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miercuri, 28 decembrie 2011

Behind the Scenes Roundup: Holidays at the White House

Your Daily Snapshot for
Wednesday, Dec. 28, 2011

Behind the Scenes Roundup: Holidays at the White House

The holidays are a very special time at the White House, from the magnificent decorations in every room to the festive celebrations held throughout the month of December. This year’s holiday theme, “Shine, Give, Share,” honors members of the military and their families for all that they do and sacrifice for our nation.

Check out some of our favorite videos that take you inside the White House holiday festivities.

Seth's Blog : A hundred little things

A hundred little things

One of my favorite restaurants is a little Mexican place in Utah called El Chubasco. I've often eaten there twice in a day, and once (it's true) ate there three times.

It's always crowded. Sometimes people wait outside, in the cold, even though there are plenty of alternatives within walking distance. So, what's the secret? Why is it worth a drive and a wait?

No specific reason. The energy of owners Jill and Craig is certainly part of it, but most customers never encounter them. I think it's the hand-fitted gestalt of thousands of little decisions made by caring management out to make a difference. Usually, when a business like this gets bigger or turns into a chain, marketers make what feel like smart compromises. The MBAs collide with the mystical, and the place gets boring. "Why do we need 14 free salsas when we can get away with six?" or "Perhaps we ought to stop handing out huge tumblers of water for free--our bottled water sales will go up."

This turns out to be the secret of just about every really successful enterprise. Sure, you can copy one or two or even three of their competitive advantages and unique remarkable attributes, but no, it's going to be really difficult to recreate the magic of countless little decisions. The scarcity happens because so many businesses don't care enough or are too scared to invest the energy in so many seemingly meaningless little bits of being extraordinary.

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Mish's Global Economic Trend Analysis

Japan Industrial Production Declines 2.6%, 3rd Quarter Capital Spending Drops 9.8%, Corporate Sentiment Drops to Minus 4; Powder Keg Waiting for a Spark
Italians Cut Spending in Worst Christmas in 10 Years; Debt in Spanish City of Gandia 50% Higher than Previously Reported; Harsh Times Ahead for All Europe
Ron Paul Did Not "Walk Out" of CNN Interview; Blatantly Biased Headline by Time Magazine; Six Reasons to Vote for Paul
Brazil is World's 6th Largest Economy, Overtaking UK Earlier this Year. Can Brazil Overtake France by 2016? What about BRICs in General?

Japan Industrial Production Declines 2.6%, 3rd Quarter Capital Spending Drops 9.8%, Corporate Sentiment Drops to Minus 4; Powder Keg Waiting for a Spark

Posted: 27 Dec 2011 06:52 PM PST

A torrent of bad news hit Japan in November. Please consider some details from the Bloomberg article Japan Factory Output Falls on Global Slump

Factory output fell 2.6 percent from October
Exports fell for the second straight month
Capital spending in the third quarter dropped 9.8 percent
The Bank of Japan Tankan quarterly index of corporate sentiment fell to minus 4 this month. A negative figure indicates that pessimists outnumber optimists

Japan blames this mess on a strong Yen and Thailand's worst flooding in almost 70 years. The flooding crippled the output in Southeast Asia of Japanese companies such as Sony Corp. and Honda Motor Co.

Japan created four separate "supplementary budgets" totaling of 20 trillion yen ($257 billion) to deal with the the earthquake and tsunami. In 2012, Japan will create a "separate budget" for reconstruction.

However, no matter how many piles spending is split into, Japanese deficit spending cannot be hidden.

Japan's problems don't stop there. Europe is Japan's third largest export market, and Europe is a basket case. Europe will remain a basket case if Eurozone austerity measures are even modestly implemented.

Land of the Rising Debt

Pater Tenebrarum had some excellent charts and commentary in his post Land of the Rising Debt

Government spending does not 'spur growth'. If it did, Japan would have been the world's growth engine for the past two decades. In reality, every cent the government spends must be taken from the private sector and therefore can no longer be spent or invested by it. We can see what the government's spending achieves (not much) – what we cannot see is what would have been achieved had the government left well enough alone and the private sector had saved, spent and invested instead. This is the 'broken window effect' – one must not only consider the obvious economic effects of a policy, but also the 'unseen' ones. Government spending is a burden, not a boon.

Like its counterparts in Europe, Japan's government tries to get its house in order not by reducing spending – apparently a completely taboo subject in Japan – but by raising taxes. This will predictably - just as it does in Europe - double the burden on the economy. Since these tax hikes are immensely unpopular in Japan, it is not necessarily likely that they will happen. Moreover, there may be no more time to take effective countermeasures against the growing debt load: the death spiral may well begin before such measures can be implemented and take effect.

