Orange Reddish Object Over Columbia Maryland

Date: December 31, 2010

Time: Approx: 11:53 p.m.

My two friends and I saw an object gliding by our restaurant at around 11:53pm. The object had orange-reddish light forming a triangular shape that slid across the sky. The object made no sound as it distanced itself from view. It went from a close-up look to a distant figure in a matter of 1 to 2 minutes. We found this site as we are still trying to wrap our heads around what we saw.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Round Object With Orange Aura Over Salt Lake City Utah

Date: January 1, 2011

Time: 12:08 a.m.

Location of Sighting: Salt Lake City Utah.
Number of witnesses: 1
Number of Objects: 1
Shape of Objects: Round with orange aura.

Full Description of Event/Sighting: It traveled upward, not toward the horizon. Horizontal seemed odd once it started making quick moves, abnormal for aircraft movement. Then continued heading upward. It was very cool stuff. I hope more people saw it too!

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Blue Light Flash Across The Sky Over Stockton California

Date: January 1, 2002

Time: 2:00 a.m. – 3:00 a.m.

Location of Sighting: Stockton California.
Number of witnesses: 1

Full Description of Event/Sighting: Now the way I remember I,t is it happened on New Years eve, actually New Years day if you want to be technical (Jan 1) I woke up around 2:00 – 3:00am. in the morning for I don't know what reason and out of my window I saw a blue light flash across my window. I pulled up my blinds and opened my window to get a better look and within five minutes I saw the blue light stretching from west to east, but moving from north to south.

I'm not sure what I saw, I'm still pretty skeptical about it because all I saw was a flashing light that moved across the sky. I felt that I needed to share this because it’s been bothering me a bit and now that it’s New Years, it kind of reminded me about it. So if any body else have seen this, send me an email. Oh I'm not quite sure about the year, all I know is that it’s some where around that number.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Orange Lights Over Jacksonville Florida

Date: January 1, 2011
Time: 12:20 a.m.

I was enjoying the New Year and walked out into my backyard in Jacksonville Florida. I noticed an orange looking light that resembled an airplane. It was interesting to note that I had only seen one single engine plane since 10:00pm this evening, since I normally see airplanes in the sky constantly. Always see the blinking lights and very accustomed to seeing them.

So I definitely found it odd that I didn't see any airlines flying around at about 10:00pm or later. For me, that was great, because I could see the night sky and it's stars clearly. I was walking back into the house and noticed an orange light, no big deal, but the light was at about 15,000 to 20,00 feet since I'm pretty good at seeing 30,000 feet airplanes. So these lights were lower than a traveling airplane.

I saw one light and thought is was a plane, then thought it was a star, but the reality starting setting in that this wasn't a star, since it was moving quickly and realized that it must be a plane. I was waiting to see the red light. I was waiting to see the pattern of lights that an airplane usually displays. So I looked more intently and the interesting part of what I saw is that it looked to veer and become smaller.

So I was intrigue by that and thought, ok, was that a horizontal firework? Or a fireworks display gone bad? Maybe, except that there were three other orange, semi blinking, ball formation lights in a single file line right behind it. That's when I thought it was weird and pulled out the cell phone camera which couldn't pick up the imaging.

Then called my daughter, 7, to look at it with me and she said, "That's weird" and ran into the house and I called her back out because I love astronomy and I wanted her to see this. She came back out and we watched the light disappear into the atmosphere.

I was looking directly at Orion's Belt when the first light appeared. A little to the left of the constellation is where the other three 'balls' of light appeared and travelled west. It was fast and odd in that the color of the lights were like no other object I had ever seen. It seemed like the sun was shining on these objects as they travelled, but I just don't know if that's possible at this hour. I read an earlier story about another person seeing this type of light also in this area, but the time was 11:20pm. My sighting was eerie at 12:20pm.

Not sure what I witnessed, if it was real or a hoax, but I know it was something.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Red Fireball Flickering Light Over Hudson Florida

Date: December 31, 2010

Time: Evening

My name is (name removed). I can be reached, along with one of the other witnesses at (phone number removed). I wish I had observed the time of sighting. We are in Country Club Estates, along U.S. 19 near the Wal-Mart in Hudson/Bayonet Pt. Red/orange flickering light, larger than a pinpoint.

Reminded us of a cigarette 'cherry'. Moved from SE to NW across our view for around 60 seconds. Could not estimate height, but there was no 'under glow' from the numerous lights along the 19 corridor.

No sound. No blinking aircraft lights, no suspending 'balloon', or other structure visible.

Lifetime night sky observer, had a sighting as a child in the 1970s, and have never seen anything I could not identify again until tonight.

We observed it from our backyard (facing southeast), then went out in front of the house, and watched it eventually fade from sight to our northwest. Moved at apparent aircraft speed, although with no altitude information, it is hard to say. It was not floating, we have seen luminaire and balloon suspended lights before. Anyway....Yeah. WOW.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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HBIC YIR - Part Two

We're back for the second half of Hockey Blog In Canada's Year In Review. Champagne, good food, and friends and family should be on the docket tonight, so HBIC will run through some of the highlights from the second half of the year. Yesterday, we took a look at the stories from January to June that attracted some attention, and we'll do the same today as we work through July to December. Happy New Year, everyone, and we'll be back in the normal fashion starting on January 1 with more hockey-related news and stories. Until then, all the best in the new year, and may health and happiness find you no matter where you are!

July Highlights

• July 2: An interesting Sports Illustrated article from 1976 shows that some of rules instituted by the NHL in the last few years are the same ones that players in the 1970s wanted. History does indeed repeat itself, it seems.
• July 5: Hockey loses one of its most feared players as Bob Probert passes away. I always respected Probert as a hockey player because he was the ultimate hybrid of guts and skill. Unfortunatley, his star burned out far too early.
• July 9: The National Film Board of Canada has another video gem in their archives. The Rocket is all about Maurice Richard, and is a fascinating film!
• July 16: The Hartford Whalers. I love the Whale, and I really wish the original Hartford Whalers were still playing. This article brings back some great memories.
• July 26: ESPN runs an interesting column that looks at the cleanliness and overall food quality of arenas and stadiums. A very interesting read for those attending games.
• July 29: Sports Illustrated's 1969 article about how Vancouver was going to become competitive as an expansion team is almost too incredible to believe. Except it happened, and Sports Illustrated ran the story.

