Central Perk: 02/01/2015

sâmbătă, 28 februarie 2015

Mish's Global Economic Trend Analysis

In Memory of Spock: Live Long and Prosper; Is He or Isn't He? Fish Tomatoes, Hand Transplants, Sci-Fi vs. Reality

Posted: 28 Feb 2015 06:20 PM PST

One of my favorite characters in TV history was Star Trek's "Spock". Yesterday, Leonard Nimoy, Spock of 'Star Trek,' Died at 83.

Leonard Nimoy, the sonorous, gaunt-faced actor who won a worshipful global following as Mr. Spock, the resolutely logical human-alien first officer of the Starship Enterprise in the television and movie juggernaut "Star Trek," died on Friday morning at his home in the Bel Air section of Los Angeles. He was 83.

His wife, Susan Bay Nimoy, confirmed his death, saying the cause was end-stage chronic obstructive pulmonary disease.

Mr. Nimoy announced last year that he had the disease, attributing it to years of smoking, a habit he had given up three decades earlier. He had been hospitalized earlier in the week.

His artistic pursuits — poetry, photography and music in addition to acting — ranged far beyond the United Federation of Planets, but it was as Mr. Spock that Mr. Nimoy became a folk hero, bringing to life one of the most indelible characters of the last half century: a cerebral, unflappable, pointy-eared Vulcan with a signature salute and blessing: "Live long and prosper" (from the Vulcan "Dif-tor heh smusma").

There's much more in the article. Inquiring minds may wish to take a look.

Is He or Isn't He?

Nimoy is author of two contradictory autobiographies:

"I Am Not Spock," published in 1977
"I Am Spock," published in 1995.

Vulcan Greeting

Nimoy Explains Origin of Vulcan Greeting

Link if video does not play: Leonard Nimoy Explains Origin of Vulcan Greeting.

In Memory of Leonard Nimoy

Science Friday has an interesting article Memory of Leonard Nimoy.

In an enclosed video in the above link, Nimoy talks with Ira Flatow, physics professor John Kramer, and science fiction writer Robert Sawyer about the relationship between science and science fiction.

Sci-Fi vs. Reality

The Science Friday video was from 1998. The video mentioned among other things, artificial hands and transplanting fish genes into tomatoes to make them more resistible to frost.

Artificial hands are here. Fish genes in tomatoes?

Let's investigate hand transplants and "fish tomatoes" in more detail.

Hand Transplants

Hand transplants are a success. The March 27 issue of BBC Future has the story of Rose Eveleth who says "I had a double hand transplant".

Rose considers the operation a success although it required much intensive therapy.

Genetically modified tomatoes were not a success to say the least. A couple of stories will explain.

Does Your Tomato Have Sole?

UC Santa Barbara asks Does Your Tomato Have Sole? If So, Is It Still a Veggie?

"Fish tomatoes," are transgenic tomatoes that have been genetically engineered with a gene from winter flounder, which are also known as lemon sole. Fish tomatoes have become an icon in the debate over Genetically Modified Foods, especially in relation to the perceived ethical dilemma of combining genes from different species.

Killer Tomatoes

The above article explains the intent. The following article will explain the success or failure of the experiment.

Please consider Throwing Biotech Lies at Tomatoes

Remember the pictures of the fish tomatoes? For years they were an unofficial emblem of the anti-GMO movement. They depicted how anti-freeze genes from an Arctic fish were forced into tomato DNA, allowing the plants to survive frost. Scientists really did create those Frankentomatoes, but they were never put on the market. (Breyers low-fat ice cream, however, does contain anti-freeze proteins from Arctic fish genes, but that's another story.)

The tomato that did make it to market was called the Flavr Savr, engineered for longer shelf life. Fortunately, it was removed from the shelves soon after it was introduced.

Although there are no longer any genetically modified (GM) tomatoes being sold today, the FDA's shady approval process of the Flavr Savr provides a lesson in food safety—or rather, the lack of it—as far as gene-spliced foods are concerned. We know what really went on during the FDA's voluntary review process of the Flavr Savr in 1993, because a lawsuit forced the release of 44,000 agency memos.

