Mish's Global Economic Trend Analysis

President Obama's Slave Trade; Senator DeMint Says Team Obama Acts Like Thugs; Death of Right-to-Work?
Portuguese Budget Deficit Revised Up Second Time to 9.1%
Portuguese Budget Deficit Revised Up Second Time to 9.1%
FHA Mortgage Squeeze

President Obama's Slave Trade; Senator DeMint Says Team Obama Acts Like Thugs; Death of Right-to-Work?

Posted: 23 Apr 2011 06:17 PM PDT

Suppose you own a profitable, legal in all 50 states, business and want to expand or reorganize your operations.

Now let's suppose the someone came up to you and said "Sorry boys, but you cannot do what you want with your business. You cannot go anywhere you please. See those balls and chains on your feet, boy? I have the key and I say you are staying right here. I am the slave master and don't you forget it."

That is exactly what President Obama said to Boeing.

Labor Board Seeks to Halt Boeing Move to South Carolina

Inquiring minds are reading Labor Board Tells Boeing New Factory Breaks Law

In what may be the strongest signal yet of the new pro-labor orientation of the National Labor Relations Board under President Obama, the agency filed a complaint Wednesday seeking to force Boeing to bring an airplane production line back to its unionized facilities in Washington State instead of moving the work to a nonunion plant in South Carolina.

In its complaint, the labor board said that Boeing's decision to transfer a second production line for its new 787 Dreamliner passenger plane to South Carolina was motivated by an unlawful desire to retaliate against union workers for their past strikes in Washington and to discourage future strikes. The agency's acting general counsel, Lafe Solomon, said it was illegal for companies to take actions in retaliation against workers for exercising the right to strike.

It is highly unusual for the federal government to seek to reverse a corporate decision as important as the location of plant.

But ever since a Democratic majority took control of the five-member board after Mr. Obama's election, the board has signaled that it would seek to adopt a more liberal, pro-union tilt after years of pro-employer decisions under President Bush.

Although the board has not yet issued many major decisions reversing Bush-era policies, it has proposed requiring private sector employers to post a notice about workers' right to unionize, and Mr. Solomon has begun moving more aggressively to win reinstatement of union supporters fired illegally by management during unionization drives.

In a statement Wednesday, Mr. Solomon said: "A worker's right to strike is a fundamental right guaranteed by the National Labor Relations Act. We also recognize the rights of employers to make business decisions based on their economic interests, but they must do so within the law."

Correction: April 22, 2011

An article on Thursday about a National Labor Relations Board complaint seeking to prevent Boeing from moving some airplane production to a nonunion plant in South Carolina misstated the status of a rule to require private sector employers to post a notice about workers' right to unionize. An N.L.R.B. proposal for such a rule is pending; it has not been made final.

Fundamental Rights

Rights work both ways.

No one should have to work for a company if they don't want to. People can quit, or they can strike.

Likewise, no employee and no labor board has any fundamental right to tell businesses who they can hire, who they can fire, or what states they can do business in.

Violation of either point above is slavery. There is no other way of looking at it.

Labor Relations Board Acting Like 'Thugs'

Senator Jim DeMint says Labor Relations Board Acting Like 'Thugs'

"I thought I'd seen it all, but now the administration is acting like a bunch of thugs," DeMint told Fox News' Neal Cavuto Thursday. "They are really trying to bully and intimidate — not just Boeing — they are attacking every right-to-work state, and in effect warning every employer in the country, if they happen to decide to move to a state where workers are free not to join a union, that they are going to be harassed and harangued by the National Labor [Relations] Board.

Cavuto noted the White House said it is not involved and it is NLRB issue. DeMint replied, "the president could stop this it in a second — if he wanted to."

"And, frankly, he's the one who packed this board, he's the one who's responsible for the way they're behaving," DeMint continued. "And this is very much like some of the other agencies — attacking, intimidating, bullying the people who are creating jobs in America today.

"But this is the worst of the worst," he added. "Like you said [Boeing] announced this two years ago, but they are forcing Boeing to spend millions of dollars in legal costs to try and defend their right — they didn't move a facility, this is a new one, they've added jobs in Washington [state] since they started building this plant in South Carolina."

Obama the Head Slave-Master

Senator DeMint is incorrect.

The National Labor Relations Board is not acting like a group of thugs. Rather, the NLRB instead acting like a group of slave-masters attempting to put balls-and-chains on Boeing.

Some will point out that Senator DeMint is biased because he is a senator from South Carolina, where Boeing wants to move.

However, bias has nothing to do with it. You either are in favor of slavery or not.

No one should support slavery, and DeMint doesn't. That the senator is from South Carolina is irrelevant.

By packing the NLRB with proponents of slavery, President Obama is nothing more than the head slave-master.

Death of Right-to-Work?

The Wall Street Journal says the actions by the NRLB mean the Death of Right to Work

The WSJ is wrong. People will see this act by the NRLB for what it is: forced slavery.

I believe it will give a boost to Senator Rand Paul's national Right-to-Work proposal. Hopefully it gives the next Congress reason to get rid of the NRLB altogether.

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

Portuguese Budget Deficit Revised Up Second Time to 9.1%

Posted: 23 Apr 2011 03:05 PM PDT

Courtesy of Google Translate, please consider Portugal again revised upwards the deficit in 2010

Portugal's public deficit stood at year-end 2010 to 9.1 percent of Gross Domestic Product (GDP), five tenths above the 8.6 percent reported three weeks ago.

Early estimates on the Portuguese executive deficit in 2010, which received clearance from Brussels, they set a decline in the deficit to 7.3 percent, which Portugal is ranked as one of the countries of the European Union ( EU) with a greater reduction.

