China Denies Speculation about Diversifying from Euros; Oil in Euros Revisited; No Good Currency Choice Except Gold

A year ago the talk of the town was how governments would abandon the US dollar in favor of Euros and this would be the death of the dollar. At that time China denied speculation it was diversifying out of the dollar. Look at how things change.

Now China denies speculation is it diversifying out of Euros. Please consider China Euro Policy Denial Prompts Detection of Changes.

The euro weakened 2.4 percent against the dollar last week even after China�s State Administration of Foreign Exchange, which manages the country�s $2.4 trillion of reserves, denied speculation that it was diversifying away from European bonds. The 20 percent depreciation from last year�s peak in November has demonstrated the limits of the euro as a reserve currency to rival the dollar as well as the European Central Bank�s ability to defend its legal tender.

A net 105 billion euros ($129 billion) flowed out of the region�s fixed-income markets on an annualized basis in the first three months of the year, signaling a �broad shift� in appetite for euro-denominated assets, according to Nomura Holdings Inc. The region attracted a net 225 billion euros from foreign debt investors in 2009.

�It�s clearly the case that there�s been an element of foreign central banks slowing down their euro purchases,� said Jens Nordvig, a managing director for foreign-exchange research at Nomura in New York. �The institutional framework is being questioned, the credibility of the ECB is being questioned, and all that uncertainty is really fueling an asset allocation shift away from the euro zone.�

�There�s a growing realization that the outlook for the currency is bleak,� said Samarjit Shankar, a managing director for the foreign exchange group in Boston at BNY Mellon. �There is evidence that central bankers and reserve managers are trying to diversify away from euro.�

�Both the dollar and the euro have structural debt problems but at least Europe is doing something about it,� said David Bloom, global head of currency strategy at HSBC Holdings Plc in London. �The pendulum will swing against the dollar later this year as people realize that the U.S. has even bigger problems than the E.U.�

HSBC predicts the euro will end the year at $1.35 as the U.S. mid-term elections in November shift attention to the nation�s inability to reduce a deficit projected to reach $1.5 trillion this year.

The number of wagers by hedge funds and other large speculators on a decline in the euro stood at 106,736 contracts more than those anticipating a gain on May 25, near the record 113,890 on May 11, according to data from the Washington-based Commodity Futures Trading Commission. As recently as December, bullish contracts exceed bearish ones by 22,151.

�The move lower in the euro is not just speculation,� said Lee Hardman, a currency strategist at Bank of Tokyo Mitsubishi UFJ Ltd. in London. �There has been an asset allocation away from euro. The problem is deeply rooted and fundamental in terms of unsustainable fiscal deficits.�

Crude Priced in Euros

Flashback October 06, 2009: Anyone remember the Ridiculous Hype Over Secret Oil Meetings that oil priced in Euros would kill the dollar?

It made no more sense then than it does now, which is to say "none".

What matters (as we have clearly seen) is willingness to hold a currency, not a pricing unit on oil or anything else.

Euro Weekly Chart



click on chart for sharper image

This morning the Euro printed a fresh new low below 1.2120 before bouncing.

Euro 30 Minute Chart



There are now so many Euro bears, a bounce is quite possible.

One of the reasons I liked the US$ index at 75 was sentiment on the dollar was so bearish. Now the opposite is true.

However, It is important to realize that crashes do not occur in overbought conditions, but rather oversold ones. It will not be a good sign if the ECB decides on currency intervention.

My position is such intervention never works.

No Good Currency Choice Except Gold

It's hard to have a real love affair with dollars, especially at this level. However, it is harder (for the time being) to have a love affair with the Euro.

With property bubbles in Canada, Australia, and China it sure is hard to like the Loonie, the Australian dollar, or the Renminbi (Yuan).

The essence of the matter is there is really nowhere to hide, except gold.

