Central Perk

sâmbătă, 10 august 2013

Mish's Global Economic Trend Analysis

Obama's Cream Puff Plan to Reform US Surveillance Program

Posted: 10 Aug 2013 10:01 AM PDT

On Friday, president Obama announced a plan to reform NSA surveillance.

Don't expect much of anything to come out of it. It's a dog and pony show designed to make people feel better as opposed to any solid measures as to how much data government collects on everyone.

Here are excerpts from the above article with my comments interspersed.

Independent: President Obama told a packed room of journalists at the White House Friday afternoon that he will work to reform Section 215 of the Patriot Act - the provision which currently allows the federal government's intelligence agencies to collect domestic phone data.

The President also said that he will work to increase oversight with regards to the Foreign Intelligence Surveillance Court - the secretive judicial body that authorizes the government to collect data on communications coming in and out of the United States.

Obama said the reform will be accompanied with the roll-out of a new website which will provide Americans and people around the world the ability to learn more about the surveillance programs.

Obama: "The US will "make public as much information about these programs as possible."

Mish: Expect to discover that the only thing "possible" is a bunch of government propaganda designed to purposely mislead the public about the extent of government data gathering activities.

Independent: Obama said he is forming an outside advisory panel to review the surveillance programs, assigning a privacy officer at the National Security Agency and creating an independent attorney to challenge the government's spy policies in court.

Mish: The NSA advisory panel will have as much say as an advisory panel of ants at an anteater convention.

Obama: "No, I don't think Mr. Snowden was a patriot," Obama said. "I called for a thorough review of our surveillance operations before Mr. Snowden made these leaks. My preference, and I think the American people's preference, would have been for a lawful, orderly examination of these laws. A thoughtful, fact-based debate that would then lead us to a better place."

Mish: Snowden is a hero.

Obama: "So the fact is that Mr. Snowden has been charged with three felonies," added Obama. "If in fact he believes that what he did was right, then like every American citizen he can come here, appear before a court with a lawyer and make his case. If the concern was that somehow this was the only way to get this information out to the public, I signed an executive order well before Mr. Snowden leaked this information that provided whistleblower protection to the intelligence community for the first time. So there were other avenues available for someone whose conscious was stirred."

Mish: There were no other avenues that would have done anything about the blatantly illegal data gathering other than making everything public.

Obama: "If you are outside of the intelligence community, if you are the ordinary person, and you start seeing a bunch of headlines saying, 'US, Big Brother looking down on you, collecting telephone records, etc.,' well, understandably people would be concerned. I would be too if I wasn't inside the government. It's not enough for me to have confidence in these programs. The American people have to have confidence in them as well."

Mish: Obama has confidence in something blatantly illegal, and he has the gall to insist you should have equal confidence.

Obama: "The question is: How do I make the American people more comfortable?"

Mish: The answer is: Stop the spying on US citizens and stop the spying on our allies as well.

Obama: "I am comfortable that the program is currently not being abused"

Mish: Even if one foolishly believes spying on US citizens is constitutional, Snowden proved without a doubt the program was repeatedly and purposely abused. And that makes the president is a blatant liar.

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

A Better Bargain for Responsible, Middle Class Homeowners

Featured

A Better Bargain for Responsible, Middle Class Homeowners

In this week’s address, President Obama says that the housing market is starting to heal, and now it’s time to build on that progress by creating a better bargain for responsible, middle class homeowners. The President announced steps he will take to strengthen the housing market, and now Congress must act to help make homeownership a source of pride and middle class security for generations to come.

Click here to watch this week's Weekly Address.

Seth's Blog : Why not give?

Why not give?

Not because it's the holidays or because you get a tax deduction.

Not because someone is going to match your funds or because your neighbor won't be able to enter a marathon if you don't.

Not because the kid is at the doorbell with those cookies or because it's pledge week.

And not because you read something that pulled your heartstrings.

Right now, for no good reason (and for every good reason), even if it's only $5. Pick whatever cause you care about. And tell a friend.

What if everyone did that, right now?

Generosity is its own reward. Go for it.

• Email to a friend •

vineri, 9 august 2013

Mish's Global Economic Trend Analysis

French Egg Producers Smash 300,000 Eggs and Demand Government Action to Raise Prices
When Will Spanish Banking System Collapse?
Ambrose Evans-Pritchard's Disingenuous Strawman "Defend Europe, If You Still Dare"

French Egg Producers Smash 300,000 Eggs and Demand Government Action to Raise Prices

Posted: 09 Aug 2013 04:03 PM PDT

Farmers in France are on an egg-smashing rampage in protest of low prices.

Farmers in northwest France have vowed to escalate an egg-smashing rampage they began this week in protest at low prices and rising production across the EU.

The protesters say a 2012 European directive, which obliges egg producers to improve the wellbeing of hens by increasing the size of their cages, has forced them to invest millions of euros to cover the upgrade.

On Tuesday night masked members of the informal collective vented their frustration by dumping 100,000 eggs – about 5 per cent of their output – from the backs of vehicles in the small Brittany town of Ploumagoar.

A day later, they descended on Carhaix. On Thursday, it was the turn of Morlaix, where they left 100,000 smashed eggs outside the tax office. Residents were quick to complain about the smell.

The producers have called on the government to help co-ordinate a 5 per cent reduction in the country's production, and to designate a special site where eggs can be destroyed.

On Friday, Sébastien Salliou, a local producer, said that prices had sunk so low that he was now selling 100 eggs at €4.50, even though his break-even price was €7. He also said that the European directive had forced him to spend about €2m on infrastructure adjustments for his business of 100,000 hens.

