Central Perk: 18 oct. 2010

luni, 18 octombrie 2010

Mish's Global Economic Trend Analysis

Chicago Pension Funds Selling Assets to Meet Obligations; Needs to Double Property Taxes; Current Liabilities of $41,966 per Household

Posted: 18 Oct 2010 08:16 PM PDT

Congratulations of sorts go to Chicago for having the most messed up pension plan of any city in the nation.

Please consider Chicago faces crisis over pension funding, how to pay for it

Much has been made of retiring Mayor Richard Daley's plan to draw down reserve funds to balance next year's city budget and how it could burden his successor.

But the chairman of the Finance Committee, Ald. Ed Burke, today talked about a far larger problem. One in four pension funds for city workers will go broke in the next decade, if current funding levels continue and markets don't improve, and all will be belly up by 2032 if nothing gives.

"It's similar to watching the house burn down without turning on the fire hydrant," said Burke, 14th, during the first day of hearings on Daley's proposed $6.15 billion budget. "At the present time, the city pension funds are actually selling assets to meet obligations."

Stabilizing employee pensions long-term would require greater employee contributions, higher taxes, major changes to the pension systems or a combination of those steps. Without relief, the city would have to about double its property taxes for the next 40 years to cover its pension obligations, said Gene Saffold, the city's chief financial officer.

To cover the outstanding liabilities, each household in Chicago would have to pay $41,966, the report concluded. That's the highest per-home amount among U.S. cities.

Number of Chicago Households

Inquiring minds just may be wondering "How many households are in Chicago?"

The answer is 1,044,027. That would make the pension liability a mere $43,813,637,082.

Chicago is bankrupt.

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

Industrial Production Unexpectedly Declines, First Drop in a Year; Where to From Here?

Posted: 18 Oct 2010 09:44 AM PDT

In yet another sign of a weakening economy, Production in U.S. Unexpectedly Dropped in September

Output at factories, mines and utilities fell 0.2 percent, the first decline since the recession ended in June 2009, figures from the Federal Reserve showed today. Factory production also decreased 0.2 percent, reflecting declines in consumer durable goods, like appliances and furniture.

The rebuilding of stockpiles, a component of the factory rebound last year, will probably cool following eight consecutive gains in inventories, a sign assembly lines will not accelerate much more. At the same time, improving demand from overseas and a pickup in business investment on new equipment may keep benefiting American manufacturers like Alcoa Inc., helping support the

Economists forecast production would increase 0.2 percent, according to the median of 63 projections in a Bloomberg News survey. Estimates ranged from a decrease of 0.3 percent to a gain of 0.4 percent. The drop followed an unrevised 0.2 percent gain in August.

Industrial Production Release

Inquiring minds are interested in the Industrial Production Release details.

Final products and consumer goods were both down for the second consecutive month. With the collapse in housing and the stimulus money pretty much spent, I expect further weakening of all the major market group components.

The only positives in the report this month are mining and business equipment, with the latter weakening rapidly.

Industrial Production

In percentage terms the bounce in industrial production looks impressive. In actual terms it looks pretty feeble.

Note that industrial production collapsed to 1998 lows at the bottom of the recession, taking back an unprecedented 11 years worth of gains. In spite of the huge bounce from the bottom in percentage terms, Industrial production is barely above the level in 2000.

Business Inventories

Note the impressive drop in business inventories. In percentage terms the rebound looks good, but only in percentage terms, not real terms.

Moreover, the important point is that inventory replenishment is nearly over. Looking ahead, production will be more in line with actual final demand, and that demand looks both weak and weakening.

Look for 3rd quarter GDP to surprise to the downside.

Fed is Spooked

I believe this is what has the Fed spooked. Yet, spooked or not, the Demographic Pendulum is in Motion.

Demographic Pendulum in Motion

Few understand the deflationary impacts of the entire gamut of trends that is playing out, or the stress these trends place on families.

It is futile to fight changing social trends, but that has not stopped the Fed with reckless proposals on top of reckless proposals. Please see Inflation Targeting Proposal an Exercise in Blazing Stupidity; Fed Fools Itself for more details.

As I stated in June of 2008, we are now on the back side of peak consumption and Peak Credit. Regardless of what Bernanke of the Fed does, the demographic pendulum is in motion. There is no going back.

Once attitudes hit extreme then reverse, there is nothing the Fed or anyone else can do about it.

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

Zombie vs Japanese Kids

Posted: 18 Oct 2010 08:01 AM PDT

Japanese kids bravely fight a zombie that invaded their home. Watch the subtitles for some adorable dialog. Give your opinion: child abuse, character building, or just plain fun?

The Best Parent Fails

Posted: 18 Oct 2010 06:55 AM PDT

Usually parents would do anything to make sure that the up bringing of their children is done in the best possible way. However, some of them don't really deserve to be parents. Take a look at these pictures to see what I mean.

Related Post:
Bad Parents
Animal Parents Vs. Human Parents

26 Worst Male Tramp Stamps

Posted: 18 Oct 2010 04:53 AM PDT

What`s wrong with these guys? Daddy issues? Mad at the world? What?

Google Headquarters

Posted: 18 Oct 2010 04:19 AM PDT

The photos are mostly from the Google headquarters in Mountain View, California, but some pictures were taken at the Google New York City offices.

If you worked in the Google headquarters, you could bath in a lap pool, have a massage in a massage room and if too tired, take a nap in a nap capsule and many other stuff.

I've seen plenty of cool offices but any of the Google offices around the world is the best!

New Way to Fight Prostitution in Russia

Posted: 18 Oct 2010 04:15 AM PDT

Prostitution has become a real problem in many Russian cities. Here is the latest trend. After the girls are arrested they have a long conversation with a priest who explains them why prostitution is bad for their souls. But I doubt that it helps.

The Lion Whisperer - Kevin Richardson

Posted: 18 Oct 2010 01:19 AM PDT

Kevin Richardson plays with white lions at a park in South Africa. The lions seem to love him.

Animal behaviourist Kevin Richardson says he relies on instinct to win the hearts and form an intimate bond with the big cats. He can spend the night curled up with them without the slightest fear of being attacked. His magic works not only work for lions but other animals such as cheetahs, leopards and even hyenas do not hold a threat against him. Lions are his favourites and its a wonder how he can play, carress, cuddle with them whose teeth are sharp enough to bite through thick steel. Its a dangerous job but to Kevin, its more of a passion for him.

14 Weirdest Wedding Cakes

Posted: 18 Oct 2010 12:57 AM PDT

Cakes are perfect to celebrate any event or occasion. We all are fond of cakes. The more we eat, the more we want to eat. A wedding cake is the traditional cake served to the guests at a wedding reception.

These weird wedding cakes, apart from the color and structure, are completely different from any other wedding cakes.

The 10 Most Dangerous Stunts Of Jackass

Posted: 18 Oct 2010 12:40 AM PDT

Jackass 3D arrives in theaters this weekend and while many may be ready to dismiss Johnny Knoxville and the gang as just a bunch of idiots, we're not. Sure they're idiots, but they're really brave idiots willing to risk life and limb for your entertainment. It's more than just scat jokes, they're modern day daredevils and sometimes their stunts go so far that it's a miracle at least one of them hasn't ended up dead yet.

This weekend Jackass 3D will show up with a whole new host of stupidly death defying stunts, but before that we're taking a look back at the most deadly Jackass moments of the past. Here they are, the ten most dangerous stunts of Jackass… so far:

More Infographics.

Click to Enlarge.