joi, 28 iulie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Boehner Humiliated, Cancels Vote, Stock Futures Tank; Stocks and Treasuries Unusually Correlated

Posted: 28 Jul 2011 10:00 PM PDT

Thursday morning Bloomberg reported House Majority Leader Cantor Predicts House Republicans Will Pass Debt Plan Today
House Majority Leader Eric Cantor predicted Republicans would pass a debt-limit increase plan today as some freshman lawmakers pledged support for the measure in the face of unified Democratic opposition in the Senate.
Vote Cancelled

Kiss that prediction of Cantor goodbye. Thursday evening Republicans put off vote on debt limit because Boehner clearly lacks the votes.
An intensive endgame at hand, Republican leaders abruptly postponed a vote Thursday night on legislation to avert a threatened government default and slice federal spending by nearly $1 trillion.

"The votes obviously were not there," conceded Rep. David Dreier, R-Calif., after Speaker John Boehner and the leadership had spent hours trying to corral the support of rebellious conservatives.

The decision created fresh turmoil as divided government struggled to head off an unprecedented default that would leave the Treasury without the funds needed to pay all its bills. Administration officials say Tuesday is the deadline for Congress to act.

Senate Democrats stood by to scuttle the bill -- if it ever got them -- as a way of forcing Republicans to accept changes sought by Obama.

Based on public statements by lawmakers themselves, it appeared that five of some two dozen holdouts were from South Carolina. The state is also represented by Sen. Jim DeMint, who has solid ties to tea party groups and is a strong critic of compromising on the debt issue.

Others said conservatives wanted additional steps taken to try to ensure that a constitutional balanced-budget amendment would be sent to the states for ratification. As drafted, the legislation merely requires both houses of Congress to vote on the issue.

Even before the House voted, Reid served notice he would stage a vote to kill the legislation almost instantly.

"No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now," he said.
Boehner Humiliated

Boehner was humiliated and justifiably so. He had nothing to gain and everything to lose by attempting to ram-rod a gaseous bill through the House that was guaranteed dead-on-arrival in the Senate.

Majority leader Cantor made matters worse by predicting passage.

Stock Futures Tank in Unusual Correlation with Treasuries

Please consider U.S. S&P 500 Futures Retreat as McCarthy Says No Vote on Debt Plan Tonight
Futures on the Standard & Poor's 500 Index fell after the U.S. House of Representatives postponed a vote to increase the nation's debt limit, boosting concern that the lawmakers are far from an agreement to avoid default.

S&P 500 futures expiring in September lost 0.8 percent to 1,286.9 at 12:28 p.m. in Tokyo. The decline suggests the U.S. equity benchmark may extend its 3.3 percent slump from the past four days when markets open in New York.

Stocks and Treasuries are moving in tandem twice as often as they normally do, a sign investors are growing convinced the U.S. will lose its AAA credit rating and that an impasse among lawmakers may spur losses in both markets. The S&P 500 has risen or fallen together with 10-year Treasury notes 80 percent of the time in the last 10 days, compared with the average since 2000 of 41 percent, according to data compiled by Bloomberg.
Not Raising the Debt Ceiling Would be Blessing

I am sticking to what I said in Not Raising the Debt Ceiling Would be Blessing; Debt Limit Analysis; Interactive Map, You Decide What Not To Pay
All things considered, especially since Boehner's credibility is gone in his latest gaseous proposal, the best thing for Congress to do would be to NOT hike the debt ceiling and work out a credible plan over the next month.
Is Mish a "closet Liberal-humanist?"

In response to that post I received a humorous email from "BC" who wrote...
Mish, your choices reveal your empathy! Are you a closet Liberal-humanist?!

Your choices favor the elder working class, the working-class and poor ill, unemployed, poor and "food challenged", and imperial legionaries and auxiliaries against the corporate-statists!!!

Are you one of those maladjusted working-class types who just doesn't "get it"?!

