Europe: the crisis is not over--

Europe: the crisis is not over--

1. The problem is not solved --
An EU Summit mis-think: The pitfalls in official first-loss bond insurance | vox - Research-based policy analysis and commentary from leading economists: . . . Italy is a lot like Fukushima . . .

2. The markets know it --(watch the Italy/Germany spread)

http://www.bloomberg.com/quote/!ITAGER10:IND  

But the stock markets went up Thursday you say? The stock markets today are full of traders and speculators--if you're an investor, it's best not to hang out in bad neighborhoods!

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Recovering from Leo--HP to Keep PC Business

I hope the world is paying attention--one CEO, Leo Apotheker, personally paid millions, did billions of damage to HP--he grossly overpaid for Autonomy, trashed HP's biggest division, created chaos and havoc with his "leadership" and did unknown billions of damage to the brand name. Now Meg Whitman and Ray Lane, the employees and customers, are trying to recover from all the carnage left in his wake. Obviously the HP board was dysfunctional to have hired Apotheker to begin with, but at least they had the good sense to fire him before he completely killed the company.

H-P to Keep PC Business - WSJ.com: The latest study found that other changes, such as reduced purchasing power and the elimination of joint branding opportunities would have cost H-P about $1 billion a year. "It slowly but surely became very clear that the math just wasn't going to work on this one," Ms. Lesjak said. . . . Ms. Whitman's analysis took a more comprehensive approach, said Ms. Lesjak, evaluating 18 different factors and consulting about 100 people. . . . It also found that some of the mitigation strategies initially considered, such as joint purchasing agreements and letting the PC company keep the H-P brand, weren't viable, she said. . . .Ms. Whitman showed she is pressing for still deeper change. She said she is now reexamining options for a mobile operating system, known as webOS, acquired as part of H-P's $1.2 billion acquisition of Palm Inc.

http://online.wsj.com/article/SB10001424052970203687504577002144041676680.html#articleTabs%3Darticle

When you have an inept, dysfunctional CEO--if you are lucky to get rid of him before he completely destroys the company--you need time to recover once he is gone, and start moving again in the right direction. HP is recovering and now moving in the right direction.

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Europe's temporary solution (video)

Europe's temporary solution, the crisis is not over (video below)

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Lombardi Says Europe Crisis Remedies Could Fall Short - Greece will default

Lombardi Says Europe Crisis Remedies Could Fall Short - Greece will default

Oct. 24 (Bloomberg) -- Domenico Lombardi, a senior scholar at the Brookings Institution, talks about the outlook for resolving the European sovereign debt crisis and this week's European Union summit. Lombardi speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

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What were they thinking? Magical thinking!

I follow Paul Krugman regularly and not because I necessarily agree with him, but to get his view of things.
Today he nails it re: Europe and the continuing "crisis" and the roots thereof:

Forgetting Can Hurt You Badly. . . the creators of the euro essentially threw away hard-won wisdom — stuff that Bagehot knew in the 19th century! — to create a stripped-down central bank without the powers or flexibility that history has shown are necessary (lender of last resort). What were they thinking?. . . supposedly sober, serious people are actually radicals insisting that we can make the economy work in ways that it has never worked in the past — hence the embrace of magical thinking on expansionary austerity and the power of structural reform. . . . which is why we’re in the state we’re in.

It's just more of what I've said before.

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Jeffrey Friedman: Regulators' Ignorance Contributed to the Financial Crisis (video)

Jeffrey Friedman: Regulators' Ignorance Contributed to the Financial Crisis
AEIvideos
http://www.aei.org/event/100483 "Capital Standards, Regulatory Ignorance and the Financial Crisisof 2008" Jeffrey Friedman, University of Texas, Austin, and Critical Review.

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Time for R&R: 36 Hours in South Beach (video)

36 Hours in South Beach
From Tommy Tune and surfers in South Pointe Park to the velvet ropes at the latest nightclubs, South Beach offers a cocktail of both the new and the classic.

