Maelo's mothers are both relaxed about their children's online presence, not all parents feel the same. James Seddon, Wired magazine's GeekDad blogger, said his instant reaction was to turn down his eight-year-old's request for her own blog as the thought of her "sharing who she is with the world" made him "uneasy". Other parents "lock" their children's blogs, handing the passwords only to friends and families.

Should You Let Your Child Blog?

About.Com addresses the question Should You Let Your Child Blog?

The article cites Online Safety Tips some of which are common-sense suggestions for all age groups, yet other tips seem excessively restrictive for highschoolers (for example, screening everything they write).

For the youngest bloggers, Blog Hosting for Kids may be a good idea.

Encourage, Not Let

About.Com asks the wrong question. "Let" is the wrong word. "Force" or "make" is the wrong idea as well.

"Encourage" is a much better word, and not necessarily just about blogging, but about doing something that will give kids an edge up on job hunting after graduation.

The same applies to free college level classes. I discussed one such opportunity recently in Stanford Offers Free Robotics and Artificial Courses; 10,000 Already Sign Up.

Without a doubt, free robotics classes are a fabulous idea, far better than the public union idea of throwing more taxpayer dollars at problems.

Repeating what I said above, the future belongs to those willing to do things, not just sit and play video games.

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

Merkel and Sarkozy the "Imperial Couple"

Posted: 21 Aug 2011 09:18 AM PDT

After a lengthy delay it's time once again for Sunday Funnies.

Please consider The imperial Couple by Peter Schrank a freelance cartoonist.

Nicolas Sarkozy and Angela Merkel's proposals for economic government in the eurozone have failed to reassure the markets.

Click on link for more cartoons from various cartoonists.

Merkel Emphatically Rejects Eurobonds, Debt Unions

Using even stronger language, Merkel Says She'll Resist Pressure for Euro Bonds

German Chancellor Angela Merkel attempted to shut the door on common euro-area bonds as a means to solve the debt crisis, saying that she won't let financial markets dictate policy.

Joint euro bonds would require European Union treaty changes that would "take years" and might run afoul of Germany's constitution, Merkel said today. While common borrowing might arrive at some point in the "distant future," bringing in euro bonds at this time would further undermine economic stability and so they "are not the answer right now."

"At this time -- we're in a dramatic crisis -- euro bonds are precisely the wrong answer," Merkel said in an interview with ZDF television from the chancellery in Berlin. "They lead us into a debt union, not a stability union. Each country has to take its own steps to reduce its debt."

Merkel has stepped up her opposition to euro bonds since returning from her summer vacation last week, making resistance to common European borrowing a campaign theme of Sept. 4 elections in her home state of Mecklenburg-Western Pomerania. Investor calls for euro bonds intensified last week as concerns about the debt crisis and a stuttering global economy drove European stocks to their lowest in more than two years.

"Politicians can't and won't simply run after the markets," Merkel said in the interview, her first since returning from a three-week summer break. "The markets want to force us to do certain things. That we won't do. Politicians have to make sure that we're unassailable, that we can make policy for the people."

EU President Herman Van Rompuy sided with Germany and France yesterday, ruling out issuing common bonds as a cure for the debt crisis at least until European economies and budgets are better aligned.

With three countries drawing financial aid and national debts ranging from 6.6 percent of gross domestic product in Estonia to 142.8 percent in Greece, this is the wrong time to set up a single borrowing agency, Van Rompuy said in an interview on Belgium's RTBF radio.

Merkel, who said that she's confident of a majority to pass the changes in parliament, called for the focus of Europe's crisis-fighting strategy to remain on tackling debt. Decades of deficit spending in euro-area countries has turned the region into a "debt union" that requires each country to slash debt levels, she said.

"This is an arduous, difficult path that can't be solved in one fell swoop, for instance with euro bonds," she said.

The Eurobond idea is finished. The EU and the market is going to have to deal with it, and the market has been viewing Eurobonds as a savior. I do not care for Eurobonds either, yet the odds of an EU breakup have just increased.

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

SEOmoz Daily SEO Blog

Is Optimizing Photos More Important Than You Think?