Wink , wink ;-) ;-).
To see my choices as to what I would cut and to make your own choices about what to do if the debt ceiling is not raised, click on the above link for an interactive map.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Not Raising the Debt Ceiling Would be Blessing; Debt Limit Analysis; Interactive Map, You Decide What Not To Pay

Posted: 28 Jul 2011 01:03 PM PDT

As the chances of a gaseous Congressional compromise to do nothing about deficit reduction grow larger, inquiring minds wonder just what might happen if nothing passes.

Contrary to popular belief, the US would not default. Troops would still be paid. Medicare and Medicaid would not stop. The Bipartisan Policy Center has a nice analysis in a PDF on Debt Limit Analysis.

NO "SILVER BULLETS" TO EXTEND DATE



  • Our analysis also shows that the X Date will fall between August 2 and August 9. On July 1st, Treasury publicly reaffirmed their estimate of the X Date as August 2
  • The 14thAmendment does not provide a reasonable basis for challenging the constitutionality of the debt ceiling. The Administration will not attack the debt ceiling on this basis
  • Treasury has no secret bag of tricks to finance government operations past August 2. Treasury will not attempt to "firesale" assets during a crisis.
  • Other ideas are impractical, illegal and/or inappropriate (gold loans, IOUs)
  • There is no precedent; all other debt limit impasses have been resolved without passing the X Date
  • The government shutdown of 1995 –96 does not provide a precedent

Prioritization



Obama's, Geithner's, and Bernanke's statements about default simply are not credible. Nor are threats of cutoffs to military pay or Social Security. Indeed those totals allow Medicaid and Medicare to be paid.

The PDF covers alternate scenarios of what can and cannot be paid.

Interactive Map, You Decide What Not To Pay

I contend there is easily a month or more to work out a better deal. There are many programs we can easily do away with that should not be funded at all.

Please consider You choose: who gets paid (and who doesn't)
On August 2, the federal government will not have enough cash to pay for all of its programs and obligations. The U.S. will take in a total of $172.4 billion in revenue during the month, but its total payments exceed $306 billion, resulting in a $134 billion shortfall. If a debt-limit increase is not approved, the U.S. Treasury will have to choose among 80 million monthly payments and prioritize which programs are funded and which ones are not.
Mish Choices



click on chart for sharper image

As you can see, I have $30.6 billion to spare.

The first thing TO pay is interest on the national debt. It is non-payment of interest that would constitute default. Given $29 billion is easily payable, talk of default if Congress does nothing is the height of silliness.

The first thing to NOT pay should be congressional salaries.

As you can clearly see there are many things that would be a benefit to not pay, and never pay again.

Things to Not Pay and Never Pay Again

  • Department of Education - $20.2 Billion
  • Health and Human Services Grants - $8.1 Billion
  • HUD - $6.7 Billion
  • Department of Energy - $3.5 Billion
  • Department of Labor - $1.3 Billion
  • Small Business Administration - $0.3 Billion
  • Other Spending - $52.8 Billion

Clearly those things would have to be phased out, but the total of those things is a whopping $92.9 billion. That "Other Spending" category may have some essentials, but certainly most of it is not. Also bear in mind, I have $30.6 billion to spread around as needed. Some can go to salaries, but certainly not salaries of Congress.

In contrast, please see Boehner's Credibility Gone in Revised Proposal; Boehner Tells Congress to "Get Your Ass in Line"; Best Deal Republicans Can Get? for Boehner's revised cop-out.

All things considered, especially since Boehner's credibility is gone in his latest gaseous proposal, the best thing for Congress to do would be to NOT hike the debt ceiling and work out a credible plan over the next month.

Addendum:

The link at the top has been changed.

I received an email from Michael Stubel at the Bipartisan Policy Institute thanking me for the post and sending out an updated link.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Boehner's Credibility Gone in Revised Proposal; Boehner Tells Congress to "Get Your Ass in Line"; Best Deal Republicans Can Get?

