Central Perk

sâmbătă, 20 noiembrie 2010

Mish's Global Economic Trend Analysis

Sunday Funnies 2010-11-21 Dual Mandate
San Diego Mayor Proposes Eliminating City Pensions; Public Union Concessions a New Trend
China Renews Attack on Bernanke for Asset Bubbles, Imported Inflation, Excessive Printing; US$ About to Lose Reserve Currency Status?

Sunday Funnies 2010-11-21 Dual Mandate

Posted: 20 Nov 2010 10:23 PM PST

Honey about your dual mandate ...

The above is in response to the dual mandate of the Fed to produce price stability and maximum employment. The Fed has failed at both.

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

San Diego Mayor Proposes Eliminating City Pensions; Public Union Concessions a New Trend

Posted: 20 Nov 2010 03:03 PM PST

After citizens of San Diego voted overwhelmingly against raising taxes to cover deficits, the Voice of San Diego reports Mayor Proposes Eliminating City Pensions

As time runs down in San Diego Mayor Jerry Sanders' tenure, his proposals to solve the city's financial crisis are becoming more drastic. This summer, he embraced a tax hike. Friday, he proposed 401(k)-style retirement accounts for most new city employees, and in turn, eliminating their pensions.

Staring him and everyone else in the face is a $70 million-plus ongoing deficit, one that neither a tax increase or a pension elimination will fix. The tax hike won't work because voters said no. The pension elimination, which also needs voter approval, won't save any money for years and wouldn't go on a ballot until next year at the earliest.

Sanders has two more years to solve the financial problem he was elected to fix. Friday, he recommitted to the task.

"I won't pass the structural deficit on to the next mayor," Sanders said.

Details of how the new 401(k) plan would work are sparse. Sanders said it would exempt police officers and firefighters. He didn't say how much it would save, just millions.

While I wholeheartedly endorse the idea of eliminating defined benefit pension plans for public employees, the mayor simply refuses to admit the truth. You cannot balance the budget responsibly unless and until police and fire unions aid in the effort.

Politicians Padding Their Own Pensions

Please consider Reform to Politicians' Pensions Could Go Further

The U-T ran the numbers last week. To fund council members' pensions, $29,700 must be paid into the retirement fund annually. Now, they contribute $2,400 toward that amount and taxpayers pay the rest. With the Prop. D reform, the amount would increase to $6,800. If the cap is eliminated, which the council can do, the council members would be paying nearly $15,000 each year.

Politicians own pension contributions rarely reached the radar until Prop. D came along over the summer. Since then, it's become an example of the effectiveness of Councilman Carl DeMaio, the most outspoken Prop. D opponent, in hammering on an issue. He has been discussing the politician pension cap for months, and it has gained traction.

No One Speaks for the Taxpayer

The biggest problems with public pensions is no one speaks for the taxpayer. The sad state of affairs is that mayors buy votes of the teachers, police, and fire unions to get reelected. Then they create outlandish pension plans for themselves, funded by taxpayers.

Voters in San Diego finally had enough. Citizens Rejected Proposition D by a margin of 63-37.

San Diego voters gave a stiff rebuke to city leaders Tuesday by roundly rejecting a proposed sales tax increase, setting up a difficult choice for Mayor Jerry Sanders on whether to follow through on his threat of devastating cuts to public safety if Proposition D failed.

The ballot measure would have increased the city's sales tax by a half-cent on the dollar for the next five years, but it fell well short of topping the 50 percent threshold for passage. The measure was receiving 37 percent support with nearly two-thirds of the returns in at 12:30 a.m.

Amid sweeping anti-tax sentiment that propelled Republicans into office across the nation, local voters also rejected a property tax for San Diego city schools, a utility tax in Chula Vista and a fee for state parks.

Public Union Concessions a New Trend

Meanwhile please note the start of a trend. City after city is starting to address these issues. They have to. The economy finally forced it. Expect to see major concessions by public unions in big and small cities alike as taxpayers and voters everywhere have had enough. Voters are fed up with a national unemployment rate close to 10%, with 14 million unemployed, with seeing their property taxes go up, even as the value of their homes collapse, topped by public union pension guarantees the average person can only begin to dream about.

