Central Perk

luni, 3 octombrie 2011

Seth's Blog : Squidoo launches magazines

Squidoo launches magazines

Here's a Squidoo update, along with a chance to share your work and your passion and perhaps find a new gig.

Six years after our founding, we're now ranked #73 out of the millions of websites in the US measured by Quantcast. We now get more traffic than Digg, NBC or Hulu.

Millions of people have used Squidoo to build pages about content that they care about and want to share. What we've discovered is that in fact, self-expression is truly important to many people. That rush you get when you know an audience wants to hear what you have to say about something you care about--we've been supporting that for a while and it's clearly resonating with people.

What we've been committed to for the last six years is the idea that self-expression is at the heart of the best content, and that the web makes it easy to create personal media. Squidoo gives people a chance to build a personal interest graph online, page by page, interest by interest.

Announcing magazines: Squidoo is adding on to our core by launching a series of online magazines, highlighting great content, publishing original articles and connecting passionate people via Facebook. With Halloween right around the corner and more people eating vegetarian we thought we'd start there, but with a lot more to come. The team has done a fabulous job launching these, I hope you can take a look, or even better, join in.

If you'd like to contribute to our upcoming roster of new magazines (either to promote your own work or to be considered as an editor) please fill out this quick form and we'll send you regular updates.

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“Our Military is Stronger and Our Nation is More Secure"

Your Daily Snapshot for
Monday, October 03, 2011

"Our Military is Stronger and Our Nation is More Secure"

On Friday, President Obama welcomed Army General Martin Dempsey as the new Chairman of the Joint Chiefs of Staff. He also honored the outgoing Chairman, Navy Admiral Mike Mullen, and thanked him for his four years of extraordinary service in that role and his four decades in uniform saying that “our military is stronger and our nation is more secure because of the service that you have rendered.”

Watch the full video.

Photo of the Day

President Barack Obama participates in the Armed Forces farewell tribute to Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, right, at Joint Base Myer-Henderson Hall, in Arlington, Va., Sept. 30, 2011. (Official White House Photo by Pete Souza)

Seth's Blog : "I couldn't have done it without you."

"I couldn't have done it without you."

Seeking out the opportunity to say that to your team is at the heart of every successful project.

Of course, that means the members of the team have to decide it's worth the risk to earn it. For some, "indispensable" is threatening.

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duminică, 2 octombrie 2011

Mish's Global Economic Trend Analysis

Trade War Threat Looms Once Again; Senate Takes Up Bill to Punish China for Manipulating Currency; How Many Jobs Would Tariffs Create?
Greek Cabinet to Fire 20% of Public Workers; Unconstitutional Action? What if Greece Says "* You" to the Troika?
House is Gone but Debt Lives On; Expect Huge Surge in Deficiency Lawsuits

Trade War Threat Looms Once Again; Senate Takes Up Bill to Punish China for Manipulating Currency; How Many Jobs Would Tariffs Create?

Posted: 02 Oct 2011 06:35 PM PDT

Trade wars and tariffs never solve anything. Nonetheless Congress addresses Chinese currency manipulation

After years of trying, Congress is taking another stab at retaliating against what many see as Chinese manipulation of its currency to make its exports to the United States cheaper and U.S. goods more expensive in China.

The Senate is expected to take up legislation Monday that would impose higher U.S. duties on Chinese products to offset the perceived advantage that critics say China gets by undervaluing its currency.

The Senate bill has bipartisan support and is expected to clear a procedural hurdle Monday evening. But intense lobbying against it by American-based multinational corporations and their trade associations could spell trouble for the legislation.

Sens. Chuck Schumer, D-N.Y., and Lindsey Graham, R-S.C., along with others, have tried for at least six years to pass legislation making it easier to impose higher tariffs on Chinese goods. That would help compensate for what they say is Beijing's effort to keep its currency, the yuan, undervalued against the dollar.

Among Republicans, presidential hopeful Mitt Romney has said he would penalize China for keeping its currency artificially low.

The Senate bill, which does not specifically mention China, has two main components:

--Up to now, the Treasury Department has had to declare that a country was willfully manipulating its currency to trigger a response, which is something the Bush and Obama administrations have avoided doing. The legislation would require Treasury to determine only that another country's currency is misaligned, then give its government 90 days to make corrections before countervailing duties are imposed.

