Central Perk

luni, 5 septembrie 2011

"The Entire Country is Behind You"

Your Daily Snapshot for
Monday, September 5, 2011

"The Entire Country is Behind You"

Yesterday, President Obama traveled to New Jersey to tour areas damaged by Hurricane Irene and reassure residents affected by the hurricane that the federal, state and local governments will be there to help them rebuild.

Learn more.

President Barack Obama comforts a resident in a neighborhood hit with flooding from Hurricane Irene in Wayne, N.J., Sept. 4, 2011. (Official White House Photo by Pete Souza)

Seth's Blog : Back to (the wrong) school

Back to (the wrong) school

A hundred and fifty years ago, adults were incensed about child labor. Low-wage kids were taking jobs away from hard-working adults.

Sure, there was some moral outrage at seven-year olds losing fingers and being abused at work, but the economic rationale was paramount. Factory owners insisted that losing child workers would be catastrophic to their industries and fought hard to keep the kids at work--they said they couldn't afford to hire adults. It wasn't until 1918 that nationwide compulsory education was in place.

Part of the rationale to sell this major transformation to industrialists was that educated kids would actually become more compliant and productive workers. Our current system of teaching kids to sit in straight rows and obey instructions isn't a coincidence--it was an investment in our economic future. The plan: trade short-term child labor wages for longer-term productivity by giving kids a head start in doing what they're told.

Large-scale education was never about teaching kids or creating scholars. It was invented to churn out adults who worked well within the system.

Of course, it worked. Several generations of productive, fully employed workers followed. But now?

Nobel-prize winning economist Michael Spence makes this really clear: there are tradable jobs (making things that could be made somewhere else, like building cars, designing chairs and answering the phone) and non-tradable jobs (like mowing the lawn or cooking burgers). Is there any question that the first kind of job is worth keeping in our economy?

Alas, Spence reports that from 1990 to 2008, the US economy added only 600,000 tradable jobs.

If you do a job where someone tells you exactly what to do, they will find someone cheaper than you to do it. And yet our schools are churning out kids who are stuck looking for jobs where the boss tells them exactly what to do.

Do you see the disconnect here? Every year, we churn out millions of of worker who are trained to do 1925 labor.

The bargain (take kids out of work so we can teach them to become better factory workers) has set us on a race to the bottom. Some argue we ought to become the cheaper, easier country for sourcing cheap, compliant workers who do what they're told. We will lose that race whether we win it or not. The bottom is not a good place to be, even if you're capable of getting there.

As we get ready for the 93rd year of universal public education, here's the question every parent and taxpayer needs to wrestle with: Are we going to applaud, push or even permit our schools (including most of the private ones) to continue the safe but ultimately doomed strategy of churning out predictable, testable and mediocre factory-workers?

As long as we embrace (or even accept) standardized testing, fear of science, little attempt at teaching leadership and most of all, the bureaucratic imperative to turn education into a factory itself, we're in big trouble.

The post-industrial revolution is here. Do you care enough to teach your kids to take advantage of it?

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duminică, 4 septembrie 2011

Mish's Global Economic Trend Analysis

Telegraph Reports Italy Needs to Rollover Record €62-Billion of Bonds in September; On September 7, German Court Rules on Bailouts
Merkel's Credibility Shattered; CDU Party Defeated in Regional Election, Merkel Coalition at Risk
Nevada Dramatically Expands Lawsuit Against Bank of America; Recap of Recent BAC Events
If Donkeys Could Vote; Orwellian Madness

Telegraph Reports Italy Needs to Rollover Record €62-Billion of Bonds in September; On September 7, German Court Rules on Bailouts

Posted: 04 Sep 2011 06:10 PM PDT

On September 7 Germany's top court to rule on euro bailouts.

The Karlsruhe-based Federal Constitutional Court will announce its verdict on September 7 at 4 a.m. EDT, it said in a statement on Tuesday.

