Happy New Year

Happy New year to everyone in the 159 countries that visited this blog in December (and even to those in the 25 or co countries that did not).



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Happy New Year from our friends at Minyanville to all of you as well.



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

2007 Daily Year in Review

A look back at the year that was, as documented by this ol' blog.

In January, I visited 30 buildings in 30 days.

In February, the AIA released its 150 favorite structures (as picked by 1,800 Americans); the Grand Canyon Skywalk was under construction; Archinect gave us some reading suggestions; I wrote a paper on film noir and the automobile.

In March, select New Yorkers picked the ugliest buildings in New York; Architecture for Humanity released its Open Architecture Network; Banana Republic used architects to shill their merchandise; somebody bought a Peter Zumthor monograph for $836.00; Death by Architecture returned, redesigned; Richard Rogers won the Pritzker Prize.

In April, SANAA made Swiss cheese; I started literary dosing (in between my 40 Bond dumpster dives); Eikongraphia made a list; the Parasol rose; I chimed in on the reappraisal of Robert Moses.

In May, Burj Dubai reached halfway; Bruder Klaus Chapel was photographed; OMA and Foster squared off in the desert; Maison Tropicale was open for potential bidders; Google released Street Views; Postopolis! videotaped itself (beware, memory-intensive link!).

In June, I graduated from City College; a pink blob overtook Atlantic Yards; The Archi-Tourist moved (and it will be updated again, one of these days, I promise!); a Waldspirale was designed for The Bronx; the East River got crowded; Serra wowed MoMA visitors; One Jackson Square undulated; Stout started selling Kidder Smith's old library; I saw Manufactured Landscapes.

In July, I went on a road trip...to Washington D.C.; I started looking at firm faces; Inversion got the meme treatment; Charlie Kaufman started a new film; Queens residents poo-pooed a McModern; MVRDV designed a massive LACK table; Sn�hetta played with sand.

In August, Charles Eames turned 100 (not really); I analyzed advertising on architecture blogs; Chuck E. Cheese took over Simmons Hall.

In September, The World Edition launched; I caught some Jihad Pop; Kolumba opened; Paul Rudolph buildings got torn apart; a Hadid saw better days.

In October, 12 Blocks won an award; a Holl building opened (no, not that one); I experienced A Psychic Vacuum; Richard Meier showed us some of his sculptures; Atelier Bow-Wow showed us their Graphic Anatomy; I tried to show a sense of solar scale; I reconsidered Javits Plaza; Ponte City was transformed (or at least marketed) for the upper class.

In November, I visited some NYC bookstores; an urban lobby emerged; a new Nouvel was unveiled; city planners and academics debated PLaNYC; I went home again and pondered a suburban future.

In December, the New New Museum opened; Hudson Yards was given the big developer, big architect treatment; you bought some holiday gift books; Oscar turned 100 (really); I visited Chicago and recapped the transformation; I recapped 2007.

Unnecessary Outcry over Adobe CS3 and Omniture Tracking

On Dec 26th a blog post on Uneasysilence.comshowed that when a user launches CS3 suite adobe calls a server on Omniture. According to the article
When you launch a CS3 application the application pings out to what looks like an IP address - and internal IP address: 192.168.112.2O7.

This created a lot of paranoia among Adobe users and led to a lot of blog posts and comments on these blog posts (Also see http://valleywag.com/338011/wear-tinfoil-hats-when-using-adobe-products). Everybody started talking about how evil adobe is and so on. It appears that we, Web Analytics community and online marketers, have a huge task of educating users about Web analytics tracking and quelling this kind of paranoia.

Finally one product manager from Adobe stepped up to clear all the confusion.

Adobe Product manager wrote a reply on Adbobe Blog. Here is what he wrote:
According to Doug Miller from the Adobe.com team, "Omniture is Adobe's web analytic vendor for Adobe.com. There are only 3 places we track things via Omniture anywhere in or around our products.":

• The welcome screens (these things) in some Adobe apps include a Flash SWF file that loads current news, special offers, etc. These requests hit Adobe.com servers and are logged, like regular browser-based traffic, by Omniture.


• Adobe Bridge embeds both the Opera browser and the Flash Player, both of which can be used to load Adobe-hosted content. These requests are also logged.


• Adobe apps can call various online resources (online help, user forums, etc.), and those requests are logged. [Update: To clarify, those contacts are made only if the user requests them--e.g. by choosing Help->Adobe Exchange.]

This, as far as I've been able to discover, is the extent of the nefarious "spying." If I learn anything else when more people get back on email, I'll update this post.

Let me start by saying that the kind of tracking Adobe appears to be doing is pretty harmless to you end users. Now let me ask a question to all these people, who became so paranoid about Adobe and Omniture Tracking. �Do you know that you are being tracked at a lot of places?� I am sure you have done one or more of the following

Connected to the internet � Do you know that ISP track of what you do online? You should read my blog post titled �ISP Based Behavioral Targeting.
Visited any site on the internet? - A lot of sites (and in fact they all should) track user behavior to create a better experience for users and to help them in their business goals.
Installed a toolbar � Do you know that their activity is being tracked by toolbars you install?
Used any social networking site where they volunteered all sorts of information.
Used a credit card. � Yes they have whole history of what you bought, when and where.
Bought a product on any major retail chain, used a credit card or a club card. � They keep track of what you buy, when and where too.

Since you are tracked everywhere, why is there a paranoia about being tracked by Adobe? Actually the kind of tracking Adobe is doing is not even close to the information you are giving away via other activities (some of them mentioned above). The kind of tracking adobe is doing is to understand the usage of their sites and provide a better experience for the users. The way I understand, Adobe is looking at user behavior at an aggregate level and not at an individual level, most of the companies doing web analytics do not look at individual user behavior. Most of the web analytics tools, like Omniture, use an anonymous cookie to track user behavior. This anonymous tracking usually looks at aggregated data for entire user base (or few segments) instead of an individual and hence do not invade your privacy.
So I request you to stop this paranoia about tracking by web analytics tools. They are helping you to have a better experience on the web.

Note: I am not associated with Adobe in any way. I have never worked for them in any capacity and do not know anybody personally at Adobe.

Comments?

2007 Weekly Favs

Here's a rundown of my ten favorite projects (out of 49) featured on my weekly page in 2007, in order of their appearance.

Tietgen Residence Hall in Copenhagen, Denmark by Lundgaard & Tranberg


Nazar� Wall Intervention in Granada, Spain by Antonio Jim�nez Torrecillas


Christ Church Tower in London, England by Boyarsky Murphy Architects


Housing at Westport, County Mayo, Ireland by Richard Murphy Architects & Taylor Architects


Handmade School in Rudrapur, Bangladesh by Roswag & Jankowski and Anna F. Heringer


Casa no Ger�s in Ger�s, Portugal by Gra�a Correia Arquitectos


Centro das Artes | Casa das Mudas in Calheta, Madeira by Paulo David


Instituto Rafael Arozarena in La Orotava, Tenerife by AMP Arquitectos


Nebesa Mountain Retreat in Livek, Slovenia by REAL Engineering


Termas G�ometricas in Villarrica, Chile by Germ�n del Sol

While I'm at it, here's my ten favorite books (out of 46) featured on my weekly page in 2007, in order of appearance. Keep in mind that not all books were published in 2007. The same can be said of the buildings above; many of them were completed previous to 2007.

