31.12.13

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Happy New Year (and Some British Humor)

Posted: 31 Dec 2013 06:44 PM PST

Looking for a laugh? Play the video below "Putting Out the Dog"



Link if video does not play: Mrs. Brown's Boys

Happy new year to you and your loved ones!

Wishing 2014 to be your best year ever.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Apple Denies Working With NSA on iPhone Backdoors; NSA Toolbox Catalog; Celebrate the New Year: 1984

Posted: 31 Dec 2013 11:51 AM PST

Today Apple denied creating backdoors on the iPhone for the NSA to exploit. First let's review some articles that preceded the denial.

Within the last few days came numerous reports NSA Reportedly Has Total Access To The Apple iPhone.

Back in September, Der Spiegel online reported iSpy: How the NSA Accesses Smartphone Data

AppleInsider notes "New documents revealed on Monday show the U.S. National Security Agency has the capability of deploying software implants on Apple's iPhone that grants remote access to on-board assets like SMS messages, location data and microphone audio."

NSA Toolbox

Please consider Der Spiegel article Shopping for Spy Gear: Catalog Advertises NSA Toolbox by Jacob Appelbaum, Judith Horchert and Christian Stöcker.
After years of speculation that electronics can be accessed by intelligence agencies through a back door, an internal NSA catalog reveals that such methods already exist for numerous end-user devices.

According to Juniper Networks' online PR copy, the company's products are "ideal" for protecting large companies and computing centers from unwanted access from outside. They claim the performance of the company's special computers is "unmatched" and their firewalls are the "best-in-class." Despite these assurances, though, there is one attacker none of these products can fend off -- the United States' National Security Agency.

A document viewed by SPIEGEL resembling a product catalog reveals that an NSA division called ANT has burrowed its way into nearly all the security architecture made by the major players in the industry -- including American global market leader Cisco and its Chinese competitor Huawei, but also producers of mass-market goods, such as US computer-maker Dell.

A 50-Page Catalog

These NSA agents, who specialize in secret back doors, are able to keep an eye on all levels of our digital lives -- from computing centers to individual computers, and from laptops to mobile phones. For nearly every lock, ANT seems to have a key in its toolbox. And no matter what walls companies erect, the NSA's specialists seem already to have gotten past them.

This, at least, is the impression gained from flipping through the 50-page document. The list reads like a mail-order catalog, one from which other NSA employees can order technologies from the ANT division for tapping their targets' data. The catalog even lists the prices for these electronic break-in tools, with costs ranging from free to $250,000.

In the case of Juniper, the name of this particular digital lock pick is "FEEDTROUGH." This malware burrows into Juniper firewalls and makes it possible to smuggle other NSA programs into mainframe computers. Thanks to FEEDTROUGH, these implants can, by design, even survive "across reboots and software upgrades." In this way, US government spies can secure themselves a permanent presence in computer networks. The catalog states that FEEDTROUGH "has been deployed on many target platforms."

Some of the equipment available is quite inexpensive. A rigged monitor cable that allows "TAO personnel to see what is displayed on the targeted monitor," for example, is available for just $30. But an "active GSM base station" -- a tool that makes it possible to mimic a mobile phone tower and thus monitor cell phones -- costs a full $40,000.
Inside TAO

A second Der Spiegel article takes a look Inside TAO a top-secret National Security Agency team known as Tailored Access Operations.
In January 2010, numerous homeowners in San Antonio, Texas, stood baffled in front of their closed garage doors. They wanted to drive to work or head off to do their grocery shopping, but their garage door openers had gone dead, leaving them stranded. No matter how many times they pressed the buttons, the doors didn't budge. The problem primarily affected residents in the western part of the city, around Military Drive and the interstate highway known as Loop 410.

Fault for the error lay with the United States' foreign intelligence service, the National Security Agency, which has offices in San Antonio. Officials at the agency were forced to admit that one of the NSA's radio antennas was broadcasting at the same frequency as the garage door openers. Embarrassed officials at the intelligence agency promised to resolve the issue as quickly as possible, and soon the doors began opening again.

It was thanks to the garage door opener episode that Texans learned just how far the NSA's work had encroached upon their daily lives.

An internal description of TAO's responsibilities makes clear that aggressive attacks are an explicit part of the unit's tasks. Indeed, TAO specialists have directly accessed the protected networks of democratically elected leaders of countries. They infiltrated networks of European telecommunications companies and gained access to and read mails sent over Blackberry's BES email servers, which until then were believed to be securely encrypted. Achieving this last goal required a "sustained TAO operation," one document states.

Having Fun at Microsoft's Expense

One example of the sheer creativity with which the TAO spies approach their work can be seen in a hacking method they use that exploits the error-proneness of Microsoft's Windows. Every user of the operating system is familiar with the annoying window that occasionally pops up on screen when an internal problem is detected, an automatic message that prompts the user to report the bug to the manufacturer and to restart the program. These crash reports offer TAO specialists a welcome opportunity to spy on computers.



When TAO selects a computer somewhere in the world as a target and enters its unique identifiers (an IP address, for example) into the corresponding database, intelligence agents are then automatically notified any time the operating system of that computer crashes and its user receives the prompt to report the problem to Microsoft. An internal presentation suggests it is NSA's powerful XKeyscore spying tool that is used to fish these crash reports out of the massive sea of Internet traffic.