Bleeding stomachs

Calgene, the tomatoes' creator-in-chief (now a part of Monsanto), voluntarily conducted three 28-day rat feeding studies.

The rats that ate one of these Flavr Savr varieties probably wished they were in a different test group. Out of 20 female rats, 7 developed stomach lesions—bleeding stomachs. The rats eating the other Flavr Savr, or the natural tomatoes, or no tomatoes at all, had no lesions.

If we humans had such effects in our stomachs, according to Dr. Arpad Pusztai, a top GMO safety and animal feeding expert, it "could lead to life-endangering hemorrhage, particularly in the elderly who use aspirin to prevent thrombosis."

Oh yeah, some rats died

The team that had obtained the formerly secret FDA documents sent the full Flavr Savr studies to Dr. Pusztai for review and comment. While reading them, he happened across an endnote that apparently the FDA scientists either did not see or chose to ignore. The text nonchalantly indicated that 7 of the 40 rats fed the Flavr Savr tomato died within two weeks.

But the endnote summarily dismissed the cause of death as husbandry error, and no additional data or explanation was provided. The dead rats were simply replaced with new ones.

When I discussed this finding with Dr. Pusztai over the phone, he was beside himself. He told me emphatically that in proper studies, you never just dismiss the cause of death with an unsupported footnote. He said that the details of the post mortem analysis must be included in order to rule out possible causes or to raise questions for additional research. Furthermore, you simply never replace test animals once the research begins.

Questionable follow-up study

Calgene repeated the rat study. This time, one male rat from the non-GM group of 20, and two females from the GM-fed group of 15, showed stomach lesions. Calgene claimed success. They said that the necrosis (dead tissue) and erosions (inflammation and bleeding) were "incidental" and not tomato-related.

In reality, the new study was not actually a "repeat." They used tomatoes from a different batch and used a freeze-dried concentrate rather then the frozen concentrate used in the previous trial. Dr. Martineau explained to me that by freeze-drying, it allowed them to put more of the concentrated tomato into each rat.

In spite of the outstanding issues, the political appointees at the FDA concluded that the lesions were not related to the GM tomatoes. To be on the safe side, however, Calgene on its own chose not to commercialize the tomato line that was associated with the high rate of stomach lesions and deaths. The other line went onto supermarket shelves in 1994.

Faulty science rules the day

This was the very first GM food crop to be consumed in the US. It was arguably the most radical change in our food in all of human history. It was the product of an infant science that was prone to side-effects. Yet it was placed on the market without required labels, warnings, or post-marketing surveillance. One hopes that the FDA would have been exhaustive in their approval process, holding back approvals until all doubts were extinguished. But the agency was officially mandated with promoting biotechnology and bent over backwards to push GMOs onto the market. As a result, their evaluation was woefully inadequate.

Federal Death Agency

I was at a Casey conference last September and Doug Casey commented the FDA (Food and Drug Administration) ought to be reclassified as the Federal Death Agency.

Those articles help explain why.

I conclude "Live long and prosper" ... and don't eat "fish tomatoes".

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

Greece Negotiations Resume Again; "Constructive Ambiguity"; Schäuble Outmaneuvered!

Posted: 28 Feb 2015 03:00 PM PST

On Friday, the German Bundestag Backed the Greek Bailout Extension. Ahead of the vote, many commented that Greece collapsed.

It's not all that simple as I have explained.

The likely explanation for the alleged collapse of Syriza is Greece did not have a primary account surplus. Had it left now, it would have been forced off the euro, violating a campaign promise of Syriza.

Caving in required temporary caving in of other campaign promises.

Both Sides Got Something

The four-month extension gives Greece a better chance to prepare for default while allowing Greece to stay on the euro. The extension also give the ECB four more months to prepare for Grexit or default.

Properly analyzed, both sides got something. Isn't that what usually happens in complex negotiations?

Third Bailout Needed

Meanwhile, it's pretty clear that Greece needs yet another bailout.