:: Sensory Design, by Joy Monice Malnar and Frank Vodvarka
:: The Suburbanization of New York, edited by Jerilou Hammett and Kingsley Hammett
:: Function of Ornament, edited by Farshid Moussavi and Michael Kubo
:: Interpreting Nature, by I. G. Simmons
:: Formula New Ljubljana, by Sadar Vuga Arhitekti.
:: Materials for Design, by Victoria Ballard Bell with Patrick Rand
:: Desert America, edited by Ramon Prat, Jaime Salazar, Michael Kubo & Irene Hwang
:: The Hanging Cemetery of Baghdad, by NaJa & deOstos.
:: Strange Details, by Michael Cadwell
:: Architectural Regionalism, edited by Vincent B. Canizaro.

Images of Pentax's K200D DSLR surface?

Images of Pentax's K200D DSLR surface?

Just over a month ago, we got word that Pentax could be readying a pair of new DSLRs, and now it seems that we've been blessed with a plethora of shots of the K200D. 'Course, we suppose they could be doctored, but we just don't believe someone would spend that much time working up Pentax fakes, ya know? Regardless, feel free to hit the read link and check out what's probably the outfit's next shooter -- or some mighty fine 'shops, worst case scenario.

(Via Engadget.)

Images of Pentax's K200D DSLR surface?

Images of Pentax's K200D DSLR surface?

Just over a month ago, we got word that Pentax could be readying a pair of new DSLRs, and now it seems that we've been blessed with a plethora of shots of the K200D. 'Course, we suppose they could be doctored, but we just don't believe someone would spend that much time working up Pentax fakes, ya know? Regardless, feel free to hit the read link and check out what's probably the outfit's next shooter -- or some mighty fine 'shops, worst case scenario.

(Via Engadget.)

Monday, Monday

My weekly page update:

Ann Demeulemeester Shop in Seoul, South Korea by Mass Studies.

The updated book feature is The Landscape Urbanism Reader, edited by Charles Waldheim and Large Parks, edited by Julia Czerniak and George Hargreaves.

Some unrelated links for your enjoyment:

Daily Blue Print
A site "constantly monitoring the top blogs and blog posts on Architecture. " (added to sidebar under blogs::aggregate)

(CRIT)
Design blog of the MFA Graduate Program at the School of Visual Arts. (added to sidebar under blogs::design+technology)

The Iaakuza Chronicles
Newish, well-done blog by an Italian architectural engineer. (added to sidebar under blogs::architecture)

The Back-of-the-Envelope Bush Library Design Contest
The Chronicle for Higher Education is looking for "designs that are serious, humorous, adventurous, or all of the above" if you were to design George W. Bush's Presidential Library.

Things That "Can't" Happen

Minyan Nimesh Writes:

For almost thirty years, count them, for almost thirty years people like you have predicted that our economy will collapse and the end of the consumer. Throughout all of those years, it didn't happen. No matter how many logical arguments the "gloom and doom" crowd has made, it hasn't happened.

Nimesh, I have only been on the deflation bandwagon for a few years, not thirty. However, you are correct about one thing: Some notable people have indeed been calling for a collapse for nearly thirty years. However, that does mean an economic collapse can�t happen, now does it?

Chronology Of Things That Can't Happen

• One of the reasons the Fed was created was to manage the economy and prevent further depressions. Guess What? The biggest deflation in history, the great depression, happened 17 years later.
• At one time economists thought that inflation and recession could not happen at the same time. It happened anyway. A new term was coined for it �Stagflation�.
• Deflation supposedly couldn't happen in a fiat regime. Japan proved otherwise.
• If you asked anyone in Japan if housing prices could fall for 18 straight years, they would have said "It can't happen". It did happen.
  
• For 30 years people have said US housing prices would never again decline on a national scale. They were wrong. It happened.

It is the very nature of the market that it takes the convincing of nearly everyone to believe that something cannot happen, to actually cause it to happen. Consider housing. Everyone became convinced that housing was a one way ticket north, that all housing was local, and housing would not decline nationally.

This mass belief in a faulty housing premise in spite of evidence to the contrary in Japan is what helped form the US housing top. Greater fools everywhere who came to believe that faulty theory eventually rushed in to speculate in housing. That made the top. Even the rating agencies got into the act.

Please consider Fitch Discloses Its Fatally Flawed Rating Model. As amazing as it might seem now, Fitch disclosed as recently as March 2007 that their model for rating CDOs assumed low to single digit home price appreciation forever into the future. They even admitted their model would break down if home prices were flat for an extended period of time. There is a shocking conference call discussed in the above link where Fitch described those fatally flawed assumptions.

Fitch placed so much faith in their models (as did Moody's and the S&P) that the biggest financial speculation in housing history took place. Greenspan and the Fed cheered the miracle of derivatives most of the way. Such foolishness has already cost Citigroup (C) and Merrill Lynch (MER) their CEOs. It may cost Citigroup its entire company. See More Writedowns Force Citigroup To Sell Assets.

Housing speculation is likely to cost both Ambac (ABK) and MBIA (MBI) their companies. See Buffett Signs Death Warrant For Ambac & MBIA for more on the demise of the guarantors.

It's Different Here

All of the above are casualties of the bursting of a housing bubble, a bubble that until last year people denied even existed. Instead of looking at Japan for what was about to happen, all we heard was "It's Different Here. The US is Not Japan".



The above image thanks to The Best of Five Things You Need to Know.

Housing prices rose three standard deviations above norm in relation rental prices and wages yet excuses were made as to "Why it's different this time". Now, in spite of all the evidence to the contrary, most still insist that "Deflation Can't Happen Here". The entire argument rests on one or more of the following faulty premises.

Faulty Premises

• It's Different Here.
• It's Different This Time.
• The Fed won't let deflation happen.

Belief in the third point above goes well beyond amazing to the point of being nearly universal. Yes, there are a handful of us that see deflation coming, but as Nimesh writes "For almost thirty years people like you have predicted that our economy will collapse and it hasn't happened."

That is precisely the sentiment that it takes to make a top (or a bottom). Many predicted the demise too early and are now discredited. Those hopping on the bandwagon near the top are compared to the early visionaries. It becomes guilt by association even though there is no real association.

Mocking of the early visionaries is part of the topping process. Group think sets in and is reinforced over the years. Risk premiums drop as the long term trend reaches the peak. That takes time. Memories fade. Does anyone fear another great depression? Heck, does anyone even remember it, let alone fear it?

Where Prechter Went Wrong

Since everyone knows the early visionary we are talking about, we may as well openly discuss his name. Robert Prechter ignored and/or did not foresee many things that could keep the credit bubble expanding. Let's start with a flashback to conditions of the 70's and 80's.

Why The Credit Bubble Lasted For Decades

• Single household breadwinner became two household bread winners
• Interest rates were at 18% headed to 1%
• Internet revolution provided tremendous numbers of jobs
• Lending standards declined
• Housing boom provided jobs
• Rising asset prices supported consumption
  

Every one of those things allowed the credit bubble to keep expanding. Many of those factors took years to play out, decades in aggregate. The decline in interest rates alone made housing more affordable for quite some time, at least until things went extremely loony a few years back. And when housing prices went loony, progressively lower credit standards kept the expansion going. The madness ended when there was no one left to buy, and no way to keep that portion of the credit bubble expanding.

