I recently heard from a TED speaker who was able to quote, verbatim, truly nasty comments people had posted about her talk.
And yet, I've never once met an author who said, "Well, my writing wasn't resonating, but then I read all the 1 star reviews on Amazon, took their criticism to heart and now I'm doing great..."
There are plenty of ways to get useful and constructive feedback. It starts with looking someone in the eye, with having a direct one on one conversation or email correspondence with a customer who cares. Forms, surveys, mass emails, tweets--none of this is going to do anything but depress you, confuse you (hey, half the audience wants one thing, the other half wants the opposite!) or paralyze you.
I'm arguing that it's a positive habit to deliberately insulate yourself from this feedback. Don't ask for it and don't look for it.
Yes, change what you make to enhance delight. No, don't punish yourself by listening to the mob.
Keynesian clowns are concerned about the decline in government jobs in the past few years. They want the government to step up spending and hire more workers to make up for the loss of jobs in the private sector.
Here is a chart from reader Tim Wallace that will help put the recent loss of government jobs in a better perspective.
Percentage Job Growth vs. Population Growth
click on any chart for sharper image
The growth in government jobs is not sustainable nor is there any genuine excuse for it other than political pandering and vote-buying operations.
The deviance between private bobs and population growth is easily explained by the entry of women in the workforce.
Percentage Male and Female Job Growth vs. Population Growth
Note how the percentage growth of men in the labor force closely tracks population growth the percentage growth of women in the workforce has skyrocketed.
Employment in Millions
Entry of women in the workforce allowed much higher household debt levels than ever before.
Now what?
I'll tell you what. Ability of households to take on more debt has peaked. There are no more female workers to add to the pool. Everyone male or female is working (or is looking for work) whether they really want to or not.
Women actually overtook men in the work force way back in 1990.
Percentage of Total Workforce That is Female
Unfortunate Facts
The unfortunate fact of the matter is everyone need to work to pay off accumulated debts and meet living expenses, but the jobs are not there.
The second unfortunate fact is we cannot afford and do not need all of the existing government jobs.
The third unfortunate fact is demographics are no longer favorable. Indeed, there are too few jobs, too much student debt, and too few workers supporting too many retirees on Social Security.
Those unfortunate facts happen to be highly deflationary.
Just 14% expect today's children to be better off than their parents
Just 31% believe the U.S. economy will be stronger in one year
Just 27% think the country is heading in the right direction.
Just 24% of American Adults believe the job market is better than a year ago
44% think the job market is worse, up 15 points from June
Demographics Suggest Majority is Right
I happen to agree with the majority who think those now graduating from high school will not be better off than their parents.
There are too few jobs, too much student debt, and too few workers supporting too many retirees on Social Security.
Who Will Address the Problems?
As I look out on the political landscape, I see little hope that either Republicans or Democrats will address these problems.
Republicans refuse to address the income side of the balance sheet, and Democrats refuse to address the spending side.
Neither party is willing to tackle military spending.
How long the market lets these can-kicking exercises continue is anyone's guess, but the longer this goes on, the more pain there will be.
The culmination will be a currency crisis at some point down the road. Timing is very problematic. Japan proves debt-to-GDP ratios may go on much further than anyone thinks possible.
Markus Söder, Bavarian Finance Minister: The politician from the Christian Social Union, the conservative sister party to Chancellor Angela Merkel's Christian Democratic Union, is known for his tub-thumping rhetoric and has stepped up a gear in the euro crisis with vitriolic comments about Greece. "An example must be made of Athens, that this euro zone can show teeth," he told the Bild am Sonntag tabloid newspaper this week.
Alexis Tsipras, the leader of Greece's leftist Syriza party: In his latest proposal, Tsipras argues the Greek government should refuse to talk to the so-called troika comprised of the European Commission, the European Central Bank and the International Monetary Fund. He wants to "criminalize" the privatization of public enterprises. He has been labelled the "most dangerous man in Europe" since he became leader of the radical left and has been pressuring successive governments to abandon austerity measures that underpin Greece's continued access to international aid.
Silvio Berlusconi, entrepreneur and former Italian prime minister: His Popolo della Libertà (People of Freedom) party supports current Prime Minister Mario Monti but is secretly preparing for Italian elections next year. Berlusconi wants to win a fifth term as prime minister with the help of populist anti-euro rhetoric. He recently said the Italian central bank should simply print more euros to avoid instructions from Brussels. He has also threatened to reintroduce the lira.