I wrote about the bailout issues and the primary surplus issues on February 11 in Third Greek Bailout? Another €53.8 Billion Needed? Primary Account Surplus Revisited.

"Real" Negotiations Begin

Given that Greece does indeed need a third bailout, today's headline story should not be at all surprising: Greece Seeks Negotiations on ECB Bond Repayment.

Greece called into question on Saturday a major debt repayment it must make to the European Central Bank this summer, after acknowledging it faces problems in meeting its obligations to international creditors.

Finance Minister Yanis Varoufakis said Athens should negotiate with the ECB on 6.7 billion euros ($7.5 billion) in Greek government bonds held by the Frankfurt-based bank that mature in July and August.

Varoufakis did not say what he hoped to achieve in any talks, but he accused the ECB of making a mistake in buying the bonds around the time Greece had to take an EU/IMF bailout in 2010.

"Shouldn't we negotiate this? We will fight it," he said in an interview with Skai television. "If we had the money we would pay ... They know we don't have it."

With tax revenue falling far short of target last month and an economic recovery faltering, the state must repay an IMF loan of around 1.6 billion euros in March and find 800 million in interest payments in April. It then needs about 7.5 billion in July and August to repay the bonds held by the ECB and make other interest payments.

Varoufakis, who has staged a media blitz in recent days to sell the euro zone deal to the Greek people, singled out former ECB President Jean-Claude Trichet for criticism.

"One part of the negotiations will be on what will happen to these bonds which unfortunately and wrongly Mr Trichet bought," he said. "I see it as a mistake - but the ECB did this with the aim of keeping us in the markets in 2010. They failed."

Varoufakis argued that if the bonds had remained in investors' hands, their value would have been cut by 90 percent under a restructuring of Greece's privately held debt in 2012, reducing the burden on the state.

The ECB bought the bonds at a deep discount and made large profits because their value rose as the euro zone debt crisis eased. Under Greece's second bailout deal, these profits were due to be returned to Athens to help it repay debt.

Athens received a partial payment in 2013 but euro zone countries are withholding a further 1.9 billion euros pending the review of Greece's economic plans. Varoufakis wants this money sent directly to the IMF to meet the March payment.

Curious Timing

Although the above headline and details are not surprising, the timing may appear somewhat curious. Even though the Bundestag signed off, the eurogroup as a whole has not ratified the extension.

Today's call for further negotiations ahead of that vote are sure to raise more than a few eyebrows.

Why now?

I have two possible game theory explanations

Varoufakis wants to quell Greek parliament sentiment that Syriza collapsed, and he feels the need to do that right away
Syriza really does not care if it is forced out of the eurozone as long as Greece can 100% without a doubt place the blame elsewhere

Advocates of position number two may argue that by caving into the demands and getting Germany to go along, it will not appear to anyone as if Syriza was responsible for Grexit, should the eurogroup parliament reject the extension.

Which is more reasonable?

As a fan of Occam's Razor (the rationale that requires the fewest assumptions is most often the correct explanation), I vote for number one.

Option 1 is self-explanatory. Option 2 requires a lie by Syriza (that it does not really want to stay on the euro), and a complex way to make that happen, absolving themselves of blame because the Greek population as a whole does want to keep the euro.

Constructive Ambiguity

As a result of the timing, I expect still more bickering accompanied by still more warnings. Nonetheless, the extension will be approved.

Also in support of theory number one is Intentional Vagueness.

Greece's finance minister says the country's agreement with its European creditors to extend its international loan agreement by four months was intentionally vague to ensure the European countries that need to have it ratified by their parliaments would be able to do so.

Greece was granted the extension by its European creditors last week in exchange for a commitment to budget reforms Varoufakis laid out in a document sent to Brussels. The list is a policy plan but does not contain specific measures or figures.

Varoufakis said that "we are very proud of the degree of ambiguity. And I use a term, constructive ambiguity."

Using Time Wisely

In the next four months, the real negotiations begin. Expect Syriza to announce it really did not cave in at all, because the document is purposely vague.