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

Rebuilding a Sustainable Haiti

REBUILDING A SUSTAINABLE HAITI
Long-term planning for Haiti�s environmental, cultural, and economic wellbeing

WHO:
Panelists include:
� Leslie Voltaire, Lead Planner for the Haitian Government�s recovery efforts and the UN Special Envoy to Haiti
� Ami Desai, Foreign Policy Director, Clinton Foundation
� Patrice Nevil, Director of Infrastructure, Partners in Health
� Chris Williams, Washington DC Representative, UN-HABITAT
� Louis Herns Marcelin, Director, INURED Haiti
� David Mulet, Project Coordinator, Organization of American States (OAS)
� David Evans, Chief Technical Advisor, UN-HABITAT Sri Lanka
� R. Steven Lewis, President, National Organization of Minority Architects
� Garry Pierre-Pierre, Editor and Publisher, Haitian Times
� Deborah Gans, Principal, Gans Studio
� James Dart, Principal, DARCH
� Toni L. Griffin, Adjunct Associate Professor, Harvard University Graduate School of Design

WHAT: The Institute for Urban Design will hold the symposium Rebuilding a Sustainable Haiti to launch critical discussions on a that encompasses the country�s environmental, cultural, and economic wellbeing. The event will identify specific ways in which New York City�s planning and design community can work within the framework established by the Haitian government to encourage a truly integrated planning process for the reconstruction.

WHERE:
Rose Auditorium
Cooper Union
41 Cooper Square
New York, NY 10003

WHEN:
Friday, June 4, 2010
1:00 PM - 6:00 PM

COST: Free and open to the public.

REGISTRATION: info@ifud.org

Updated Interactive Map of Failed Banks, Includes Failures for May 21 and May 28; Texas Ratios, Capitalization Ratios, etc, for Failed Banks

Following is a visualization of bank failures this year. A quick look at the Texas Ratios and other data will show you why they failed. List is sorted by date. Hover over the fields in the list box for any bank that failed this year, to see bank assets, loans and leases, deposits, and much more data.

As is always the case with these interactive visualizations, Please give them an extra few seconds to load.

Thanks to Ellie Fields and Ross Perez at Tableau Software for help with the display!

We hope to update this list every Monday or Tuesday going forward. Also I hope to have new Texas Ratios for all banks through the first quarter of 2010 sometime soon.

Note: A few state banks and S&Ls may not display on the list for lack of data. Here is the Failed Bank List from the FDIC.

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

Portrait study process and playing around with Photoshop brushes

Portrait study process and playing around with Photoshop brushes.

This post is just a doodle of painting portrait using different Photoshop custom brushes to create the texture and mood that reflect those of oil paint.
Usually I would emphasis on starting out with BIG shape and strokes and get them all into the right shape or as close to what you want. Then we can begin to go in and refine them and clean up.
This one suppose to be just 30 mins to an hour speedpainting study, but I could make it in time so it is unfinished at the moment. I will have to work on it still one more sitting to clean up some area, define more edges, and little dark and light here and there then I think it should be complete.
A lot of you are asking me about custom brushes, what I usually emphasis is that really fancy brushes aren't that necessary if you don't know how values works. I would strongly recommend that FIRST you master the default Photoshop round hard and soft. Also know how to work with how much or strong paint you should apply onto the painting (or opacity strength), then you can think about custom brushes. Custom brushes are really useful, but you cannot rely on it all the time. Knowing the basic or the foundation is a lot more important in painting than using fancy brushes. To me the custom brushes are totally cosmetic and they can save us a lot of time, but it cannot replace the foundation of what you know and how you know to execute. Most good painting can be made with just default brushes if you know how. :)

Here are also some basic drawing people in general, body and face (portrait) lessons like these tutorials, they will direct you to a basic how to: How to draw lesson girl face, How to draw person head basic. And digital painting tutorial rogue samurai female. As for the face or head (women, female) Draw girl's face how to lesson video and step by step and learn how to draw face, woman. Enjoy the video tutorials.

Anyway here is a portrait I'm working on, still unfinished.

Here are step by step from sketch to painting

Here is what I have so far, still a bit more to work on.

Time: around 45 mins

Continue here for next step: Tutorial Portrait painting digital

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

Australia Holds Rates at 4.5%; Canada is First G-7 Country to Hike

Australia may have seen its last rate hike for quite some time. Today the Reserve Bank of Australia Holds Rate at 4.5% to Gauge Market Turmoil.

