Home Refinance Calculator: February 2011

Monday, February 28, 2011

Mish's Global Economic Trend Analysis

US Dollar About to Lose Reserve Currency Status - Fact or Fantasy?
Clinton Tells Qaddafi "Surrender Now"; More Protests in Yemen, Bahrain, Oman
Clinton Tells to Qaddafi "Surrender Now"; More Protests in Yemen, Bahrain, Oman
Timing the China Property Crash

US Dollar About to Lose Reserve Currency Status - Fact or Fantasy?

Posted: 28 Feb 2011 04:50 PM PST

A number of sites are commenting on a Bloomberg video in which El-Erian, PIMCO Co-CEO says "Dollar could lose its reserve currency status".

Bloomberg: "Mohammad what does a weak dollar signal to you, a dollar that can't jump up here on a day like we've seen today?"

El-Erian: "It is a warning shot to America that we cannot simply assume flight to quality, flight to safety. That people are starting to worry about the fiscal situation in the U.S. They are starting to worry about the level of debt. They are starting to worry about what they hear about states and municipalities. So, I would take this as a warning shot that we cannot assume that we will maintain the standing of the reserve currency as we have in the past."

Reserve Currency Definition

Before we can debate whether or not the US will lose reserve currency standing, we must first define what it means.

Investopedia defines Reserve Currency as follows.

"A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate."

I accept that definition. Unfortunately Investopedia rambles on with nonsense about the implications: "A large percentage of commodities, such as gold and oil, are usually priced in the reserve currency, causing other countries to hold this currency to pay for these goods."

That sentence is a widely believed fallacy. The reality is no country is obligated to hold dollars to buy goods denominated in dollars.

Currencies are Fungible

Currencies other that illiquid currencies with low or no trading volume (think of Yap Island stones or the Cuban Peso) are fungible. It is a trivial process to switch from one currency to another.

You can buy gold or silver in any country, and I assure you those transactions do not all take place in dollars. Thus, just because a commodity is widely priced in dollars does not mean it only trades in dollars.

That holds true for oil as well.

I keep pointing this out, unfortunately to no avail, that oil trades in Euros right now. There is no selling of Euros to buy dollars on the front causing the oil producers to trade dollars for euros on the back end. The oil states simply sell oil for a price in Euros and then hold Euros in their Forex reserves.

Fact and Fantasy

The first part of what El-Erian said is factual. Here it is again for convenience. "People are starting to worry about the fiscal situation in the U.S. They are starting to worry about the level of debt. They are starting to worry about what they hear about states and municipalities."

Those are true statements. Unfortunately, his "warning shot" regarding reserve currency status is fallacious.

To understand why, let's return to the definition of reserve currency: "A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate."

Foreign Currency Reserve Factors

Trade Volumes
Trade Deficits
Currency Manipulation
Hot Money

Trade Volumes and Trade Deficit

The US happens to be at or near the top of nearly every country's trading partners. The US runs a trade deficit with most of them. Those trading partners accumulate dollars as a simple function of math. We run a deficit, someone else runs a surplus.

Some wonder why the surplus countries do not buy oil or commodities with their accumulated dollars. OK, what does Saudi Arabia, Iran, or Venezuela do with the dollars then?

Does Iran or Venezuela even hold dollars now? Think of the implications of that answer in light of the widely viewed fallacy that one needs dollars to buy oil.

Regardless, of where the dollars end up, those US dollars will eventually return home. Recall that Dubai tried to buy a US port and China tried to buy Unocal. Both were rejected for security reasons. However, those dollars will return home, with China, Japan, and the oil states buying various US assets.

Currency Manipulation

Most US trading partners do not want their currencies to rise, especially China and Japan.

Consider the Yuan which does not float. To suppress the value of the Yuan, China takes US dollars and exchanges them for Yuan at a pegged rate. China does this hoping to create job and boost exports.

The US calls this currency manipulation and it is. However, it is no more manipulative than Bernanke flooding the markets with US dollars hoping to weaken the US dollar and stimulate growth.

Hot Money

Hedge funds and other speculators have moved money to China banking on currency appreciation.

China needs to maintain currency reserves to allow for the repatriation of those US dollars. Michael Pettis at China Financial Markets points out that most of the hot money inflows into China are done by Chinese businesses that understand how to get around rules and regulations regarding currency inflows.

That argument make perfect sense, but the math remains the same regardless of where the hot money comes from.

Global Beggar-Thy-Neighbor Policies

It is pretty pale to suggest the end of the US dollar as a reserve currency when countries hold dollars as a function of math, then hold still more dollars to suppress their currencies, hoping to keep their exports up to "stimulate growth".

Mathematical Impossibility

Another mathematical relationship says the dollar, the pound, the Yen, and the Yuan cannot all be weak at the same time (relative to each other). Yet that is precisely what every country wants. It's mathematically impossible.

You can see the effect in rising commodity prices.

If commodity prices were a function of the US dollar alone, then they would be rising in US dollar terms alone. Instead there is upward pressure on commodities in all currencies.

At some point the desirability to hoard commodities will peak.

Zero Hedge Comments

Zero Hedge commented on reserve currency status about a week ago.

Regarding El-Erian's statement: "I would take this as a warning shot that we cannot assume that we will maintain the standing of the reserve currency as we have in the past"

Zero Hedge quipped:

That's a given - the question however remains, which fiat currency, if any, is willing and ready to step in and replace the USD? With all eyes continuing to be look at the CNY, how long before China finally takes the plunge to find out just who is the real reserve currency in the world?

Will Another Fiat Currency Replace the Dollar?

For starters, Zero Hedge ignored the essential trade deficit math. The US runs a trade deficit, someone else must run a trade surplus.

Second, Canadian dollar and the Swiss Franc do not have enough trading volume. More importantly, there are not enough Canadian Dollars or Swiss Francs to go around. Look at what happened to Iceland when too many plunged into the Icelandic króna.

The Canadian and Swiss economies are simply not big enough for them to be global reserve currencies. In regards to the Euro, is Europe in a better fundamental situation than the US? Would it matter even if it was? To answer the second question, please remember trade deficit math.

