Central Perk: 15 aug. 2013

joi, 15 august 2013

Mish's Global Economic Trend Analysis

Is Selling Bonds the Taste of Things to Come?
Is Obamacare Really Responsible for Rise in Part-Time Employment? If So, Why Doesn't Average Weekly Hours Show Just That?
Philly Fed Misses Expectations; Industrial Production Unchanged; Manufacturing Declines; Treasury Yields Soar Anyway
Wal-Mart, Macy's, Kohl's Cut Profit Outlook; Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery

Is Selling Bonds the Taste of Things to Come?

Posted: 15 Aug 2013 07:38 PM PDT

Treasury yields are on the rise as I have noted on numerous occasions recently.

The action has prompted the world's largest hedge-fund manager, to throw in the towel on treasuries and inflation-linked TIPS.

Please consider Dalio Patched All Weather's Rate Risk as U.S. Bonds Fell

As the bond market plunged in late June, Ray Dalio convened the clients of Bridgewater Associates LP, the world's largest hedge-fund manager, to tell them that a fund designed to withstand a broad range of market scenarios was too vulnerable to changes in interest rates.

Bridgewater, citing months of study, said it had underestimated the interest-rate sensitivity of various assets in its All Weather fund and was taking steps to mitigate the risk, according to clients who listened to or read a transcript of the June 24 call. By the end of the month, the Westport, Connecticut-based firm had sold off enough Treasuries and inflation-linked bonds to help reduce the fund's most rate-sensitive assets by $37 billion, according to fund documents and data provided by investors.

The move, disclosed to investors five days after the Federal Reserve said it's prepared to phase out its unprecedented bond purchases, was unusual for the fund. As its name suggests, All Weather is designed to produce returns in most economic environments and avoid altering asset allocations when the outlook changes. All Weather incurred a second-quarter loss of 8.4 percent that was primarily tied to its $56 billion portfolio of inflation-linked debt, said the clients, who asked not to be named because the fund is private. 'A Foretaste'

The decline at All Weather and similar funds, including those run by Cliff Asness's AQR Capital Management LLC and Invesco Ltd. (IVZ), shows Bridgewater's pioneering strategy for allocating assets between stocks and bonds, known as risk parity, can leave investors overexposed to rising interest rates. The losses were amplified for some funds by a selloff in inflation-linked securities that also caught Bill Gross's $262 billion Pimco Total Return Fund (PTTRX) off guard.

"This is just a foretaste of what is going to happen," said Ramin Nakisa, a global asset-allocation strategist at UBS Investment Bank who co-wrote a March research report titled "When Risk Parity Goes Wrong." Nakisa called June's selloff in Treasuries and inflation-linked bonds "a dress rehearsal" for the volatility awaiting when the U.S. Federal Reserve actually begins to taper its bond-buying program, known as quantitative easing.

All Weather trimmed its use of leverage to about 144 percent of net assets at the end of June, according to the clients who requested anonymity. Gross exposures to different asset classes declined to about $116 billion from $138 billion in the quarter, while net assets stayed at $80 billion.

Reflections on Leverage

Lovely. All Weather now has a mere 144 percent leverage? What happens if stocks, bonds, and commodities all take a dive?

Here's the deal: This selloff in treasuries may be over. Or it may not be. Anyone who thinks they know is fooling themselves.

What I do know is leverage works both ways. I also know that the Fed has so distorted the economic horizon that it is next to impossible to predict what's coming down the pike.

Stocks, bonds, and commodities other than gold all rose in union over the past few years. My bet is on an unwinding of that trade.

I see no value in treasuries, no value in corporate bonds, no value in equities, and no value in municipal bonds.

I do see value in gold, so that is where I am. Without leverage. Patiently waiting.

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

Is Obamacare Really Responsible for Rise in Part-Time Employment? If So, Why Doesn't Average Weekly Hours Show Just That?

Posted: 15 Aug 2013 01:20 PM PDT

Inquiring minds are digging into average weekly hours of workers looking for Obamacare effects on which to place blame.

Average Weekly Hours Of Production And Nonsupervisory Employees

Since this data series began in 1964, the average weekly workweek has been trending lower.

Note the tendency following each recession. 1990-1998 is the only exception to the general rule that hours never recovered to the previous pre-recession level.

