luni, 28 ianuarie 2013

Photo of the Day: A Run Along the Colonnade

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Monday, January 28, 2013

Photo of the Day: A Run Along the Colonnade

President Barack Obama runs along the Colonnade of the White House with Deputy National Security Advisor Denis McDonough's children, Jan. 25, 2013. The President announced McDonough will become Chief of Staff, replacing Jack Lew, the nominee for Treasury Secretary. (Official White House Photo by Pete Souza)

Seth's Blog : Beyond showing up

Beyond showing up

You've probably got that part nailed. Butt in seat, smile on your face. We often run into people who understand their job to be showing up on time to do the work that's assigned.

We've moved way beyond that now. Showing up and taking notes isn't your job. Your job is to surprise and delight and to change the agenda. Your job is to escalate, reset expectations and make us delighted that you are part of the team.

Showing up is overrated. Necessary but not nearly sufficient.

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duminică, 27 ianuarie 2013

Mish's Global Economic Trend Analysis

Australia Roundup: Hundreds of Restaurants Close Rather Than Pay 250% Holiday Rate; Massive Housing Incentive, Still No Buyers

Posted: 27 Jan 2013 09:09 PM PST

It's time once again to take a look at happenings down under. Restaurants are closing en masse rather than pay double time and a half to stay open on holidays.

Please consider Penalties blamed for taking high-end dining off menu.

The annual survey of the 7500- member Restaurant and Catering Australia reveals a 33 per cent jump since 2011 in the numbers of restaurateurs saying they cannot afford to open on public holidays.

Public holiday penalty rates require employers to pay double time and a half, equating to pay rates of at least $40 an hour.

Robert Marchetti, executive chef of Sydney's Icebergs Dining Room and Bar and North Bondi Italian Food and owner of highly acclaimed restaurants in Sydney and Melbourne, said some of his businesses - including Neild Avenue - would be closed today, while those that opened would be providing a "public service".

"The government are a bunch of monkeys who don't understand business," he said.

"We're not living in the 1960s anymore. Australia has its head stuck up its arse on IR.

Following ACTU Secretary Dave Oliver's Christmas Eve call for the Fair Work Act to be changed to enshrine penalty rates as a minimum entitlement, United Voice liquor and hospitality division Secretary Tara Moriarty said the issue was one the industry raised every public holiday.

"Penalty rates haven't made the sky fall in yet, despite them constantly making suggestions to the contrary," she said.

Shop, Distributive and Allied Employees Association national secretary Joe De Bruyn said the closure of some businesses on public holidays would simply mean more business for the restaurants that stayed open.

"Penalty rates have been part of workers' entitlements for decades," he said.

Unions were awaiting the outcome of a Fair Work Australia hearing on penalty rates. "While the unions put up a very strong case for preserving penalty rates, the employers' case was a pathetic performance," Mr De Bruyn said.

Double-Time and a Half Insanity

You have to love the mentality "the sky is not falling yet" mantra, especially when it clearly is.

Who pays for this absurdity? Consumers in general of course. Business owners and employees of businesses who cannot afford to pay double-time and a half, also get hit hard.

House and Land Incentives

Property Observer notes House-and-land incentive and discounts from $5,000 to $126,000

New housing finance and building approval figures suggest there will be no swift rebound in demand for new housing.

There was a 10.3% fall in home loan commitments for new dwellings and a 0.3% drop in building approvals for new houses in November, according to seasonally adjusted ABS figures.

New home buyers can secure discounts in the thousands and sometimes tens of thousands of dollars on select blocks of lands and new homes in Melbourne, the Gold Coast and Sydney.

There are also generous first-home buyer incentives on offer from NSW, Queensland, Tasmanian and South Australian state governments for those buying or building new homes.

$30,000

Listed residential developer Peet is offering savings of up to $30,000 on "certain lots" in residential communities on the outskirts of Melbourne.

$22,000

Listed developer Devine is offering to pay mortgage repayments for up to a year on behalf of approved purchasers who sign an unconditional contract to purchase a new Devine house and land package before February 28 2013 under its Devine Mortgage Break promotion.