Posted: 20 Aug 2011 10:31 AM PDT

Posted by kasy.allen

This post was originally in YOUmoz, and was promoted to the main blog because it provides great value and interest to our community. The author's views are entirely his or her own and may not reflect the views of SEOmoz, Inc.

A few years back I would go to SEO beginner seminars a lot and try to help out with questions that the audience would have. It was less of a seminar, and more of a roundtable, but it was nice to hear from the people that didn't do SEO for a living. They would dip their toes in it, were generally interested and would ask the absolute best questions to get you thinking. I remember a particular question that really got me thinking about the importance of correctly labeling your photos, and it was simply, "Why, can't I just use keywords on my image alt tags? Why do I have to actually label it what it is?"

Great question, and there's a very simple answer.

Think about this, I scan Google images when I am looking for a recipe. I want to find the tastiest looking recipe, and a perfect example is tortilla soup, because everyone's recipe is different. I like mine thicker than the majority of recipes, and I don't want to read recipe after recipe to find that soup. I save a lot of time by scanning the images to find the perfect looking recipe. I wouldn't find that image if it wasn't labeled properly though.

Another example, my husband was working on our car and couldn't find the instructions he needed to install a certain part. He was getting frustrated with the search results and I suggested that he switch to Google Images to see if he could find what he needed there. Within seconds he found exactly what he needed.

If this is how my husband and I scan the Internet for results, then there has to be more people out there that find this beneficial as well. And, if you fill the alt tag with nothing but keywords, how are people going to get the images that they really need? Do I want "world's best tortilla soup recipe ever" or do I want "thick tortilla soup recipe?"

At this point, I knew I was on to something. There will be a change at one point where Google realizes this undiscovered goldmine.

In comes Slice and dice your recipe search results. This is exactly what a recipe lover like me has been waiting for. It offers me the pictures I crave, the star ratings that make Allrecipes.com so awesome and the option to filter ingredients. Almost perfect, right? Google forgot about other ways that people may use their images, like my husband searching for auto mechanic pictures. To be honest, I really see this going far past a simple recipe search. How about home remodeling and décor photos? Real estate photos? Restaurant photos?

Maybe, optimizing photos is far more important than we could have ever imagined.

Image Case Study

Well, it's nice to talk about images being ranked in Google, and we know that Google images has its own bot, but how does it really work? Let's look at an example. Do a search in Google for "thick tortilla soup recipe" and click over to images.

Out of all the images in the above picture, they all link to a site where I can pull the recipe. However, not all of the images are labeled (using filename and alt tag) with the keywords that I'm using, but yet they're still at the top. Let's take a look at three of them.

The first image uses the following information:

The image filename and alt tag are exactly the same – not exactly the most optimized, but yet it's still sitting as the number one picture. So, what's on the page?

Title: Chicken Tortilla Soup - Chicken Tortilla Soup Recipe
Description: This chicken tortilla soup recipe is made with onions, carrots, garlic, bell peppers, salsa, corn, cooked chicken, corn chips and seasonings. A creamy tomato soup base makes this a satisfying chicken tortilla soup.
A recipe with an h1 tag "Chicken Tortilla Soup Recipe" and an h3 tag "Chicken Tortilla Soup Recipe."
Yahoo! Site Explorer shows 46 links (4 inbound links not from the root domain)
Open Site Explorer shows 13 links (1 inbound link not from the root domain)
Anchor text distribution for both, Yahoo! Site Explorer and Open Site Explorer use the keywords that this recipe is trying to target

The second image uses the following information:

Before beginning, I didn't choose the second image from the first image in this post, but rather the first image that used an alt tag that didn't explain the picture.

Much like our image above, the filename and the alt tag is exactly the same (at least it's not blank). Neither of these images are overly reaching for optimization here, but yet they remain at the top. Again, let's look at the details on the page.