The automated crash reports are a "neat way" to gain "passive access" to a machine, the presentation continues. Passive access means that, initially, only data the computer sends out into the Internet is captured and saved, but the computer itself is not yet manipulated. Still, even this passive access to error messages provides valuable insights into problems with a targeted person's computer and, thus, information on security holes that might be exploitable for planting malware or spyware on the unwitting victim's computer.
NSA Intercepts Packages to Install Bugs

The NSA does not stop there. The Verge reports NSA intercepts laptops purchased online to install spy malware before routing to the customer.

OK, but what is Apple's, Google's, and Microsoft's response as to whether backdoors are purposely built into the phones and computers?

Apple Denies Working With NSA

Today, Techcrunch reports Apple Says It Has Never Worked With NSA To Create iPhone Backdoors, Is Unaware Of Alleged DROPOUTJEEP Snooping Program.
Apple has contacted TechCrunch with a statement about the DROPOUTJEEP NSA program that detailed a system by which the organization claimed it could snoop on iPhone users.

Apple says that it has never worked with the NSA to create any 'backdoors' that would allow that kind of monitoring, and that it was unaware of any programs to do so.

Here is the full statement from Apple:

Apple has never worked with the NSA to create a backdoor in any of our products, including iPhone. Additionally, we have been unaware of this alleged NSA program targeting our products. We care deeply about our customers' privacy and security.  Our team is continuously working to make our products even more secure, and we make it easy for customers to keep their software up to date with the latest advancements.  Whenever we hear about attempts to undermine Apple's industry-leading security, we thoroughly investigate and take appropriate steps to protect our customers.  We will continue to use our resources to stay ahead of malicious hackers and defend our customers from security attacks, regardless of who's behind them.

The statement is a response to a report in Der Spiegel Sunday that detailed a Tailored Access Operations (TAO) unit within the NSA that is tasked with gaining access to foreign computer systems in order to retrieve data to protect national security.

Among these options was a program called DROPOUTJEEP — a program by which the NSA could theoretically snoop on 'any' Apple iPhone with '100% success'. The documents were dated 2008, implying that these methods were for older devices. Still, the program's detailed capabilities are worrisome.

Researcher and hacker Jacob Applebaum — the co-author of the articles, coinciding with a speech he gave at a conference about the programs — pointed out that the '100% success rate' claimed by the NSA was worrisome as it implied cooperation by Apple. The statement from the company appears to preclude that cooperation.

This year has been an eventful one for NSA spying program revelations. Apple joined a host of large companies that denied that they had been willing participants in the PRISM data collection system — but later revelations of the MUSCULAR program indicated that the NSA could get its hands on data by monitoring internal company server communications anyway. This spurred targets like Google and Yahoo to implement internal encryption.
Operations Muscular and Prism

Inquiring minds may also be interested in these Tech Crunch articles.

Operation "Muscular": NSA Infiltrates Google And Yahoo Networks

Operation "Prism": Google, Facebook, Dropbox, Yahoo, Microsoft, Paltalk, AOL And Apple Deny Participation In NSA PRISM Surveillance Program

Reflections on NSA Gag Orders

Unfortunately, the NSA has made it difficult or even impossible for companies to comment on precisely what the NSA requires of them.

Clearly these gag orders makes backdoor denials at least somewhat suspicious. 

Apples Files Suit

On November 5, Tech Crunch reported Apple Files With U.S. Government For More Information Request Transparency As It Releases First Report.
Today, Apple has released its first ever report on government information requests, detailing exact numbers of account information and data requests internationally. The report highlights how restrictive the rules are for Apple in the US, as only ranges of 1,000 are represented there.

[Mish note: the link does not work. Three possibilities - I highly doubt the first: Either the link was in error, Apple took it down for its own reasons, or the NSA forced Apple to take it down. Tech Crunch has some of the details.]

Apple also specifies the exact FBI letters and requests that it had to comply with. In the report, Apple goes into detail about what it would like to see changed about the process.

"This report provides statistics on requests related to customer accounts as well as those related to specific devices. We have reported all the information we are legally allowed to share, and Apple will continue to advocate for greater transparency about the requests we receive," the report states. "At the time of this report, the U.S. government does not allow Apple to disclose, except in broad ranges, the number of national security orders, the number of accounts affected by the orders, or whether content, such as emails, was disclosed."
Open Letter on Government Surveillance

Recently AOL, Apple, Facebook Google LinkedIn, Microsoft, Twitter, and Yahoo sent an Open Letter on Global Government Surveillance seeking reforms that would limit government authority to collect user information.

Will anything come of it? I highly doubt it.

Celebrate the new year: 1984 is here.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

France in Review: Perfect Track Record of Economic Ineptitude

Posted: 31 Dec 2013 01:09 AM PST

In 2013 France stood out as the perfect model of economic ineptitude. It's very difficult to be perfect at anything, even failure. France managed. Here are some headlines.