As for the Yuan, it is complete silliness to suggest the currency of a command-economy dictator-led country that will not even float its currency will be some sort of major reserve currency.

To the extent that China trades with Russia, South Korea, etc., local reserves in varying currencies can happen (and are happening already), but the global significance of it is wildly overstated. The amounts in question are tiny, as a simple function of math.

Will the dollar remain the global reserve currency forever? Of course not. However, it is highly unlikely any of the presumed leading Fiat candidates including the Yuan and the Keynesian wet-dream IMF SDRs (Special Drawing Rights), will take the dollar's place. SDRs are essentially a basket of currencies.

The concept of trading in baskets of currencies backed by nothing is even more ridiculous than the existing setup. People do not buy goods and services in baskets of currencies.

What can replace the dollar?

Gold, or a mechanism like gold that would impose a hard restrictions on perpetual deficits is what its takes to restore sanity. However, we may not see a significant move towards gold until there is a massive currency crisis or revolt against fiat currencies in general, not just the US dollar.

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

Clinton Tells Qaddafi "Surrender Now"; More Protests in Yemen, Bahrain, Oman

Posted: 28 Feb 2011 10:33 AM PST

Libyan rebels now hold about 80% of the country. France is sending an airlift of medical supplies, including doctors and nurses to aid the rebels. Think anything else might be in those planes?

Regardless, Qaddafi is holed up in Tripoli with options growing smaller by the day. The only country that might take him is Venezuela. Why anyone would take him is beyond me.

US Secretary of State Hillary Clinton has stepped up the rhetoric as International Pressure on Qaddafi Intensifies.

An international campaign to force Col. Muammar el-Qaddafi out of office gathered pace on Monday as the European Union adopted an arms embargo and other sanctions, as Secretary of State Hillary Rodham Clinton bluntly told the Libyan leader to surrender power "now, without further violence or delay."

Germany proposed a 60-day ban on financial transactions, and a spokeswoman for Catherine Ashton, the European Union's foreign policy chief, said that contacts were being established with the opposition.

Italy's foreign minister on Sunday suspended a nonaggression treaty with Libya on the grounds that the Libyan state "no longer exists," while Mrs. Clinton said the United States was reaching out to the rebels to "offer any kind of assistance."

France said it was sending medical aid. Prime Minister François Fillon said planes loaded with doctors, nurses and supplies were heading to the rebel-controlled eastern city of Benghazi, calling the airlift "the beginning of a massive operation of humanitarian support for the populations of liberated territories."

Across the region, the tumult that has been threatening one autocratic government after another since the turn of the year continued unabated. In Yemen, protests drove President Ali Abdullah Saleh to make a bid for a unity government, but the political opposition rapidly refused. An opposition leader, Mohamed al-Sabry, said in a statement that the president's proposal was a "desperate attempt" to counter major protests planned for Tuesday.

In Bahrain, protesters blocked access to Parliament, according to news agencies. In Oman, whose first major protests were reported over the weekend, demonstrations turned violent in the port city of Sohar, and spread for the first time to the capital, Muscat.

Third Night of Protests in Oman

Bloomberg reports Youth Protests Enter Third Night as Sultan Promises to Create Jobs

Hundreds of Omani protesters gathered in the city of Sohar for a third night, demanding that the government open talks on their demands for more jobs, higher pay and more representative political institutions.

Khaled Maqbuli, a leader of the protest, called on the demonstrators at a roundabout in the center of Sohar, north of the capital, Muscat, to stay peaceful and avoid confrontation with the army and the police. Two people were killed, several wounded and a supermarket set on fire over the past two days.

"We are peaceful, we have demands, we are not saboteurs," Maqbuli, 26, said through a loudspeaker. "We want the government to send civilian people to discuss our demands; we have nothing to say to the military."

Sultan Qaboos Bin Said, the country's ruler since 1970, "has received the demands of the citizens in all the provinces and is giving them his attention," state television reported.

If governments could easily create jobs they would. Look no further than the US for proof. Only private enterprise can create jobs, at least lasting ones.

Governments can only take wealth from one place and distribute it elsewhere, by taxation, by force, or by the hidden tax of inflation that comes from printing money. When the stimulus ends, so do the jobs, except the bureaucratic ones, where massive pension problems and needless bureaucrats remain.

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

Clinton Tells to Qaddafi "Surrender Now"; More Protests in Yemen, Bahrain, Oman

Posted: 28 Feb 2011 10:33 AM PST

An international campaign to force Col. Muammar el-Qaddafi out of office gathered pace on Monday as the European Union adopted an arms embargo and other sanctions, as Secretary of State Hillary Rodham Clinton bluntly told the Libyan leader to surrender power "now, without further violence or delay."

Germany proposed a 60-day ban on financial transactions, and a spokeswoman for Catherine Ashton, the European Union's foreign policy chief, said that contacts were being established with the opposition.

Italy's foreign minister on Sunday suspended a nonaggression treaty with Libya on the grounds that the Libyan state "no longer exists," while Mrs. Clinton said the United States was reaching out to the rebels to "offer any kind of assistance."

France said it was sending medical aid. Prime Minister François Fillon said planes loaded with doctors, nurses and supplies were heading to the rebel-controlled eastern city of Benghazi, calling the airlift "the beginning of a massive operation of humanitarian support for the populations of liberated territories."

Across the region, the tumult that has been threatening one autocratic government after another since the turn of the year continued unabated. In Yemen, protests drove President Ali Abdullah Saleh to make a bid for a unity government, but the political opposition rapidly refused. An opposition leader, Mohamed al-Sabry, said in a statement that the president's proposal was a "desperate attempt" to counter major protests planned for Tuesday.

In Bahrain, protesters blocked access to Parliament, according to news agencies. In Oman, whose first major protests were reported over the weekend, demonstrations turned violent in the port city of Sohar, and spread for the first time to the capital, Muscat.