August Highlights

• August 4: We get out first glimpses of what the Montreal Canadiens and Calgary Flames will be wearing during the 2011 Heritage Classic. Also included: my comments.
• August 12: HBIC recaps the first-ever Canadian Women's Hockey League draft. There are some good teams being assembled, and I think this league deserves a little recognition.
• August 15: Some incredible WHA news was reported in this 1979 Sports Illustrated article. It's amazing to read some of the interesting stuff that happened in the "Dub".
• August 31: Seventy-four year-old Chris Chelios announces his retirement from hockey. Immediately after, hell freezes over.

September Highlights

• September 4: HBIC's month-long road trip through the midwestern US takes me through Kansas City, Missouri. Lots of good hockey history in that city, and I look at some of it.
• September 5: The following day had me in Oklahoma City, Oklahoma. Great city, and some solid hockey history there. I really enjoyed my time in the city.
• September 8: Houston's WHA era was interesting, and certainly has some very cool history behind it. The Howes, the flirting with the NHL, and their eventually dissolution are all covered in this piece.
• September 9: Houston's WHA Aeros led to the IHL's Houston Aeros being born in memory of the WHA franchise. Some more excellent hockey history here.
• September 20: San Antonio is a gorgeous city, and I really enjoyed my time there. Because of my visit, I wrote a piece on San Antonio's hockey history.
• September 23: My stop in Des Moines, Iowa was short, but I drove through the city rather than going around it. A lovely little city that has a solid hockey history attached to it.
• September 29: The Whale return! Unfortunately for Hartford, the Whalers continue to not exist while the AHL's Hartford Wolf Pack will become the Connecticut Whale. I'm not impressed with these developments.

October Highlights

• October 2: Washington shows off its uniform choice for the Winter Classic. While the jersey choice is highly appropriate, Reebok's lack of effort in recreating the uniform is more than disappointing considering the magnitude of the game.
• October 17: Found some great viral video from France that features a guy showing people what it looks like when a player gets bodychecked into the boards. Hilarious!
• October 29: The Penguins show off their chosen duds for the 2011 Winter Classic. It's kind of a mish-mash of former uniforms, but it gets a pass.

November Highlights

• November 7: Buffalo and Toronto clash in the annual Hockey Hall of Fame game, and Buffalo shows up with some serious problems on their uniforms.
• November 12: The New York Rangers officially unveil their new alternate uniforms just weeks after Sean Avery unveiled them on his website.
• November 13: The Saskatoon Blades donned their "Canadian tuxedo" uniforms to welcome the Professional Bull Riders Association, as well as Gene Simmons and Shannon Tweed.
• November 20: Pat Burns, the legendary NHL coach who won three Jack Adams Awards, succumbed to cancer after a long battle. Burns' contributions to hockey will live on forever, and we lost a great man far too soon.
• November 25: The Columbus Blue Jackets unveil their new alternate jersey, and I express my unhappiness with their choices. This won't be the last time we talk about these uniforms, I assure you.
• November 26: Another day, another alternate unveiling, more unhappiness from Teebz. This time sees the Anaheim Ducks squarely in my cross-hairs.
• November 30: It was a tough November as the hockey world lost another great. Hall of Fame writer Jim Kelley lost his battle with pancreatic cancer, and the world loses one of the most passionate hockey voices on the planet.

December Highlights

• December 2: The Portland Winterhawks unveil a new alternate jersey, but it looks remarkably like a jersey from a team in a different sport. To err is to be human, but this one just makes the team look bad in ripping off another team's idea.
• December 9: The University of Michigan and Michigan State University look to make history as they play an outdoor game in The Big House at Ann Arbor. Lots of cool information here about outdoor games.
• December 13: Remember those Blue Jackets' alternate uniforms? Apparently, the team has decided that superstition will kill them off as Columbus looks to mothball them.
• December 18: Donald Fehr is introduced as the new Executive Director of the NHLPA. Baseball laughs and mocks the NHL over their horrible luck. However, Fehr sounds like he's more interested in making hockey better.
• December 20: The world of Teebz and HBIC are changing. Actually, they already have by this point, but I've now charted a better future for me. Cross your fingers, kids!
• December 23: John MacLean is fired by the New Jersey Devils, and Jacques Lemaire is brought back. I point a finger at the $100M root of all the problems in New Jersey.

So there's another year down in the history of Hockey Blog In Canada. I'm really looking forward to next year already, and it starts with the 2011 Bridgestone Winter Classic tomorrow afternoon evening. Hunker down in front of the old cathode ray tubes, and enjoy some outdoor hockey from Sid the Kid and the Great Eight!

Until next time, keep your sticks on the ice!

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Two Red Lights Over Naples Florida

Date: December 31, 2010
Time: Approx: 11:20 p.m.

Two red lights slowly moving east to west across the sky. Around 11:20ish 3 witnesses saw it glide across the sky at a medium speed. dark but bright red. Appeared to have a membrane of light around them.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Red Fireball Ball Holiday Florida

Date: December 31, 2010

Time: Evening.

A few neighbors a and I have seen a red fireball ball moving from East to west 3 times tonight in Holiday, Florida. No tail on this one either.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Red Lights Over Towson Maryland

Date: December 31, 2010

Time: Approx: 10:00 p.m.

Me and my girlfriend were outside in our back yard letting our dog out around 10:00pm eastern standard time. We saw a red light come up from behind some tree's, but it was very fast moving and we tried to follow it, but it all of a sudden disappeared. We started talking about what it could of been and we did not hear any noise so we were confused.

About 1-2 minutes later another red light appeared heading the exact same path as the previous one and again the light disappeared and we lost it. Finally about 1-2 minutes later another red light appeared and we kept a much closer eye on this one to realize it did not disappear, but actually turned it's light off and kept going the same way (we could very faintly see a outline.)

Again there was no sound to the moving object and all were going to the exact same path. Is there any explanations for this?

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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"Crash Tax" Ripoff Expands in California and New York

You pay taxes for services. At least you think you do. Fifty cities in California think you don't. They tax the hell out of you, then bill you if you need services. Drivers who cause accidents in at least 50 cities can be billed for the police and firefighters who show up.

Please consider 'Crash taxes' are growing in popularity among cash-strapped California cities

At least 50 cities in the state have adopted so-called crash-tax laws allowing local governments to seek reimbursement from insurance companies for the costs of sending public emergency crews to accident scenes. The fees can amount to hundreds or even thousands of dollars. If insurers don't pay, cities can hire collection agents to seek payment from the motorists involved.

