joi, 24 septembrie 2015

Mish's Global Economic Trend Analysis

3rd Quarter GDP Now Forecast Ticks Down to 1.4%
Why I'm Never Going to "Two-Bit" China
Durable Goods Orders Decline 2%, Led by Transportation; QE Bounce Effect is Over; Recession on the Way?
Japan Manufacturing PMI Borders on Contraction as New Export Orders Plunge

3rd Quarter GDP Now Forecast Ticks Down to 1.4%

Posted: 24 Sep 2015 01:04 PM PDT

The Atlanta Fed GDPNow Forecast model ticked slightly lower today following recent economic reports.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.4 percent on September 24, down slightly from 1.5 percent on September 17. The decline occurred on Monday when the model's forecast for third-quarter real residential investment growth fell in response to the existing home sales release from the National Association of Realtors.

I thought today's Durable Goods report (see Orders Decline 2%, Led by Transportation; QE Bounce Effect is Over; Recession on the Way?) would have knocked a tick or two off the model forecast, but it was actually existing home sales that did it.

Mike "Mish" Shedlock

Why I'm Never Going to "Two-Bit" China

Posted: 24 Sep 2015 11:01 AM PDT

I would never go to China, even if someone paid for the trip and all expenses.

My reason can be explained in one headline: China Arrests US Citizen for 'Endangering National Security'.

An American businesswoman has been formally arrested in China on suspicion of "endangering national security" just days before Chinese President Xi Jinping arrives in the US for his first official state visit.

Phan Phan-Gillis, 55, who also uses the name Sandy, disappeared in late March while traveling as part of a delegation made up of local officials from her home town of Houston, Texas.

Her husband, Jeff Gillis, told US media he later discovered she had been detained by China's Ministry of State Security and that she was suspected of espionage and stealing state secrets.

Judging from news reports and corporate websites, Ms Phan-Gillis has been an active promoter of Sino-US ties.

During her trip to China in March she identified herself as executive president of the America Asia Trade Promotion Association (AATPA) and president of the Houston Shenzhen Sister City Association.

Missing Since March

Gillis went missing on March 19. We are only hearing about it just now because her husband was afraid publicity might jeopardize her chances of being released.

Since then, he has awakened to reality: He is at the mercy of merciless, corrupt Chinese leaders.

As noted by the Financial Times, "In China the definition of state secrets is broad and vague and often encompasses things that would be considered public information in other countries. Authorities regularly detain foreign citizens they suspect of spying but ethnically Chinese foreign citizens are far more likely to be held and charged."

Reader Questions

When I write about China I frequently get comments along the lines "What do you know about China? Have you ever been there?"

In the not-so distant past, such questions were accompanied by comments like "China is booming. Have you seen all the building cranes? They are everywhere. Every city is expanding ..."

My reply was along the lines of "There were cranes all over Florida as well, right before US real estate collapsed."

Now reports of vacant cities, malls, and corruption are all over news about China. Capital flight is the order of the day. China has to prop up the yuan or it might sink.

One does not need to go to China to see the pollution or understand the untenable fraud inherent in its massive State Owned Enterprise (SOE) schemes.

National Security Risk

I am an outspoken critic of planned government, GDP lies, pollution, and in general everything associated with China's corrupt central planning model.

It is questionable whether I could last a day without being arrested.

In regards to Gillis, I have to ask: WTF was a delegation from Houston in China for in the first place? Most likely it was a taxpayer boondoggle.

Regardless, Gillis was no more danger to China's "national security" than I am. But that's the problem, isn't it?

I do not get to decide, nor does an unbiased jury get to decide what constitutes "national security". In China, some unelected Communist bureaucrat attempting to prop up his regime gets to decide what constitutes not only national security, but anything and everything else.

If the state decides to burn Gillis at the stake, then that's precisely what will happen.

How China is Ruled

The BBC explains "How China is Ruled".

The Chinese Communist Party has ruled the country since 1949, tolerating no opposition and often dealing brutally with dissent.

The country's most senior decision-making body is the standing committee of the politburo, heading a pyramid of power which tops every village and workplace.