Melbourne builder Carlisle Homes is offering a $30,000 discount off the retail price of double-storey homes and $22,000 off the retail price of single-storey homes in its luxury Affinity and T Range collections. There is currently no end date to this promotion.

$10,000

Up until February 25 2013, Stockland is offering approved purchasers a $10,000 VISA gift card to spend as they wish.

$76,000 - $126,000

Discounts of up to $126,000 are on offer for residential lots in The Highlands community in the Ecovillage, Currumbin Valley on the Gold Coast.

Massive Housing Incentive, Still No Buyers

Macrobusiness reports Developers Go Completely Mad.

Today, Property Observer has provided a comprehensive list of incentives being offered by developers in a bid to lift sales, which are in addition to generous incentives on offer in New South Wales, Queensland, Tasmania and South Australia.

Clearly, such developer incentives are failing to stimulate demand and could actually be precluding the new home market from functioning properly.

Australia's property development industry appears to be caught in a pincer. If they don't abandon incentives in favour of transparent land price deductions, financing of new house and land packages will remain problematic and sales will likely continue to struggle. At the same time, reducing the listed price by the same value as the bonuses and incentives being offered could lower their collateral value, potentially triggering the banks to call in more equity from bank-financed developers to bring their loans back to agreed conditions and/or loan terms. Straight price cuts are also more likely to aggrieve recent purchasers that paid higher prices.

How Fast the Collapse?

The housing bubble in Australia has clearly burst. All that remains to be seen is how fast things collapse.

Meanwhile, Australia's unions still cling to an already dead model, oblivious to the fact the boom is over.

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

"Libertarian Turned Keynesian" Responds

Posted: 27 Jan 2013 12:49 PM PST

In response to How to Debate Paul Krugman: "Ask Questions Like a Child", a self-proclaimed "Libertarian Turned Keynesian", a graduate of Columbia University, writes ...

Hello Mish

I want you to publish this rebuttal to your post.
You can use my first name if you'd like with Libertarian-turned-Keynsian in brackets.

Let's say there are 8 million healthy, unemployed people in US.

The Treasury can simply print 4 million pieces of IOU claiming that the holder of this piece of paper is entitled to a free massage or a free cleaning services or free haircut or free baby-sitting or free moving (basically any service worth $50 with negligible raw material) from another unemployed person and simply distribute it to unemployed people.

What happens? On Day 1, the 4 million who got the coupons tender their coupons and receive services (increase in daily GDP 4 million * 50 == 200 Million).

On Day 2, the opposite happens and this goes on quite a while. Now, lets say the economy improves and 2 Million get employed. Now essentially we have 1 Million extra coupons (inflation). Treasury will tax the lucky/rich people who have a job and a coupon and essentially retire them.

Or, let's say the economy deteriorates and 2 more more million get unemployed. Now there are few coupons and some may be willing to do the job for 3/4th of a coupon (deflation). Now essentially Treasury can print extra 1 million and distribute them.

Notes:

1) We need flexible money supply.
2) Having gold standard is stupid. What does amount of gold supply have to do with anything?
3) We increased GDP by simply printing pieces of paper.

Bonus:

Let's say someone comes with a brilliant idea that one unemployed can actually perform two jobs a day. Now instantly the capacity doubled and Treasury can print double the amount of IOUs.

So Ridiculous I Hardly Know Where to Start

I did not post the first name of "Libertarian Turned Keynesian" on purpose. His name was unusual enough that he could be found.

The above response is clearly absurd. I reply only because it is precisely the kind of "something for nothing" silliness that is frequently taught in higher education.

Any person with a modicum of common sense, at any education level beyond 7th grade, should understand what happens to demand as soon as free money stopped.
Any person with a modicum of common sense, at any education level beyond 7th grade, should understand costs of goods and services would soar if free money was handed out in any significant amount.
Any college graduate should understand the difference between nominal GDP and "real" inflation adjusted GDP.
Any college graduate should understand what happened in Zimbabwe and Weimar Germany.
Any person with any amount of common sense should understand it's what you get for your money, not how much you have, that matters.