Third Night of Protests in Oman

Bloomberg reports Youth Protests Enter Third Night as Sultan Promises to Create Jobs

Hundreds of Omani protesters gathered in the city of Sohar for a third night, demanding that the government open talks on their demands for more jobs, higher pay and more representative political institutions.

Khaled Maqbuli, a leader of the protest, called on the demonstrators at a roundabout in the center of Sohar, north of the capital, Muscat, to stay peaceful and avoid confrontation with the army and the police. Two people were killed, several wounded and a supermarket set on fire over the past two days.

"We are peaceful, we have demands, we are not saboteurs," Maqbuli, 26, said through a loudspeaker. "We want the government to send civilian people to discuss our demands; we have nothing to say to the military."

Sultan Qaboos Bin Said, the country's ruler since 1970, "has received the demands of the citizens in all the provinces and is giving them his attention," state television reported.

Timing the China Property Crash

Posted: 28 Feb 2011 02:40 AM PST

Inquiring minds are investigating Analysis of the Chinese Property Bubble by Huw McKay, Senior International Economist, for Westpac Bank.

China: strong for now but imbalances loom

The strength in China's January trade data was absolutely remarkable. Going back to 2000, the level of unadjusted exports or imports in a January month has never exceeded the level in the immediately prior December: until now. There are deep-seated seasonal reasons why this just shouldn't happen - and history had never offered an exception to the rule. So, clearly, seasonally adjusted month-on-month growth was huge - around 12% for exports and 16% for imports. Iron ore import volumes were a monthly record by almost 7%. Sure, global manufacturing had a strong end to the year and business surveys had a respectable January, but this sort of implied demand is bordering on ridiculous. While three consecutive months of triple digit growth in imports to the special economic zones through Q4 argue the export numbers should not be a total surprise (at least on the supply side, never mind who the customers are), we remain astonished by the import surge.

Yes, commodity prices rose and some public and private discretionary inventory building ahead of the lunar new year was likely underway, but neither factor goes all that far in explaining the level of apparent demand. Getting away from levels and getting back to growth, at 51%yr imports are as strong as they were in the first half of 2004, when the authorities saw fit to clamp down on out of control heavy industrial investment, overall fixed investment began the year up 53% and 24 of 31 provinces experienced power shortages as an overloaded grid strained under the pressure. Is that a good description of the current climate? No, not really, but to say that the economy has good momentum opening the year would be an egregious understatement.

So, the Chinese economy is expanding at a rapid pace – for now. However, the imbalances that have emerged in the policy induced recovery phase have not disappeared. In fact, they have been inflamed. When real estate policy began to be tightened in the first half of 2010, the volume of sales moved broadly sideways (with regional variation), but the volume of new starts continued to rise .

The implications of this are many. One, bringing these projects to completion will generate very significant demand for raw and intermediate materials. This should keep commodity markets well supported in coming months - even if a pull-back from extraordinary January import levels must be assumed, and the fact that base metals prices are extremely elevated already. But the stronger implication is that once these starts do reach completion it seems extremely unlikely that the level of sales will be high enough to comfortably absorb the new supply. That implies that the developer industry will run into some trouble later this year and into early 2012 – and that will impact on activity levels in the construction sector, with predictable flow-on effects for upstream industries inside China and out.

Estimating a precise lead time between starts and completions is not easy. The private construction cycle is young enough that it has yet to establish firm "rules of thumb" for forecasters to adopt. Chinese housing ownership reforms date back to just 1998 and the explosion in private sector housing activity dates to only 2003. We have a single national downturn to ponder (late 2008) in addition to the Shanghai experiment of 2004/05. While the cycle does appear to be settling into more of an established groove, we are not at a point where we can be confident about the leads and lags. Our best efforts suggest that a lead period of between 1½ and 2 years is a reasonable if imprecise guide. As the surge in starts dates back to the middle of 2009, the first "cluster" of completions should be hitting the market in physical form later this year, and in "off-theplan" form somewhat earlier. But the post-April rise in starts is a story for early-mid 2012. Where will sales demand be at this time against a backdrop of monetary tightening? Not high enough.

It should be emphasized that we are talking about new supply coming to market. Secondary stock is to be added to the amount of housing available for sale. When the volume of sales fell below completions in late 2008 (Chart 2) developers were forced to discount aggressively to offload their properties. In the absence of a supportive policy shift as part of the second stimulus package, realised prices could have fallen by 20-30%, essentially consuming the entire margin rumoured to be enjoyed by the luxury development sector. The policy response should events play out as expected is a vitally important question. On the one hand, history argues that the "Wen put" (an analogue of the legendary "Greenspan put") will again be exercised, thereby sparking another wave of subsidised housing speculation and downstream demand for the heavy industrial sector. On the other, the administration's oft-stated and pragmatic desire to tackle housing affordability concerns, and their desire to ignite the latent consumption impulse, might argue for a very public sacrifice of the developers. Taken together with the current focus on inflationary risks – both immediate and medium term – and a disinflationary trend emanating from residential real estate doesn't appear to be wildly inconsistent with the broader aims of policy. Whatever balance the policymakers strike, the implications will resonate far afield.

Mortgage and Loans - Mortgage Refinance, Home Loans

What information about the insurance industry would help me in an interview?
Before You Go To Take The Homebuying Plunge, A Mortgage Broker Will Help
Selecting The Important Prolonged Time period Treatment Insurance coverage Rider
Online Forum on Small Business: President Obama on Loans

What information about the insurance industry would help me in an interview?

Posted: 28 Feb 2011 06:27 AM PST

I have an interview for an actuarial position coming up. I’m pretty solid on probability, statistics, etc; but I don’t know a lot about insurance in general. Anybody have a good, solid answer that could give me some info going into the interview?

Before You Go To Take The Homebuying Plunge, A Mortgage Broker Will Help

Posted: 27 Feb 2011 11:25 PM PST

When you’re getting prepared to invest in a home, among the list of dilemmas you could have is whether or not to work with the assistance of a mortgage broker Middleton WI. You may well be torn between the undeniable fact that you understand very little about acquiring home financing and also the concept of having to pay a greater portion of your hard-earned money to hire someone to do the job on your behalf . What exactly are you getting for your money , and will it be worth your while to use a mortgage broker in Wisconsin or elsewhere to act as the liaison with the bank? Maybe possessing a bit more info on the support a brokerage can provide will help you make your choice .