Politburo members have never faced competitive election, making it to the top thanks to their patrons, abilities and survival instincts in a political culture where saying the wrong thing can lead to a life under house-arrest, or worse.

Two-Bit China

The idea that a centrally planned communist country will soon be the preeminent economic power and its currency the world's reserve currency is laughable.

No one in their right mind believes Chinese growth estimates. And much of the growth we do see is nothing but malinvestment. China does not have a large, open, or liquid bond market that a global reserve currency requires. Heck, China dare not even float the yuan.

As noted above, those in China better be careful about what they say. Anyone who bothers to bluntly speak the truth, like I just did, would not last a day in China.

China may be a big economic power, but at the heart of it all, China is nothing but a two-bit, scandalous, central planning dictatorship when it comes to property rights, human rights, freedom of speech, and freedom of press.

Those who gloat over China's miracle growth and think the yuan will soon supplant the US dollar are mistaken on both counts.

Mike "Mish" Shedlock

Durable Goods Orders Decline 2%, Led by Transportation; QE Bounce Effect is Over; Recession on the Way?

Posted: 24 Sep 2015 08:45 AM PDT

Those looking for "lift off" material for Fed hikes will not find it in the latest Durable Goods report from the US Department of Commerce.

Durable Goods orders declined 2.0% in line with Bloomberg Consensus Estimates, but details and year-over-year numbers weak.

Transportation equipment, specifically aircraft orders, are once again skewing durable goods orders which fell 2.0 percent in August as expected. Excluding transportation, durable goods were unchanged which is slightly lower than expected. Weakness here in part reflects a pause for core capital goods as nondefense ex-auto orders slipped 0.2 percent following two prior months of very solid growth.

Looking at transportation equipment, both aircraft and motor vehicles were weak. Orders for civilian aircraft fell 12 percent in the month while vehicle orders fell 1.5 percent. Vehicle shipments were down 1.6 percent but follow July's big 4.7 percent surge.

Total shipments were flat in the month but follow solid gains in July and June. Core capital goods shipments, like orders, slipped 0.2 percent but also follow prior gains. Still, the dip in core shipments will not be lifting third-quarter GDP estimates. Factories held inventories unchanged in August and worked off backlog orders slightly, down 0.2 percent.

Shipments and Orders Current vs. Prior

The transportation decline was expected. The decline ex-transportation was not expected.

Also note the revision to last month's ex-transportation number. These numbers certainly will not add to third quarter GDP estimates.

Durable Goods New Orders

Durable Goods New Orders vs. Year Ago

Note the over-sized effect that transportation has on order. Yet the picture is not pretty even when transportation is excluded.

Durable Goods New Orders vs. Year Ago Detail

Recession on the Way?

The effect of QE, and central bank stimulus in general, is over (assuming it was ever really in play in the first place).

If the strength in autos is over, and I suppose a global scandal on Volkswagen would mark a fitting top, then recession cannot be too far off.

Mike "Mish" Shedlock

Japan Manufacturing PMI Borders on Contraction as New Export Orders Plunge

Posted: 24 Sep 2015 02:54 AM PDT

Japan's Manufacturing PMI is still growing, but barely.

Key Points

Flash Japan Manufacturing PMI™ at 50.9 (51.7 in August). Operating conditions improve at slower rate.
Flash Japan Manufacturing Output Index at 51.4 (51.1 in August). Growth in production little changed from August's modest pace.

Markit Comment

Amy Brownbill, economist at Markit, which compiles the survey, said: "September PMI data pointed to a general slowdown in the expansion of the Japanese manufacturing sector. New order growth moderated, having increased in August at the fastest rate since January. Underpinning the slowdown in total new order growth was a sharp reduction in international demand as new export orders dropped to the greatest extent for 31 months. A number of panelists blamed a fall in sales volumes from China leading to a decrease in new exports. Subsequently, employment levels declined for the first time since March."

Japan PMI Charts

Treading Water

Japan is clearly treading water here as 50 is the break-even rate. Right now it looks like China will pull Japan down with it. And what about prices?