Posted: 28 Jul 2011 10:54 AM PDT

It was bad enough when Boehner proposed a $3 Trillion deficit cutting proposal that the CBO said would only cut the deficit by a mere $850 billion.

Please see Rating the Obama, Reid, and Boehner Deficit Reduction Plans on Mish's 10-Point Credibility Scale for details.

However, one can make excuses for a "one-time" mistake. However when you submit a second plan that the CBO says will only cut the deficit by $950 billion you lose all credibility. Nonetheless, Boehner tells Congress ...

"Get Your Ass In Line"

Bloomberg reports Boehner Revises Debt Proposal as Aug. 2 Nears
Republican leaders were moving ahead with plans to vote on the measure tomorrow, less than one week before a potential U.S. default Aug. 2, and sought to ease party members' concerns that it wouldn't cut spending enough. The Congressional Budget Office said Boehner's new plan would cut $915 billion in spending over a decade, still short of the $2.2-trillion Senate plan.

Boehner, when asked by radio host Laura Ingraham whether he told members at a closed-door meeting today to get "your A-word in line" behind his debt bill, said: "I sure did. Listen, this is time to do what is doable."

Boehner's plan would promise another debt-limit showdown in the 2012 election year unless Republicans and Democrats agree by the end of this year to reduce deficits. President Barack Obama and congressional Democrats insist on extending the nation's borrowing authority through the 2012 elections, saying continued uncertainty would harm financial markets.

An analysis by the nonpartisan CBO of Boehner's revised plan said it would cut spending by $915 billion, compared with $850 billion for his original plan. This still was less than the $1.2 trillion advertised by party leaders for an initial round of cuts, which prompted leaders to cancel today's scheduled House vote on the bill.
Boehner's Credibility Gone In Second Gaseous Proposal

The best Boehner could come with over the course of 10 full years, is another $65 Billion! My dead grandmother could find more than that.

With that gaseous proposal, Boehner's credibility is burnt toast.

Moreover, the Senate will likely reject any of these proposals of Boehner that require a balanced budget amendment. So what is the point other than to put on a ridiculous show?

It would be one thing if his plan contained debt reductions of substance. But in two attempts, Boehner could only find a mere $95 billion a year in cuts when the deficit is a shocking $1.4 trillion.

On my 10-point credibility scale, Boehner passed #7 "Nauseous" and is now solidly in the #8 spot of "Gaseous". The next step is "Imaginary" where President Obama's nonexistent plan sits.

Governor Chris Christie Blasts Obama

New Jersey Governor Chris Christie blasted Obama for not having a plan, telling the president ""You Can't Lead From Behind".

Please see Chris Christie on Obama's Unwillingness to Submit a Deficit Plan "You Can't Lead From Behind" for details and a video.

Exercise in Futility

Meanwhile in an exercise in futility Boehner Moves Ahead on Debt.
House Republican leaders pleaded with their recalcitrant rank and file Thursday to back a plan to stave off an unprecedented government default next week. The House vote would bring President Barack Obama and congressional leaders one step closer to the endgame before Tuesday's deadline.

Republicans are seeking deep spending cuts in exchange for raising the nation's $14.3 trillion debt limit. The White House has threatened to veto the House GOP bill even if it makes it through the Senate, where it faces unanimous opposition among Senate Democrats. Still, getting the newly modified House plan passed on Thursday was seen as an important step toward the process of finding a compromise between the House and Senate proposals.

In a closed-door GOP meeting just hours before a scheduled vote, Speaker John Boehner, R-Ohio, made headway in getting toward the 217 votes necessary to pass his plan in the House. No Democrats were expected to support it. Boehner told the Republicans he expected to round up enough votes but was not there yet.

"But today is the day," he said, according to people in the room.

"I think it's the best deal we can get," said Rep. Steve Chabot, R-Ohio, who said he had dropped his opposition. Rep. Walter Jones, R-N.C., said he would back the measure to ensure that Boehner "has a seat at the table" for the endgame negotiations.
Best Deal You Can Get?