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The GOP has a problem

The GOP has a problem--they only have 1 or 2 electable candidates running for nomination to be President of the United States--and Rick Perry isn't one of those "electables."  The problem with Perry is that other than being a career politician and crony capitalist, he lacks "authenticity" as well as the moral character to be President--but he will do almost anything to win an election:

1. "It’s hard to dispute that Rick Perry’s he-hired-an-illegal-immigrant attack on Mitt Romney was a cheap shot."
http://www.politico.com/news/stories/1011/66488.html#ixzz1bRJHd3XM

2. The man knows no bounds on fibbing (but what would one expect from a guy who endorsed Al Gore and now pretends to be a conservative): “If you’re saying that I can be bought for five thousand, I’m offended,” said Perry, in a response that will make a swell campaign ad. (“Vote for the Man Who Can’t Be Bought for as Little as $5,000!”). Although Merck has apparently donated about $30,000. And at the time Perry made the decision, his former chief of staff was working for Merck as a lobbyist.  http://www.nytimes.com/2011/09/15/opinion/collins-the-bachmann-chronicle.html?src=me&ref=general

I have no idea what my Republican friends are going to do, but I can assure them that Rick Perry is not "their man."  Maybe Obama's going to get a second term after all.

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European debt crisis talks plunged into chaos

European debt crisis talks plunged into chaos as leaders announce another summit: Plans to "decisively address" the debt crisis this weekend were plunged into chaos on Thursday night as European leaders were forced to announce another "summit" next week amid political deadlock between France and Germany.   

  

"The first summit starts on Friday afternoon with a meeting of finance ministers. Stephen King, chief economist at HSBC, said: "Keeping the eurozone together will involve huge financial resources and considerable ingenuity. The alternative would be worse. We argue that a break-up of the euro would be a disaster, and in a worst-case scenario could trigger another Great Depression.""

What's going on?--Germany (the economic engine of Europe) has slowed to stall speed (opposition to the bail-out plans was reinforced when Germany's growth forecast for next year was cut to 1% down from a previous 1.8%) and its politicians want accountability and transparency--Germany's leaders were grappling with a rebellion from politicians who make up Mrs Merkel's coalition. They have demanded details of the EFSF plans or they will withdraw Mrs Merkel's mandate to negotiate. They also wanted full sight of the troika's latest report on Greek finances.

http://www.telegraph.co.uk/finance/financialcrisis/8839929/European-debt-crisis-talks-plunged-into-chaos-as-leaders-announce-another-summit.html

  

It remains to be seen whether France can sweet-talk Germany into co-signing the loans to bail out Greece and the rest of Europe.

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Alabama: not the anwer to illegal immigration

When all the crazy Republican primary talk on illegal immigration is said and done, what are you left with? Alabama: a bitter harvest of dislocation and fear. Hispanic homes are emptying, businesses are closing, employers are wondering where their workers have gone. Parents who have not yet figured out where to go are lying low and keeping children home from school. . . . Alabama’s reputation has also taken a huge hit just when it is trying to lure international businesses. No matter how officials may try to tempt foreign automakers, say, with low taxes and wages, the state is already infamous as a regional capital of xenophobia.
http://www.nytimes.com/2011/10/20/opinion/its-what-they-asked-for.html?hp
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GOP debate October 18th - my take

Here's my take (and I watched the whole thing):  

Romney is a Leader;
Cain is a Gentleman (and businessman);
Santorum is just a Jerk;
Perry is a Loser (and not very bright).  

Bottom line--nothing has changed.

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KPCB Internet Trends (2011) (Mary Meeker)

KPCB Internet Trends (2011)
 This fact-packed presentation compiled by KPCB partner Mary Meeker explores and examines the significant trends shaping the Internet today. Backed by hard data and decades of technology analysis, Mary posits that the mobile revolution is still in its infancy and poised for tremendous growth. Her presentation also zeroes in on the newest breakout trends driving e-commerce, including the rejuvenating effects of local commerce, the global race to adopt mobile devices and apps, and the latest innovations in online payments. The evolving social space comes under Mary’s scrutiny as well. She observes that social networking is proving to be not just a powerful engagement model, but also a pervasive new wave of opportunity that spans the online experience. View the full presentation for a look at the digital trends that surround us in today’s increasingly mobile, social world.

For videos of the presentation and Q/A go here.

