Baghdad Bonds Safer Than KeyCorp and National City

Bloomberg is reporting Iraq Safer Than Ohio Banks Stung by Credit Crisis.

Iraq's bonds are delivering the biggest returns in emerging markets as oil export revenue bolsters government finances and violence declines.

The country's $2.7 billion of 5.8 percent bonds due 2028 gained 45 percent since August 2007, according to Merrill Lynch & Co. indexes. Investors demand 4.84 percentage points more in yield to own the debt instead of Treasuries, down from 7.26 percentage points a year ago. The spread is narrower than for notes of Ohio banks National City Corp. and KeyCorp, suggesting Baghdad may be safer for bond investors than Cleveland.

Iraq's bonds, which don't have a credit rating, rallied even as more than $500 billion of credit market losses and writedowns drove investors away from all but the safest government securities.

National City (NCC) and KeyCorp (Key), based in Cleveland, have debt ratings of A and spreads of 9.59 percentage points and 7.55 percentage points. The banks are two of the more than 70 firms worldwide that have recorded about $512 billion in losses and writedowns since the start of 2007 amid the collapse of the subprime mortgage market.

FDIC Ready For More Bank Failures

The FDIC is ramping up staff in preparation for more bank failures. Please consider FDIC Adds Office Space in Dallas, Ready for More Bank Failures.

The Federal Deposit Insurance Corp. is preparing to sign a five-year lease to add five floors of space at its Dallas regional office as the agency prepares to increase scrutiny of failing and troubled U.S. banks.

The federal agency, which insures deposits and disposes of failed banks and their assets, will add 125,000 square feet to the 185,000 square feet it rented last year at 1601 Bryan St., a 49- story tower in downtown Dallas. That agency will add about 300 staff at the building, including some of the 69 retirees it is bringing back to help handle the increased workload, said spokesman Andrew Gray.

At least a dozen U.S. lenders and credit unions have been closed by state and federal regulators since last year, and the FDIC said on Aug. 26 it had 117 banks on its "problem list." On Aug. 22, Columbian Bank and Trust Co. of Topeka, Kansas became the ninth U.S. bank to collapse this year.

Dallas is the headquarters of the agency's Division of Resolution and Receivership, the unit that handles failed banks. The staff additions would bring the total number employees at that location to about 850, he said.

The FDIC last year leased seven floors at 1601 Bryan, also known as Energy Plaza, for 10 years, Gray said. The agency will be completely moved into the space by Nov. 1, he said.

The 1.3 million square-foot skyscraper should have about 300,000 square feet vacant once the FDIC takes its new space, said Carl Ewart, managing director at real estate brokerage Jones Lang LaSalle's Dallas office. Gray said the agency has no plans to expand beyond its current 310,000 square feet, "but that could change."

So Baghdad is safer than Cleveland. Who would have thought that?

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

Manga Friday "Kapow Express" page 1 from idrawgirls.com

Manga Friday: "Kapow Express"

Chapter 1: "Mei"
page 1

Here is "Kapow Express" *new name for Shanghai Express. I arrange the layout in pieces in stead of the whole Manga page for convenience viewing in the Blog format.
I also schedule to deliver at least ONE Kapow Manga page every Friday! And the rest...are More tutorial.

After I have about 10-20 pages, then I will combine them into a Manga page format and host them at KapowExpress.com (that's the plan anyway...but we'll see)

pg#1


pg#2


Here is page 3 Online Manga, Kapow Express.

Edited new font into the Manga (09/01/08)
Edited page layout (09/04/08)

to be continued...NEXT Friday. :)

Related posted:
-How to draw Manga comics panel Kapow Express
-Manga comics thumbnails page layout process
-Page 1 and 2 panel layouts, the lost project "Shanghai Express"

Drawing Software & Tools I used and recommended:
-Genius MousePen 6x8
-Wacom Intuos3 6X8 Pen Tablet
-Bamboo (Small) Pen Tablet (new from Wacom!) Economy for everyone.
Softwares:
-Gimp (Free Download)
-Adobe Photoshop CS2 (Professional software)
*You can just use pencil, paper, markers on this one...just practice rendering.

New tutorials:
-How to draw Manga male face
-Manga tutorials draw facial expression mad or angry girl face
-How to draw face of demonic creature Asura
-Gatorfish or Fish-Gator Creature Design drawing.
-How to sketch a Sorcerer Pink


FEATURE TUTORIAL:




-Character Design Tutorial: Dark Valkyrie


** If you have any basic questions or specific please looked up Q/A section. Most of the time your questions has already been answered in Q/A.

