Giveaway weekend!

I am pleased as punch to share this weekend�s giveaway with you all! Maybe you�ve heard of little shop called Lisa Leonard Designs? Hmmm?? Just maybe?  :)

Well, Lisa�s been an advertiser of mine for awhile, but even before she joined me at TDC, I drooled over admired her beautiful jewelry. 

Let�s go over some of my favorites, shall we?

Gah. I adore the little hearts on this one�

You can get it customized with two to four hanging hearts and whatever text you want around the edge. The tiny pearl is the perfect finishing touch!

Lisa is killing me with the owl!:

It�s called �Whoo do you love?� Are you dying? Love that hubby�s name is on a little disc with a moon. Adorable.

The family crest necklace is perfect for any mother or grandmother:

What a lovely way to thank any woman who is the �glue� of the family!

These teeny tiny hearts are so simple and perfect:

You could do the kid�s initials or yours and hubs/significant other. It would be a great gift for an anniversary � put the couples initials on and you�re set! At least the wife will be thrilled!  ;)

I can�t get over how original this one is:

Each name is stamped under a different piece of laundry � the little socks about put me over the edge they are so precious. Not one person would have the exact same necklace! (Well�unless there was another family with your exact names and you got the same exact designs�and that would just be weird.)

Look at the initials carved into a tree:

Perfect for a newly engaged friend or newlywed. How sweet!

I saw this one on Twitter a few weeks ago and thought it was such a great idea for a little girl:

Not too much � just sweet and simple and the perfect �real� piece of jewelry to start a young one�s collection.

The pops of aqua are what made this one a fast favorite as well:

And the cutie patoot little bird sure didn�t hurt either!!  ;)

Lisa�s talents don�t stop with necklaces � she has a variety of bracelets available:

As well as earrings:

And gifts for anyone �- including the men in your life!:

Isn�t it all lovely? I know you�re swooning. :)

To make you really swoon Lisa is giving one of you a $75 gift card to use as you wish on her site � whoohoo!

Here�s the deal � leave a comment here for your first entry. For a second entry, check out Lisa Leonard Designs, browse around, and then come back and let me know your favorite piece! It�s as easy as that! (Please remember an email address if you comment anonymously.)

The giveaway will be open through Monday at noon, Eastern time.

Have fun, good luck and enjoy your weekend!

Good Morning America - 25% of ABC Staff Fired

Today ABC News, made the news, with massive job cuts. Please consider Job Cuts at ABC Leave Workers Stunned and Downcast.

If �Good Morning America� or �World News� look any different in the coming weeks, it might be because ABC News is employing nearly 400 fewer people.

Earlier this week, ABC News, a unit of the Walt Disney Company, largely completed one of the most drastic rounds of budget cutbacks at a television news operation in decades, affecting roughly a quarter of the staff. The cutbacks promise to change ABC both on- and off-camera.

The business of news is a particularly ugly one these days, and news outlets across the country have trimmed their staffs. But it is exceedingly rare for a newspaper or a network to shed a quarter of its employees all at once, as ABC has done.

For viewers, the effects will be felt on the individual broadcasts, like �World News with Diane Sawyer,� which lost two of its six senior staff members to buyouts. They will not be replaced.

In the future, more segments will be reported, filmed and edited by jacks-of-all-trades, called digital journalists, internally. They may lack the polish that a traditional four-person crew can provide, but they are much less expensive. Sometimes two of the digital journalists will team up for reports.

�We are now, as a work force, becoming much more flexible,� said Jon Banner, the executive producer of �World News.�

Inside ABC News, it is widely believed that the cutbacks were mandated by Disney. The cuts came shortly after CBS News, one of the other three network news divisions, lost about 70 staff members. The third division, NBC, is in a much better financial position because it has a cable news arm, MSNBC.

We're all "digital journalists" now.

Need I say it? This is certainly not inflationary news.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Bubble in Law School Tuition and Lawyers?

Has excess capacity hit the legal profession? The Chicago Tribune discusses the situation in Law school tuition hikes spark talk of bubble

The rising cost of law school is becoming a sore subject as the number of high-paying jobs shrink.

With large numbers of unemployed or underemployed lawyers who borrowed heavily to pay for their educations, legal educators face growing skepticism about the value of a law degree. Anonymous critics have started blogs with harsh names such as "Big Debt, Small Law" or "The Jobless Juris Doctor."

With three-year programs at top schools costing nearly $150,000, not including room, board or even books, some of the criticism is coming from inside the legal profession. Christine Hurt, a law professor at the University of Illinois, suggests that the market for legal education is strikingly similar to the subprime mortgage market. Her theory, which she posted on "The Conglomerate Blog" last week, goes like this:

Double-digit tuition increases in the last 25 years have priced law schools out of reach for many. Yet the promise of a career at a big law firm with its six-figure paychecks kept boosting enrollment. Easy credit allowed more students to finance their law degrees. All of a sudden law firms lay off droves of attorneys and limit the number of new hires, leaving graduates out of work with more than $100,000 in loans to repay.

The recession already has forced law schools to rein in tuition hikes that were well above inflation for the last 25 years, including double-digit increases in many years. Last fall, Northwestern University's law school raised its tuition by about 4 percent, its smallest increase in 32 years, said David Van Zandt, its dean. Its annual tuition is still among the highest in the country at $47,202.

But with law firms cutting salaries and hiring fewer graduates last year because of the economy, Northwestern sent just 55.9 percent of its 2009 graduates to the largest firms, according to the National Law Journal. Yet the school still was No. 1 in the publication's annual ranking of graduates who found jobs at big firms.

Van Zandt said he believes big law firms will never go back to hiring graduates in droves. That means they will recruit from fewer schools.

"It doesn't make a lot of sense to go to law school unless you go to a pretty good one," Van Zandt said.

Bubbles, Student Loans and Sub-Prime Debt

It took a bit of searching but I found the article the Chicago Tribune referred to. Please consider Bubbles, Student Loans and Sub-Prime Debt

For a couple of decades now (and until a few years ago), the conventional wisdom was that real estate would always rise in value and that the world would always need lawyers. Home ownership at whatever cost, particularly with tax-deductible interest rates, was better than alternatives such as renting; financing a law degree with student loans, some of which was low-interest and tax-deductible, was an equally good investment given the value of the law degree. Just as something about home ownership seemed intrinsically good, so did getting a law degree, from any law school. Strangely, most law school educations were priced similarly. Law schools with lower employment rates charged more money than some schools with higher employment rates. Price was not a clear signal of quality. Anyway, more and larger houses were built; more and larger law schools were built. Then, as if on a dime, the world changed and all of a sudden lots of people with law degrees were getting laid off, deferred, ignored.

