Central Perk

sâmbătă, 15 februarie 2014

Mish's Global Economic Trend Analysis

Irony of the Day: Venezuela President Calls for "Protest March Against Fascism"

Posted: 15 Feb 2014 06:33 PM PST

In yet another episode of truth is stranger than fiction, via translation from El Economista, I present "Venezuela President Calls for Protest March Against Fascism"

The president of Venezuela, Nicolas Maduro, has again invited his people to take to the streets Saturday in a march "for peace and against fascism."

Mature blames his opponents for violence in recent demonstrations, in which there were three deaths last Wednesday.

The president stated that violent demonstrations are part of a plan to end its power, similar to what occurred recently in Ukraine.

Maduro is calling for a march of all social policies for peace and against fascism forces. "I call all the people of Caracas to join the protest march against fascism , against violence, against the coup," said the president.

Maduro made the remarks in a meeting with his Cabinet that could be followed on radio and television all Venezuelans. The President took the opportunity to launch an attack on the opposition, accusing it of organizing the violent events that have taken place this week in order to overthrow him.

He said that behind these movements are "the same financiers who live by their imperialist policy to penetrate, control the world."

Maduro said that justice will be done and those responsible will be caught "one by one " and called on the opposition to "take responsibility without blackmail, with courage."

Am I mistaken or did Venezuela president Nicolas Maduro just call for a protest march against himself.

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

Mistrust Leads to Shocking Union Defeat in Tennessee

Posted: 15 Feb 2014 10:42 AM PST

Efforts by the United Auto Workers to unionize a Tennessee Volkswagen plant failed today in spite of the fact that Volkswagen chose to cooperate closely with the UAW. Volkswagen allowed UAW organizers to campaign inside the factory—a step rarely seen in this or other industries.

Mistrust Sinks Deal

By a vote of 712 to 626 the UAW Suffers Big Loss at Tennessee VW Plant.

The United Auto Workers union suffered a crushing defeat Friday, falling short in an election in which it seemed to have a clear path to organizing workers at Volkswagen AG VOW3.XE +1.10% 's plant in Chattanooga, Tenn.

The setback is a bitter defeat because the union had the cooperation of Volkswagen management and the aid of Germany's powerful IG Metall union, yet it failed to win a majority among the plants 1,550 hourly workers.

"If the union can't win [in Chattanooga], it can't win anywhere," said Steve Silvia, a economics and trade professor at American University who has studied labor unions.

The UAW said that "outside interference" affected the outcome of the vote. "Unfortunately, politically motivated third parties threatened the economic future of this facility and the opportunity for workers to create a successful operating model that that would grow jobs in Tennessee," Gary Casteel, the union official in charge of the VW campaign, said in a statement.

The Chattanooga workers had been courted steadily for nearly two years by both the UAW and the IG Metall union, which pushed Volkswagen management to open talks with the UAW and to refrain from trying to dissuade American workers from union representation.

The election was also extraordinary because Volkswagen choose to cooperate closely with the UAW. Volkswagen allowed UAW organizers to campaign inside the factory—a step rarely seen in this or other industries.

"This is like an alternate universe where everything is turned upside down," said Cliff Hammond, a labor lawyer at Nemeth Law PC in Detroit, who represents management clients but previously worked at the Service Employees International Union. "Usually, companies fight" union drives, he added.

The union's loss adds to a long list of defeats for organized labor in recent years. States like Wisconsin enacted laws that cut the power of public-employee unions, and other states, including Michigan, home of the UAW, adopted right-to-work laws that allow workers to opt out of union membership if they choose.

The vote was held amid public campaigning against the union by Republican politicians, including Gov. Bill Haslam, and conservative activist groups. Conservative political groups, including one backed by antitax activist Grover Norquist, put up anti-union billboards around Chattanooga. A small but determined group of workers who oppose the UAW also worked to tilt their colleagues against the union, an effort that ultimately proved successful.

"I'm thrilled for the employees and thrilled for the community," Tennessee Republican Sen. Bob Corker said in a telephone interview, adding that he's "sincerely overwhelmed" by the result.