Last Five Observations

2013-07: 33.6 Hours
2013-06: 33.7 Hours
2013-05: 33.7 Hours
2013-04: 33.7 Hours
2013-03: 33.8 Hours

Lets' zero in to a tighter timeline for a closer look.

The second chart shows that in spite of Obamacare, average weekly hours has been bouncing between 33.6 and 33.8 for quite some time.

Several readers emailed such data is proof that Obamacare is not having the effect that I have repeatedly stated that it has.

They are wrong.

Just because hours have stabilized does not mean there is no Obamacare effect. It simply means some industries have not been impacted as much as others. You just have to know where to look.

Focus on Home Centers, General Merchandise, Services for Elderly

Jed Graham at Investor's Business Daily highlights select areas in his report ObamaCare Fuels Sharp Workweek Drop In 4 Industries, while coming to the proper conclusion.

Anyone who insists ObamaCare employer penalties aren't having a meaningful impact on work hours simply hasn't looked closely at the evidence.

In a private economy with 114 million workers clocking 34.4 hours a week on average, it's easy to miss important changes. What feels like a wave to modest-wage workers getting hit may appear to be a mere ripple from an altitude of 40,000 feet.

After all, 1.4 million workers could lose an 8-hour shift and it would shave just six minutes off the average workweek. But if one looks closely, it's not hard to find industry groups with an unprecedented drop in work hours since ObamaCare became law.

Among retail bakeries, home-improvement stores and providers of social assistance to the elderly and disabled, the workweek for nonmanagers has fallen to record-low levels — by far.

At general merchandise stores, department stores and discounters, the rate at which the workweek has fallen since early 2012 is way off the charts relative to prior data going back to 1990.

The White House pointed to hours worked in the restaurant sector to disprove an ObamaCare impact, but the data don't support the claim. Because average hours worked are already below 25 hours, part-timers hired for 28 hours would raise the average.

Questions and Answers

Q: Why doesn't a chart of average weekly hours show the Obamacare effect?
A: It does. You just have to look in the right places.

Q: Is Obamacare responsible for the overall trend of declining workweek hours?
A: The workweek has been declining since the series began, so the answer must be no. However, Obamacare has indeed contributed to the trend as shown above.

Q: Is Obamacare to blame for rising part-time employment?
A: Yes

Obamacare Effects

For more on "Obamacare Effects", please see

As Jed Graham states "Anyone who insists ObamaCare employer penalties aren't having a meaningful impact on work hours simply hasn't looked closely at the evidence."

To which I would add ... the economic distortions go far beyond part-time employment.

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

Philly Fed Misses Expectations; Industrial Production Unchanged; Manufacturing Declines; Treasury Yields Soar Anyway

Posted: 15 Aug 2013 10:33 AM PDT

Philly Fed Misses Expectations

Bloomberg reports Manufacturing in Philadelphia Regions Expands for Third Month

The Federal Reserve Bank of Philadelphia's general economic index fell to 9.3 this month from a reading of 19.8 in July that was the highest since March 2011. Readings greater than zero signal growth in the area, which covers eastern Pennsylvania, southern New Jersey and Delaware.

The median forecast of 54 economists surveyed by Bloomberg called for a reading of 15. Estimates ranged from 7 to 23.

Industrial Production Unchanged

Manufacturing in the Philadelphia region may be up, but overall manufacturing is negative while industrial production is unchanged for July.

Industrial production in the U.S. was unchanged in July as a slowdown at factories overshadowed an increase in mining.

The reading for output at factories, mines and utilities followed a 0.2 percent gain the prior month that was smaller than previously reported, a report from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey of 82 economists called for a 0.3 percent rise in July.

Manufacturing, which makes up 75 percent of total production, declined for the first time in three months.

Month-Over-Month Manufacturing Declines

Manufacturing is down month-over-month but only slightly. Let's look at some longer term trends in manufacturing and industrial production.

Industrial Production Percent Change From Year Ago

Manufacturing Percent Change From Year Ago

Trends are certainly weakening in manufacturing and industrial production.

Wal-Mart Cuts Profit Outlook

As noted earlier, Wal-Mart, Macy's, Kohl's Cut Profit Outlook; Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery.