Sadly, people still give Greenspan credit for his role in keeping the economy expanding. Greenspan deserves absolutely no credit. All Greenspan really did was accelerate the existing trend. Furthermore, he did so in a way that was completely reckless. The only reason the economy did not collapse under Greenspan was the ability of consumers and businesses to take on credit had not yet peaked.

Major Bubbles Fueled By Greenspan

• Greenspan fueled an overall stock market bubble by bailing out banks exposed to Long Term Capital Management. For more on LTCM please see Genius Fails Again.
• Greenspan fueled a dotcom bubble in 1999-2000 out of irrational fear of a Y2K crash. Greenspan embraced the productivity miracle and was worried about the economy overheating just months before it imploded. The story is documented in FOMC minutes.
• Greenspan fueled an even bigger bubble between 2003-2006 by embracing ARMs and slashing interest rates to 1% to bail out his banking buddies caught up in bad loans to dotcom companies and bad loans to countries like Argentina.

In a sense, Greenspan was the luckiest Fed chair in history. He had a tailwind of productivity at his back that helped keep consumer prices low while he fueled bigger and bigger and bigger credit bubbles when each of several smaller bubbles popped.

Greenspan has now left an unsolvable mess for Bernanke to cleanup. This time, there is no bigger credit bubble to be blown.

What They Were Saying And When

• In 1999-2000 people were saying "The Nasdaq hasn't crashed yet so it's not going to".
• In 2006 Lereah wrote: Why The Real Estate Boom Will Not Bust. Ironically, it already had.
• In 2007 many are writing me with reasons why the credit bubble will not bust. It already has. However, just like housing in 2006, the implications have not yet been fully felt.

The party is over once the ability and willingness of banks to lend, or ability and willingness of consumers and businesses to borrow is exhausted. Those signs in place today for all but ostriches.

One thing I want to be clear on is that I am not calling for another "great depression". We could have one, but I am inclined (at least right now) to doubt it. Japan went through 18 years of deflation and the world did not end. The US will survive deflation as well.

However, we are likely to see something the US has not seen since the great depression: a falling standard of living and a declining middle class. Many things will be A Matter Of Choice but no one alive knows exactly what choices government will make.

One thing I am sure of is the more money we waste in Iraq and the more money we waste attempting to be the world's policeman, the worse off we will be.

Can The Fed Inflate Out Of This Mess?

There is enormous and unwarranted belief in the Fed's ability to "inflate out of this mess". It's all an illusion. Greenspan presided over an economy that added enormous numbers of internet jobs followed by enormous numbers of housing related jobs and enormous numbers of jobs related to the buildout of commercial real estate.

This was not "success"; This was forestalling the day of reckoning by repetitively blowing bigger bubbles. Greenspan appeared successful only because the ability and willingness of consumers and businesses to take on more debt was not yet exhausted.

Bernanke, on the other hand has no dotcom boom to bail out the economy. Nor does Bernanke have a housing bubble to look forward to that will bail out bad bank lending practices and provide jobs to the economy.

Problems Bernanke Faces

• Falling real estate prices
  
• Subprime housing mess
• Alt-A mortgage mess
• Pay Option ARM mess
• Sharply rising unemployment
• Rising credit card defaults
• Commercial Real Estate implosion
• Global wage arbitrage
• Falling US dollar
• Overheating China
• Slowing global economy
• Tapped out consumers
• Implosion of $500 trillion in derivatives
  
• Solvency issues at banks
• Forced unwind of massive Yen carry trade
• Boomer retirement
• Pension plan assumptions in an economy starving for yield
• Rising corporate defaults
  

Greenspan never had to deal with anything remotely close to that set of problems. It's a lethal combination of things given that solvency issues at banks that will restrict lending. It is also a lethal combination in the face of consumers and businesses that are unwilling to expand because consumers are tapped out. In addition, rising unemployment sure is not going to do anything about consumer's willingness or ability to take on more credit.

Yet because of Greenspan's so called success, many came to believe in the magic of the Fed. The idea was further enhanced by one of the most ridiculous Fed speeches ever Deflation: Making Sure "It" Doesn't Happen Here.

Trends Do Not Die Easily

With Bernanke's speech, came the near universal belief that Bernanke would succeed in fending off deflation as well. However, near universal belief in a flawed idea is a necessary but insufficient condition for a primary trend exhaustion.

The housing boom morphed into merger mania, leveraged buyout speculation, buyout bingo and all sorts of other nonsense including covenant lite deals where debt was paid back not with interest but with more debt.

There were not really any more players because there was no one left to convince. Rather the players involved just got greedier and greedier. Even as housing died, credit expansion looniness continued for two more years.

Chuck Prince Dances At the Top

When everyone acts as if every risk no matter unsound will go unpunished by the Fed and the market, it fosters the environment where the greedy participants (and even some innocent bystanders) are going to be tremendously punished.

It is fitting that Chuck Prince marked the top of the insanity in July of 2007 when he announced No End Soon To Buyout Boom. Chuck Prince resigned in disgrace four months later.

Unsound Beliefs Foster Unsound Actions

Few have stopped to consider that credit conditions only got as insane as they did because of fundamentally unsound belief the Fed cannot fail. Similar beliefs marked the top of the housing boom in the summer of 2005. Yet in spite of the housing implosion, everyone acted (and most still do) as if there is no risk of deflation. Most still fail to see that it was unsustainable credit expansion that fueled not just housing, but the economy in general.

Ironically, it is the unvarnished arrogance by Bernanke in conjunction with greater fools who believe in his untested academic wizardry, that fostered the very extreme risk taking attitudes towards credit that makes deflation inevitable.

Things that can't happen, are about to.

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

DSLR Tips! A new website from Camera Labs

Today sees the launch of DSLR Tips, a new photography site from the founders of Camera Labs! DSLR Tips is aimed at anyone who�s just got their first DSLR or wants to take their photography beyond automatic. Our video tutorials will show you how to achieve a number of effects and styles, while the lens guide will help you decide which optics are best for your style of photography. So if you�d like to learn more about your DSLR � or know someone who does � then head over to DSLR Tips!

more : dslrtips

DSLR Tips! A new website from Camera Labs

Today sees the launch of DSLR Tips, a new photography site from the founders of Camera Labs! DSLR Tips is aimed at anyone who�s just got their first DSLR or wants to take their photography beyond automatic. Our video tutorials will show you how to achieve a number of effects and styles, while the lens guide will help you decide which optics are best for your style of photography. So if you�d like to learn more about your DSLR � or know someone who does � then head over to DSLR Tips!

more : dslrtips

Shiller Warns Of Japanese Style Recession

The Times Online is reporting Shiller Says America could plunge into Japan-Style Recession.

Losses arising from America�s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world�s leading economists has told The Times.

Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.

Professor Shiller, co-founder of the respected S&P Case/Shiller house-price index, said: �American real estate values have already lost around $1 trillion [�503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars� worth of losses.�

He said that US futures markets had priced in further declines in house prices in the short term, with contracts on the S&P Shiller index pointing to decreases of up to 14 per cent.