One of the advantages you’ll find in making use of a mortgage broker is the fact that you’ll gain access to numerous loan sources instead of needing to contact them individually. A broker keeps a line-up of lenders which he can tap into to find the best deal to suit your needs . Considering that the purchase of your home could well be the largest one of your life, you want to make sure you do it right. Through the use of mortgage lenders Wisconsin based or otherwise, that makes things sound good but actually charges you a higher rate of interest can finally end up costing you thousands during the term of this mortgage.

A mortgage broker doesn’t actually loan you the money, but he facilitates somebody else to take action . He is also responsible for doing your legwork and your paperwork in order to cinch the deal. Deciding on the best broker will make a whole lot of difference, though. A reputable broker should have your best interests at heart . If you get the idea the person you speak with is being less than honest with you or holding things back, you ought to go along with your gut instincts. A dishonest broker can end up costing you a lot of extra hassle and money , so choose wisely.

No one expects a first- or even second-time home buyer to be aware of each of the ropes of establishing a loan and attending to all of the red tape which is the reason that mortgage brokers in Wisconsin are in business. They do execute a valuable service and may stop you from falling into the pitfalls of the mortgage game. It used to be no trouble to take care of everything yourself when buying a new home, but, as with everything else in today’s world , the process has become more complex and lengthy. Finding a mortgage broker can actually be the greatest choice you’ve ever made.

Selecting The Important Prolonged Time period Treatment Insurance coverage Rider

Posted: 27 Feb 2011 11:27 AM PST

With the ever-increasing requirement for extended time period care nowadays, quite a few insurance companies possess added comes equipped with, more generally have any idea as riders, among LTCi insurance policies. A lot of insurers also try to make policies which are pending from their competitors. inboedelverzekering inboedelverzekeringen goedkope inboedelverzekering

Riders can be useful to your coverage, but you need to determine that particular rider is really worth the bucks. Keep in mind that most companies try to trade a newlyweds of riders that you don’t in fact need, they are occasionally given to enhance the company’s sales. Once purchasing for prolonged term treatment insurance coverage policies, always examine the procedures and set of showcases provided from one company to another. That can be complicated, but it will pay off.

According to Jesse Slome, govt director for the People Affiliation for Long Term Care Insurance coverage or AALTCI, long time period proper care insurance coverage procedures must be “simple and reasonably priced” and such riders need to be complete and stay to its promise. The after are various riders that may be offered from insurance manufacturers:

Spousal Benefit Rider

The spousal advantage rider is really worth taking into consideration according to Slome. This rider allows each and every partner to take control of the various’s swimming pool of advantages. Every person may buy program or protection accordingly. Although that rider can rise until 15 % on the LTCi costs, it supplies optimum protection to each partner for minimum five or six years.

House Health Proper care Rider

A lot of the current policies contain some form of residence health care added benefits. Tax-qualified insurance policies are the most typical today that will allow certain lengthy expression proper care insurance coverage tax deduction and follows some safety from the National Association of Insurance coverage Commissioners and the Wellness Insurance coverage Portability and Accountability Act (HIPAA). Most of these tax competent procedures routinely include some kind of home wellbeing care. If you have non tax -qualified coverage, ask your insurance agent if it can upgraded to get home well being proper care benefits.

Non forfeiture Benefit Rider The state calls for which all tax-qualified must possess non forfeiture advantage riders. Insurance providers are mandated to present the non forfeiture, but are not expected for acquire. Consumers may choose whether to buy the non- forfeiture advantage or not.

As which the name implies, non- forfeiture riders give policyholders that their positive aspects won’t get forfeited when they cease spending the premiums. The two types are funds back possibility or give of premium rider and the shortened benefit interval. The cash-back alternative provides the refund to the policyholder’s beneficiary owing to demise or freeze payment, whilst the shortened advantage period of time guarantees the policyholders to get the benefits at the time specified in the coverage. Both types commonly elevate your top quality cost.

Inflation rider

This is the a lot essential rider so far. The charges of long term treatment are escalating every single year; therefore, you could buy a rider which could defend your coverage in opposition to the bothering price hike. That also stops you from spending rates which typically double or triple in few far more years.

It is vital to figure out the ideal feature or rider in prolonged term care insurance insurance policies to conserve cash and to take pleasure in the insurance coverage benefits. Also, make sure you fully grasp how long term proper care insurance coverage works.

Online Forum on Small Business: President Obama on Loans

Posted: 27 Feb 2011 10:59 AM PST

President Obama joins Chairman of the Council of Economic Advisers Austan Goolsbee to answer your questions from WhiteHouse.gov as he participates in the Winning the Future Forum on Small Business in Cleveland, OH. In this segment, the President responds to a question from James in Addison, Texas: “With the virtual death of local banking, it’s next to impossible today to get bank loans for anything other than fixed assets. For working capital, speculative funding, for others, entrepreneurs must look to save capital, family, friends, or even a first customer. Traditional financing sources only help the more traditional forms of business. Innovators must look elsewhere. We’re locked in this and we were wondering what your view is.”

Sunday, February 27, 2011

Mish's Global Economic Trend Analysis

Arab World Embraces Israeli’s YouTube "Zenga Zenga" Spoof of Qaddafi Rant; Two Versions, With and Without Dancers
China Cracks Down on Mid-East Style Protests With Water Canons; Police Blanket Shanghai, Beijing; Internet Search for "Egypt" and "Tunisia" Blocked
Libyan Rebels Tighten Ring Around Tripoli; Oman Sultan Reshuffles Cabinet After Protests
Massive Rout in Irish Elections; Collision Course with the EU; Default the Best Option for Ireland

Arab World Embraces Israeli’s YouTube "Zenga Zenga" Spoof of Qaddafi Rant; Two Versions, With and Without Dancers

Posted: 27 Feb 2011 04:27 PM PST

The New York Times reports Arab World Embraces Israeli's YouTube Spoof of Qaddafi Rant.

