Central Perk: 4 aug. 2013

duminică, 4 august 2013

Mish's Global Economic Trend Analysis

Bernanke Wants 2% Inflation in a Deflationary World; Who Pays the Price?

Posted: 04 Aug 2013 05:55 PM PDT

PEW Social Trends research shows a Record 21.6 Million Young Adults Live in Their Parents' Home

Here are some clips from the fascinating PEW study.

In 2012, 36% of the nation's young adults ages 18 to 31 the so-called Millennial generation—were living in their parents' home, according to a new Pew Research Center analysis of U.S. Census Bureau data. This is the highest share in at least four decades and represents a slow but steady increase over the 32% of their same-aged counterparts who were living at home prior to the Great Recession in 2007 and the 34% doing so when it officially ended in 2009.

A record total of 21.6 million Millennials lived in their parents' home in 2012, up from 18.5 million of their same aged counterparts in 2007. Of these, at least a third and perhaps as many as half are college students.

The steady rise in the share of young adults who live in their parents' home appears to be driven by a combination of economic, educational and cultural factors. Among them:

Declining employment: In 2012, 63% of 18- to 31-year-olds had jobs, down from the 70% of their same-aged counterparts who had jobs in 2007. In 2012, unemployed Millennials were much more likely than employed Millennials to be living with their parents (45% versus 29%).
Rising college enrollment: In March 2012, 39% of 18- to 24-year-olds were enrolled in college, up from 35% in March 2007. Among 18 to 24 year olds, those enrolled in college were much more likely than those not in college to be living at home – 66% versus 50%.
Declining marriage: In 2012 just 25% of Millennials were married, down from the 30% of 18- to 31-year-olds who were married in 2007.

Percent of Married Millennial Declines

Long-Term Changes in Young Adult Living Arrangements

Household Formation

Married Residing in Own Household Plummets

Since 1968, age at first marriage has increased by nearly six years for both men and women. Consequently, the share of young adults who are married and residing in their own household has plummeted since 1968. In 2012, only 23% of Millennials were married and residing on their own as household head or spouse, a precipitous decline compared with 1968 when 56% of 18- to 31-year-olds were married and on their own.

End PEW

Fed Policies Exacerbate Trend

Bernanke wants 2% inflation in a deflationary world. Wages have not kept up with inflation as Fed policies exacerbate the trends.

The result is apparent. Everyone pays the price, but especially Young adults who cannot afford to get married, and they certainly cannot afford a house.

The Fed wants home prices up to help out the banks, but what about the new household formation? And what about student loans and the ability to pay those loans back?

And think about how cheap money allows corporations to borrow money for next to nothing to buy technology to replace humans with hardware and software robots.

Trends noted by PEW and predicted in this corner at least six years ago are structural long-lasting trends.

Those expecting a huge pickup in inflation, a spike in US GDP, or a big boom in housing based on misguided perceptions of "pent-up housing demand", fail to understand how Fed boom-bust and bank-bailout policies preclude such outcomes.

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

Magazine Ad Revenues Plunge; Google Collects Half of Mobile Internet Ads; Cannibalization of Ad Market

Posted: 04 Aug 2013 04:15 PM PDT

Is the advertising pie growing, shrinking, or simply being redistributed? Let's start with a look at PEW Center research that shows News magazines hit by big drop in ad pages.

In a difficult advertising environment for the magazine industry overall, newly-released numbers from the Association of Magazine Media (MPA) show the nation's news magazines being hit particularly hard.

Total consumer magazine ad pages dropped 4.9% compared with the first half of 2012, according to MPA data for the first six months of 2013, released July 9. But the drop in ad pages for five major news magazines—Time, The Economist, The Atlantic, The Week and The New Yorker—was far steeper, a combined 18% in the first half of 2013 compared with the same period a year earlier. In one indicator of the difficulties facing news magazines, Newsweek—which saw ad pages decline by 60% from 2002 to 2012—discontinued its print edition at the end of 2012.

