Central Perk: 25 aug. 2012

sâmbătă, 25 august 2012

Mish's Global Economic Trend Analysis

Douglas County Colorado Proposal Seeks to Terminate Collective Bargaining of Teachers' Unions

Posted: 25 Aug 2012 07:33 PM PDT

Three members of the Douglas County School Board have floated proposals to terminate dealings with teacher's unions.

Three board members proposed three separate ballot questions, each chipping away at what have been traditional district-union relationships in the affluent county south of Denver.

Should the district be prohibited from using public funding for the compensation of union leaders?

Should the district be prohibited from collecting union dues from employee paychecks on the union's behalf?

Should the district be prohibited from engaging in collective bargaining with the union?

Board members are expected to vote at their Sept. 4 meeting on which of the questions – or all or none of them – to place before voters on Nov. 6. School boards have until Sept. 7 to submit ballot language to their county elections officials.

Three Superb Ideas

Hopefully this is the start of a trend because those are three superb ideas. I commend the board members for those ideas.

Willfully dealing with public unions when you don't have to is blatantly stupid. Unions are 100% guaranteed to increase costs and reduce productivity, then demand tax hikes on top of it, while whining the whole while "it's for the kids"

The clear-cut way to do something for the kids would be to eliminate the unions and pass some of the saving on to hire more teachers.

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

Home Sellers Get Realistic in Australia; Mining Companies Going Bust in Record Numbers; Australia Headed for Disaster Zone

Posted: 25 Aug 2012 09:11 AM PDT

Real estate agents in Australia who assured everyone for years there was no housing bubble and home prices would only ever go up because there was a "shortage of houses" are now telling everyone who is stuck in a house they cannot afford that they have prices too high.

What this means of course is real estate agents are selling few homes, thus making little in commissions so they need prices to come down. What the agents don't realize is this is the beginning of a trend and home prices, some drastically reduced already, still have much further to fall.

The Sunshine Coast Daily reports Sellers get realistic with cuts

The prices of some Sunshine Coast properties have been slashed by a million dollars as owners look to shift homes that have been stewing on the market for up to four years.

A Sunshine Beach property that was on the market in 2008 for $2.6 million has been reduced to $1.595 million while a Cooroy property for sale for $3.15 million in 2009 has been discounted $1.155 million.

A list of the top 25 discounted properties from the SQM Research shows prices discounted between 24% and 40%.

The head of SQM Research, Louis Christopher, said the discounting was the result of vendors being forced to correct unrealistic price expectations.

"Many are not willing to accept where the buyers are at. They can't handle, psychologically, that this is what their property is worth," he said.

The discounting on the Sunshine Coast was not confined to any area or price range. SQM's list showed price cuts at beachside locations from Mooloolaba through to Noosa Heads and Rainbow Beach, and out to the hinterland villages of Mapleton, Cooroy and Imbil.

In Due Time My Little Pretty

This article is sure to trigger complaints "It's only the Sunshine Coast" or some other such nonsense as if large cities and more populated areas will not be affected to this degree.

In due time my little pretty, all in due time.

Back in the Solar System

By the way, the article said sellers are realistic. What the writer meant was "back in the solar system" as opposed to "realistic". Until homes are selling in normal transaction volumes for sustained periods, sellers will not really be "realistic".

Risk of Recession?

Remember how the boom in China was guaranteed to prevent falling prices for iron ore and other commodities? Recall that such nonsense was supposed to prevent a recession.

More reality has set in as Australia faces growing risk of recession in 2013

ONE of Europe's biggest banks today warned of the growing risk of recession in Australia in 2013, as prices for its key commodities such as iron ore and coal spiral lower.

The warning by Deutsche Bank comes amid rising concern that Australia's mining investment boom, which has insulated the commodity-rich economy from a global slowdown, is waning, leading to mine expansions being scaled back and mounting job losses.

Policy makers are "dangerously complacent" about the risk now arrayed against the $1.4 trillion economy, which relies heavily on prices paid for its biggest exports - iron ore, coal and gas - for its prosperity.