  1. December 19, 2013: 50 Foreign Companies Operating in France Sound the Alarm
  2. December 16, 2013: Sharp Decline in France PMI; Private Sector Employment Drops 21st Time in 22 Months
  3. December 10, 2013: French Industrial Output Drops Unexpectedly; France Finance Minister in Complete Denial; Expect the Unexpected
  4. December 04, 2013: Taxed to the Point of No Recovery; France Plans Tougher "Exit Tax"November 17, 2013: France Tax Revenues €5.5 Billion Lower than Expected; Poll Shows 92% Do Not Believe Hollande's Tax Promises 
  5. November 29, 2013: Montebourg Targets UGAP Over "Made in France" 
  6. November 03, 2013: "France is Not a Cash Cow"; Riots Over Ecotax Continue; Is Anyone Happy? 
  7. October 25, 2013: Made in France: Montebourg Ridiculed in Text and Pictures; France Goes After "Red Bull" Energy Drinks to Finance Social Security
  8. October 18, 2013: Still More France Economic Idiocies: New Rent Price Controls, Mandatory Rental Insurance, "Unfair Competition" Laws
  9. October 10, 2013: Law of Career Security: France's Minister of Digital Economy Orders Telecom Companies "to be Virtuous and Patriotic" and to Use Alcatel-Lucent to Prevent Layoffs
  10. October 03, 2013: France Vows to "Save the Bookstores", Fixes Price of Books, Bans Free Shipping by Amazon
  11. August 20, 2013: Socialist Delusion: France Promises Full Employment, a Third Industrial Revolution, an Affordable Housing Utopia in 10 Years
  12. May 31, 2013: Bad Weather in France to Blame For ...
  13. May 30, 2013: Simmering Feud Between France and Germany Erupts Into Verbal Warfare; France Tells Brussels to Shove It
  14. May 24, 2013: France Private Sector Implosion Continues
  15. May 15, 2013: Triple Dip Recession in France; It's Not the Weather
  16. May 11, 2013: Germany France Feud Erupts Again; German Central Bank Head Blasts France
  17. April 02, 2013: Hollande Orders Employers to Pay 75% Tax; Top Executives Join France Exodus
  18. March 21, 2013: Le Monde Headline "No, France is Not Bankrupt"
  19. March 12, 2013: Housing Construction in France Lowest in 50 Years; Hollande Responds With Measures to Support Building "For the Public Good"
  20. March 10, 2013: France Postpones Austerity and Deficit Targets for Rest of 2013
  21. February 27, 2013: France Unemployment Highest Since 1997
  22. February 21, 2013: France Sinks Further Into Gutter; PMI Accelerates to 4-Year Low; "Core" of Europe Now Consists of Germany Only
  23. February 19, 2013: Incredible Letter from CEO of Titan to France Minister of Industrial Renewal, Blasting French Unions and USA: "How Stupid Do You Think We Are?"
  24. January 28, 2013: Hard Times: Dijon France Sells Half of Prized Wine Collection to Help Those Appealing for Social Aid
I will post my thoughts (not just links) on the global economy shortly.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

30.12.13

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Joke Headline of the Day: "Pending Home Sales Rise"; Five Housing Headwinds

Posted: 30 Dec 2013 01:02 PM PST

I was perusing online stories about today's release of pending homes sales data from the National Association of Realtors. Here are a few sample headlines.

NAR: Pending Home Sales Edge Up in November
CNBC: US pending home sales rise 0.2 percent
Calculated Risk: Pending Home Sales Index increased 0.2% in November
Forbes: Pending Home Sales Tick Up In November, First Time In Five Months
Reuters: U.S. pending home sales end slide, hint at stabilization
Fox Business News: Pending Home Sales Rise Slightly, Miss Street View

One Headline Title Stood Out

Zero Hedge: Pending Home Sales Plunge At Fastest Pace Since April 2011

It took about one second to understand the discrepancy.

All but the ZeroHedge headline (not necessarily the articles) ignored the NAR statement (see first link) "The Pending Home Sales Index,* a forward-looking indicator based on contract signings, inched up 0.2 percent to 101.7 in November from a downwardly revised 101.5 in October, but is 1.6 percent below November 2012 when it was 103.3."

ZeroHedge has a chart that shows just that.

Pending Home Sales Year-Over-Year



It's kind of easy for sales to be up when the previous month was revised lower. But how much lower? The NAR did not even say. Let's take a look at monthly NAR reports to find out.

November 25 NAR: October Pending Home Sales Down Again, but Expected to Level Out: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 0.6 percent to 102.1 in October from an upwardly revised 102.7 in September, and is 1.6 percent below October 2012 when it was 103.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.

October 28 NAR: Pending Home Sales Continue Slide in September: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August, and is 1.2 percent below September 2012 when it was 102.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.

September 26 NAR: Pending Home Sales Decline in August: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, eased 1.6 percent to 107.7 in August from a downwardly revised 109.4 in July, but remains 5.8 percent above August 2012 when it was 101.8; the data reflect contracts but not closings. Pending sales have been above year-ago levels for the past 28 months.

August 28 NAR: July Pending Home Sales Slip: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, declined 1.3 percent to 109.5 in July from 110.9 in June, but is 6.7 percent above July 2012 when it was 102.6; the data reflect contracts but not closings.  Pending sales have stayed above year-ago levels for the past 27 months.

Note the October data (released November 25) showed the pending home sales index slipped a reported 0.6 percent to 102.1.
  
"Pending Home Sales Rise"

  • Last Month: 102.1
  • This Month: 101.7
  • Result: Rise of 0.2

With all this revisionist history, these month-over-month comparisons seem rather meaningless. The chart posted by ZeroHedge shows the real story.

Lawrence Nun, the NAR cheerleader had this to say "We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014".

Absolutely nothing suggests a cyclical low. The recovery has been fueled by excessively low rates, that are now rising sharply.  Numerous headwinds blow strongly. I strongly disagree with Nun on jobs and household formation.