�Over the next five years, the futures contracts are pointing to losses of around 35 per cent in some areas, such as Florida, California and Las Vegas. There is a good chance that this housing recession will go on for years,� he said.

Well I certainly am not arguing with that forecast. A Japanese Style Recession is consistent with what I have been proposing for quite some time.

When does Peter Schiff hop on board that train of thought? Please see Not Your Father's Deflation: Rebuttal or Peter Schiff Replies to Deflation Rebuttal for alternative viewpoints and a rebuttal of those viewpoints.

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

Olympus E3 accessories

Primed for any assignment and satisfying the most stringent demands for professional Digital Single Lens Reflex photography, the long-awaited Olympus E3 Digital SLR is finally here. To celebrate the occasion, Olympus has two special offers for early purchasers of its new flagship model. As a thank you to its many loyal D-SLR customers, Olympus is offering all current E-System camera owners a free HLD-4 power grip with the purchase of the new Olympus E3. The HLD-4 power grip extends battery life so there�s no need to worry about assignments going into overtime. It also features a second shutter release to facilitate ease of use while working in portrait format.

Dennis Hissink

more : ces-show

Olympus E3 accessories

Primed for any assignment and satisfying the most stringent demands for professional Digital Single Lens Reflex photography, the long-awaited Olympus E3 Digital SLR is finally here. To celebrate the occasion, Olympus has two special offers for early purchasers of its new flagship model. As a thank you to its many loyal D-SLR customers, Olympus is offering all current E-System camera owners a free HLD-4 power grip with the purchase of the new Olympus E3. The HLD-4 power grip extends battery life so there�s no need to worry about assignments going into overtime. It also features a second shutter release to facilitate ease of use while working in portrait format.

Dennis Hissink

more : ces-show

It works, rain or shine - E3

"The Olympus E3 comes at a time when the market is full of DSLRs. However, I do believe that Olympus has carved itself a comfortable niche with the E3. And it is competitively priced at RM5,699 (body only).

I can happily recommend the E3 to any serious photographer who has not yet jumped into the DSLR world and is looking for a completely new and innovative set-up. And the Olympus E-series and the Four-Thirds systems have enough lenses and accessories to please even the most hardened professionals."

By LAI VOON LOONG

more : thestar

It works, rain or shine - E3

"The Olympus E3 comes at a time when the market is full of DSLRs. However, I do believe that Olympus has carved itself a comfortable niche with the E3. And it is competitively priced at RM5,699 (body only).

I can happily recommend the E3 to any serious photographer who has not yet jumped into the DSLR world and is looking for a completely new and innovative set-up. And the Olympus E-series and the Four-Thirds systems have enough lenses and accessories to please even the most hardened professionals."

By LAI VOON LOONG

more : thestar

Nikkor AF-S 14-24mm f2.8 user review

Nikon's latest DSLR bodies may have been the highlights of the company's most recent announcements, but fans of high quality glass have been getting equally excited about the new Nikkor AF-S 14-24mm f2.8 lens. Camera Labs forum moderator Thomas has been putting this ultra-wide angle lens through its paces on his D80, and has some very interesting results in hisNikkor AF-S 14-24mm f2.8 user review.

more : cameralabs

Nikkor AF-S 14-24mm f2.8 user review

Nikon's latest DSLR bodies may have been the highlights of the company's most recent announcements, but fans of high quality glass have been getting equally excited about the new Nikkor AF-S 14-24mm f2.8 lens. Camera Labs forum moderator Thomas has been putting this ultra-wide angle lens through its paces on his D80, and has some very interesting results in hisNikkor AF-S 14-24mm f2.8 user review.

more : cameralabs

Pentax K200D Photos Surface

We know PMA is getting closer because the rumors are getting tough to keep up with. Check out all of these purported photos of the Pentax K200D. (via DigitalFotoNetz.de) If they�re real, it sure looks pretty. Unfortunately, no additional word on the specs, yet. See the previous info on the K20D and K200D on this page.


more: photographybay

Pentax K200D Photos Surface

We know PMA is getting closer because the rumors are getting tough to keep up with. Check out all of these purported photos of the Pentax K200D. (via DigitalFotoNetz.de) If they�re real, it sure looks pretty. Unfortunately, no additional word on the specs, yet. See the previous info on the K20D and K200D on this page.


more: photographybay

POTY ''Open'' Final Round - last chance to enter!

The Theme:

Open.The last Photographer of the Year competition is the ultimate challenge for any photographer. Rather than pick a single subject or even a theme, it's all entirely up to you. Anything goes� well, almost!

This is a deceptively difficult task, because it's designed to show a broad palette of photographic skills. With a submitted maximum of five images per person, the 'Open' category gives you the chance to submit a portfolio of your best images. Perhaps you want show the depth of your knowledge with variations on a theme and images from the same photographic discipline. Or maybe you want to demonstrate your mastery of a diverse range of topics by showing five very different images. The choice is yours.

You have until the end of the year, so get thinking and get submitting - you may want to use the caption box when submitting an image to explain your ways of thinking and/or your technical process to achieve results.

The Prize:

There can be only one winner, so there's only one prize. But it's a real stunner...

First place

The winning picture by members' votes will earn its photographer a brand new Sony DSLR-A700 DSLR, complete with matching 18-70 zoom, from superstar camera supplier Park Cameras. Forming the new pinnacle of the Sony Alpha range, this excellent 12.2 megapixel DSLR camera and lens together are worth �1,100 - but you can win one for free! So, get snapping!

Mike Lowe

more : thinkcamera

POTY ''Open'' Final Round - last chance to enter!

The Theme:

Open.The last Photographer of the Year competition is the ultimate challenge for any photographer. Rather than pick a single subject or even a theme, it's all entirely up to you. Anything goes� well, almost!

This is a deceptively difficult task, because it's designed to show a broad palette of photographic skills. With a submitted maximum of five images per person, the 'Open' category gives you the chance to submit a portfolio of your best images. Perhaps you want show the depth of your knowledge with variations on a theme and images from the same photographic discipline. Or maybe you want to demonstrate your mastery of a diverse range of topics by showing five very different images. The choice is yours.

You have until the end of the year, so get thinking and get submitting - you may want to use the caption box when submitting an image to explain your ways of thinking and/or your technical process to achieve results.

The Prize:

There can be only one winner, so there's only one prize. But it's a real stunner...

First place

The winning picture by members' votes will earn its photographer a brand new Sony DSLR-A700 DSLR, complete with matching 18-70 zoom, from superstar camera supplier Park Cameras. Forming the new pinnacle of the Sony Alpha range, this excellent 12.2 megapixel DSLR camera and lens together are worth �1,100 - but you can win one for free! So, get snapping!

Mike Lowe

more : thinkcamera

More Writedowns Force Citigroup To Sell Assets

According to Goldman, Citigroup, Merrill Face More Writedowns.

Citigroup Inc., JPMorgan Chase & Co. and Merrill Lynch & Co. may write down an additional $34 billion in securities linked to the collapse of the subprime mortgage market, according to Goldman Sachs Group Inc.