Australia�s central bank left its benchmark interest rate unchanged and signaled it may keep borrowing costs steady in coming months as it assesses the impact of the most aggressive rate increases in the Group of 20.

Governor Glenn Stevens and his policy-setting board kept the overnight cash rate target at 4.5 percent, the Reserve Bank of Australia said in a statement in Sydney today. The decision was predicted by all 22 economists surveyed by Bloomberg News.

�They�re not going to be looking to hike interest rates for the next couple of months,� said Ben Dinte, an economist at Macquarie Group Ltd. in Sydney. �But at the same time they�re still commenting on the terms of trade and inflation. While they�re on hold, they�re not ruling out further increases later this year or early 2011.�

Stevens increased rates from a half-century low of 3 percent in early October, citing surging Asian demand for Australian commodities and a jobs boom that has pushed down unemployment to around half that of the U.S. and Europe.

The interest-rate moves helped stoke a 27 percent gain in Australia�s dollar in the 12 months through April 30, making it the second-best performer among the world�s 16 most-traded currencies. The currency has since pared around half of those gains as European Union policy makers moved to prevent a potential Greek debt default.

Canada is First G-7 Country to Hike

In what is likely a symbolic measure more than anything else, Canada Hikes Interest Rate to 0.5%

Canada on Tuesday became the first Group of Seven nation to raise interest rates since the global financial crisis, but said any further hikes would depend on global economic conditions.

The Bank of Canada increased its key interest rate by a quarter point to .50 percent from a record-low rate of .25 percent. It said the decision to raise rates still leaves considerable monetary stimulus in place.

Economists widely expected the central bank to raise rates after the country's economy grew 6.1 percent in the first three months of this year, emerging from the global downturn faster than the U.S.

"While Canada joined with other countries in taking interest rates down to virtually zero the sense of crisis was never as great here," said Avery Shenfeld, senior economist at CIBC World Markets.

Shenfeld pointed out that the central bank didn't include the usual statement about further rate hikes being required.

"They've left themselves an out to stop after one trivial move if financial markets and commodity markets continue to tell them that the global economy is going in the other direction," Shenfeld said.

With GDP growing at 6.1% the central bank sure seems tepid with this policy decision.

Could it be the Canadian Central bank does not believe the recovery? Or is is the Canadian Central Bank fears the busting of Canada's housing bubble.

My bet is both. Regardless, it's far too late to do anything about Canada's property bubble. It's a case of Hosed in Canada; Housing Crash is a Given.

Canadian Dollar Weekly



The Canadian dollar did not approach the 1.10 area it hit in October, 2007. The factors in play now are energy and metal prices, Canada's interest rate at .5%, and Canada's housing bubble.

Falling crude prices , tepid rate hikes, and a bursting of the property bubble all weigh against a strengthening Loonie.

Australian Dollar Weekly



The same factors are in play in Australia as with Canada in regards to the strength of the Australian dollar. One difference is Australia has plenty of room to cut, Canada does not.

The next set of moves by the Reserve Bank of Australia will likely be lower along with a weakening housing market. Expect to see the Australia dollar weaken as well if the reserve bank aggressively cuts rates hoping to keep the property bubble alive.

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

Monday, Tuesday

My weekly page update:

This week's dose features Quay Housing in Zierikzee, Netherlands by Kingma Roorda Architects:


The featured past dose is Mauritskade Apartments in Amsterdam, Netherlands by Erick van Egeraat:


This week's book review is The Landscape of Contemporary Infrastructure by Kelly Shannon and Marcel Smets:


Some unrelated links for your enjoyment:

3rd Coast Atlas
"A platform for research and design initiatives that explore the urbanization, landscape, infrastructure and ecology of the Great Lakes Basin and Great Lakes Megaregion" A call for submissions is underway.

a m l
Blog about "20th century spheres and labyrinths: collective memory, urban utopias, urban facts, public art, social housing, slums, sprawl, density, and the tension generated through and/both over the resolution of neither/or." (added to sidebar under blogs::architecture)

dpr-barcelona
"Beyond books | between art, science and architecture." (added to sidebar under blogs::architecture)

Remodelista
The new architect/designer directory.