The court is considering three lawsuits brought by six eurosceptic plaintiffs -- five academics and a lawmaker from the Bavarian sister party to Chancellor Angela Merkel's Christian Democrats -- against German-backed international bailout schemes for Greece, Ireland and Portugal.

The plaintiffs argue that the bailouts, which total 273 billion euros ($393 billion), violate property rights and other protections in the German and European constitutions, and break the "no-bailout" clause in the European Union's treaty, which says neither the EU nor member states should take on other governments' liabilities.

Legal experts believe the court is extremely unlikely to block Germany's participation in the multi-year bailouts, or in an additional 109 billion euro package of official aid for Greece that euro zone leaders announced last month.

However, many legal experts and some government sources say they expect the court to set conditions for German participation in future bailouts, perhaps giving the German parliament a bigger say in approving it. That makes the court's verdict key for the whole euro zone.

For example, the eight judges could require German contributions to the European Stability Mechanism, the planned regional bailout fund which will start operating in 2013, to be subject to a vote by Germany's parliament. Currently, this is not formally mandated.

Any changes, even parliamentary approval will leave the door open at a later date for saying enough is enough.

Biggest Ever Italian Bond Rollover in September

The Telegraph reports Italy needs to rollover €62-billion of bonds in September. The Globe and Mail claims €46-billion.

Either way, September will be a big month.

Please consider German endgame for EMU draws ever nearer.

Finance minister Wolfgang Schäuble could hardly have chosen a more toxic term than "Bevollmächtigung" or general enabling power when he requested blanket authority from the Bundestag for EU rescues, as if Weimar were so soon forgotten. He was roundly rebuffed.

You can feel the storm brewing in Germany. Within days of each other, President Christian Wulff accused the European Central Bank of going "far beyond" its mandate and subverting Article 123 of the Lisbon Treaty by shoring up insolvent states, and Bundesbank chief Jens Weidmann said bail-out policies had "completely gutted" the EU law.

Both believe the EU Project has taken a dangerous turn. Fiscal powers are slipping away to a supra-national body beyond sovereign control. "This strikes at the very core of our democracies. Decisions have to be made in parliament in a liberal democracy. That is where legitimacy lies," said Mr Wulff.

We will find out to what extent Germany's constitutional court shares these fears when it rules this Wednesday on the legality of the EU rescue machinery, and delivers its verdict of life or death for monetary union.

The assumption this time is that the eight judges will insist on beefed up powers for the Bundestag, but will not disturb the existing nexus of bail-outs and bond purchases. That is the most likely outcome.

Whether they go any further is the existential question for EMU. If they rule that the permanent bail-out fund (ESM) after 2013 breaches treaty law, they will queer the pitch greatly since the viability of the current fund (EFSF) depends on a hand-over.

If they rule in any significant way that the EFSF itself breaches Lisbon's `no bail-out' clause, or even that Germany cannot participate until the Treaty is changed, market confidence in monetary union will collapse instantly.

Whatever the court does, the simmering revolt in the Bundestag over recent weeks lays bare the salient strategic fact that Germany is not about to embrace fiscal union or quadruple the EFSF to €2 trillion, as deemed necessary by City analysts and EU officials to stabilize Italy and Spain. Nor will it pay for a third Greek rescue.

The EU-IMF Troika left Athens abruptly on Friday, blaming Greece for failure to comply. The equal failure is the scorched-earth austerity policies imposed by the EU itself. Fiscal deflation cannot work in a rigid economy with a large trade deficit and a high debt stock. It ensures a Fisherite debt deflation spiral.

The IMF must know from its errors in Argentina a decade ago that Greece needs a 40pc devaluation and 50pc debt forgiveness to claw back to viability. Yet the EU has blocked both, and the Fund has until now acquiesced.