Sacramento, with nearly half a million residents, soon could be the largest city in California to do so. The City Council has scheduled a vote next month to establish what it's calling a "fire cost recovery charge." The fee would reimburse the city for a variety of emergency-related chores, including cleaning up hazardous fluids, putting out vehicle fires and responding to gas line explosions and downed power poles. Proposed fees would range from $432 for a "scene stabilization" to $2,275 for a helicopter evacuation. The measure is expected to raise as much as $500,000 a year, city spokeswoman Linda Tucker said.

"To me, it's an outrage. We're already paying these people — the police department, the fire department, the emergency vehicle drivers — handsome salaries and benefits," said Lew Uhler, president of the National Tax Limitation Committee. "Either we stop this kind of nonsense or we should quit paying taxes for these kind of services."

The practice isn't limited to cities in struggling California. It's gaining momentum nationwide as cash-strapped communities seek a way to offset budget cuts.

This month, New York Mayor Michael R. Bloomberg proposed charging drivers there as much as $490 when firefighters respond to an accident or a vehicle fire, beginning July 1. A public hearing is set for January.

Local taxpayers shouldn't have to pay for accidents they had no part in creating, said Costa Mesa Fire Battalion Chief Bill Kershaw.

"Someone has to pay for the cleanup," he said. "We're subsidizing the insurance companies" if cities don't collect from the responsible parties.

At least 10 states, including Florida, Georgia and Pennsylvania, have already banned the collection of accident-response fees, according to A.M. Best Co., an independent insurance information service based in Oldwick, N.J.

But California cities and the companies they hire to collect accident fees are gearing up for a fight. The Strickland bill would prohibit local governments from collecting for all types of emergency services, including fire, police and medical, they said.

Such a ban "could devastate city services and economic health," the League of California Cities said in a letter to lawmakers.

Insurance companies are trying to harness populist antitax sentiment, typified by the "tea party" movement, to protect their own profits, said Rick Benner, chief financial officer of Fire Recovery USA.

The gall of Rick Benner of Fire Recovery USA and Costa Mesa Fire Battalion Chief Bill Kershaw infuriates me.

Firefighters together with police unions they have bankrupted most cities in the nation. Public union firefighters and police (in general) are the most overpaid undeserving ungrateful ingrates the country has ever known.

Those statements will annoy many, but it is the truth, in general, especially for the larger cities. If you are a small town police officer or firefighter with few benefits then what I said may not apply to you.

I would gladly support collection measures if tax dollars did not already go to overbloated, untenable public union pension contracts.

Spare me the sap about how dangerous the jobs are. Please consider the 8 Most Dangerous Jobs in the World

1. Fishermen
2. Pilots and airline employees
3. Loggers
4. Structural construction workers
5. Waste management employees
6. Farmers and ranchers
7. Power-line technicians
8. Roofers

The true heroes deserving of respect and appreciation are volunteer fire departments.

The problem is expenses not lack of revenues. Cities ought to outsource both police and firefighters, the latter to volunteer departments in return for reduced or eliminated property taxes.

How many people do you think would volunteer for a few days a month in return for elimination of property taxes?

I bet enough to get rid of nearly every public union fire department in the country.

Addendum:
Please see In Praise of Volunteer Fire Departments
for an email response from a 20-year police and fire union worker, and my rebuttal to his response.

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

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Lights Zooming Around The Sky And Witnesses Truck Lit Up At Strip Pits (State Park) Just East Of Columbia Missouri

Date: Late 1980/Early 1981.

Time: 1:30 a.m. - 2:30 a.m.

Number of witnesses: 1
Number of Objects: 5 – 10 ?
Shape of Objects: Spherical ?

Full Description of Event/Sighting: I noticed a bright red/orange spot in the sky, which molted into greenish blue and then I noticed white other lights streaking across the night sky toward and away from the larger spot, at rates far faster than any earthly aircraft. Then the ground around the truck began to brightly light up as if spotlighted, here and there, but with no visible 'beam' or source.

As this 'spotlight' eventually 'lit up' the truck where my infant son and I were waiting for my husband to come back with help for a flat tire that had occurred while we were out there nighttime cat-fishing in the strip pits. I began to try to communicate telepathically (in real fear and in the moment losing control of my bladder, that "Please don't do anything to my son. He's just a baby. Do whatever to me, but not my son. I'm not a threat. I'm friendly. I believe in peace for all beings of the universe and other trite sounding thoughts"

Just as quickly as this all began, I noticed the satellite white (changing to red and back) lights in the sky all zoomed toward the larger one and then 'poof' it all disappeared.

I tried to explain this all to my husband (because of the smell in the truck) but he wasn't having any of it. I waited over 20 years to bring it up to anyone again, but was so dismissed I didn't talk about it again until now.

I was searching for records on a severe downburst storm that happened in Columbia in July 1981 (that downed over 10,000 trees and almost killed my sons and me) and the Google search brought up another poster's UFO sighting file here from Columbia MO around the same time.

If I can lend any credence to their report, I hope this is helpful.

I was/am a Girl Scout First Class (equiv. to Eagle and now called Gold Award) and have extensive camping experience which includes lots of primitive camping/hiking of the Appalachian Trail.

I'm not afraid of the forest after dark. I had not smoked or drank anything that night because I was pregnant with my second son at the time. Also, if there were other reports or news about the experience at the time, I did not see/read/hear them.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Credit Default Swaps PIIGS vs CINN Group (California, Illinois, New York, New Jersey)

In response to European Sovereign Debt Crisis in Pictures; PIIGS Spreads to Germany at or Near Record Levels I received this chart from Chris Puplava at Financial Sense.



click on chart for sharper image

Chris writes "In addition to foreign credit risk (Greece, PIIGS), I’m seeing my CINN STATE (CA, IL, NY, NJ) Credit Default Swap (CDS) composite moving higher again."

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

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Mint News Blog 2011 Survey

As a way of wrapping up 2010 and looking ahead to 2011, I have created a survey for Mint News Blog readers. The questions are related to US Mint numismatic products, coins, and precious metals.

Last year about 700 people responded to the survey, providing some interesting insights and surprisingly accurate predictions. This year, the survey is a little bit shorter with fewer open ended responses to provide better focus for the coverage of results.