...

How can someone write off $100,000 or $200,000 in student loans as a bad call? Many of these loans aren't federal loans -- they are from private lenders at high rates. And, unlike homeowners, law students don't have a "put" option -- they can't tell lenders to take their law degrees and quit calling them.

So, what's the future of law school pricing? Will someone create an affordable model that doesn't depend on third-party financing? Will some law schools start to look like culinary schools or technical institutes that provide financing of $40,000 a year for a law degree few employers are looking for? Or will law schools pride themselves not on inputs (LSAT, GPAs, you know -- USNews stuff) and on outputs (where our graduates actually end up working, and how much they make).

Thanks Christine. To answer your question ... The future is tuition price deflation across the board (not just lawyers) and lower salaries for college professors and administrators. How and when that starts is subject to debate. That the current model is both broken and unsustainable is certainly not debatable.

Forget about lawyers for a second, step back and think about English majors graduating school, hundreds of thousands in debt. How can that ever be paid back? The answer is it can't because there is no demand.

Are some with English degrees rolling the dice opting for Law School? Probably, yet the competition for jobs will only get tougher. Those who do not land good jobs will be debt slaves for life. Even those who do land a job may be hugely in debt for a decade.

For further discussion, please see For Profit Schools Turn Students Into Debt Zombies; It's Time To Kill The Entire Pell Grant Program

I suggest that rather than throwing hard earned taxpayer dollars at programs that invite fraud and make debt zombies out of students, it's time to kill the program entirely. Instead, Obama wants to expand the fraud, even indexing the fraud to inflation.

The inept policies of the Obama administration, increasing student grants, is one key reason the tuition bubble has not yet popped.

Regardless, all bubbles end by definition. The tuition bubble will be no exception.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Gerald Celente on Global Trends - Interview by Bill Meyer

Here are some Gerald Celente quotes from his interview by Bill Meyer on April 26, 2010.

"Median household income is below 1999 levels. What kind of imbecile is out there saying we have to raise taxes to keep things going more?"

"This is a stimulus recovery. They are printing phantom money out of thin air based on nothing, and producing practically nothing. It's digital money not worth the paper it's not printed on."

"It's not only the US by the way, and that's why I want to make this clear. It's China, It's Japan, It's Indonesia, It's Australia. It's the UK and all of Europe."



I do not care for Celente's views on hyperinflation or the US breaking up, but the 48 minute long interview is interesting.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Today's archidose #415

helmut jahn @ charlottenburg, originally uploaded by d.teil.

Ku'Damm #70 in Berlin, Germany by Murphy & Jahn, 1994. This project is notable as much for its slender footprint (2.5m deep site) as for the design by Zaha Hadid that predated Jahn's completed building by about eight years, two years before Jahn developed his design. Compare the completed building above with a crop of Hadid's early rendering below:


[original image source]

A controversial aspect of the project is that Zaha Hadid won a competition for the building, only to have it built to a similar design by another, more seasoned, architect.

To contribute your Flickr images for consideration, just:

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

US Rail Traffic "Statistical Recovery"

US Rail traffic is improving on a year over year basis, but looks are deceiving as the comparison is against very feeble 2009 traffic. Let's take a look at Railfax Data through April 24, 2010.

Total US Rail Traffic



The table shows the 4 week rolling average of auto traffic is up 32% from a year ago. However, auto traffic is still down 31.8% compared to 2008.

The same holds true for metals, up a whopping 71% from a year ago, yet down 18.5% from two years ago.

13 Week Rolling Averages - Year Over Year Comparisons



Please refer to the article for still more charts.

Traffic is up, but only based on anemic comparisons. This is what's known as a statistical recovery. By the way, it took trillions of dollars of global stimulus to generate that "recovery". Guess what happens when the stimulus stops?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Spanish Unemployment Rate Tops 20%, Borrowing Costs Rise; Debt Rollover Risk Mounts

The economic picture in Spain is grim. Spanish Unemployment rose from 18.8% to 20.1%, union work rules helped wreck the economy, and Spain must shrink its deficit according to EU rules.

Please consider Spanish Unemployment Rate Tops 20%, Undermining Deficit Fight

Spain�s unemployment rate rose above 20 percent for the first time in more than a decade, undermining Prime Minister Jose Luis Rodriguez Zapatero�s fight to cut the euro region�s third-largest budget deficit.

Spanish borrowing costs have surged in the past two weeks on concern the state will struggle to rein in the deficit. Standard & Poor�s cut the country�s credit rating on April 28, saying the government was underestimating its fiscal problems and overestimating growth prospects. Adding to public spending, Zapatero has extended benefits for the long-term unemployed.

�I suspect employment will continue falling for most of the rest of this year,� said Ben May, an economist at Capital Economics Ltd. in London. �Clearly it has knock-on implications for fiscal policy.�

Spain�s budget deficit was the third-largest in the euro region last year, at 11.2 percent of gross domestic product. S&P said it expects the shortfall to remain above 5 percent in 2013, the year the government has pledged to cut it to the EU�s 3 percent limit.

Spain has some of the highest firing costs for open-ended contracts in Europe, according to the World Bank�s Doing Business Index, while around a quarter of the country�s workers have temporary contracts. The Bank of Spain says a labor-market overhaul is �urgent� as high unemployment poses a risk to banks and the Socialist government has pledged to change labor legislation after talks with unions and employers.

The surge in unemployment is eroding support for Zapatero, who was re-elected in 2008 on pledges of full employment.

Debt Rollover Risk in Spain

Spain's economic crisis is far more important to the EU than Greece. In addition to massive unemployment and a stagnant economy, one of Spain's biggest problems at the moment is ability to rollover 225 billion of euro denominated debt.

Please consider a few snips from Spain�s Debt Rating Cut as Finance Officials Meet

�The issue is rollover risk,� said Jonathan Tepper of Variant Perception, a research group based in London and known for its bearish views on Spain. �Spain has to issue new debt to the tune of 225 billion euros this year. Forty-five percent of their debt is held by foreigners. So they are dependent on the kindness of strangers.�

Though they are under the most immediate pressure, Greece and Portugal are relatively small economies.

Given Spain�s size, its debt crisis is seen by many as the looming problem for world markets. On the surface, its debt load appears manageable. Its debt relative to gross domestic product, the broadest measure of its economy, is 54 percent � compared with 120 percent for Greece and 80 percent for Portugal.