Needless to say, battered banks, insurance companies, and pension fund will not wait for further rounds of punishment. They know that Italy must redeem €14.6bn of debt this week and €62bn by the end of September, the highest ever in a single month. It must roll over €170bn by December.

The ECB can in theory hold the line by soaking up the entire public debt of Italy, the world's third largest at €1.84 trillion. The question is whether it can plausibly act on such a theory when the president of EMU's dominant power deems this to be illegal.

Troika Abruptly Walks Out of Talks in Athens

In case you missed it, last Friday Inspectors leave Greece after talks are suspended

THE STRUGGLE to keep the ailing Greek economy afloat took a further turn for the worse as the EU-IMF "troika" abruptly suspended talks in Athens on the release of the next round of rescue aid to the country.

A team of troika inspectors unexpectedly left Greece yesterday after the emergence of divisions with the government over the execution of reforms agreed in its first international bailout.

With the release of each round of bailout loans contingent on the delivery of agreed reforms, the latest breakdown raises fresh questions about the government's capacity to implement the rescue plan.

The dispute comes as Greece tries to persuade private creditors to bear investment losses as a condition of its second bailout. The terms of the second rescue were finalised in July after months of dispute which intensified the sovereign debt crisis.

With Italy and Spain under pressure, the latest turmoil in Athens unsettled bond markets yet again. Greek two-year bond yields soared to a new record of more than 46 per cent and Italian and Spanish borrowing costs also rose.

The troika – comprising the EU Commission, the ECB and the IMF – sent an inspection team to Athens a fortnight ago for the fifth quarterly review of the first Greek rescue. Top officials from the three institutions joined talks with Greek ministers on Monday but the deadlock persists.

"At a certain point you reach the conclusion that there is no point in having new meetings every day – and you leave the Greeks a chance to do their homework," said a source close the troika.

At issue is the Greek government's failure to deliver promised reforms to public sector pay and its tax collection system. The troika is also unhappy with the government's failure to liberalise a number of professions.

Although the IMF had hoped to wrap up the talks next Monday, the troika said yesterday that its inspectors now expected to return to Greece by the middle of the month. It wants Athens to complete technical work by then and to continue talks on policies needed to complete the review.

Can Italy rollover debt without help from the ECB? I highly doubt it, but we are about to find out.

There is lots of Eurozone action in September, that's for sure.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Merkel's Credibility Shattered; CDU Party Defeated in Regional Election, Merkel Coalition at Risk

Posted: 04 Sep 2011 03:10 PM PDT

The Telegraph reports Angela Merkel slumps to defeat in home state elections

Exit polls for the vote in Mecklenburg-Vorpommern gave Mrs Merkel's Christian Democrats just 24 per cent of the vote, down from the 28 per cent they garnered in the last vote in 2006. Adding to her woe was the performance of the Free Democrats, her coalition allies, who could be wiped out of the regional assembly, with just 3.6 per cent of the vote.

If the results stand, the Christian Democrats face the unpleasant possibility of being ousted from their current state coalition with the Social Democrats. Exit polls gave the left-wing party 37.7 per cent, and it could decide to strike an alliance with the Left Party or the Greens instead of maintaining the coalition.

To lose on her home turf will come as an acute embarrassment to Mrs Merkel.

She made nine visits to the state of 1.4 million people in the lead up to the election, and the defeat will raise question marks over her credibility and leadership.

Before the Mecklenburg-Vorpommern vote, the Christian Democrats had already suffered a series of humiliating pummellings in five regional elections this year. In March the party lost control of the prosperous state of Baden-Wurttemberg for the first time in 60 years after the Social Democrats and a resurgent Green Party pushed them into a lowly third place.

Coalition at Risk

The Financial Times reports Merkel suffers blow in regional election

Angela Merkel, the German chancellor, suffered a blow on Sunday as the parties underpinning her national government were on course for big losses in a regional vote in the Baltic Sea state of Mecklenburg-Western Pomerania.