Take the Mint News Blog 2011 Survey

The survey will remain open through January 9, 2011. Only one response per person is allowed. Coverage of the survey responses will take place on Mint News Blog throughout the month January.

Happy New Year Everyone!

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Housing Bubble in Norway

Here is a quick post under the theme "Housing Bubbles Around The World". This one is from Norway, courtesy of reader Espen Johansen.

Dear Mish

Thank you for your effort to spread the economic truth in the jungle of lies. The Norwegian Central Bank and the authorities has fed the bubble monster for years by keeping interest rates too low too long, and the biggest culprit, socializing credit. (We have a socialist/communist government, and have had a blend of that since 1990)

I have tried sending letters to the finance ministry, and the central bank, but no one seem to wake up. About 90 % of all households have Floating rate mortgages.

I do not blame the banks, they know they will be bailed out, and compete doling out as much money as they can to make a profit for share/bondholders with the given terms of a bailout waiting.

A picture says more than a 1000 words, and enclosed are some graphs I believe tell it all.

Sources: The blog “krakk!”
House price indices for Norway

End the central bank cartel, and we will see prosperity and peace.
Merry Christmas and a Happy New Year
Med vennlig hilsen/Best regards
Espen Johansen

Inflation Adjusted Housing Prices In Norway



Norway Homes Prices In Gold



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

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Revisiting Mint News Blog 2010 Survey

Last year I had put together a brief survey for Mint News Blog readers, which opened on December 31, 2009 and closed on January 8, 2010. The survey included questions about US Mint numismatic products, coins, and other topics of interest to collectors.

Besides looking back over the previous year, there were also questions about the upcoming year and an opportunity for readers to make predictions. With the year almost over, I thought it would be interesting to look back at some of these questions, responses, and predictions.

Will the US Mint issue a proof version of the 2010 Silver Eagle?

With 64.85% of the vote the majority of readers responded Yes. For most of 2010, the offering remained far from certain. On March 27, 2010 at the ANA National Money Show in Texas, the Mint Director made comments about the continuing record demand for bullion coins, which raised serious doubts about the collector offerings.

As the year moved on, there were two possible avenues for minting 2010 Proof Silver Eagles. First, a change in law could allow greater flexibility in producing collector coins. Second, the US Mint could meet full demand for bullion coins, allowing production of collector coins under existing law.

Eventually, a drop in bullion demand in August and September allowed the production of proof Silver Eagles to take place, although a change in law was also later enacted. The US Mint offered the 2010 Proof Silver Eagle beginning November 19, 2010 and it sold out by December 28.

Will the overall production of circulating coins for 2010 rise or fall from the number produced in 2009?

For this question, 61.41% of readers responded Fall, while 38.59% predicted Rise. Through November 30, 2010, annual circulating coin production for 2010 has already topped 2009 production by more than 77%.

Across all denominations there have been nearly 6.3 billion circulating coins produced during 2010, compared to 3.55 billion last year. Large increases for cents, nickels, and dimes, offset moderate declines in production for quarters and dollar coins.

Gold and Silver Eagle Bullion coin production

There were two questions asking whether readers thought production of Gold Eagle and Silver Eagle bullion coins would rise or fall in 2010 compared to the prior year. Responses were split, with about half of readers predicting a fall and half predicting a rise.

Through the current date, Silver Eagle bullion coin production rose, at 34,662,500 ounces compared to 28,766,500 last year. Gold Eagle bullion coin production fell, with 1,220,500 ounces sold this year, compared to 1,425,000 last year.

Will the price of gold rise or fall during 2010?

For this question, 74.18% of readers correctly predicted that the price of gold would rise. In a follow up question, readers were asked to predict the closing price of gold on December 31, 2010. The majority of responses fell into the correct range of $1,250 - $1,500 per ounce.

Out of all responses, the average guess was $1,375.13. The price of gold is currently $1,418.00 just before the end of the year.

Bold Predictions

A final section of the survey asked readers to make a bold prediction for 2010. A decent number of these predictions turned out to be accurate. I will include some of these predictions below with my comments in italics.

"Palladium UHR!"

A bill authorizing American Palladium Eagles was recently signed into law by the President. The coins will feature Adolph A. Weinman's designs from the Mercury Dime obverse and 1907 AIA Medal reverse. Coins will be issued within one year of the submission of a marketing survey.

"I expect the 5 oz silver National Parks coins will sell out immediately . Their prices will follow the same type of curve the 1st wives coins did when first released. By the second year, the release will be a non event."

Authorized purchasers have ordered the full US Mint production of 165,000 coins. Secondary market prices have spiraled higher, even before the majority of the coins have been sold to the public. We will have to wait and see about the second half of the prediction.

"Congress will mandate Eagle Proofs be minted for collectors."

The bill H.R. 6162 was recently signed into law by the President. Among other things, this bill will allow the Secretary of the Treasury the flexibility of authorizing collector versions of the Gold and Silver Eagles, even if full demand for bullion coins is not being met.

"At least one MS first spouse gold coin will finish its production run with under 3,000 sales."

The US Mint ended sales of the Julia Tyler First Spouse Gold Coin on June 3, 2010. The last reported sales for the uncirculated version were 2,861 coins.

"A metal change for circulating coins."

The recently enacted bill H.R. 6162 requires the Secretary of the Treasury to make biennial reports to Congress about the costs and cost trends of circulating coins, as well as make recommendations about coin composition changes. This seems to open the door to future changes.

"The new quarters will be hard to find, low mintage, and banks won't order them."

The 2010 America the Beautiful Quarters have the lowest mintages for the denomination in decades. However, they are readily available from the US Mint through numismatic bags, rolls, and other products. Availability at banks is spotty at best, due to the fact that the banks are not provided with special ordering procedures for each design, like they were for the prior State Quarters Program.

For anyone interested, you can read all of the survey responses and reader comments here.

A new survey for this year will be posted later today.

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wishes for 2011: political and personal

When we state our wishes and dreams - out loud, in public - we open ourselves to ridicule and snark. So many people claim to know the future with great certainty - which is, of course, impossible.

Wishes and dreams are too important to scoff at. All positive change begins in our imaginations. If we can't imagine something, we can't create it. Our dreams may not become reality, but I'd rather work towards a dream than ridicule dreamers.

In 2011, I'd like to see...

1. The end of the Harper Government.

2. A provision enacted by Parliament allowing Iraq War resisters to stay in Canada - and for those now in the US to be allowed to move or return here if they wish.