Glad you asked.

Both input and output prices are back in negative territory. Wasn't Abenomics supposed to cure that problem?

Indeed it was, not that it posed any real problem though. The only problem is going into debt to fight deflation. All you get out of it is more debt.

Mike "Mish" Shedlock

Announcing the 2015 Local Search Ranking Factors Results - Moz Blog

Announcing the 2015 Local Search Ranking Factors Results

Posted by David-Mihm

As we head into the thick of fall conference season, I'm happy to announce that the results of the 2015 Local Search Ranking Factors Survey are in.

Eager to dive right in? Click here for the full results.

At the very least, I hope they help kickstart your Birds of a Feather roundtable conversations. (Or if you have a local search addiction as debilitating as mine, perhaps even an after-party conversation over over a pint!)

My high-level takeaways

Google's local search algorithm seems to be maturing

Overall, we've seen a continuation of the gradual trend towards Google rewarding quality on all fronts—from citations to links to reviews. And as more companies have implemented the table stakes of site architecture, keyword- and location-relevant title tags, and claiming their Google My Business pages, quality and authority become the differentiators in competitive markets.

The influence of Google+ on local results is on its way out (if it even existed in the first place)

With the removal of links to Google+ pages from Maps and even from the primary SERP, the always-awkward integration between Plus and Local has now been completely severed.

At this point, I view Google My Business essentially as a UI for structured data* and a conduit to AdWords. While Google's original "business builder" vision may still come to fruition, it clearly won't be under the social umbrella of Google+.

*as well as photos--increasingly important for conversion in a Knowledge Card-heavy future.

Behavioral signals are increasing in importance

Experts judged behavioral and/or mobile signals to make up 9.5% of the algorithm across pack and localized organic results. Granted, that number is not strikingly high, but it's up 38% compared with last year's 6.9%. Research from Darren Shaw and others in the past year has borne out this factor empirically at least in certain markets.

In localized organic results, clickthrough rate was judged the #4 overall factor, and in competitive markets, it moved up 8 spots from 2014, cracking the top ten factors for the first time. A number of experts noted additional behavioral factors beyond clickthrough rate may be playing a role, including post-click time spent on-site or pogosticking.

Citations are still crucial—but your focus should be on quality and consistency

Oddly, citations went from 15.5% to 13.6% as a general ranking factor, but specifically, citation quality and consistency remain top-five factors for both pack results and in competitive markets.

Reading between the lines, it's the quantity of horizontal citations on traditional directories that is becoming less important. Algorithmically, this makes sense, as many of these sites have been hit by successive Panda releases for thin content. The authority passed by mentions on these sites has clearly declined.

Are links the new links?

Overall, links were up 9% as a general factor compared to last year, and a number of experts noted an increased focus on quality links since the rollout of the Local Stack / Snack Pack. Diversity of inbound links as a ranking factor in pack results moved up 22 spots from last year, and even in competitive markets, it rose 10 spots to #14. And in localized organic results, locally-relevant links, location keywords in anchor text, and product/service keywords in anchor text all moved up at least 10 spots in 2015.

Pigeon's shift to the user as centroid has "stuck"

The decline of proximity to centroid as a ranking factor, particularly in competitive markets, now seems just about complete. As Google has gotten better at location detection--on both desktop and mobile results--this rather arbitrary factor has been almost completely discarded. We saw this trend start in earnest with the release of Pigeon last summer, and since the snack pack / local stack rollout, proximity to centroid is the factor that experts think took the biggest hit.

On the other hand, proximity to searcher moved up four spots in the pack-specific rankings, and 10 spots in competitive markets. Clearly, the location of a business matters immensely, but only relative to where people are physically conducting their searches.

Wrapping Up

This is always the case, but this year in particular there are so many pearls of wisdom from the survey's participants that I hope you spend some serious time diving into the comments section of the results. These little nuggets are every bit as interesting as the numbers, if not more so. I truly appreciate the contributions from all participants this year, and look forward to reading comments from our great community members below!

This is just the tip of the iceberg. Want to see the rest?

Take a look at the full results

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