Ignoring the typos, clearly the writer has absolutely zero sense of the difference between nominal GDP and wealth. In nominal terms (using the number of Zimbabwe dollars in circulation as "wealth"), Zimbabwe was economically the strongest country in the world.

Unfortunately, they cannot teach common sense in schools. Instead they teach Keynesian claptrap. Then economically illiterate graduates write me things similar to the above. This kind of thing happens all the time, frequently with emails ending in ".EDU".

Addendum: Spare the Monetarists?

Reader Ayal asks "You target your attacks at Keynes and Keynesians, but why do you spare the Monetarists?"

The simple answer is I don't. Bernanke is primarily a monetarist with some Keynesian tendencies as well. QE is 100% monetarism and I attack that all the time.

Countless times I have pointed out that Japan tried both monetary and fiscal stimulus and failed. One can also search my blog for Greg Mankiw, the high priest of monetarism to see what I have to say.

If I had to pick one of article in that search reference to read, it would undoubtedly be Modern Day Fairy Tale of 3 Economic Wizards (Except It's True)

Comment

It's quite shocking what comes out of our education system. Of course, what comes out is hugely influenced by economically illiterate teachers at the highest levels in education.

Addendum 2: Not a Hoax

Several people suggested the email was a hoax.

It's not. I have additional correspondence with this person thanking me for not using his name. And a Google check of his name with numerous references ties back to Columbia.

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

SEO Blog

Five Must Have Apps For The Proactive Freelancer

Posted: 27 Jan 2013 11:38 AM PST

The days where one could simply pick up a job, write, pick up a paycheque, and then pick up another job are long gone. Now it's up to the freelancer to find their jobs, organise their electronic data, market themselves, and do this all whilst working on any existing...
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Interpersonal skills | Most required to create a good social network

Posted: 26 Jan 2013 10:31 PM PST

To interact with the people socially we need some skills which are known as Interpersonal skills. These are the set of rules applied to interact effectively with persons. Interpersonal skills play a very important role in one's life if he wants to be succeeding in an organization. These are essential...
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Seth's Blog : Eleven things organizations can learn from airports

Eleven things organizations can learn from airports

[Of course, this post isn't actually about airports].

I realized that I don't dislike flying--I dislike airports. There are so many things we can learn from what they do wrong:

No one is in charge. The airport doesn't appear to have a CEO, and if it does, you never see her, hear about her or interact with her in any way. When the person at the top doesn't care, it filters down.
Problems persist because organizations defend their turf instead of embrace the problem. The TSA blames the facilities people, who blame someone else, and around and around. Only when the user's problem is the driver of behavior (as opposed to maintaining power or the status quo) things change.
The food is aimed squarely at the (disappearing) middle of the market. People who like steamed meat and bags of chips never have a problem finding something to eat at an airport. Apparently, profit-maximizing vendors haven't realized that we're all a lot weirder than we used to be.
Like colleges, airports see customers as powerless transients. Hey, you're going to be gone tomorrow, but they'll still be here.
By removing slack, airlines create failure. In order to increase profit, airlines work hard to get the maximum number of flights out of each plane, each day. As a result, there are no spares, no downtime and no resilience. By assuming that their customer base prefers to save money, not anxiety, they create an anxiety-filled system.
The TSA is ruled by superstition, not fact. They act without data and put on a quite serious but ultimately useless bit of theater. Ten years later, the theater is now becoming an entrenched status quo, one that gets ever worse.
The ad hoc is forbidden. Imagine an airplane employee bringing in an extension cord and a power strip to deal with the daily occurrence of travelers hunched in the corner around a single outlet. Impossible. There is a bias toward permanent and improved, not quick and effective.
Everyone is treated the same. Effective organizations treat different people differently. While there's some window dressing at the edges (I'm thinking of slightly faster first class lines and slightly more convenient motorized cars for seniors), in general, airports insist that the one size they've chosen to offer fit all.
There are plenty of potential bad surprises, but no good ones. You can have a flight be cancelled, be strip searched or even go to the wrong airport. But all possibility for delight has been removed. It wouldn't take much to completely transform the experience from a chore to a delight.
They are sterile. Everyone who passes through leaves no trace, every morning starts anew. There are no connections between people, either fellow passengers or the staff. No one says, "welcome back," and that's honest, because no one feels particularly welcome.
No one is having any fun. Most people who work at airports have precisely the same demeanor as people who work at a cemetery. The system has become so industrialized that personal expression is apparently forbidden.