Title: Easy & Tasty Chicken Tortilla Soup Recipe - Food.com - 126624
Description: This is a variation of another soup recipe that I tried and loved. I added some things and took out others to make this recipe an instant hit. This also freezes well, so you can save some for a rainy day!
Recipe with an h2 tag "Easy & Tasty Chicken Tortilla Soup" and an h3 tag "Chicken Tortilla Soup Recipe."
Yahoo! Site Explorer shows 38 links (one inbound link not from the root domain)
Open Site Explorer shows 3 links (no inbound links not from the root domain).
Anchor text distribution for both, Yahoo! Site Explorer and Open Site Explorer use the keywords that this recipe is trying to target
Tons of outbound links that go to other recipe recommendations for Chicken Tortilla Soup

We can start to see a pattern here, but it doesn't help if we don't look at the image that's all the way at the bottom (off the bottom of this screenshot)...

The last image uses the following information:

This image does take advantage of keywords in the filename and the alt tag, but it's hosted on Blogspot.com, not the sites root domain.

Title: The Hungry Texan: Tortilla Soup
Description: None
Recipe with an h3 tag "Tortilla Soup," the heading tags ahead of this tag don't take advantage of keywords Yahoo! Site Explorer shows 23 links (three inbound links not from the root domain)
Open Site Explorer shows 23 links (four inbound links not from the root domain).
Anchor text distribution for both, Yahoo! Site Explorer and Open Site Explorer could be better optimized

This image does have more inbound links than the previous image, but it doesn't take advantage of SEO basics – hosting your own image, heading tags, a strong title and a description.

The first few images are from major websites that carry a much higher domain authority, but when comparing page authority, the page our last image sits on is neck and neck with the competitors:

Based on these rankings, you'd think that the second image would be #1 in this case study, but it's not. Let's compare apples to apples.

Without a doubt, the first image and page is more optimized than the other two images we are comparing here. So let's skip to the second and last image. The main difference here is that the image is hosted on the root domain of the main site, the title, the description and the total number of links. Our last image is only winning with the total number of inbound links.

Takeaway

So what does this mean for us? The Google image bot definitely seems to be looking at filename and the alt tag, but it also looks at a lot of the same factors that the Google search bot looks at - title tag, meta description, heading tags, links and anchor text. If we are already focused on optimizing our individual pages, maybe it's time to remember that image optimization is just as important. Oh, and it also seems to be important that you host your own images, but you already knew that, right?

I'll apologize ahead of time to the random "thick tortilla soup recipe" clickers from the search engines… there's no recipe here, but you can find my favorite at RecipeJane.com.

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Seth's Blog : When ideas become powerful

When ideas become powerful

Why are we surprised that governments and organizations are lining up to control ideas and the way they spread?

When power resided in property, governments and corporations became focused on the ownership, regulation and control of property.

When power shifted to machines and interstate commerce, no surprise, the attention shifted as well.

Now, we see that the predictions have come true, and it's ideas and connections and permission and data that truly matter.

So gifted inventors shift gears and become patent trolls, suing instead of merely creating. So government agencies rush to turn off cell phone towers. So corporations work to extend and reinvent the very notion of copyright protection.

Here's what we ought to demand:

Are copyright rules being played with as a way to encourage creation of art (which was the original intent) or are they now a tool for maximizing corporate profit?

Are patents (particularly software patents) being used to encourage new inventions, or have they turned into a tax that all of us have to pay whenever we use a computer or a phone? (Hint: if you can draw your patent on an index card, it's an idea, not a patentable process worthy of protection).

Is disconnecting a cell phone or a social network any different from trashing a printing press?

When organizations seek to control widgets and hammers and land, it seems right--that property is clearly private, and sharing it doesn't scale. When two people both try to eat a marshmallow, there's less for both.

Controlling ideas and connections and data... that's a fundamentally different deal, partly because it's so personal (that idea in your head might or might not have been inspired by the idea I wrote down, but it feels wrong for me to tell you that you can't have your idea) and partly because in fact, shared ideas do scale, they don't usually diminish.

Ideas are going to continue to become more valuable, which means that the urge to control and patrol them is going to get greater.