But last March 31, the caretaker government rose to 8.6 percent deficit for the loss of large public transport and a nationalized bank, which had not been included in the accounts submitted to Brussels.

The new upward revision is that the harsh adjustment measures implemented in the country Luso during the past year to reduce the public deficit-increasing tax burden, reducing public spending, cuts in salaries of civil servants, etc .- are having a more limited effect than expected.

These changes also had an impact on the level of public debt, which rose from 92.4 per cent of GDP to account for 93 percent, equivalent to 160,470.1 million.

Shortly after the INE making the announcement, from the Social Democratic Party (main opposition group) considered that these figures prove "financial incontinence" practiced by the Portuguese government for the past six years, when current Prime Minister Jose Socrates came to power.

The original link (in Spanish) from my friend Bran who lives in Spain: Portugal vuelve a revisar al alza el déficit de 2010 y lo eleva al 9,1 %

Portuguese 10-Year Government Bond Yield 9.5%

Spanish 10-Year Government Bond Yield 5.47%

Italian 10-Year Government Bond Yield 4.76%

Irish 10-Year Government Bond Yield 10.48%

Greek 2-Year Government Bond Yield 23.01%

The 2-Year yield on Greek bonds says a haircut on sovereign debt is coming regardless of daily denials from Greece by the Finance Minister and Prime Minister.

For more on Greece, please see Next Phase of Sovereign Debt Crisis; Greek 2-Year Yields Top 20%; Greece Denies Restructuring Plan; Why the Denial?

Some have an eye on Spain. I have an eye on both Spain and Italy. For a recap on Italy, please see Italy The Invisible Elephant

A crisis in Spain or Italy would more than consume all the Eurozone allotted bailout funds.

Italy is the granddaddy. It has nearly as much debt as Germany. So far, Italy has been able to roll over its huge pile of debt over at reasonably attractive rates.

Eventually, I believe that the debt of both Italy and Spain will be called into question.

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

Portuguese Budget Deficit Revised Up Second Time to 9.1%

Posted: 23 Apr 2011 01:38 PM PDT

Courtesy of Google Translate, please consider Portugal again revised upwards the deficit in 2010

Portugal's public deficit stood at year-end 2010 to 9.1 percent of Gross Domestic Product (GDP), five tenths above the 8.6 percent reported three weeks ago.

Early estimates on the Portuguese executive deficit in 2010, which received clearance from Brussels, they set a decline in the deficit to 7.3 percent, which Portugal is ranked as one of the countries of the European Union ( EU) with a greater reduction.

But last March 31, the caretaker government rose to 8.6 percent deficit for the loss of large public transport and a nationalized bank, which had not been included in the accounts submitted to Brussels.

The new upward revision is that the harsh adjustment measures implemented in the country Luso during the past year to reduce the public deficit-increasing tax burden, reducing public spending, cuts in salaries of civil servants, etc .- are having a more limited effect than expected.

These changes also had an impact on the level of public debt, which rose from 92.4 per cent of GDP to account for 93 percent, equivalent to 160,470.1 million.

Shortly after the INE making the announcement, from the Social Democratic Party (main opposition group) considered that these figures prove "financial incontinence" practiced by the Portuguese government for the past six years, when current Prime Minister Jose Socrates came to power.

The original link (in Spanish) from my friend Bran who lives in Spain: Portugal vuelve a revisar al alza el déficit de 2010 y lo eleva al 9,1 %

Portuguese 10-Year Government Bond Yield 9.5%

Spanish 10-Year Government Bond Yield 5.47%

Italian 10-Year Government Bond Yield 4.76%

Irish 10-Year Government Bond Yield 10.48%

Greek 2-Year Government Bond Yield 23.01%

The 2-Year yield on Greek bonds says a haircut on sovereign debt is coming regardless of daily denials from Greece by the Finance Minister and Prime Minister. For more on Greece, please see Next Phase of Sovereign Debt Crisis; Greek 2-Year Yields Top 20%; Greece Denies Restructuring Plan; Why the Denial?

Some have an eye on Spain. I have an eye on both Spain and Italy. For more on Italy, please see Italy The Invisible Elephant

A crisis in Spain or Italy would more than consume all the Eurozone allotted bailout funds.

Italy is the granddaddy. It has nearly as much debt as Germany. So far, Italy has been able to roll over its huge pile of debt over at reasonably attractive rates.

Eventually, I believe that the debt of both Italy and Spain will be called into question.

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

FHA Mortgage Squeeze

Posted: 23 Apr 2011 07:22 AM PDT

In response to Jumbo Mortgage Loan Squeeze: Will it Affect Home Prices? Dan, a loan officer for a mortgage broker, pinged me with ...

Hello Mish

Perhaps even more important than the Jumbo Squeeze is the coming "FHA squeeze". Enlarged FHA loan size also expires in October.

For example, in Minneapolis, the current FHA max for single family loans is $365,000. On October 1, that reverts back down to about $275,000. While some buyers of homes in the $290,000 - 380,000 range who could have done FHA loans will be able to switch to conventional conforming loans, some will not.

FHA loans are a lot easier to get: higher debt ratios are allowed, lower credit scores are allowed (without rate upcharges), and the down payment requirement is a mere 3.5%.

The reduction in max FHA loan size will take some buyers out of the market.

Once again, government does not belong in the mortgage business. If it was up to me (but it's clearly not), I would shut down Fannie Mae, Freddie Mac, and the FHA entirely.

Nonetheless, with these changes, fewer people will qualify loans and the qualifications amounts will be lower and/or the down payments higher.

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

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Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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