Five Housing Headwinds

  1. Prices Up (Housing Less Affordable)
  2. Interest Rates Up (Housing Less Affordable)
  3. Insufficient Wage Growth (Housing Less Affordable)
  4. Household Formation Poor (Lack of Buyers)
  5. Poor Job Growth  (Lack of Buyers)

For further discussion of headwinds, especially the rise in interest rates, please see Average 30-Year Mortgage Rate Hits 4.47% (Not Counting Fees); Affordability Check

For a report on Household Formation, please see Haircut Deficit: Kids Living in Basements a Drag on U.S. Services Spending.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Judge Bars San Jose from Imposing Voter-Approved Pension Cuts; Hollow Victory for Unions

Posted: 30 Dec 2013 10:32 AM PST

On December 24, a state court judge barred the city of San Jose, California, from imposing voter-approved pension cuts on current municipal worker.
San Jose Mayor Chuck Reed, a Democrat, encouraged voters in his city to back municipal pension cuts he proposed as part of last year's Measure B, which drew 70 percent support at the polls. The unions challenged the measure, leading to Judge Lucas' ruling in Santa Clara County Superior Court. Her decision is likely to be appealed.

In her "tentative" ruling, dated from last week but publicly released on Monday, Lucas said the city was entitled under the ballot measure to cut workers' pay to save money, but she held that vested pension benefits were protected by state law and thus off limits.

Reed is pressing for a statewide ballot initiative next year that would give cities across California the authority to reduce pension benefits.

In a statement, Reed welcomed the judge's ruling on pay cuts, but added: "Unfortunately, the judge's decision to invalidate certain portions of Measure B also highlights the fact that current California law provides cities, counties and other government agencies with very little flexibility in controlling their retirement costs."
Hollow Victory

The pension ruling was hailed by union advocates but not the wage cut ruling. Both sides are likely to appeal aspects of the ruling. Should the ruling stand as is, unions will come to regret their victory.

Voters Had Enough of Unions

Reed will press the matter further, in a statewide initiative. And sentiment suggests voters have finally had enough of unions.

However, one must expect the teachers' unions, the police and fire unions, and every other public union in the state to spend massive amounts of money hoping to defeat the proposition.

For California public-union sentiment details, please see Voters Take Negative View of Labor Unions; Liberals in Favor of Strikes (Until Strikes Happen); Aging Population an Anti-Union Force?

Should Reed's initiative pass and be struck down by the courts, Reed can shove it straight down the union's throats by declaring bankruptcy.

Unlike the mayoral economic illiterates in Vallejo and Stockton (who could have and should have slashed pension benefits in bankruptcy), it's pretty clear Reed would do just that.

100% Certain Pensions Not Sacrosanct

Given rulings in Detroit, Michigan; Central Falls, Rhode Island (see Central Falls Set to File Bankruptcy Exit Plan; 50% Pension Reductions, 40% Slash in Police and Fire Budgets Coming Up) and numerous cities in California, it is 100% certain that federal bankruptcy laws override state constitutions. In other words it is 100% certain that public union pensions are NOT sacrosanct.

One way or another pensions must be cut, and will be cut. But how?

Unions can help decide the nature of the cuts, or they can fight them every step of the way only to have cuts crammed down their throats in bankruptcy court. Unions being what they are, will no doubt choose to be force-fed cuts in numerous bankruptcies across the nation.

Unfortunately, force-fed across-the-board cuts in bankruptcy court are not the fairest thing to do. Nor is it fair to ask taxpayers to pick up the tab, given the threats, coercion, vote buying, and backroom deals under which politicians rewarded their friends and themselves jobs with ridiculous pensions.

For further consideration of the fairness aspect, please see Mish Template for Fair Public Union Pension Settlement.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

29.12.13

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Toxic Smoke Cloud Engulfs Greece; Six Years of Relentless Recession; Horrific Statistics

Posted: 29 Dec 2013 11:35 PM PST

Please consider a mass of grim statistics regarding Greece, via translation from the El Pais article: Ruined Greece takes the helm of the EU in the first half of 2014.
On January 1, Greece assumes the rotating presidency of the European Union in a state close to suffocation, not only via austerity adjustments since 2010, but also literally, by a toxic cloud fueled by wood fires that replace conventional heating.

The beret dense smog that grips these days Athens or Thessaloniki is also a metaphor for the political gridlock: the government insists on not lowering the tax on heating oil to intractable limits for broad social layers, but a group of 41 deputies of the conservative New Democracy (ND), rector of the bipartite Executive, has unsuccessfully raised a parliamentary motion to reduce it. An authentic rebellion aboard the party of Prime Minister Andonis Samaras. ND and Pasok socialist now number just 152 seats in a House of 300, and the rebel MPs representing about one-third in the ranks of ND.

The mutiny of the conservatives is just the penultimate chapter of an intestine, economic, but with clear political implications, the result of six years of recession and unfathomable weariness of citizenship to the endless cuts crisis.

Horrific Statistics

  • A 27.4% unemployment (nearly 52% among those under 24 years)
  • 3.8 million Greeks living in poverty or social exclusion in 2012 (400,000 more than the previous year)
  • 350,000 households without electricity for non-payment bills
  • 30% of the population have no access to public health care
  • Virtual paralysis of the universities, which since September run almost unattended by the dismissal of officials
  • Three killed by asphyxiation because of home fires for warmth
  • Four out of five blocks of flats facing the winter without heating due to inability to afford it
  • 21 continuous quarters recession
  • 34.6% of the Greek population at risk of poverty or social exclusion

Political Setup

  • SYRIZA, leads most polls of likely voters ahead of ND
  • Neo-Nazi Golden Dawn caress between 9% and 11% of the votes and consolidated as the third political force
  • Only 33% of citizens believe possible ND victory if the election were held today
  • The once mighty Pasok, houses more than a trashy expectations 5% support, compared with 44% of votes in 2009

How much longer the "New Democracy" government of Prime Minister Andonis Samaras can hang together remains to be seen.

Should Samaras lose a vote of confidence for any reason, the Greek house of debt that that cannot and will not be paid back all comes crashing down.