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Going off-grid: 6 days on Little Deadman's Cay, Bahamas (video)

Going off-grid: 6 days on Little Deadman's Cay, Bahamas

Definitely Paradise!

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At the precipice--this is not good--Europe rejects U.S. and IMF recommendations on debt crisis

At first I could hardly believe this when I read it tonight--

Europe rejects U.S., IMF recommendations on debt crisis, stirring doubts about plan

European officials working to address the region’s financial crisis have rejected key recommendations from the United States and the International Monetary Fund, casting doubt on whether an emerging plan will be as broad or fast-acting as hoped.. . . the plan excludes the open-ended use of the European Central Bank as a guarantor of government debt and the swift infusion of public capital into banks that U.S. and IMF officials say could be critical to restoring confidence in the euro region. Both were central elements of the effort to shore up the U.S. financial system three years ago. . . . the plan means months more uncertainty while potentially weakening banks that have to turn to public sources for help and admit they cannot raise money on their own. http://www.washingtonpost.com/business/economy/europe-rejects-us-approach-to-financial-crisis-stirring-doubts-about-plan/2011/10/13/gIQACZQVmL_story.html

When your friends reject your best advice and decide to keep spiraling down, what do you do? Unfortunately we live in a global system and the coming contagion is going to be hard to contain once it starts. What a contrast to what the Bank of England did just a few days ago.

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Ann Coulter on the GOP presidential field: Romney for President, Cain VP (video)

Ann Coulter on the GOP presidential field: Romney for President, Cain VP (10/11/2011)

Glad to see a well-known (and intelligent/beautiful) Republican agrees with me!

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Ben Bernanke's Darkest Fears (funny video)

 Ben Bernanke's Darkest Fears (video)

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Is the U.S. becoming a Third-World Nation? -video

Is the United States a Third-World Nation? (video)

Michael Lewis, author of the new book "Boomerang," says the United States and many European nations suffered a moral failure that led to economic collapse. Lewis insists that the U.S. economic situation will get much worse before it gets better.

According to Lewis, the optimistic scenario is "slow growth, high unemployment" for an extended period. Otherwise prepare for shocking financial collapses, e.g., banks and even governments (for example many U.S. states and cities have made unsustainable contracts with public employee unions--California is the poster child for these kinds of excesses). Unfortunately, the only way to correct things in a democracy appears to be through crisis--when the pain gets bad enough that almost everyone realizes "something" must be done and the voters will elect those who will do the "hard" things that must be done to "right the ship." In short, we can either face the truth and do the necessary things to correct the situation which will mean short-term pain for long-term gains. If we are unwilling to have a decade of pain, we can only look forward to a century of decline.  See also "That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back" by Thomas L. Friedman and Michael Mandelbaum.

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William Bennett to Robert Jeffress: "You did Rick Perry no good, sir, in what you had to say"

Kudos to Bill Bennett!

On Saturday morning, author and former Education Secretary William Bennett responded to Dallas megapastor Robert Jeffress who had introduced and endorsed Rick Perry at the Values Voters Summit the day before by criticizing Mitt Romney and calling Romney’s Mormon faith a cult.  From the stage Saturday morning, just minutes before Mitt Romney's arrival to speak, in response to Jeffress' remarks, Bennett said "You did Rick Perry no good sir, in what you had to say." Bennett also told the gathering of evangelicals at the Summit Saturday morning, "Do not give voice to bigotry. I'm thinking of the words of Pastor Jeffress. Do not give voice to bigotry."

Ron Paul won the Values Voters straw poll on Saturday with 37 percent of the vote. Rick Perry finished in a tie for fourth.

"You did Rick Perry no good sir, in what you had to say."

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The Bank of England moves aggressively in face of a growing global economic disaster

UK determined not to go down with Europe—the Bank of England has sounded the alarm and is now moving aggressively while the European Central Bank (ECB) fails to act

The big story is now playing out across the “pond”--driven by growing signs of a global economic disaster, the Bank of England is putting £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession. In announcing the decision Bank of England Governor Sir Mervyn King said:

“This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever.  We’re having to deal with very unusual circumstances, but to act calmly to this and to do the right thing.”