"This vote was essentially gift-wrapped for the union by Volkswagen," Mr. Hammond, the labor lawyer, said.

The chief executive of the plant, Frank Fischer, said in a statement that Volkswagen will continue to search for a method of establishing a works council.

The works council concept also proved a winner for some Chattanooga workers. Jonathan Walden, 39 years old, earns about $19.50 an hour—about $4 an hour more than starting workers at GM, Ford and Chrysler—but he voted for the union because he wants a works council. "I don't know why more companies don't do this," said Mr. Walden, who works in the paint shop.

But more workers were persuaded to vote against the union by the UAW's past of bitter battles with management, costly labor contracts and complex work rules. "If the union comes in, we'll have a divided work force," said Cheryl Hawkins, 44, an assembly line worker with three sons. "It will ruin what we have."

Other UAW opponents said they dislike the union's support of politicians who back causes like abortion rights and gun control that rub against the conservative bent of Southern states like Tennessee. Still others objected to paying dues to a union from Detroit that is aligned with Volkswagen competitors like GM and Ford.

"I just don't trust them," said Danielle Brunner, 23, who has worked at the plant for nearly three years and makes about $20 an hour—about $5 an hour more than new hires at GM, Ford and Chrysler plants.

The no-UAW vote raises questions on how the union proceeds now in separate efforts to organize other foreign-owned plants in the South, and whether international cooperation can provide any additional leverage for labor unions.

Interference Both Ways

Outside interference did not sink the vote. Were it not for inside interference there would not even have been a vote.

Ultimately, the vote failed because of mistrust of unions. That mistrust is certainly well-placed.

I can certainly understand why the company and employees would want a work council. Cooperation from employees can make all kinds of improvements. But why do you need a union to have a work council?

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

Calling on Congress to Raise the Minimum Wage

Featured

Weekly Address: Calling on Congress to Raise the Minimum Wage

This week, President Obama took action to lift more workers' wages by requiring that federal contractors pay their employees a fair wage of at least $10.10 an hour. In this week's address, he highlights that executive action and calls on Congress to pass a bill to raise the federal minimum wage for all workers.

Click here to watch this week's Weekly Address.

Seth's Blog : Modesty and hubris

Modesty and hubris

When you're seeking to succeed with your art, it's helpful to see how those before you have done it. And so the conference was invented. The ones where recently successful internet entrepreneurs tell their stories are particularly popular right now, but you can certainly find designers, novelists and others that are generous enough to talk about how they succeeded.

Some speakers at these events are brimming with false modesty. "I'm incredibly successful and happy, it happened really fast and I have no idea what I'm doing." The appeal here is the same that works for the lottery. Someone has to win, it might as well be you, it's easy, buy a ticket.

Some speakers, on the other hand, bring false hubris to the table. "This is incredibly difficult, I worked harder than you can imagine, and only a perfect storm of effort and connections that were created directly by me led to this moment."

The truth, of course, is a combination of both. "I worked really hard, back against the wall, thinking I was going to fail, almost did, and I got lucky." And that's like hearing that there's a lottery and the tickets are very expensive.

But it's true.

• Email to a friend •

vineri, 14 februarie 2014

Mish's Global Economic Trend Analysis

German Left (Die Linke) VP Claims "Euro Divides Europe, No Benefit to EU"
Industrial Production Declines, November and December Revised Lower; String of Unexpected Events Continues
MEPs Accuse Troika of Aggravating Unemployment and Poverty in Rescued Countries

German Left (Die Linke) VP Claims "Euro Divides Europe, No Benefit to EU"

Posted: 14 Feb 2014 01:56 PM PST

In a Ziet Online interview, Sahra Wagenknecht, Die Linke vice president and economic spokesperson, says the "The euro splits Europe" and there is no benefit to the EU.

ZEIT ONLINE: Ms. Wagenknecht, what is the biggest advantage of the European Union mean to you?
Sahra Wagenknecht: After the Second World War, the united Europe has brought peace. But ever since the Maastricht Treaty and the Lisbon Treaty, the European Union has developed in a direction that primarily serves the interests of big business and banks. ... Integration reduces the welfare of the majority in Europe along with growing anti-European resentment. We have 19 million unemployed in the south of Europe and a disastrous austerity policies, for which the European Commission is responsible as part of the troika. Entire countries are incapacitated and plunged into the social abyss.