With a weaker than expected Philly Fed, negative manufacturing, flat industrial production numbers, and a declining outlook at Wal-Mart and other retail stores, one might have thought treasury yields would drop.

Nonetheless, treasury yields rose, presumably on the assumption the Fed is still going to taper asset purchases starting next month and the economy will strengthen.

The first assumption is questionable, the latter is highly overoptimistic.

$TNX 10-Year Treasury Yield

$TYX 30-Year Treasury Yield

Yields Rise Significantly in Two Days

In the last two days Yield on the 30-Year long bond rose from 3.602% to as high as 3.837%, a rise of 23.5 basis points (nearly a quarter percentage point).
Yield on the 10-Year treasury note rose from 2.552% to as high as 2.821%, a significant rise of 26.9 basis points (over a quarter percentage point).

Curve Watchers Anonymous offers the following chart to help put things in proper perspective.

Yield Curve Historical Perspective

click on chart for sharper image

$TYX: 30-Year Treasury Yield - Green
$TNX: 10-Year Treasury Yield - Orange
$FVX: 05-Year Treasury Yield - Blue
$IRX: 03-Mnth Treasury Yield - Brown

To understand the significance of this move higher in treasury yields, please see Mortgage Applications Decline 13th Time in 15 Weeks; Are Mortgage Rates Cheap? What's Next For Housing?

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

Wal-Mart, Macy's, Kohl's Cut Profit Outlook; Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery

Posted: 15 Aug 2013 08:36 AM PDT

The earnings hit parade keeps on rolling, but not in the directions bulls wanted or expected. And with stocks priced well beyond perfection, today's reaction should hardly be a surprise. Yet, treasury yields soared once again in spite of poor earnings, and in spite of a flat industrial production report.

Wal-Mart, Macy's, Kohl's Cut Profit Outlook

Yahoo!Finance reports Wal-Mart cuts profit outlook on shopper worries

Wal-Mart Stores Inc. cut its annual profit and revenue outlook Thursday as the world's largest retailer expects a tough economy at home and abroad to continue to squeeze its low-income shoppers through the rest of the year.

Wal-Mart also reported second-quarter results that missed Wall Street estimates. The company's stock fell nearly 2 percent in premarket trading.

Wal-Mart's sober assessment of consumer spending adds to worries in earnings from Macy's Inc. and Kohl's Corp. Both lowered their expectations for the year after reporting disappointing results.

Wal-Mart said recent tax changes have further put pressure on its shoppers. Americans are dealing with a 2 percentage-point increase in payroll taxes that took effect Jan. 1. That means that take-home pay for a household earning $50,000 a year has been sliced by $1,000.

"The retail environment remains challenging in the U.S. and our international markets, as customers are cautious in their spending," Wal-Mart Chief Financial Officer Charles Holley said in a statement. He noted a "reluctance" among its customers to spend on discretionary items like flat-screen TVs.

Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery

The Wall Street Journal reports Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery.

Cisco Systems Inc. is once again tightening its belt, this time before bad news hits the bottom line.

The Silicon Valley network-equipment giant on Wednesday said it would cut 4,000 jobs, or 5% of its workforce, despite reporting an 18% jump in profit in the fourth fiscal quarter.

"What we see is slow steady improvement, but not at the pace we want," Mr. Chambers told analysts on a conference call.

While orders from customers in the Americas rose 5% in the fourth period, for example, orders from Asia declined 3%—and its business in China fell 6%.

Cisco, based in San Jose, Calif., is best known for hardware that helps pump data to and around the Internet, selling both to communications carriers as well as other classes of companies. The performance of those mainstay businesses was mixed.

Revenue in Cisco's biggest segment, switching equipment, rose 5%. But sales were flat in the company's original business of routing gear.

Cisco may be a mixed bag, but the outlook for retailers certainly is not. Wal-Mart accounts for a whopping 10 percent of nonautomotive retail sales, and its outlook is telling. And once again interest rates are up across the US treasury curve which certainly will not be good for housing or jobs.