But what Spain does have is the highest twin deficit, or combined budget and current account deficits, of any country in the world except Iceland, a reflection of how dependent it is on increasingly fickle foreign investors for financing. Spain has 225 billion euros in debt coming due this year � an amount that is about the size of Greece�s economy.

The base of investors willing to invest in the bonds of Spain and other distressed European countries is dwindling. Mohamed El-Erian, the chief executive of Pimco, one of the world�s largest bond investors, has said publicly that Pimco is no longer a buyer of Greek debt. Other Pimco executives have also said they have a negative view of the debt in countries on Europe�s periphery.

Given the losses that European investors have taken on Greek, Spanish and Portuguese bonds in recent months, it seems doubtful that such investors can be relied on to provide the capital these countries need.

If it takes $120-$300 billion to bail out Greece over three years, what would it take to bailout Spain?

That's a trick question actually. The right question is "Can these economies be bailed out at all?"

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Patience grasshopper (kids room inspiration)

I know. I KNOW. I hate that I have to do it, but I am going to reveal the big boy room later this weekend.

I KNOW! Stop yelling at me! :)

Life has gotten in the way this week just a bit, so I�m going to finish up the little details tomorrow and then take pics this weekend. I will tell you, it is so beautiful. I�m not even kidding�I just adore this room. It is now our favorite in the house!

So bear with me � I have a great giveaway for you Squeezies tomorrow (you don�t want to miss it!) and I�ll post the room Sunday night.

Anyhoooooo�I thought I would share some lovely toddler rooms I�ve seen around the Net lately. They are a little heavy on the boy side, but I did that on purpose � I�ve mentioned before I think boys rooms are hard!

These are some of my favorites from Pottery Barn Kids:

LOVE the big fire truck print on the wall, love the molding, love the white and red together. And the chocolate brown on the walls and how it ties in with the bed is genius. They know what they�re doing, those Pottery Barn peeps!

A naval inspired room is so classic and fun, and with some added pirate-inspired whimsy it is perfect for a little boy:

That bed is the coolest! Here�s another:

Love the sail too. Do you see the rope and knot detail on the wall above the chair rail? And that navy blue�you know I�m swooning!

Of course this little girl�s room is adorable, but my favorite part is the massive memo board behind the bed:

Love how huge it is and love the bright green frame! This gives me an idea for our office�

There are a few lovelies in this one that stuck out to me:

The bedding is just beautiful. The branches with flowers hanging from them � you could SO do that! And the birdcages hanging are a great finishing touch.

Restoration Hardware started a baby/child line a couple years ago, and I�ve always loved how elegant their products are:

Are you swooning?!

I found some fun ideas at Better Homes and Gardens too. Love the firehouse as a headboard!:

And did you see the bed? What little boy wouldn�t adore that?

How cool is this? Fish tanks hung on the wall, with plants inside:

Love the typography on the wall, in different sizes and shapes. Awesome!:

This one stuck out to me and now I know why:

Uh DUH. Same navy blue walls, same grayish blue ceiling, same (but much nicer!) built ins. And it�s all primary colors just like his room!

Someday I am going to have a window seat like that installed in the Bub�s room. Window seats make me all gushy � I�ve never had one but always wanted one. :)

Got a kid�s room you want to share? Link up to it in the comments! I�ve never had more fun doing a room than this one and I can�t wait to show you! Thanks for your patience with me. ;)

Barofsky Threatens Criminal Charges in AIG Coverup, Goldman Sachs Abacus Deal, TARP Insider Trading; New York Fed Implicated

The day that Tim Geithner lands in jail will be a day of celebration. Don't count on it soon or ever, but Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), is now threatening criminal charges.

Please cheer the following headline: Barofsky Says Criminal Charges Possible in Alleged AIG Coverup

... [Neil Barofsky], the TARP watchdog has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York.

The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges.

In Senate Finance Committee testimony on April 20, Barofsky said SIGTARP would investigate seven AIG-linked mortgage-related securities similar to Abacus 2007-AC1, the instrument underwritten by Goldman Sachs Group Inc. that is at the center of a U.S. Securities and Exchange Commission lawsuit filed against the investment bank on April 16.

�I�ve been in contact with the SEC,� he told the committee. �We�re going to coordinate with them, but we�re going to lead the charge. We�re going to review these transactions.�

Barofsky and Geithner�s offices have gone toe-to-toe over AIG, alleged lax oversight of TARP funds and even over the question of whom Barofsky reports to.

Barofsky, a former federal prosecutor who was once the target of a kidnapping plot by Colombian drug traffickers, says he�s also looking into possible insider trading connected to TARP.

�There was a time when, if you got that word the stock price would go up, and if you were to trade on that information prior to the public announcement, that would be classic insider trading,� Barofsky says.

�There�s a reason there are Tea Partiers out there, and when you look at it, anger at the bailout is one of the first things they talk about,� says Barofsky, referring to the anti- Obama political movement. �This Treasury Department and the previous Treasury Department bear some of the responsibility for not being straightforward with the American people.�

Barofsky criticized Geithner�s predecessor, Paulson, in an October 2009 report, saying Paulson publicly described the initial nine TARP bank recipients as healthy when he knew that at least one of them risked failure.

�The special inspector general for TARP hit the ground running,� says Senator Charles Grassley, an Iowa Republican who helped draft the legislation creating SIGTARP. �He�s the kind of watchdog taxpayers need and deserve.�

From the day Congress created it, TARP has been troubled. Paulson crafted it as an initiative to buy the toxic assets that were then threatening to capsize the world�s banking system. Since then, the Treasury and Congress have transformed it into a hydra-headed beast encompassing 13 financial aid plans.

Says Representative Jeb Hensarling, a Republican from Texas and former member of the Congressional Oversight Panel that guides TARP policy, �It�s almost a program that defies oversight.�

SIGTARP has more than 40 agents, including former Secret Service, Federal Bureau of Investigation and Internal Revenue Service investigators, who sport blue windbreakers emblazoned with the SIGTARP seal.

In its late-January report, SIGTARP said that the banks rescued by TARP remained �too big to fail.� They still have an incentive to make risky wagers in order to generate the profits that will reward their executives, the report says.

�The definition of insanity is repeating the same actions over and over again and expecting a different result,� Barofsky says. �If the goal of TARP was to make sure we don�t have another financial collapse, well, obviously it�s made the likelihood of that much, much greater.�

In April 2009, Treasury asked the Justice Department for a ruling on whether Barofsky and SIGTARP reported to Secretary Geithner. In a letter to Justice, Barofsky argued that he reported only to the president.

�We are absolutely an independent agency,� he says.

Treasury withdrew its request.