Ideas that spread, win
Networks in which ideas flow are worth more than networks without
Great ideas are amplified when others build on them
Just because an idea spreads doesn't mean it's good for us
Locking down ideas makes them worth less
Those in power will try to keep outsiders from bringing new ideas forward

• Email to a friend •

sâmbătă, 20 august 2011

Mish's Global Economic Trend Analysis

End of the End of Colonel Qaddafi; "Decisive Battle to Liberate Tripoli Started"; Rebels Encircle Tripoli; Rats Flee Sinking Ship
European Roundup: Germany Nixes Eurobonds Once Again, So Does EU President Herman Van Rompuy; Belgium Wants Eurobonds and Bigger Bailouts
Bank of England Regulator Argues "Banks Need to Take More Risks" to Underpin Economy; Revisionist Roosevelt History
Private Consumption in Portugal Plunges 3.4%, Biggest Drop in 30 Years; Expect Rest of Europe to Follow

End of the End of Colonel Qaddafi; "Decisive Battle to Liberate Tripoli Started"; Rebels Encircle Tripoli; Rats Flee Sinking Ship

Posted: 20 Aug 2011 10:37 PM PDT

Colonel Qaddafi's days as dictator of Libya are numbered, not in months but perhaps days. Bloomberg reports Libyan Rebels Launch Offensive to Seize Tripoli

"The decisive battle to liberate Tripoli started," Abdel Hakim Belhaj, a rebel brigade commander, said in an interview with Al Jazeera. "I would like to tell our families inside the capital that we are coming and call upon Qaddafi's troops to abandon their weapons tonight and to join us to get rid of Qaddafi and his regime."

Rebel Control

"Rebels are now controlling Zlitan, and they are located near Wadi Kam," said the council spokesman, Munir Mohammed. There was no independent confirmation of the reports of the rebel operations in the valley or in Zlitan.

Rebels also said they have taken Zawiya, west of the capital, and Ghariyan to the south.

Libyan Oil Minister Omran Abu Kraa headed to Tunisia rather than returning to his country after a trip to Italy, the state- run Tunisian news agency TAP said. Shokri Ghanem, Libya's former top oil official, defected to join the rebels, according to a June 1 statement from the rebel Transitional National Council.

The rebels announced on Aug. 19 that they had control of the oil refinery at Zawiya and shut its supply to Tripoli while almost encircling the outskirts of the capital. Rebels took the main square in Zawiya, the Associated Press reported yesterday. Qaddafi's forces remain in the eastern part of the city, the news service said.

Rats Flee Sinking Ship

The New York Times reports Heavy Fighting Reported in Tripoli; Rebels Encircle City

For the first time in months, witnesses in Tripoli reported heavy fighting across the capital late Saturday night, even as rebel forces claimed to have encircled the city by taking major towns to its east, west and south.

"We are coordinating the attacks inside, and our forces from outside are ready to enter Tripoli," said Anwar Fekini, a rebel leader from the mountainous region in western Libya, speaking by telephone from Tunis. "If you can call any mobile number in Tripoli, you will hear in the background the beautiful sound of the bullets of freedom."

"The rebels are fleeing like rats, to the mountains," Colonel Qaddafi said.

He gave no indication of where he might be speaking from, a topic of increasing speculation in recent days as rumors have swirled of his preparing to flee, or perhaps having already left Libya. If Colonel Qaddafi's location remained unknown, it became increasingly clear Saturday that even his most senior aides were making exits of their own.

The Tunisian state news agency reported Saturday that Libya's oil minister, Omran Abukraa, had defected to Tunisia, after leaving Tripoli on what was ostensibly a business trip abroad. If confirmed, his defection would be the third of a senior government official in the past week.

Abdel Salam Jalloud, a former Qaddafi deputy, was reported to have defected Friday. A senior security official, Nassr al-Mabrouk Abdullah, flew to Cairo with his family on Monday.

This is the "End of the End of Colonel Qaddafi" and a new beginning for Libya. The question is "a beginning of what?" At this stage there are far more questions than answers.

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

European Roundup: Germany Nixes Eurobonds Once Again, So Does EU President Herman Van Rompuy; Belgium Wants Eurobonds and Bigger Bailouts

Posted: 20 Aug 2011 07:38 PM PDT

This weekend Belgium finance minister came out in support of Eurobonds. He may as well have come out in support of the "Great Pumpkin" theory.

Belgium and the PIIGS (Portugal, Ireland, Italy, Greece, Spain) may want Eurobonds but if Germany, France, Finland and other countries don't want them it is not going to happen. The vote must be unanimous.