The assessment stands in stark contrast to the upbeat appraisal by the RBA, which earlier this month upwardly revised its forecast for economic growth in 2012 to 3.5 per cent, from 3 per cent.

The RBA today said it expected the mining investment boom to peak during 2013-14, but added the timing of the peak was uncertain.

Also today, corporate insolvencies hit a record high in the year to June 30, according to the Australian Securities and Investment Commission. Mining states are among the worst hit, it said.

"We see one of the mining boom states, Queensland, showing one of the most dramatic increases in corporate failures," ASIC said. "Western Australia's financial year company failure figure is also the highest on record for that state."

Mining Companies Going Bust in Record Numbers

The idea the investment boom will keep going until 2014 is complete nonsense given mining companies are going insolvent at record highs.

The upward GDP revision by the Reserve Bank of Australia is also nonsense. One really has to wonder what those clowns are smoking.

Iron Ore Prices Near Three-Year Low

The Financial Times reports Iron Ore Prices Near Three-Year Low.

Iron ore prices have fallen to their lowest since late 2009 as steelmakers in Europe curtail purchases, forcing miners to sell their output in the congested Asian market.

Iron ore traders and brokers said Vale of Brazil, the world's largest iron ore miner, was diverting part of the material usually identified for European steel mills into the Asian spot market at the precise moment Chinese consumption slows down, forming a glut.

Iron ore has been a cash-cow for the mining sector during the past five years and the current drop in prices is affecting substantially the profitability of blue-chip miners Vale and London-listed Rio Tinto, BHP Billiton and Anglo American.

Cost of Chinese steel has also plunged to levels last seen nearly three years ago, emphasising the depth of the slowdown in the world's second-biggest economy.

Analysts at Nomura said they were "very concerned" that Chinese steel mills had increased production at the same time as prices fell and many of them had struggled to make a profit. "The recent collapse in steel and iron ore prices suggests to us that we have reached the point in the cycle where a major destock is required," Nomura said. "If production is not cut voluntarily, imbalances will continue to build, increasing the risk of a large, involuntary cut in steel production."

Last month the China Iron and Steel Association said domestic steelmakers saw profits plunge 96 per cent in the first half compared with a year ago, turning the industry into a "disaster zone".

Disaster Zone for Corporate Profits

China has slowed, as predicted in this corner, and commodity prices, especially coal and iron ore are taking a hit. Growth in China will slow much further over the next decade and that pain has yet to be felt.

Here are a few pertinent links

August 16, 2012: Pettis on Debt, Currency Wars, Commodity Prices and Capital Flight; China FDI Contracts 8.7% YoY, 8th Drop in 9 Months
March 30, 2012: The Dating Game: Michael Pettis Challenges The Economist to a Bet on China
August 22, 2011: Long-Term Outlook for China, Europe, and the World; 12 Global

The housing bust coupled with a commodity bust and a commercial real estate bust is going to turn most of Australia into a disaster zone for profits.

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

Damn Cool Pics

Som Sabadell Flashmob

Posted: 24 Aug 2012 07:46 PM PDT

Over 100 people of the Vallès Symphony Orchestra and the choirs of Lieder and Friends of l'Opera and the Choral Belles Arts participated in this amazing Flash Mob in Sabadell, Spain. In celebration of the 130th anniversary of Banco Sabadell they performed Beethoven's "Ode To Joy."

Weekly Address: Preserving and Strengthening Medicare

Saturday, August 25, 2012

Weekly Address: Preserving and Strengthening Medicare

President Obama speaks to the American people about the critical need to strengthen and preserve Medicare for our seniors and future generations.

Watch President Obama's weekly address.

President Barack Obama tapes the Weekly Address in the East Room of the White House, Aug. 23, 2012. (Official White House Photo by Chuck Kennedy)

Weekly Wrap Up

First Lady Michelle Obama Hosts First-Ever Kids' State Dinner: On Monday, First Lady Michelle Obama hosted the first-ever Kids’ “State Dinner” at the White House, welcoming 54 budding chefs to a formal luncheon in the East Room as part of her Let’s Move! initiative. The guests, all between the ages of 8 and 12, represented all U.S. states, three territories and the District of Columbia.