It is high time mayors of cities big and small stand up for taxpayers and not for unions who contribute to their election campaigns. The inequities must stop, and they will. Mayors who do not understand the economics and the anger of voters will soon be out of office.

Although I applaud the mayor's move in the right direction (finally), there is much more to this story that shows how disingenuous mayor Jerry Sanders is. I will do a followup post shortly that will prove it.

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

China Renews Attack on Bernanke for Asset Bubbles, Imported Inflation, Excessive Printing; US$ About to Lose Reserve Currency Status?

Posted: 20 Nov 2010 09:38 AM PST

G-20 is over but the acrimony is not. Bloomberg reports China Assails Monetary Easing, Citing Inflation, Bubble Risks

China renewed an attack on quantitative easing, citing the risk of increased prices in emerging economies, a day after the Group of 20 nations said the markets can adopt regulatory steps to cope.

China "doesn't support" the monetary easing that causes "imported" inflation in developing countries, Commerce Minister Chen Deming told a forum today in Macau, a Chinese special autonomous region. The capital inflows increase the risk of "asset bubbles," Jin Zhongxia, deputy director general of the international department at the People's Bank of China, said at the same forum.

"Major reserve-currency issuing countries excessively print money to get out of their own economic difficulties, posing a policy dilemma for emerging economies," Jin said in Macau today, without naming any countries. "That will impose greater pressure on capital inflows, bigger bubbles in asset markets and inflationary pressure."

Capital flows into emerging markets are running at $575 billion a year, 20 percent higher than before the world financial crisis, Goldman Sachs Group Inc. said in September. The U.S. dollar has weakened over the past three months against all 16 major market currencies tracked by Bloomberg.

Steps to impose restrictions on capital have increased as emerging-market currencies strengthened, with Brazil's real climbing 21 percent against the dollar in the past 18 months, Chile's peso up 18 percent, Thailand's baht rising 16 percent and South Korea's won appreciating 10 percent.

China plans to boost cross-border yuan-denominated trade with other countries 10-fold to 20 percent of total trade, or more than 2.5 trillion yuan, to reduce reliance on a few reserve currencies, Jin said, without specifying a target date.

More Regional Yuan Trading Proposed

Echoing the sentiment of Jin Zhongxia, Thailand calls on Asia to use yuan in trade.

Prime Minister Abhisit Vejjajiva, fearful of the effects of the soaring baht due to massive capital inflows, has proposed the use of the Chinese yuan as a major regional trading currency.

"The G20 did not make any progress on the matter and it is difficult to get the United States and China to express their clear stances on the issue. But what we can do is try to cooperate in the region and reduce the impact from currency volatility," Mr Abhisit said before leaving for the Asian Games in China and an Asia-Pacific Economic Cooperation (Apec) leaders' meeting in Yokohama, Japan, this weekend.

Only vague "indicative guidelines" were set for measuring imbalances between their multi-speed economies. Leaders called a timeout to let tempers cool and left details to be discussed in the first half of next year.

Mr Abhisit echoed a call made by the Asian Development Bank (ADB) to use China's yuan as a major trading currency in the region to reduce the impact of currency volatility, especially linked to the weakening of the US dollar. He said he was the one who proposed the idea to the ADB.

Donald Tsang, chief executive of the Hong Kong Special Administrative Region, said the regional private sector should brace for high volatility in the currency and securities markets as economies were increasingly linked.

The most pronounced problem to result from capital inflows, stemming from US funds seeking returns in Asia, would be an unsustainable rise in asset prices, Mr Tsang said.

"The imbalance is unique. I have never seen it in my working life," he said.

An Attack on US$ Hegemony?

Is this the start of a the Yuan as a reserve currency? China may want that, but it hard to take China serious unless and until it is willing to float the Yuan.

The irony in the proposal by Jin and Abhisit is they are proposing a reserve currency that is still tied to the dollar.

Moreover, there are other several constraints, but first consider this UN proposal.

UN Proposes to Scrap Dollar as Sole Reserve Currency

A UN Report says Scrap dollar as sole reserve currency.

A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

But several European officials attending a high-level meeting of the U.N. Economic and Social Council countered by saying that the market, not politicians, would determine what currencies countries would keep on hand for reserves.

