Central Perk

luni, 5 martie 2012

Photo: POTUS and Bo Have an Oval Office Meeting

Your Daily Snapshot for
Monday, March 5, 2012

Photo: POTUS and Bo Have an Oval Office Meeting

During the month of January, official White House photographers captured some incredible moments -- from giving the State of the Union Address, to leading "First Dog," Bo, into the Oval Office.

Interested in seeing more adorable behind-the-scenes photos from the White House? Check out our Flickr photostream.

President Barack Obama looks back as Bo, the Obama family dog, follows him into the Oval Office, Jan. 27, 2012. (Official White House Photo by Pete Souza)

Seth's Blog : Fear, scarcity and value

Fear, scarcity and value

The things we fear are probably feared by others, and when we avoid them, we're doing what others are doing as well.

Which is why there's a scarcity of whatever work it is we're avoiding.

And of course, scarcity often creates value.

The shortcut is simple: if you're afraid of something, of putting yourself out there, of creating a kind of connection or a promise, that's a clue that you're on the right track. Go, do that.

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duminică, 4 martie 2012

Mish's Global Economic Trend Analysis

Australia Services Index Plunges to Significant Contraction; Bleakest of Views From Retail Shops; Retail and Housing Bloodbath Coming Up
Ron Paul on Face the Nation Blasts Rush Limbaugh's Insincere Apology, Santorum's Fake Conservatism, Government Mandates; Rooting for Santorum; 10 Things That Should Be Clear
Super Tuesday Delegate Rules and Preview; Brokered Convention Revised Math

Australia Services Index Plunges to Significant Contraction; Bleakest of Views From Retail Shops; Retail and Housing Bloodbath Coming Up

Posted: 04 Mar 2012 05:54 PM PST

Two more signs surfaced today that suggest Australia is headed for if not in recession.

Australia Services Index Plunges, Now in Contraction

Bloomberg reports Australian February Services Fall to Lowest in Almost a Year

Australia's services industry declined in February to the lowest level in almost a year, driven by a drop in new orders as the gap between resources and other industries widens, a private survey showed.

The performance of services index sank to 46.7 last month from 51.9 in January, the weakest reading since March last year, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. Fifty is the dividing line between expansion and contraction.

Today's report, based on a poll of about 200 companies, is similar to the U.S. non-manufacturing ISM index.

Australia Service Index Components

Index sank to 46.7 from 51.9
Selling prices fell to 44.2 from 46.9
Employment measure slid to 47.5 from 51.2
Sales declined to 47.5 from 49.4
New orders plunged to 45.6 from 54.1
Wages indicator dipped to 57.7 from 57.8

This is nothing short of an absolute disaster. That wages have held up is not good news either. Think retailers or any other service industries will be hiring? If so, think again.

Bleakest of Views From Retail Shops

The Herald Sun comments on the Bleakest of views from the shopfronts.

THE Australian retail sector is in trouble like it's never been before. Not even in the dark days of the 1990 recession.

That should have been made blindingly clear when Woolworths, our biggest and most successful retail group, unveiled on Thursday its first drop in profit in nearly 20 years.

Yes, Woolies is getting out of electronics because it stuffed up with Dick Smith.

This story is repeated, with varying degrees of intensity, across all retail.

The casualty list is long and growing. From women's fashions - one of the mainstays of shopping - to housewares and home furnishings, to the big department stores.

Sales are struggling, profits are plunging, jobs are being slashed and names are disappearing from high streets and shopping centres.

The article concludes with complete economic drivel...

The numbers from the big listed retailers, such as Harvey Norman and David Jones, are ominous enough. We are not really seeing the havoc wreaked across small mum-and-dad retailing.

Lower interest rates would help, leaving more money in consumers' pockets.

That's why it's not wise to rule out further rate cuts, just because of the continued boom in the resources sector.

The jobs and spending from the boom, at least, put some floor under retail. But for the foreseeable future it's going to be good for shoppers.

Not so good for shopkeepers. Or the broader economy.

Retail and Housing Bloodbath Coming Up

There is so much misguided drivel in the article that I hardly know where to start.

Here is some nonsense about a shopper's sweet spot: "For shoppers, it's something of a sweet spot. They've never had it so good. The $100 you spend in a supermarket buys you about 5 per cent more in goods than it did a year ago."

Retail prices in Australia are absurd. A 5% reduction in prices is hardly a bargain. As for the notion mining will carry the economy, forget about it. Commodity prices are going to plunge, and besides, commodities are not a big driver of jobs anyway.

There is no "floor" under retail. The bottom is going to fall out, and unemployment is going to soar. In turn, rising unemployment will clobber Australia's already deep-in-trouble housing sector.

As for small shops, they are completely doomed. Store owners with little leeway on wages will not get the income they need to pay taxes, interest, utilities, and rent.