3. The beginning of the re-building of a liberal Liberal Party and a truly progressive New Democrat Party.

4. A full withdrawal of all foreign troops from Afghanistan and Iraq. (Remember, I said "dream".)

5. Bradley Manning released from prison.

6. A widespread understanding of the difference between support for a free Palestine and anti-Semitism.

Personally, I'd like to get...

1. A better day-job, allowing me to:
1a. pay off debt, and
1b. have a little money to travel.

2. A part-time library job.

3. A new sister for Tala. (That one's easy!)

Here's hoping 2011 is good to almost everyone. I hope Stephen Harper, Jason Kenney, Peter MacKay, Lawrence Cannon, Vic Toews, Bev Oda, John Baird and the rest of them have a very bad year.

Happy New Year!

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wmtc redesign is complete: goodbye L-girl

For anyone interested, the wmtc redesign is complete. All the tabs (static pages) along the top are now written.

Tonight at midnight, "L-girl" will be retired and "laura k" will take her place.

I've used the name L-girl since I first got online in the late 1990s, as part of a bisexual women's community. I feel a bit sad saying goodbye to that name. But it's time.

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European Sovereign Debt Crisis in Pictures; PIIGS Spreads to Germany at or Near Record Levels

The sovereign debt crisis in Europe is still simmering. Country by country, spreads to German debt are at or near record levels.

Chart follow snips from German Bonds Climb in 2010 as Fiscal Crisis Roils Euro Area

German bunds climbed this year, the best performance since 2008, as the fiscal crisis that roiled the euro area’s most-indebted nations drove investors to the safest fixed-income assets in the region.

Top-rated euro-denominated securities from Austria, Germany, the Netherlands, Finland and France led gains in 2010, while the debt of Greece and Ireland, which sought bailouts this year, had the biggest losses among 26 markets tracked by Bloomberg and the European Federation of Financial Analysts Societies.

German bonds returned a profit of almost 6 percent this year, according to the Bloomberg/EFFAS data, compared with a 20 percent loss on Greek debt, a 14 percent slump in Irish securities and an 8 percent decline for Portuguese securities. Spanish and Italian bonds also made a loss as investors demanded increasing yields to own the debt of the euro area’s high-deficit nations.

As borrowing costs climbed again amid a wave of sovereign downgrades that saw Greek debt cut to non-investment grade at Moody’s Investors Service and Standard & Poor’s, Ireland opted on Nov. 28 to follow Greece, accepting an 85 billion-euro bailout. That, too, failed to prevent the spread of the debt crisis, fueling investor concern that Europe’s stronger nations may be unwilling or unable to foot the cost of future rescues.

The extra yield investors demand to hold Greek 10-year government bonds instead of German bunds, Europe's benchmark government securities, surged to a euro-era record of 973 basis points on May 7, and was at 953 basis points today. It started the year at 239 basis points. The difference in yield, or spread, between German bonds and 10-year debt from Ireland, Portugal, Spain and Italy also reached euro-era records.

Germany, Ireland, Portugal, Greece Sovereign Debt Yields



click on chart for sharper image

France, Spain, Belgium, Italy Sovereign Debt Yields



click on chart for sharper image

Sovereign Debt Spread to Germany
Country	Jan 01	May 07	Dec 30
Belgium	0.3%	0.7%	1.0%
France	0.2%	0.4%	0.4%
Greece	2.4%	9.7%	9.5%
Ireland	1.4%	3.1%	6.0%
Italy	0.3%	1.5%	1.8%
Portugal	0.7%	3.5%	3.6%
Spain	0.6%	1.6%	2.5%

The bailouts to Greece and Ireland solved nothing. Spain and Portugal are up next. The country to keep an eye on is Italy. It is off nearly everyone's radar right now. Not mine. Italy is simply too big to bail and its spreads are creeping up.

Correction: Second chart as originally posted contained a line for Spain that was actually Portugal a second time. Now corrected.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Brilliant Green Light Slows Down South Of Fowler California

Date: December 25, 2010

Time: 5:15 p.m.

Location of Sighting: South of Fowler California.
Number of witnesses: 2
Number of Objects: 1
Shape of Objects: Oval.

Full Description of Event/Sighting: My wife was driving north on CA-99 just south of Fowler when a light caught my eye out the passenger side window. It was at least two miles up in the air and at least five miles northeast of us moving east at several hundred miles per hour. It appeared as a brilliant green light which I at first mistook for a meteor.

I pointed it out to my wife who also observed it for about six seconds, and we both watched it slow almost to a stop which it maintained for about one second. It then suddenly accelerated in a southeasterly direction to great speed and out of sight.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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HBIC YIR - Part One

Time certainly has flown this year as we're two days away from recycling those 2010 calendars hanging on walls and posted on desks. Hockey has seen some great things this year, and we've also lost some icons that made the sport much better with their presence. We've seen players emerge as superstars and we've seen superstars fall to below-average play. All of this is actually a statement about the game - it's fluid, and it's constantly changing and evolving through each shift, each game, and each season. Today, HBIC looks back on the first six months of the year, and the important stories that came from January to the end of June.

January Highlights

• January 1: We start every year off right with the NHL's Winter Classic, and the January 1, 2010 game was certainly memorable as the Philadelphia Flyers visited the Boston Bruins in historic Fenway Park. What a great day of hockey!
• January 2: Switzerland's World Junior Championship team pulls off a massive upset as they defeated Russia 3-2 to beat the Russians for the first time in history at the WJC.
• January 5: The 2010 World Junior Championship is decided in overtime as American John Carlson ends Canada's streak with his goal to give Team USA the gold medal. Great game, and a very impressive showing by America's best young hockey talent.
• January 21: If you've been following this blog, you know I'm a big fan of Frank McClelland's newest equipment invention. January 21 was the first time I was lucky enough to speak to Frank and bring to light what would eventually be his Skate Fenders product. A very interesting story to see how the plastic skate guards got started!
• January 23: I arrive in Minneapolis for the US Pond Hockey Championships, and the weather was very un-winter for the tournament. Strange weather is nothing new on the prairies, but January is rarely a month known for rain. Great uniforms seen at the tournament, and a few great stories!
• January 25: I express my disappointment with the NHL's stance on protecting its players after a major incident in the QMJHL.
• January 29: I bring to light the story of Alton White, the first professional black hockey player to record 20 or more goals in a season as well as the first professional black hockey player to record a hat trick in a professional game. Since it happened in the WHA, no one seems to care that he doesn't get this recognition. But I do.