"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," the U.N. World Economic and Social Survey 2010 said.

The report says that developing countries have been hit by the U.S. dollar's loss of value in recent years.

"Motivated in part by needs for self-insurance against volatility in commodity markets and capital flows, many developing countries accumulated vast amounts of such (U.S. dollar) reserves during the 2000s," it said.

The report supports replacing the dollar with the International Monetary Fund's special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies.

"A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency," the U.N. report said.

Russia and China have also supported the idea.

But Paavo Vayrynen, Finland's Foreign Trade and Development Minister, told reporters that he doubted it was possible "to make any political or administrative decisions how to formulate the currency system in the world."

The Market Dictates Reserve Currencies

Short of reestablishing gold as a mechanism for forcing trade balances to be kept in sync, the whole idea of establishing new reserve currencies by decree or agreement is potty.

How can you dictate what currencies a country should hold, or if they hold any at all? Does one size fit all? Look at the acrimony out of G-20. Think there is going to be an agreement on using SDRs?

Reserve currencies cannot be set by decree or even by agreement. There are market constraints and mathematical constraints.

Function of Math

Some maintain that commodities are priced in dollars so dollars must be held.

Nonsense. To the extent that countries trade with each other and not the US, there is no need to hold dollars at all. The Yen is freely convertible to dollars so is the Euro. One does not need dollars to buy oil or copper. Currencies are fungible.

With a couple mathematical caveats, any country is free to hold whatever it wants.

One mathematical constraint is there are not enough New Zealand dollars (or Australian dollars or Canadian dollars, etc) to go around for everyone to expect to buy oil in any of those currencies.

However, there are enough New Zealand dollars to go around to support all existing trade with New Zealand.

Why Are Countries Piling Up US$?

The second mathematical constraint relates to trade imbalances. The US runs a trade deficit as well as a budget deficit partially financed by foreigners. Our dollars go overseas, month after month, year after year. The reserves pile up over time as a function of basic math.

To the extent Asian countries trade with China, then sure, a buildup of Yuan reserves is possible. However, given the US trade deficit dwarfs the trade deficit of every other country, it will be tough mathematically to make a dent in the buildup of US dollar reserves relative to other reserves.

Sure there will be periods of fluctuations in reserves are there are now, but the trend towards higher reserve levels is essentially mathematically forced by trade imbalances.

In addition to trade imbalances, one must also factor in hot money inflows of US$ into China, Brazil, and other places. Those countries hold reserves to accommodate an eventual exodus of hot dollar inflows. That is the third constraint.

Note that Bernanke's QE has had such an impact that countries are resorting to capital constraints to stop the inflight of dollars.

Mathematically, whoever has the biggest trade deficit and hot money outflows on a sustained basis will see the biggest amount of reserves pile up elsewhere. It's as simple as that. Thus, all this talk about SDRs and using the Yuan or the Yen as major reserve currencies is complete silliness.

As it stands now, any reserve currency changes will be dictated by math, not decree.

Want to cure global trade imbalances? It's quite easy. Go back to the gold standard and have the political will to balance the budget. Nothing else will work.

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

Seth's Blog : Groping for a marketing solution: TSA and security theater

[You're getting this note because you subscribed to Seth Godin's blog.]

Groping for a marketing solution: TSA and security theater

There's plenty of controversy about the new full body scanners that the TSA is installing at airports, and plenty more about the way some TSA agents are handling those that choose to opt out.

The heart of the matter comes from the fact that the TSA often doesn't understand that it is in show business, not security business. A rational look at the threats facing travelers would indicate that intense scrutiny of a four ounce jar of mouthwash or aggressive frisking of a child is a misplaced use of resources. If the goal is to find dangerous items in cargo or track down Stinger missiles, this isn't going to help.

Instead, the mission appears to be twofold:

1. Reassure the public that the government is really trying and

2. Keep random bad actors off guard by frequently raising the bar on getting caught

The challenge with #1 is that if people believe they're going to get groped, or get cancer, or have to wait in line even longer on Thanksgiving, they cease to be on your side. Particularly once they realize how irrational it is to try to stop a threat after it's already been perpetrated. (Imagine the havoc if someone had a brassiere-based weapon...)