For those counting, Greece received 240 billion euros in aid, in a foolish attempt by the Troika to keep Greece in the eurozone. Most of the loan has been earmarked for the recapitalization of banks and the payment of interest on the debt, which now accounts for 157% of GDP.

Germany and the ECB are adamant there will not be writedowns on that debt. Both are in fantasyland.

Default, accompanied by a messy eurozone breakup awaits.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Voters Take Negative View of Labor Unions; Liberals in Favor of Strikes (Until Strikes Happen); Aging Population an Anti-Union Force?

Posted: 29 Dec 2013 12:03 PM PST

In what is decidedly a good thing for California as well as the nation at-large, a recent Field Poll shows California Voters Take Negative View of Labor Unions.
According to the latest Field Poll, California voter views of labor unions have taken a decidedly negative turn over the past two and one-half years. Whereas a March 2011 survey found voters by a four to three margin, believing that labor unions generally do more good than harm, opinions about this have shifted, with more voters now saying they do more harm than good, 45% to 40%.

The poll also finds Californians sharply divided on the question of whether public transit workers should be allowed to go on strike, with 47% feeling they should continue to have this right, while 44% believe they shouldn't. Voters in the nine-county San Francisco Bay Area, who faced a paralyzing strike by its Bay Area Rapid Transit (BART) workers in both July and October and who face the possibility of a third strike, are more likely than voters elsewhere to oppose public transit workers having the right to strike.

Overall Results



click on any chart for sharper image

Demographic and Political Breakdown



Union Household Trends

  • Those on the take at the expense of everyone else (unions) are overwhelmingly pro-union.
  • Even among union households, note the sharp 13% increase in the percentage of people who say unions do more harm than good. 
  • By a 49-35 margin, nonunion households now say unions do more harm than good.

Primary Union Support

  • Union households
  • Los Angeles County
  • San Francisco Bay Area
  • Age Group 18-29
  • Latinos
  • Blacks

The age demographic is interesting. Are teachers pounding pro-union propaganda into kids heads from age six through college?

Support for Ability to Strike



Those in Favor of Ability to Strike

  • Democrats
  • Independents
  • Liberals
  • Union households
  • Los Angeles County
  • Age Group 18-29
  • Age Group 30-39
  • Latinos
  • Blacks

Those Against Strikes

  • Republicans
  • Conservatives
  • San Francisco Bay Area
  • 65 and older
  • Asians

These results are extremely interesting. Of course we see the expected political breakdowns.

Aging Population an Anti-Union Force?

Those 40-64 are against strikes by a  49-43 margin. Those 65 and older are against strikes by a 50-39 margin.

Those over 65 may be increasingly dependent on reliable public transportation and may be on fixed income as well. Those on fixed income budgets do not like price hikes because their income cannot keep up.

Implications suggest that an aging population is an anti-union force.

Liberals in Favor of Strikes (Until Strikes Happen)

On the humorous side, take a good look at San Francisco which suffered through a massive BART (Bay Area Transportation) strike. For details, please see my October 18 post BART Holds San Francisco Hostage; Best Way to Deal With Public Unions

The San Francisco Bay area, a bastion of liberal foolishness, is now against the ability of public transportation strikes by a 52-41 margin.

Conclusion: Liberals are all in favor of strikes until they are personally affected by them!

What follows is a repeat of things I have stated earlier. Some might not be aware but even FDR saw the light regarding public unions.

Message From FDR

Inquiring minds are reading snips from a Letter from FDR Regarding Collective Bargaining of Public Unions written August 16, 1937.
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.

The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.

A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.
For more on public union slavery, coercion, bribery, and scapegoating please see ...



Best Way to Deal With Public Unions

The best way to deal with public unions is to not deal with them at all. Ronald Reagan had the right idea when he fired all of the PATCO workers.

Scott Walker had the right idea in Wisconsin when he ended collective bargaining of some public unions. Unfortunately, Walker failed to include police and firefighters.

Actual Wisconsin results prove Union-Busting is a "Godsend"; Elimination of Collective Bargaining is the Single Best Thing one Can do for School Kids

It's time to implement national right-to-work laws and put an end to public union collective bargaining nationally.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

New Law in France: Limos Must Wait 15 Minutes Minimum Before Picking Up Rides

Posted: 29 Dec 2013 10:51 AM PST

Want to arrange a limo in France to take you to the airport or go on a private tour? Thanks to a new law in France, you have to wait a minimum of 15 minutes except at 4 or 5 star hotels.

The reason: taxis persuaded government that chauffeur driven limos are "unfair competition".

Via translation from Les Echos, please consider Taxis against VTC: the conflict continues.

Note: "VTC" (Voiture de Tourisme avec Chauffeur) translates roughly as chauffeur driven touring car.
Starting January 1, limos must wait 15 minutes before they can pickup passenger. According the Minister of Crafts, Trade and Tourism and the Interior Minister, the delay helps distinguish the activity of VTCs from taxis.

The "Competition Authority" criticized the decree, emphasizing in particular that the radio taxis also operate on reservation. The "Competition Authority" claims the situation is "detrimental to consumers."
I had to look this up because it's the first I have heard of France's "Competition Authority".

Wikipedia explains "The Autorité de la concurrence (English: Competition Authority) is France's national competition regulator."

It's shocking the Autorité de la concurrence actually translates its rulings and opinions into English. Here are some examples.

Opinions translated into English


What's even more shocking than decisions translated into English is the fact that the Autorité de la concurrence appears to be on the right side of the issue (Does someone at the Autorité de la concurrence operate a VTC on the side?)