Expect an across the board retail and housing bloodbath because one is coming.

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

Ron Paul on Face the Nation Blasts Rush Limbaugh's Insincere Apology, Santorum's Fake Conservatism, Government Mandates; Rooting for Santorum; 10 Things That Should Be Clear

Posted: 04 Mar 2012 03:27 PM PST

Ron Paul was on Face the Nation today discussing Rush Limbaugh, Rick Santorum, and Government Mandates.

CBS News reports Paul: Limbaugh apologized for personal gain.

Republican presidential candidate Rep. Ron Paul said an apology by conservative talk radio host Rush Limbaugh to Georgetown Law student Sandra Fluke for calling her a "slut" and a "prostitute" was not sincere, and was made only because it best served Limbaugh.

"He's doing it because some people were taking their advertisements off of his program. It was his bottom line he was concerned about," Paul said.

Paul referred to three companies that pulled advertisements from Limbaugh's show following incendiary remarks Limbaugh made about Fluke for testifying before a mock Congressional committee in favor of free contraception insurance coverage at Georgetown, a Jesuit university. [One company's spokesman said that Limbaugh's comments "do not align [with] our values." Another pulled out "Due to continued inflammatory comments - along with valuable feedback from clients and team members" about the remarks.]

Although Paul disagreed with Limbaugh's remarks and called them "over the top," he said the government should not mandate that insurance companies provide contraception coverage.

"This is philosophically and politically important because, does the government have a mandate to tell insurance (companies) what to give?" Paul asked, and then responded to his own question: "So they're saying that the insurance companies should give everybody free birth control pill, that strikes me as rather odd."

Paul was specific in his attack against former Pennsylvania Senator Rick Santorum and his support (as Senator) for Planned Parenthood dollars in a government funding bill.

"He pretends to be the champion of social values," Paul told Schieffer. "That to me is rather bizarre, and that's why I call him a fake conservative."

Attack by Limbaugh Awakens a 'Stop Rush' Campaign

The New York Times reports Attack by Limbaugh Awakens a 'Stop Rush' Campaign

Some of the same activists that persuaded advertisers to boycott Glenn Beck's television show on Fox News in 2009 are now mobilizing against Rush Limbaugh in the wake of his verbal attacks on a Georgetown University law school student this week.

Actually, they are remobilizing. A Twitter account, "Stop Rush," which has been dormant since late 2010, woke up on Wednesday, when Mr. Limbaugh first called the student, Sandra Fluke, a "slut."

On Friday, as complaints from "Stop Rush" and others about Mr. Limbaugh's comments mounted, a handful of companies said that they had halted their advertising on "The Rush Limbaugh Show," at least temporarily.

One of the companies, Quicken Loans, wrote on Twitter, "Due to continued inflammatory comments — along with valuable feedback from clients and team members — QL has suspended ads on Rush Limbaugh program."

Two mattress companies, Sleep Train and Sleep Number, made similar statements on Friday. A representative of Sleep Number wrote on Twitter, "Recent comments by Rush Limbaugh do not align w/ our values, so we made decision to immediately suspend all advertising on that program."

Limbaugh the Epitome of Everything Wrong With Republican Party

Rush Limbaugh and his ilk are the epitome of everything wrong with the Republican party. Limbaugh is a chickenhawk, a sexist, was fired from sports broadcasting for being a racist, was arrested on drug charges, and was addicted to pain killers.

Yet the blazing hypocrite stated "Drug use, some might say, is destroying this country. And we have laws against selling drugs, pushing drugs, using drugs, importing drugs. ... And so if people are violating the law by doing drugs, they ought to be accused and they ought to be convicted and they ought to be sent up."

Asinine talk might appeal to the far right, but the far right is not going to carry the day. Republicans need to be seeking the middle ground and independents. Divisive attacks on abortion, birth control pills, and refusal to consider military cuts are not going to win over independents.

Rooting for Santorum

New York Times columnist Joe Nocera says he is Rooting for Santorum.

I'm rooting for Rick Santorum to win the Republican nomination. Seriously.

You probably think that is because it would be the best possible outcome for President Obama. No doubt it would be. If Santorum were the Republican nominee for president, the independents disenchanted with Obama would come flocking back; their fear of Santorum's unyielding brand of social conservatism would far outweigh their reservations about the incumbent president. A Santorum nomination would likely lead to an epic defeat, ranking with Richard Nixon's 49-to-1 state landslide victory over George McGovern in 1972, or Ronald Reagan's 49-to-1 state whipping of Walter Mondale 12 years later.

But it's not the Democrats I'm really concerned with. It's the Republicans. For more than a decade now, moderate Republicans have been an endangered species, either losing elections or choosing to retire in the face of a hard-line challenger.

