Central Perk: 25 iul. 2011

luni, 25 iulie 2011

Mish's Global Economic Trend Analysis

Dollar Plunges as Obama, Boehner Speak on Deficit; Finger-Pointing Text
Fiat Money Produces Endless Sea of Wars, Debt, Social Inequality, Economic Bubbles, Rampant Consumerism, Environmental Rape; Why Gold is the Answer
Spanish Government Bonds Hit 6% Again; Yields Climb in Italy
Boehner, Cantor Attack Obama's $2.4 Trillion "Blank Check" Plan; Both Sides Digging In; It's a Four Player Scenario, Pelosi is Irrelevant
Sea of Red in Asia, China Down Nearly 3 Percent; New Record High for Gold; "Super Committee" is Super Idiocy

Dollar Plunges as Obama, Boehner Speak on Deficit; Finger-Pointing Text

Posted: 25 Jul 2011 09:06 PM PDT

Tonight president Obama and speaker Boehner gave back-to-back speeches pointing the finger at each other as to who is to blame for the debt crisis. I did not think much of either speech, neither did the Forex markets.

MarketWatch reports Dollar plunges after Obama, Boehner speak on debt

Speaking from the White House Monday evening, Obama urged congressional leaders to give him a "fair compromise" about cutting the deficit and raising the U.S. debt ceiling in "the next few days."

The dollar initially fell against the yen as Obama spoke, to ¥77.96 from ¥78.24 before the speech, but it pared losses as he finished his remarks.

The greenback resumed against the yen its fall as U.S. House Speaker John Boehner spoke, supporting a Republican plan to end the debt stand-off.

Text of Finger-Pointing Speeches

Barack Obama's speech as delivered

Speaker Boehner's remarks, as prepared for delivery

US Dollar Index

click on chart for sharper image

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Fiat Money Produces Endless Sea of Wars, Debt, Social Inequality, Economic Bubbles, Rampant Consumerism, Environmental Rape; Why Gold is the Answer

Posted: 25 Jul 2011 12:07 PM PDT

My friend Dominic Frisby put together an interesting video on the rationale for a gold standard.

link if above video does not play: Gold: Independent Money

A gold standard will not cure every social ill in the world, nor will it stop all senseless wars. Nothing will. However, by now it should be clear to everyone that the current fiat system is good only for bankers, brokers, politicians, war mongers, and the already wealthy. Everyone else loses as inflation eventually eats away at what's left of the rapidly shrinking "middle class".

All fiat currencies including the US dollar are doomed. The only debate is the path it takes to get there.

For further discussion please consider

Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold's Honest Discipline Revisited

Michael Pettis Warns of "Virulent Political Turn Against Euro", Adds Clarification to "Gold's Honest Discipline"

Jim Grant on going forward with a gold standard, "This is not a threat, this is not a promise, it's going to happen"

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

Spanish Government Bonds Hit 6% Again; Yields Climb in Italy

Posted: 25 Jul 2011 09:54 AM PDT

With most eyes focused on the smoke and mirrors debt ceiling fiasco in the US, inquiring minds note that sovereign debt yields in Europe are once again climbing with 10-Year Spanish government bonds touching 6% once again.

Spain 10-Year Government Bonds

Bloomberg Quote: Spain

Italy 10-Year Government Bonds

Bloomberg Quote: Italy

Note that Bloomberg's charts do not match the quotes, so go by the quotes, not the charts.

Lower yields on Greece, Portugal, and Ireland are meaningless if they head higher on Spain and Italy. That Spain is back above 6% already and Italy headed there is significant.

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

Boehner, Cantor Attack Obama's $2.4 Trillion "Blank Check" Plan; Both Sides Digging In; It's a Four Player Scenario, Pelosi is Irrelevant

Posted: 25 Jul 2011 08:43 AM PDT

Four players must agree to do a debt ceiling resolution or nothing gets done. Those players are House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and President Obama.

Many have House Minority Leader Nancy Pelosi in that group. However, Pelosi is irrelevant. The house passed the "Cut, Cap, & Balance" without Pelosi so the House can pass something without her support again.