Exit polls published by ARD, the broadcaster, shortly after voting closed suggested that Ms Merkel's conservative Christian Democrats faced their worst ever result in the state, with the Free Democrats likely to be kicked out of parliament.

Social Democrats and Greens, the main opposition parties and potential partners in government at national level, gained strongly, although a so-called red-green coalition did not look likely in Mecklenburg.

Manuela Schwesig, a leading Social Democrat and the state's social affairs minister, said the vote gave Erwin Sellering, the state premier, "a clear mandate" to continue governing – though she did not say with which partner.

Voters have clearly had enough of Merkel's Eurozone bailout policies. Whether she has the votes to ram through expansion of the EFSF remains to be seen.

As noted yesterday, Two-Thirds of Germans Oppose Expanding EFSF, Believe Merkel has "Lost Grip" on Euro Crisis.

Today voters took it out on her at the polls. Merkel's only concern now is her legacy. She does not want a breakup of the Eurozone on her watch.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Nevada Dramatically Expands Lawsuit Against Bank of America; Recap of Recent BAC Events

Posted: 04 Sep 2011 09:47 AM PDT

Last week the state of Nevada amended its previous complaints against Bank of America.

The Amended Complaint accuses Countrywide Financial of a "pattern of pattern and practice of deceptive conduct ... misconduct cut across virtually every aspect of Defendants' operations - from originating to servicing and, all too often to foreclosing on the loans and homes of Nevada consumers".

Please consider Nevada Wallops Bank of America With Sweeping Suit

The state of Nevada dramatically expanded its lawsuit against Bank of America today, turning the narrow case it filed late last year into a broadside that targets virtually all aspects of the bank's mortgage operations. Bank of America has previously denied wrongdoing.

The sweeping new suitcould have repercussions far beyond Nevada's borders. It further jeopardizes a possible nationwide settlement with the five largest U.S. banks over their foreclosure practices, especially given concerns voiced by other attorneys general, New York's foremost among them.

Nevada's attorney general charges that Bank of America and the now-defunct mortgage giant Countrywide acquired by the bank in 2008, deceived borrowers and investors at almost every stage of the process.

According to the suit, borrowers were duped into unaffordable loans and then victimized again through a misleading mortgage modification program that homeowners tried to use to avoid foreclosure. Finally, the suit alleges, the bank filed fraudulent documents to move forward with the foreclosures.

"Taken together and separately, [Bank of America's] deceptive practices have resulted in an explosion of delinquencies and unauthorized and unnecessary foreclosures in the state of Nevada," the suit alleges.

The state's suit had previously been confined to the modification issue. At that time, Bank of America also said homeowners would be best served not through litigation but through reaching a multistate settlement that would "broaden programs for homeowners who need assistance."

By expanding the suit, Nevada's Catherine Cortez Masto joins New York Attorney General Eric Schneiderman in stepping up investigations of the bank. In addition to initiating a broad investigation of banks' securitization practices, he recently filed a suit charging that Bank of America had fraudulently foreclosed on homeowners.

Last week, fissures in the coalition became public when Iowa Attorney General Tom Miller, who leads the 50-state coalition, removed New York's Schneiderman from the group's executive committee because, he said, Schneiderman had "actively worked to undermine" its efforts by opposing any quick settlement. As part of any settlement (reportedly in the range of $20 billion to $25 billion), the banks have been seeking a wide-ranging release from future legal claims, not just those related to foreclosure practices. Schneiderman has publicly rejected that idea and pushed ahead with his investigation.

Masto's suit signals that Nevada may also reject any settlement in the near future on the foreclosure issues. Two other attorneys general, notably those from Massachusetts andDelaware, have also voiced concerns recently about any broad waiver of claims.

Bank of America Broke 2008 Mortgage Settlement Agreement

The New York Times covered this on August 30, in Nevada Says Bank Broke Mortgage Settlement

The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.