Not only is Japan's debt-to-GDP ratio uncomfortably high, its tax revenues continue to decline precipitously as a percentage of government spending.

click on chart for sharper image

In such a situation, the level of interest rates becomes an ever growing concern. Right now, Japan's interest rates remain among the very lowest in the world. And yet, in spite of near record low interest rates, the percentage of tax revenue the government must spend on interest expenses is increasing fast.

Powder Keg Waiting for a Spark

The pertinent point is not the sorry state of affairs including a debt-to-GDP ratio of 220%, but rather when it matters. So far Japan has avoided printing on the scale of the Bernanke Fed, but one has to wonder how long that can continue in spite of Japan's dire worst in the industrialized-world demographics.

Tenebrarum points out "At the moment, JGB's trade like 'risk free' debt, in spite of the fact that Japan has lost its 'AAA' rating long ago and has been downgraded again this year, with further downgrades likely. Should the percentage of foreign ownership of JGB's rise significantly, the probability of a 'non-linear' debt market convulsion will rise commensurately. The Japanese government can 'financially repress' its own institutions, but not foreign investors."

"It seems rather like a powder keg waiting for a spark".

Indeed! Moreover, Japan's efforts to kick the can down the road perpetually issuing short-term debt that will need to be rolled over at some point insures the explosion will be massive once the debt-bomb finally ignites. Please see Japan Seeks to Market Record 145 Trillion Yen Bonds in 2012; Kicking the Can Japanese Style for a brief analysis.

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

Italians Cut Spending in Worst Christmas in 10 Years; Debt in Spanish City of Gandia 50% Higher than Previously Reported; Harsh Times Ahead for All Europe

Posted: 27 Dec 2011 12:54 PM PST

Spanish City of Gandia is Insolvent

Courtesy of Google Translate El Economista reports The debt of the City of Gandia exceeds 300 million euros

The Deputy Mayor for Economic and Financial Officer of the City of Gandia, William Barber, has appeared before the media to explain and detail the results of the audit report conducted by Deloitte, commissioned by the new municipal government. The result is 300,066,000 euros, although the municipal government of the PP, initially estimated that out of about 200 million.

In this report, it appeared that the City was in a situation of "negative equity", which obliged the government to take drastic and quick, and to develop an economic and financial plan, presented the mayor this week in Conselleria, to try to address this situation.

Despite the situation, Barber wanted to reassure the public. "While the situation is difficult, we are working to balance budgets, checking all items, although I can announce them or Social Welfare and basic services will be hurt. Our commitment is also paying suppliers not to complicate the situation further not to raise taxes. "

Not an Isolated problem

Every official in Spain repeats the line they will not raise taxes. In the case of Gandia which is in a situation of "negative equity" (bankrupt), how the heck does the city propose paying suppliers?

Gandia is not an isolated problem. Please consider Spanish Implosion Coming Up; Deficit Up, Receipts Down, a Need to Cut 40 Billion in Expenses from 90 Billion; Spain's "Hidden Deficit" for another take on "hidden deficits" coming to light.

Italians Cut Spending in Worst Christmas in 10 Years

Bloomerg reports Italians Cut Spending in Worst Christmas in 10 Years

Italian retailers had the worst Christmas in 10 years, consumer group Codacons said, as austerity measures to combat the sovereign debt crisis prompted households to cut spending.

Italians spent 48 euros ($62.75) less per person this holiday season than the average of the past five years, Rome-based Codacons said in a statement on its website. The shoe and clothing sector was hit the most, with sales dropping 30 percent from previous years, it said, adding retailers won't recover the decline during seasonal promotions that start in January.

The discount period "will be a flop," with sales declining as much as 40 percent compared with 2010, Carlo Rienzi, the head of Codacons, said in the statement.

Prime Minister Mario Monti secured final passage last week for 30 billion euros of austerity and growth measures as he seeks to cut the euro region's second-biggest debt. The measures, including a tax on luxury goods, a levy on primary residences and higher gasoline prices, may further sap consumer spending and push the euro area's third-biggest economy deeper into recession.

The austerity plan will cost every Italian family 1,129 euros, according to consumer group Federconsumatori. Italians spent 4.4 billion euros in the holiday season, 400 million euros less than Federconsumatori's forecast, the group said.

I am trying to get a handle on the percentage decline and the magnitude of the decline. The consumer group estimates "as much as 40 percent" but believe that appears to be by sector, not overall spending.