The problem is the Senate and President Obama.

Debate Getting More Rancorous, Both Sides Digging In

Both sides are digging in, and if anything the verbal attacks are getting more rancorous.

Boehner and House Majority Leader Cantor both laid into Obama's proposal as noted in Boehner's Blog Common-Sense GOP Effort Will Prevent Job-Crushing Default & Deny President Obama a $2.4 Trillion Blank Check.

Highlights from Boehner's Blog

Today, House Republican leaders will discuss with lawmakers a new framework designed to prevent a national default while ensuring any debt limit increase granted to President Obama includes spending reforms and cuts that exceed the debt limit hike. This common-sense plan is aimed at stopping President Obama's indefensible quest for a debt limit increase that would run past the next election without a process in place to ensure spending is being cut as the debt ceiling is being raised.

I know the president's worried about his next election. But my God, shouldn't we be worried about the country?

President Obama desperately wants a large debt limit increase that will take him past the next presidential election. Granting the president's request would amount to giving the president a $2.4 trillion blank check he can use to continue the spending binge that has driven our nation to the brink of a job-destroying downgrade and default.

The president has made it pretty clear he sees this debate as inconvenient compared to his desire to create more 'stimulus' programs. "I'd rather be talking about stuff that everybody welcomes – like new programs," he said at a recent press conference.

He is trying to set up a no-win situation for taxpayers: either he gets his $2.4 trillion blank check, or America defaults.

Congress can deny President Obama a blank check and protect the American people by passing legislation to prevent a default that is consistent with the principles of the Cut, Cap, & Balance plan that passed the House with bipartisan support.

The American people are still asking the question: 'where are the jobs?' And they know Washington's spending binge is part of the problem.

For the sake of our economy and our future, we need to stop spending money we don't have and start creating a better environment for long-term job growth.

Smoke and Mirrors

Over the weekend several people asked what was in the various plans and how much would really be cut. Unfortunately details are scant and the plans keep changing. However, anything short of the "grand bargain" has no real substance. It is debatable if the "grand bargain" has substance.

There will be an agreement. The question is what that agreement will look like. No one knows exactly but the short answer is "smoke and mirrors".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Sea of Red in Asia, China Down Nearly 3 Percent; New Record High for Gold; "Super Committee" is Super Idiocy

Posted: 25 Jul 2011 01:19 AM PDT

In the wake of a budget ceiling impasse, markets in Asia are down sharply with China leading the way, down nearly 3 percent.

Seriously, does anyone think Congress will not pass something?

The US is not going to default and everyone knows it. Of course there are plenty of reasons for the global markets to sink, so it's remotely possible the markets picked this time to worry about the slowing global economy.

New Record High for Gold

One thing does make sense this evening and that is a new high for gold in spite a firm US dollar.

The US is not going to do much about the deficit, nor is the crisis in Europe over. Add in an overheating Chinese economy and a potential downgrade of US debt and gold ought to be headed higher and it is.

Super Committee Nonsense

I thought it was Tim Geithner who came up with the "Super Committee" idea but he was merely silly enough to latch on to it. The latest hare-brained scheme comes from Senate Minority Leader Mitch McConnell and Majority Leader Harry Reid.

Please consider 'Super Congress': Debt Ceiling Negotiators Aim To Create New Legislative Body

Debt ceiling negotiators think they've hit on a solution to address the debt ceiling impasse and the public's unwillingness to let go of benefits such as Medicare and Social Security that have been earned over a lifetime of work: Create a new Congress.

This "Super Congress," composed of members of both chambers and both parties, isn't mentioned anywhere in the Constitution, but would be granted extraordinary new powers. Under a plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.) and his counterpart Majority Leader Harry Reid (D-Nev.), legislation to lift the debt ceiling would be accompanied by the creation of a 12-member panel made up of 12 lawmakers -- six from each chamber and six from each party.