ZEIT ONLINE: Do you agree your life partner Oskar Lafontaine, that Germany should withdraw from the euro?
Wagenknecht: He has not suggested that Germany exit the euro, but that a new currency system with stable exchange rates and capital controls in place of the Euro occurs. The euro as introduced, does not work, but divides Europe.

ZEIT ONLINE: What's the alternative? Return to the D-Mark?
Wagenknecht: It is clear that a resolution of the single currency must not allow exchange rate speculation. There must be institutions that hold the currency market stable. And it needs capital controls.

ZEIT ONLINE: You argue like the AfD.
Wagenknecht: I beg to differ. AfD top candidate Hans Olaf Henkel is a neo-liberal economic lobbyist who throughout his life seeks low wages and welfare cuts. The AFD is not for a social Europe.

ZEIT ONLINE: The Left Party is the AfD for the poor?
Wagenknecht: Nonsense. Even the middle class would benefit from more welfare state and a better wages.

ZEIT ONLINE: Is end the EU the only message of the Left Party before its European Congress?
Wagenknecht: That's not our message. We want a Europe that is socially and democratically and met, for example, the tax evasion by the rich and corporations with uniform tax rates at a high level. We hope that there will soon be a much stronger active resistance from the people of Europe and that the frustration just does not discharge in the election of right-wing populist parties.

ZEIT ONLINE: Will your party will discuss how to deal with military operations?
Wagenknecht: Of course. I find the current debate on more military involvement in Germany spooky. We've seen that the military operations in which we have participated, such as in Afghanistan, the people did not benefit. On the contrary, thousands of civilian deaths were the result. Humanitarians do not need bombs. German soldiers have no place abroad.

ZEIT ONLINE: What would happen if there were a new Srebrenica [genocide in Bosnia]? Would the green helmets then stand idly by?
Wagenknecht: Wars are never out of humanitarian reasons. Take a look a look at how conflicts arise in many conflicts, including in the Congo and elsewhere, European countries have supplied weapons and fueled the civil war. Some of these were proxy wars. And then come the arsonists. That's hypocritical, it's about raw materials and geostrategic positions.

ZEIT ONLINE: Between Left Party and the Greens and the SPD prevails a Thaw. The party leaders of the Left and the Greens meet. SPD General Secretary Yasmin Fahimi was open to joint coalitions. Is a Red-Red-Green coalition in front of the door?
Wagenknecht: It's good that there is finally calls. However, significant political differences remain. When I look at the policy that makes the SPD in the grand coalition, this differs significantly from what we want politically.

Setup to Watch

Eurointelligence had some interesting comments on this development, and I generally agree with the analysis.

We know that Sahra Wagenknecht was always critical of the German government's handling of the eurozone crisis. Now the deputy leader and economics spokeswoman of the Left Party favours the dismantlement of the eurozone. It is not the party's official position yet but her statement as reported in Spiegel Online marks an important political shift for the party.

Germany would then have two parties openly against the euro - the AfD and the Left. Her argument is that the euro splits Europe politically, that it disenfranchises states and impoverishes the majority of the people. As an alternative she is proposing a new fixed-exchange rate system with capital controls.

This is one to watch.

Despite entering a Grand Coalition, the SPD has now officially opened the door for a coalition with the Left Party in 2017 - and that position will either complicate or frustrate that process, or turn into a more general position of the left - depending on the politics of the eurozone crisis in the next few years.

We believe that her arguments are to be taken seriously - Ralph Dahrendorf argued on the same lines well before the euro was introduced. The eurozone has yet to demonstrate that the arrangement will benefit the people in the long run. The real danger to the future of the euro will not come from financial markets. It could come from a broader political realization that the euro has failed to deliver. Not everybody is ready to come to the same conclusion as Wagenknecht, but we should not be surprised to hear more views like this.

Capital Controls and More Regulation Not the Answer

Her arguments regarding capital controls, more regulation, and fixed-rate exchanges are complete silliness.