Courtesy of Google Translate, here is another link from El Economista: The Italian Christmas spent 400 million euros less than in 2010

The Italians spent this Christmas 400 million less than last year, according to a report by the Consumer Federation of ONF, met with another federation Coldiretti farmers who notes that Christmas dinner and lunch on day 25 spent 18% less than in 2010.

According to the ONF, in this Christmas period the Italians spent four billion euros, compared to the 4,400 million provided for the consumer organization, which means that the average expenditure per household was 116 euros, below the amount projected which were already down.

Austerity Kicks In, Harsh Times Ahead for Europe

Translation is not entirely clear. As measured by a 400 million decline from 4,400 million, spending is down 9%, not the 18% Coldiretti farmers reference.

Regardless, various austerity measures will take a direct bite out of Spain, Portugal, Italy, France, and Greece via reduced wages, rising unemployment rate and extremely harsh times.

With the rest of Europe pulling back, and with China cutting back, the export machine of Germany is headed for major problems. Thus, austerity will take an indirect bite out of Germany and the trade surplus countries as well.

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

Ron Paul Did Not "Walk Out" of CNN Interview; Blatantly Biased Headline by Time Magazine; Six Reasons to Vote for Paul

Posted: 27 Dec 2011 10:19 AM PST

In response to Attack Dogs Unleashed on Ron Paul; No Need to Rethink Endorsement; Plus Side of Attack Dogs I received many emails informing me that Ron Paul did not walk out of an interview with CNN with Gloria Borger.

The Daily Paul, posted the entire CNN interview that shows a much different picture than portrayed by Time and CNN.

Blatantly Biased Headline by Time Magazine

Play the video and you will see the interview was effectively over. Time Magazine posted a very slanted headline Paul Walks Away.

Piling on the Nonsense

David Frum, CNN Contributor, piles on the nonsense Codger, crank or more?

It's fair to say that almost no one who has followed the controversy believes that Paul is telling the truth about any of this. The authorship of the newsletters is an open secret in the libertarian world: they were produced by a community of writers led by Paul aides Lew Rockwell and Murray Rothbard, who wrote a newsletter of their own at the same time that expressed similar ideas in similar language. The racism of the newsletters -- and the elaborate lying subsequently deployed to evade responsibility for the newsletters -- say much about the ethics of Paul himself and the circle around him.

Fair to Say?!

It's certainly not fair to make that claim. Can I see a poll please? Moreover, Libertarians do not hold the racial beliefs stated by David Frum.

If someone wants to talk about ethics, it's just as easy for me to claim "It's fair to say the vast majority of those following the Paul story understand that CNN writers like Gloria Borger, David Frum, and Wolf Blitzer do not care about the news, they only care about generating sensational headlines, any way they can. Moreover, CNN openly support wars, regardless of the ethics of war, because war is good for ratings."

I do believe that's "fair to say", although like David Frum I do not have a poll to prove it.

While on the theme of "fair to say" I would like to point out this comment made by "EasyRhino" to Frum on the CNN blog: "Keep in mind Frum is a 5 star chicken hawk who defended the invasion of Iraq and advocates regime change in Iran and Syria, everything Paul is against."

Contact CNN

I might also point out that it's "fair to say" the CNN writers must be cowards because they do not have a direct way to contact them via email.

You can however, Send a General Email to CNN and let them know what you think of their reporting.

Attempts to Turn Non-News into News

This biased reporting of "walking away" is a case of news agencies attempting to "make news" where there is no news. Moreover, a couple of questions by Gloria Borger, including the question of returning money, were economically inane. There is no one to return money to, as Paul pointed out.

Still when pressured by Borger, Paul should have been more direct with something like "Sorry Gloria, things I did not say over 20 years ago and have explained to CNN a number of times are not meaningful and are not news, no matter how much you try to spin it so. What is relevant today is my position on the economy, on troops in Afghanistan, and on reducing the deficit, not things I never said, and more importantly never acted on in all my years in Congress."

Six Reasons to Vote for Paul

Paul is the only one for a balanced budget and a plan to get there
the only one who would bring US troops home immediately
the only one who would end the Fed
the only one who believes in the free market
the only one who believes gold should be money
the only one who would dismantle entire government departments

As I have pointed out before, President Obama and Mitt Romney are Nearly One and the Same!

This is not a case of the lesser of two candidates, this is a case where one electable candidate and one electable candidate alone has a platform that makes sense.

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

Brazil is World's 6th Largest Economy, Overtaking UK Earlier this Year. Can Brazil Overtake France by 2016? What about BRICs in General?

