[QUOTE]Not everyone is cut out to be a software developer - and who is gonna grow the food and build the cars and houses and roads for all those economy-driving tech geeks? When did being good with one's hands and at building stuff become something to be looked down at? [/QUOTE]

This strikes me as kind of funny. I grew up farming, am still a very active gardener, run a small business selling tomato plants online ( [url]http://www.selectedplants.com[/url] ), have a day job as a systems engineer designing telephone offices, and moonlight in my spare time writing software.

DarJones

[QUOTE=literka;279971]European Union was created with an assumption that all members would have equal rights, that Parliament would resolve crucial problems, and all members would have proportional representation in Parliament. It was kind of a revolution, and has ended like all known revolutions. Beautiful ideas in the beginning, dictatorship at the end.
First break occurred with admission of Eastern European countries, former Soviet bloc countries. They wanted to join for any price. They've got it together with heavy duty trucks with paper, where terms and conditions of admissions were written. This was a precedence that different countries could be treated with different laws. But still in that time European Parliament had some importance and so called European Commissaires had some power.
Great Britain joined EU with a strong will to colonize Europe. But they were realistic, since there were such powers as Germany and France. They understood that cooperation is the only way to achieve goals and that they had to restrict theirs interests to traditional regions of influence. [/QUOTE]So are you saying that Pan Europe cannot be summoned to the solution of this problem, but only a Europe with free and independent national States whose areas of interest are divergent and precisely delimited?


Paul
[COLOR="White"][SIZE="1"]I hope I don't get into trouble with this one ...[/SIZE][/COLOR]

[QUOTE=xilman;280086]So are you saying that Pan Europe cannot be summoned to the solution of this problem, but only a Europe with free and independent national States whose areas of interest are divergent and precisely delimited?


Paul
[/QUOTE]


I am not sure what kind of a problem you wrote about. Current situation is not a problem for such countries as Germany and Great Britain - they take advantage of a situation (I described before bonds tradings). Previously, for Germany, Greece was a problem because of simple reason - many Germans were going for a vacation to Greece leaving lot of cash there. Now, after a possible buying some assets, there is an opportunity to avoid tourists cash imbalance.
If larger members want to have European colonies, they are on the right track. Smaller countries are hopeless in this situation, because larger countries set the rules, while disobeying theirs very few rules of EU.
Paradoxically, imposing force is not good for either side. To understand it, take any history book and assume that history repeats.

There is not much substance to this, Fitch just revised the outlook for U.S. debt downward from stable to negative. Still, it is only a short step from negative to a drop from the current AAA.

[url]http://www.bbc.co.uk/news/business-15932247[/url]


DarJones

[QUOTE=Fusion_power;280305]There is not much substance to this, Fitch just revised the outlook for U.S. debt downward from stable to negative. Still, it is only a short step from negative to a drop from the current AAA.

[url]http://www.bbc.co.uk/news/business-15932247[/url]


DarJones[/QUOTE]

Watch yourself there...surely you mean there is little meat in the linked article, not that there is no substance to the idea of downgrading US debt.... :smile: :batalov:

Pretty much what I mean is that there is a big difference between sitting down to a meal vs smelling food cooking from a distance. This announcement just smells like something is cooking. Or maybe it is just a bad odor.

DarJones

Markets had another huge gap-up open today, 2nd day this week, on the combination of a very positive-sounding [url=http://market-ticker.org/akcs-www?post=198332]ADP employment report[/url] in the US and the announcement of major liquidity-enhancing moves by [url=http://globaleconomicanalysis.blogspot.com/2011/11/maximum-intervention-moves-into.html]the Fed, a number of central banks in Europe[/url] and a [url=http://globaleconomicanalysis.blogspot.com/2011/11/china-cuts-bank-reserve-ratios-by-5.html]discount-rate cut in China[/url]. The latter are actually a sign that things are deteriorating quite badly in Europe and China, but as we've seen over and over during the past several years, markets loooooooooooove 'liquidity', because it is a euphemism for 'central bank gotcha back, boys.' And those [url=http://www.zerohedge.com/news/standard-and-poors-downgrades-37-global-banks-among-which-bank-america-citi-wells-fargo-morgan-]downgrades of 37 major global banks[/url] by the naughty people at S&P late yesterday? Clearly this must be good news for the banking sector, because banks shares (e.g. the XLF ETF) are up big today. Bad news is good news.

None of the liquidity moves does anything to address the fundamental problem which is one of solvency (i.e. excessive debt and no means to actually pay it down) rather than liquidity, but again as we've seen repeatedly, when pols and central bankers find they have no means (or will) to address the fundamental issues, they unfailingly do what is to them the next-best - in fact perhaps best, because it's so much easier - thing, which is to 'support markets' in hopes of 'inspiring confidence' and bringing on the magical, mythical self-sustaining consumer-demand-led recovery. Just because it has utterly failed to work the last N times they tried it doesn't mean it won't work this time, right?

I also had to chuckle at the news reports about the just-concluded Obama-led [url=http://www.pbs.org/newshour/bb/business/july-dec11/euro1_11-28.html]debt summit[/url], in which "the president again pressed for a resolution to Europe's banking and debt crisis, one that would prevent its further spread worldwide and here in the U.S." The irony of the leader of the greatest debtor nation in world history lecturing the Euros (who admittedly are not far behind in terms of 'greatness', collectively speaking) on getting their debt situation under control...

But for today, enjoy the party and all the happy talk about 'recovery' and 'solution to the European debt crisis' it will inspire on the evening news reports. And don't forget to do your part to support those 2 happy themes, by getting out there and shopping, of course. And like the aforementioned governments, never let a lack of actuall 'money' stand in your way. Embrace the miracle of leveraged credit creation and all will be well.

