duminică, 24 noiembrie 2013

Seth's Blog : Big promises can lead to better experiences

 

Big promises can lead to better experiences

A $75 bottle of wine tastes better than a $14 bottle of wine. Even if you switch the wines. The promise implied in the price actually changes the way we experience the product.

Two things to keep in mind:

a. Giant promises lead to poor experiences. When you strain credulity and then fail to deliver on the miracle, we won't enjoy it, nor will we trust you again any time soon.

b. The reason we hesitate to make big promises is that we are afraid. Afraid to own it, afraid to be vulnerable in the face of possible disappointment.

Once you make a big promise, you have to work harder to keep it. Easier, it seems, to merely make tiny promises instead.

But the fact remains: Human beings have better experiences when they expect to have a better experience. To hold back on your promise is to deprive your customer of something valuable.

A promise doesn't have to be a grandiose statement, with or without fine print. It can be something as subtle as the music you hear when you walk into a restaurant or the respect a salesperson offers you when you first interact...

[I'm going to disagree with myself about a different sort of case--it is the promise that starts an ongoing experience. A promise just big enough to get me started on something that gets better all the time is the best way to engage, because that ever-improving experience will continue to delight and surprise, increasing my word of mouth and satisfaction. Alas, these sorts of experiences are hard to build and hard to find.]

       

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sâmbătă, 23 noiembrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Nearly Retired? Facing a Huge Increase in Healthcare Costs? More on "Opting Out" of Obamacare

Posted: 23 Nov 2013 12:40 PM PST

Risk of Opting Out
 
In response to Gambling On No Healthcare Insurance: Is it a Good Deal? Here's the Math; Obamashock! Work More, Get Less! "Money Multiplier Man" replied...
If you get a heart attack, you cannot wait until open enrollment. You need treatment now. And the hospital will send you a bill for $92,000. So if you are without insurance, you're in big trouble.
That is precisely the risk (actually one of them). Yet, how likely is that scenario for someone under 30 and in good health? For those in good health, an auto accident may be more likely. Still - accidents happen.

But for someone with little money or assets, why not take the chance? Bankruptcy is always an option.

Ultimately, this line of thinking may cause millions to opt out. And it is not just the young who will opt out.

Nearly Retired? Facing a Huge Increase in Healthcare Costs?

Reader Lynn faces that unwelcome prospect.

Her solution, yet one she really would prefer not to be forced to make, was to "opt out" and pay the penalty.

Lynne writes ...
Hello Mish,

Your articles are always a well-written source of insight, wisdom and common sense for me. Thank you for providing excellent current event commentaries!

I am a 61 year old self-employed woman who received notice from Anthem Blue Cross on November 4th that my individual health insurance plan was being cancelled because of the "Affordable" Care Act. My health plan currently costs $225 per month and I am happy with it. The notice goes on to say that unless I elect something else by December 15, 2013 I will be automatically enrolled in a new ACA-compliant health plan at a cost of $530 per month, a 136% percent increase in premium. My annual health plan cost will increase from $2,700 to $6,360 for 2014.

The bottom line for me is a choice between reducing the amount of my retirement plan contributions by $3,660 per year or going without health insurance and paying the penalty. As a self-employed person who couldn't afford to start saving for retirement until my mid-forties, I'm equally afraid of either choice.

In trying to understand what caused health insurance plans to skyrocket in cost, I found out that to be ACA-compliant they must now cover things like maternity care and pediatric dental -- even if you're a 61 year old empty nester!

After researching my state's exchange web site it appears that I'm ineligible for any premium subsidies or cost-sharing assistance. My husband's income (he's on Medicare) must also be counted and our combined income is over the $62,040 threshold. And after speaking with my long-time insurance agent, there aren't any other health insurance options available to me next year for much less than $530 per month.

So, what to do? I'm healthy now and I'll be eligible for Medicare in less than four years, can I make it that long without a serious ailment? I'm inclined to go without health insurance, even knowing it's a huge financial risk. But so is not having enough retirement savings.

Update: this week I received another notice from Anthem Blue Cross. They're allowing me to opt into continuing my current health coverage through February 28, 2014. Of course I've already signed up for this, but it only postpones my gut-wrenching decision by two months.

The Obamacare mess reminds me of the 2008 presidential platform slogan "Hope and Change" -- his changes have me hoping that US citizens can regain freedom from a meddling, control-freak government.

Thanks again for your insightful writings,

Lynne
Reader Lynne provides yet another reason to "opt out" and pay the penalty. Ultimately, how many will opt out?

