Central Perk

sâmbătă, 18 mai 2013

Mish's Global Economic Trend Analysis

Poll Shows 46% in UK Want to Exit EU, 30% Want to Stay In

Posted: 18 May 2013 04:48 PM PDT

By a wide margin, but not quite a majority (yet), Let's quit EU say 46 per cent of voters in poll.

Asked the exact question Conservatives want to put the public in the 2017 referendum – "Do you think that the UK should remain a member of the EU" – 46 per cent opt to come out, a higher figure than in other recent surveys.

Just 30 per cent say they want to remain.

In a further boost for the eurosceptic cause, 44 per cent want an "in/out" referendum immediately, although 29 per cent are prepared to wait until 2017, David Cameron's preferred option.

The headline figure using ICM's "Wisdom Index" method – which asks voters to predict the result of the next general election rather than which party they support – puts Labour just three points ahead of the Tories, the party's narrowest lead since the index was launched last year.

Cameron is hurting himself by not agreeing to a referendum now. For further discussion, please see Cameron Faces Cabinet Crisis of His Own Making; Purposely Self-Inflicted Wounds

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Protests in Italy Against New Coalition; How Long Will Coalition Last?

Posted: 18 May 2013 09:42 AM PDT

The new coalition government in Italy is off to such a rocky start, it's hard to say there ever was a honeymoon.

People want more jobs. Instead, the price for a coalition by former Prime Minister Mario Silvio Berlusconi was a rollback in property taxes.

Here is the result: Thousands rally in Rome against cuts.

Thousands of protesters, led by trade unionists, have rallied in the Italian capital Rome against the policies of the new coalition government. Wielding red flags and placards, they urged the centre-left Prime Minister, Enrico Letta, to scrap austerity measures and focus on job creation.

Public trust in his fragile coalition with the centre-right is dropping, opinion polls suggest. The country is experiencing its longest recession in more than 40 years. National debt is now about 127% of annual economic output, second only to Greece in the eurozone.

National debt is now about 127% of annual economic output, second only to Greece in the eurozone. Unemployment is at a record high of 11.5% - 38% for the under-25s.

Before taking office, Mr Letta vowed to make job creation his priority, but critics are unhappy that he has focused on property tax reform.

Soon after being appointed, Mr Letta met other eurozone leaders to convey growing public unrest over austerity measures in Italy. But the new prime minister has to maintain a delicate balance between the policies of his own supporters and those of the centre-right, led by Mr Berlusconi.

Protest Pictures From Reuters, BBC

How Long Will Coalition Last?

Inquiring minds are wondering how long this rocky coalition can last. There is no definitive answer but there are a some general rules.

Long enough for Berlusconi to get the tax changes and prosecution immunity he seeks
Not much longer than support for the coalition starts to cost Berlusconi votes
Not much longer than Berlusconi is pretty sure he can win the next election outright

1. Berlusconi got a suspension of property taxes but not the complete rollback he was seeking. Prime Minister Enrico Letta has not said how he will pay for property tax reform so expect some heat from Brussels.

If Berlusconi does not get a complete property tax rollback, the coalition will likely end right then and there. If he does get the rollback, he will have gotten one of the things he wanted.

2. Support for coalition may be costing Berlusconi votes right now.

3. Support for Beppe Grillo waned after the election so Berlusconi could be closing in on the number now.

In all respects, it appears the coalition will splinter sooner rather than later.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Family Photos: Then And Yikes

Posted: 18 May 2013 07:00 PM PDT

It's all fun and games until someone brings an adult baby.

Sports Betting Sites.

Weekly Address: The President Talks About How to Build a Rising, Thriving Middle Class

Your Daily Snapshot for
Saturday, May 18, 2013

Weekly Address: The President Talks About How to Build a Rising, Thriving Middle Class

President Obama talks about his belief that a rising, thriving middle class is the true engine of economic growth, and that to reignite that engine and continue to build on the progress we’ve made over the last four years, we need to invest in three areas: jobs, skills and opportunity.