Regardless, Hollande's Minister of Crafts, Trade and Tourism and the Interior Minister ruled in favor of taxis. But the taxis are not fully appeased either. Taxis don't want competition from VTCs at all.

This is the way things "work" in France.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

28.12.13

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


France Seeks Another Tax on Facebook, Google And YouTube, to Finance "French Culture" Cinema

Posted: 28 Dec 2013 12:12 PM PST

The economic stupidity in France is astounding. It's hard keeping up with all the inane ideas of President Francois Hollande's socialist administration. Here's another one of Hollande's ideas for your amusement.

RT reports French broadcasting watchdog CSA eager to tax YouTube, Facebook, Dailymotion
France's Superior Council of Audiovisual, an independent broadcasting authority, wants to impose taxes on media giants like YouTube, Facebook and Dailymotion to force them to contribute to financing French culture.

The sites fall into the same category as video-on-demand services, the organization said; so they would be subject to French cultural protection laws that require distributors to hand over some of their revenues to help subsidize productions.

"These platforms have been developing partnerships with audiovisual publishers and content providers for years, with which they share revenues from advertising," the report [in French] said.

The watchdog has urged the French government to conduct research into the websites' profit from professional productions and to determine how much they may be required to pay.

The obstacle which remains, though, is the fact that the legislation is only applicable to websites that are based in France. In the future, the organization is planning to demand all video-on-demand services to declare their existence to the CSA.
Culture Tax

Bloomberg reports France's 'Culture Tax' Could Hit YouTube and Facebook
Should YouTube subsidize le cinéma français? France's audiovisual regulator thinks so. In a report this week, the Superior Audiovisual Council (CSA) says that video-sharing websites should be subject to a tax that helps finance the production of French films and TV shows.

The so-called culture tax, totaling more than €1.3 billion ($1.8 billion) annually, is paid by movie theaters, broadcasters, and Internet service providers in France. The CSA contends that YouTube (GOOG), French video-sharing site DailyMotion, and their ilk are effectively providing video-on-demand services, which are already subject to the tax.

Separately, France is considering a tax on smartphones, tablets, and other devices as another source of revenue for cultural subsidies. A government-commissioned report, released in May, said that a sales tax of 1 percent should be imposed on electronic devices capable of accessing movies, music, and other content. The proposed tax would raise an estimated €86 million annually that would be used to finance the "cultural industries' digital transition," France's Culture Ministry said at the time.

Trade associations for French Internet and technology companies spoke out against the proposal, which the government has not yet acted on. Rejecting the government's assertion that a 1 percent tax would be "painless," the groups warned in a statement in July that the government should be encouraging growth of the digital economy, rather than taxing it.
Subsidies For Films No One Watches

Forbes has some interesting comments as well. Please consider French Try Another Tax On Facebook, Google And YouTube
France is trying to impose another tax upon Facebook, Google and YouTube. It's going to go into subsidies for all those French films that no one ever watches. Which is, of course, why they need subsidy.

The basic background here is that the French are so proud and so confident of the superiority of their culture that they fear it will be wiped out by all these imports of American and other "Anglo" productions. They thus have various limits on how many of these imports there can be: even to the point that in the past they have had exemptions from the standard European Union strictures on the free movement of goods and services. They've even got a law stating that English cannot be used in advertising: this named after the Minister that brought it in, Jack Allgood.

There is just one small problem with this:

The obstacle which remains, though, is the fact that the legislation is only applicable to websites that are based in France.
The moral of the story is "Don't base websites, start businesses, or expand businesses in France".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

27.12.13

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Obamacare Showdown: Missouri Bill to Gut Obamacare, Ban Penalties, Ban Healthcare Exchange; How Would Obama Respond?

Posted: 27 Dec 2013 04:30 PM PST

If enough states act, we are on the way to a constitutional showdown over Obamacare. The Washington Times reports Missouri bill would gut Obamacare
Next month, the Missouri Senate will consider a bill which would effectively cripple the implementation of the Affordable Care Act within the state.

Following the lead of South Carolina, where lawmakers are fast-tracking House Bill 3101 in 2014, and Georgia, where HB707 was recently introduced by Rep. Jason Spencer, Missouri State Senator John T. Lamping (R-24) pre-filed Senate Bill 546 (SB546) to update the Health Care Freedom Act passed by Missouri voters in 2010. It passed that year with more than 70% support.

SB546 would ban Missouri from taking any action that would "compel, directly or indirectly, any person, employer, or health care provider to participate in any health care system." That means the state would be banned by law from operating a health care exchange for the federal government.

The bill also proposes suspending the licenses of insurers who accept federal subsidies which result in the "imposition of penalties contrary to the public policy" set forth in the legislation. Since it is unlikely that any insurer would then accept a subsidy, not a single employer in the state could be hit with the employer-mandate penalties those subsidies trigger.

Following significant portions of the Tenth Amendment Center's four-step plan to nullify Obamacare on a state-level, Fox News Senior Judicial Analyst Judge Andrew Napolitano noted that such actions were not just legal, but effective.

"If enough states do this, it will gut Obamacare because the federal government doesn't have the resources … to go into each of the states if they start refusing," he said.

Tenth Amendment Center national communications director Mike Maharrey suggested that a large-scale effort against the Act would be coming. "Our sources tell us to expect at least ten states moving in this direction in the coming months. But that will only come true if people start calling their state representatives and senators right now. State lawmakers need to know they should introduce bills to ban the state from participating in any Obamacare programs."
Nullify Obamacare

Inquiring minds are investigating the Nullify Obamacare website for further information.
INTRODUCTION

States have always held the prerogative of whether or not they will enforce or participate in federal acts or regulatory programs.  This legislative package seeks to ban the state from enforcing or assisting in the enforcement of the federal Patient Protection and Affordable Care Act of 2010.  It also seeks to ban the State, along with all its political subdivisions, from operating or participating in the operation of a health care exchange under the federal act.  It also provides for penalties for violations of the act.