We will find out within a couple of months.

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

UKIP "Last Best Hope for Britain"; May 2014 European Parliament Vote: What Shift is Taking Place? Political Earthquake?

Posted: 23 Nov 2013 09:36 AM PST

One of the UK's wealthiest men has pledged "whatever it takes" to ensure the UK Independence Party triumphs in the 2014 European Parliament elections.

The BBC reports Tycoon Paul Sykes backs UKIP European election campaign
Eurosceptic Paul Sykes said UKIP was the "last best hope for Britain" and he would help fund its election campaign.

Mr Sykes, who has formerly backed the Conservatives, made donations to UKIP between 2001 and 2004. His latest funds will pay for UKIP's advertising. UKIP leader Nigel Farage said Mr Sykes' backing was a "significant boost".

Mr Sykes, who is estimated to have a fortune of around £650m, has given no indication of how much he is prepared to donate on this occasion, but said he believed the European elections were "the one last chance to stop the gradual erosion of our national independence".

"Nigel Farage and UKIP are the last best hope for Britain. I am prepared to do whatever it takes to propel them to victory next year."

He said he hoped success for UKIP at next year's election would lead to an early referendum on the UK's membership of the EU rather than "hanging about to 2017".

"I think it's time to step up and bring the referendum forward to 2015," he said.
May 2014 European Parliament Vote

To help understand what's at stake, Wikipedia reports the European Parliament Elections will be held in all member states of the European Union (EU) between 22 and 25 May 2014, as decided unanimously by the Council.

It will be the eighth Europe-wide election to the European Parliament since the first direct elections in 1979.

What Shift is Taking Place?

I asked reader Bernd from Germany for election comments. He replied ...
Hello Mish,

This is a difficult question.

The large number of Euro-skeptic or EU skeptic parties are considering a common platform, but there is a huge rift within the right.

Last week Geert Wilder's Freedom Party of The Netherlands and Marine Le Pen's FN agreed to form an "Alliance of the Right" for the coming EU elections.

Currently the following alliances on the right are existing already:

  • "Alliance of European Conservatives and Reformists"
  • "Movement for a free and democratic Europe"
  • "European Democratic Party"
  • "Alliance of European National Movement"
  • "Free European Alliance"
  • "European Alliance for Freedom"
  • "Pirates of Europe"
  • "Christian Political Movement for Europe"
  • "EU Democrats"

All the above are subsumed under Euro-skeptics and have a total of 115 Seats in the EU Parliament.

To compare:

  • Christian Democrats (European Peoples Party)   275 Seats
  • Social Democrats (Party of European Socialists) 194 Seats
  • Liberals (Alliance of Liberals and Democrats)      85 Seats
  • Greens (European Green Party)                             56 Seats
  • The Left (Party of the European Left)                   35 Seats

Already the Euro/EU-skeptics are the third largest group in the EU Parliament.

As measured by seat pickups, I anticipate that the Euro-skeptics will be the winner of the coming elections. However, the rift between the eurosceptics in general and the extreme right wing parties will be more evident and more significant.

Clearly UKIP from UK and AFD from Germany have very little common ground with Golden Dawn from Greece, Front National of France or Freedom Party of Holland.

The latter are clearly nationalistic, anti-Islamic and anti-Semitic, whilst the first two are only EU and Euro-skeptic, not willing to embrace the other, uglier values of right wing parties.

In Germany, in Austria, in France, in UK, in Holland and in Belgium – the countries I frequently visit and over which I claim some knowledge, the EU-Parliament is seen as a joke. It is a show Parliament, with no real power, introduced to give the appearance of Democracy to the EU.

Regardless, the established main stream parties will do everything in their power to prevent the Euro-skeptic block from growing. I expect to see the usual smear campaigns by the media, throwing Euro-skeptics and right wing extremists into one basket. This will work in many places, but not everywhere. For example, smear campaigns are unlikely to work in France and Holland, but very likely in Germany.

I expect that the Euro-skeptic block will grow substantially – however I don't expect the block to be number 2 in overall votes.

Thus, I doubt that the party mix in the EU-Parliament will have any bearing on EU Politics in the years to come. The agenda for the EU is set elsewhere and will be pushed through without regard to the will of the people.

Bernd
UK Prosper Outside EU

UKIP leader Nigel Farage claims Britain would prosper outside EU
Britain would flourish outside the EU, Nigel Farage has said, predicting UKIP will cause a "political earthquake" in European elections next year. Addressing the party's annual conference, he said leaving the union would "open a door to the world".
Political Earthquake?