TARP�s Small Business

In February of this year, the department moved to exclude the Small Business Lending Fund from Barofsky�s oversight. The program is funded with $30 billion of TARP money.

�On its face, it looks like Treasury is trying to supersede SIGTARP�s position by having the program operate outside TARP,� says Smallberg of the Project on Government Oversight. �Barofsky is certainly a thorn in the side of Geithner.�

Meanwhile, Barofsky�s investigators continue to lay into TARP. In a January report, SIGTARP cited an unnamed money manager in TARP�s Public-Private Investment Program, which buys toxic assets, saying the person sold a recently downgraded mortgage-backed bond from a company fund, then promptly purchased the same security in the same amount at a higher price for a fund backed by TARP money.

In a December report, Barofsky showed how insurance giants Hartford Financial Services Group Inc. and Lincoln National Corp. bought tiny thrifts -- one with just $7 million in assets -- to qualify for the TARP Capital Protection Program, which is designed to encourage bank lending. Hartford and Lincoln used the more than $4.3 billion in TARP funds they received almost entirely to finance insurance operations, according to the report.

�Treasury didn�t have to approve that,� Barofsky says.

Barofsky says he�s battling an entrenched culture of secrecy in the Treasury and elsewhere.

�One of the important lessons that I hope will be learned from this entire financial crisis is that the reflexive reaction against transparency, that disclosure will bring terrible things, has not been proven true,� he says.

Culture of Secrecy

He offers the AIG bailout as an example. For more than a year, the New York Fed kept key aspects of the AIG bailout secret, including details of its own involvement and its decision to have AIG pay the insurer�s bank counterparties 100 cents on the dollar on the credit protection they�d bought against about $62 billion in CDOs.

Barofsky�s to-do list grows. SIGTARP now has 120 employees, has initiated 20 audits and was involved with 84 investigations as of March 31. In January, it opened a New York office, with San Francisco and Los Angeles branches scheduled for later this year.

That is a significant snip, but there is still much more in the article. Richard Teitelbaum, writing for Bloomberg, compiled an admirable report. Please take a closer look.

In my opinion, back-to-back treasury secretaries Tim Geithner and Hank Paulson are guilty of fraud and/or coercion and belong in prison where they can meditate for the rest of their lives on how and why they are not above the law.

It will be interesting to see just what it takes to get Obama to dump this criminal.

Rolling List

It's time to update my rolling list of who should be criminally indicted and why.

April 16, 2010: Rant of the Day: No Ethics, No Fiduciary Responsibility, No Separation of Duty; Complete Ethics Overhaul Needed

March 2, 2010: Geithner's Illegal Money-Laundering Scheme Exposed; Harry Markopolos Says �Don�t Trust Your Government�

January 31, 2010: 77 Fraud, Money Laundering, Insider Trading, and Tax Evasion Investigations Underway Regarding TARP

January 28, 2010: Secret Deals Involving No One; AIG Coverup Conspiracy Unravels

January 26, 2010: Questions Geithner Cannot Escape

January 07, 2010: Time To Indict Geithner For Securities Fraud

October 20, 2009: Bernanke Guilty of Coercion and Market Manipulation

July 17, 2009: Paulson Admits Coercion; Where are the Indictments?

June 26, 2009: Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl"

April 24, 2009: Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Conversion Tip: Making the Most of the Email Confirmation Thank you Page

Email sign-ups are a very common ways for businesses to capture a potential lead. Visitors who are interested in your product or services will likely take a step towards providing their email address to you.

Your job as a marketer in not complete when a visitor gives you�re your email address. You need to make sure that you provide proper scent (links, messages etc.) for them to engage with your site/content/brand etc.

Almost every contact with a potential customer provides a conversion opportunity i.e. an opportunity to engage them to view more content, products and /or sell. If you do not take advantage of that opportunity then you might miss out on many conversions that you could have had.

Email sign-up confirmation page is one such opportunity that is so often forgotten by the marketers. The main reason for that seems to be the use of 3rd party to manage your email subscription list. Often the small details are missed in a hurry to get the system live. I hope you are not making this mistake.
I am going to share two examples to illustrate my point.

Example 1: Missed Opportunity

This is from a site called Daily Checkout. I loved what they had to offer so I decided to sign up for their daily email.

After providing my email address on their site, here is an email that I got from them. (so far so good, though the �from� email address is the address of 3rd party they are using to manage their email list).

I clicked on the link to confirm my email subscription and I was taken to the page below:

That�s all I got. The title of the page shows me some other company�s name. I am sorry, which site did I sign up for? Where is the rest of the page? I want to look at more products on your site, how do I do that? MISSED OPPORTUNITY.

Example 2: Making the most of the thank you page.

This page provides a nice confirmation thank you page and also provides me a link to explore more content. Well Done.


What do you think? Do you have any examples of the email confirmation pages that totally miss the mark or the pages that do it perfectly? If yes, I would love to see them.

---

Looking to fill your Web Analytics or Online Marketing position?
Post your open jobs on Web Analytics Job Board
Landing Page Optimization Analyst, at Red Ventures (Fort Mill, SC)

Financial Reform Provision Would Break Up Nine Biggest Banks and Affect All Primary Dealers

Details are still sketchy at the moment but it is clear that financial reform is going to pass. Moreover, according to Marketwatch, Provision would break up nine biggest banks.

Nine of the largest financial institutions including Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. would have to scale down by about 40%, according to legislation introduced by a group of eight Democrats on Thursday. The group is hoping the measure will be approved as part of sweeping bank reform legislation under consideration on Capitol Hill. The measure limits the size of non-deposit liabilities at financial institutions to 2% of U.S. gross domestic product, or about $300 billion. It's unclear whether congressional leaders will allow the measure to be voted upon by the full Senate or whether lawmakers would approve it.

Inquiring minds seeking additional details are reading U.S. Senate Opens Debate on Wall Street Legislation

The U.S. Senate began debate on Democrats� financial-overhaul bill today, including a provision to create the first formal regulatory structure for the $605 trillion over-the-counter derivatives market.

Republicans decided to allow debate after Democrats agreed to change a section of the bill aimed at preventing future bailouts of Wall Street banks similar to the $700 billion bailout Congress approved in 2008 for firms including Citigroup Inc. and American International Group Inc.

Earlier this week, Republicans blocked Democrats from starting debate on the measure in three procedural votes.

At issue is a provision that would give the government new power to take apart failing financial firms whose collapse would shake the economy. It would create a $50 billion industry- supported fund that regulators would use to pay the cost of dissolving a firm. Republicans say the language contains loopholes that wouldn�t end bailouts.