If you need any help or support you can
-post questions or comment on the post (seems to be the fastest way to get response)
Peace,

Labor(-Free) Days

I'm taking time off over the holiday weekend to spend time with friends and family. Posts will resume Wednesday. If you're celebrating, have a happy Labor Day!

Is Massive Foreign Treasury Buying Causing A US$ Rally?

Here is an interesting theory stipulating that foreign central banks are behind the rally in treasuries and that in turn is causing a rally in the dollar. Please consider Foreign Central Banks Behind Rally In US Treasuries.

The huge amount of US Treasury purchases which has sent that chart nearly vertical helps to explain the continued rally in the US Dollar. It is a near certainty that something has been transpiring behind the scenes involving various Central Banks in regards to the US Dollar. Should any of this Foreign CB buying abate for any reason whatsoever, the Dollar will lose all of its support immediately. With yields on US Treasuries headed firmly lower only a foolish investor would see bonds or notes as a safe haven given what we all know about the real rate of inflation here in the US in contrast to the absurd and mentally insulting numbers that the knavish feds are dishing out.

I repeat my main assertion - Foreign Central Banks are behind the rally in US Treasuries and as a consequence the rally in the US Dollar.

Theory vs. Practice

Inquiring minds, being the inquiring minds that they are, want to see just how well theory stands up to practice. Let's match up the chart of custodial treasuries from the article above with a chart of the US$ for the exact same timeframe.

Custodial Holdings of Treasuries for Foreign Central Banks vs. US$ Index



click on chart for sharper image

So much for that theory.

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

Search Behavioral Targeting

Microsoft and Google both have plans for using users past search behavior to provide tailored search results, practice commonly known as Behavioral Targeting. While companies like Revenue Science and Tacoda (now part of AOL) use users web surfing behavior on the internet to determine what users are interested in and server Relevant Ads, search giants are using the past search queries and click though activity to determine users intent and show them relevant search results (organic and paid ads).

As these practices become more prevalent no two users will see the same results on search engine results page for same queries, some of this is already happening. In future even the same user might see her results change from one day to another based on what he/she searched and clicked on between those two days.

An example of how search behavioral targeting might work A user looks for hotels in Bahamas and then search for Scuba Diving lessons the next day, she might see the search results (organic and paid) that combine both the queries to show her Scuba Diving Lessons in Bahamas. Yet another day she decides to search for Jamaica. Guess what? Her organic and paid results might show her Hotels, Airfares (though she never searched for it) for Jamaica and maybe Bahamas or even some other Caribbean destination. She might also get results for local Scuba Diving lessons. So why will the search engine showing all these results when user never explicitly searched for them? Search engine is trying to determine user's intent based on what user searched for and then show the customized results based on the intent. In this case the user's intent is clear; she is looking to go somewhere, most likely in Caribbean. Since she is searching from a geo location other than Caribbean, she might need flight and hence airfare might be shown. She has already indicated she needs Hotel and is looking for Scuba diving lessons so her search results are related to those keywords as well. Once the intent is determined search engine can show can show customized results for a particular user. As the user searches more her intent become even clearer and the possibilities of how search results can be customized for this user are endless.

Last July Google started using immediate search queries to show targeted paid search results. Google is now expanding the time frame that it uses to look for search queries. Here is what NYTimes.com reported on Google�s plan:

Nick Fox, a director of product management who looks after ads on Google�s search site, said the company was now testing the use of more search queries in its ad targeting. He did not describe how it was doing that. But Internet experts said that it was most likely using its cookies.
Mr. Fox said that Google�s approach was different from what Yahoo, AOL and others call behavioral targeting. Those companies look at what a user did a few days earlier to show them ads about the same topic today. Google says it believes that search engine advertising is most effective if it relates to what the user has most recently searched for.
�We are trying to understand what the user is trying to do right now,� Mr. Fox said. �In some cases, those queries are ambiguous, so you need a little more context.�
Google�s previous system of looking at a user�s immediate past query was not useful enough, he said. �It is probably not just the previous query that matters,� Mr. Fox said. �You want to know if the user is still doing the same thing. You wouldn�t want to go back a month. You wouldn�t want to go back a day. But you may want to go back two or three queries.�

Microsoft plans to take it one step further and expand the �behavioral targeting� to the organic search results. Here what is what CNET reported:

Specifically, the company believes examining a full sequence of user queries can lead to more useful results. Today, the company only keeps track of the immediately prior search, but often users use search engines to explore subject areas broadly, said Satya Nadella, senior vice president of Microsoft's search, portal and advertising platform group, at the Search Engine Strategies conference.
"I believe this notion of understanding user intent--being able to analyze (search queries) and come up with search patterns and use them to shape the search experience--is one of the most important areas for us," Nadella said.