--The bill makes it easier for specific industries to petition the Commerce Department for redress under claims that the misaligned currency of China or another country amounts to an export subsidy. That more narrowly focused provision passed the House last September on a 348-79 vote. The last Congress, however, ended before the Senate could take it up.

Supporters point to studies by the Peterson Institute for International Economics that say a 20 percent appreciation of the yuan would reduce the U.S. trade deficit by up to $120 billion and create a half-million U.S. jobs. The more liberal Economic Policy Institute estimates that a 28.5 percent appreciation would create more than 2 million jobs.

Tariffs Will Cost Jobs

Anyone who thinks government officials can determine if and when currencies are "misaligned" has no economic sense, is engaging in populist rhetoric to buy votes, or both.

The clowns at the Economic Policy Institute think tariffs will create 2 million jobs and reduce the trade deficit by $120 billion.

I suggest tariffs will cost jobs. Manufacturing will not return to the US, nor will manufacturing of any sort, on account of tariffs. Wage differentials are too great and trade channels will simply shift (at great expense) to another country.

However, prices will rise, sales will slow, and the squeeze on consumers will accelerate. Here is a simple example: Let's assume a 35% tariff on underwear. How many jobs will return to the US ? 50? 100? Any?

Let' be generous and assume 500 (although the answer is most likely zero). In return for those 500 jobs, everyone in the United States has to pay 35% more for underwear? Is that a good trade-off?

Clearly the answer is no, but it is much worse than that. We also need to address the question "how many jobs would be lost because underwear is 35% higher?"

Whatever additional money is spent on underwear by 300 million Americans will come at the expense of those consumers spending less on something else, perhaps eating out, perhaps buying toys, or perhaps buying shirts.

To save 500 or whatever manufacturing jobs, everyone buying underwear will cut back on something else. Those cutbacks will have a real effect on shipment of goods (trucking), eating out, recreation, etc., just to benefit underwear manufacturers.

Magnify the underwear example by the vast numbers of idiotic lawsuits from manufacturers that will stem from a law that only requires some bureaucrat to figure out if a currency is misaligned. Then figure out how much bureaucratic expense and waste will that cause?

Lindsey Graham and Mitt Romney are definitely on the wrong side of this issue.

If Congress is foolish enough to pass such a law, and president Obama is foolish enough to sign it, expect to lose a half million jobs minimum because of it. Depending on retaliations and how things escalated, 2 million jobs lost would not be surprising in the least.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Greek Cabinet to Fire 20% of Public Workers; Unconstitutional Action? What if Greece Says "* You" to the Troika?

Posted: 02 Oct 2011 11:00 AM PDT

Government workers make up 20% of the Greek labor force. Worse yet, most of them cannot be fired for virtually any reason. That is about to change, and it's a much needed change for the better.

However, the idea that it will reduce the budget deficit to required levels by 2012 or even 2014 is ludicrous. When that does not happen larger haircuts will be unavoidable.

Reuters reports Greek cabinet to approve '12 budget, plan to sack state workers

The Greek cabinet is expected to approve a contentious plan Sunday to lay off state workers, and sign off on a draft of next year's budget, in a race to slash spending, free up bailout loans and stave off bankruptcy.

Without the release of an 8 billion euro ($10.7 billion) tranche of an EU bailout, massively indebted Greece could run out of money to pay state wage bills within weeks.

To persuade the troika to release the loans, Greece has promised to raise taxes, cut state wages and accelerate plans to reduce the number of public sector workers by a fifth by 2015.

But all eyes will be on their forecasts for 2012-2014. If the inspectors conclude that Greece's recession will continue to be worse than predicted, EU officials have suggested that banks that agreed to write-off 21 percent of the value of Greek debt in July may be forced to take more pain.

Sunday's budget figures will indicate whether forecasts need to be revised. The government has been falling behind an ambitious deficit target of 7.6 percent of GDP for 2011, partly because of a deeper than expected contraction of the economy.

No part of the package is more contentious than the plan to lay off state workers -- who make up a fifth of the Greek workforce and are guaranteed jobs for life under a constitution that bans firing them under nearly all circumstances.

The government plans to begin layoffs by putting 30,000 workers in a "labor reserve" by the end of this year. They would be paid 60 percent of their salaries for a year, after which they would be dismissed.