Dodd acknowledged the concern and said the Senate would consider an amendment offered by Senator Barbara Boxer, a California Democrat, to require that no taxpayer funds be used to disassemble a failed company.

The legislation would create a consumer financial protection bureau at the Federal Reserve and a council of regulators to monitor the economy for systemic risk. It would strengthen oversight of hedge funds and ban proprietary trading at U.S. banks.

I am in favor of a ban on proprietary trading but it will accomplish nothing unless enacted with teeth, and without loopholes. Properly executed, all the Primary Dealers would be affected. That list includes Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley and others.

In regards to creating a new $50 billion oversight industry funded by the industry, I suggest it is a waste of time. Worse than that, the bill will likely punish small banks and financial institutions that were not involved in this mess, by making them pay a part to cleanup the next mess the bill creates.

Regulators always get in bed with the institutions they regulate. This time will not be different.

Bank Size Limitations

Credit.Com notes Bank size limited under new financial reform measure

Under the measure, companies would not be able to hold any more than 10 percent of the nation's total insured deposits. Bank of America Corp., JP Morgan Chase & Co. and Wells Fargo Co. already violate this size limit, according to the report, and would be given three years to downsize.

Nondeposit liabilities would also be limited under the bill, to 2 percent of America's overall gross domestic product for banks or 3 percent of GDP for nonbanks. U.S. Senator Ted Kaufman spoke to the National Organization of Investment Professionals about the importance of the legislation.

"When mega-banks fail, their interconnected nature inevitably leads to a systemic risk, a collapse in confidence and the classic patterns of a bank run," Kaufman, a Democrat from Delaware, said. "By splitting up these mega-banks, we by definition will make them smaller, safer, and more manageable."

Democratic Senators Sherrod Brown of Ohio, Jeff Merkley of Oregon, Robert Casey of Pennsylvania and Sheldon Whitehouse of Rhode Island also offered their support for the measure, which would be included in the financial reform passed in March.

In theory, significant changes are coming. In practice, the devil (loopholes) is in the details.

Also note that financial reform is centered around preventing the last problem from reoccurring. However, it's not the last crisis we need to worry about but the next one.

Even if Congress did nothing, the odds of blowing another housing bubble are negligible. Moreover, somewhere in these reform bills, perhaps not even intentional, will be loopholes or totally new provisions that financial institutions will exploit to create the next crisis. Such problems may not surface for years or longer.

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

Redmond, WA Condo Association Votes to Mass Default

80+ proud owners in the Riverwalk at Redmond Washington condo complex have had enough and are ready to bail, en masse.

I received news of this event from Matthew who writes ...

Hi Mish

I am good friends with an owner in the Riverwalk at Redmond condo complex and I also used to rent there, which is how I got wind of this story.

It turns out the developer sold out the complex, dissolved his LLC, and is living somewhere in the Caribbean. Meanwhile, unit owners are in the hole by as much as 50% of their purchase price, not counting needed repairs of as much as $50,000 per unit.

There are major defects that require about $4.1 million in renovation work to address underlying �envelope� issues that cause leaks and mold issues in 11 units. The consultants said the exterior on the entire complex had to be replaced.

The home owners association (HOA) discussed five alternatives.

1) Sue the developer. Since the developer left the country so there�s no one to sue.

2) Pay the $4.1 million maintenance with a loan. However, no bank will issue a loan because the HOA fund has a high delinquency rate and not everyone is paying their dues nor are they paying on time.

3) Make each home owner pay approximately $45,000. Who would be willing to do that when everyone's mortgage is seriously underwater?

4) Liquidate the entire complex, forcing everyone into foreclosure.

5) Opt for Band-Aid fixes. Go into each unit, rip it apart and fix the problem. However, the consultants have said that the damages will eventually spread to all units because the problem is structural. The HOA has gone this route in the past but the problems in 11 units keep coming back.

Unwarranted Hope and Begging the Mayor for Help

In a followup email Matthew writes "As of the last HOA meeting they�ve narrowed it down to option 4 and a new option� beg the local government for help. So they�re sending a letter to the Mayor of Redmond".

I read the letter but it did not disclose much more that what is shows above. My general comment on the letter is it is a useless waste of time.

Mayor Marchione would be a fool to do anything more than send his sympathies. Of course there are countless government fools, but in this case 80+ homeowners are nothing compared to the complaints the mayor would get if he helped such a small select group.

Furthermore, if the mayor were to bail out this complex, there would be 10,000 more requests. The mayor understands this without a doubt, thus there is absolutely no chance the mayor can do anything other than write a nasty letter to the developer. That would be a waste of time and money, while building unwarranted hope.

Here's the deal. Under the circumstances presented, it seems foolish to make another mortgage payment or another homeowner's association payment.

If you own a unit in that complex, your best choice of action is to consider walking away

Caution: Before Walking Away Consult An Attorney. There are a lot of potential snags to consider if you go it alone.

If you live in that complex (or any complex with similar issues), please seek legal help before you waste another cent on dues or mortgage payments.

By the way, assuming every owner walks, and assuming those loans are widely spread out among lenders, it will be impossible to sell those units. The entire building could be worthless.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Belmont Stakes Needs Government Loan to Stay in Business; Bluegrass Country on the Skids; Horse Farms for Sale

Bluegrass country is on the skids. Stud fees are down as much as 90%, gambling revenue has plunged, and the horse racing industry switched its stance from fighting casino gambling to embracing it.

The New York Times tells the story in Gamble Sours for Many Kentucky Horse Breeders

The for-sale signs on horse farms are as common as the bluegrass and the limestone fences here, and breeders have grown accustomed to sending horses through the auction ring and feeling fortunate when they fetch half of their asking price � or anything at all.

�The rails are quiet,� said Mike Meuser, a Lexington lawyer who is usually in the forefront of such deals. �Collecting, or trying to collect money, is the bulk of my business these days.�

The bankers have disappeared here as well. Lending to buy horses, the grease in the deal-making machine for many years, has dropped 60 percent to about $400 million from an estimated $1 billion in 2007, according to the Kentucky Thoroughbred Association.

Money bet on horse races, known as the handle, is off nearly 30 percent, to $12 billion in 2009, a major decline for a once-reliable source of revenue for local governments.

The economic decline of racing, however, will be on full display during this year�s Triple Crown season. Eskendereya, who would have been the favorite for the Kentucky Derby but was pulled out with an injury, is owned by a bankrupt stable. The owners of Pimlico Race Course, the historic racetrack in Baltimore that hosts the Preakness Stakes, are going through bankruptcy. And the New York Racing Association said it might not have enough money to hold the Belmont Stakes this year; it is trying to get a loan from the state government.