Watch this week's Weekly Address.

Seth's Blog : It's Thomas Midgeley day

It's Thomas Midgeley day

Today would be his 124th birthday. A fine occasion to think about the effects of industrialization, and what happens when short-term profit-taking meets marketing.

Midgeley is responsible for millions of deaths. Not directly, of course, but by, "just doing his job," and then pushing hard to market ideas he knew weren't true—so he and his bosses could turn a profit.

His first mistake began when he figured out that adding lead to gasoline appeared to make cars perform better. At the time, two things were widely known by chemists: 1. Adding grain alcohol to gasoline dramatically increases octane and performance, and 2. Ingesting or sniffing lead can lead to serious injury, brain damage and death.

The problem for those that wanted to be in the gasoline business was that grain alcohol wasn't cheap, and the idea couldn't be patented. As a result, the search was on for a process that could be protected, that was cheaper and that could open the door for market dominance. If you own the patent on the cheap and easy way to make cars run quieter (and no one notices the brain damage and the deaths) then you can corner the market in a fast-growing profitable industry...

As soon as the lead started being used, people began dying. Factory workers would drop dead, right there in the plant. Even Thomas himself contracted lead poisoning. Later, at a press conference where he tried to demonstrate the safety of the gasoline, he washed his hands in it and sniffed it... even though he knew it was already killing people. That brief exposure was sufficient to require six months off the job for him to recover his health.

Does this sound familiar? An entrenched industry needs the public and its governments to ignore what they're doing so they can defend their status quo and extract the maximum value from their assets. They sow seeds of doubt, and remind themselves (and us) of the profts made and the money saved.

And we give them a pass. Because it's their job, or because it's our job, or because our culture has created a dividing line between individuals who create negative impacts and organizations that do.

People who just might, in other circumstances, stand up and speak up, decide to quietly stand by, or worse, actively lie as they engage in PR campaigns aimed at belittling or undermining those that are brave enough to point out just how damaging the status quo is.

It took sixty years for leaded gas to be banned in my country, and worse, it's still used in many places that can ill afford to deal with its effects.

After leaded gasoline, Midgeley did it again, this time with CFCs, responsible for a gaping hole in the ozone layer. He probably didn't know the effects in advance this time, but yes, the industry fought hard to maintain the status quo for years once the damage was widely known. It's going to take at least a millenium to clean that up.

We might consider erecting a statue of him in every lobbyist's office, a reminder to all of us that we're ultimately responsible for what we make, that spinning to defend the status quo hurts all of us, and most of all, that we have to balance the undeniable benefits of progress, innovation and industry with the costs to all concerned. Scaling has impact, so let's scale the things that work. No, nothing is perfect, but yes, some things are better than others.

I can't imagine a better person as the symbol a day that's not about honoring or celebrating, but could be about vigilance, candor and outspokenness instead.

[Previously: No such thing as business ethics.]

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vineri, 17 mai 2013

Mish's Global Economic Trend Analysis

Hollande Asks ECB to Engage in Japanese Style Currency Debasement

Posted: 17 May 2013 11:44 AM PDT

French president Francois has had enough of austerity but claims he "cannot do it alone". The Financial Times reports François Hollande goes on 'offensive' over stalled EU economy.

François Hollande promised an "offensive" to bring "more growth and less austerity" to Europe as he launched a bid to resurrect his presidency.

Mr Hollande said the first priority of his second-year "offensive" was a four-point plan to "get Europe out of its torpor" – concentrating on combating youth unemployment and a strategy of investment. "The number one objective is changing Europe's direction to have more growth and less austerity," he said.

"I cannot do it alone," he said, adding that the European Central Bank could "put in liquidity, as is happening in Japan, which has allowed a fall in the yen and helped exports".