During the McGovern-Mondale era, the Democrats were exactly where the Republicans are now: the party had been taken over by its most extreme liberal faction, and it had lost touch with the core concerns of the middle class, just as the Republicans have now.

One person who was drummed out is Lincoln Chafee, the governor of Rhode Island, a Republican turned independent. "I care about deficits," he told me, "but, on social issues, I believe that people should have the right to make their own decisions." As a result, he said, "I realized that there wasn't any room in the Republican Party for me."

When I asked him what it would take to change the Republican Party, he had a quick answer: "What it usually takes is a good drubbing at election time."

If Mitt Romney takes the nomination and then loses to Obama, the extremists who've taken over the party will surely say the problem was Romney's lack of ideological purity. If, however, Santorum is the nominee — and then loses in a landslide — the party will no longer be able to delude itself about where its ideological rigidity has taken it.

An alcoholic doesn't stop drinking until he hits bottom. The Republican Party won't change until it hits bottom. Only Santorum offers that possibility.

The Republican party needs to get rid of the extreme right-wingers like Limbaugh and Santorum, the phonies like Mitt Romney, and the war-mongers like McCain. If they did, they could hold the center for decades (assuming there was anything left of the party).

10 Things That Should Be Clear

It should be clear by now that cutting taxes and spending more money will not shrink the budget.
It should be clear by now the US cannot afford to have troops in 140 countries
It should be clear by now that wars are expensive and we cannot afford more of them
It should be clear by now that some bargaining is needed to bring the deficit under control
It should be clear by now that some tax hikes coupled with genuine structural reforms to rein in collective bargaining of public unions would be a good idea
It should be clear by now that republicans need independents and the center to win
It should be clear by now that the war on drugs cannot be won, should not be fought, and US prisons are overloaded at great expense as a result
It should be clear we need less government on social issues, on drugs, on war-mongering, on taxes, on education, on spending, on everything, not just half of everything along party lines.
It should be clear that Mitt Romney, Rick Santorum, and Rush Limbaugh are not the future of the Republican party
It should be clear Republicans risk losing to a very weak, unpopular Democrat president in the midst of economic uncertainty and miserably high unemployment rates

Those things should be clear but obviously they are not. Perhaps a Democrat landslide is what it takes to make the case clear.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Super Tuesday Delegate Rules and Preview; Brokered Convention Revised Math

Posted: 04 Mar 2012 01:55 AM PST

On Monday February 27, I laid out the Mathematical Case for Brokered Convention. Since then, Michigan, Wyoming, and Washington have posted results. The table below reflects those results.

I made additional changes to my super Tuesday estimates based on new information regarding delegate rules. For example, many states have minimum percentages to receive any delegates and this favors Mitt Romney and Rick Santorum except in Georgia where rules heavily favor Gingrich.

Finally, the LA times and Krem have posted different explanations for how the Idaho caucus works. There are now three possible scenarios for Idaho in play (depending on which explanation is correct).

Totals through March 3 in the table below are from Real Clear Politics 2012 Republican Delegates.

March 6 Super Tuesday numbers are my estimates.

State	Primary	Count	Romney	Santorum	Gingrich	Paul
Total to Date	-	374	166	72	33	29
Iowa	Jan 3	28	6	7	0	0
New Hampshire	Jan 10	12*	7	0	0	3
South Carolina	Jan 21	25	2	0	23	0
Florida	Jan 31	50*	50	0	0	0
Nevada	Feb 4	28	14	3	6	5
Minnesota **	Feb 7	40	2	17	1	4
Colorado **	Feb 7	36	9	17	2	1
Maine **	Feb 11	24	9	3	0	7
Michigan	Feb 28	30*	16	14	0	0
Arizona	Feb 28	29	29	0	0	0
Wyoming **	Feb 29	29	10	8	1	6
Washington **	Mar 3	43	12	3	0	3
Georgia	Mar 6	76	24	6	46	0
Ohio	Mar 6	66	36	30	0	0
Tennessee	Mar 6	58	20	38	0	0
Virginia	Mar 6	49	49	0	0	0
Oklahoma	Mar 6	43	12	21	10	0
Massachusetts	Mar 6	41	38	3	0	0
Idaho **	Mar 6	32	18	0	0	14
North Dakota	Mar 6	28	8	7	6	7
Alaska	Mar 6	27	10	11	3	3
Vermont	Mar 6	17	15	2	0	0
Super Tuesday Est	Mar 6	811	396	190	131	53

* States penalized half of their delegates.
** Not all delegates assigned, or assigned to candidates who have dropped out
*** Idaho Rules are in Question. See explanation below.