A satirical YouTube clip mocking Col. Muammar el-Qaddafi's megalomania is fast becoming a popular token of the Libya uprising across Middle East. And in an added affront to Colonel Qaddafi, it was created by an Israeli living in Tel Aviv.

Noy Alooshe, 31, an Israeli journalist, musician and Internet buff, said he saw Colonel Qaddafi's televised speech last Tuesday in which the Libyan leader vowed to hunt down protesters "inch by inch, house by house, home by home, alleyway by alleyway," and immediately identified it as a "classic hit."

"He was dressed strangely, and he raised his arms" like at a trance party, Mr. Alooshe said in a telephone interview on Sunday. Then there were Colonel Qaddafi's words with their natural beat.

Mr. Alooshe spent a few hours at the computer, using Auto-Tune pitch corrector technology to set the speech to the music of "Hey Baby," a 2010 electro hip-hop song by American rapper Pitbull, featuring another artist, T-Pain. He titled it "Zenga-Zenga," echoing Col. Qaddafi's repetition of the word zanqa, Arabic for alleyway.

Mr. Alooshe said he was a little worried that if the Libyan leader survived, he could send one of his sons after him. But he said it was "also very exciting to be making waves in the Arab world as an Israeli."

As one surfer wrote in an Arabic talkback early Sunday, "What's the problem if he's an Israeli? The video is still funny." He signed off with the international cyber-laugh, "Hahaha."

Two Versions, With and Without Dancers

original smash hit with dancers

Zenga Zenga Original Link: http://www.youtube.com/watch?v=cBY-0n4esNY

revised version without dancers

Zenga Zenga Revised Link: http://www.youtube.com/watch?v=6GcUutnU2gk

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

China Cracks Down on Mid-East Style Protests With Water Canons; Police Blanket Shanghai, Beijing; Internet Search for "Egypt" and "Tunisia" Blocked

Posted: 27 Feb 2011 12:47 PM PST

In Shanghai and Beijing, signs of political unrest are starting to brew. In response, China has clamped down on internet access, banning search words, even names of countries associated with unrest.

For now, police have things under control with a huge display of force relative to the size of the protests. The key words are likely "for now".

The Washington Post reports Chinese police face down Middle East-style protests

Police and security officials displayed a massive show of force here and in other Chinese cities Sunday, trying to snuff out any hint of protests modeled on the uprisings in the Middle East. In Shanghai, several hundred people trying to gather were dispersed with a water truck.

Officials have used state-run media outlets to dismiss any comparisons with China while at the same time stepping up public comments on the need to address "social conflict" and to tackle problems such as the growing income disparity between the rich and poor. They have also detained a number of activists and human rights lawyers, blocked Internet search terms considered sensitive, such as "Egypt," "Tunisia" and even U.S. Ambassador Jon Huntsman Jr.'s Chinese name. And they have issued warnings to foreign journalists to be mindful of reporting restrictions.

A previously unknown group has used an overseas-based Chinese language Web site to call for a series of peaceful, silent protests, named "jasmine rallies" after the Tunisian uprising, on consecutive Sunday afternoons in cities across China. The rallies were called for heavily trafficked commercial areas, public squares and parks, ostensibly so silent protesters could blend in with ordinary passersby to avoid arrest.

However, police on Sunday were out in huge numbers in Beijing, Shanghai and other cities at the sites where the rallies were supposed to take place.

At the Wangfujing protest site in Beijing, a foreign journalist shooting video for a news agency was reportedly punched and kicked in the face by plainclothes Chinese security officers who confiscated his camera. The Foreign Correspondents Club of China reported that more than a dozen other journalists were roughed up at the site.

"I came here today to see how people protest against the government, which is corrupt and rules in an authoritarian way," said a 71-year-old man, who asked that only his family name, Cao, be used. "Democracy is the trend in the world. No country in the world can be an exception to the process."

Another man, named Xia, 64, said there were about 400 to 500 people gathering at People's Square when he arrived around 1 p.m., but they were dispersed by the spray from the water truck. He said he would keep returning to try to protest because he was already in his 60s and not afraid.

On Sunday, Premier Wen sat for two hours for an Internet chat, with the Xinhua news agency and the central government's Web site, www.gov.cn, addressing common complaints and answering questions submitted online. It was Wen's third such Internet chat session, coming just before the March opening of the National People's Congress, China's nominal legislature.

In the session, Wen discussed the problem of corruption, following the recent firing for "discipline violations" of Liu Zhijun, the minister of railways and the top official in charge of China's rapidly expanding high-speed rail development.

Wen also said the government was adjusting its rapid growth targets to an average of 7 percent for the next five years -- and to make sure the growth was balanced and wealth more evenly distributed.

Police Head Off Protests, Premier Vows to Tackle Corruption, Inflation

Bloomberg reports Wen Pledges to Curb Graft, Income Inequality as Police Head Off Protests

Chinese Premier Wen Jiabao pledged to punish abuse of power by officials and narrow the growing wealth gap as police blanketed Beijing and Shanghai to head off planned protests inspired by revolts in the Middle East.

The root of corruption lies in a government that has too much unrestrained power, Wen said in a two-hour online interview with citizens today. He promised to curtail food costs and tackle surging property prices. Wen also cut economic growth targets and said the government would focus on ensuring the benefits of expansion were more evenly distributed.

Wen's comments came as hundreds of police deployed in Beijing and Shanghai at the site of demonstrations called to protest corruption and misrule. At least seven people were bundled into police vans near Shanghai's People's Square, while in Beijing several foreign journalists were forcibly removed from the Wangfujing shopping district.

"The new five-year plan will be more about quality of growth," said Kevin Lai, a Hong Kong-based economist at Daiwa Capital Markets. "The government is going to pay more attention to sustainable growth, environment, better distribution of income, rather than pure GDP pursuit."