FOUR STEPS

Step 1: Ban State Enforcement, Participation and Material Support
Step 2: Reject Medicaid Expansion
Step 3: Protect Residents from Mandates
Step 4: Challenge the IRS's illegal ObamaCare taxes

LEGAL BASIS

The "approach is on sound legal footing"
-Mercer University law professor David Oedel, part of the legal team that represented Georgia in its court challenge to Obamacare

There is a long-standing legal tradition which supports the choice of the State to determine whether or not they will participate in a federal act.

James Madison, writing in Federalist #46, recommended state responses to "unwarrantable" (unconstitutional) or merely "unpopular" federal acts which included "a refusal to cooperate with officers of the Union."

Supported by Supreme Court opinions spanning more than 150 years, the "anti-commandeering doctrine" is the legal principle that states are not required to help the federal government enforce federal acts or regulatory programs.

The cases are as follows:

* 1842 Prigg: The Court held that states were not required to enforce federal slavery laws.
* 1992 New York: The Court held that Congress could not require states to enact specified waste disposal regulations.
* 1997 Printz: The Court held that "the federal government may not compel the states to enact or administer a federal regulatory program."
* 2012 Sebelius: The Court held that states could not be required to expand Medicaid even under the threat of losing federal funding.

Anti-commandeering is virtually undisputed by legal experts from both the left and right.

EFFECT

A number of states following this plan will "gut Obamacare."
-Judge Andrew Napolitano on Fox News, 12-10-13
For more details on each of the steps, please see Model Legislation: Nullify Obamacare in 4 Steps

How Would Obama Respond?

Regardless of the constitutionality of this action by states, how could Obama act in response?

I suppose Democrats could cut off various state funding. But that would take a Democratic controlled Congress (and its pretty safe to assume that's not going to happen).

Would the Federal government setup health exchanges in states? With what funding?

This could get interesting if even three states nullify Obamacare, and allegedly 10 states are considering such action.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Fear the Octopus: Judge Says NSA Phone Surveillance Is Legal; Case Likely Headed to Supreme Court

Posted: 27 Dec 2013 11:48 AM PST

December 16 Ruling vs. Ruling Today

On December 16, in a rare victory for constitutional freedoms, U.S. District Court Judge Richard Leon, ruled NSA phone program likely unconstitutional. (See District Court Judge Rules NSA Phone Taps Likely Unconstitutional; 68 Page Ruling Cites "Orwellian Technology" and Unreasonable Searches).

In contrast, a Manhattan District judge ruled today NSA Phone Surveillance Is Legal
U.S. District Judge WIlliam H. Pauley III in Manhattan sided with the government in his decision Friday, calling the collection program a "vital tool" to combat terrorism and deeming it "the Government's counter-punch."

The ruling stands in conflict with a decision issued earlier this month in a separate case by a federal judge in the District of Columbia who said the program "almost certainly" violated the Constitution.

The New York case was brought in June by the American Civil Liberties Union, which claimed that the NSA was violating the group's constitutional rights by collecting metadata from the ACLU's phone calls. It was among the first big legal challenges against the NSA program after it was disclosed in June.

The group sought a court order declaring that the mass call logging violated federal law governing foreign intelligence surveillance as well as constitutional free speech and search-and-seizure protections.

Judge Pauley disagreed. "The right to be free from searches and seizures is fundamental, but not absolute," he wrote.
Case Likely Headed for Supreme Court

The Guardian comments on today's NSA Phone Ruling.
A legal battle over the scope of US government surveillance took a turn in favour of the National Security Agency on Friday with a court opinion declaring that bulk collection of telephone data does not violate the constitution.

Friday's ruling makes it more likely that the issue will be settled by the US supreme court, although it may be overtaken by the decision of Barack Obama on whether to accept the recommendations of a White House review panel to ban the NSA from directly collecting such data.

But the ruling from Judge William Pauley, a Clinton appointee to the Southern District of New York, will provide important ammunition for those within the intelligence community urging Obama to maintain the programme.

Judge Pauley said privacy protections enshrined in the fourth amendment of the US constitution needed to be balanced against a government need to maintain a database of records to prevent future terrorist attacks. "The right to be free from searches is fundamental but not absolute," he said. "Whether the fourth amendment protects bulk telephony metadata is ultimately a question of reasonableness."

Pauley argued that al-Qaida's "bold jujitsu" strategy to marry seventh century ideology with 21st century technology made it imperative that government authorities be allowed to push privacy boundaries.

"As the September 11 attacks demonstrate, the cost of missing such a threat can be horrific," he wrote in the ruling. "Technology allowed al-Qaida to operate decentralised and plot international terrorist attacks remotely. The bulk telephony metadata collection programme represents the government's counter-punch: connecting fragmented and fleeting communications to re-construct and eliminate al-Qaida's terror network."

The ACLU said it would appeal the decision, starting in the New York circuit. "We are extremely disappointed with this decision, which misinterprets the relevant statutes, understates the privacy implications of the government's surveillance and misapplies a narrow and outdated precedent to read away core constitutional protections," said Jameel Jaffer, ACLU deputy legal director.