Thru Super-Tuesday (If Idaho Splits)
Romney: 396
Santorum + Gingrich + Paul: 374
Other: 41

Thru Super-Tuesday (If Idaho Goes to Paul)
Romney: 378
Santorum + Gingrich + Paul: 392
Other: 41

Thru Super-Tuesday (If Idaho Goes to Romney)
Romney: 410
Santorum + Gingrich + Paul: 360
Other: 41

As you can see there is a decent-sized swing in play for Idaho, depending on the exact caucus rules. Even assuming Romney wins 100% of the Idaho delegates, he would still have barely over 50% of the delegates to date. However, that would probably, but not necessarily be enough as he would pick up some of those 41 and he rates to do reasonably well in California.

Nonetheless, even if Romney does as outlined above, the possibility for a brokered convention still exists. If Romney does worse than expected on Super Tuesday, it's a whole new ball game. It would also be a whole new ballgame if Romney were to do poorly in California, or split the delegates three ways here on out.

Super Tuesday Delegate Rules, Preview, Estimates

The rules for each primary are from the LA Times article Super Tuesday 2012: What's at stake and who's in the lead

Except where noted, polls are from Real Clear Politics Super Tuesday Poll.

GEORGIA PRIMARY
Delegates at stake: 76
How it works: 34 delegates will be awarded proportionally to any candidate receiving more than 20% of the statewide vote. The winner in each of the state's 14 congressional districts will earn another two delegates, and the second-place finisher will win one, unless one candidate wins more than 50% in a district.

Georgia Predictions
Gingrich wins all 14 districts for 28
Romney comes in second in all 14 districts for 14
Gingrich gets 52% of 34 for 18
Romney gets 28% of 34 for 10
Santorum gets 20% of 34 for 6

Totals
Gingrich: 46
Romney: 24
Santorum: 6
Paul: 0

OHIO PRIMARY
Delegates at stake: 66
How it works: 15 delegates will be awarded on a proportional basis to any candidate receiving more than 20% of the statewide vote. If a candidate has more than 50%, though, he wins all 15. Another three delegates will be awarded to the winner in each of the state's 16 congressional districts.
In both cases, voters are electing delegates who have pledged to vote for a presidential nominee. Santorum, it should be noted, did not file delegate lists in all of the congressional districts.
The final three delegates are the elected state party leaders.

Santorum is not on the ballot in 3 of 13 districts.
See Family of three GOP delegates gets Santorum on ballot in an Ohio district for an explanation.

Ohio Predictions
Of the 15 at-large

Romney: 7
Santorum: 8

Of 16 Districts
Romney wins 3 by default and 6 contested for 27 delegates
Santorum wins 7 contested for 21 delegates

State Party Leaders give Romney 2, Santorum 1

Totals
Romney: 36
Santorum: 30

TENNESSEE PRIMARY
Delegates at stake: 58
How it works: 28 delegates will be awarded on a proportional basis to any candidate receiving more than 20% of the statewide vote. If one candidate has more than 66% of the vote, he wins all 28. In the nine congressional districts, a candidate will win all three delegates if he wins 66% of the vote. If the winner and runner-up both have between 20% and 66% of the vote, the winner receives two delegates and the runner-up gets one. The other three delegates are the elected state party leaders.

A more recent MTSU Poll show those percentages are holding.

Tennessee Predictions
Of the 28 at-large Santorum wins 18
Of the 28 at-large Romney wins 10

In the 9 Congressional Districts Santorum wins all 9 for 18
Romney come in second in all 9 for 9

State party leaders give 2 to Santorum, 1 to Romney

Totals
Romney: 20
Santorum: 38

VIRGINIA PRIMARY
Delegates at stake: 49
How it works: 13 delegates will be awarded proportionally to any candidate receiving 15% of the vote. But because there are only two candidates on the ballot -- Romney and Paul -- it will likely be winner-take-all. Three delegates will also be awarded to the winner in each of the 11 congressional districts.

Prediction
Romney wins all 49

OKLAHOMA PRIMARY
Delegates at stake: 43
How it works: 25 delegates will be awarded on a proportional basis to any candidate receiving more than 15% of the statewide vote, unless one candidate has more than 50%, in which case he wins all 25. In each of the state's five congressional districts, three delegates will be awarded proportionally to candidates with 15% of the vote, unless, again, one had more than 50% of the vote in that district. The other three delegates are the elected state party leaders.

Oklahoma Predictions
Santorum wins 48% of 25 for 12
Romney wins 28% of 25 for 7
Gingrich wins 24% of 25 for 6

15 district Delegates
Santorum wins 7
Romney wins 4
Gingrich wins 4

Santorum wins 2 party leader votes, Romney 1

Totals
Romney: 12
Santorum: 21
Gingrich: 10

MASSACHUSETTS PRIMARY
Delegates at stake: 41
How it works: 11 delegates will be awarded proportionally to any candidate receiving more than 15% of the statewide vote. Another three delegates will be awarded based on the vote in each of the state's nine congressional districts, again proportionally to any candidate receiving more than 15% of the vote. The other three delegates are the elected state party leaders.