I strongly agree with Farage that the UK is far better off outside the EU. But what about a "political earthquake"?

If "political earthquake" means policy shifts within the EU, then I would side with Bernd in that nothing much will change in European parliament, adding (but the voices, the debate, and the finger-pointing will all get more intense as Germany and France slide back into recession).

If, "political earthquake" means more UK awareness and eurosceptcism, with an increased likelihood of an up-or-down vote on UK membership in the EU, Farage may very well be correct, and I hope he is.

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

Seth's Blog : Almost everything I don't know about social media...

 

Almost everything I don't know about social media...

I just finished Gary Vaynerchuk's new book. It comes out next week, and I recommend you spend some time with it.

Also! Here's a list of my most popular blog posts of 2012, together with a link to a bound collection of the best of my blog and ebooks from the last seven years...

       

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Working with Both Parties to Keep the Economy Moving Forward

Here's What's Happening Here at the White House
 
 
 
 
 
 
  Featured 

Weekly Address: Working with Both Parties to Keep the Economy Moving Forward

In his weekly address, President Obama says our economy is moving in the right direction. We have cut our deficits by more than half, businesses have created millions of new jobs, and we have taken significant steps to reverse our addiction to foreign oil and fix our broken health care system.

Click here to watch this week's Weekly Address.

Watch: President Obama's Weekly Address

 

 
 
  Top Stories

Honoring the Medal of Freedom Recipients: On Wednesday, President Obama honored 16 Medal of Freedom recipients during a ceremony in the East Room.

The Presidential Medal of Freedom was established 50 years ago by President John F. Kennedy and is our nation’s highest civilian honor. This year’s recipients include sports champions, scientists, activists, musicians, journalists and public servants. “These are the men and women who in their extraordinary lives remind us all of the beauty of the human spirit, the values that define us as Americans, the potential that lives inside of all of us,” President Obama said.

Tribute to President John F. Kennedy: President Obama, former President Bill Clinton, First Lady Michelle Obama and Hillary Clinton traveled to Arlington National Cemetery to lay a wreath at the eternal flame, in honor of President Kennedy’s life and legacy.

150th Anniversary of the Gettysburg Address: One hundred and fifty years ago on Tuesday, President Abraham Lincoln delivered the Gettysburg Address from Gettysburg, PA. President Obama handwrote an essay in tribute to Lincoln’s historic speech for an exhibit at the Lincoln Presidential Library. Make sure to read President Obama’s essay here.

Filibuster Rule Change: President Obama spoke from the White House Press Briefing Room on Thursday on the Senate’s vote to change the way the filibuster works. In his remarks, the President stated his support for the change.

All too often, we've seen a single senator or a handful of senators choose to abuse arcane procedural tactics to unilaterally block bipartisan compromises, or to prevent well-qualified, patriotic Americans from filling critical positions of public service in our system of government.

The President also spoke about why this change is especially important right now. “It's no longer used in a responsible way to govern. It's rather used as a reckless and relentless tool to grind all business to a halt,” the President said. Read his full remarks here.

Wall Street Journal CEO Council Meeting: The President spoke at the annual Wall Street Journal CEO Council meeting before sitting down for a question and answer session. There the President spoke on a wide range of issues including immigration, education and the Affordable Care Act.

Vice President in Panama: Vice President Biden traveled to Panama on Monday to look at the Panama Canal and the expansion project, which is set to open in 2015. The expansion project will double the capacity of the Panama Canal and allow for larger ships. The Vice President also met with the President of Panama, Ricardo Martinelli and conducted a wreath-laying ceremony.


 

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Seth's Blog : The sound of confidence

 

The sound of confidence

It's a blend of two things. "I'd really like to help you," and, "If this isn't for you, that's okay, there are others it might be a better match for."

Generosity, not arrogance. Problem-solving, not desperation. Helpfulness, not selfishness.

       

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vineri, 22 noiembrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


EU "Ayatollahs" Killing Italy’s Recovery Chances Says Italy's Prime Minister; Italy Attempts Another "Quick Fix"

Posted: 22 Nov 2013 05:07 PM PST

The European budget debate stepped up a notch today as Italy, Spain Warned on Budget.
After Italy rebuffed warnings about its budget, euro-area finance ministers late Friday agreed to give the country additional opportunities to show it can make savings and bolster revenue.