Citigroup, the biggest U.S. bank, may reduce the value of its holdings by $18.7 billion in the fourth quarter and cut its dividend 40 percent, Goldman analyst William Tanona said in a Dec. 26 report on the New York-based companies. JPMorgan Chase & Co., the third-largest U.S. bank, may write off $3.4 billion, double Goldman's previous estimate. Merrill Lynch & Co. may reduce its holdings by $11.5 billion, he wrote.

My Comment: By the time Citi is done shoring up its balance sheet it is highly doubtful it remains the largest US bank. It is possible it does not remain an independent US bank at all.

"It will be a couple of quarters before the current credit crisis is fully digested by the markets," wrote Tanona, who has a "sell" rating on Citigroup's stock and a "neutral" rating on JPMorgan and Merrill. "Given the magnitude of the writedowns we assume and Citi's remaining exposure, we believe the firm has a serious need to preserve or raise additional capital."

My Comment: Tanona is an optimist. It can easily be two years (not quarters) before the credit crisis is "digested". Heck, it could be much longer than that judging from what happened in Japan. No one is counting on a hard recession, an implosion in commercial real estate, sharply rising unemployment, and huge defaults on credit cards. I think all four of those will happen.

Citigroup tumbled 8.1 percent on Nov. 1 after CIBC World Markets analyst Meredith Whitney said it may have to trim its dividend. Deutsche Bank AG analyst Michael Mayo also predicted a dividend cut, saying the investment from Abu Dhabi is ``probably not enough'' to absorb credit losses.

My Comment: A dividend cut is all but guaranteed.

MarketWatch is reporting Citi, HSBC eye sales of branches, divisions.

Banks including Citigroup (C) and HSBC Holdings (HBC) are considering sales of everything from branches to entire units, The Wall Street Journal reported Friday, citing analysts and unnamed executives. Citi could sell 80%-held Student Loan Corp (STU), its North American auto-lending unit, its 24% stake in Brazil credit card operation Redecard (RDCL) and the bank's Japanese consumer finance business, the report said.

New Citigroup CEO Vikram Pandit is considering laying off as many as 20,000 employees and shedding business lines, the report continued, citing people familiar with the matter. HSBC may sell its auto-finance business, the report added.

Citigroup Forced To Sell Assets

Some thought I was a little over the top with Citigroup Fighting For Its Financial Life back on November 5th, and Question of Solvency at Citigroup on November 1st but here we are.

Citigroup is not considering these actions because it wants to, it is so capital impaired that it is forced to. The same can be said for a reduction in force. 20,000 jobs (assuming the number is correct) is quite a lot. Where are those who are let go going to find jobs in this market?

The problem for Citigroup and other lenders is that housing is just the first of the tsunamis that is going to hit shore. An implosion in commercial real estate, sharply rising unemployment, and huge defaults on credit cards are all on the way. Furthermore, the housing tsunami is not even played out yet. Two more waves of the housing tsunami are on the way: Alt-A and Pay Option ARM resets.

If Citigroup survives it will be a mere shadow of its former self.

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

Consumer Survey on Payment Delinquencies

I am reading an interesting report from ORCC on Payment Delinquencies Spanning All Industries from December 2007. Here are a couple of charts:

Consumers Are Overextended

Households across the country are finding it harder to meet financial obligations now than they did just twelve months ago. Of the households surveyed, 43 percent report that it is harder for them to meet their financial obligations, including bills, loans, mortgage and debt, than it was 12 months ago.



click on chart for sharper image

Reasons It Is Harder To Meet Obligations vs. 12 Months Ago

More than half of households chose multiple reasons why they are finding it harder to meet their financial obligations. The most popular reason�and the only one cited by more than half of respondents�is increased energy costs. As further evidence that troubles are not limited just to the mortgage industry, only 19 percent of households report that their mortgage is a reason why it is harder for them to meet financial obligations.

click on chart for sharper image

This is one of those times when I sit back and wonder about the small sample size and methodology.

Two separate online surveys were conducted to understand consumer and biller collections. The consumer household survey was conducted in conjunction with MarketTools, Inc. Survey responses were collected from October 5, 2007 until October 25, 2007. Survey respondents were recruited and invited to participate by MarketTools, Inc. Survey invitations were sent via email with a link to a website containing the survey questions. To encourage participation, MarketTools, Inc. offered respondents 50 bonus points they could redeem for prizes. Responses were received from a nationally representative sample of 1,006 online households.

Questions About The Survey

• Is that sample size valid?
• Did "bonus point" skew the results?
• If you have to pay people to take a survey what kind of respondents are you going to get?
  
• Do consumers simply not want to admit their house is their problem?
• Is the psychological impact of seeing gas prices tick up and up and up a constant irritation?

I do not know about the sample size but I think the winner is number 5.

Weekly US Gasoline Prices



click on chart for sharper image
Chart courtesy of the Department of Energy.

Note that the survey was taken in October. A quick glance at the above chart shows huge gasoline price dips in previous years but not 2007. In addition, some 30% of the population does not own a home so mortgage related problems do not apply.

Given that Homeowners Protest Property Taxes one might have expected to see that reason on the list except perhaps it is typically only paid twice a year for some and lumped in with mortgage payments for others. And what about food prices?

The key number is the dramatic 43% rise in those finding it harder to make payments for whatever reason. Looking at that number, it should not be shocking to see Credit Card Defaults move to Forefront of Deflation Debate. If unemployment shoots up in 2008 as expected, things are going to get very ugly.

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

Epson art photo award 2007/08

Since its start in 2005, the Epson art photo award already achieved two major successes. It is time to surpass what has been done. Round three is starting now!

And this one is a very special round: As of 2007, the partner of the Epson art photo award, ART COLOGNE, is moving its exhibition schedule from autumn to spring.

We would without a doubt like to continue our partnership with ART COLOGNE to offer our winners a venue in which they can present their works for the first time.

For this reason, the application dates for the competition are of course different. For this �bridge year�, it specifically means: Groups and classes can submit their works and concepts from March 2007 to January 31st 2008. They can participate with works from the 2007/08 winter semester as well as the 2007 summer semester. All works must be sent by January 31st 2008 at the latest.

We warmly invite you to apply for the Epson art photo award 2007/08 with your class or group at your academy, college, university or other centre of education.

more : art-photo-award

Epson art photo award 2007/08

Since its start in 2005, the Epson art photo award already achieved two major successes. It is time to surpass what has been done. Round three is starting now!

And this one is a very special round: As of 2007, the partner of the Epson art photo award, ART COLOGNE, is moving its exhibition schedule from autumn to spring.

We would without a doubt like to continue our partnership with ART COLOGNE to offer our winners a venue in which they can present their works for the first time.

For this reason, the application dates for the competition are of course different. For this �bridge year�, it specifically means: Groups and classes can submit their works and concepts from March 2007 to January 31st 2008. They can participate with works from the 2007/08 winter semester as well as the 2007 summer semester. All works must be sent by January 31st 2008 at the latest.

We warmly invite you to apply for the Epson art photo award 2007/08 with your class or group at your academy, college, university or other centre of education.

more : art-photo-award

Is Pentax's top model the right one?