Based on the rules it appears Santorum will be lucky to win even a handful.
Totals
Romney 38
Santorum 3

IDAHO CAUCUSES
Delegates at stake: 32
How it works: According to the Idaho Republican Party, a secret vote will be held at each county caucus, lasting several rounds. In each round, the candidate with the least number of votes is eliminated until one reaches 50%. County results will then be tabulated statewide, with 29 delegates awarded proportionally based on the final tallies. The other three delegates are the elected state party leaders.

Note: That description from the LA Times differs considerably from this
Idaho Caucus Explanation:

Voters will go to locations for their county and use ballots or tokens to support a candidate on Tuesday, March 6th. There are five candidates for Idaho voters to choose from and they will keep voting until a winner is selected.

In each round the candidate with the fewest votes or anyone with less than 15% is out of the race. The voting ends at the county level when there is a final vote for two candidates or one has more than 50% of the vote for that county.

The delegates assigned for that county will then represent the winning candidate. Counties will report their winner to the state office in Boise. If one candidate has more than 50% of the vote for all of Idaho, they get all 32 delegates. Otherwise, the candidates split delegates they won in each county

Predictions
Assuming the LA Times is correct, the delegate totals will be split between Mitt Romney and Ron Paul. Otherwise Paul or Romney will win them all.

Scenario 1: Mitt Romney: 18 Ron Paul: 14
Scenario 2: Mitt Romney 32
Scenario 3: Ron Paul 32

NORTH DAKOTA CAUCUSES
Delegates at stake: 28
How it works: The caucuses will begin the process of allocating delegates to the national convention, but all 28 will remain unbound, meaning they can ultimately vote for whichever candidate they choose.

Predictions
This is somewhat of a crapshoot but no one is likely to dominate and Paul's organization in caucus states should help.

Romney: 8
Santorum: 7
Paul: 7
Gingrich: 6

ALASKA DISTRICT CONVENTIONS
Delegates at stake: 27
How it works: 24 delegates will be awarded on a proportional basis to candidates, based on the statewide vote, at individual district conventions. The other three delegates are the elected state party leaders.

Predictions
This is another crapshoot but one that favors Santorum and Romney
Totals
Romney: 10
Santorum: 11
Paul: 3
Gingrich: 3

VERMONT PRIMARY
Delegates at stake: 17
How they're awarded: 11 delegates will be awarded on a proportional basis to any candidate receiving more than 20% of the statewide vote, unless one candidate received a majority. Another three delegates will be allocated to the overall statewide winner. The final three delegates are the elected state party leaders.

Rules are such that Romney will walk away with the lion's share
Predictions
Romney: 15
Santorum: 2

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

Seth's Blog : Why lie?

Why lie?

"We've decided to hire someone with totally different skills than yours..." and then they hire someone just like you, but more expensive and not as good.

"We're not going to buy a car this month, my husband wants to wait..." and then you see them driving a new car from that other dealer, the one with the lousy reputation.

"I'm just not interested..." and then you see the new RFP, one you could have helped them write to get a more profitable and productive outcome.

People lie to salesmen all the time. We do it because salespeople have trained us to, and because we're afraid.

Prospects (people like us) lie in many situations, because when we announce that we''ve made the decision to hire someone else, or when we tell the pitching entrepreneur we don't like her business model, or when we clearly articulate why we're not going to do business, the salesperson responds by questioning the judgment of the prospect.

In exchange for telling the truth, the prospect is disrespected.

Of course we don't tell the truth--if we do, we're often bullied or berated or made to feel dumb.

Is it any surprise that it's easier to just avoid the conflict altogether? Of course, there's an alternative, but it requires confidence and patience on the part of the seller and marketer.

Someone who chooses not to buy from you isn't stupid. They're not unable to process ideas logically, nor are they unethical or manipulated by others. No, it's simpler than that:

Given what they know and what they believe, the prospect is making exactly the right decision.

We always make our decision based on what we know and believe. That's a tautology, based on the definition... a decision is the path you take based on what you know and believe, right?

The challenge, then, it seems to me, is to realize that perhaps the prospect knows something you don't, or, just as likely, doesn't believe what you believe. Your job as a marketer is to figure out what your prospect's biases and worldview and fears and beliefs are, and as a salesperson, your job is to help them know what you know.

If you keep questioning our judgment, we're going to keep lying to you.