In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada's participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers' modification requests were pending and failed to meet the settlement's 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

This Nevada lawsuit is in addition to the FHFA $196 Billion lawsuit against 17 banks accused of "misleading Fannie Mae and Freddie Mac about the soundness of the mortgages underlying the securities".

For details of the FHFA lawsuit, please see Is it Acceptable to Present a $196 Billion Sac-O'-Sheet to Sophisticated Investors as Diamonds-in-the-Rough?

Bank of America insists it does not need to raise capital but it raised $5 billion from Warren Buffett on very onerous terms and it has been busy shedding billions of assets.

Yves Smith at Naked Capitalism reported Bank of America Death Watch: Unloading "Non-Core" Assets Aggressively

Indeed, actions speak louder than words.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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If Donkeys Could Vote; Orwellian Madness

Posted: 04 Sep 2011 08:23 AM PDT

On the lighter side ...

Link if video does not play: https://www.youtube.com/watch?v=F6etfJgZQ7A&feature=player_embedded

Orwellian Madness

Here is something straight from the insane asylum: Reich: Government Has To Spend More To Get Out Of Debt

"At this point, there's a huge shortfall between consumer spending, businesses are not going to hire, on the one hand, and also on the economy's potential at full employment or near full employment on the other hand. Government is the spender of last resort. The only way to restart not only jobs, Simon, but also economic growth, which is terribly important for every purpose including deficit reduction. the only way we're going to get the deficits and long-term debt under control is if we get back growth. The only way to get back growth is for government to be this spender of last resort," Former Secretary of Labor Robert Reich told CNBC.

Such idiocy did not work for Japan and it will not work here. Of course the nutcases will simply respond that "Japan did not spend enough".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Seth's Blog : People looking for 'more of the same' aren't actively looking

People looking for 'more of the same' aren't actively looking

While there may be a lot of them, they're satisfied with what they've got, which means that they're hard to attract.

No, the real opportunity is in reaching out to the dissatisifed, to those in search of something new.

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sâmbătă, 3 septembrie 2011

Mish's Global Economic Trend Analysis

Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable IRS Credits
Two-Thirds of Germans Oppose Expanding EFSF, Believe Merkel has "Lost Grip" on Euro Crisis; To Hell with Taxpayers, Merkel Worried about Her Legacy
CNN Poll Says 8 in 10 Think US is in Recession; Obama Full-Month Approval in August Falls to Lowest of His Presidency

Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable IRS Credits

Posted: 03 Sep 2011 06:05 PM PDT

According to a Treasury Inspector General audit, Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits

Redaction Legend:
1. Tax Return/Return Information
2(f). Risk circumvention of agency Regulations or Statutes

IMPACT ON TAXPAYERS

Many individuals who are not authorized to work in the United States, and thus not eligible to obtain a Social Security Number (SSN) for employment, earn income in the United States. The Internal Revenue Service (IRS) provides such individuals with an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns. Although the law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, an increasing number of these individuals are filing tax returns claiming the Additional Child Tax Credit (ACTC), a refundable tax credit intended for working families. The payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.

WHAT TIGTA FOUND

Claims for the ACTC by ITIN filers have increased from $924 million in Processing Year 2005 (the calendar year in which the tax return was processed) to $4.2 billion in Processing Year 2010. Clarification to the law is needed to address whether or not refundable tax credits such as the ACTC may be paid to those who are not authorized to work in the United States. *********************2(f)*********************************** Also, employees in the Accounts Management Taxpayer Assurance Program are not taking steps to notify taxpayers when it is obvious their SSNs and names have been compromised.

