Mish's Global Economic Trend Analysis

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• EU Doesn't Like Its Forecasts, So It Removes Them From Its Site
• Quadrocopter Pole Acrobatics
• Italians Head to Voting Booths, Election Ends 9:00AM EST Monday; Surge for Grillo and "The Apathy Factor" Will Doom Bersani Coalition

EU Doesn't Like Its Forecasts, So It Removes Them From Its Site Posted: 24 Feb 2013 08:24 PM PST With thanks to Yogi Berra, making predictions is hard, especially about the future. And with constantly revised forecasts for the EU, the European Commission decides the safe safe thing to do is Eliminate Forecasts for 2015. Via Google Translate from El Economista ... This morning you could see the data for 2012, 2103, 2014 and 2015, but now can only see the figures from 2011 to 2014 and there is no trace of the catastrophic 2015 numbers (see the screenshots attached below). Although there is no official communication in one way or another, hypothetically could be a real blunder produced after being released by mistake, or any type of computer failure, a former forecasts for 2012 under the 2015 column.'s say, that would have mistakenly announced as 2015 forecast estimates released earlier this year to last year. Forecasts of Discord Those European Commission forecasts envisage a general improvement in economic scenario for 2014. However, estimates for 2015, this morning hidden behind an interactive graphic , pointed for a few hours, before being erased-a brutal relapse. In fact, Germany would grow 2% in 2014 to only 0.8% in 2015, would UK from 1.9% to 0.3%, France 1.2% and Spain 0.2% from 0.8% to -1.4%. Sooner or Later El Economista has some interesting snapshots of the removed estimates. To be completely fair, the original posting may have been a simple mistake. Regardless, I suggest the EU forecast for 2014 is too optimistic. Will the EU 2014 estimates be revised lower as well? If not soon, then expect revisions later, with France leading the way lower. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Quadrocopter Pole Acrobatics Posted: 24 Feb 2013 07:02 PM PST Here is an interesting video that came my way via reader "Nino". It's a look at some rather amazing technology that is developing right now, and I suspect very few are aware of it. Link if video does not play: Quadrocopter Pole Acrobatics The video shows a quadrocopter capable of dynamically balancing an inverted pendulum (a stick weighted at the bottom), but also flipping the stick to another quadrocopter that determines the optimal position to catch it without losing balance. Technology marches on whether anyone is aware or not. People do become aware as markets for technology develop. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Italians Head to Voting Booths, Election Ends 9:00AM EST Monday; Surge for Grillo and "The Apathy Factor" Will Doom Bersani Coalition Posted: 24 Feb 2013 10:58 AM PST Voting booths are open in Italy though 3:00PM Monday (9:00AM EST). Exit polls will trickle in soon after but early exit polls could be misleading. If the result is close we may not know for over a day. The Wall Street Journal offers this Italian Election Guide. Italian voters can cast ballots Sunday and until 0900 ET  Monday, after which exit polls will provide quick but approximate insight into the probable result of the election. The center-left coalition led by Democratic Left leader Pier Luigi Bersani was five percentage points ahead of Silvio Berlusconi's center-right coalition according to the average of polls before a blackout on such surveys kicked in two weeks ago, giving it clear front-runner status. Exit polls in 2006 and 2008 underestimated votes cast for Mr. Berlusconi, but unless Italy's 51 million eligible voters shifted dramatically in recent days, Mr. Bersani should  – even with fewer than a third of the ballots cast – win a plurality, meaning his coalition will be awarded a majority of seats in the 630-seat lower legislative chamber. Shift Has Taken Place The Journal says "unless Italy's 51 million eligible voters shifted dramatically in recent days, Mr. Bersani should  win a plurality." I suggest such a shift has taken place. The open question regards turnout and apathy, not a shift, per se. Loser's Penalty In the Chamber (the lower House of parliament) the party with the largest plurality in the national vote gets a majority (54%) of the seats. In the Senate (the upper chamber of parliament) each of  Italy's 17 regions operate independently. The winner of each region gets a majority (55%) of the region's seats. There are 315 seats in the Senate. Lombardy, Italy's largest region gets 49 seats and the winner will take 27 seats (55%). The other parties will split the remaining 22. Second place may only get 10. The Journal sums it up this way. "If Mr. Bersani wins all 17 regions, his coalition will have 178 seats and a commanding upper-house majority. However, if he loses Lombardy, the most populuous region, he will have only 162 seats. If he wins Lombardy but loses Veneto – a near certainty given polling trends – and also loses Sicily – to Mr. Grillo rather than Mr. Berlusconi – the center-left will have 159 Senate seats, a razor-thin majority." Not So Fast I am not convinced Bersani wins the Chamber, let alone the Senate. Some 22-25% of Italians were undecided in the election polls before blackout two weeks ago. Since then, I suggest (based on crowd turnout and social media comments) that there has been a surge for Beppe Grillio and Silvio Berlusconi. The last election polls before the blackout look like this: Bersani center-left 34.5% Berlusconi center-right 29% Beppe Grillo's Five-Star Movement 19% Monti Civic Choice 12%. Given the number of undecided voters, Bersani can easily drop 3% or more (and I suspect more). If Berlusconi and/or Grillo gets a huge percent of the undecided votes, Bersani can easily drop  to second or even third place. Senate Coalition Unlikely Monti is a lost cause and I doubt he gets more than 10%, making a Senate coalition unlikely if not impossible. I commented on the possibility of a win by Berlusconi or Grillo in Germany Warns Against "Silvio the Savior" (And That May Backfire); Fake Horse Race Odds Get Around Blackouts. Reader "AC" who is from Italy but now lives in France writes ... Hi Mish After a hung parliament, the next most likely outcome may very well be the Five Star Movement (M5S) getting an absolute majority. Rage against the political class is extremely high in Italy, everything that looks "new" is getting votes. Grillo was able to catch the sentiment shift with extremely populist proposals even though his economic program is quite incoherent if not blatantly preposterous. Grillo support comes from the youngest part of the population. Undecided voters may not vote at all (in Italy you do not have to register to have right to vote, you are registered by default) or they will probably shift massively to Grillo. The outcome will depend on whether the undecideds stay home. How Grillo's parliament members will react as newly elected officials is a real unknown. Grillo himself will not be in the Parliament, and his party will be quite young. None of them have much political experience, even not in smaller city councils. What they will do? How they will react? Nobody knows. That's the most "fascinating" thing of M5S, completely new people of a completely new party managed in a completely new way. Grillo and his candidates never did a single minute of TV interview during the whole campaign. They decided to ignore completely TV (but TV has not completely ignored them). This also is completely new, probably new in the modern world. I do not think Berlusconi will be able to win this time. He has definitely lost a part of his voters, those that expected from him to keep his past promises. The hung parliament is the most likely outcome, as I said months ago, and I do not even think that Bersani and Monti together will have majority. Last but not least: Monti has declared yesterday that Merkel was not comfortable with Bersani as Prime Minister, but Merkel officially denied the minute after. Really a strange declaration from a man like Monti that made of international credibility its main "value proposition". Regards AC The Apathy Factor I expect a surge of voter enthusiasm for Grillo that will take votes away from Bersani and Berlusconi. Somewhat paradoxically, I also expect a surge in apathy where voters stay home. The apathy I refer to is not on the Grillo or Berlusconi side, but apathy for Bersani and Monti. Certainly the campaign by Monti is anemic. Thus, unless there is a late surge of energy for Bersani (and I highly doubt there is), Bersani is going to come up short. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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