The tensions over Italy's budget grew after Enrico Letta, the country's prime minister, warned on Friday that "ayatollahs" in Europe were seeking to promote austerity even though it was killing Italy's chances of recovery.

The meeting here came a week after Olli Rehn, the European Union's commissioner for economic and monetary affairs, warned that Italy and Spain faced debt and deficit problems under their current spending plans for 2014. The main topic on the agenda was whether the verdicts by Mr. Rehn, who has gained authority to review national spending plans, should be followed.

On Friday, Mr. Rehn dryly rebutted Mr. Letta's "ayatollahs" comment, rejecting any suggestion that he was too tough on Italy. "I trust Mr. Letta meant the negotiations on the Iranian nuclear program," Mr. Rehn told a Finnish broadcaster. "It is very important that all E.U. member states, including Italy, aim at the stability of their public finances."

But the meeting of ministers and European officials avoided, for now at least, a full-blown fight with Italy by agreeing to give Rome a chance to meet its budgetary targets with additional measures to raise revenue and trim spending.
No Quick Fix

Eurointelligence accurately comments about Italy's Quick Fix proposals to meet EU targets.
Instead of solving the underlying problem of an unsustainable growth trajectory, the Italian government continues to be preoccupied with quick-fix measures to chase after some official fiscal target, which have become the be-all and end-all of economic policy. The Italian government yesterday agreed on a privatisation programme, which should net some €10-12bn in 2014 (it would reduce debt-to-GDP from a number of above 130% of GDP by some 0.6pp to a number still above 130%). The sales include a 3% stake in Eni, the energy company, plus stakes in seven companies in total. In two of them, the government would be selling the controlling interest.

Politically, the announcement came under immediate attack by Matteo Renzi, the mayor of Florence and the presumptive next leader of the PD. It said the sale comes at the wrong time, when the economy is still weak, and when the government is not in a position to attract good prices for its holdings, as this fire-sale is heavily tilted in favour of the buyers. The benefit this sale would bring in the short term, comes at the expense of the medium-term, he said.

Corriere della Sera writes in its front page article that Enrico Letta wanted to conquer Brussels with this manoeuvre after the European Commission raised doubts that Italy may not make sufficient progress on debt reduction in 2014.
There is no quick fix and no recovery either. Europe is back in recession, not that it ever left in the first place.

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

Expect "Dramatic Slowdown" in Germany: Saxo Bank Analysis

Posted: 22 Nov 2013 12:46 PM PST

Saxo Bank chief economist Steen Jakobsen had some interesting comments on Germany and German exports given a slowdown in China and a rising Euro.

To help put things in perspective, here is a chart on the Euro.



Technical analysts will point out this is a bearish break of the trendline, thus the euro may be headed lower.

Fundamentally, the chart reflects an unexpected rate cut by ECB president Mario Draghi as well as statements by various ECB members regarding the possibility of negative interest rates.

Let's continue the fundamental view as presented by Steen Jakobsen.

Expect Dramatic Germany Slowdown

Via email, Steen writes ...
The German economy is heavily exposed to global growth which we see dramatically slowing down - the strong EURO will impact export 5-7 month from now which creates dramatic slow-down where we even could see the German economy going below 1% growth and come close to recession.

Our Economy-Physics models sees slow-down for the next three to six-month then small rebound before dramatic slow-down in tail-end of 2014 - overall the German GDP will be challenged.

German industry and its consumer is increasingly becoming uncompetitive through one of the worst energy policies in Europe. Right now German companies (Read: BMW and Daimler) are either already moving or about to move jobs to mainly the US due to steep rises in energy cost.

The new coalition furthermore wants to pursue less flexible labor market model to "reset" inequality. Nice top line effort wrong method.

Finally, the European economy is almost perfect symmetrical in its peaks and valleys:  (Source: Bloomberg LLP & Citigroup CESI Index)
Eurozone Symmetry



I agree with the viewpoint stated by Steen.

For further discussion and analysis, please see ...


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

California Business Owner with 600 Employees Chimes in on Obamacare Effect; Clown to the Left, Jokers to the Right, Musical Tribute

Posted: 22 Nov 2013 11:14 AM PST

Yesterday I received an email from a California Business Owner with 600 employees. Let's tune in to how Obamacare affected him, as well as his employees.
Dear Mish

My company, based in California, employs 600. We used to insure about 250 of our employees. The rest opted out. The company paid 50% of their premiums for about $750,000/yr.