As we see at many organizations that end up like this, the airport mistakes its market domination for a you-have-no-choice monopoly (we do have a choice, we stay home). And in pursuit of reliable, predictable outcomes, these organizations dehumanize everything, pretending it will increase profits, when it actually does exactly the opposite.

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sâmbătă, 26 ianuarie 2013

Mish's Global Economic Trend Analysis

How to Debate Paul Krugman: "Ask Questions Like a Child"

Posted: 26 Jan 2013 04:33 PM PST

I received an interesting email the other day on debating Paul Krugman. I did a search on the topic and found a post with that exact name: How to debate Paul Krugman

Paul Krugman is the high priest of Keynesianism and modern interventionism, of economic improvement through inflation and budget deficits. As such he is bête noir among us libertarians and Austrian School economists. What makes him so annoying is his unquestioning, reflexive and almost childlike enthusiasm for state intervention, even in the face of its obvious failure, and his apparent unwillingness to probe any deeper into the real causes of our present economic problems or to show any willingness to investigate the effectiveness or ineffectiveness of his particular medicine. His Keynesian convictions are presented as articles of faith that no intelligent person can seriously question. A Krugmanesque argument is always built on a number of assumptions that are beyond doubt: ....

On and On

The above article goes on and on. Moreover, it appears to be 100% accurate. Unfortunately, it's not the correct way to debate Paul Krugman at all.

Economist Hans Hermann-Hoppe explains the Right Way To Debate Paul Krugman in the following video.

The video is a mere 63 seconds long. Here is the key snip.

"It is very important in replies to people like Paul Krugman, that we don't get involved in technical details. Ask some questions almost like a child. Explain to me how increases in paper pieces can possibly make a society richer. If that were the case, explain to me why is there still poverty in the world? Isn't every central bank in the world capable of printing as much paper as they want? I am sure the guy cannot answer this type of question. Nobody can answer this type of question. We always get bogged down in technical details of his argument instead of always repeating this question: Please explain to me how a piece of paper can make society richer."

Would that work?

Krugman would respond with incomprehensible gibberish "for wonks only" as well as typical Keynesian nonsense about how paying people to dig holes and other people to fill them up would start a chain reaction of growth.

A child would see the answer was preposterous, but not a trained economist, politician, or brainwashed academic. Paul Krugman, keynesian economists in general, politicians wanting a free lunch, and most academics are all incurable.

Nonetheless, Hans Hermann-Hoppe's answer is indeed the correct one. By asking questions a child will understand, some non-brainwashed people will see Keynesian and Monetary stimulus for what they really are: economic stupidity.

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

Debt Grows at Astonishing Rate Even in Texas; A Roadmap to Better; "It's Your Money"; Infinite Amortization Periods

Posted: 26 Jan 2013 01:36 PM PST

"It's Your Money"

Susan Combs, Texas Comptroller of Public Accounts says "Texas, It's Your Money".

At the Comptroller's office, we've long championed the importance of transparency — giving the Texans we serve the information they need to make informed decisions and hold their government officials accountable.

That's why our office launched the Texas, It's Your Money series of reports, which spotlights issues that hit Texans in their wallets: local taxes, government debt, education debt and public pension obligations. We're committed to keeping the state's books open, accessible and understandable for our citizens.

A Roadmap to Better

With that introduction lets dig deeper into one of the reports "A Roadmap to Better"
click on any chart for sharper image

Sales Taxes and Property Taxes

Since 1993, special purpose districts that levy sales tax have increased by more than 1,900 percent, which means that more entities are taxing you. In that same time period, the number of special purpose districts that levy property tax has grown by more than 45 percent, with the creation of more than 500 new districts of this type.