But the government has yet to announce how the plan would work. If most workers placed in the reserve are near pension age and planning to retire soon anyway, the savings would be negligible and the inspectors are likely to be unimpressed.

The deputy leader of the Christian Social Union, one of three parties in Chancellor Angela Merkel's center-right coalition, said Sunday Greece may be better off leaving the euro zone if it cannot restore its fiscal health.

Alexander Dobrindt told Deutschlandfunk radio that a Greek exit from the euro would be a last resort measure and Greece would find it easier to recover outside the currency bloc.

"I believe it is a solution, if one wants to bring Greece back into an economically stable competitive condition, that this would be done outside the euro zone," he said.

Unconstitutional Action?

From an eventual economic recovery standpoint, even more government workers should be fired than proposed. Moreover, the retirement age of workers needs to be increased, and pensions reduced.

However, such actions are against the Greek constitution and I see no reference the Greek constitution was actually changed. I can only find a call for a change by prime minister George Papandreou, on June 19, 2011: Greek PM calls for constitutional change amidst enduring crisis

Democracy International discusses the proposed referendum on July 15, 2011 in Direct Democracy in Greece & the 2011 Referendum

Greek Economy in Depression, will Further Collapse

Since government spending adds to GDP by definition, Greek GDP will collapse.

Worse yet, tax hikes are precisely the wrong thing to do in the midst of an economic depression, and will not aid the recovery in any time frame.

There is no chance Greek can make its budget deficit estimates unless they are radically changed, and probably even if they are radically changed (on my assumption the budget estimate changes will not be radical enough).

It will be interesting to see what kind of unrealistic haircuts the Troika comes up with next. Anything under 50% is ridiculous (with some estimates running as high as 90%). Yet I will take a wild stab at 30%, (up from 21%).

Looking ahead to the Exit of Papandreou

Looking ahead, prime minister George Papandreou will not survive the next election. He is hanging by a thread now, with a mere 4-seat majority in Parliament.

Will the next government go along with all these proposals? I highly doubt it.

What if Greece Says "* You" to the Troika?

All these actions by the Troika are based on the silly belief the Troika is in control of a Greek default and can set the parameters thereof.

The Real Deal

Greeks are so pissed at banks, at bailouts, at austerity, at Greek Prime Minister Papandreou, and at the Greek parliament the majority simply does not care if a revolt is worse than further austerity measures.

Greek citizens they have been lied to so often they probably cannot tell the difference between relatively good scenarios and disastrous ones if they tried. The one thing they do correctly understand is bailouts were not setup for the benefit of Greece, but rather the benefits of lenders.

So what would you do if you were Greek?

If you were wealthy and mobile you would pull your money out of Greek banks and leave. Otherwise, you would be at the point of telling the EU, ECB, and IMF "* You".

Portugal and Spain are in the same boat, just not as advanced.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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House is Gone but Debt Lives On; Expect Huge Surge in Deficiency Lawsuits

Posted: 02 Oct 2011 12:43 AM PDT

Forty-one states allow lenders to sue for mortgage debt if a home fetches less than the mortgage in a foreclosure sale. It always will. Such lawsuits are one of the reasons I have consistently advised people to consult an attorney before walking away.

For a nice write-up on deficiency judgments please consider the Wall Street Journal article House Is Gone but Debt Lives On.

Joseph Reilly lost his vacation home here last year when he was out of work and stopped paying his mortgage. The bank took the house and sold it. Mr. Reilly thought that was the end of it.

In June, he learned otherwise. A phone call informed him of a court judgment against him for $192,576.71. It turned out that at a foreclosure sale, his former house fetched less than a quarter of what Mr. Reilly owed on it. His bank sued him for the rest.

The result was a foreclosure hangover that homeowners rarely anticipate but increasingly face: a "deficiency judgment."

Until recently, "there was a false sense of calm" among borrowers who went through foreclosure, Mr. Englett says. "That's changing," he adds, as borrowers learn they may be financially on the hook even after the house is gone.

Some close observers of the housing scene are convinced this is just the beginning of a surge in deficiency judgments. Sharon Bock, clerk and comptroller of Palm Beach County, Fla., expects "a massive wave of these cases as banks start selling the judgments to debt collectors."