Marine Le Pen, leader of the far-right Front National in France: The populist politician campaigned in this year's presidential election by warning about the supposed might of the EU. "Frau Merkel and her friends, Van Rompuy and the European Commission are in the final stages of creating a European Soviet Union," she thundered. "We are about to lose our status as a free nation."
Timo Soini, leader of the True Finns party and a member of the European Parliament: Since the election, Finland has demanded that Greece provide collateral in return for Finnish aid. Soini wants that aid to stop. "Not a penny more," he says. "We've paid enough."
Alexander Dobrindt, general secretary of the conservative Bavarian Christian Social Union (CSU): "It's the end of the line for Greece," Dobrindt said recently. Previously, he had demanded that the Greek government should no longer pay its civil servants and pensioners in euros but in drachmas.
Nigel Farage, leader of the UK Independence Party (UKIP) and a member of the European Parliament: Farage is the man who can cause an uproar in the otherwise dull European Parliament, where he called the Lisbon Treaty "the most spectacular, bureaucratic coup d'etat that the world had ever seen." He has described European Council President Herman Van Rompuy as having the "charisma of a damp rag."
Heinz-Christian Strache, head of the Austrian Freedom Party (FPÖ): Strache claims that the permanent euro bailout fund, the European Stability Mechanism (ESM), will destroy "not only our state, but also our democracy and constitution." He says the ESM is tantamount to an ´Ermächtigungsgesetz, an allusion to the 1933 German law that allowed Hitler to rise to power.
Geert Wilders, head of the Dutch Freedom Party (PVV): Wilders wants to see the return of the Dutch guilder and described the ESM as "a dictate from Brussels."
Viktor Orbán, Hungarian prime minister: Orbán's statement that he would bow to Brussels' power but not to its arguments created considerable irritation.
Der Spiegel is Clueless and Dangerous
While the list does include some fascists and other questionable characters, the main "crime" against the collective group is they seek to end the euro.
Reader "Martin" from Australia writes ...
Hello Mish
Der Spiegel's article on dangerous politicians is a good example of how clueless main stream media is. While some in the list are clearly facists like Orban and Le Pen, the media tries to discredit Nigel Farage by putting him in the same group.
By the way Der Spiegel is considered a major respectable magazine. They all work for the EU.
Regards, Martin, Sydney, Australia
Eurozone Cannot Possibly Survive
Reader Martin is exactly correct. In this regard Der Spiegel is not only clueless, but dangerous, because it fans myths that the eurozone can survive intact (it cannot), and the myth the euro is worth saving in the first place (it's not).
Mish's Top List of Europe's Most Dangerous Politicians
Angela Merkel, Chancellor of Germany, deserves special mention. Merkel is widely blamed for not doing enough to keep the eurozone crisis from spreading. However, her hands are tied by constitutional issues as well as political issues within her coalition. Yet, every step of the way Merkel caved in to demands of those desperately attempting to save the unsaveable. Nothing is more dangerous that ranking politicians on a mission to do the wrong thing, hoping to preserve their legacy.
David Cameron, UK Prime Minister: Cameron refuses to call a vote on exiting the EU even though the UK is damaged by inane EU rules. Last December, Cameron almost gave in to ridiculous EU treaty changes but did not do so only because he was dead set against preposterous financial transaction taxes proposed by Brussels. Were it not for the financial transaction tax, it appears Cameron would have done the wrong thing.
Mario Monti, technocrat Prime Minister of Italy. Monti was never elected, he was installed by eurocrats because he would support the euro.
Herman Van Rompuy, European Council president: Van Rompuy spends his time flying all over Europe promoting discarded eurobond ideas. He seldom shows up in European Parliament.
José Barroso, European Commission president: Farage describes Barroso as "delusional idiot and was a supporter of Chairman Mao"
Reflections On Merkel
Nigel Farage properly classifies Barroso as a "delusional idiot". The same applies to Herman Van Rompuy, and self-admitted liar Jean-Claude Juncker.
In contrast, Chancellor Merkel is anything but a delusional idiot.
Rather, Merkel is an extremely skilled, as well as widely respected if not charismatic leader, with a seriously misguided notion there needs to be a European nannyzone super-state. Worse yet, she appears willing to sell her soul and the future of Germany to secure that outcome.
As noted above, nothing is more dangerous that ranking politicians on a mission to do the wrong thing, hoping to preserve their legacy.