TIGTA also found that a feature on tax preparation software programs which automatically takes the taxpayer identification number and enters it as the identifying number for the taxpayer's Wage and Tax Statements ******************2(f)*************************************.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the IRS work with the Department of the Treasury to seek clarification on whether or not refundable tax credits may be paid to individuals who are not authorized to work in the United States. TIGTA also recommended the IRS require individuals filing with ITINs and claiming the ACTC to provide specific verifiable documentation to support that their dependents meet the qualifications for the credit, including residency, and that questionable Child Tax Credit (CTC) and ACTC claims on ITIN returns **********2(f)*******************************. The IRS should also notify taxpayers when their SSNs are compromised and ensure that software packages do not auto-populate an ITIN onto Wage and Tax Statements.

IRS management agreed to discuss with the Department of the Treasury the issue of ITIN filers' ACTC eligibility. The IRS did not agree to require additional documentation to support CTC and ACTC claims on ITIN returns ********************2(f)*********************************** The IRS is exploring options to alert taxpayers whose SSNs have been compromised and plans to address software that auto-populates an ITIN onto Wage and Tax Statements and take sanctions for noncompliance.

American Recovery and Reinvestment Act of 2009 Made Fraud Easier

The Washington Post commented on the fraud in Undocumented workers got billions from IRS in tax credits, audit finds

Sen. Orrin Hatch (R-Utah), ranking member of the Senate Finance Committee, On Friday announced plans to examine the refunds.

"The disconcerting findings in this report demand immediate attention and action from Congress and the Obama Administration," Hatch said in a statement.. "With our debt standing at over $14.5 trillion and counting, it's outrageous that the IRS is handing out refundable tax credits...to those who aren't even eligible to work in this country."

Wage earners who do not have Social Security numbers and are not authorized to work in the United States can use what the IRS calls individual taxpayer identification numbers. Often these result in fraudulent claims on tax returns, auditors found.

Their data showed that 72 percent of returns filed with taxpayer identification numbers claimed the child tax credit.

Changes to tax law are partly to blame for the explosion in refunds for additional child tax credits in recent years, auditors found. Before 2001, filers needed to have three or more children to qualify — and to owe more Social Security taxes than earned income credits.

But those requirements have been eliminated and the allowable refund for each child doubled. The American Recovery and Reinvestment Act of 2009 also made the refund easier to get, auditors found.

Fraud and government programs go hand-in-hand.

In my opinion we should kill this ridiculous program entirely. The next best alternative is to not grant any credits to anyone who does not have a social security number and is not a US citizen.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Two-Thirds of Germans Oppose Expanding EFSF, Believe Merkel has "Lost Grip" on Euro Crisis; To Hell with Taxpayers, Merkel Worried about Her Legacy

Posted: 03 Sep 2011 04:50 PM PDT

Against the wishes of two-thirds of German citizens, Merkel is hell-bent on ramming through a massive expansion of the European Financial Stability Facility (EFSF).

Please consider Germans oppose bailout boost, critical of Merkel

Center-right Chancellor Merkel is trying to face down a threatened revolt in her own bloc in parliament over a September 29 vote to ratify more money and powers for the euro rescue fund.

She was also publicly criticized by her ex-mentor Kohl, Germany's longest-serving post-war chancellor and architect of German reunification, over policy on Europe, the United States and Libya, saying Berlin had "no view or idea" about where it was going.

An opinion poll by Infratest dimap for public broadcaster ARD suggested 68 percent of Germans agree with Kohl's comments published in a magazine last week, while 66 percent think the Merkel government has "lost its grip" on the euro crisis.

Two thirds said they were opposed to giving more funds for the European Financial Stability Facility (EFSF) and over half were against introducing common euro-zone bonds -- a proposal the German government has energetically rejected so far.

At the same time, 64 percent believed European countries should coordinate policy more closely, suggesting most Germans are reluctant to fund more bailouts but are not "eurosceptic" in the broader sense.

Coordinating policy and "eurosceptic" are not opposites. For example, the US could coordinate trade policies with Canada and that would neither imply or deny "Loonie Skepticism".