Interestingly, EU President Herman Van Rompuy just nixed Eurobonds but a rumors of an EU Eurobond feasibility study ignited a rally on Friday in Europe. That rally faded quickly in the US.

Here is a weekend roundup of European news starting with a look at what's not going to happen.

Belgium adds to call for euro bonds, bigger bailout

Reuters reports Belgium adds to call for euro bonds, bigger bailout

Pressure on Germany and France to take radical action on the euro zone debt crisis mounted on Friday, as financial markets sagged further and Belgium added its support to calls for the region to issue debt jointly.

Belgian Finance Minister Didier Reynders said the bloc should issue common euro bonds and expand its bailout fund to calm repeated market selloffs of government bonds and bank shares of vulnerable debtor countries.

But Reynders' call in the Financial Times for the euro zone had to prove it had "deep pockets" underlined increasing fears among euro zone governments that they would be unable to reassure investors that euro zone banks are safe without drastic action by the 17-nation bloc.

Merkel repeated her criticism of proposals for euro zone bonds, telling a rally of her Christian Democrats this was a "slippery slope" that would probably leave everyone worse off.

"Euro bonds would not allow any rights at all to intervene to force discipline on others," she said.

French Prime Minister backed her view, writing in an editorial published in daily Le Figaro that common euro zone bonds without further fiscal consolidation could threaten France's triple-A credit rating.

EU President Opposes Common Euro Bonds

Inquiring minds note that EU President Van Rompuy Opposes Common Euro Bonds

European Union President Herman Van Rompuy ruled out issuing common bonds as a cure for the debt crisis, saying any joint borrowing should wait until European economies and budgets are better aligned.

With three countries drawing financial aid and national debts ranging from 6.6 percent of gross domestic product in Estonia to 142.8 percent in Greece, this is the wrong time to set up a single borrowing agency, Van Rompuy, 63, said in an interview broadcast on Belgium's RTBF radio today.

"We could have euro bonds on the day when there is genuine budgetary convergence, the day when everyone is in balance or virtually in balance," he said.

12th of Never

The day everyone is in balance is the 12th of never. It's not going to happen.

Rumors that the EU commission was studying Eurobonds ignited a faded rally in Europe on Friday. For details, please see Yet Another 2.5 Hours, 2.3% Hour Rally, This Time on Silly Rumors Eurobonds Back in Play

Germany Rebuffs Renewed Euro Bond Debate

The future of Eurobonds is with Germany. Here is the present as well as the projected future: Germany rebuffs renewed euro bond debate

BERLIN | Sat Aug 20, 2011 12:28pm EDT

Germany on Saturday rebuffed renewed calls that euro zone countries should issue joint euro-denominated bonds and have a joint finance minister, arguing that would only be possible if fiscal policy were collective already.

"As long as we don't collectivise financial policy we also cannot have a uniform interest rate level. The different rate levels are the incentive to run a solid economy or the punishment if you are not running it properly," Finance Minister Wolfgang Schaeuble, speaking at his ministry's open day.

"So the question is, how do we manage to promote political integration step by step. We cannot collectivise interest rates," Schaeuble said, referring to proposals that the euro currency bloc should issue common euro bonds.

Germany has led resistance to calls that the euro currency bloc should issue common euro bonds and expand its bailout fund to calm repeated market selloffs of government bonds and bank shares of vulnerable debtor countries.

Der Spiegel magazine reported finance ministry calculations that showed issuing joint euro bonds would cost Germany billions of euros each year.

Anyone paying any attention to Eurobond rumors that do not include support from Germany is wasting their time. Eurobonds also need support from French President Nicolas Sarkozy. Eurobonds do not have that support neither.

As it stands, both Chancellor Angela Merkel and finance minister Wolfgang Schaeuble oppose Eurobonds. I suspect the former is out of political expediency. Merkel realizes she does not have the votes.

Until this setup changes, Eurobonds are dead, no matter how many others support them.