Recently Behavioral Targeting has been under a lot of fire from privacy advocates and lawmakers. It will be interesting to see how privacy police reacts to search behavioral targeting. Though Behavioral Targeting from Revenue Science is anonymous, Search Behavioral Targeting is based on user provided information (search keyword), which can easily be tied to PII information.

I have always advocated an opt-in model for Behavioral Targeting, a system where users give their consent to be tracked and have an easy option to turn the tracking on or off. I believe that Search behavioral targeting makes it even more desirable to have an opt-in model.

Comments? Questions?

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GDP Much Weaker Than Headline Numbers

The 2nd quarter 2008 preliminary GDP numbers are out.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.3 percent in the second quarter of 2008, (that is, from the first quarter to the second quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.9 percent.

The increase in real GDP in the second quarter primarily reflected positive contributions from exports, personal consumption expenditures (PCE), federal government spending, nonresidential structures, and state and local government spending that were partly offset by negative contributions from private inventory investment, residential fixed investment, and equipment and software. Imports, which are a subtraction in the calculation of GDP, decreased.

Incomes Lag, Corporate Profits Down

Bloomberg is reporting Lagging Incomes Signal U.S. Economy Weaker Than GDP Suggests.

The meager gains in earnings over the last year signal the U.S. economy is in much deeper trouble than the growth estimates indicate, economists said.

Gross domestic income (GDI), or the money earned by the people, businesses and government agencies whose purchases go into calculating gross domestic product, rose 0.3 percent in the 12 months ended in June after adjusting for inflation, according to Bloomberg calculations based on today's Commerce Department growth report. GDP expanded 2.2 percent.

"The income side of the economy, with profits down for four straight quarters and employment falling, looks like a recession," said John Ryding, chief economist at RDQ Economics in New York.

"What you are seeing is more legitimate economic weakness in the income numbers," said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. "The GDI numbers raise the potential that GDP is overstating growth."

The 1.9 percentage-point difference between the GDI and GDP over the last 12 months is the biggest in the post World War II era.

Corporate profits were down 7 percent in the year to June, the biggest drop since the last economic contraction in 2001, according to the Commerce Department.

"I'm looking at the labor market, and the GDP income numbers make more sense," said Ryding. "It certainly did not feel like 3.3 percent growth."

The disparity between income and growth may take a long time to be resolved, if ever. Once Commerce issues its final estimate for second quarter growth next month, the figures will not be updated again until the annual benchmark revisions are issued in July 2009.

Last Hurrah?

Bloombereg is reporting U.S. Economy Probably Expanded at Faster Pace on Export Gains.

"The second quarter GDP numbers will mark the economy's last hurrah," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. "Exports will continue to expand, but at a much slower pace."

Separately, initial jobless claims will remain near a six- year high, indicating the job market has weakened, economists forecast a Labor Department report at the same time will show. Applications fell to 425,000, from 432,000 a week earlier, according to the survey median. Claims totaled 457,000 in the week ended Aug. 1, the most since March 2002.

A weakening labor market is one reason consumer spending is likely to slow after the government sent out about $92 billion in tax rebate checks. The U.S. has lost 463,000 jobs so far this year and wages haven't kept up with inflation, according to Labor Department data.

The longest expansion in consumer spending on record will probably end this year, according to economists surveyed by Bloomberg earlier this month. Retail sales fell in July for the first time in five months, led by a slump in auto purchases, according to Commerce data.

Government Consumption Expenditures

Count me in the group that is skeptical of any rises in GDP associated with government spending, but here are the numbers from the government report.

Real federal government consumption expenditures and gross investment increased 6.8 percent in the second quarter, compared with an increase of 5.8 percent in the first. National defense increased 7.4 percent, compared with an increase of 7.3 percent. Nondefense increased 5.5 percent, compared with an increase of 2.9 percent. Real state and local government consumption expenditures and gross investment increased 2.2 percent, in contrast to a decrease of 0.3 percent.

I question the merit of adding all government spending, no matter how useless, to the GDP, but that is what is done. Government consumption expenditures added .76 to the total.

GDP Deflator Manipulation

Barry Ritholtz at Big Picture is asking Is BEA Measuring Growth or Inflation?

Part of the reason the GDP number looked so good was because the GDP price index for the second quarter was marked at just 1.2. In other words, BEA subtracted from nominal GDP 1.2% in order to produce their version of "real" (inflation-adjusted) GDP.