And the challenge of #2 is that the cost of raising the bar gets higher and higher.

Smart marketers know how to pivot. I think it's time to do that. Start marketing the idea that flying is safe, like driving, but it's not perfect, like driving. If someone is crazy enough to hurt themselves or spend their life in jail, we're not going to stop them, and even if we did, they'd just cause havoc somewhere else. So instead of spending billions of dollars a year in time and money pretending, let's just get back to work.

The current model doesn't scale.

• Email to a friend •

•

Your Weekly Address: New START Treaty "Fundamental" to Security

Your Daily Snapshot for
Saturday Nov. 20, 2010

Your Weekly Address: New START Treaty "Fundamental" to Security

The President says ratifying the New START, a pivotal treaty with Russia on nuclear weapons, must happen this year. He explains that failure to ratify the treaty this year would not only mean losing our nuclear inspectors in Russia, but also undermine the international coalition pressuring Iran, put at risk the transit routes used to equip our troops in Afghanistan, and undo decades American leadership and bipartisanship on nuclear security.

Watch the video.

Weekly Wrap-Up

A quick look at the week of November 15, 2010:

Quote: “It is in these labs -- often late at night, often fueled by a dangerous combination of coffee and obsession -- that our future is being won,” said President Obama during the presentation of the National Medals of Science, Technology and Innovation, “For in a global economy, the key to our prosperity will never be to compete by paying our workers less or building cheaper, lower-quality products. That's not our advantage. The key to our success -- as it has always been -- will be to compete by developing new products, by generating new industries, by maintaining our role as the world’s engine of scientific discovery and technological innovation. It’s absolutely essential to our future.” VIDEO: http://wh.gov/OrI

Your West Wing Week: “I Really Like this Guy.” VIDEO: http://wh.gov/OaI

On the White Board: In the newest installment of the White House White Board series, Austan Goolsbee discusses the American Auto industry’s comeback. VIDEO: http://wh.gov/Oav

Behind-the-Scenes Pictures: The White House photo office and Pete Souza bring you October in photos. SLIDESHOW: http://wh.gov/Or8

Success Story: President Obama on GM. VIDEO: http://wh.gov/OaK

Official Arrival Ceremony: The President visits Lisbon, Portugal to meet with NATO allies. http://wh.gov/OrY

Vice President Biden: It Gets Better: Vice President Biden’s message to young people that are bullied because of their actual or perceived sexual orientation. VIDEO: http://wh.gov/Oxk

Equal Rights: New rules require equal visitation rights for all patients, including same-sex domestic partners. http://wh.gov/OOs

Must Have Apps: Our top ten picks for government mobile apps. http://wh.gov/OC9

National Entrepreneurs’ Day: The first-ever, part of a full-blown National Entrepreneurship Week. http://wh.gov/O1j

And the Medal of Freedom Goes To…:President George H.W. Bush, Warren Buffett and Maya Angelou, just to name a few. http://wh.gov/OOS

Ask Interior: The Department of the Interior launches a new online Q&A to answer your questions. http://bit.ly/bmsFAM

An American Hero: President Obama presents the Medal of Honor to Staff Sergeant Salvatore Giunta. VIDEO: http://wh.gov/O3n

It’s About National Security: The President and Vice President meet with nation security experts to discuss the New START treaty. http://wh.gov/OrW

6,200 Farmers Markets and Counting: Find your local farmers market, even design an app. http://bit.ly/9D8XU5

Equal Pay For Women: Lilly Ledbetter and leading advocates for women and girls discuss the Paycheck Fairness Act with President Obama. VIDEO: http://wh.gov/OrZ

Tuesday Talks: Talk to Nancy-Ann DeParle, Director of the White House Office of Health Reform, about health reform implementation on Tuesday, November 23rd. http://wh.gov/O15 And check out what you missed last week with the inventor of the digital camera and other recipients of the National Medals of Science, Technology and Innovation. VIDEO: http://wh.gov/OrR

Get Updates

Stay Connected

This email was sent to e0nstar1.blog@gmail.com
Manage Subscriptions for e0nstar1.blog@gmail.com
Sign Up for Updates from the White House
Unsubscribe e0nstar1.blog@gmail.com | Privacy Policy
Please do not reply to this email. Contact the White House

The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Seth's Blog : It's one thing to hear it...