While local sales taxes increased by almost 170 percent from 1993 to 2011, property taxes grew by 188 percent from 1992 to 2010. Compare that to slightly more than 120 percent growth in combined population and inflation during those years.

Local Obligations

Our local governments more than doubled their debt load in the last decade, amassing more than $7,500 in debt for every man, woman and child in the state. Between 2001 and 2011, the outstanding debt of Texas local governments rose more than twice as fast as inflation and population growth rates combined.

Total Local Outstanding Debt

Local Debt - Where We Fall Short

New debt often is approved by a small percentage of voters, who must make vital decisions about new debt with little information about its implications. And a large share of local debt — totaling $12.7 billion since 2005 — is issued through "certificates of obligation," generally, without any voter approval.

Combined State and Local Debt

How Texas Can Do Better

You have a right to a full and complete disclosure of public debt. All government
entities should reveal all debt obligations on a public website, including the debt's original stated purpose, the total amount of debt authorized, the issued and unissued amounts of authorized debt, spent and unspent amounts of issued debt and the per capita debt burden on taxpayers. Any ballot for new debt should be accompanied by a similar
accounting.

You have a right to approve debt issued in your name. Texas should significantly narrow public governments' authority to issue debt without voter approval, and revise the petition process to make it easier for taxpayers to compel a public vote on proposed debt.

Education Debt

In fiscal 2011, our public school debt was $63.6 billion, or $13,530 for every Texas student in a school district carrying debt. And while state college and university debt is lower, at $12.5 billion, that debt rose nearly eight times faster than enrollment in the last decade.

College Debt vs Enrollment

The bulk of Texas' education debt supports the construction or renovation of school facilities. Yet Texas has no centralized source for information on current public school facilities, such as total square footage, square footage per student and total cost. To obtain such information, every district must be contacted individually. Construction costs also are not reported to any single entity, making it almost impossible to identify unreasonable costs on individual projects.

In addition—as with other debt—new debt often is approved by a small percentage of voters. It also is difficult for taxpayers to learn the full dimensions of debt in their area.

How Texas Can Do Better

You have a right to full and complete information on education debt. Every Texas school district should disclose on its website the cost and details of all construction and renovation projects, including actual square footage, total cost per student, total cost per square foot and square footage per student. Each district should also post an online inventory of all existing facilities, detailing available square footage, total student capacity and current student enrollment for each campus.

All ballots for new education debt should reveal all current and proposed debt obligations, including the amount of outstanding debt, existing debt service, amount of new debt and the average length of proposed debt obligations.

Pension Obligations

Too little public information on public pension finances is readily available. Many plans do not report their actual investment returns to the state's Pension Review Board.

Several of the state's largest pension plans also have "infinite amortization periods," meaning that they can never eliminate their unfunded liabilities as currently structured.

Texas public pension plans cover 2.3 million active and retired members. As with most other investments globally, Texas public pension program earnings fell during the recent recession. Although plan assets have rebounded since 2010, overall they are still below pre-recession levels.

Will Work to Pay Debt

The following image shows precisely what the current Ponzi scheme looks like.

The number of workers is shrinking dramatically compared to the number of retirees collecting Social Security or disability checks. Meanwhile state and local taxing bodies want still more debt and forever increasing taxes to keep the Ponzi scheme going longer.

This state of insanity is frequently described as being "Progressive".

Instead, I support the common sense proposals of Susan Combs, Texas Comptroller of Public Accounts.

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

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luni, 28 ianuarie 2013

Photo of the Day: A Run Along the Colonnade

Seth's Blog : Beyond showing up

Beyond showing up

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duminică, 27 ianuarie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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SEO Blog

Seth's Blog : Eleven things organizations can learn from airports

Eleven things organizations can learn from airports

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sâmbătă, 26 ianuarie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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YouTube | Broadcast Yourself™

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