Posted: 27 Dec 2011 12:22 AM PST

Earlier this year, Brazil surpassed the United Kingdom as the world's 6th largest economy. Moreover, Brazil's finance minister makes the claim Brazil to Remain Ahead of U.K. Economy and will surpass France by 2016.

Brazil will remain one of the fastest-growing nations in the coming years after overtaking the U.K. this year to become the world's sixth-largest economy, the country's Finance Minister Guido Mantega said.

The countries that will grow the most are the emerging markets such as Brazil, China, India and Russia," Mantega said in a statement published on the finance ministry's web site, referring to findings by the London-based Center for Economics and Business Research, or CEBR. "The trend is for Brazil to remain one of the world's top economies."

The CEBR echoed forecasts earlier this year by the International Monetary Fund showing that Brazil's $2.5 trillion economy had overtaken the U.K. to become the world's sixth- largest. The IMF expects Brazil to climb past France to become the fifth-largest economy by 2016.

Is Brazil Fundamentally Different?

This reminds me of forecasts that China will soon overtake the US. China won't and energy is the reason. Is Brazil fundamentally different?

Please consider the American Thinker article Import Brazil's Oil Policy, Not Brazil's Oil

In 1980, Brazil imported 77 percent of its oil. Now it imports 0.0 percent. During that same time period, America increased its oil imports from roughly 30 percent to 70 percent. If Brazil can become completely self-sufficient in oil, why can't America start becoming more self-sufficient?

To answer the question, Brazil can produce relatively cheap energy from sugar cane, something that cannot be said about ethanol from corn.

Fundamentally, if Brazil can produce ethanol cheaper than the US, then the US should indeed import Brazilian ethanol, contrary to the opinion expressed by American Thinker. Furthermore, the US certainly can and should end agricultural tariffs that drive up the price of corn and ethanol.

Let's take a sidetrack for a moment to look at one aspect of US agricultural policy.

In Support of Hemp

Certainly the US should legalize hemp for softer-than-cotton fibers that use far less water and energy-wasteful fertilizers.

Hemp quickly grows up to 5 metres in height with dense foliage which blocks weed growth. This means herbicides are not needed and the field is weed free for the next crop. Unlike cotton hemp does not have a high water requirement. The hemp plant has a deep tap root system which enables the plant ot take advantage of deep subsoil moisture, thus requiring little or no irrigation.

Anything that can be made from cotton can be made from hemp. Hemp's long fibres give it the strength to create a finished product that is much stronger and more durable than one produced from cotton. Just as hemp can be cultivated instead of trees, it can also be grown in place of cotton, with environmental benefits.

Cotton is one of the most environmentally destructive agricultural crops. In pesticide use in the US alone, is staggering – 125 million kilograms annually. Worldwide, cotton production used 50 percent of the world's pesticides/herbicides. Pesticides are possibly the greatest toxic threat to contaminating our soil, air, water and natural communities because they are often permanent and they bio-accumulate, ie their toxicity increases as they are consumed up the food chain. Many pesticides are known carcinogens, and can also cause immuno-deficiency disorders. Added to this, pesticides have a petroleum base and their excessive use perpetuates our dependency on oil.

Cotton also requires large quantities of fertilisers, growth regulators, general biocides such as methyl bromide, and water. Hemp on the other hand, is one of the most environmentally positive crops that actually leaves the soil enriched. Hemp requires little or no pesticides or herbicides and the extensive and deep root system draws nutrients from deeper soil layers, and when the roots breakdown after harvest they aerate the soil and provide humus. Hemp grows very tall and thick, shading and mulching the ground contributing to a healthy microbial life in the soil.

Why is Hemp illegal?

Warmongers like to wage endless wars or drugs, so do manufacturers of artificial fibers, so do fertilizer companies, and of course the cotton industry does not want competition either.

OK let's return to Brazil.

Brazil Inflation

When inflation is running comparatively hot, as it is in Brazil, you have a perception of growth that really isn't there. In "real" inflation-adjusted terms, Brazil's growth does not look spectacular.

Brazil Real GDP

Brazil Economy Stalls Q3

Trading Economics reports Brazil Economy Stalls in Q3

Brazil Economy failed to grow from the previous three months for the first time since the first quarter of 2009, as credit curbs, higher borrowing costs and budget cuts checked demand. The GDP grew 2.1 percent from the same period a year ago.

As Europe's crisis deepens, President Dilma Rousseff's government is taking steps to reinvigorate the economy with a mix of tax cuts, interest rate reductions and looser bank lending requirements.