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

Bank of England Regulator Argues "Banks Need to Take More Risks" to Underpin Economy; Revisionist Roosevelt History

Posted: 20 Aug 2011 11:54 AM PDT

In case you need additional proof that more regulators is the last thing we need, please consider Banks 'should take more risk' argues BoE executive director

Banks should be allowed to take more risk to underpin the recovery in spite of the lasting damage caused by the financial crisis, a leading regulator has suggested.

Andrew Haldane, executive director of financial stability at the Bank of England, argued that banks have over-reacted and are now suffering from "acute risk aversion".

This aversion has pushed up the cost of credit and "may be retarding the recovery".

Departing from current thinking, Mr Haldane suggested regulators now allow banks to operate with weaker finances to encourage lending.

Specifically, he indicated that banks could reduce the amount of loss-bearing capital they hold from around 10pc to 7.5pc.

"Setting regulation to boost risk-taking may feel like a radical departure," he said. But, drawing parallels with the Great Depression, he pointed out that President Franklin Roosevelt relaxed bank regulation in 1933.

Foolish Thinking and Revisionist History

More risk will mean more losses.

The world is flooded with overcapacity in nearly everything except energy. Encouraging more production and expansion in this environment when overspent boomers heading into retirement are not about to go on a spending spree is a mistake.

Moreover most of these comparisons to the 1930's are nonsensical. FDR did so many stupid things, some of which were blatantly illegal if not treasonous including confiscation of gold, forced crop burning, and the National Industrial Recovery Act (NIRA) of 1933 that was found unconstitutional.

However, and as is typically the case, various stimulus efforts in the 30's (numerous "CCC" type programs) died out by 1937 and the economy went back into recession. Of course Keynesian clowns now argue a pissy tightening action "caused" the relapse, when then as now, stimulus ran its course.

Contrary to popular fantasy, the unemployment picture following Roosevelt's policies is not as rosy as is often cited.

Here is a table from Wikipedia on Franklin D. Roosevelt

Unemployment (% Labor Force)
Year	Lebergott	Darby
1933	24.9	20.6
1934	21.7	16.0
1935	20.1	14.2
1936	16.9	9.9
1937	14.3	9.1
1938	19.0	12.5
1939	17.2	11.3
1940	14.6	9.5
1941	9.9	8.0
1942	4.7	4.7
1943	1.9	1.9
1944	1.2	1.2
1945	1.9	1.9

Derby counts Works Progress Administration (WPA) workers as employed, Lebergott as unemployed.

Of course you can have 100% employment if the government employed everyone.

War Recovery vs. Austrian Economic Theory

Unemployment did not really drop until 1941 or 1942. WWII started with the invasion of Poland in September 1939.

It was war that started the recovery, not the policies of Roosevelt. That statement may sound contrary to Austrian economics but it's not.

Destruction of productive capacity and assets is always a net loss. War is never a good thing in this regard. To believe otherwise is to believe in the Broken Window Fallacy.

However, the US was the only major country that did not suffer major losses in production capacity. Following WWII, the US became the growth engine of the world, further fueled by war-weary soldiers who returned home and started families, kicking off the "baby boom" and all of its ramifications.

Europe followed eventually, but no one in their right mind could suggest that WWII or wars in general are a good thing for stimulating economies.

Saddled with the Failed Policies of FDR

Today we are saddled with the consequences of Roosevelt's inept actions.

There is no gold standard to act as a trade moderator or to impose spending restraints.
Unions have bankrupted cities and states.
Trillions of dollars of public pension promises that cannot and will not be met.
Government is bloated at every level: city, county, state, federal

Finally, this is not 1939 in terms of demographics, in terms of public debt, or in terms of private debt. To suggest otherwise displays incompetence. In general, to expect anything but incompetence, greed, corruption, or graft from regulators is a mistake.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Private Consumption in Portugal Plunges 3.4%, Biggest Drop in 30 Years; Expect Rest of Europe to Follow

Posted: 20 Aug 2011 01:08 AM PDT

Courtesy of Google translate, please consider Private consumption in Portugal is suffering the biggest drop in 30 years

The indicator of private consumption in Portugal in July recorded a fall of 3.4% compared to the homologous months of 2010, the lowest since data collection began in 1978.

According to the Bank of Portugal (BOP), this was the eighth consecutive month in which the pointer just in negative territory, which has been deteriorating gradually since December 2010.