Let's revisit a couple of statement from my February 22 article Tspiras Claims to have "Won a Battle, Not the War"; Greece to Combat Tax Evasion; Illusion Shattered; Another Bailout?

"Once you get them into the safe space for the next four months, there'll be another set of discussions which will effectively involve the negotiation of a third program for Greece," said Irish Finance Minister Michael Noonan.
German finance minister Wolfgang Schäuble rubbed Greek capitulation in Tsipras' face with his comment "The Greeks certainly will have a difficult time to explain the deal to their voters. As long as the programme isn't successfully completed, there will be no payout."

Schäuble Outmaneuvered

In retrospect, number two is rather amusing. How will Syriza explain this to the Greeks?

Like this: We got a four-month extension in return for vague promises at our discretion. Essentially we got the extension for free. Now we can negotiate payments to the ECB and IMF!

I suggest Schäuble was outmaneuvered by game theory book author Varoufakis. (See Mish's Game Theory Math)

If Syriza uses that time wisely, it can get back to a state of primary account surplus. And if it does, it will be in a far position to tell the much hated Troika where to go.

I still have odds of default (with or without Grexit), well over 50% by June. Which one depends on the state of primary account surplus in June when this extension ends.

All that happened in February was approval of four month extension giving both sides time to prepare for the inevitable.

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

My Favorite 5 Analytics Dashboards - Whiteboard Friday - Moz Blog

My Favorite 5 Analytics Dashboards - Whiteboard Friday

Posted on: Friday 27 February 2015 — 01:15

Posted by Sixthman

Finding effective ways of organizing your analytics dashboards is quite a bit easier if you can get a sense for what has worked for others. To that end, in today's Whiteboard Friday the founder of Sixth Man Marketing, Ed Reese, shares his five favorite approaches.

UPDATE: At the request of several commenters, Ed has generously provided GA templates for these dashboards. Check out the links in his comment below!

For reference, here's a still of this week's whiteboard!

Video transcription

Hi, I'm Ed Reese with Sixth Man Marketing and Local U. Welcome to this edition of Whiteboard Friday. Today we're going to talk about one of my favorite things in terms of Google Analytics -- the dashboard.

So think of your dashboard like the dashboard on your car -- what's important to you and what's important to your client. I have the new Tesla dashboard, you might recognize it. So, for my Tesla dashboard, I want navigation, tunes, calendar, everything and a bag of chips. You notice my hands are not on the wheel because it drives itself now. Awesome.

So, what's important? I have the top five dashboards that I like to share with my clients and create for them. These are the executive dashboards -- one for the CMO on the marketing side, new markets, content, and a tech check. You can actually create dashboards and make sure that everything is working.

These on the side are some of the few that I think people don't take a look at as often. It's my opinion that we have a lot of very generic dashboards, so I like to really dive in and see what we can learn so that your client can really start using them for their advantage.

#1 - Executives

Let's start with the executive dashboard. There is a lot of debate on whether or not to go from left to right or right to left. So in terms of outcome, behavior, and acquisition, Google Analytics gives you those areas. They don't mark them as these three categories, but I follow Avinash's language and the language that GA uses.

When you're talking to executives or CFOs, it's my personal opinion that executives always want to see the money first. So focus on financials, conversion rates, number of sales, number of leads. They don't want to go through the marketing first and then get to the numbers. Just give them what they want. On a dashboard, they're seeing that first.

So let's start with the result and then go back to behavior. Now, this is where a lot of people have very generic metrics -- pages viewed, generic bounce rate, very broad metrics. To really dive in, I like focusing and using the filters to go to specific areas on the site. So if it's a destination like a hotel, "Oh, are they viewing the pages that helped them get there? Are they looking at the directional information? Are they viewing discounts and sorts of packages?" Think of the behavior on those types of pages you want to measure, and then reverse engineer. That way you can tell they executive, "Hey, this hotel reservation viewed these packages, which came from these sources, campaigns, search, and social." Remember, you're building it so that they can view it for themselves and really take advantage and see, "Oh, that's working, and this campaign from this source had these behaviors that generated a reservation," in that example.