Breeders pay up to $150,000 to mate a mare to these studs in the hope they can land a sales topper in the auction ring.

Lately, however, horsemen have been betting their farms and losing. There are 265 farms of more than 20 acres for sale here in the four counties of horse country � up from 199 listed last year � and that is not counting the more than 60 �pocket listings�.

Smarty Jones, who nearly swept the Triple Crown in 2004, once stood for $100,000, but today he can be had for $10,000.

When it comes to prices, this story is more of the same: Things people already own, depend on for a private-sector livelihood, or do not really need, are falling in price. Things people need to buy, such as health care, are not.

This is neither inflation nor a symptom of inflation, but rather a symptom of an overwhelming deflationary trend coupled with foolhardy government regulation in a completely unbalanced economy.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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NYC Guide RFB #2

In my previous Request for Buildings (RFB) for my Guide to Contemporary New York City Architecture -- to be published by W. W. Norton next year -- I asked for help from readers to determine what projects should be included in the book. One project type that I was not going to consider was rooftops. Well, I've changed my mind and will be including some rooftops in the book, in particular ones that are visible from below. Examples would be residential constructions but also institutional and other types of buildings, like this rooftop enclosure for Public School 59 on the Upper East Side by Ehrenkrantz Eckstut & Kuhn Architects:



So do you know of any interesting rooftop additions/renovations completed since 2000 that are visible from the street? Ones that are particularly interesting formally but also in how they interact with their "hosts" below? If you'd like to send me a rooftop project you think is guidebook worthy, please copy and paste the information below into an e-mail to me, filling in as many blanks as possible:

Project: ______
Architect: ______
Location: ______
Year of completion: 20__

Thank you!

Female character design sketch in process

Female character design sketch in process. Just had some time last night to sketch a character in contemporary costume. Usually I tend to design a fantasy or period or sci-fi costume. This one I felt like I should do something normal in the current period environment. :)

Well, this one is pretty much a study that I intend to do. I am trying to render or paint leather and to get its values correctly. It is still in process and on its way (hopefully) to be finished.

It is a good exercise for any artist to study painting of fabric such as silk, satin, leather because those fabric when put right next to metal, skin, or plain cottons, they have unique quality and reflect light differently. In other words, it has its own way of showing off its values on a painting. If you look at many classical painting, they are great examples, especially John Singer Sargent, Ander Zorn, etc.

If you notice, the face is the one that I've already sketch earlier as a tutorial a while back. And I have a video tutorial for it you can go check it out here, How to draw comics batgirl. I just happen to like that face so I thought, I should do something better with it and create a new design for her. But still I did tweak the facial and hair just tiny bit so that it fits the new design.

So here it is.

Anyway, here is a step by step.

here is what I have so far:

Next Step here: Digital painting girl female sketch.

And continue to part 2 process, adding Zombie to the scene: How to draw Zombie digital painting.

FEATURE TUTORIALS: *Over 60 minutes to 2 hours of video.



-Draw and Paint Women Body Tutorial I: Female Manga Fusion I
-Draw and Paint Women Body Tutorial II: Female Manga Fusion II

Euro Slide Hurts US Multinational Corporation Profits; Roubini Eyes Sovereign Debt Defaults, Inflation

United Technologies Corp., Terex Corp., DuPont Co., McDonald�s Corp. and Johnson & Johnson are all singing the woes of a "strong dollar". Please consider Euro Slide Leaves CEOs Wringing Hands With Forecasts at Risk

United Technologies Corp. finance chief Greg Hayes sets aside some wiggle room in his profit forecast every year for swings in the euro. By March, half his safety net had already evaporated.

The maker of Otis elevators and Pratt & Whitney jet engines, which gets about a quarter of its sales from Europe, started 2010 assuming a $1.48 euro exchange rate. Hayes cut it to $1.37 last month as concern mounted that Greece would default on its debt. This week, the euro dropped below $1.32 for the first time since April 2009.

�It�s one of those things that you can�t control,� Hayes said in an interview April 23. �In fact, I think our stock is actually down the last couple of days because of this Greece crisis.�

Terex Corp., DuPont Co., McDonald�s Corp. and Johnson & Johnson also said in the past two weeks that the euro�s slide is affecting profit or may hold back growth. The 8.2 percent decline in the currency so far this year makes U.S. exports more expensive and lowers overseas sales when euros are translated to dollars, threatening a potential rebound in revenue and a lift to the economy.

�McDonald�s sells more hamburgers overseas than they do in the U.S.,� Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York, said in a April 27 phone interview. �That will have a notable impact, especially when you couple that with the fact that the euro has been falling for the better part of six months.�

�The dollar ought to weaken over time versus the euro just because of the deficit spending we have in the U.S.,� Hayes said in the interview, barring a financial meltdown in Portugal, Ireland, Greece and Spain. �So the view long-term is bearish on the dollar. The problem is, on a quarter-to-quarter basis, it gets bumped around a little.�

Whose playbook is Hayes reading? There is simply no good reason for the Euro to rise against the dollar. Notice his out: "... barring a financial meltdown in Portugal, Ireland, Greece and Spain".

A meltdown in Greece is clearly underway, and it is likely to spread.

For more contagion details, please see Greek 2-year Yields Hit 18% on S&P Cut; Contagion Hits Portugal; Credit Swaps on Sovereign Debt at Record Highs; Blind Panic?

Also consider How Much is Needed to Bail Out Greece? $159 Billion? $794 Billion? Estimates Vary Wildly as Greece Turns Viral; S&P Downgrades Spain

Roubini Eyes Sovereign Debt Defaults, Inflation

Economist Nouriel Roubini says Rising Sovereign Debt Leads to Inflation, Defaults

�The bond vigilantes are walking out on Greece, Spain, Portugal, the U.K. and Iceland,� Roubini, 52, said yesterday during a panel discussion on financial markets at the Milken Institute Global Conference in Beverly Hills, California. �Unfortunately in the U.S., the bond-market vigilantes are not walking out.�

�The thing I worry about is the buildup of sovereign debt,� said Roubini, a former adviser to the U.S. Treasury Department and IMF consultant, who in August 2006 predicted a �painful� U.S. recession that came to fruition in December 2007. If the problem isn�t addressed, he said, nations will either fail to meet obligations or experience higher inflation as officials �monetize� their debts, or print money to tackle the shortfalls.

�Tip of the Iceberg�

�While today markets are worried about Greece, Greece is just the tip of the iceberg, or the canary in the coal mine for a much broader range of fiscal problems,� Roubini, who teaches at NYU�s Stern School of Business, told attendees at the Beverly Hilton hotel. Increasing tax revenue won�t be enough to �save the day,� he said.