Q I'm buying a digital SLR camera and you write favorably about Pentax. I've seen the K10D, their top model, on sale recently with a $100 rebate. That makes it the same price as the entry-level Canon Digital Rebel XTi and Nikon D40x. Do you think the K10D is a better buy at approximately the same price? Anything else I should consider?

STELIOS DOKIANAKIS, PITTSBURGH, PA

A Whether the K10D is right for you is best determined by what kind of camera you want and need. There are three classes of digital SLRs: professional, consumer and "prosumer." Professional models are heavy-duty workhorses with lightning-fast responses and a wide range of settings. This category is completely dominated by Canon and Nikon. Prices start above $3,000 and go way up from there.

The Canon Digital Rebel XTi, Nikon D40X and Pentax K100D Super are consumer models. These produce excellent image quality but are not built as sturdily, nor do they focus and shoot as quickly as pro models. They are lighter, and easier to carry around and operate. These cameras typically run $500 to $800, including a kit lens for general-purpose photography.

"Prosumer" models combine characteristics of professional and consumer models. They are sturdy and feel better in the hand than consumer models, operate faster and have more features, but aren't as rugged and feature-rich as pro models. This category is populated by the Pentax K10D, Canon 40D and Nikon D300. Prices for a prosumer model typically start at $1,200 and go up to around $2,500.

DON LINDICH

more : startribune

Is Pentax's top model the right one?

Q I'm buying a digital SLR camera and you write favorably about Pentax. I've seen the K10D, their top model, on sale recently with a $100 rebate. That makes it the same price as the entry-level Canon Digital Rebel XTi and Nikon D40x. Do you think the K10D is a better buy at approximately the same price? Anything else I should consider?

STELIOS DOKIANAKIS, PITTSBURGH, PA

A Whether the K10D is right for you is best determined by what kind of camera you want and need. There are three classes of digital SLRs: professional, consumer and "prosumer." Professional models are heavy-duty workhorses with lightning-fast responses and a wide range of settings. This category is completely dominated by Canon and Nikon. Prices start above $3,000 and go way up from there.

The Canon Digital Rebel XTi, Nikon D40X and Pentax K100D Super are consumer models. These produce excellent image quality but are not built as sturdily, nor do they focus and shoot as quickly as pro models. They are lighter, and easier to carry around and operate. These cameras typically run $500 to $800, including a kit lens for general-purpose photography.

"Prosumer" models combine characteristics of professional and consumer models. They are sturdy and feel better in the hand than consumer models, operate faster and have more features, but aren't as rugged and feature-rich as pro models. This category is populated by the Pentax K10D, Canon 40D and Nikon D300. Prices for a prosumer model typically start at $1,200 and go up to around $2,500.

DON LINDICH

more : startribune

Nikon D60 to Replace D40x

Word is that the Nikon D60 will replace the D40x in Spring 2008. This info comes from M-L, who also gave us the heads up on the Nikon D3 the day before its announcement, so this is perhaps a little more solid than many of the rumors that we get leading up to new announcements. The source also revealed that a Nikon D90/D80x would not be coming. Perhaps Nikon will be dropping the D70/D80 series as a wedge between the D40 series and D200/D300 series.

This rumor was prompted by reports of the end of manufacturing of the Nikon D40x on this site. A DP Review forum user gave us a decent translation and some commentary:

more : photographybay

Nikon D60 to Replace D40x

Word is that the Nikon D60 will replace the D40x in Spring 2008. This info comes from M-L, who also gave us the heads up on the Nikon D3 the day before its announcement, so this is perhaps a little more solid than many of the rumors that we get leading up to new announcements. The source also revealed that a Nikon D90/D80x would not be coming. Perhaps Nikon will be dropping the D70/D80 series as a wedge between the D40 series and D200/D300 series.

This rumor was prompted by reports of the end of manufacturing of the Nikon D40x on this site. A DP Review forum user gave us a decent translation and some commentary:

more : photographybay

Olympus E-3 REview

The E-3, the flagship of Olympus' Digital SLR line, combines speed and durability in a splash-proof magnesium alloy body. Early to embrace Live View and Dust Reduction features in a dSRL, Olympus now appears to offer the fastest autofocus in the world. Body-Integrated image stabilization , a 10-megapixel Live MOS image sensor, Supersonic Wave Drive and one of the largest and most accurate viewfinders prove Olympus is not sitting on their laurels but is still an innovator in photographic technology.

Are you ready for the "World's Fastest Autofocus" dSLR? Used in combination with the Zuiko Digital SWD ED 12-60mm f2.8-4 lens, the E-3�s new AF system is the world�s fastest. The newest SWD (Supersonic Wave Drive) lenses focus twice as fast as previous Zuiko Digital lenses with the same focal length. Happily, every lens receives some benefit from the new AF, not just SWD lenses. Olympus credits a unique Twin cross type, 11 point AF sensor based on their micro-sensing technologies as a key to the E-3's rapid focusing.

An amazing 1/8000-second, high-speed, precision shutter is available for you to shoot that gazelle while on safari or your child at the soccer match. The E-3 can also capture images at the highest quality setting at a rate of 5 frames per sec. The camera�s durable shutter mechanism is rated up to 150,000 cycles to withstand heavy use. The 10-megapixel Live MOS Image Sensor delivers high-resolution images for largeer print sizes, and TruePic III� digital processing engine ensures high-speed image processing, accurate color and improved detail - with lower image noise.

more : steves-digicams

Olympus E-3 REview

The E-3, the flagship of Olympus' Digital SLR line, combines speed and durability in a splash-proof magnesium alloy body. Early to embrace Live View and Dust Reduction features in a dSRL, Olympus now appears to offer the fastest autofocus in the world. Body-Integrated image stabilization , a 10-megapixel Live MOS image sensor, Supersonic Wave Drive and one of the largest and most accurate viewfinders prove Olympus is not sitting on their laurels but is still an innovator in photographic technology.

Are you ready for the "World's Fastest Autofocus" dSLR? Used in combination with the Zuiko Digital SWD ED 12-60mm f2.8-4 lens, the E-3�s new AF system is the world�s fastest. The newest SWD (Supersonic Wave Drive) lenses focus twice as fast as previous Zuiko Digital lenses with the same focal length. Happily, every lens receives some benefit from the new AF, not just SWD lenses. Olympus credits a unique Twin cross type, 11 point AF sensor based on their micro-sensing technologies as a key to the E-3's rapid focusing.

An amazing 1/8000-second, high-speed, precision shutter is available for you to shoot that gazelle while on safari or your child at the soccer match. The E-3 can also capture images at the highest quality setting at a rate of 5 frames per sec. The camera�s durable shutter mechanism is rated up to 150,000 cycles to withstand heavy use. The 10-megapixel Live MOS Image Sensor delivers high-resolution images for largeer print sizes, and TruePic III� digital processing engine ensures high-speed image processing, accurate color and improved detail - with lower image noise.

more : steves-digicams

3 Blocks, 5 Buildings, 18 Months Later

Back in April 2006 I posted a panorama of a small area in Chicago's Streeterville neighborhood undergoing a bit of a high rise building binge. About a year and a half later -- while in town on a vacation over Thanksgiving -- the shifting skyline was starting to take shape, with cranes giving way to glassy exterior walls and approximately 1,000 residential units.