While these numbers highlight a difficult print advertising climate, they don't tell the whole story. MPA President Mary Berner says magazines are increasingly generating digital revenue. Initial industry monitoring of digital advertising revenue for some magazine iPad versions found that sales increased about 25% in the first half of 2013. Berner called those gains "encouraging" and added that later this year, about 100 magazines will begin reporting some digital revenue results. In addition, some news magazines, most notably The Economist and The Atlantic, have begun diversifying revenue streams with such initiatives as events, conferences and creation of niche content.

Looking over the past decade, from 2003 through 2012, the overall ad pages for news magazines (excluding Newsweek) dropped by 36%, from 7,848 to 5,008. But within that time frame were several shifts in trajectory. A major drop-off in ad pages occurred from 2008 to 2009 (17%.) Ad pages stabilized from 2009 to 2011, growing at a modest 1%. But then another downturn occurred as ad pages in 2012 dropped 13% from the previous year, followed by the 18% decline in the first half of 2013.

Google Take Home Half of Mobile Internet Ads

eMarketer reports Google Takes Home Half of Worldwide Mobile Internet Ad Revenues.

Google earned more than half of the $8.8 billion advertisers worldwide spent on mobile internet ads last year, helping propel the company to take in nearly one-third of all digital ad dollars spent globally, according to eMarketer's first-ever figures on worldwide digital and mobile advertising revenues at major internet companies.

Ad Revenues in Dollars and Percent of Market

After making nearly half a billion dollars worldwide on mobile ads last year, Facebook—which had no mobile revenue in 2011—is expected to increase mobile revenues by more than 333% to just over $2 billion in 2013, and account for a 12.9% share of the global net mobile advertising market.

eMarketer estimates that Google made $4.61 billion in mobile internet ad revenues last year, more than triple its earnings in 2011. This year's mobile revenues will be up a further 92.1% to $8.85 billion.

Combined, three companies—Google, Facebook and Twitter—account for a consolidating share of mobile advertising revenues worldwide, as other players, such as YP, Pandora, Apple and Millennial Media, see their shares decrease, despite maintaining relatively strong businesses growing at rapid rates.

Cannibalization of Ad Market

My friend "BC" who sent the links surmises ....

"The decline in magazine ad revenues is approximately the same as the increase in Internet and mobile/social media ads; therefore, the net increase in ads is a wash, i.e., cannibalization of the advertising market. Companies earning their revenues from ads will now be in a zero-sum competition for no growth of, and later a falling number of, ad dollars hereafter."

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

Seth's Blog : Words are hooks, words are levers

Words are hooks, words are levers

There's a debate raging in my town over whether or not to replace the existing planted-grass school football field with what used to be known as Astroturf. One side has already won a crucial victory: the local paper calls the new alternative, "turf."

Turf is what we call a racetrack, or half a fancy dinner (surf and...). Turf is short and punchy and feels organic. If they had called it 'plastic' or 'fake grass' or 'artificial turf', every conversation would feel different before we even started.

What to call the new diamonds that are being manufactured in labs, not dug out of the ground under horrible conditions? Some want them to be called 'artificial diamonds' or not diamonds at all. Others might prefer 'flawless' diamonds (because they are) or 'perfect'.

Is it a 'course', a 'group' or a 'club'? It might be all three, but the word you choose will change the anchor and thus the leverage that word has going forward. Are you a 'consultant', an 'advisor' or a 'coach'?

Engineers and doctors and other scientists seem to think they're skipping all of this when they use precise, specific language. But the obvious specificity and the desire to scare off untrained laypeople is in itself a form of leverage.

For politicians and others that want to re-invent the language for their own ends--you can work to plant your hook anywhere you choose, but if you torture the meaning and spin, spin, spin, you risk being seen as a manipulator, and all your leverage disappears. If your hook finds no purchase, you have no leverage.

On the other hand, the great brands (Pepsi, Kodak, etc.) planted words that meant nothing and built expensive fortresses around their words, words that now have emotional power.

The only reason words have meaning is because we agree on what they mean. And that meaning comes from associating those words with other words, words that often have emotional anchors for us. This isn't merely the spin of political consultants. It goes right to the heart of how we (and our ideas) are judged.