[You're getting this note because you subscribed to Seth Godin's blog.]

It's one thing to hear it...

It's another to do something about it.

Is there anything at all for which this isn't true?

Knowing the facts, the opportunity or even the process is merely a first step.

• Email to a friend •

•

vineri, 19 noiembrie 2010

Mish's Global Economic Trend Analysis

China Builds 15 Story Hotel in 6 Days
Michigan Forbids City of Hamtramck to Seek Bankruptcy; My Advice to Hamtramck: "Default"
Run on Allied Irish Banks, Customers Pull 17% of Deposits; Ghost Estates and Broken Lives: the Human Cost of the Irish Crash

China Builds 15 Story Hotel in 6 Days

Posted: 19 Nov 2010 05:00 PM PST

Inquiring minds should be interested in the deflationary aspects of the following video.

In terms of jobs, is that entertaining or frightening?

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

Michigan Forbids City of Hamtramck to Seek Bankruptcy; My Advice to Hamtramck: "Default"

Posted: 19 Nov 2010 12:02 PM PST

A few days ago I noted Hamtramck, Michigan Seeks Bankruptcy.

That Hamtramck is clearly bankrupt, unable to bay bills, saddled with unions salaries, pension promises that cannot be met, as well as other problems it desperately needs to get rid of without burdening taxpayers even more, is of no concern to the current governor of the state.

Please consider this updated report Michigan Forbids City To Seek Municipal Bankruptcy.

A spokesman for the Michigan state treasury said Thursday that municipal bankruptcy isn't an option for Hamtramck, the small city near Detroit that earlier this month asked the state for permission to file for the process.

No Michigan local government has ever filed for municipal bankruptcy, Stanton said, a rarely used tool that allows cities and other local governments to deal with creditors and extract concessions from its unions.

Instead, Michigan has offered Hamtramck, a city of 23,000 residents, three options.

One is a low-interest loan from the state for a maximum of $3 million, to be paid back over 20 years.

The second is a tax-anticipation note, or TAN, which would allow Hamtramck to borrow up to half of whatever it collects in property-tax assessments in a given year; it would have to be repaid in 12 months.

The third is a fiscal stabilization bond, which would let the city borrow up to 3% of its assessed value.

Bill Cooper, the city's manager, said that Hamtramck is currently evaluating the options the state gave it, but he is "not very optimistic these options will work for us" because "we don't need to take on any more debt."

"We have a survival deadline here," Cooper said, noting that, if things continue on the current course, Hamtramck could run out of money by Jan. 31 and be unable to make payroll or pay bills.

Cooper said the state's options essentially require Hamtramck to borrow more money, and much hinges on the city's ability to win its lawsuit against Detroit.

"It pushes the problem down the road," he said.

Meanwhile, getting the city's unions to negotiate has been a problem, as Hamtramck officials have already tried to work with them three times. Municipal bankruptcy could be a way to force concessions, Cooper said.

"It should allow us in essence to restructure," said Cooper, who added the city wouldn't want to be in bankruptcy a long time. "If major corporations can do it, why can't we give it a shot?"

Uncommonly Good Sense

I commend city manager, Bill Cooper, for a masterful display of common sense. Moreover, I point out the well-deserved election shellacking of Democrats as noted by the Lansing State Journal.

The national mood of voter unrest that swept through many states Tuesday played a large part in the shellacking Democratic candidates took in Michigan, when Republicans swept the governor, secretary of state, attorney general and state education board seats while winning control of the state House and a majority on the Michigan Supreme Court.

Advice for Hamtramck City Manager, Bill Cooper

My advice consists of one word "default". Who can stop you? The answer is no one. Let the incoming governor know that is how you intend to proceed.

Send the public unions a message that you will not be intimidated by the state. Explain to the taxpayers you are doing this for them. Let the city residents know if you take the Treasurer's options you would have to hike taxes and burden them with debt for decades to come.

That is all it will take to win their overwhelming support.