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

Damn Cool Pics

The Cast of 'The Fresh Prince of Bel-Air' Then & Now

Posted: 15 Aug 2013 11:06 AM PDT

Will Smith as Will "The Fresh Prince"
Born September 25, 1968 (age 44)

Tyra Banks as Jackie Ames
Born December 4, 1973 (age 39)

James Avery as Philip Banks
Born November 27, 1948 (age 64)

Alfonso Ribeiro as Carlton Banks
Born September 21, 1971 (age 41)

Joseph Marcell as Geoffrey, the Butler
Born 18 August 1948 (age 64)

Tatyana M. Ali as Ashley Banks
Born January 24, 1979 (age 34)

Nia Long as Lisa Wilkes
Born October 30, 1970 (age 42)

DJ Jazzy Jeff as Jazz
Born January 22, 1965 (age 48)

Vernee Watson-Johnson as Vy Smith, Will's mother
Born January 14, 1954 (age 59)

Janet Hubert-Whitten as Vivian Banks (Seasons 1–3)
Born January 13, 1956 (age 57)

Can you guess who this is?

Daphne Maxwell Reid as Vivian Banks (Seasons 4–6)
Born July 13, 1948 (age 65)

Karyn Parsons as Hilary Banks
Born October 8, 1966 (age 46)

Ross Bagley as Nicholas "Nicky" Banks
Born December 5, 1988 (age 24)

Arirang is North Korea’s First Smartphone

Posted: 14 Aug 2013 07:40 PM PDT

North Korea has built its first smartphone. It's called Arirang (it's the name of a Korean folk song. Who needs a smartphone in the country without Internet?

President Obama Calls for an End to Violence in Egypt

Featured

President Obama Calls for an End to Violence in Egypt

President Obama this morning issued a statement on the unfolding situation in Egypt and called for an end to violence.

"The Egyptian people deserve better than what we've seen," he said.

Click here to hear President Obama's statement.

President Barack Obama makes a statement to the press about the situation in Egypt while in Chilmark, Mass., Aug. 15, 2013. (Official White House Photo by Amanda Lucidon)

Why Simple Websites Will Always Lead to Better SEO Graywolf's SEO Blog

Why Simple Websites Will Always Lead to Better SEO

Posted: 15 Aug 2013 10:14 AM PDT

Earlier this year it was discovered that Google was having a problem crawling Apple’s website and, as a result, direct links to apps weren’t showing in the results. The next few days involved lots of finger pointing, blame shuffling, and hang wringing; but, a few non public changes later, things were sorted out. This, however, set […]

The post Why Simple Websites Will Always Lead to Better SEO appeared first on Graywolf's SEO Blog.

A New Analysis of Google SERPs Across Search Volume and Site Type

Posted: 14 Aug 2013 07:43 PM PDT

Posted by Matt Peters

At Moz, we have been following up on our 2013 Search Engine Ranking Factors study by continuing to analyze interesting aspects of the data. One of our most frequently asked questions is, "Do you see any systematic differences in Google's search results across search volume or topic category?" By design, our main study used a broad keyword set across all search volumes and industries to capture Google's overall search algorithm. As a result, we weren't able to answer this question since it requires segmenting the data into different buckets. In this post, I'll do just that and dig into the data in an attempt to answer this question.

Our approach

We used a subset of the data from our 2013 Ranking Factors study, focusing on a few of the most important factors. In the main study, we collected the top 50 search results for about 15,000 keywords from Google, along with more then 100 different factors. These included links, anchor text, on-page factors, and social signals, among others. Then, for each factor we computed the mean Spearman correlation between the factor and search position. Here's a great graphic from Rand that helps illustrate how to interpret the correlations:

In general, a higher correlation means that the factor is more closely related to a higher ranking than a lower correlation. It doesn't necessarily mean that there is causation!

In addition to search results and factors, we collected the categories from AdWords (e.g. "Home and Garden") and the monthly US (local) search volume. This allows us to examine correlations across these different segments.

Search volume

First up is search volume. We segmented each keyword into one of three buckets depending on the average local (US) monthly search volume from AdWords: less than 5,000 searches per month, 5,000-15,000 searches per month, and more than 15,000 searches per month.

To begin exploring the data, here is the median page and domain authority in each bucket, along with the total percentage of results with a domain name exactly matching the keyword:

Not too surprisingly, we see the overall page authority, domain authority and the exact match domain (EMD) percentage all increase with search volume. This is presumably because higher-volume queries are targeted by larger, more authoritative sites.