Judge Pauley said his ruling did not mean it was right to continue with the program, which he acknowledged was a "blunt tool" that "imperils the civil liberties of every citizen" if unchecked. "While robust discussions are under way across the nation, in Congress, and at the White House, the question for this court is whether the government's bulk telephony metadata program is lawful. The court finds it is," he wrote. "But the question of whether that program should be conducted is for the other two coordinate branches of government to decide."
Conflicted Ruling

Pauley appears to to talking out of both sides of his mouth at the same time, each side saying a different thing.


  1. "The right to be free from searches and seizures is fundamental"
  2. "The right to be free from searches and seizures is not absolute" 

  1. Collection program a "vital tool".  Al-Qaida's "bold jujitsu" requires government to push privacy boundaries.
  2. Phone collection "blunt tool" that "imperils the civil liberties of every citizen" if unchecked. 

  1. "Bulk telephony metadata program is lawful"
  2. "It's for the other two coordinate branches of government to decide"

Fear the Octopus

Is Pauley a constitutional as well as hypocritical wimp or what? Hopefully the Supreme Court gets it right.

My fear is Obama makes some totally meaningless changes in the program to get the Supreme Court ruling he wants, then after the ruling, lets the NSA do whatever it wants, which is to collect everything on everybody, stored permanently.

Nothing Beyond the Octopus Reach

For more on the NSA and its illegal actions, please see the chilling report Nothing Beyond the Octopus Reach

My conclusion ...
The Patriot Act was anything but. It should be scrapped. James Clapper [Obama's Intelligence Director] should be prosecuted and spend the rest of his life in prison where he can think about the true meaning of patriotism.

Meanwhile, those looking for a true patriot ought to stand up and salute Edward Snowden. He risked his life, security, and personal freedom to protect the US constitution. What's more patriotic than that?
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Madrid Bans Vacation Home Rentals to "Protect Tourists" and "End Unfair Competition"

Posted: 27 Dec 2013 09:55 AM PST

In the name of "Protecting Tourists" Madrid Prohibits Vacation Rental Homes. Via Mish-modified translation from El Economista ...
Proposed rules would effectively prohibit homeowners from renting their homes. Rental licenses will be only given to properties for primary uses (hotels, offices, etc.), not to individuals for temporary use.

The Community of Madrid seeks "to establish minimum requirements designed to "protect the rights of tourists" and to "end unfair competition."

News follows rent laws published in June in which prime minister Mariano Rajoy allowed each of the 17 regions to legislate rentals on their own.

If approved, individuals will find it almost impossible to temporarily rent their home through internet sales as it will be very difficult to obtain a license to conduct such activity. According to the Hoteliers Association of Madrid (AEHM), there are currently about 8,000 community accommodations.
Clearly, the proposal seeks to eliminate competition to the unfair advantage of hotels. If hotels cannot compete against homeowners, they are charging too much for what they offer.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

European Monetary Union Misnamed; I Propose GEU (German Economic Union) or USG (United States of Germany)

Posted: 26 Dec 2013 11:23 PM PST

The irony and hypocrisy in chancellor Angela Merkel's first parliamentary speech of her third term would be astounding were it not par for the "Everything for Germany" course of action.

Please consider Chancellor Urges Reforms to Preserve Euro
In her first parliamentary speech since her re-election for a third term on Tuesday, she warned that Europe needed to take further action to make the euro zone crisis-proof.

More European Control

"I know that pushing through treaty changes in the member states can be difficult, but if you want more Europe, you have to be prepared to develop it further," Merkel said. "In a world that is constantly changing, we can't stand there and say that at some point we agreed the Lisbon Treaty and there's no need to change it again. This won't work."

Germany wants closer economic policy coordination and will push at a summit of European Union leaders on Thursday and Friday for members to agree binding contracts with the European Commission to implement further reforms.

It is also pushing for changes to the Lisbon Treaty to give greater European control over policy. Germany's closest ally in Europe, France, opposes such a move, as do other member states.

"European unity remains one of the most important tasks of the grand coalition," said Merkel. "Germany is only strong if Europe is strong."

Criticism of EU Green Energy Probe

She said she would fight an EU probe announced on Wednesday into exemptions from a green energy surcharge for some 2,000 German companies. The European Commission is examining whether the exemptions, totalling some €5 billion and granted to heavy energy users like the steel industry, were unfair and should be repaid.

The German government would not tolerate a weakening of German industry or job losses, she said. "Germany wants to remain a strong industrial location, we need competitive companies," she said. "This is about companies and when it's about companies, it's about jobs."

She said Germany's new Economy and Energy Minister, Social Democrat Sigmar Gabriel, would make this very clear to the European Commission.
Merkel the Hypocrite

Allegedly Merkel wants more EU controls. She is even at odds with France over controls. But let the EU propose energy controls and all of a sudden she does not want them.

Recall that Germany backtracked on the  banking union. Heck, Germany fought bitterly to have some of its banks specifically excluded from banking union provisions, and won.

Now Germany wants more integration. Except of course when it doesn't, like a true banking union deal a week ago, and energy controls today.

I am certainly not defending EU energy policy. But I am critical of the inherent hypocrisy in Merkel's plea for more EU controls when she does not want more EU control, but rather more German control.

Since this is par for the course, (and it will remain that way), let's put an appropriate label on it.

Do You Prefer

  1. GEU - German Economic Union
  2. USG - United States of Germany

Is it number 1 or number 2?

The question is moot actually, except for the short-term. Long-term, the European Monetary Union is doomed.

I made the case for a disorderly breakup in Laughable Eurozone Banking "Non-Union".

Merkel's first parliamentary speech of her third term adds credence to the disorderly breakup thesis.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com