[Mish Note: The CPI is running at 5.6%. A reasonable person would have expected the GDP deflator to be somewhere near 5.6% as opposed to 1.2% but a reasonable person would have been wrong. GDP would have been negative if a lager deflator was used.]

Mike Panzner sends along the chart below, along with these comments:

"Call me a skeptic, but based on the accompanying graph of the GDP inflation figure and headline CPI (which most people already believe is lower than reality), there seems to be something of a disconnect between the two (which would imply, of course, that U.S. economic growth is a lot lower than reported)."



click on chart for sharper image

Hedonics And Imputations

Of course one needs to add hedonics and imputations to the list of GDP distortions. Imputations are a part of GDP that the government decides to estimate value, where no cash actually changed hands. In other words, if I scratch your back and you scratch mine but no one gets paid, then back scratching is undercounted in the GDP.

One such imputation is the value of "free" checking accounts. The reality is bank checking accounts are not free. Banks are sweeping out nearly every penny every night and lending the money out. What's "free" is banks having free assess to your money. Nonetheless the BEA assigns a value to those free checking accounts and adds it to the GDP. Given that nearly every adult in the country has a checking account, the amount is non-trivial.

It goes far beyond that however, into complete fairy tale absurdities. For example: If you own your own house, the government recalculates your income as if you were really renting from yourself and paying yourself rent.

Imputed rent just happens to be one of the most frequently asked questions of the BEA. Here is their response: The BEA treats homeowners as businesses, which pay rent to themselves. Therefore, homeowners contribute to the real estate industry's GSP even if not employed by the industry. In addition, like businesses, homeowners' property taxes paid to state and local governments are included as part of real estate TOPI.

One can believe the GDP numbers or not. I don't. The US economy is contracting and the assumptions used to show expansion are getting more and more absurd with each report.

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

Four basic elements of composition for illustration, how to, tips and technique for artists, illustrator and comics

Four basic elements of composition in art, how to, tips and technique for artists, illustrator and comics

The 4 main elements of composition are:

1) Frame or Picture area: This is the surface within the four borders of your picture that is used for the drawing or painting. The picture area will help you determine placement of objects, and how big they should be.

2) Depth: This is the illusion of distance or a third dimension. Depth creates a three dimensional effect, making objects feel closer, or further away. The finished result will not appear flat on the paper or canvas if depth is created.

3) Line: **Two basic kind of lines are The line or direction the viewer's eye takes to go through the picture. The objects or forms within the picture should lead the eye to the focal point. When art is viewed, most people will begin in the bottom left corner, and continue through the picture to the right. A good composition will not allow the viewer to keep going right, all the way off the page. The viewer should be lead back into the painting in a flowing motion.

3a)Straight LINES: Horizontal, vertical, and angled lines all contribute to creating different moods of a picture. The angle and the relationship to the size of the frame both work to determine the influence the line has on the image. They are also strongly influenced by tone, color, and repetition in relation to the rest of image. Horizontal lines, commonly found in landscape, gives the impression of calm, tranquility, and space. An image filled with strong vertical lines tends to have the impression of height, and grandeur. Tightly angled convergent lines give a dynamic, lively, and active effect to the image. Viewpoint is very important when dealing with lines particularly in photography, because every different perspective elicits a different response to the photograph.

3b)Curved LINES are generally used to create a sense of flow within an image. They are also generally more aesthetically pleasing, as we associate them with soft things. Compared to straight lines, curves provide a greater dynamic influence in a picture. Curved lines can give gradated shadows when paired with soft-directional lighting, which usually results in a very harmonious line structure within the image.

4) Value: This is the lightness, or darkness of an area, or a shape within the picture. It is also used to create the over-all feel of the picture.

Related posts:
-Basic Composition for artist
-5 tips to improve drawing skill for artist.
-Color temperature warm vs cool for artist.
-Basic Color Scheme for Artist, Monochromatic.
-Basic Element of good design for artist.

New tutorials:
-How to draw Manga male face
-Manga tutorials draw facial expression mad or angry girl face
-How to draw face of demonic creature Asura
-How to draw fantasy female character Manga Mage
-Gatorfish or Fish-Gator Creature Design drawing.
-How to sketch a Sorcerer Pink


FEATURE TUTORIAL:




-Character Design Tutorial: Dark Valkyrie


** If you have any basic questions or specific please looked up Q/A section. Most of the time your questions has already been answered in Q/A.

If you need any help or support you can
-post questions or comment on the post (seems to be the fastest way to get response)
Peace,