The president promised a 10-year investment programme in digital, energy, health and infrastructure sectors to regenerate growth, saying that it could in part be financed by the sale of some of France's big state corporate holdings, which have a total market capitalisation of about €60bn. But he made clear that any sales would not be at the expense of ceding state control or influence over vital companies.

Economic Illiteracy

Not only is the Hollande in praise of competitive currency debasement which mathematically cannot work if every country does it (not that it can work anyway without long-term consequences), he also wants to sell France government holdings "without ceding state control or influence over vital companies".

Good luck with that. No one in their right mind would want to buy companies under such conditions.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

How Clueless Are Manufacturing Future Expectations?

Posted: 17 May 2013 01:16 AM PDT

Month in and month out I see unwarranted optimism in Europe and in the US.

For example, on Thursday I stated "Philly Fed Slips Into Contraction (Again); Current Conditions Recessionary, Future Expectations Far Too Optimistic".

Here is the chart I posted:

That chart got me to wondering "just how wrong are future expectations historically?" The data is available, all one has to do is chart it.

I asked Doug Short at Advisor Perspectives if he could produce a chart of future expectations offset by six months to see how expectations actually matched what did happen. Doug graciously produced a pair of charts.

click on either chart for sharper image

Future Expectations Shifted 6 Months Back vs. Actual Results

Note that manufacturers in the Philly region are especially clueless during recessions as to how fast things will improve. They can be wildly off at other times too, as shown by the black ovals.

Since the Philly Fed index is generally noisy (huge month-to-month random fluctuations), we decided to smooth out the lines by showing a 3-month rolling average of current conditions vs. a 3-month rolling average of future expectations.

Future Expectations Shifted 6 Months Back vs. Actual Results (3-Month Rolling Averages)

Charts by Doug Short, annotations in purple and black by Mish.

Optimistic Expectations

Generally speaking, manufacturers' expectations about future conditions are wildly off for many months before during and after recessions.

In the double-dip recession of 80-82, it took 43 months from the end of the first recession for expectations to match reality, then the lines immediately diverged again.

Mid-cycle there were a couple of periods where expectations generally matched reality (as noted by close lines with repeat crossovers). The first was 1985 to 1987, and the second was 1996 to 1999.

In the 1974 and 1980 recessions expectations plunged ahead of the recession. Both appear to be oil related because it has not happened since.

Key Points

Wide variances in expectations vs. current conditions tend to be way over-optimistic.
Current spread of expectations vs. reality is in recession territory, albeit not quite as pronounced (yet) vs. earlier recessions.

Addendum: The heading on the charts originally said six moths forward. It should have said backwards. The caption on the chart itself was correct.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Your Argument is Invalid Meme
Meet the Skywhale
How to Fix a Phone Dropped in the Toilet [Infographic]
Biopic Film Actors Alongside Their Real-Life Equals

Your Argument is Invalid Meme

Posted: 17 May 2013 12:58 PM PDT

Your arguments is invalid.

Meet the Skywhale

Posted: 17 May 2013 12:13 PM PDT

A $170,000 hot air balloon called the Skywhale has been unveiled to mark Canberra's centenary.

At 34 metres long and weighing half a tonne, it is at least twice as large as a standard hot-air balloon.

Via canberratimes

How to Fix a Phone Dropped in the Toilet [Infographic]

Posted: 17 May 2013 10:35 AM PDT

As a nation of multi-taskers we use any moment that our hands are free to send a cheeky text or check the latest facebook updates, so we weren't surprised when a recent polled revealed that 75% of people admitted to toilet tweeting, emailing and even making a cheeky call whilst sat on the loo. (Tweeting we get, but calling someone?!)

Horror stories of dropping your phone down the loo are increasingly common, with a slip of the hand being all it takes to see your shiny smartphone lying in the deep dark abyss of the toilet bowl. As inevitable is this is, we decided to delve deeper into how exactly your phone can survive this gloomy fate, with a handy info graphic revealing all the steps needed to recover a loo ridden device.

Click on Image to Enlarge.