An August report by Zurich-based Credit Suisse AG put income inequality levels in China at levels not seen outside of sub-Saharan Africa. High food prices, unemployment and anger over corruption helped spark the protests that toppled Tunisian President Zine El Abidine Ben Ali, Egypt's Hosni Mubarak and fueled rebellion against Libya's Muammar Qaddafi.

An open letter on the U.S.-based website Boxun.com [Mish Note: Website is in Chinese] called for people to gather in at least 27 sites around the country from Tibet to Manchuria for "jasmine" rallies, named after the uprising last month in Tunisia. "Come out and take a stroll at two o'clock on Sundays to look around," the letter said.

In Shanghai, at least 23 police vehicles were stationed around Shanghai's Peace Cinema in the shopping area of People's Square. Police in Beijing, which included paramilitary units and patrols with Rottweiler and German Shepherd dogs, forcibly removed several foreign journalists from Wangfujing Street at about 2:45 p.m. Police were stationed at every entrance to Wangfujing today.

"You see how the police try to control the crowd? They spend so many resources on this, yet why does the government do so little to improve people's livelihoods?" said a 72-year-old retired car mechanic in Shanghai, who didn't want to be named because he feared being detained.

Did you note the irony in Premier Wen Jiabao's statements? "The root of corruption lies in a government that has too much unrestrained power", yet the government busts the heads of journalists, blocks internet access, and refuses to let people gather. Finally, the Chinese government bureaucrats plan damn near everything, and the economy is clearly overheating.

If that is not the epitome of "too much unrestrained power", what is?

In case you missed the fraud and corruption involving China's rapidly expanding high-speed rail development, please consider Speculation, Investment Scandals, Fraud, and China's Hard Landing; Miracle of Chinese High-Speed Rail will be Reduced to Dust; Peak Oil Doomsday Clock

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

Libyan Rebels Tighten Ring Around Tripoli; Oman Sultan Reshuffles Cabinet After Protests

Posted: 27 Feb 2011 11:31 AM PST

Muammar el-Qaddafi still has control of Tripoli but hardly anything else. The United Nations Security council has imposed sanctions and is investigating war crimes. However, the security council did not impose a no-fly zone that some wanted.

In Oman, police fired teargas at protesters and two were shot dead when demonstrators tried to storm a police station. In response, the sultan changed six ministers in "the public's interest".

Libyan Rebels Tighten Ring Around Tripoli

The New York Times reports Libyan Rebels Tighten Ring of Armed Control Near Tripoli

ZAWIYA, Libya — In this city 30 miles west of Tripoli, hundreds of people rejoiced in a central square on Sunday, waving the red, black and green flag that has come to signify a free Libya and shouting the chants that foretold the downfall of governments in Tunisia and Egypt: "The people want to bring down the regime."

Rebels, in control of the city, had reinforced its boundaries with informal barricades, and military units that had defected stood guard with rifles, six tanks and anti-aircraft guns mounted on the backs of trucks. In the central square here, a mosque was riddled with enormous holes, evidence of the government's failed attempt to take back this city on Thursday. Nearby lay seven freshly dug graves belonging to protesters who had fallen in that siege, witnesses said.

Proving how close opposition control has come to the capital, where Col. Muammar el-Qaddafi maintains tight control, the confidence of the demonstrators in Zawiya was remarkable, all the more so because it was witnessed as part of the official tour for international journalists that Colonel Qaddafi's government organized. The public relations effort, apparently intended to show a stable Libya to the outside world, appeared to backfire, as a tour of Tripoli had on Saturday.

Instead, the tour, whose minders were forced to wait at the city's outskirts, showed a nation where the uprising had reached the capital's doorstep, underscoring a growing impression that the ring of rebel control around Tripoli was tightening. But in a sign that the fight was far from over, armed government forces were seen massing around the city.

Hillary Rodham Clinton, the secretary of state, said Sunday before departing for Geneva that the United States was "reaching out to many different Libyans who are organizing in the east" but said it was too soon to recognize a provisional government.

Security Council Calls for War Crimes Inquiry

Qaddafi's options are rather limited at this point. He can stay and fight to the last drop of his blood, he can flee to Venezuela, one of the few countries that would take him, or if he gives up, he likely faces a war crimes tribunal, assuming his own military does not take him out.

Please consider Security Council Calls for War Crimes Inquiry in Libya

The United Nations Security Council voted unanimously on Saturday night to impose sanctions on Libya's leader, Col. Muammar el-Qaddafi, and his inner circle of advisers, and called for an international war crimes investigation into "widespread and systemic attacks" against Libyan citizens who have protested against the government over the last two weeks.

The vote, only the second time the Security Council has referred a member state to the International Criminal Court, comes after a week of bloody crackdowns in Libya in which Colonel Qaddafi's security forces have fired on protesters, killing hundreds.

Also on Saturday, President Obama said that Colonel Qaddafi had lost the legitimacy to rule and should step down.

The Security Council resolution also imposes an arms embargo against Libya and an international travel ban on 16 Libyan leaders, and freezes the assets of Colonel Qaddafi and members of his family, including four sons and a daughter. Also included in the sanctions were measures against defense and intelligence officials who are believed to have played a role in the violence against civilians in Libya.

The sanctions did not include imposing a no-fly zone over Libya, a possibility that had been discussed by officials from the United States and its allies in recent days.

The resolution also prohibited all United Nations member nations from providing any kind of arms to Libya or allowing the transportation of mercenaries, who are believed to have played a part in the recent violence. Suspected shipments of arms should be halted and inspected, the resolution said.

Two Oman Protesters Shot Dead

Protests and violence are unusual in Oman, a country where political parties are outlawed. Nonetheless, Yahoo! News reports Two protesters shot dead in Oman

Omani police shot dead two demonstrators with rubber bullets on Sunday, a security official said, as the deadly wave of protest rocking the Arab world spread to the normally placid pro-Western sultanate.

Five people were also wounded when security forces opened fire on the demonstrators who tried to storm a police station, the official said.

"Two were killed after being shot with rubber bullets as protesters attempted to storm a police station" in Sohar, some 200 kilometres (125 miles) northwest of Muscat, the official said, requesting anonymity.