Notice the rank and file starting to cave in to Boehner's gaseous proposal. Rep. Steve Chabot, R-Ohio called it "the best deal we can get."

No it's not. It's not even the best deal you can't get. The Senate will not go along, so there is nothing to get.

As long as you are going to submit proposals you can't get, you may as well make it a good one. $950 billion over 10 years is not a good deal. It's not even a down payment on a good deal, and with that, Boehner just pissed away his credibility.

In the end, something will pass. But it will not do a damn thing credible to reduce the deficit. Reid's plan and Boehner's plan are both back-loaded.

Republicans had a golden opportunity to attempt to extract some major concessions in return for tiny tax concessions. Instead, they are going to settle for nothing. This fiasco is exactly why Republicans need someone like Chris Christie running for president. No one else has managed to show any leadership.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Italy Bonds Smacked in Selloff, Yields Now Approach Spain; Vote of "No Confidence" on Debt Plan

Posted: 28 Jul 2011 09:32 AM PDT

Investors wasted not time in a vote of no confidence on the latest debt package supposed to save Europe. 10-year Spanish government bonds are back above 6% and yields on Italian government bonds are close behind.

Bloomberg reports Italian Bonds Decline After Borrowing Costs Rise at Nation's Debt Sale
Italian bonds fell for a second day, increasing the yield spread over German bunds, after the nation's borrowing costs rose at a sale of 10-year debt and Standard & Poor's said Greece risks further defaults.

Italy's 10-year yield surged to the most in more than a week amid speculation a probe into a former aide of Finance Minister Giulio Tremonti may force him to step down. German yields fell to near a five-month low versus their U.S. counterparts as American lawmakers pushed conflicting plans to raise the nation's debt ceiling. Bunds rose for fifth day, the longest streak since April.

Italian Auction

Italy sold 2.7 billion euros of its 10-year benchmark security, less than the maximum target of 3 billion euros. The debt was priced to yield 5.77 percent, higher than 4.94 percent the last time the securities were sold on June 28, and drew bids for 1.38 times the securities on offer, compared with 1.33 times. In six sales of 10-year bonds this year, the average bid- to-cover ratio was 1.42 and the average yield was 4.81 percent.

"With Italy investors have recognised that the debt ratio is 120 percent" of gross domestic product, said Julian Callow, chief European economist at Barclays Capital in London. "That's very high. Any country really above 80 ought to be getting concerned and looking at ways of bringing down that ratio. When you're above 100, that's flashing red signals. As well, in Italy you've had very weak economic growth."

Irish bonds advanced for a third day after an S&P report said some provisions of the EU's rescue plan would help protect Ireland and Portugal.
Italy 10-Year Government Bonds



Spain 10-Year Government Bonds



Vote of "No Confidence"

Although yields on Italian and Spanish debt are off the highs of the day, the direction is crystal clear. The proper way to look at trends of Spain and Italy is as a vote of no confidence in the latest plan, not as a vote of confidence on Finance Minister Giulio Tremonti .

Yields on Portuguese and Irish debt fell, supposedly on the belief the latest debt deal will lower borrowing costs. It won't. The S&P''s statement "some provisions of the EU's rescue plan would help protect Ireland and Portugal" is laughable.

There is no way the EU's EFSF, the European Financial Stability Facility, can cover Spain, let alone Italy.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
Publicat de 1 la 23:50 0 comentarii

Damn Cool Pics

Damn Cool Pics

MS-DOS Turned 30 Years Old

Posted: 28 Jul 2011 05:55 PM PDT

MS-DOS, Microsoft's first desktop operating system today turned 30. The MS-DOS was launched on July 27, 1981, after Microsoft bought the full rights to QDOS (Quick and Dirty Operating System), the PC operating system the company acquired from Seattle Computer Products for $50,000.