The entry into force of some austerity measures that Portugal should apply to return for the loan of 78,000 million euros was granted the EU and the International Monetary Fund (IMF) have affected the contraction in household consumption Lusas.

Translation of that last paragraph is a bit choppy, but essentially the 78 billion "bailout" loans coupled with forced austerity measures is to blame for the massive plunge in private consumption.

Expect Rest of Europe to Follow

Contraction in Greece is arguably factored in (although hugely rising deficits are not). More importantly, worsening conditions in Spain and especially Italy are not accounted for.

The ECB forced Italy into various austerity measures in return for providing a backstop to Italian debt. That backstop has worked for now (it won't last), driving 10-year Italian government bond yields down from well over 6% to 5%, still a mighty spread vs. Germany.

Low growth for Italy is penned in. It will not happen. Expect a plunge in Italian GDP and personal consumption.

If Italy, Spain, Greece, and Portugal contract (all but Italy are already), spillover into France and Germany is a given.

Moreover, even France has pledged some budget tightening. Expect more social unrest and a huge recession in Europe because both are on the way. Germany will not be immune.

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

Damn Cool Pics

International Photography Award Winners 2011

Posted: 19 Aug 2011 09:15 PM PDT

The International Photography Award winners and finalists have been announced and as usual, they're downright impressive. The IPAs are sponsored by the Lucie Foundation , whose mission is to discover innovative photography, honor great photographers, and promote photography in general. This year, they received 8,000 submissions. A whopping 70 jurors judged these submissions. Here are 41 of some of the best winning photos.

"5th Ave. Fix"
Lorin Crosby

"Five Minutes in Santa Fe"
Michael Crouser

"Burning Peak"
Rafael Rojas

" Magic World"
Name: Adam Balcerek, Poland

"Noorderlicht, Spitsbergen, Norway"
Philip Harvey

"A Night in Tahrir Square"
Jacopo Quaranta

"Friends"
Joanna Borowiec

"Nouakchott opus incertum"
Philippe Bernard

"Afghan Heroin: Not for Export"
Thomas Stanworth

"Gatorade Natural"
Brian Kuhlmann

"Our Oceans Aren't The Only Ones In Danger"
Adam Taylor

"Agent Orange"
Ed Kashi

"Go, My Beauty"
Gordon Welters

"Pastoral Scene"
Nikolas Despiniadis

"Black River"
Michael Mullady

"Guantanamo: If the Light Goes Out"
Edmund Clark

"Pure Blood"
Ximena Etchart

"Buddies"
Serhat Demiroglu

"Gulf Oil Spill"
Daniel Beltra

"Remote Control"
Claudio Allia

"Chicago"
Ball & Albanese

"Heinz"
Maurice Heesen

"Strange Things Are Smoking"
Karen Divine

"Cold Places"
Sue Flood

"Innocence"
Claudio Allia

"Surplus"
Michael Krebs

"Desertic City"
Joanne Pouzenc

"Tibetan Monastery Kitchens"
Marrigje De Maar

"Docklands"
Rafal Krol

"Under Water Lilies"
William Scully

"Drough and Flooding Rains"
Melissa Powell

"Let Them Eat Cake"
John Wright

"Warsaw Chopin Airport"
Kacper Kowalski

"Langstrand"
Ulrike Klumpp

"Where Ships Were Born"
Paul Alexander Knox

"ELEMENTARZ"
Karolina Karlic

"Wild Card (1)"
Russ Lamoureux

"Geezz"
Lennette Newell

"Yangtze - The Long River"
Nadav Kander

"Nazi Americana"
Julie Platner

"Our Oceans Aren't The Only Ones In Danger"
Adam Taylor

Kurt Cobain's Daughter is All Grown Up

Posted: 19 Aug 2011 03:19 PM PDT

Kurt Cobain and Courtney Love's daughter turns 19 next week and in this new photoshoot, Frances Bean Cobain is looking gorgeous than ever!

Designer and photographer Hedi Slimane posted these photographs of Frances on his website, showing her in glorious black and white. By the way, I do not condone smoking, but this picture is just too cool!