Europe does not need capital controls, nannycrat dictators, or fixed rate exchanges. Fixed rate exchanges cannot possibly work in conjunction with fractional reserve lending and other competitive currency debasement mechanisms.

Her arguments should not be taken seriously, but it's likely they will.

Nonetheless, Eurointelligence did mention the key idea "The real danger to the future of the euro will not come from financial markets. It could come from a broader political realization that the euro has failed to deliver."

The euro has not delivered and it will not deliver. It is fundamentally, and fatally flawed. Political bickering over banking unions, fiscal unions, freedom of movement, and literally everything shows the euro cannot possibly be repaired.

Repeating what I said in 2011 (and numerous times since):

"Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected."

All it will take, is for one charismatic person, timing social mood correctly, to say precisely the right thing at exactly the right time. It will happen.

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

Industrial Production Declines, November and December Revised Lower; String of Unexpected Events Continues

Posted: 14 Feb 2014 09:56 AM PST

This morning the Fed reported Industrial production declined. Moreover November and December were revised sharply lower.

Industrial production decreased 0.3 percent in January after having risen 0.3 percent in December. In January, manufacturing output fell 0.8 percent, partly because of the severe weather that curtailed production in some regions of the country. Additionally, manufacturing production is now reported to have been lower in the fourth quarter; the index is now estimated to have advanced at an annual rate of 4.6 percent in the fourth quarter rather than 6.2 percent.

Market Groups

Consumer goods fell 0.5%, the first decrease in six months
Consumer durables down 2.6%
Consumer non-energy nondurables down 0.8%
Within consumer durables, the production of automotive products fell 5.1% and the output of appliances, furniture, and carpeting declined 0.6%
Clothing up 0.5%
Home electronics up 1.1%
Paper Products down 1.0%
Business equipment down 0.1%, a third consecutive decline
Defense down 1.0%, a fourth consecutive decline
Construction down 1.0% following loss of 0.6% in December

Unexpected Happens Again

The unexpected decline in industrial production (the most since May of 2009) follows
The unexpected decline in retail sales which in turn followed
The unexpectedly weak jobs report in February
Which followed a Huge Miss in ISM; Largest Decline in New Orders in 4 Years
Which followed a Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected in January

Don't worry, it's the weather.

Economists did not know it was cold and snowy when they made all of those estimates.

Regardless, expect another lowering of GDP estimates as a result of today's unexpected news.

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

MEPs Accuse Troika of Aggravating Unemployment and Poverty in Rescued Countries

Posted: 14 Feb 2014 03:19 AM PST

Via translation from El Pais, Members of European Parliament Accuse Troika of Aggravating Unemployment and Poverty in Rescued Countries

"They could have acted as surgeons, cutting superfluous. Instead they acted like butchers with an ax," says MEP Alejandro Cercas in reference to the policies that the European Commission, the European Central Bank (ECB) and International Monetary Fund (IMF), the troika, that have been implemented in Greece, Ireland, Portugal and Cyprus, the four Eurozone countries that were forced to request a bailout.

The report before the Committee on Employment and Social Affairs of the European Parliament adopted on Thursday morning does not use such harsh words, but blames the three agencies-known as the troika for policies that have contributed to the deterioration of the welfare levels in the four countries.

"The extremely difficult economic situation and adjustment policies have led to an increase in unemployment," says the text. MEPs regretted also that these measures "be designed without adequate assessment of their consequences."

The injury count after a long five years of crisis is substantial. The report notes that in 2012 the Greek youth unemployment exceeded 50%, but the latest data this percentage rose beyond 61%. MEPs regret that cuts in social benefits derived from the austerity measures are increasing "levels of poverty."

The report adopted by the committee on Employment, focused on the social consequences of the bailouts.

The European People's Party (the largest party in parliament which includes the CDU) has distanced itself from the conclusions of this report.

But watering down of the content will provoke a confrontation with leftist forces and prevent the Strasbourg plenary approval before the elections next May according to congressional sources.

Discontent is growing by leaps and bounds. That discontent will play straight into the hands of the euroskeptics in the May election.

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