Because most targets have scant savings, the judgments sell for only about two cents on the dollar, versus seven cents for credit-card debt, according to debt-industry brokers.

Silverleaf Advisors LLC, a Miami private-equity firm, is one investor in battered mortgage debt. Instead of buying ready-made deficiency judgments, it buys banks' soured mortgages and goes to court itself to get judgments for debt that remains after foreclosure sales.

Silverleaf says its collection efforts are limited. "We are waiting for the economy to somewhat heal so that it's a better time to go after people," says Douglas Hannah, managing director of Silverleaf.

Investors know that most states allow up to 20 years to try to collect the debts, ample time for the borrowers to get back on their feet. Meanwhile, the debts grow at about an 8% interest rate, depending on the state.

Laws vary from state to state and things may depend on whether or not the loan is a recourse loan or not. Once again, before walking away, and before considering a short-sale or bankruptcy, please consult an attorney who knows real estate laws for your state.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Seth's Blog : What to do next

What to do next

This is the most important decision in your career (or even your day).

It didn't used to be. What next used to be a question answered by your boss or your clients.

With so many opportunities and so many constraints, successfully picking what to do next is your moment of highest leverage. It deserves more time and attention than most people give it.

If you're not willing to face the abyss of choice, you will almost certainly not spend enough time dancing with opportunity.

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sâmbătă, 1 octombrie 2011

Mish's Global Economic Trend Analysis

Reader Question on Quantitative Easing; Let The Fed Bashing Continue

Posted: 01 Oct 2011 07:21 PM PDT

Reader Alan writes ...

Dear Mish,

I enjoy your insightful observations, particularly your understanding that deflation is all about credit contraction. Does this mean that Federal Reserve monetary expansion, so long as it is less than private credit contraction, can have beneficial mitigating impact?

Thank you,

Alan

Fed QE Expansion Not Beneficial

Fed expansion is certainly not beneficial. It distorts the markets.
Commodities soared on QE2 yet it created no jobs and did nothing to revive housing
QE hammered those on fixed incomes
QE creates a potential exit problem for the Fed down the road
The idea the Fed can manage the economy is nonsensical. We have enormous bubbles of increasing amplitude to prove it.

Let The Fed Bashing Continue

In a seriously misguided post, Terry Ponick at the Washington Times says Note to Republicans: Stop bashing Ben Bernanke

Ben Bernanke and his Federal Reserve weighed in yesterday afternoon with their latest attempt to keep the U.S. economy from plunging back into the tank of despair. Their latest, greatly-anticipated program, known in trade jargon as "Operation Twist," aims to pull massive investments in short-term Treasury instruments and get them into riskier assets like long-term bonds, stocks, and mortgages by forcing these investments toward more appealing levels of return.

But the positive reaction the Fed probably sought was not forthcoming. After a short market pop yesterday after the Fed's announcement, the general stock market plunged. The waterfall effect was felt overnight in world markets and has returned to the U.S. market today with a vengeance, with the Dow Jones Industrials down over 400 points as of this writing. Commodities markets were hammered even worse, including the previously hot trade in gold.

Worse, as if on cue, the Republican Congressional leadership piled onto the Fed by publicizing an extraordinary, unusual, and highly critical letter they'd just sent to the Chairman. To read it, parsing your way through the government-speak, you'd think Bernanke was the FBI's Public Enemy Number One.

Stated the letter in part, "It is not clear that the recent round of quantitative easing undertaken by the Federal Reserve has facilitated economic growth or reduced the unemployment rate.'' Right answer as far as it goes. It didn't.

But the problem here is not Ben Bernanke or the Fed. The problem is that, roughly since the beginning of 2009, Washington's political leadership has entirely failed to do its part to work in concert with the Fed to right the nation's tottering economy. And this is something that politicians on both sides of the aisle find painfully inconvenient to share with the public. It reflects badly on their politicized and self-serving antics. So they blame the Fed.

In point of fact, whether the Fed's efforts to provide monetary stimulus to the economy are Keynesian or post-Keynesian is not the real issue here. In the case of an economic emergency (such as 9/11) or an increasingly deflationary environment (such as our current era when plunging housing prices at least initially began to lead to a disastrous decline in the value of commodities), the classic initial fix is to flood the market with liquidity, gradually withdrawing the excess as soon as practicable to avoid the opposite problem of an inflationary environment.