Without a doubt, Merkel's attributes make her the most dangerous politician in Europe.
A Note About Nigel Farage
Der Spiegel labeled Farage Europe's 7th most dangerous politician. Check out the platform of UKIP, Farage's party.
We believe in the minimum necessary government which defends individual freedom, supports those in real need, takes as little of our money as possible, and doesn't interfere in our lives.
I think the Republican Party in the US should adopt that platform and that anything except a platform based on minimal government and individual freedom is dangerous.
No price of labor is too high if you are a supporter of public unions. Here is a case in point: In Hermosa Beach California, Police Chief Steve Johnson and Councilman Howard Fishman defended $100,000 meter maid positions on the grounds "When you outsource, you take away union jobs."
Note that meter maid positions do not require much more than the ability to drive a standard transmission car and have a high school diploma.
When contemplating the many reasons cities in California and elsewhere are venturing closer to bankruptcy, look no further than the relatively lucrative and often-unjustifiable salaries bestowed on municipal employees – and the lofty pension benefits attached to the high pay.
One of the latest examples comes from the California coastal city of Hermosa Beach, where some community service staffers who collect money from parking meters and manage their operations – positions once widely known as "meter maids" – are making nearly $100,000 a year in total compensation, according to city documents.
There are 10 parking enforcement employees for the 1.3-square-mile beach city southwest of downtown Los Angeles, and they pull down some disproportionate compensation, considering their job functions. In fact, the two highest-earning employees for fiscal year 2011-12 are estimated to have made more than $92,000 and $93,000, respectively, according to city documents provided by Patrick "Kit" Bobko, one of five council members and who also serves as mayor pro tem. Those two have supervisory roles. The other eight parking-enforcement employees make from $67,367 to $84,267 in total compensation.
Bobko also wrote in a memo that the retirement costs for these 10 employees "from [fiscal year 2011-12] through their retirement age at 62 was nearly $1.6 million, and the medical costs for these employees from this fiscal year to their retirement at age 62 would be $1,353,827." Excluding salaries, the [retirement] contributions and medical costs for the 10 employees performing parking enforcement will cost, on average, nearly $300,000 apiece."
Aside from the personnel costs, there has been criticism from Hermosa Beach Treasurer David Cohn that parking meter operations have been mismanaged. Cohn cited nonfunctioning parking meters, a backlog in disputed parking tickets and problems with the accounting for revenue.
Bobko is pushing a plan to outsource the city's parking enforcement operations, which he says will save money, reduce maintenance costs, relieve the city of accounting functions related to parking enforcement, increase efficiency and, perhaps most importantly, increase revenue and "reduce the city's pension and salary obligations."
There has been opposition to the outsourcing proposal from Hermosa Beach's Police Chief Steve Johnson and Councilman Howard Fishman. Both expressed concerns about letting go full-time city staff. Bobko accurately characterized the resistance: "When you outsource, you take away union jobs."
As I have said repeatedly, the goal of public unions is to little or no work for enormous sums of money at taxpayer expense.
In these trying times, one might think that public union supporters would back off of ludicrous demands, at least a tiny bit.
However, statements by union nutcase supporters like Police Chief Steve Johnson and Councilman Howard Fishman show the only solution is the complete elimination of public unions.
If that sounds harsh, please note that even FDR would agree.
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.
A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.
Top Chinese banks are involved in Ponzi financing of investment deals, offering interest rates over 7% to depositors, to finance real estate projects gone bust and other projects whose assets are not even disclosed.
Banks label these schemes "Wealth Management Products" (WMPs) but any individuls foolish enough to invest in them are going to lose money, perhaps all of it.
The Chinese investment vehicle known as "Golden Elephant No. 38" promises buyers a 7.2 percent return per year. That's more than double the rate offered on savings accounts nationally.
Absent from the product's prospectus is any indication of the asset underpinning Golden Elephant: a near-empty housing project in the rural town of Taihe, at the end of a dirt path amid rice fields in one of China's poorest provinces.
"They haven't even built a proper road here," said Li Chun, a car repairman, who said he lives in the project. "The local government is holding onto the flats and only wants to sell them when prices go up."
Golden Elephant No. 38 is one of thousands of "wealth-management products", instruments aimed at monied investors, which have shown phenomenal growth over the last five years. Sales of them soared 43 percent in the first half of 2012 to 12.14 trillion yuan ($1.90 trillion), according to a report by CN Benefit, a Chinese wealth-management consultancy.