Epic Fails - Part 16

Posted: 28 Jul 2011 05:34 PM PDT

Satisfy your thirst for massive failure by checking out this latest round of hilarious humans failing the best that they can. Here is a new set of the best and the most epic fails.









































































































Previous parts:
Epic Fails - Part 1
Epic Fails - Part 2
Epic Fails - Part 3
Epic Fails - Part 4
Epic Fails - Part 5
Epic Fails - Part 6
Epic Fails - Part 7
Epic Fails - Part 8
Epic Fails - Part 9
Epic Fails - Part 10
Epic Fails - Part 11
Epic Fails - Part 12
Epic Fails - Part 13
Epic Fails - Part 14
Epic Fails - Part 15

Cartoons That Were Voiced By Celebrities

Posted: 28 Jul 2011 05:16 PM PDT

Often celebrities find some very weird characters to lend their voice to. Here's a list of the best and strangest.

Katy Perry plays Smurfette opposite Neil Patrick Harris and Jayma Mays in The Smurfs, due out on July 29th. Perry's character channels Marilyn Monroe's famous Seven Year Itch moment in the movie's trailer, as the Smurfette's billowy white dress flies up over a windy grate.


Jennifer Aniston served as the voice for character Annie Hughes in 1999's Iron Giant, when the actress was still part of the Friends cast.


Anne Hathaway gave a voice to character Jewel in Rio. Though Hathaway made her singing debut in the film, she had done voiceover work before in shows The Simpsons and Family Guy.


Christina Applegate voiced sassy female chipmunk Brittany in Alvin and the Chipmunks: The Squeakquel alongside two other Chipettes, played by Amy Poehler and Anna Faris.


Ellen DeGeneres puckered up to play Dory in 2003's Finding Nemo. The comedian mastered the amnesiac fish's stumbling speech patterns in the film.


Emma Watson voiced the part of Princess Pea in The Tale of Despereaux. "I read the script, and I just loved it. It was so charming. I fell in love with Despereaux, so I really didn't have a choice. I had to be his princess," Watson told MTV.


Isla Fisher gave voice to Dr. Mary Lou Larue in Horton Hears a Who! The Dr. Seuss-inspired film boasted a star-studded cast of Jim Carrey, Steve Carell, Seth Rogan and Jaime Pressly.


Jada Pinkett Smith played Gloria in Madagascar and Madagascar 2. "I always have such a good time with Gloria, it allows me to be very playful," Smith said of her role in the films.


Miley Cyrus provided the voice to Penny in Bolt. More than her voiceover, she won high praise for the song I Though I Lost You, which she sings in the film with John Travolta.


Nicole Kidman voiced penguin Norma Jean opposite Hugh Jackman and Robin Williams in 2006's Happy Feet.


Queen Latifah provided comedy as the voice of Ellie, a mammoth who is convinced that she is a possum, in Ice Age. "She has her own idea about who she is and she just won't be dissuaded," the star said of her character.


Reese Witherspoon chose to play Susan Murphy a.k.a Ginormica in Monsters vs Aliens because the character had role model potential. "You always go for the great character to play, even if she's animated," Witherspoon said.

What Your Favorite Ice Cream Says About You [Infographic]

Posted: 28 Jul 2011 04:57 PM PDT

In honor of National Ice Cream month, the Ultimate Coupons design team decided to have a little fun with everyone's favorite frozen treat. Simply find your favorite ice cream flavor on the chart and see what your love of that flavor really says about your personality. We admit that these results aren't scientifically proven, but they're probably about as accurate as your daily horoscope. Except for the Frozen Yogurt one – that is totally, 100% true. Trust us.

Click to see full size view.

Improv Eeverywhere: The Mp3 Experiment Eight

Posted: 27 Jul 2011 08:45 PM PDT



As part of their MP3 Experiment series, Improv Everywhere asked people to download an original MP3 file, go to the Hudson River at sunset and listen to it simultaneously. 3,500 people showed up ending up doing synchronized activities.