In an apparent move to appease demonstrators, Qaboos on Saturday announced an increase in the monthly allowance for students at universities and vocational schools.

ONA said he ordered a raise in the allowance of between 25 and 90 Omani rials ($65 to $234) to "achieve further development and... provide a decent living for his people."

He also ordered the creation of a consumer protection bureau, and was looking into opening cooperatives, it said.

Earlier this month, Oman raised the minimum wage for an estimated 150,000 private sector employees from $364 to $520 a month.

Six Oman Cabinet Ministers Changed in Public Interest

In response to the protests, Oman's Sultan Reshuffles Cabinet Ministers.

Oman's Sultan Qaboos bin Said reshuffled his cabinet on Saturday, changing six ministers in "the public's interest," one week after a rare protest calling for political reform.

The cabinet changes came as 500 protesters demanding democracy and jobs blocked traffic and broke street lights in the largest industrial city Sohar. Protests are rare in Oman, a small Gulf country where political parties are banned.

In Sohar, protesters blocked cars and shoppers at a mall in the city to demand that the Gulf Arab state's elected advisory body be given legislative powers, witnesses said.

Protesters chanted: "We want long-term corrupt ministers to go!" "We want the Shura Council to have legislative powers!" "We want jobs!" and "We want democracy!"

"It has been going on for hours now. They are now at the Globe Roundabout blocking traffic," said Mohammed Sumri, a resident. The police did not intervene, residents said.

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

Massive Rout in Irish Elections; Collision Course with the EU; Default the Best Option for Ireland

Posted: 27 Feb 2011 02:09 AM PST

The voting is over in Ireland and in this writer's eyes, quite anticlimactic. Fianna Fail, the party that agreed to enormously unpopular austerity measures to bail out UK, German, French and US banks, was blasted to smithereens. The vote was both expected and well deserved.

The real fun begins now, and it is not at all certain what that outcome is. My choice is for default, but I do not get to vote. However, if common sense prevails, the EU and ECB is in for a rude shock.

Ireland's new government on a collision course with EU

The Telegraph reports Ireland's new government on a collision course with EU

Exit polls and early tallies from Ireland's general election heralded political annihilation for Fianna Fail (FF), the party which has ruled Ireland for more than 60 years of the Irish Republic's eight decades of independence.

The unprecedented and historic defeat, Fianna Fail's worst result in 85 years, makes the Irish government the first eurozone administration to be punished by voters in the aftermath of the EU's debt crisis. Voter turn-out was exceptionally high at more than 70 per cent, indicating public anger at the government and the EU.

Late last year, Ireland was forced to accept a £72 billion EU-IMF bailout to cover huge public debts that were ran up to save failed Irish banks.

The bail-out was designed to prevent financial contagion that threatened the existence of the euro, but according to economic forecasts, the cost of servicing Irish bank debt and the EU-IMF bank loans will consume 85 per cent of Ireland's income tax revenue by 2012, a burden that a majority of voters find intolerable.

Brian Cowen, the Irish Prime Minister and Fianna Fail leader, who stood down last month rather than face furious voters, was also pressured into implementing a savage £13billion austerity programme of tax rises and spending cuts drawn up by the EU.

The cost of the EU-IMF bailout in extra taxes for an average Irish family has been estimated at over £3,900 a year. Other deeply unpopular measures include controversial reductions to the minimum wage, unprecedented cuts to public services and 90,000 jobs losses in a country where unemployment is already running at almost 14 per cent.

In Dublin, Fianna Fail won just eight per cent of the vote in an electoral decimation that called into question the future of previously unassailable politicians such Brian Lenihan, the Irish finance minister.

"However bad people thought it would get for Fianna Fail, nobody thought it would get this bad," said Michael Marsh, professor of political politics at Trinity College Dublin. "That is highly significant."

Based on anger and some preliminary polls, I thought FF would get about 10-12% of the vote. By that measure Fianna Fail did as well as could have been expected except in Dublin.

Unfortunately, Brian Lenihan, one of the complete fools behind the Irish sellout to the EU, appears likely to retain his seat. However, he is burnt toast as Finance Minister. Please see Lenihan battles the tears as he claims fourth seat for details.

Returning to The Telegraph ...

Enda Kenny, Fine Gael's leader, will later on Sunday, start to form a new government, almost certainly with Labour, after full election results under Ireland's complicated PR system come through.

Both Mr Kenny and Eamonn Gilmore, Labour's leader, have promised Irish voters that they will renegotiate the EU-IMF austerity programme to reduce the burden for taxpayers and to force financial investors to shoulder some of the bank debts currently paid out of the public purse.

At a summit of centre-right EU leaders in Helsinki next Friday, Mr Kenny will use his position as Ireland's new Prime Minister to beg the German Chancellor, Angela Merkel, and French President, Nicolas Sarkozy, for concessions ahead of an emergency March 11 Brussels summit to restructure the euro zone.

But neither the two European leaders nor the European Central Bank or EU will permit any substantial changes, despite the huge popular Irish revolt against the bailout.

Chancellor Merkel will tell Mr Kenny that if he wants to reduce the high, punitive 5.8 per cent interest rate charged on EU loans then Ireland will have to give up its low corporate tax rates - a measure regarded as vital to Ireland's recovery and one of the few economic policies it has not yet handed over to Brussels or Frankfurt.

The new Irish premier will also be warned that there is no question of forcing privately-owned financial institutions to assume Ireland's £85 billion bank debts because the resulting market panic would spread to Germany and France, tearing the euro single currency apart.

As Irish voters headed for the polling booths on Friday, the European Commission bluntly declared that the terms of the EU-IMF bailout "must be applied" whatever the will of Ireland's people or regardless of any change of government.

"It's an agreement between the EU and the Republic of Ireland, it's not an agreement between an institution and a particular government," said a Brussels spokesman.

A European diplomat, from a large eurozone country, told The Sunday Telegraph that "the more the Irish make a big deal about renegotiation in public, the more attitudes will harden".

"It is not even take it or leave it. It's done. Ireland's only role in this now is to implement the programme agreed with the EU, IMF and European Central Bank. Irish voters are not a party in this process, whatever they have been told," said the diplomat.