Each of the guests, along with their parents, submitted a healthy recipe as part of Epicurious’ Healthy Lunchtime Challenge, which invited families to create an original lunchtime recipe that is healthy, affordable and delicious, and follows the nutritional guidelines of MyPlate.

President Obama Held a Press Conference: Also on Monday, President Obama took questions from reporters and discussed a big new announcement from the Department of Health and Human Services (HHS).

"Today, HHS announced that thanks to the health care law that we passed, nearly 5.4 million seniors with Medicare have saved over $4.1 billion on prescription drugs. That’s an average savings of more than $700 per person," he said. "This year alone, 18 million seniors with Medicare have taken advantage of new preventive care benefits like a mammogram or other cancer screening at no extra cost."

Assisting Iranians in Need: On August 11, strong earthquakes in northwest Iran destroyed and damaged hundreds of villages, causing the loss of many lives, leaving thousands without electricity, water, health care and other essential services. The United States immediately sent the Iranian people our condolences and offered direct earthquake relief to the government of Iran. Despite our strong differences with the Iranian government, we have a deeply held obligation to help those in need in times of disaster. To learn more about the United States’ assistance to the Iranian people, please read Deputy National Security Advisor Denis McDonough’s comments.

First Lady Announced a Major Milestone for Joining Forces: On Wednesday, at Naval Station Mayport near Jacksonville, Florida, First Lady Michelle Obama announced that 2,000 companies had hired or trained an amazing 125,000 veterans and military spouses in the past year through Joining Forces. This effort, combined with policies and legislation put in place by the President have resulted in a 20 percent decrease in veteran unemployment compared to this time last year.

International Traveler Spending On Pace For a Record Setting Year: Also on Wednesday, the U.S. Department of Commerce released data showing that international visitors have spent an estimated $82.2 billion on U.S. travel and tourism-related goods and services year to date, an increase of 11 percent when compared to the same period last year. The new data indicate that the first half of 2012 set a new record for U.S. travel and tourism exports, and, if these trends continue, international visitors could end up injecting close to $170 billion into the U.S. economy by year-end.

The Department of the Interior recently redesigned Recreation.gov to engage visitors with enhanced interactive web content and more multimedia, mobile, trip-planning tools. Check out the new Recreation.gov website to see the 90,000 federal sites, including national parks, wildlife refuges, waterways, and forests for you and your family to explore in the United States.

#InnovateGov: On Thursday, the inaugural class of Presidential Innovation Fellows, top innovators from all over the country who are working to create solutions that will boost government innovation for the American people, was welcomed by US Chief Technology Officer Todd Park. Learn about these projects at wh.gov/innovationfellows and read Todd Park's blog post.

Open-Sourcing We the People: Also on Thursday, the White House published the source code for We the People, the online petitions system for the public to connect with the White House. When President Obama talked about We the People at the Open Government Partnership last year, he promised to, "share that technology so any government in the world can enable its citizens to do the same." Now anybody, from other countries to the smallest organizations to civic hackers can take this code and put to their own use. One of the most exciting prospects of open sourcing We the People is getting feedback, ideas and code contributions from the public.

First Lady Michelle Obama Visited Sikh Community in Wisconsin: Also on Thursday, First Lady Michelle Obama visited with the Sikh American families affected by the tragedy on August 5 in Oak Creek, Wisconsin. She not only expressed her condolences but also underscored how strong those who died were, and how strong the Sikh community continues to be. The First Lady expressed her pride in the community, and looked into the eyes of the children in the room and said that she expects them to achieve ever greater things as well. The First Lady also greeted the family of Oak Creek Police Lt. Brian Murphy, who was shot and injured while defending the temple. Learn more about First Lady Michelle Obama’s visit to the Sikh Community.

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