Free bubble up and rainbow pie won't make the fundamentals any different.

The reality is that:
manufacturing in China is declining and is at a 4 year low.
Europe has 7 economies in major debt related decline
The U.S. is up to its eyeballs in debt
The emperor is wearing no clothes and everyone is afraid to say so.

Where does this leave Russia?

DarJones

Happy news on the jobs front today: The BLS announced that the US unemployment rate droped a whopping 0.4% last month, from 9.0% to 8.6%. That surely must be a sign of robust jobs creation, right? Would that that were the case, but alas it is very much not so. Here links to pair of Mish posts, quotes are from the 2nd, which links to the 1st:

[url=http://globaleconomicanalysis.blogspot.com/2011/12/falling-unemployment-rate-is.html]Charts of the Day: Labor Force and Unemployment Rate Adjusted for Population Growth Since 1948 Show Falling Unemployment Rate is "Statistical Mirage"[/url]
[quote]In [url=http://globaleconomicanalysis.blogspot.com/2011/12/us-payrolls-rise-modest-120000.html]Unemployment Rate Dips to 8.6% as 487,000 Drop Out of Labor Force[/url] I presented some quick facts on the drop in the unemployment rate.

* In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.
* In November, those "Not in Labor Force" rose by a whopping 487,000. If you are not in the labor force, you are not counted as unemployed.
* Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.
[b]
Labor Force and Unemployment Rate Adjusted for Population Growth
[/b]
Reader Tim Wallace responded with a very nice set of graphs and commentary. Wallace writes ...
[i]
In the entire history of the labor force data, only in 1951, 1961, 1964, and 2009 did the labor force "shrink". It also "shrank" in 2011 off 2010. Also note that from 1964 to 2007, only in 1991 at 631,000, 1995 at 723,000 and 2002 at 801,000 did the labor force fail to add more than 1,000,000 people.

However, in 2008 the labor force only expanded by 776,000. This was followed by a loss of 826,000 in 2009, a trivial gain of 155,000 in 2010 and a loss of 67,000 in 2011.

If you look at the average labor force growth from 1948 to 2007 of 1,579,000 the labor force should have expanded by 6,316,000 2008-2011. Instead the labor force expanded by a mere 38,000!

Thus, 6,278,000 people are unaccounted for in the unemployment numbers based on historical averages.

The final graph takes the adjusted data and calculates the unemployment number off the adjusted workforce and those that actually have jobs. The unemployment numbers using this historical trend method show the following numbers for November in these years:
[b]
Unemployment Rate Adjusted for Population Growth

2007 4.7%
2008 7.3%
2009 11.7%
2010 12.4%
2011 12.2%
[/b]
I am sure it is just coincidence, but it is interesting to note that the flat lining of the labor force began in earnest with the Obama administration.[/i][/quote]
I'm not sure if Mr. Wallace meant to be snarky or not with that parting comment, but in fact I believe it *is* a coincidence 'that the flat lining of the labor force began in earnest with the Obama administration'. The fact is, the fallout from the Great Financial Crisis of 2008 was reaching its maximum effect on the jobs market (esp. the private-sector jobs ... governments at all levels were still net-hiring for at least another year, and are only this year really starting the much-needed shrinkage back toward fiscally sustainable levels, which ultimately implies a roughly halving of government realtive to the private sector) and there was little the Obama administration could do about that, small dents from stimulus packages aside. Where I fault the Obama administration is that they have done 0 to 'restore confidence in financial markets' by way of actually fixing the problems of excessive leverage and reckless risk-taking by Wall Street and by prosecuting the epidemic of massive criminality which lay behind so much of the late great housing bubble, and their efforts to stimulate the economy have been a litany of useless Keynesian throw-money-at-the-problem and 'promote demand' snake-oil cure-alls, which are of dubious effectiveness even during 'normal' business-cycle downturns and are doomed to fail in the current 'balance sheet' recession/depression, where the fundamental problem is massive indebtedness at all levels, and sustainable demand growth will simply not occur until that root cause is addressed, i.e. a huge amount of debt either gets paid down or defaulted on.

[b]Friday Funny[/b]

On a lighter note, ZeroHedge features an insightful article in a Saudi Paper which lays out [url=http://www.zerohedge.com/news/friday-humor-allowing-women-drive-leads-rampant-prostitution-pornography-homosexuality-and-divo]the grave societal perils of allowing women to drive[/url] anything larger than a donkey cart.

[QUOTE=ewmayer;280826]I'm not sure if Mr. Wallace meant to be snarky or not with that parting comment, but in fact I believe it *is* a coincidence 'that the flat lining of the labor force began in earnest with the Obama administration'.[/QUOTE]Mightn't a closer examination show that the flatlining began right after October 2008, slightly before the Obama administration?

Speaking of grave societal perils, apparently some [URL="http://www.smh.com.au/world/global-business-chiefs-fear-poverty-could-destroy-capitalism-20111202-1obey.html"]Global business chiefs fear poverty could destroy capitalism[/URL]
[QUOTE]One unidentified Asian business leader told the authors: ''Herein lies a major challenge, because the world has become very much more prosperous as a result of market capitalism.

''The rich have become richer. The poor in most cases have become richer. But the gap between the rich and the poor has also grown wider … There is the growing sense of being left out, even as people are getting better off.''[/QUOTE]
[QUOTE]''History tells us that when an awful lot of people are disenfranchised, they have no incentive to play by the rules, and given today's communications availability, weaponry … that's an issue we have to really think about, probably over a very long period of time,'' one executive said.[/QUOTE]