#2 - CMO

Now, let's look at it from a marketing perspective. You want to help make them look awesome. So I like to reverse it and start with the marketing side in terms of acquisition, then go to behavior on the website, and then end up with the same financials -- money, conversion rate percentages, number of leads, number of hotel rooms booked, etc. I like to get really, really focused.

So when you're building a dashboard for a CMO or anyone on the marketing side, talk to them about what metrics matter. What do they really want to learn? A lot of times you need to know their exact territory and really fine tune it in to figure out exactly what they want to find out.

Again, I'm a huge fan of filters. What behavior matters? So for example, one of our clients is Beardbrand. They sell beard oil and they support the Urban Beardsman. We know that their main markets are New York, Texas, California, and the Pacific Northwest. So we could have a very broad regional focus for acquisition, but we don't. We know where their audience lives, we know what type of behavior they like, and ultimately what type of behavior on the website influences purchases.

So really think from a marketing perspective, "How do we want to measure the acquisition to the behavior on the website and ultimately what does that create?"

These are pretty common, so I think most people are using a marketing and executive dashboard. Here are some that have really made a huge difference for clients of ours.

#3 - New markets

Love new market dashboards. Let's say, for example, you're a hotel chain and you normally have people visiting your site from Washington, Oregon, Idaho, and Montana. Well, what happened in our case, we had that excluded, and we were looking at states broader -- Hawaii, Alaska, Colorado, Texas. Not normally people who would come to this particular hotel.

Well, we discovered in the dashboard -- and it was actually the client that discovered it -- that we suddenly had a 6000% increase in Hawaii. They called me and said, "Are we marketing to Hawaii?" I said no. They said, "Well, according to the dashboard, we've had 193 room nights in the past 2 months." Like, "Wow, 193 room nights from Hawaii, what happened?" So we started reverse engineering that, and we found out that Allegiant Airlines suddenly had a direct flight from Honolulu to Spokane, and the hotel in this case was two miles from the hotel. They could then do paid search campaigns in Hawaii. They can try to connect with Allegiant to co-op some advertising and some messaging. Boom. Would never have been discovered without that dashboard.

#4 - Top content

Another example, top content. Again, going back to Beardbrand, they have a site called the Urban Beardsman, and they publish a lot of content for help and videos and tutorials. To measure that content, it's really important, because they're putting a lot of work into educating their market and new people who are growing beards and using their product. They want to know, "Is it worth it?" They're hiring photographers, they're hiring writers, and we're able to see if people are reading the content they're providing, and then ultimately, we're focusing much more on their content on the behavior side and then figuring out what that outcome is.

A lot of people have content or viewing of the blog as part of an overall dashboard, let's say for your CMO. I'm a big fan of, in addition to having that ,also having a very specific content dashboard so you can see your top blogs. Whatever content you provide, I want you to always know what that's driving on your website.

#5 - Tech check

One of the things that I've never heard anyone talk about before, that we use all the time, is a tech check. So we want to see a setup so we can view mobile, tablet, desktop, browsers. What are your gaps? Where is your site possibly not being used to its fullest potential? Are there any issues with shopping carts? Where do they fall off on your website? Set up any possible tech that you can track. I'm a big fan of looking both on the mobile, tablet, any type of desktop, browsers especially to see where they're falling off. For a lot of our clients, we'll have two, three, or four different tech dashboards. Get them to the technical person on the client side so they can immediately see if there's an issue. If they've updated the website, but maybe they forgot to update a certain portion of it, they've got a technical issue, and the dashboard can help detect that.

So these are just a few. I'm a huge fan of dashboards. They're very powerful. But the big key is to make sure that not only you, but your client understands how to use them, and they use them on a regular basis.

I hope that's been very helpful. Again, I'm Ed Reese, and these are my top five dashboards. Thanks.

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Seth's Blog : If you want...

If you want...

If you want employees to go job hunting in order to leverage you into giving them a raise to keep them, then by all means, only give them a raise when they go job hunting.