February Highlights

• February 5: The hockey world stops for a few moments to grieve the loss of Brendan Burke, Brian Burke's son. Brendan worked as student manager for the hockey team while attending the University of Miami (Ohio), but made headlines when he announced to the world that he was a gay man. And I still believe in my words: "Being gay doesn't change who he is or how much respect I have for him. Nor should it change you."
• February 13: Phil Hecken of Uni Watch Blog and I take a look at what each team will be wearing at the Olympics. Some uniforms are good. Others are not.
• February 14: I discuss some of the ways that women's hockey at the Olympics can fix blowouts between the elite teams and the rest of the field. I still feel that getting more women involved from the other countries will make the game stronger.
• February 21: Team USA plays a much more complete game in the round-robin at the Olympics and beats Canada soundly. I'm hard on Canada and praise the Americans. And this will only set up the inevitable.
• February 28: The Goal. Need I say anything more? I take a look at the 2010 Winter Olympics as a whole, and celebrate "The Goal.

March Highlights

• March 4: Frank McClelland returns with some updates on his Skate Fenders. I'm truly a fan of Mr. McClelland's and LSSU's work, and this product is something that players should really look into for their own health.
• March 11: HBIC renews its commitment to the Vancouver Olympics by giving the sport of sledge hockey as much coverage as possible. I really like this sport, and there have been some excellent games as of late as a number of countries have improved in this sport.
• March 18: One of the countries that has improved? Japan. They defeated the heavily-favoured Canadian squad by a 3-1 score in the semi-final to earn a berth in the gold medal final. If you haven't seen a game of sledge hockey in your life, you're missing out.
• March 21: The 2010 Women's Frozen Four wrapped up in style as there were some incredible games played by the NCAA women. Congratulations go out to the University of Minnesota-Duluth Bulldogs who captured their fifth NCAA Championship!
• March 30: The 2010 CIS Men's Hockey Championship wrapped up, and the Canadian collegiate champions are the Saint Mary's Huskies! Canadian collegiate hockey, while not as prolific as NCAA hockey, is certainly one of the places where NHL teams can find some hidden talent. There are lots of good players studying across Canada!

April Highlights

• April 4: The Alberta Pandas, the women's CIS hockey team, pulled off one of the most stunning upsets in the history of the CIS as they defeated the McGill Marlets in the CIS Championship game to be called "Canada's best".
• April 5: Columbus Blue Jackets' forward RJ Umberger calls out the Washington Capitals, and makes a prediction for the playoffs about the Capitals' chances of going all the way. A number of people wrote Umberger off, but read his comments. Hockey players know hockey.
• April 10: The Boston College Eagles defeat the Wisconsin Badgers and capture the 2010 NCAA Men's Hockey Championship. The win was a great effort for a team that many didn't pick to win the championship, but the Eagles captured their fourth championship!
• April 18: I'm fairly harsh towards Hockey Canada and the effort put forth at the World U-18 Championships. I like Canadian hockey, but I hate lack of effort.
• April 27: The NHLPA decides to change the Lester B. Pearson Award to the Ted Lindsay Trophy. More hockey history is being killed, and I'm not happy about it.
• April 30: In the same fashion I criticized Hockey Canada's efforts in the U-18 Tournament, I rip the Washington Capitals for their lack of hard work. Another exit far too early in the playoffs, and the Capitals spend more time on the golf course.

May Highlights

• May 3: The KHL crowns a champion as Ak Bars Kazan won their second KHL Championship in consecutive seasons. While there are still major differences between the NHL and KHL, it appears that Kazan is becoming the "Detroit Red Wings" of the KHL.
• May 7: I found a great article in Popular Science from 1935 about the game of hockey! It's a very good read with lots of pictures, but it goes to show that some magazines were covering hockey before it was popular!
• May 14: A reader by the name of Chelsea sent me a great email about head trauma suffered by hockey players. She makes some excellent points in her email, and there are several NHL players who echo her sentiments.
• May 23: The Czech Republic snaps the Russian's 27-game winning streak at the World Championships, and captured the World Championship title! Jaromir Jagr's reason for winning? "They had stars and we had guys who play in the Czech Republic, but this shows that talent doesn't matter - you have to work hard." Hard work, kids. I can't say it enough.
• May 25: I still have no clue as to what happened to the Charlie Conacher Memorial Trophy that was awarded annually to an NHL player. Any ideas?
• May 28: Damian Cox goes absolutely loopy with his suggestion that the Chicago Blackhawks change their logo because it's offensive. Cox stirring the pot? Nothing new.

June Highlights

• June 1: A fabulous video from the National Film Board of Canada shows off a ton of Quebec Nordiques history. This video is amazing!
• June 7: More videos are posted, this time of the WHA in all its spectacular glory. I really wish I had more WHA video. Note this foreshadowing. It will come in handy next week.
• June 9: The Chicago Blackhawks are your 2010 NHL Stanley Cup Champions. They dispatched the Philadelphia Flyers in six games to capture their first Stanley Cup in 49 years. To the victors go the spoils!
• June 14: The AHL's Hershey Bears stand atop the pile of AHL teams as they capture the 2010 Calder Cup as AHL Champions! The Bears defeated the Texas Stars in six games to capture their second consecutive Calder Cup. Well done, Bears!
• June 22: In what seems like a crime against humanity, the Hockey Hall of Fame finally allowed women to be eligible to be voted into the Hall of Fame. Women's hockey has its detractors, but the pioneers of the sport deserve their kudos as much as the men.
• June 28: More amazing hockey video is found through the National Film Board of Canada's website as we see the UBC Thunderbirds heading to China to help grow the game in the Communist country. This is another amazing video that shows how significantly-different cultures can work together to grow the game.

So there are the highlights from the first six months of HBIC's 2010. I really had a great time writing this year, and the interactions with you, the readers, are what makes this so rewarding. I love reading other opinions and ideas, and I encourage you to continue to email, comment, friend me on Facebook, and whatever else you to do to send me your hockey thoughts.

More tomorrow as we review the year that was from July to December!

Until next time, keep your sticks on the ice!