Legislation approved by the Super Congress -- which some on Capitol Hill are calling the "super committee" -- would then be fast-tracked through both chambers, where it couldn't be amended by simple, regular lawmakers, who'd have the ability only to cast an up or down vote. With the weight of both leaderships behind it, a product originated by the Super Congress would have a strong chance of moving through the little Congress and quickly becoming law. A Super Congress would be less accountable than the system that exists today, and would find it easier to strip the public of popular benefits. Negotiators are currently considering cutting the mortgage deduction and tax credits for retirement savings, for instance, extremely popular policies that would be difficult to slice up using the traditional legislative process.

House Speaker John Boehner (R-Ohio) has made a Super Congress a central part of his last-minute proposal, multiple news reports and people familiar with his plan say. A picture of Boehner's proposal began to come into focus Saturday evening: The debt ceiling would be raised for a short-term period and coupled with an equal dollar figure of cuts, somewhere in the vicinity of a trillion dollars over ten years. A second increase in the debt ceiling would be tied to the creation of a Super Congress that would be required to find a minimum amount of spending cuts. Because the elevated panel would need at least one Democratic vote, its plan would presumably include at least some revenue, though if it's anything like the deals on the table today, it would likely be heavily slanted toward spending cuts. Or, as Obama said of the deal he was offering Republicans before Boehner walked out, "If it was unbalanced, it was unbalanced in the direction of not enough revenue."

Constitutional concerns aside, abdicating legislative responsibility to a super committee with super powers is idiotic. Besides didn't the Gang-of-Six just attempt to do something similar? And where did that plan go after a year of wrangling?

Is a 12 man committee more likely to agree to something than a 6 man committee? Anyone who thinks so has mush for brains.

Of course the whole idea might be to save face for both parties so that no one has to do anything but point fingers and blame the other side for lack of sensible action.

Each passing day delivers more reasons to be disgusted with leaders of both parties.

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

Damn Cool Pics

Food Photographed with an Electron Microscope
Comic-Con 2011
Tropical Island Paradise on a Yacht

Food Photographed with an Electron Microscope

Posted: 25 Jul 2011 05:22 PM PDT

Caren Alpert is a food photographer based in San Francisco. For the last 18 months, she has been shooting food with an electron microscope. The foods featured here are Cake Sprinkles, Brussel Sprout, Shrimp Tail, Passion Fruit, Sun Dried Tomato, Star Anise, and Blueberry.

Pineapple Leaf

Table Salt

Cauliflower

Fortune Cookie

Kiwi

Sun Dried Tomato

Life Saver

Passionfruit

Chocolate Cake

Raisins

Vitamin C

Raw Almond

Shrimp Tail

Fried Onion

Oreo

Brussel Sprout

Cake Sprinkels

Star Anise

Blueberry

Comic-Con 2011

Posted: 25 Jul 2011 04:46 PM PDT

Thousands of costumed fans have flocked to San Diego for Comic-Con 2011, the annual pop culture convention. Hundreds of exhibitors and more than 130,000 guests are expected to pack the San Diego Convention Centre for the sold-out, four-day event.

Source: telegraph

Tropical Island Paradise on a Yacht

Posted: 25 Jul 2011 04:29 PM PDT

Having a yacht is no big deal today. What matters is the class of yacht you own. Even a super luxury yacht is not a novelty any more. You have to own something bigger and better to be noticed and appreciated as being better than the rest.

Yacht Island Design introduced to the world of yachting a new concept. This consists in a theme of luxury yacht design, a tailored environment for the customer to enhance his cruises by taking his own custom build habitat anywhere he wants. They were very creative and they already created a project called "Streets of Monaco" design and their latest creation is called the "Tropical Island Paradise", a 90 metre island with a top speed of 15 knots. Both are amazing and very unique.

The main deck is a beach "cove" of cabanas surrounding a massive ocean view swimming pool, with a waterfall falling nearby from the volcano. Apart from that the stunning yacht has a bar area, outdoor dining, there's a private spa and four VIP suites for friends, all with their own private balcony. Sounds good,isn't it? and at all these adds and a sweet helicopter landing pad and underneath the gorgeous swimming pool, the recreational area includes jet skis, kayaks and a RIB.