10 Most Strangely Shaped Lakes

Posted: 27 Jul 2011 07:47 PM PDT

Nature tells you a story, of solace and existence. Similarities can be found in the things surrounding us but what is most astonishing is when water bodies cry for attention; through their various intriguing shapes and outlines, we look but we do not see.

Schulensmeer Lake – Belgium

Giant water gun: Nature and man worked together to unintentionally make a weapon out of Belgium's 2.5 km long Schulensmeer. A highway was constructed nearby in 1970's and the parcels of land brought for it turned the lake into a pistol shape. It is not as deadly as it seems, however in case of flooding it causes the Demer River to overflow. Otherwise, sailing, surfing and water sports are the powder in the gun.

The Lake that leads the Latin Alphabet

To be honest there are simply loads of heart-shaped lakes out there everywhere from Ohio to Korea so we just didn't have room for all of them here. Shot from a balloon, this next lake or perhaps more accurately pond looks like the letter 'A' to us. Anyone know of other lakes that spell something out to them? We'd be interested to hear.

Friday's Lake

The reservoir of the Kiev Hydroelectric Power Plant.

Catherine's garden in Moscow is of the same form (and content)


The Lake designed by Pisces

This frozen-over, fish-shaped wonder was captured on Alaska's Mt. McKinley, the highest mountain peak in North America at around 6,194 metres. Mount McKinley actually has a larger rise than Mount Everest, as its base sits at a much lower elevation of 610 m, and is also bulkier than its Himalayan rival. With such imposing facts, it's no wonder this obscurely fishy lake is less well-known..

The Lake in the image of Man

This next shape is clearly a product of deliberate human intervention in the natural landscape, a figure that stands some 140 metres tall in a lake located near Iacanga in the Brazilian state of São Paulo. However, aside from its location and vital statistics, information about this strange piece of land art is scarce. Anyone know anything we don't? If so, pray do tell.

The Lake of Lady Luck

Canada's aptly-named Horseshoe Lake might bring luck for some, but geographically oxbow lakes like this are not uncommon. These sweeping U-shaped bodies of water are formed when a wide meander from a river's main stem is cut off, creating the characteristically curved lake. This fine-looking example is located along the long the Red River, near Morris in southern Manitoba.

The River that doubles your luck

So how do oxbow lakes arise? Well many of them start out a lot like this. Yes, we know, it isn't a lake, but it could be one in the making. This is Arizona's Horseshoe Bend, a magnificent meander of the Colorado River situated slightly downstream from Lake Powell within Glen Canyon National Recreation Area. From the steep cliff above, some 305 metres higher up, it makes a breathtaking sight.

Manicouagan Lake – Canada

Engaging ring: One of the seven wonders of Canada, a ring-shaped hydroelectric reservoir lake occupies the centre of Quebec's Manicouagan Crater. This shuttle view shows the prominent 70 kilometers diameter, ice-covered annular lake that fills a ring where impact-brecciated rock has been eroded by glaciation.

The Lake that says 'How do you do?'

The previous lake may have been man-shaped by design, but this next one looks more natural; natural but not au naturel – see he's wearing a hat and cane as he walks across the countryside. We're not sure where this is, but we've featured it on EG before and one commenter reckoned it could be Blythefield Reservoir in Staffordshire, England; another said it must be Mr. Peanut of Planters fame.

Heart shaped lake, possibly in Korea


The Lake Eros, India

If you fancy giving a lake photo as a valentine gift, the heart shaped Lake Eros is the water body for you. The Chembra Peak in India overlooks what is the symbol of love throughout the world, at 1,398 metres above sea level. The water not only warms the eyes but is also at a fairly tolerable temperature with a surface area of 1,827 square meters.

Not really a lake but there is some water

Arabian sheik billionaire decided to glorify himself in the world and outside it, by writing his name on the sand of the island belonging to him
with kilometer letters. HAMAD inscription is dug in the sand of the island belonging to him with al-Futaisi letters. The whole inscription is about 4 km at length.
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