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Man of the decade

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Looking for Love in all the Wrong Places? Contrary Investor Examines Misguided Fed and Obama Admin. Efforts to Increase GDP Via Increased Consumption

The latest Contrary Investor Subscriber Report contains an interesting set of charts and commentary that shows just how misguided Fed and Obama administration focus on supporting consumption as the means to improve GDP.

Their analysis is always well written, so inquiring minds may wish to take a closer look.

I have permission to do occasional clips so please consider this clip from Looking For Love In All The Wrong Places?

Looking For Love In All The Wrong Places?...You are all very much aware of the change in market tone and sentiment over the last four months. Strategists and investors fretting over rapidly deteriorating macro leading economic indicators (remember the ECRI reaching levels always consistent with recession?) and contemplating the possibility of a double dip has given way to these same folks now trying to one up each other in putting forth ever higher domestic GDP growth estimates for the new year. Goldman (Jan Hatzius) has been a poster child example of this about face, but they have plenty of company. The transition is not hard to understand. With the heavy POMO started in September, followed up by QE2, and now the tax cut extension legislation that should add about $400 billion of "new" fiscal stimulus in 2011, we better have an improved outlook. Certainly THE issue as we move into 2011 is the potential for organic economic growth, or otherwise. Personally, we just can't put a big "multiple" on marginal stimulus (read borrowed money) additions to macro near term economic expansion. But this issue will not become relevant until 2011 is well underway.

As we see it, one of the really big keys for economic and we believe ultimately financial market performance in the new year will be first, whether corporations spend their currently amassed "savings". It's more than well known that through both operations and borrowing in a generationally low interest rate environment, corporations are sitting on top of a boatload of cash at the moment. We're already seeing the M&A deals primarily in tech and health care sectors taking place. Secondly, again if QE2 is to be effective, corporations must spend their cash domestically, and not let that cash "leak" into foreign direct investment and/or capital markets. Preferably, corporations would spend their cash domestically on productive investment. Even we'll admit, that would be bullish. And crazily enough, it would be in stark contrast to what we believe are the misguided policies of the Fed and US government over the last three years.

Right to the key point of this portion of the discussion that happens to be a question and will hopefully become clear as we look at a few longer term data points. Why has the Fed and Administration focused their monetary and fiscal policies virtually exclusively on consumption when it is productive investment that is the key to longer term sustainable economic health and ultimately growth?

The Fed and Administration are carrying out a failed longer term policy of focusing virtually exclusively on trying to stimulate consumption. Unless they change their ways, and fast, it will only be the corporate sector that can truly save the day for the longer term sustainable health of the US economy. Keep an open mind and let's walk through a bit of history.



The top clip is self explanatory. You may also remember, and we will not drag you through it again, that US credit market debt relative to GDP began a three decade acceleration in the early 1980's leading up to the recent peak of a generational credit cycle.

We believe the message of the combo chart above is as clear as a bell. As consumption became an ever larger piece of US GDP over time, the ten year rolling average of US GDP growth went into longer term rate of change decline.

The point is that debt financed consumption pressured the longer term growth rate of US GDP over time as consumption adds nothing back to the longer term infrastructure and productive capacity of the economy itself.

Now, remember that disposable income can either be consumed or saved. And it's that very savings that ends up as productive economic investment over time. So next up is a look at the US savings rate relative to the 10 year rolling average of US GDP growth over the last half century. Notice anything? Of course you do.



From the late 1950's through to the early 1980's, the US savings rate reached ever higher highs, as exactly did the rolling ten year average of US GDP growth. But once the decline in the savings rate began, so did the decline in the longer term growth rate in US GDP. Directionally these two data points are twins.

Below we're looking at the year over year change in nominal US GDP. About as simple as it gets. Alongside is the year over year change in non-residential US fixed investment. A very broad proxy for productive investment/corporate capital spending. These two data points are about as highly directionally correlated as they come. And what this clearly implies is that the longer term rhythm of the US economy is integrally tied to productive investment. Not consumption, but productive investment.



So stepping back just a bit, why have the Fed and Administration been focusing their efforts on consumption when it's clear that productive investment is the driver of longer term US economic growth? Is it consumption that allows China to grow its economy at double digits, or productive investment? Again, we know there has been over investment in China and we have too much productive capacity globally for now, as this is really a story for another complete discussion. But China never could have "arisen" economically without an important investment in long lived productive assets. You know the fiscal remedies so far stateside. Cash for clunkers, home buyer tax credits, appliance purchase rebate credits, the recent one year drop in the employee side of payroll tax rates, etc. - every single initiative focuses on consumption as opposed to investment. Again, maybe we'll look like nut balls before the current cycle is over, but Fed and Administration policies are not going to put the US on a longer term firm economic footing, especially within the context of a globalized economy. The US is not going to borrow and consume its way to prosperity. That only enriches the nations doing the actual production. We did that over the last thirty years and the rolling ten year US GDP growth report card is our reward.

Unfortunately, as opposed to supporting and encouraging this transition from reliance on consumption (in a still highly levered economy) to increasing focus on productive investment, the Fed and Administration are acting in contravention. They appear blind to the messages of history. We're scratching our heads. To be honest, we have only one answer as to why this is happening, and we sound like conspiratorial maniacs when we voice it. Consumption favors the financial sector, especially if that consumption is even partially financed.

It's simply out in the open these days that the Fed and Administration have done everything in their power to protect the financial sector in the US, even at the expense of the taxpayers and small business. The same thing is happening in Europe. Could it really be that this misguided and myopic focus on consumption as our current savior is simply an extension of that blanket of "protection" to the financial sector? Let's hope not. Let's just hope it's ignorance, ok?

Explaining Fed Actions

The Fed is clearly beholden to the banks, especially large too-big-to-fail (TBTF) banks. Certainly the Fed may sound concerned about unemployment, but it's safe to assume the Fed's overriding concern is borrowers' ability and willingness to pay back the banks.

History shows Bernanke's idea of inflation targeting at 2% ignoring asset bubbles that build along the way is economically stupid. So why does he do it?

For the sake of argument and in deference to Occam's Razor , let's assume that all of the Fed's mistakes are out of ignorance as opposed to some conspiracy by the Fed to transfer wealth to the financial sector. Simply put, never ignore stupidity when it is a plausible answer to why something happened.

Regardless of why, nothing changes from the perspective of the Bank CEO. The TBTF banks know full well they can take enormous economic risks, secure in the knowledge the Fed will bail them out if they get into trouble.