To reiterate from the earlier post, the five new condo towers include (from E-W; L-R in the large photo):

:: Avenue East by Built Form
:: 535 North St. Clair by Brininstool + Lynch
:: 600 North Fairbanks by Helmut Jahn
:: Cityfront Plaza by DeStefano + Partners
:: The Streeter (rentals) by Solomon Cordwell Buenz

Click image for larger, keyed before-and-after view

This view from the raised plaza adjacent to NBC Tower will be further crowded by the coming phases of Cityfront Plaza, which will finally steal the sunlight and views the Grand Ohio condos have been blessed with all these years. And interestingly, even though the Cor-Ten and gold-tinted glass Time-Life Building is out of direct sight in the view, it is apparent as a reflection in Jahn's curtain wall, with especially strong reflections from the gold windows on its base.

Who'd ever think so much development and money would be centered on land named after a founding "squatter"?

Today's archidose #164

MUBE_SNPBL_001, originally uploaded by monarqui.

Brazilian Museum of Sculpture in S�o Paulo, Brazil by Paulo Mendes da Rocha. (1988)

To contribute your Flickr images for consideration, just:

:: Join and add photos to the archidose pool, and/or
:: Tag your photos archidose

Web Analytics Jobs Trends � 2007

Web Analytics is one of the hottest career fields these days. Organizations are realizing that web analytics can no longer be a part time work and requires full time dedicated staff thus pushing the demand for web analysts.

This year, since making my Web Analytics jobs predictions in Januray, I reported on open job positions every month till August of this year. After August I stopped reporting on the jobs because I did not see any major changes and there was nothing exciting to report. Since the year is coming to an end, I thought I will close out the year with another report to show where we are and what to expect in 2008.

Before we look at the numbers please note that the Dec numbers are taken today i.e. 28th while the rest of the number reported were taken on the 1st of the month. As you know I use two job aggregator sites Indeed.com and SimplyHired.com for the data. Both of these sites collect open job positions from individual company sites and from job boards such as HotJobs.com. SimplyHired.com also provides job boards called job-a-matic, like the Job Board I have on my blog. SimplyHired.com job board allows individual bloggers or site owners to quickly create a job board specific to their site�s content.
Note: Those who are curious to know what to expect in terms of salary, I will be posting the results of Job Survey on 1st of Jan 2008.

Let�s take a look at the numbers.

When I first reported the open Jobs in January, there were 1024 open positions that had the word �Web Analytics� in them. In the very first month the open jobs were up to 1711, a jump of 67%. It is quite possible that due to holidays not many positions were advertised and when people were back from holidays they started advertising open positions and hence we saw this big jump. Well this year, as of Dec 28th, there are 2068 open positions, that is 102% increase from January this year. I don�t see much change happening in next 3-4 days so January 1st numbers will be about at the same level.
Looking at the trend in 2007, we can expect a big increase in open positions in February and the whole year



Note: Month in the above graph represents the month when the data was gathered. A lot of job positions are never listed on any job board or company sites. These jobs are filled by networking and referrals. So key to finding a job is increasing your network. Let people know that you are interested in Web Analytics.

If you want to start a career in web analytics and don't know where to start, check out my article starting a career in Web Analytics and my Web Analyst interview series to see how others got started in web analytics.

Which tool experience is in demand?

Omniture remains the most sought after tool experience, followed by WebTrends.
In this month, Google Analytics displaced Coremetrics from 3rd spot and is behind Omniture and WebTrends.

In 2008 I expect Google Analytics to be in hot demand. As Google releases new features and opens up the APIs it will become more complicated to implement and use.


Stay tuned for the Salary Survey results to be published on January 1st.

Buffett Signs Death Warrant For Ambac & MBIA

MBIA (MBI) hit a new 52 week low today and Amback (ABK) is giving back much of its recent gains as Buffett Starts Up Bond Insurer business.

MBIA Inc. and Ambac Financial Group Inc., the two largest bond insurers, fell in New York Stock Exchange trading after billionaire investor Warren Buffett said he plans to start a rival company to guarantee municipal debt.

My Comment: OK suppose you want your debt guaranteed. Are you going to go to capital impaired companies or Warren Buffett?

MBIA, based in Armonk, New York, fell as much as 17 percent and Ambac dropped 15 percent, the most in two months. Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., told the Wall Street Journal his bond insurer opens for business today in New York. New York State Insurance Department Superintendent Eric Dinallo said the agency expedited Buffett's license request.

Berkshire, which gets half its profit from insurance, is challenging the bond insurers as they struggle to retain the AAA credit ratings that allow them to guarantee about $1.2 trillion of municipal bonds. The rankings of MBIA, Ambac and other guarantors are under scrutiny amid concern they don't have enough capital set aside to cover potential losses on bonds they insure that are linked to subprime mortgages.

My Comment: Insurance from MBIA and Ambac is Worthless. Neither Ambac nor MBIA come remotely close to deserving AAA ratings. Everyone knows it, but Moody's, Fitch, and the S&P all pretend otherwise.

"Investors might feel more comfortable investing in bonds insured by Buffett than those backed by an insurer with the legacy of the credit crisis hanging over them," said Matthew Maxwell, a London-based credit analyst at Calyon, the investment banking unit of Credit Agricole SA. Bond insurers "are hurting, so now is a good time for Buffett to be getting into the market."

My Comment: Might feel more comfortable with Buffett? Is there any doubt here?

Buffett, 77, told the newspaper that Berkshire Hathaway Assurance Corp. will also seek permission to operate in California, Puerto Rico, Texas, Illinois and Florida. David Neustadt, a spokesman for New York's insurance department, said Berkshire will get a license by Dec. 31.

Credit-default swaps on MBIA, which rise as perceptions of credit quality drop, rose 30 basis points to 610 basis points, the highest ever, according to CMA Datavision in London. Ambac increased 10 basis points to 620, the widest in three weeks.

MBIA, as well as Ambac and FGIC Corp. of New York, are trying to convince Moody's, Fitch and S&P that they deserve to keep their top ratings.

My Comment: While the shameless pretending By Moody's, Fitch, and S&P continues, the real question is not about being rated AAA but how far into junk those ratings should be.

Fitch has given MBIA and Ambac less than six weeks to raise $1 billion each or face losing their AAA ratings. Moody's and S&P earlier month placed MBIA's ranking on negative outlook. MBIA on Dec. 10 said it will get $1 billion from private-equity firm Warburg Pincus LLC to bolster its capital and Ambac took out reinsurance on $29 billion of securities it guarantees.

"MBIA and Ambac are probably going to be able to get through this and raise the capital needed to retain their AAA ratings," said Rob Haines, an analyst at CreditSights Inc. in New York. "But it hurts them."

My Comment: As of the November 11 2007 10-Q MBIA had $6.96 billion in working capital. They have guaranteed $30.6 billion in CDOs and have other questionable exposure as well. Who would want that exposure and why?

Buffett smells an opportunity here and he is likely correct. Furthermore he is not going to make the mistake that both Ambac and MBIA made in insuring CDOs, subprime mortgages, and other toxic waste. It was pure greed that will end up sinking Ambac and MBIA.