Arrogance and Gall of the EU

Ireland, not the EU is in charge here. The opening salute from Kenny should not be to ask for EU concessions but to simply say "Go to Hell" or more politely to offer 1 cent on the dollar for debt.

That will set the proper tone for serious negotiation, and it is something I have been saying for many months.

Calls for a Vote

Dessie Shiels, an independent candidate in Donegal, said: "People have not been given the basic right of deciding whether or not they should have their taxes increased in order to repay bondholders who have lent to the banks."

David McWilliams, an economist and former official at the Ireland's Central Bank, has led calls for a popular vote under Article 27 of the Irish constitution, which requires on a matter of "such national importance that the will of the people ought to be ascertained".

"We have to re-negotiate everything," he said. "Obviously, the first way to do this is to make them aware that if they force us to pay everything, we will default and they will get nothing. So they had better get a little bit of something, than all of nothing. To make this financial pill easier to swallow, we must take the initiative politically. We can do this via a referendum.

"If the Irish people hold a referendum on the bank debts now, we can go to the EU with a mandate from the people which says No. This will allow our politicians to play hard-ball, because to do otherwise would be an anti-democratic endgame."

Declan Ganley, the Irish businessman who led the 2008 No vote to the Lisbon Treaty, said Ireland must "have the balls" to threaten debt default and withdrawal from the single currency.

"We have a hostage, it is called the euro," he said. "The euro is insolvent. The only question is whether Ireland should be sacrificed to keep the Ponzi scheme going. We have to have a Plan B to the misnamed bailout, which is to go back to the Irish Punt."

Calling for a vote is actually a very good idea. It would remove the stigma of Kenny saying "Go to Hell". Instead the people of Ireland can vote to tell the EU to "Go to Hell".

Other than outright default, putting the decision to a vote is the only thing that makes any sense given the stubborn arrogance of the EU.

Onerous Terms Cannot and Will Not be Honored

It is beyond stupid to demand terms so onerous they cannot possibly be paid back. Martin Wolf, writing for the Financial Times feels the same way.

Please consider Ireland needs help with its debt

This is not one, but three, crises: an economic collapse; a financial implosion; and a fiscal disaster. On the first, given the fall in demand and the need for fiscal contraction, prospects for recovery depend heavily on exports. On the second, the direct costs of recapitalising the system are set to be around 36 per cent of GDP, according to Goodbody stockbrokers. On the last, according to the IMF, general government debt could be 123 per cent of GDP by 2014. A little over a third of this increase in the public debt ratio would then be a direct result of recapitalising the banks.

Such a crisis is beyond the ability of Ireland to manage without financial collapse and sovereign default.

Apart from the Armageddon of a sovereign default, two partial escapes exist. The more trivial would be a reduction in the rate of interest on Ireland's borrowing: a 1 per cent reduction in the rate of interest would save the state 0.4 per cent of GDP a year. That would be a small help, at least. A more valuable possibility would be a writedown of existing subordinated and senior bank debt, which currently amounts to €21.4bn (14 per cent of GDP).

The ECB and the other members of the European Union have vetoed this idea, fearful of contagion. Indeed, the assistance package was partly to prevent just such an outcome. Yet the idea that taxpayers should bail out senior creditors of massively insolvent banks at such risk to the solvency of their state is both unfair and unreasonable. If the rest of the EU is determined to protect senior creditors, it should surely share in the cost of doing so. Why should the taxpayers of the borrowing country pay all? The new Irish government should make this point firmly.

Key Question

Changes in interest rates are meaningless, so would trivial, symbolic writedowns.

Wolf asked the key question I have been asking for months: Why should the taxpayers of the borrowing country pay all?

The answer is they shouldn't. Moreover I doubt they can. It would wreck the Irish economy to do so. If the EU breaks up over this, well that is the EU's problem more than it is Ireland's.

It is high time banks, not taxpayers bear the brunt of stupid lending decisions. There is no better time than the present to send that message, and the best way to do that is have the voters of Ireland decide.

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

Mortgage and Loans - Mortgage Refinance, Home Loans

Titan Auto Insurance Commercial
What is the difference between accidental death life insurance and regular life insurance?
A Complete Guide to the Loan Modification Process – Part 3 of 3
Mortgage market and interest rate commentary for Tuesday June 16, 2009

Titan Auto Insurance Commercial

Posted: 27 Feb 2011 06:21 AM PST

This is a commercial we shot for Titan Auto Insurance. If you are from Orange County, California, be sure to stop by Titan Auto Insurance for the best service at the best prices. 14502 Beach Blvd, Westminster CA 92683 www.facebook.com www.twitter.com www.myspace.com www.justkiddingfilms.net JKFilms Shirts Available: www.justkiddingfilms.bigcartel.com

What is the difference between accidental death life insurance and regular life insurance?

Posted: 27 Feb 2011 04:00 AM PST

What is the difference between accidental death insurance and regular life insurance? Which is a better buy? Wouldn’t all deaths (excluding illnesses) be accident? If you only buy life insurance and don’t include accidental death insurance then what is usually excluded? Thanks!!!
(I know its different for every insurance company, I am just wondering what generally the outcomes would be)

A Complete Guide to the Loan Modification Process – Part 3 of 3

Posted: 26 Feb 2011 10:57 AM PST

www.helpUmodify.org is a not for profit consumer advocacy project helping distressed homeowners avoid the lures of empty promises and predatory tactics of sub-prime modification outfits trying to collect upfront fees for promises of results. This is the third in a 3 part series that explains the loan modification process from application to acceptance. The purpose of this Complete Guide to the Loan Modification Process is to educate and empower home owners to better understand the process and improve the chances of a favorable outcome

Mortgage market and interest rate commentary for Tuesday June 16, 2009

Posted: 26 Feb 2011 09:10 AM PST

Mortgage market and interest rate commentary from Bruce Brown, CMPS with Pulaski Bank Home Lending and radio host of Dollars and Homes on KCMO Talk Radio 710 in Kansas City.