I am confident the new governor will be more sympathetic to your cause than the current clowns running the state. The good news is you only have a couple months to wait.

Finally, tell the current treasurer "No Deal", bargaining is over and you will deal with the new administration.

That's all it takes. Stand to your guns Bill Cooper. You have the upper hand as well as the high moral ground.

For the record, I have no financial interest related to my advice. My wife is from Livonia and I know first hand the problems of the state and of Detroit. I send the Citizens of Hamtramck best wishes.

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

Run on Allied Irish Banks, Customers Pull 17% of Deposits; Ghost Estates and Broken Lives: the Human Cost of the Irish Crash

Posted: 19 Nov 2010 09:51 AM PST

A slow steady bleed has turned into a mad dash for cash at Allied Irish Banks. Allied Irish Banks has had to rely on Central Bank funding as customers withdraw $18 billion, a stunning 17 percent of its deposit base. Without Central Bank funding, there would indeed be outright panic.

Forbes reports Allied Irish says it's lost 17 percent of deposits

Allied Irish Banks announced Friday it has lost a staggering euro13 billion ($18 billion), or 17 percent, of its total deposit base since June in the latest evidence of cash flight from Ireland's debt-crippled banking sector.

Earlier this month two other banks, Bank of Ireland and Irish Life & Permament, reported suffering losses of more than 10 percent of deposits in recent months.

The cash flight from Irish banks has accelerated since September, when the government raised its estimated bill for bailing out five banks to at least euro45 billion ($62 billion), a figure that many analysts said was still too low.

Officials at Allied Irish said the bank had euro74 billion in customer deposits at the end of June but just euro61 billion today.

Allied Irish was once Ireland's largest business, but it has suffered a spectacular fall since 2008 in line with the collapse of a construction-dependent economy.

Property Boon Gone Bust Sinks Ireland

Read that last paragraph above once again. Note that unlike Greece which was destroyed by public unions, it was a property bubble and irresponsible bank lending that sunk Irish banks.

Ghost Estates and Broken Lives

Inquiring minds are reading Ghost estates and broken lives: the human cost of the Irish crash

They stand empty across Ireland: 300,000 unoccupied homes, a silent reproach to those who built them believing that the country's economic boom would never end. As Europe's finance ministers laboured in vain to reach an agreement on how to ease Ireland's economic misery last night, the so-called ghost estates were an awful reminder that the "survival crisis" the politicians were warning was under way had already hit ordinary people.

Dave O'Hara was one of those who bought into the "Celtic Tiger" at the beginning of the decade, eschewing a seven-generation family tradition of carving headstones in favour of a piece of the country's building boom. He founded a firm that constructed bespoke windows and doors for the thousands of upscale homes being built. The firm grew into a multimillion-euro enterprise, until the recession – and the collapse of the building industry – hit in September 2008.

Now his company is in liquidation, and Mr O'Hara, 41, who has one child, is on the dole. He owes the Bank of Scotland more than 1m Euros (£850,000).

Not far from Mr O'Hara's home, the "ghost estates" are well-known eyesores along the rugged landscape. And the crisis that created them has hit not just the people who built them, but those who might once have expected to move in, as well. Hundreds of thousands of homeowners have already found themselves saddled with negative equity as a result of the crash, economists estimate, with as many as one in seven families affected.

Personal indebtedness is also an issue, as are redundancy and the end of easy loans, meaning around 100,000 households are struggling to make regular repayments on the money they owe. And yet, house prices continue to fall precipitously. Together with slumping disposable incomes due to frozen wages and stubbornly high unemployment, still running at more than one in every eight adults of working age, many fear a social disaster is unfolding.

Operating Profits Down

For a bank that is clearly bankrupt and exists only because of life support from the central bank, it is interesting to see the headline Allied Irish Banks says operating profits down

Allied Irish Banks (AIB) said today that challenging economic and market conditions are reducing operating profits overall, and in each of the divisions, relative to the same period in 2009. There has been an outflow of €13bn worth of of deposits in 2010.

Excluding Poland, the loan to deposit ratio at 30th September was 159% compared to 151% at 30th June.