The realization that guarantees from Ambac and MBIA are worthless is finally dawning on state and local investors as the following Bloomberg headline shows: Muni Insurance Worthless as Borrowers Shun Ambac.

Three Choices For Municipalities

• Have Buffett guarantee the debt
• Forego insurance
• Go to the well with Ambac and MBIA

No matter how you look at it, the only possible way MBIA and Ambac can compete in that model is by undercutting Buffett in price while hoping municipalities do not select option 2. This will obviously pressure margins at the very time MBIA and Ambac need to increase margins. Furthermore, given the huge question about the value in Ambac's and MBIA's guarantee, price competition alone is unlikely to be the factor that generates business.

This looks like a smart long term move for Berkshire Hathaway (BRK-A) if Buffett is careful about what he insures (and I am betting he will be). On the other hand it is likely the death warrant for Ambac and MBIA unless they can find a white night that wants to compete against Buffett and take on CDO and subprime exposure on top of it.

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

A Matter Of Choice

Minyan Peter is discussing The Courage to Choose.

I believe that in time, historians will define the last twenty years in America as the �Age of Aspiration� where, thanks to unprecedented levels of credit, Americans could become anything they wanted. Where, thanks to zero percent down debt and a seemingly robust economy, we could own bigger homes, fancier cars, and more lavish vacations � where our bounty was limited only by the boldness of our wants.

Well, I, for one, believe that our Age of Aspiration is ending. And, with its conclusion, we must, for the first time in almost a generation, begin to reconcile our wants with our means. We must choose what to do without, rather than what more to do with.

When anything is possible, everything is possible. Few of us have really had to choose. And, like it or not, all of us will need to return to our vocabulary a simple phrase that I believe has been lost over the past twenty years: �I can�t afford that.�

So as we approach 2008, I wish the Minyanville community the wisdom to prioritize well, the courage to make the hard, and often painful, choices, and, most of all, the strength and conviction to follow through.

Minyan Peter

Peter is one of the best reads on the Ville. In case you missed it, please click on the above link and read his entire message about choices for 2008.

I certainly agree with Peter but would like to add that people are going to be forced to make choices whether they have the courage to make them or not. Where courage comes in is making the right choice, not a choice.

Let's take a look at some major choices.

Governor Schwarzenegger Considers Major Cuts In Services

Schwarzenegger will declare a fiscal emergency.

Gov. Arnold Schwarzenegger is expected next month to seek immediate major cuts in state services, including a plan to take back $1.4 billion budgeted for schools this year and a proposal to slash the prison population by releasing tens of thousands of inmates.

When the governor reveals the details of the cuts, the state's interest groups are "going to be squealing beyond belief," said one official, who spoke on condition of anonymity because budget discussions are confidential.

My comment: Interest groups can squeal all the want but choices still have to be made: cut services or raise taxes.

The official described Schwarzenegger's approach as: "Don't talk about taxes. Talk about services. Make the public say, 'I want the prison system funded. I want education funded.' He won't talk taxes until there is a consensus that these services are what the state wants."

My Comment: Schwarzenegger's choice seems to be to force the public to choose. Unfortunately both Schwarzenegger and the public chose irresponsibly when confronted with previous choices.

The governor's fight on education, which represents 40% of the budget, is likely to be fierce because school districts are still nursing the wounds of 2004, when the governor deferred pledges to restore education funding that they agreed to surrender.

Scott Plotkin, executive director of the California School Boards Assn., said his group will not agree to any cuts until the Legislature begins a discussion of increasing revenues through taxes. "This is too big a problem to be solved solely through cuts," Plotkin said. "We've been down this road before, and we got burned."

My Comment: So now the California School Boards Assn. does not trust the governor. This is what happens when you make promises that cannot be met. Interestingly enough one group will not consider spending cuts unless tax increases are discussed first, while another group will not discuss taxes unless all spending cuts are considered first.

In these kinds of situations, the choices are put off until the last moment and no one is happy with the result. Nonetheless choices must be made.

The governor's plan to cut $1.4 billion from this year's money for schools is based on new estimates of what is guaranteed under Proposition 98, a constitutional provision that determines the minimum of state revenues that must go to education. The formula is based partly on state revenues, which have plummeted since education funding was allocated last summer.

My Comment: California voters are going to be facing lots of choices about various propositions, many of which are downright silly such as $2.9 billion in affordable housing programs and $3 billion for general obligation bonds to fund stem cell research. Both are complete nonsense and a huge waste of taxpayer money. Getting rid of such waste should be the easy choices.

Kevin Gordon, a lobbyist for hundreds of school districts, said $1.4 billion is "almost insurmountable as a number for districts to really give up."

My Comment: It's a good thing he said almost insurmountable.

Cuts would inevitably fall heavily on the Los Angeles Unified School District, which, with about 700,000 students, receives about 13% of the state's education dollars. The school board was already weighing at least $100 million in cuts anticipated for next year. It also faces a restive teachers union, which is demanding raises.

My Comment: Ah yes, raises. The unpleasant choices here are: grant raises and raise taxes, grant raises but fire teachers and increase class size, don't grant raises and face a strike. When the strike comes, review the choices and make one.

The Party Is Over In California

On December 16th in Turn out the lights California, I made the following observations:

Schwarzenegger Has 3 Choices

• Cut Spending and Services
  
• Raise Taxes
• Attempt to float massive amounts of bonds in a hostile debt market

The crisis is coming to a head and choices must be made. Arnold, it's your move. What's it gonna be?

Michigan Has Choices

I discussed Michigan recently in Why Michigan is a Basket Case. If you think Michigan's problems are all auto manufacturing related think again. Click on the above link to see Michigan's legislative process in action. It was an amazing set of choices they just made to rob Peter to pay Paul then Paul to pay Peter ending up accomplishing nothing.

Ohio Has Choices Too

There is a giant Credit Squeeze In Ohio.

Cleveland Mayor Frank Jackson said today that he and top advisers are working to stave off a money crunch that could jeopardize large capital projects on the horizon. Such projects, ranging from roads and bridges to developments such as Bob Stark's $1.5 billion plan for the Warehouse District, rely on the city's ability to borrow money.

Maryland vs. Virginia

Inquiring minds might also want to consider Maryland computer firms anxious over new tax.

�I�m being asked to levy a hefty tax on my clients, and the thing that really aggravates me is that Virginia computer companies won�t impose this on their Maryland clients,� said Matthew Shapiro, president of Rockville-based networking and integration firm Design One Corp. Shapiro doesn�t want to physically move, but he does want to consult with a lawyer about setting up a subsidiary outside the state.

Hmm. There are choices and there are consequences to those choices. Imagine setting up subsidiary outside the state to avoid tax consequences of staying in the state. Who is the winner? I know who the losers are: anyone spending money to avoid taxes, and the state that loses the taxes.

What About Florida?

The epicenter of real estate fallout has to be Florida. A 25 member committee is now addressing Florida Taxation and Budget Reform. Good luck with that.

This quick review clearly shows that Minyan Peter was spot on with his assessment that 2008 will be a year of choices: personal choices, household choices, city choices, state choices, and even national choices.

At the national level, a big presidential election is at stake, with consequences that can affect the US for decades to come.

Choose Wisely.

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