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sâmbătă, 3 martie 2012

Mish's Global Economic Trend Analysis

Brazil Declares New Currency War on US and Europe; Japan Losing Balance of Trade Battle
Vancouver B.C. vs. Donegal Ireland Real Estate: What Will $890,000 Buy?
Eurozone Wrapup: Unemployment Rate 10.7%, Highest Since 1999; Manufacturing PMI Contracts 7th Month; German Retail Sales Unexpectedly Fall

Brazil Declares New Currency War on US and Europe; Japan Losing Balance of Trade Battle

Posted: 03 Mar 2012 06:12 PM PST

In hope-against-hope scenario, countries with balance-of-trade surpluses struggle to maintain it. Put Japan, Germany, Brazil, and China in that group.

In that group, Japan is losing the Balance of Trade Battle.

Japan's trade deficit widened to a record level in January, as falling exports combined with surging imports of energy.

Imports rose 9.8 per cent from a year earlier, while exports were down 9.3 per cent, resulting in a record monthly deficit of Y1.48tn ($19bn).

Last year Japan's trade balance fell into an annual deficit for the first time since 1980, driven by subdued global demand and soaring fossil fuel imports in the wake of the Fukushima nuclear power crisis.

Japan reported a trade deficit equivalent to 1475 Million JPY in January of 2012. Exports have been the main engine of Japan's economic growth in the past six years. Japan imports raw materials and processes them into high technology products. Japan's major exports are: consumer electronics, automobiles, semiconductors, optical fibers, optoelectronics, optical media, facsimile and copy machines. Its main trading partners are The United States, China and European Union.

Brazil Declares New Currency War on US and Europe

The Financial Times reports Brazil declares new 'currency war'

Brazil has declared a fresh "currency war" on the US and Europe, extending a tax on foreign borrowings and threatening further capital controls in an effort to protect the country's struggling manufacturers.

Guido Mantega, the finance minister who was the first to use the controversial term in 2010, said the government would not "sit by passively" as developed nations continue to pursue expansionary monetary policies at the expense of Brazil.

"When the real appreciates, it reduces our competitiveness. Exports are more expensive, imports are cheaper and it creates unfair competition for businesses in Brazil," he said on Thursday after announcing changes to the so-called IOF tax.

In a presidential decree, the government extended the existing 6 per cent financial transactions tax on overseas loans maturing in up to three years. Previously, the levy was applied only to loans with maturities of under two years.

President Dilma Rousseff later weighed in on the debate, vowing to defend Brazilian industry and stop developed countries' policies from causing the "cannibalisation" of emerging markets.

The move comes as Brazil's central bank also steps up direct intervention in the market, selling dollars and offering derivatives called reverse currency swaps to curb the real's near 9 per cent surge against the US dollar this year.

Brazilian Real vs. US Dollar

The chart shows the Brazilian Real has pretty much been on a tear vs. the US dollar since 2003. Now Brazil is concerned about loss of exports, just as Japan is concerned about loss of exports.

Mathematically speaking, the desire for every country to be net exporters is impossible. Massive trade wars are on the horizon as a result.

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

Vancouver B.C. vs. Donegal Ireland Real Estate: What Will $890,000 Buy?

Posted: 03 Mar 2012 12:16 PM PST

Inquiring minds seeing new data on Vancouver's massively overpriced real estate just might be seeking new comparisons to other places. First, Let's take a look at what $890,000+- will buy in Vancouver.

Vancouver Real Estate

2119 East 3rd Ave, Vancouver
MLS® Number V934050
Listing Price: $899,500
Description: "This 1 ? story home has been extensively renovated over the last few years. The spacious kitchen has birch cabinets and Soapstone counters and opens to a 20x12' deck. On this level are 2 B/Rs and a modern 4pce bath. Upstairs has an office/den area, a 4pce bath and a big master B/R with a W/I closet and 12x8 view deck. The bsmt has a 1 B/R suite rented at $960 P.M. and the attached garage has been converted to a workshop with French doors opening to the fenced garden, with B/I bench, a patio and a kid's sandbox. "

That creative listing puts a new meaning to the the word "upstairs". Is the number of stories listed at "1?" really in question?

2564 East Pender Street, Vancouver
MLS® Number V930595
Listing Price: $899,000
Description: "Complete Transformation! Brand New Envelope! Hardie plank & cedar shingles, new windows, new electrical panel, new HW tank, new plumbing. Spacious 3 level home on extra deep lot!"

I believe it's safe to say the above creative listing puts a new meaning to the phrase "extra deep lot!"

At least the above homes were arguably livable. Check out this next beauty, and guess the price without looking too far ahead.

1016 East 7th Ave, Vancouver
MLS® Number V930461
Listing Price: $899,000
Description: "Opportunity knocks! Builders and investors need look no further if they desire a view property with multi-family zoning (RM-4). This property overlooks China Creek Park, with amazing views of the North Shore mountains and close to Commercial Drive and two skytrain stations. Priced at lot value, the property is being sold 'As Is, Where Is.'"