Industrial output was the part of the economy hit the hardest by the deepening debt crisis in Europe, posting in September the second-biggest decline since 2008. Production sank 1.9 percent in September and 0.6 percent in October

The central bank's rate increases in the first half of 2011 aimed to cool down the fastest inflation in six years and an economy that grew at a 7.5 percent pace in 2010, the fastest in two decades. Policy makers began slashing rates in August in the most abrupt reversal in monetary policy since 1999, citing a "substantial deterioration" in the global economy.

Bank lending growth in October slumped to its lowest level since January, the central bank said, as a bank workers' strike interrupted operations and the interest-rate increases began to work their way through the $2.1 trillion economy, the world's sixth biggest.

Brazil vs. France

Might Brazil overtake France by 2016?

Given Europe is likely headed for an extremely nasty recession, it might be reasonable to assume that. But what if China slows, Europe slows, and the US slows? Can Brazil put up sufficient internal demand? What about Brazil's inflation rate and the possibility Brazil's central bank is forced to slam on the brakes?

What About BRICs in General?

In a balance-sheet recession and global slowdown (especially a slowdown with defaults), it is the balance-of-trade surplus countries that will take a hit.

Thus, I expect both Germany and China to take a hit, and I have said so many times. Should Brazil be any different? Can energy make the difference?

Might stupidity from politicians outweigh everything else?

The last question is easy enough to answer, even if the other questions aren't. Certainly, poor decisions by politicians may trump everything else. And when it comes to poor economic policies, the EU is in the lead.

However, even if Brazil does grow faster than the UK or France, what growth is Brazil priced for, and how sustainable is it?

I do not have answers to all those questions, nor does anyone else. The situation is far more complex than it appears at first glance. However, the questions do provide a framework for further analysis.

By the way, the above discussion shows the frequently touted "BRIC" grouping (Brazil, Russia, India, China), is fundamentally flawed. Each country must be evaluated individually because of vastly differing energy needs, inflation, and internal politics.

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

Damn Cool Pics

Chinese Army Hand Grenade Fail
DJ Earworm Mashup – United State of Pop 2011
Lego Model of The Large Hadron Collider
The picNYC Table
Top Tech Trends of 2011 [Infographic]

Chinese Army Hand Grenade Fail

Posted: 26 Dec 2011 11:47 PM PST

After a few seconds of communicating, the trainee throws the grenade, but it bounces back into their safety pit. The trainee drops, but the instructor grabs him and pulls him over the safety. You can tell it was made in china…!!

DJ Earworm Mashup – United State of Pop 2011

Posted: 26 Dec 2011 11:27 PM PST

DJ Earworm is back with his fifth installment of his yearly viral United State of Pop mashup of the 25 biggest pop hits in the U.S. for the past year. Considering how many different songs DJ Earworm manages to mash together and make it sound somewhat coherent is an impressive feat in itself, let alone the time this must take to create.

Lego Model of The Large Hadron Collider

Posted: 26 Dec 2011 10:46 PM PST

A physicist from the University of Copenhagen has spent over 80 hours of work and over $2,600 to built a Large Hadron Collider model out of 9,500 LEGOs. The Lego LHC is a 1:50 scale model of the real thing, making the minifig scientists close to scale with real people.

As we write, scientists are trying to find out whether the elusive Higgs boson particle was glimpsed at the Large Hadron Collider (LHC) in Geneva, fueling huge excitement. If the particle, also known as the God particle, was actually there,
it will make physics history.

The LHC scientists do not yet have enough data to claim a discovery. But in the meantime, at home in Copenhagen, one physicist Sascha Mehlhase from the Niels Bohr Institute has made a part of the collider, the Atlas detector, out of LEGO toy bricks.

The picNYC Table

Posted: 26 Dec 2011 10:40 PM PST

The picNYC Table by Haiko Cornelissen Architecten is a grass-covered table that attempts to transfer the user to an outdoor location without actually having to be outdoors. The grass-covered table brings a living element to mealtime and, as the designer points out, makes spilling water a necessity rather than a burden (saves money on coasters too).

Source: doobybrain

Top Tech Trends of 2011 [Infographic]

Posted: 26 Dec 2011 10:23 PM PST

The year is almost over, so it's time to look back at what made this year great. 2011 was a barrier breaking year for mobile innovation, and was the year mobile took over the world. And just because of that, mobile dictated tech trends in 2011.

Click on Image to Enlarge.

Source: gplus

miercuri, 28 decembrie 2011