They are usually created in China's "shadow banking" system - non-banking institutions that are not subject to the same regulations as banks - which has grown to account for around a fifth of all new financing in China.
Like the subprime-debt lending spree in the United States that helped spark the 2008 financial crisis, the products are often opaque, and usually dependent on high-risk underlying assets, such as the Taihe housing project.
We wrote last week that China's shadow banking system was reflecting and, to an extent, contributing to a growing liquidity risk which in turn is being exacerbated by net capital outflows. Since then, there have been some interesting revelations on the domestic liquidity management, especially in shadow banking, and especially especially in wealth management products.
To recap, wealth management products or WMPs are a little like a term deposit, only they offer Chinese investors a more appealing rate of return than a normal bank deposit (which will deliver a negative real return) and it can be backed by assets — effectively, an informal securitisation.
If you're wondering what sort of assets that includes, Reuters wrote up an excellent investigation of the WMP scene, beginning with the case study of "Golden Elephant no. 38″ which promises a 7.5 per cent return. It shows just how illiquid some of these things are.
At the same time as the risks around WMP issuance are gaining attention, something else is going on in Chinese financial system: interbank assets are surging, as Also Sprach Analyst points out.
There's no knowing when, how or if some kind of liquidity crisis might happen in the Chinese banking system, but there are plenty of possible triggers to be found.
A story on Tuesday in China Daily cited a study by The Chinese Banker that found capital shortfalls among the five biggest banks would grow sharply in 2012 and 2013. The China Daily link is now broken, unfortunately, [Mish Note: the link is now working] but Chinascope Financial has a summary:
"Data from the report shows that capital shortfall in China's major five state-owned banks in 2012 will be: CNY 60.4 billion (Industrial and Commercial Bank of China), CNY 63.5 billion (Agricultural Bank of China), CNY 37.6 billion (Bank of China), CNY 35.4 billion (China Construction Bank), and CNY 47.8 billion (Bank of Communications). By the end of 2013, the capital gap of the five banks will further increase to CNY 69.1 billion, CNY 83.8 billion, CNY 78.7 billion, CNY 39.9 billion and CNY 68.7 billion, respectively."
Capital Shortfalls
Alphaville totaled the above numbers and came up with a capital shortfall of Rmb 244.7 billion for 2012 and a Rmb 340.2 billion shortfall by the end of 2013.
While converting Rmb 244.7 billion to US dollars (the answer is $72.11 billion), I accidentally stumbled across the Rmb 244.7 billion figure in KPMG China's weekly banking news summary
Better than expected profits from Chinese banks
Ten Chinese commercial banks have reported better than expected net profits of RMB 244.7 billion (USD 72.11 billion) in the first half of 2011, approximately 30 percent more than the net profits reported for the same period in 2010. The increase was boosted by strong growth in the banks' net interest income and intermediary business.
Better than expected earnings exactly match expected capital shortfalls. Fancy that.
Poway, Golden Elephants, and Pay Option ARMs This setup sounds much like the "better than expected earnings" reports by US banks in 2006 on Pay Option ARMs. No money came in to banks but accrued interest added to the bottom line (until the deferred payment scheme on questionable assets blew sky high).
Poway vs. "Golden Elephant"
"Golden Elephant" also sounds like the Ponzi scheme in Poway, California.
Poway borrowed $105 million and will defer interest and principal payments for 20 years at which time Poway will owe $1 billion.
Regarding Poway, I was asked "Who is dumber, the city of Poway or the bank that made the loan?"
That's a good question. Certainly the bank that originated the loan will not be paid back if they hold this loan to term. But did they keep it? Given the fiasco in Pay Option ARMs I rather doubt it.
Indeed, I highly suspect the bank that originated the deal sold the loan to some unsuspecting pension plan such as CALPers, or perhaps some plan covering Poway itself.
President Barack Obama tapes the Weekly Address in the Diplomatic Room of the White House, Aug. 10, 2012. (Official White House Photo by Chuck Kennedy)
Photo Gallery: Behind the Scenes of July 2012
The White House Photo Office just released their latest batch of behind-the-scenes photos, including the Independence Day celebrations at the White House, President Obama meeting with Team USA before the Olympics, and the First Lady in London. Check out a few of the images below, then head over to Flickr to see all 50 images in the gallery.
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