Congratulations to those who guessed the "opportunity knocks" price of $899,000 for this "As Is, Where Is" bargain complete with "amazing views", presumably through the opening where one would normally expect to find a workable door as opposed to the windows that are all boarded up.

All of the above listings are from Vancouver East Homes From $850,000 to $900,000

Donegal, Ireland

With those bargain listings in hand, let's consider a single property sale that just took place in Ireland. The previous price for the Sandhouse Hotel located in Donegal, Ireland sold at auction was $6 million.

Please consider Spectacular Irish hotel, massive discount price

Paul Diver has purchased a spectacular 55 bedroom hotel overlooking the Donegal coastline for a mere $860,000, down from the $6 million price the original owners sought for the Sandhouse Hotel three years ago.

Diver, who managed the Sandhouse Hotel in Rosnowlagh for 20 years, was delighted to secure the 50 staff members their jobs. He told msnbc.com on Friday that he had been willing to go "a bit higher" when the hotel was auctioned this week in Dublin, but was delighted when his reserve-price bid was accepted by the auctioneers.

Overall, Irish real estate prices have crashed since 2007-08, when the so-called "Celtic Tiger" economy collapsed. Home values have fallen more than 60 percent below their peak five years ago, and commercial properties have suffered similar declines.

There you have it: "amazing views" in Vancouver for $899,000 vs. "amazing views" in Donegal for $860,000.

It is indeed "different" in Canada.

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

Eurozone Wrapup: Unemployment Rate 10.7%, Highest Since 1999; Manufacturing PMI Contracts 7th Month; German Retail Sales Unexpectedly Fall

Posted: 03 Mar 2012 01:51 AM PST

There was lots of Eurozone news this week outside of the typical Greek default fodder. Nearly all of that news was not pretty. Let's take a look at the key stories.

Eurozone Unemployment Rate 10.7%, Highest Since 1999

The Telegraph reports Eurozone unemployment hits record high of 10.7pc

Data from Eurostat showed that the region lost 185,000 jobs in one month, with the vast gap between North and South growing ever wider. The figures for the previous four months were also revised upwards sharply. There are now more than 450,000 more people without jobs than assumed a month ago.

Klaus Baader from Societe Generale said the outlook was "deteriorating drastically" in the region. "Economic slowdown and fiscal austerity has hit the labour market much harder than previously thought."

Eurozone inflation nudged up to 2.7pc, while the latest PMI data for February confirmed that Euroland's manufacturing is still contracting, though the index rose slighty to 49. The "misery mix" of rising unemployment and inflation is a nasty headache for policymakers, threatening incipient stagflation.

Spain's jobless rate continued its relentless climb to 23.2pc, rising to 49.9pc for youths.

The jobless toll rose to 14.8pc in both Ireland and Portugal, though the latter began its austerity drive later. Dimitris Drakopoulos from Nomura said Portugal's economy is likely to contract by 4.4pc this year and another 2.7pc next year, a slightly milder version of the fiscal asphyxiation that brought Greece to its knees.

Eurostat's 19.9pc rate for Greece is already out of date. The Hellenic Statistical Authority said the country lost 126,000 jobs in November alone, pushing the rate to 20.9pc.

At the other extreme, Austria's jobless rate fell to 4pc. Germany's unemployment is at a 20-year low of 5.8pc, and some regions are crying out for skilled workers.

Italian Unemployment Hits Record

Please consider Italian unemployment hits record

The unemployment rate in the eurozone continued to rise in January, hitting another record high. There are now 16.9 million people out of work in the bloc, Eurostat said.

In Italy, the unemployment rate rose to 9.2% in January, the highest since monthly records began, the national statistics agency Istat said.

Italian unemployment had stood at 8.9% in December, but it is now at the highest rate since the first quarter of 2001, as the country finds itself in a second recession in four years.

'Double whammy'

Meanwhile, separate data from Eurostat showed that inflation in the euro area rose to 2.7% in February, rising slightly from 2.6% in January. It marks the 15th month in a row that inflation has been above the ECB's target of just below 2%.

Howard Archer, chief European economist at IHS Global Insight, said it amounted to a "double whammy of bad news" for the eurozone. "This is particularly bad news for consumers, as they are not only facing high and rising unemployment, but also still squeezed purchasing power," he said.

French Unemployment Rate Hits 9.4 Percent

Please note French unemployment up to 9.4 per cent in Q4 of 2011

France's unemployment rate rose by 0.1 per cent in the fourth quarter of 2011 to 9.4 per cent of the active population, state statistics agency INSEE said on Thursday.

The 0.1 per cent rise applied to both the increase from the third quarter of 2011 and the year-on-year increase from the fourth quarter of 2010.

France's growing joblessness is a major issue as President Nicolas Sarkozy bids for re-election in an April-May two-round presidential election.