Announcing its decision, the Bank said that the eurozone debt crisis was creating “severe strains in bank funding markets and financial markets”.

“The world economy has slowed, America has slowed, China has slowed, and of course particularly the European economy has slowed,” he said. “The world has changed and so has the right policy response.” The decision was the Bank of England’s first move on QE since 2009, during the global credit crisis, when the Bank injected £200 billion into the economy.

Not that any of this seems to have been obvious to the European Central Bank (ECB), whose failure to cut interest rates on Thursday was almost as surprising as the Bank of England's decision to act so precipitously and pre-emptively. http://www.telegraph.co.uk/finance/comment/jeremy-warner/8812051/Bank-of-England-hits-the-panic-button.html

City (London) traders took heart from the Bank of England’s move to boost growth, with the FTSE 100 rising 3.7 per cent -- its biggest two-day gain since 2008.

The Bank of England is now at odds with the European Central Bank (ECB), which has been moving in the opposite direction and raising rates. http://www.telegraph.co.uk/finance/financialcrisis/8810896/Bank-of-England-launches-75bn-more-QE.html

. . . . Bizarrely, the ECB still seems to be looking in the wrong direction – ever vigilantly searching the horizon for the ghost of inflation – even as the noisy locomotive of economic catastrophe bears down on it from behind. Even for such a compromised institution, with 17 masters to answer to, the incompetence of the policy stance is quite breathtaking. . . . Europe's failure to resolve its debt crisis is creating a vicious downward spiral of contracting credit and economic activity. The Bank (of England) does indeed have little option but to react in the way it has. The almost suicidal, depression economics of the eurozone leaves it no choice. . . . (emphasis added)--Jeremy Warner in the The Telegraph http://www.telegraph.co.uk/finance/comment/jeremy-warner/8812051/Bank-of-England-hits-the-panic-button.html

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Apple's design wizard has not left the building

Apple's design wizard has not left the building 

San Jose Mercury News

Both subscribe to a philosophy of minimalism that is expressed in everything from a computer's understated silhouette down to its Spartan packaging. Then there's that shared devotion to detail, which drove Jobs to kill the iMac's cooling fan "because ...

. . . .

Leander Kahney, editor and publisher of Cult of Mac, said, "The next five years at Apple will be very much like the last five. They've been busy running the company during Jobs' medical leaves and nothing has really changed. With the creativity of people like Ive, they'll go on to even greater success.

"After all," he said, "Jobs' greatest product was not the iMac or the iPhone -- it was Apple itself. He's built an amazing machine there, and it'll run just fine without him."

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Steve Jobs' 2005 Stanford Commencement Address

Steve Jobs 1955-2011

OK, Christie is not running--now what? Here's my take--

OK, Christie's not running--now what?  Here's my take based on my judgment of the electability of each candidate in the 2012 general election (I am neither a Republican nor Democrat):

Michele Bachmann: “tip of the spear” and Tea Party darling, but—unelectable;

Herman Cain: a bona fide businessman and former Chairman of the board of directors of the Federal Reserve Bank of Kansas City; has proposed the best plan yet (“9,9,9”)—electable;

Newt Gingrich: knowledgeable, but has too much baggage—unelectable;

Jon Huntsman: absolutely the best of this bunch—former Governor, Ambassador to China, CEO, etc., but isn’t getting any real traction and looks “out of the running” (he would be a great VP or Secretary of State);

Gary E. Johnson: who is he?—unelectable;

Ron Paul: principled libertarian but—unelectable;

Rick Perry: career politician, crony capitalist, has real problems on immigration and social security issues­ that probably make him—unelectable;

Mitt Romney: former Governor (of Massachusetts), former CEO, has pristine leadership credentials and qualities, can hold his own in any venue (domestic or foreign)--a little known fact is that Mitt, thanks to his Mormon upbringing, lived for a while in France and speaks fluent French—he has the highest electability in this group in a 2012 general election; in fact, Mitt is the only one (other than Obama) also running a general campaign while seeking the nomination (he’s keeping his eye on the “prize”);

Rick Santorum: why is he running?—unelectable.

Accordingly, my recommendation to my Republican friends is: a Romney/Cain ticket for 2012.