Greece �could eventually be forced to get out� of the 16- nation euro region, he said in a Bloomberg Television interview yesterday. That would lead to a decline in the euro and make it �less of a liquid currency,� he said. While a smaller euro zone �makes sense,� he said, �it could be very messy.�

�Eventually, the fiscal problems of the U.S. will also come to the fore,� he said during the panel discussion. �The risk of something serious happening in the U.S. in the next two or three years is going to be significant� because there�s �no willingness in Washington to do anything� unless forced by the bond markets.

If Greece left the EU (either voluntarily or involuntarily), then depending on what its government did to inflate, its new currency might easily have complete and total distrust by the public (i.e. be worthless). Yes that is hyperinflation.

The US, with debt it its own currency, is not remotely in the same situation.

Europe Shouldn�t Bail Out �Rich� Greece

Mark Mobius at Templeton suggests Europe Shouldn�t Bail Out �Rich� Greece.

A default by �rich� Greece on its debt would be the best way to ease the European fiscal crisis and help allay fears of a contagion, Templeton Asset Management Ltd.�s Mark Mobius said.

Greece should consider restructuring its debt to pay 25 cents to 50 cents for every dollar, helping to cut its debt level to a more sustainable level, said Mobius, who oversees about $34 billion in emerging-market assets as executive chairman of Templeton Asset. Lending aid to Greece may drag down the European Union as other indebted nations seek a bailout in turn, he said.

�A default will help to plug the leak,� Mobius said in an interview with Bloomberg Television in Singapore today. �A bailout at this stage does not make sense to me.�

Assuming the term "rich Greece" was meant as sarcasm, I am in agreement with Mobius.

Indeed, I am not in favor of bailouts, and stated so long ago. Moreover, there is no reason for Germany to want to bailout Greece, as it will just lead to more bailouts of Portugal and Spain.

At some point the bailouts have to stop. I propose now. Greece can sink or swim on its own accord and that would be a mighty lesson for others.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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"Crowd-Sourcing" part II; Email from the Creator of the Term; Other Readers Chime In Too

I received a lot of emails about "Crowd-Sourcing" IBM to Cut 3/4 of its Permanent Staff by 2017?. Let's take a look.

Steve Writes ...

Mish,

I�m currently working at Intel and was responsible for outsourcing my test team over the past decade. I�m personally being let go next Monday after 13 years and have experienced what you mentioned about crowd sourcing. I�m currently trying to get an interview with an international company that has a job offering exactly what I�ve done, but as a contractor with no benefits. You would never find this level of experience and knowledge about a job being offered as a contractor ten years ago. This is very clearly deflationary as you mention and will only increase at least for the larger companies involved with manufacturing.

I believe the jobs that can be outsourced either have or will be which means almost everything including all levels of skill and technical acumen. The only reason for keeping someone, a group or a type of job such as accounting locally in the US is because these employees have information that is not easily electronically stored or have information that is needed immediately and can�t wait for one day to receive it from Asia. I don�t believe that the reason for keeping accountants is due to fear that data will fall into the wrong hands as this information can easily be kept away of from any group of employees as necessary.

My feeling is that most of the accountants haven�t been outsourced because the information they have and not necessarily on their computer or have access to, is information that the business needs from time to time in an immediate nature and upper management hasn�t yet figured out how to wean themselves off of this instant access to critical information.

My test team was in this position of having critical information ten years ago but through outsourcing, this critical information moved overseas and hence my group�s demise.

Regards,

Steve

BG writes "The post on IBM is a great one. On my trips back and forth to India, my flights are full of H1 B visa engineers who come here and take work packages back to India. This is bad news for US IT folks."

Klaus from Canada writes ...

Hey Mish,

The 'crowd sourcing' you described in today's post is exactly what happened in Alberta, Canada with Infrastructure and Transportation departments in the early/mid 1990's. These government departments were slashed some huge amount like 80%, basically laying off all construction staff and most engineers, and keeping mainly management.

The construction staff joined or started construction firms, and since then all highway, road, bridge, etc. construction and maintenance is done through public tenders.

Not sure if you've heard of Ralph Klein, our premier at the time, but he's the one who led this and took Alberta down a path of balanced budgets and even debt elimination. There was a lot of pain when it happened, but now, 15 years later, that's still how it works.

Projects are completed through competitive bidding, and the new P3 system (public private partnership) takes it a step further by spreading the risk. This way if the
construction company screws up, taxpayers aren't on the hook. The Edmonton Ring Road was built on P3 and it boggles the mind how fast it went up. There were some issues, and the construction company was on the hook for essentially 'warranty work'.

Crowd sourcing makes sense for public sector for sure since there is a distinct lack of accountability and fiscal prudence. At least private companies are driven by profit, so you would think they could stay efficient.

Klaus

Jeff Howe a writer at Wired who coined the word "Crowd-Sourcing" writes ...

My word gets misused a lot, but this is as brazen an abuse as I�ve seen. If the subcontractors are a known quantity, and the employer is purposefully hiring them back on a project to project basis, that has nothing to do with crowdsourcing, which is all about the open call, ie, anyone could apply to fulfill the order.

We already have a word for this, it�s called �freelancing.�

If you can explain to me why this is something other than dumping your workers in order to save on benefit packages, then hiring them back on a project basis, a la what companies have been doing increasingly since the early �90s, I�ll send you a homemade cookie, and consider not ravaging this post on Twitter.

Jeff

Dear Jeff ...

If you want to ravage that post on twitter, be my guest. To be honest, I never heard the term "Crowd-Sourcing" before.

The important thing is what is happening, not what you label it. Please substitute freelancing or another word of your choice if it makes you feel better.

Will it change the meaning of the article or what's happening? I think not. The job and benefit losses are very real, no matter what term you lose.

Jeff Replies ...

Yes! It will totally change the meaning of the article. IBM isn�t saying they�re going to engage in some new fangled business process to save cost, they�re just laying people off and hiring them back sans benefits. Crowdsourcing is the smoke and mirrors, and you, as an analyst-slash-journalist, fell for the con.

Jeff, there is no con. There are many methods, and many reasons why we are losing jobs. Global wage arbitrage is at the top of the list.

The important thing to me (and I believe the important point of the article) is the expected outsourcing of jobs. Clearly, the important thing to you is the purity of the word you coined.

Someone used your term inappropriately as you see it. And I can appreciate that you would want your term used appropriately.