Eurozone Unemployment Rates at a Glance

Eurozone Average 10.7%
Spain 23.2%
Greece 20.9%
Ireland 14.8%
Portugal 14.8%
Latvia 14.7%
Lithuania 14.3%
Estonia 11.7%
Cyprus 9.6%
Italy 9.2%
France 9.4%
Germany 5.8%
Luxembourg 5.1%
Netherlands 5.0%
Austria 4.0%

Take a look at those varying unemployment rates. That is what a "one size fits Germany" interest rate policy and misguided currency union will do.

About that 5.8% German Unemployment Rate

Is Germany's unemployment rate really 5.8%? I think not. Wolf Richter comments on the German Unemployment Obfuscation.

Richter counts up all the groups that don't count and comes up with 1,701,534. That number is a bit off the mark given the officially unemployed number is 3,081,706 but 5,394,064 people actually received unemployment compensation.

There's still more obfuscation as shown in the following snip.

People 58 and older are excluded from the official unemployment numbers, even if they're desperately looking for a job. They don't receive unemployment compensation but, conveniently, pre-retirement compensation. So they don't count for the simple reason that they're too old to count. That's the German baby-boom generation. They're turning 58 in massive numbers and fall unceremoniously off the unemployment lists. In September 2011, the last month for which official numbers were available: 374,592.

Add them to the 5,394,064 official recipients of unemployment compensation to obtain 5,768,656.

And what about those who aren't eligible for unemployment compensation? While they receive "social aid" and other forms of support, they don't count as unemployed.

So, like in the US, the actual number of unemployed people and the actual unemployment rate remain a mystery, despite the confidence-inducing but false sense of accuracy that these grotesquely unrounded numbers provide. And in the end, unemployment in Germany is probably close to double the official headline number.

So what's the real German unemployment rate?

German Retail Sales Unexpectedly Fall

Bloomberg reports German Retail Sales Unexpectedly Fall

German retail sales unexpectedly declined in January as rising oil prices fueled inflation.

Sales, adjusted for inflation and seasonal swings, fell 1.6 percent from December, when they increased 0.1 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 0.5 percent, the median of 22 estimates in a Bloomberg News survey showed

Europe's debt crisis is curbing growth across the euro area, Germany's largest export market, and higher energy costs pushed inflation to 2.5 percent last month. Still, unemployment is running at a two-decade low and recent data suggest the country may avoid a recession. Consumer confidence will increase to a 12-month high in March, [consumer research group] GfK SE (GFK) predicted this week.

German companies may create as many as 250,000 new jobs this year, the DIHK national industry and trade chambers said on Feb. 17, citing a survey.

Avoid a Recession?

What the hell is Bloomberg writer Jeff Black smoking? The recession is right here, right now. As for jobs creation, forget about it. The European-wide recession is going to be long and deep, so who pray tell is Germany going to be exporting to?

By the way, why was this drop unexpected? I have been calling for it for some time, and it's going to get worse, much worse.

Eurozone Manufacturing PMI® Contracts 7th Consecutive Month

Inquiring minds are reading the Markit Eurozone Manufacturing PMI® Report.

The Eurozone manufacturing sector showed further signs of stabilisation in February. The seasonally adjusted Markit Eurozone Manufacturing PMI® rose to a six-month high of 49.0, unchanged from the earlier flash estimate and above January's 48.8.

New Orders Fell 9th Month

New orders fell for the ninth month running (though slightly less than indicated by the flash release), with the downturn in demand generally remaining broad-based by nation as only Austria and the Netherlands reported increases. Greece saw record falls in both output and new orders.

Export Orders Fall 8th Month

The level of new export orders fell for the eighth month running, albeit at the weakest pace since last July. The drop in foreign demand was led by a steep reduction in Greece and marked falls in Spain and Germany, the region's largest exporter.

Muted pricing power resulting from weak demand and strong competition meant that the rise in costs was largely absorbed by manufacturers.

German job creation slowed sharply

Job losses were reported for the third time in the past four months in February. The steepest falls in employment were seen in Greece and Spain, though further marginal cuts in staffing levels were also signalled in Italy, the Netherlands, Austria and Ireland.

Stabilization? Really? No, Not Really!

Given the drop in new orders, export orders, and German employment, coupled with rising input prices and a huge profit squeeze, it takes a real stretch of the imagination to even hint at stabilization. Moreover, austerity measures in Spain, Portugal, Greece, France, and Ireland suggest things are going to get much worse.

There is no way the vaunted German export machine stays intact in the face of those facts.

Within two months, and probably next month, the bottom will fall out of numerous eurozone production and retail sales numbers. Moreover, the lid will blow off the top of numerous eurozone unemployment numbers.

In both cases, the biggest "unexpected" downward surprises will be in Germany, even though it should be perfectly obvious what is going to happen.

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

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