Now, an overall higher page authority for high-volume queries doesn't necessarily mean that the correlation with search position will be larger. The correlation measures the extent to which page authority (or any other factor) can predict the ordering. As a example, consider two three-result SERPs, one with page authorities of 90, 92, and 88 for the first three positions; and another with values of 30, 20, and 10. The first SERP has higher values overall, but a lower correlation. To examine how these impact search ordering, we can compute the mean Spearman correlation in each bucket:

And for those who prefer a chart:

From left to right, the table lists link-related factors (page authority, domain authority, and exact match anchor text); a brand-related factor (number of domain mentions in the last 30 days from Fresh Web Explorer); social factors (number of Google +1s, Facebook shares, and tweets); and keyword-related factors (keyword usage on the page, in the title, and EMD).

Looking at the data, we can see a few interesting things:

The correlations increase noticeably with search volume for link, brand, and social media factors.
The correlations are mostly constant for keyword-related factors (keyword usage on the page or in the domain name).

Primarily, point #1 says that these factors do a better job at predicting rank as search volume increases. We'd expect to see a larger discrepancy in the link or social metrics throughout the SERPs in higher volume queries than in lower-volume queries. One corollary is that SERPs from lower-volume queries are more heavily influenced by factors that aren't represented in the table (e.g. positive or negative user signals).

One implication of point #2 is that Google's keyword-document relevance algorithm is the same for high- and low-volume queries. That is, their method for determining what a page is about doesn't depend the query popularity.

We can make this more concrete by considering two different queries and SERPs: one high volume ("cheap flights" with more than 1 million searches per month), and one low-volume ("home goods online" with less than 500 searches per month). For reference, here are the top results for each search, with the page and domain authority from the MozBar:

Above: Google SERP for "cheap flights"

Above: Google SERP for "home goods online"

When a user enters a query, Google first determines which of the many pages in its index are relevant to the query, then ranks the results. A popular query will likely have several relevant pages (or more) with many links, since they are targeted by marketers. In this case, Google should have plenty of signals to determine ranking. A relevant page with high page authority? Check, put it in the top 10. On the other hand, pages in the dark corners of the internet with relatively few links are likely most relevant to low-volume queries. In the low-volume case, since the link signals aren't as clear, Google is forced to rely more heavily on other signals to determine ranking, and the correlations decrease. This example oversimplifies the complexity of the algorithm, but provides some intuitive understanding of the data.

Site category

We can repeat the analysis for the different AdWords categories. First, the median page and domain authority and EMD percentage:

And the mean Spearman correlations:

Overall, the trends are similar to search volume, with significant differences in the link correlations, and smaller differences in the keyword-related correlations. The explanation for these results is similar to the one above for search volume. The industries with the largest link and social correlations â€" "Health" and "Travel & Tourism" â€" tend to have broad-based queries targeted by lots of sites. On the other hand, the industries near the bottom of the table â€" "Apparel," "Dining & Nightlife," and "Retailers & General Merchandise" â€" all tend to have specific or local intent queries that are likely to be relevant to specific product pages or smaller sites.

Takeaways

In this post, we have explored how a few individual ranking factors vary across search volume and keyword category. Correlations of link- and social-related metrics increase with search volume, but correlations of keyword-related factors (usage on page and in the domain name) are constant across search volume. Taken together, this suggests that Google is using the same query document relevance algorithm for both head and tail queries, but that link metrics predict SERPs from popular queries better then tail queries. We see something similar across site categories with the largest differences in link related correlations. Industries like "Health" that have broad, informational queries have higher correlations than industries like "Apparel" that tend to have queries with specific product intent.

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

joi, 15 august 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

President Obama Calls for an End to Violence in Egypt

Why Simple Websites Will Always Lead to Better SEO Graywolf's SEO Blog

Why Simple Websites Will Always Lead to Better SEO Graywolf's SEO Blog

A New Analysis of Google SERPs Across Search Volume and Site Type

A New Analysis of Google SERPs Across Search Volume and Site Type

Our approach

Search volume

Site category

Takeaways

Pagini

Persoane interesate

Arhivă blog

joi, 15 august 2013

Our approach

Search volume

Site category

Takeaways

Pagini

Persoane interesate

Arhivă blog

Subscribe to