Perhaps you need to do a bit more PR explaining what it is. Then again, (dare I say it) perhaps we really did not need another term to describe a subset or method of outsourcing (giving it a new label) in the first place.

For the sake of argument, let's assume we need your term.

With that aside, just as someone failed to understand your word, you fail to understand what's really important to my audience: the loss of jobs and benefits (and to what degree that is likely to continue), not the name we label it.

Having said that, I will try and be more careful in using your term, perhaps avoiding it altogether when in doubt. If everyone else does the same .... well you tell me what happens to your word.

Twitter away.

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

How Much is Needed to Bail Out Greece? $159 Billion? $794 Billion? Estimates Vary Wildly as Greece Turns Viral; S&P Downgrades Spain

Pressure is on German Chancellor Angela Merkel to do something. European Central Bank President Jean-Claude Trichet is in Berlin along with the IMF to arm-twist Merkel. Meanwhile, German citizens want no part of a Greece bailout.

Trichet in Berlin

Trichet in Berlin as Germans Balk at Greek Rescue

European Central Bank President Jean-Claude Trichet is on a diplomatic mission to Berlin as Germany�s reluctance to bail out Greece helps fan a fiscal crisis now burning around the euro region�s periphery.

Trichet and International Monetary Fund Managing Director Dominique Strauss-Kahn will brief German parliamentary leaders in Berlin around noon today about the $60 billion aid package for Greece, which has met with opposition in Europe�s biggest economy. The joint European Union-IMF package would require Germany to stump up the biggest individual loan to Greece.

�It�s a sales pitch in front of an audience that needs it,� said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc in London. �The lawmakers probably need it spelled out that this is not about financing luxury pensions in Greece. Not helping Greece will unfortunately have a direct impact on the euro-area economy and German jobs.�

�Why do we have to pay for Greece�s luxury pensions?� Germany�s biggest-selling tabloid newspaper, Bild Zeitung, asked on its front page yesterday. Almost 60 percent of Germans don�t want to help Greece, Die Welt newspaper reported, citing a survey of 1,009 people.

German Finance Minister Wolfgang Schaeuble asked Trichet and Strauss-Kahn to speak with lawmakers to �facilitate direct insight into the actions as they stand.�

Merkel Puts Demands On Greece

Merkel�s Cabinet Meets on Greece as Pressure for Action Grows

Chancellor Angela Merkel�s Cabinet met to debate help for Greece as Europe�s growing debt crisis tests her refusal to rush German approval of aid.

Merkel is insisting Greece commit to several years of deficit reduction as a cut in the nation�s debt rating to junk yesterday drove up borrowing costs from Italy to Portugal and Ireland and boosted indicators of corporate credit risk around the world.

Action �has to be done now, has to be done very fast,� Organization for Economic Cooperation and Development Secretary General Angel Gurria said in an interview today with Bloomberg television in Berlin before he was due to meet Merkel. �It�s not a question of the danger of contagion. Contagion has already happened. This is like Ebola. When you realize you have it you have to cut your leg off in order to survive.�

How Much is That Doggie in the Window?

IMF Tells German Lawmakers Greece Needs Up to EU120 Billion

International Monetary Fund Managing Director Dominique Strauss-Kahn told German lawmakers in Berlin today that Greece may need as much as 120 billion euros ($159 billion) in aid, Green Party parliamentary spokesman Michael Schroeren said by phone today.

Goldman Sachs, JPMorgan Economists Suggest $794 Billion in Aid

Greece Turning Viral Sparks Search for EU Emergency Solutions

European policy makers may need to stump up as much as 600 billion euros ($794 billion) in aid or buy government bonds if they are to stamp out the region�s spreading fiscal crisis, said economists at Goldman Sachs Group Inc., JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc.

Talks between the EU, the IMF and the Greek government are likely focused on assistance in the first year of between 55 billion euros and 75 billion euros with an announcement by early next week, he said yesterday. That would ensure Greece doesn�t have to access the market for the next year or so, he said.

�It is perhaps time to think of policy options of the last resort in the current sovereign crisis,� said David Mackie, chief European economist at JPMorgan in London.

A Greek agreement may not be enough to end a crisis that�s ricocheting through all euro region markets and governments may have to come up with a blanket plan for the bloc as a whole, said Mackie. He calculates that in a worst-case contagion scenario, supporting Spain, Portugal and Ireland and Greece may require aid worth 8 percent of the gross domestic product of the rest of the region. That�s equivalent to about 600 billion euros.

�Nuclear Option�

The central bank could eventually start accepting all government debt regardless of its rating and revive last year�s policy of lending unlimited amounts for periods up to a year so as to support the region�s banks, said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc.

What Cailloux calls the �nuclear option� of the ECB purchasing government bonds is also attracting attention among economists. While the central bank is prohibited from buying assets directly from authorities, it can do so on the secondary market.

�We need 300 billion euros of purchases and then the problem goes away overnight,� said James Nixon, co-chief European economist at Societe Generale SA.

Obstacles to a sweeping bailout package abound. The EU�s structure means no one elected politician is responsible for ensuring Greece�s survival and Trichet, the only major official solely responsible for the euro, has no authority to disburse taxpayers� funds. In Germany, Merkel has delayed approving the release of funds for Greece in the face of voter opposition and an election in North Rhine-Westphalia in May 9.

Eric Kraus, a strategist at Otkritie Financial Co. in Moscow, said he�s buying Greek bonds on the bet policy makers will eventually strike back.

�Sooner or later those morons in Brussels and Berlin will realize that they are playing with fire, have already been burned, and will have to stop feeding the flames,� said Kraus, who works at a brokerage part-owned by Russia�s second-biggest bank. �Then we should see a very nice bounce.�

Committing $794 Billion or even $300 billion to bailout Greece is economic madness. If someone is playing with fire, it's Eric Kraus.

Spain Downgraded

Spain Has Rating Cut to AA by S&P as Greek Contagion Spreads

Spain had its credit rating cut one step by Standard & Poor�s to AA, putting it on a par with Slovenia, as contagion from Greece�s debt crisis spreads through the euro region.

S&P said in a statement today that the outlook on Spain is negative, reflecting the chance of a possible further downgrade if the �budgetary position underperforms to a greater extent than we currently anticipate.� Spain was last cut by S&P in January 2009.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Today's archidose #414

sauerbruch + hutton @ dkv cologne 2, originally uploaded by d.teil.

Cologne Oval Offices in Cologne, Germany by Sauerbruch Hutton, 2010.

For those in and around New York City this Friday (April 30), Louisa Hutton will be lecturing at Cooper Union.

To contribute your Flickr images for consideration, just:

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