If you want vendors to nickel and dime you for the last penny, then by all means, stretch out their payments and use them as a free source of cash.

If you want the home seller or the art dealer or the agent to put their goods up for auction to maximize the price you'll have to pay, then definitely punish those that don't have auctions by seeking to pay them as little as possible.

If you want internet companies to auction off your attention to the highest bidder, the best strategy is to only use services that don't charge you a fee.

If you want to be spammed, buy something from a telemarketer or an email pitch.

If you want gotchas, fine print and the hard sell, buy your car from someone who promises you the lowest price and then figures out how to make a profit some other way.

If you want customers to throw tantrums in order to get better service, my best advice is to only give a focused, urgent response to customers who throw tantrums.

Most of all, if you want customers to hear about you, make something worth talking about. And if you want customers who are loyal, act in a way that deserves loyalty.

• Email to a friend •

vineri, 27 februarie 2015

Mish's Global Economic Trend Analysis

Panic in Ukraine Over Food, Empty Stores and Protests; Strategic Food Reserve Empty
"NowCast" - The Evolution of GDP Forecasting
Chicago PMI Crashes to 5 1/2 Year Low: Production, New Orders, Backlogs Suffer Double Digit Declines

Panic in Ukraine Over Food, Empty Stores and Protests; Strategic Food Reserve Empty

Posted: 27 Feb 2015 06:27 PM PST

Here's a brief update from "Ellen" who lives in Lviv, a city in Western Ukraine.

Hello Mish

We have quite a panic over the collapse of currency. People buy any food product that can be stored. Everyone wants to rid of Hryvnia. We haven't seen anything like this since 1991 when the Soviet Union collapsed. Stores are empty.

It is hard to say what exchange rate this days, somewhere between 34 and 42

There were riots in downtown today. A group of protesters was beaten up by police. They marched through downtown and gave a last warning to government officials. Next time they said they will shoot some officials.

Ukraine is on a brink, but the West is not in a hurry to give us money. Perhaps they want something. Maybe they know the money will end up with corrupt officials who will steal it.

Either way, the few billion dollars they promised in March won't save our economy, not after this panic started.

Best wishes
Ellen

Strategic Food Reserve Empty

A curious thing happened today. To quiet protests over food, president Petro Poroshenko ordered the minister of the food reserve to fill the shelves of stores with flour, sugar, canned meat, and buckwheat from the reserve.

Well guess what? There was no food in the reserve. It has either been looted (like the vanishing gold), or it was fed to the army.

Here is a nice translation from Russian by J. Hawk: Ukraine's Strategic Food Reserve...Runs Out Of Food.

Ukrainian food prices are rising at a rate faster than in the '90s. But the Yatsenyuk government is still blaming the situation on the ignorance of the population and speculation by supermarket chains.

They used to blame currency exchangers, now they are blaming supermarket directors. However, you can't feed the people with such tales.

The government's "economy block" hastily summoned the director of the Ukrainian State Reserve Vladimir Zhukov. They demanded that he open the storehouses and fill the shelves with flour, sugar, canned meat, and buckwheat from its stores. In response the keeper of Motherland's strategic stores revealed a terrible military secret to Yatsenyuk and Poroshenko: the storehouses are empty.

It would seem Ukraine's Black Hour is here.

J.Hawk's Comment: There indeed were earlier reports that the strategic reserve was being "unsealed" to support military operations on the Donbass. The army has to eat, after all, and maintaining several tens of thousands of soldiers for nearly a year is likely to make a dent. The second factor was the junta's desperate need to earn hard currency to somehow plug up the many budget holes opened up by its adoption of "European Choice" neoliberal economic policies. Therefore anything that could be sold, was sold, including Mariupol's huge grain reserves. Finally, there's the small matter of corruption. One gets the impression Ukraine is a giant organized style "bust-out" operation, whose objective is to stash as much loot in foreign accounts and then leave the mess for someone else to clean up. To say that the Kiev junta has some kind of a strategy would be giving them entirely too much credit. It's a collection of loosely coordinated individuals pursuing their own venal agendas and living hand-to-mouth, without any thought given to Ukraine's long-term prospects.