The bank said customer accounts have been affected by current adverse international sentiment towards the Irish sovereign and banking sector and are down by c.€13bn from the beginning of 2010 to the close of business on 16 November. This reduction was primarily due to lower institutional and corporate balances.

Operating income has declined year on year to 30th September 2010, mainly due to lower business volumes, an increase in Government guarantee costs of c.€190m and a lower net interest margin. The bank said factors reducing its net interest margin this year include lower capital income, lower treasury income, lower income on loans pending transfer to NAMA and higher wholesale funding costs. AIB said it is continuing to improve margins across non-NAMA loan portfolios and deposit margins, particularly in the Irish market, have stabilised in recent months.

Irish Taxpayers "Namatized"

For more on the situation in Ireland please see Hooray,ECB Saves Eurozone 2nd Time;Allied Irish Bonds Bid at 45% of Face Value, Anglo Irish SubDebt has 99.99% Default Odds;Irish Citizens "Namatized"

Allied Irish Banks Weekly Chart

That's quite the trip from $45 to 72 cents to $10.42 then back down to 76 cents. Shares have rallied in recent days on rumors of a bailout of Irish banks by the ECB and IMF. See the previous link for details too numerous to repeat.

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

Damn Cool Pics

The Biggest Football Miss in History - Uzbekistan vs Qatar
Steve Jobs Households
Only In Japan - Part 2
Invisible Airbag Bicycle Helmet
Hilarious Robert Pattinson Meme
Harry Potter Pets

The Biggest Football Miss in History - Uzbekistan vs Qatar

Posted: 19 Nov 2010 09:16 AM PST

In the game vs. Uzbekistan, the Qatar's 18 year old striker made probably one of the most incredible miss of goal ever.

Steve Jobs Households

Posted: 19 Nov 2010 08:25 AM PST

Here's house in Palo Alto where he lives with his wife and their three children.

He bought it right after his marriage in the 90's and since resides there. Judging by the photos, there's not any special luxury there like other celebs or rich people may have. The house is in the British country style that doesn't really resemble a house of a high-tech/media mogul.

On the screen you can see the picture of his son Reed.

Steve Jobs also has a mansion in Woodside where he lived in the latter part of the 1980s.

He always planned on raze it down and build a new house, a more contemporary styled one, but the local communities, dedicated to saving the historic residence, were opposed to it all this time. But in March of 2010 Jobs finally was granted the right by a California court to demolish the mansion.

The mansion is called the Jackling House which is a historic mansion in Woodside, California, designed and built for copper mining magnate Daniel Cowan Jackling and his family by the noted California architect George Washington Smith in 1925.

After Jobs moved to his new house in Palo Alto, he leased the mansion out for several years until 2000 when he stopped maintaining the house, with the elements degrading it.

Sources: allaboutstevejobs, appleinsider

Only In Japan - Part 2

Posted: 19 Nov 2010 08:09 AM PST

Another selection of funny and weird things that happen in Japan.

Previous part:
Only In Japan.

Invisible Airbag Bicycle Helmet

Posted: 19 Nov 2010 07:56 AM PST

All these people are wearing a helmet but you would never notice it if I didn't tell you about it. The airbag is shaped like a hood that surrounds your head. The gas inflater that inflates the airbag is placed in a holder in the collar on the bicyclist's back. The airbag is deployed by sensors – accelerometers and gyros – that pick up a bicyclist's abnormal movements in the event of an accident.

Source: hovding

Hilarious Robert Pattinson Meme

Posted: 19 Nov 2010 12:50 AM PST

Robert Pattinson has become a meme. A photo of a shirtless Twilight vampire jumping around in his swim trunks is manipulated into all kinds of situations. Have some laugh with this hilarious collection of Jumping Rob memes.

Other Internet Memes:
Disaster Girl Grown Up
Strutting Leo Meme
Bubble Girl Gets Photoshopped
Sad Keanu Reeves Meme
Arjen Robben Is a Ball, Your Argument Is Invalid
Everything You Need to Know about Memes

Harry Potter Pets

Posted: 19 Nov 2010 12:46 AM PST

Some people loved Harry Potter movies so much; they started to dress their pets as wizards and Gryffindor students. These are 20 photographs of Harry Potter themed cats and dogs.