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Rethinking Government 101

It's past time to start rethinking government --here's a start (video) and just one viewpoint.

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Obama’s Jobs Bill: Hire somebody who's not unemployed and you'll get sued!

The U.S. has a very serious unemployment problem (among other serious problems).  Federal Reserve Chairman Bernanke has called it a "national crisis"--

“We’ve had close to 10 percent unemployment now for a number of years and, of the people who are unemployed, about 45 percent have been unemployed for six months or more. This is unheard of.”  (emphasis added)

Hardly surprising then, that the Obama administration has proposed a "jobs bill." What is surprising is that Obama's bill  would make it likely than any employer who hired someone who was not unemployed, would be sued--Mr. Obama’s jobs bill would prohibit employers from discriminating against job applicants because they are unemployed. . . Unsuccessful job applicants could sue and recover damages for violations, just as when an employer discriminates on the basis of a person’s race, color, religion, sex or national origin.

http://www.nytimes.com/2011/09/27/us/politics/obama-proposes-adding-unemployed-to-protected-status.html

This proposed legislation would apply to any business having 15 or more employees. While everybody agrees we need to reduce unemployment, this proposal, if enacted, will have the opposite effect. Rather than risk getting sued, employers just won't hire--

. . . the proposed solution to this problem in President Obama’s jobs plan is a case of the cure being worse than the disease. It is not hard . . . to imagine that someone could think this proposal is a good idea, because most people have never run a business. . . Every out-of-work lawyer will find plenty of opportunities to extract money from small-business owners (the bigger companies have lots of lawyers to defend them): “Settle with my client, or we will sue you.” And it hardly matters if you are guilty or innocent. Either way, you have to waste time, energy and money defending yourself, which of course the contingency lawyer knows. Do you realize how expensive it can be for an employer to defend even a baseless claim? How do you prove your innocence? And the bottom line is this: Even if this goes through, it still won’t compel business owners to hire someone they don’t want to hire.

Who are the biggest losers in this scheme? Everyone. This is just one more reason for a business owner to avoid hiring anyone (there are other reasons, as well). . . . (Chicago business owner Jay Goltz in the New York Times-- http://boss.blogs.nytimes.com/2011/09/28/is-this-the-right-way-to-help-the-unemployed/ )

Is it asking too much to ask the President of the United States to consult with at least one small business owner before proposing "jobs" legislation?  With this provision included, this is a really, really bad "jobs plan."  President Obama obviously has no experience nor understanding of running a business and meeting a payroll--and he is obviously clueless about creating conditions that will encourage employers in the private sector to hire--in fact, in trying to "help," his administration is making things worse. Thomas Paine said, "Lead, follow, or get out of the way."  In this case, the Obama administration appears unable to lead, unwilling to follow, and therefore just needs to "get out of the way."

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FEMA's new normal, NOAA's phony hurricane, and the need for reform

Federal Budget Makes Case FEMA Reforms Needed: "For the first nine months of 2011, FEMA has issued 222 declarations, which is a single-year record and a 41 percent increase over the previous record of 157 declarations set in 1996, when President Bill Clinton was running for reelection. FEMA has issued 84 Major Disaster Declarations this year, which also is a record.
This pace of declarations is draining the DRF at a pace of $30 million to $40 million per day.
For perspective on FEMA’s “new normal,” Hurricane Irene—barely a Category 1 hurricane when it finally struck the U.S.—resulted in Major Disaster Declarations for 12 states, largely for flooding. In sharp contrast, just six years ago, Hurricane Katrina—America’s costliest disaster by tens of billions of dollars, with more than 60,000 square miles impacted—resulted in just four states receiving Major Disaster Declarations. Texas did not even receive a Major Disaster Declaration for Hurricane Katrina."

I guess we've had "disaster inflation" under the Obama administration--spend, spend, spend . . . . .  Particularly when you consider that Irene wasn't even a hurricane when it approached and finally reached New York--  http://cliffmass.blogspot.com/2011/08/when-did-irene-stop-being-hurricane.html
My prediction is that with the election coming up in 2012, the next 14 months will be the most "disastrous" in our history.

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