The latest twist is Citigroup's chairman now brags that Citigroup is "Too Interwoven To Fail". Please see 98 TARP Recipients Close To Failure; Citigroup's Chairman Gives Reasons Citigroup Should Be Broken Up for details.

When profits are rising CEO and executive compensation soars. When the banks fail, taxpayers bail out the banks and shareholders take the hit. However, the CEO gets a golden parachute worth hundreds of millions of dollars. Thus, from the perspective of TBTF banks, the right thing to do is take enormous risks.

The same thing is happening in Canada right now. Please see Canadian Borrowing Gone Mad: A Look at BMO's Misguided Balance Sheet Theory and the Keep on Dancin' Market Share Theory of Toronto-Dominion for further discussion.

This process explains the massive boom bust cycles we have seen and how wealth gets increasingly concentrated into fewer and fewer hands over time.

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

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Colored Flashing And Orange Lights Over Ashland Virginia

Date: December 28 to the 29th, 2010

Time: 10:30 p.m. – 11:00 p.m. then at 2:00 a.m. – 3:00 a.m.

Location of Sighting: Ashland Virginia.
Number of witnesses: 3
Number of Objects: 4, 1, 1.

Full Description of Event/Sighting: I was smoking a cigarette when I saw what I thought was a star at first, then it started moving. I grabbed some binoculars and they were flashing green and red. I then noticed there was two, one was moving on top of the other and then slowly started moving down by the tree line and disappeared. Then I saw another one, so I went to get my dad, and then there was 3.

They formed a triangle until a plane flew by and two of them disappeared, then reappeared once the plane left. After that I saw what I think was a military jet moving very fast towards them and they just stopped. (what I think is they turned into stars or something) My dad went away then I noticed a bigger object that had three bright yellow lights (***) that’s similar to what it looked like.

I went to go get my dad and the big one vanished when we came back. After that it was all simmering down until I saw on the tree-line a lower flying object with very bright pulsing orange lights that followed the tree-line and then flew into the night.

Later around 2:00am I went to smoke another cigarette and I saw one very bright red and green flashing light. This time I went to get my brother and he saw it too. He then took the binoculars and looked around and spotted another one that looked farther away. As we we watching the two, we noticed a third by the tree-line and it hovered slowly down until we could no longer see it.

We continued to watch the two that were still there and it looked like the bigger brighter light started moving towards the little one and then just stopped. They just floated there for about 30 minutes getting dimmer and dimmer. I looked around the woods to see if there was anything, and I thought I saw an alien ( thinking back it was probably just my eyes playing tricks) but I had my brother shine a light over the way and I started walking outside towards it.

I got close and still couldn’t tell, then I noticed the big bright pulsing orange lights by the tree-line again. I pointed at it to show my brother and I started running back to the house. We watched the orange light follow the tree-line again, but was going to opposite direction.

If you have seen anything like this in the same area please be kind enough to contact Brian Vike at: sighting@telus.net with the details of your sighting. All personal information is kept confidential.

Sightings.com website: http://www.sightings.com/

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Anecdotes on the Payroll Tax Cut

A small business owner friend of mine has some thoughts on the 2% payroll tax cut that I would like to share.

SBO writes ...

Hello Mish
Here's a quick note on the 2% payroll tax cut. We own a couple of small companies, each with under 200 employees. We provide health insurance to our employees, but they share the cost. We pay $300 per month per individual, and any cost above that (including cost increases) are shared 50-50. Our average salary is about $42,000. The 2% payroll tax cut will be about $70/month for the average person.

However, our health insurance cost increased by $117 per month for individuals (more for families) and that was only after altering the benefits, shopping intensively, and changing providers.

Thus, the same average employee will pay an additional $58.50/month for increased health care costs. The net additional dollars to the employee will be $11.50/month. So, spending another $70/month will all be a boost to GDP, since spending on health care is deemed consumer spending but I don't think my employees are going to feel any richer.

This adds to what I said in Jobs Forecast 2011 Calculated Risk vs. Mish (correcting a couple of awkward sentences).

OK there is going to be more money in paychecks because of a reduction in Social Security collection. In response, I see ever increasing estimates as to how much that payroll tax cut will add to GDP.

However, I have to ask "How much of that payroll tax cut will go to increased sales taxes, state income taxes, and property taxes?"

I have not seen anyone properly address that question. I suggest we need that payroll tax cut to break even. Certainly taxes of all kinds are going up in Illinois. Our idiotic governor wants to hike income taxes 33%. Sales taxes will likely go up as well.

While Illinois may be an extreme example, bear in mind that places where taxes are not going up will see more layoffs.

SBO adds another aspect I did not even consider. Some employees who share medical costs with their employer will have the payroll tax cut completely eaten up before they see a penny of it. The payroll tax cut will not be there to spend, it will have already been spent. That applies even more so to the self-insured.

Then there are property taxes, state income taxes, and sales tax increases to consider (or additional cutbacks in states that do not raise taxes). GDP may get a small boost from this in theory, but the overall net effect will be a decrease in jobs and the average taxpayer will not see a dime of the decrease.

Addendum:

Here is a a reader email from David who lives in North Carolina regarding the above post.

Hi Mish,

Just read the article and thought I would offer my two cents (maybe a dollar after you finish this!) on the payroll tax cut.

I am the sole employee of my S Corp, so I am self employed. The 2% FICA cut is worth about $155 a month to me. I got my annual letter from Blue Cross stating my new rate for Health Insurance. It goes up $154 a month, so I net out $1 per month. I if see you in North Carolina maybe we can share a cup of coffee if we can find a cup for $1.

I read you blog every day along with several others I deem worthy. Really enjoy it. I am floored by stories of the public unions and pensions in other states and click on the links to read the full story. NC has no public unions, virtually no private unions, and a pension system that is solvent NC public pensions are not extravagant. These stories are unheard of in NC, not that we don't have a few of other types to tell. Our corruption is a little different.

NC is facing a 20% (3.7 billion about) hole in the state budget next year. The politicians are stating they will close it without raising taxes or borrowing, but I am waiting to see what they do. There is no way to close the budget without cutting the state payroll. Most State employees have gone without pay increases for the last two years. I suspect a number of them will be laid off unless the idea of pay cuts I am starting to hear discussed is real. The precedent is there, NC cut pay in the Great Depression to close a similar gap without cutting employees / services.

David
Chapel Hill NC

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

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