Print Collection
"Publishes new historic prints and photographs for your inspiration each day." (added to sidebar under architectural links::photography)

Day Two of my Review of our P&O cruise abroad the Oriana.

Day Two aboard the Oriana, was set to be a day at sea, travelling around the tip of Cornwall and heading up into the Celtic Sea on our way to our first port of call, Dublin.

For breakfast we chose the self service option in the lovely Conservatory restaurant.

It was high up on deck 12 giving a good panoramic view through the large windows running around all sides of the restaurant. There was a wide choice of options on offer ranging from a full English cooked breakfast to continental style breads, cheeses, hams through to fruits, yoghurts and various cereals. The quality of the food and the service of the staff were excellent. Access around the restaurant was good and the staff went out of their way to assist in carrying trays and drinks when needed.

The night before a horizon magazine had been left in our cabin listing what was going on and where it would happen.

On the front it highlights the expected weather and sea conditions, special events occurring and any specific safety notices. Inside is a detailed program of the days events on offer, showing times and places. One of the events listed was a photo club at 10am in the Chaplins Cinema. So after breakfast I went for a look around the ship, stopping in the cinema to see what it was about. Unfortunatly it had been a misprint in the magazine and the photo club would not be on, on this cruise, shame. Whilst I was there though I checked to see what would be showing later in the day and during the rest of the week in the cinema. Access to the cinema was good with dedicated areas for wheelchairs and their companions set out at the rear. I found that Avatar would be showing later in the week so would have to come back to see that.

As there was no photo club I tried my hand at the Horror Movies quiz one deck down in the Lords Tavern, a cricket themed bar. Unfortunately my memory was not good enough to win, but the drinks and atmosphere of the bar were good.

While I was making a fool of myself in the quiz my wife, Mel was having a go at the Line dancing lessons in the Harlequins Club. A venue that during the day catered for various dancing and exercise classes and in the evening became a Ballroom or nightclub in which to try out your newly acquired dancing skills.

Later in the morning we took a stroll around the deck. The weather was beautiful and sunny and as you can see from the picture not a cloud in the sky.

Very few boats passed us considering we were travelling through highly commercial shipping lanes. Some like the one above made for good photo opportunities though.

(I've tweaked it a bit in Photoshop to give it an extra artistic look).

Lunch was in the Peninsular Restaurant. This is the formal dining option for lunch. I chose the Grapefruit salad followed by a Waldorf salad and rounded up with Peach souffl�. Mel chose the Pea soup to start followed by Crab in its upturned shell for the main course and Peach souffl� for dessert. The service was good and the food excellent.

We had booked ourselves into the Oasis Spa that afternoon. I had chosen an Indian head and back massage which was very relaxing. Mel went for the full body massage and said she too felt very relaxed after it. Just what was needed at the start of the holiday to help us relax, take away any stress and set us up for the rest of the holiday.

We had been invited to attend a 'Meet the Captain' reception prior to our evening meal. This was held in the Pacific Lounge (which was also our emergency station) at the Stern of the ship. Drinks and canopies were provided and we were introduced to our Captain, Ian Huntley.

Dinner followed in the Oriental Restaurant.

The selection on offer was outstanding. The meal was all silver service dining. Served by friendly, experienced and polite waiters.

The food presentation was of a very high standard and the quality and taste were excellent.

The evenings main entertainment was a show in the Main theatre 'The Theatre Royal', entitled 'I Write the Songs' a production by the Headliners Theatre company, of music including artists such as Elton John and Barry Manilow. The show was entertaining, full of good music and dance. The theatre had plenty of seating available, (Although it filled up very quickly) and had good access for disabled passengers with dedicated areas for wheelchair users and their companions.

After the show it was up to the Crows Nest at the top of the ship for evening drinks whilst listening to the live music provided by 'High Life'.

A great end to our first full day aboard the Oriana.