Collective Insanity

The farmers want the government to "do something" such as put a quota on eggs or create a "special site where eggs can be destroyed".

If that is not bureaucratic insanity, what is?

Rather than receive €4.50 for 100 eggs, the farmers would rather receive nothing. Actually, the farmers should be fined for cleanup costs so they should receive less than nothing for smashing their production in public places, creating a smelly mess in the process.

I have a simple solution.

If you do not like the price, don't produce the eggs. Selling eggs for €4.50 when it costs €7 to produce them is not smart business.

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

When Will Spanish Banking System Collapse?

Posted: 09 Aug 2013 09:18 AM PDT

The question on my mind today is "When will the Spanish banking system collapse?" Spain's exposure to Portuguese sovereign debt and unrealized losses on real estate loans are two reasons a collapse in inevitable.

The Spanish banking system passed a so-called "stress test" in 2012, but sovereign government bonds are are not included in the evaluation.

We saw how well that worked with Greece (over and over again), and with Cyprus as well. It was Cypriot exposure to Greek bonds that collapsed the Cypriot banking system.

With that backdrop, please consider Will Portugal Bring Down the Spanish Banking Sector?

At its peak in the second quarter of 2008, France's exposure to Greece totaled $86 billion. That exposure has since plummeted, partly because French banks took advantage of the ECB's Securities Market Programme (SMP) during 2010-11 to fob off Greek bonds, effectively forcing a eurozone mutualization of the debt. SMP was terminated in September 2012.

What is much less widely known is that Spanish bank exposure to Portugal today, as shown in our Geo-Graphic, is higher than French bank exposure to Greece in early 2010, despite the fact that the Spanish banking sector is only 40% the size of the French. Spanish bank stress tests in 2012 suggested that the capital hole was more manageable than widely feared, but those tests looked only at the domestic lending books; foreign assets were excluded.

A restructuring of Portuguese sovereign debt similar to the one completed by Greece, which involved haircuts of over 50%, could wreak havoc on Spain's banking system. Yet delaying restructuring, as Greece is showing, may simply drag down Portugal—whose debt-to-GDP ratio is expected to approach 125% next year—faster and further, worsening creditor losses.

Without an SMP to mutualize Spanish bank exposure to Portugal, the way it mutualized French bank exposure to Greece, delaying a Portuguese restructuring will also do nothing to help Spain weather the shock. The euro area has already lent Spain €41.3 billion to recapitalize its banks, but finding a politically palatable way to convert that debt into mutualized eurozone equity may be a necessary cost of sustaining the European single currency.

Stress-Free Tests

Recall that seven banks that now make up Bankia collapsed over bad real estate loans. Exposure to Greek bonds was not even the issue with Bankia, and the banks allegedly passed stress tests. Bankia needed a bailout, then another. And it is going to need another.

Also recall that Greek bonds suffered thru round after round of haircuts which in turn caused a collapse in the Cypriot banking system. Sometime down the line, the same thing is going to hit Spanish banks.

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

Ambrose Evans-Pritchard's Disingenuous Strawman "Defend Europe, If You Still Dare"

Posted: 09 Aug 2013 01:06 AM PDT

Inquiring minds are reading the Telegraph article "Defend Europe, If You Still Dare" by Ambrose Evans-Pritchard.

The youth jobless rate in Greece has just reached 64.9pc.

Little to add. This is pure policy error. Europe has needlessly pushed the whole EMU bloc into a deep double-dip recession, and the longest unbroken contraction since World War Two.

Keynesians warned them. Monetarists warned them. Anbody with any common sense warned them, but no, they believed in their quack theories of expansionary fiscal contraction — even when conducted without the anaesthetic of monetary stimulus.

European policymakers are like the generals of Verdun, the Somme, and Passchendaele, sending their youth straight into the barbed wire.

Europe's leaders still blame this crisis on America. You can only laugh or cry.

Is anybody on this comment thread really willing to defend EMU any longer?

Message to Ambrose

Yes, Ambrose, the Monetarist and the Keynesians did indeed warn Brussels. The Austrians warned Brussels as well. So did the eurosceptics. So stop pretending Keynesian or Monetarist policy was the right response.

The problems in Europe are structural and many. The euro is a structural problem, the "one size fits Germany" interest rate policy by the ECB is a structural problem, trade deficit settlement via Target 2 mechanisms is a structural problem.

Work rules, pensions, and unions are a structural problem of varying magnitude in various countries, with Greece, Italy, Spain, and France at the top of the list.

European policymakers are indeed "like the generals of Verdun, the Somme, and Passchendaele, sending their youth straight into the barbed wire".

However, spending money countries do not have can hardly be a solution to those structural issues! Pray tell Ambrose, what good would it do? What problems does it fix?

The same applies to monetarist idiocy of printing more money and having all of it sit as excess reserves at banks.

It is the Austrian-eurosceptics that have it right. The eurozone needs to break up. Greece, France, Italy, Spain, and Portugal are in serious need of work rule reform, pension reform, and public sector reforms of all sorts.

Instead you pour it on as if the Keynesians and Monetarists had something other than can-kicking exercises in mind. They don't and you don't either which is quite sad given you were one of the original euroscpetics.

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

Damn Cool Pics

Ramen Burger

Posted: 09 Aug 2013 11:20 AM PDT

Ramen Burger is New York's next food craze. Ramen Burger is a burger, wrapped in fried ramen noodles instead of a bun. The burger's creator, Keizo Shimamoto, hopes to start a standalone Ramen Burger restaurant. People say that Ramen Burger is juicy and delicious.