Here is a link to the original article that J. Hawk translated: Ukraine State Reserve Doesn't Even Have Buckwheat. Everything was Stolen.

Buckwheat is a Russian staple. I believe, "out of buckwheat" would be the equivalent of Japan being out of rice.

Mish note: One person accused me of bias over the word "junta". I did not choose the word. I quoted someone, just as I quote Colonel Cassad.

In context, it certainly appears J. Hawk went out of his way to not just translate, but to mention the possibility reserves were unsealed to feed the army.

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

"NowCast" - The Evolution of GDP Forecasting

Posted: 27 Feb 2015 11:42 AM PST

In the wake of existing home sales reports on Monday, and new home sales yesterday, GDP and residential investment forecasts came tumbling down.

Check out the latest "GDP Nowcast" from the Atlanta Fed.

"The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 was 1.7 percent on February 26, down from 1.9 percent on February 18. The first-quarter nowcast for real residential investment growth fell from 11.1 percent to 2.3 percent following Monday's existing-home sales release from the National Association of Realtors and yesterday morning's releases on sales and construction costs of single-family homes by the U.S. Census Bureau."

Please note that the "NowCast" does not factor in this: Chicago PMI Crashes to 5 1/2 Year Low: Production, New Orders, Backlogs Suffer Double Digit Declines.

Expect another revision soon.

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

Chicago PMI Crashes to 5 1/2 Year Low: Production, New Orders, Backlogs Suffer Double Digit Declines

Posted: 27 Feb 2015 08:22 AM PST

Fourth quarter GDP was revised lower today to 2.2 percent from 2.6 percent previously estimated.

Looking ahead, I think we are going to see some shocking downward estimates in the months to come. Meanwhile, a shocking PMI report came out today.

Chicago PMI Crashes to 5 1/2 Year Low

ISM Chicago reports Chicago Business Barometer At 5½-Year Low

The Chicago Business Barometer plunged 13.6 points to 45.8 in February, the lowest level since July 2009 and the first time in contraction since April 2013. The sharp fall in business activity in February came as Production, New Orders, Order Backlogs and Employment all suffered double digit losses, leaving them below the 50 level which separates contraction from expansion.

New Orders suffered the largest monthly decline on record, leaving them at the lowest since June 2009. Lower order intake and output levels led to a double digit decline in Employment which last month increased markedly to a 14-month high.

Disinflationary pressures were still in evidence in February, although the slight bounceback in energy costs pushed Prices Paid to the highest since December – although still below the breakeven 50 level. Some purchasers cited weakness in some metals prices including copper and brass, but others said suppliers were slow to pass along lower prices to customers.

Commenting on the Chicago Report, Philip Uglow, Chief Economist of MNI Indicators said, "It's difficult to reconcile the very sharp drop in the Barometer with the recent firm tone of the survey. There's some evidence to point to special factors such as the port strike and the weather, although we'll need to see the March data to get a better picture of underlying growth."

Blame it on the Ports

Everyone was quick to blame this on the ports and bad weather.

But the LA port issue has been festering for months. Weren't economists aware of the ports? Of bad weather?

The reason I ask is the Bloomberg Consensus Estimate was 58.7. The range was 55.5 to 59.6. Who predicted 59.6?

Regardless, the actual number came in nearly 10 points lower than any forecast!

Surprise! Surprise! Surprise!

Link if video does not play: Gomer Pyle on Surprises.

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

Damn Cool Pics

These Are The Most Ridiculous Haircuts Of All Time

Posted: 27 Feb 2015 03:44 PM PST

If you're going to get a bad haircut, you've got to get the right barber to give it to you.

These Are The 20 Richest Athletes In The Entire World

Posted: 27 Feb 2015 12:46 PM PST

There are a lot of rich athletes in the world but you have to be worth a lot of money to be in the top 20 richest athletes. These are the people that made the cut.