That's what Bernanke's Fed has been doing for roughly three years now, yet it hasn't seemed to have done much good. But the reason is not that the Fed's policies are necessarily wrong. It's just that there's always an implied support expected from the Federal government, courtesy of a competent, concerned Congress that tailors new legislation to aid and abet the efforts of the Fed. In other words, when all the wagons are pulling together, the U.S. can usually extricate itself from any mess—and that means even the current morass.

It's time to stop the Fed-bashing. It's time to respect Bernanke for having done what he's done. And it's time to give him the hand that he'd been politely requesting all along for those who'd care to listen.

Fed To Blame

Quite frankly that's total bullsheet. History shows the Fed is responsible for blowing bubbles of ever increasing amplitude over the years. The only winners have been banks and Wall Street.

Bernanke deserves no respect. He is an academic wonk with no idea what caused the great depression, and is clueless as to what to do now.

Terry Ponick correctly bashes Democrats and Republicans in his article, but to say the Fed's polices are not wrong is ludicrous. There should not be a Fed in the first place, thus any policy of the Fed can logically be considered wrong.

The only thing that is true is the way in which Perry blasted the Fed is wrong, and I hope that costs Perry the nomination in favor of Chris Christie.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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FICO Survey: “Sharp and Deep Turn to Pessimism” on Housing, Credit Card Lending, Auto and Student Loans

Posted: 01 Oct 2011 10:21 AM PDT

Aaron Task at the Daily Ticker had an interesting interview with Mark Greene, CEO of FICO regarding a "Sharp and Deep Turn to Pessimism" by risk managers at lenders.

FICO's quarterly survey of bank risk managers shows a "sharp and deep turn to pessimism," as CEO Mark Greene details in the accompanying video.

"Across the board [there's] unhappy news" in the survey, most notably in housing, Greene says.

According to the survey, 73% of bank risk managers expect mortgage foreclosure to rise in the next 5 years and 49% predict housing prices won't return to 2007 levels until 2020, at the earliest.

If true, America could be looking at "a decade of housing disaster," which will prompt more and more homeowners to 'walk away' from under-water mortgages, Greene says.

Unfortunately, the bad news is not limited to housing. Among the survey respondents — basically, the people who decide whether consumers can get loans — there are signs of increasing concern about the health of U.S. consumers, across all areas:

Auto Loans: 30% expect delinquencies to rise.
Credit Cards: 40% expect delinquencies to rise.
Student Loans: 48% expect delinquencies to rise.

"Consumers had been doing fairly well — paying off credit card balances. Even student loans were doing well," Greene says. "All of those have turned negative as well in the outlook of risk managers."

To make matters even worse, the survey suggests banks are starting to tighten lending standards and restrict the amount of capital available to consumers, particularly in mortgages, the FICO CEO notes.

This is another sign the economy is already in a recession, not just headed for one.

Addendum:

Patrick Pulatie at LFI Analytics pinged me with this comment: "I have spoken with many lender risk officers. Most will admit off the record that recovery in housing will be much longer, two decades plus. However, they cannot admit that openly."

Mish: It depends on the reference. If one is looking for 2006-2007 peak pricing, then I agree. Furthermore, in "real" terms it may never happen.

However, the bottom in price will be in long before that. Some areas may have bottomed already. Just don't expect prices to go much higher for a long time after the bottom is reached.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Living With an English Mastiff

Posted: 30 Sep 2011 11:34 PM PDT

One of the dogs got into the trash. Was it Jed, Xena, or Tank? I think they are all guilty, but one was not smart enough to get rid of the evidence!

Photo-Realistic Street Art by MESA

Posted: 30 Sep 2011 11:10 PM PDT

M-E-S-A impresses passersby with his fine art skills. His murals are not only massive, they're exceptionally detailed and well done. M-E-S-A has a tendency to use large human heads and crows in his work, which is reminiscent of art by JR and ROA.

30 Strange Currencies Around the World

Posted: 30 Sep 2011 02:43 PM PDT

The common impression is that currencies come only in the form of the paper money in your wallet or coins in your pocket. Or that gold, copper or silver once functioned as primitive form of currencies.

From today's modern society, that's true.

But from history's perspective, we realize currencies took in many forms...including the most bizarre ones.

Zimbabwe Currency