Under Obamacare, no one can opt out without penalty, and the rates are double or triple, depending upon the plan. Our 750k insurance for 250 employees is going to $2 million per year for 600 employees.

By mandate, we have to pay 91.5% of the premium or more up from the 50% we used to pay.

Our employees share of the premium goes from $7/week for the cheapest plan to $30/week. 95% of my employees were on that plan.  Remember, we used to pay 50% now we pay 91.5% and the premiums still go up that much!!

The  cheapest plan now has a deductible of $6350! Before it was $150. Employees making $9 to $10/hr, have to pay $30/wk and have a $6350 deductible!

They can't afford that to be sure. Obamacare will kill their propensity to seek medical care. More money for less care? How does that help them?

Here is the craziest part. Employees who qualify for mediCAL (the California version of Medicare), which is most of my employees, will automatically be enrolled in the Federal SNAP program. They cannot opt out. They cannot decline. They will be automatically enrolled in the Federal food stamp program based upon their level of Obamacare qualification. Remember, these people work full time, living in a small town in California. They are not seeking assistance. It all seems like a joke. How can this be the new system?

Pelosi, pass the bill to find out what's in it? Surprise! You've annihilated the working class.

California Business Owner
In a followup email, I asked what would happen if he dropped coverage altogether. Here is his reply ...
Our calculus suggests that the penalties could be worse because it is per employee per year. There are different kinds of penalties too. One for not offering a qualifying plan and one for when an employee signs up for an exchange in the absence of a plan at work. However, more importantly than the money is the unions.

If I drop my health plan, we would be exposed to union maneuvering.

As Steve Miller said, "clowns to the left and jokers to the right"
Clown to the Left, Jokers to the Right

I offer the following musical tribute, by Stealers Wheel.



SongFacts comments on Stuck In The Middle With You by Stealers Wheel.
Also known simply as "Stuck In The Middle", this Stealers Wheel classic was co-written by the group's guitarist Gerry Rafferty and keyboard player Joe Egan.

In his obituary of Rafferty for the January 5, 2011 issue of the Daily Telegraph, Martin Chilton said of this song that it was
"Written as a parody of Bob Dylan's paranoia, it ridiculed a music industry cocktail party, with the lyrics:

'Clowns to the left of me,
jokers to the right,
here I am, stuck in the middle with you.'

To Rafferty's utter disbelief his parody, composed as little more than a joke but with a catchy pop arrangement, struck gold, selling more than a million copies. The song reached a new generation of listeners when Quentin Tarantino used it in the notorious ear-slicing scene in his 1992 movie Reservoir Dogs.
Unions and Obamacare

As an interesting footnote, unions were the biggest Obamacare proponents, but now they too are upset with it.

Obama to the rescue ...

On November 7 the New York Post commented Rule lets unions avoid ObamaCare tax ... "Buried in the new rules is a proposal to exempt 'certain self-insured, self-administered plans' from the fee in 2015 and 2016. That description applies to many union plans, according to experts."

On November 17 the Wall Street Journal commented on such a ruling in great detail in its article ObamaCare's Union Favor.
The Affordable Care Act's greatest hits keep coming, and one that hasn't received enough attention is a looming favor for President Obama's friends in Big Labor. Millions of Americans are losing their plans and paying more for health care, and doctors are being forced out of insurance networks, but a lucky few may soon get relief.

Earlier this month the Administration suggested that it may grant a waiver for some insurance plans from a tax that is supposed to capitalize a reinsurance fund for ObamaCare. The $25 billion cost of the fund, which is designed to pay out to the insurers on the exchanges if their costs are higher than expected, is socialized over every U.S. citizen with a private health plan. For 2014, the fee per head is $63.

The unions hate this reinsurance transfer because it takes from their members in the form of higher premiums and gives to people on the exchanges. But then most consumers are hurt in the same way, and the unions have little ground for complaint given that ObamaCare would not have passed in 2010 without the fervent support of the AFL-CIO, the Teamsters and the rest.

The unions ought to consider this tax a civic obligation in solidarity with the (uninsured) working folk they claim to support. Instead, they've spent most of the last year demanding that the White House give them subsidies and carve-outs unavailable to anyone else.

There's no conceivable rationale—other than politics—for releasing union-only plans from a tax that is defined as universal in the Affordable Care Act statute. Like so many other ObamaCare waivers, this labor dispensation will probably turn out to be illegal.
Illegal? Yes, but who cares if it buys union votes. Certainly not president Obama.

And everyone else pays the price.

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