To Hell with Taxpayers, Merkel Worried about Her Legacy

The important take-away is German taxpayers are clearly fed up with bailouts, yet Merkel does not care one iota what they think. After all, she has a legacy to preserve. At this stage, enduring legacy is even more important to Merkel than reelection.

She does not want the Euro to go down on her watch. Nothing else matters to her, and that is why she repeatedly gives in to demands of ECB president Jean-Claude Trichet and wishes of French President Nicolas Sarkozy.

Just to show you how wishy-washy Merkel is regarding the EFSF, on August 17 Bloomberg reported "German Chancellor Angela Merkel and French President Nicolas Sarkozy rejected an expansion of the 440 billion-euro ($633 billion) rescue fund".

Now she is in favor of it. So is Sarkozy. What happened?

This ......

Greek One-Year Yield Soars to 72%

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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CNN Poll Says 8 in 10 Think US is in Recession; Obama Full-Month Approval in August Falls to Lowest of His Presidency

Posted: 03 Sep 2011 11:05 AM PDT

President Obama's approval index rating is -21, the lowest ever. Obama's sinking numbers can be explained by a CNN Poll: 8 in 10 think we're in a recession

Economic fears are not diminishing. More than eight in 10 Americans think the economy is in another recession, according to a new CNN/ORC poll. One-third of those surveyed think it's serious.

While the country isn't technically in a recession because the economy hasn't experienced two straight quarters of negative growth, the poll's results highlight the importance of President Barack Obama's jobs speech next Thursday night.

Don't expect Republicans to stop demanding more budget cuts though. Almost half of GOPers surveyed say deficit reduction is just as important as creating more jobs, including those who identify themselves as tea party supporters.

Democrats strongly disagree. Eighty-three percent want the president to focus more on job growth, and two-thirds of independents say the same.

This could hint at the president's economic plan as he campaigns for re-election. With only 34% of Americans approving of the way he is handling the economy, according to a CNN/ORC Poll released earlier this week, job creation could help the president solidify his party's eroding support, while bringing in key independent voters.

Definition of Recession

It's disappointing to see CNN spreading nonsense that it takes two quarters of negative growth to call a recession. Two quarters is certainly a sufficient condition, it is not a necessary condition.

Recessions are called by the NBER and nearly all them start while the economy is still growing.

Poll Results

35% say the recession is serious, 34% moderate, 13% mild. Only 18% say the country is not is recession. Click here for complete CNN poll results.

I suggest the average person has it correct.

Obama Full-Month Approval in August Falls to Lowest of His Presidency

Please consider Obama Approval Index Month-by-Month

When tracking President Obama's job approval on a daily basis, people sometimes get so caught up in the day-to-day fluctuations that they miss the bigger picture. To look at the longer-term trends, Rasmussen Reports compiles the numbers on a full-month basis, and the results can be seen in the graphics below.

In August, the number who Strongly Approve of Obama's job performance was at 21%. That's down three points from 24% in July and the lowest level measured during Obama's entire presidency. The previous low was 23% reached in both April and June of this year.

Since July 2009, the number who Strongly Approved of the president's performance has now ranged from a low of 21% to a high of 31%. By comparison, 43% Strongly Approved of Obama's performance in January 2009.

The number of voters who Strongly Disapprove of the president's performance increased a point from July to 42% in August. The number of voters who Strongly Disapproved has ranged from 37% to 44% since July 2009.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Damn Cool Pics

Oprah And The Yelling Goat

Posted: 02 Sep 2011 10:36 PM PDT

What happens when you take Oprah and add the "Goat Yelling Like a Man?" Complete synchronicity. You get a laugh! And you get a laugh! And you, and you…everybody gets a laugh!

Celebrities You Didn't Know Were Multiracial

Posted: 02 Sep 2011 06:26 PM PDT

While some of these celebrities ethnic backgrounds might not surprise you, others will have you scratching your head. Here are 34 celebrities who's lineage is much more interesting than you would have thought. Who knew?.

Steve Jobs