Central Perk

vineri, 31 august 2012

It's Summer Mailbag Time!

Your Daily Snapshot for
Friday, August 31, 2012

West Wing Week: It's Summer Mailbag Time!

Welcome to the West Wing Week, your guide to everything that's happening at 1600 Pennsylvania Ave. It's the summer's special Mailbag Edition of West Wing Week, featuring Elizabeth Olson, Director of Presidential Correspondence.

This week we're taking a moment to pick out a few of your letters from the thousands that arrive everyday here at the White House and answer some of your questions on immigration, healthcare, and the economy. That's August 24th to August 30th or, "It's Summer Mailbag Time!"

Be sure to check out this week's behind-the-scenes video.

Changes at SEOptimise

Posted: 30 Aug 2012 08:57 AM PDT

Although I wouldn't usually use the blog for this, I thought I'd give you a quick update on the recent changes here at SEOptimise.

As you may have heard, my co-founder, Kevin Gibbons has moved on to pastures new. I'm sure Kevin will make a great success of his new business, and it leaves SEOptimise in a strong position as it continues to forge forward under the key Oxford team.

SEOptimise was formed in 2007 when Kevin and I started to work together. We brought together different skill sets that complemented each other and enabled us to grow quickly from a couple of desks in my spare bedroom to offices in multiple locations, working with blue chip organisations.

As part of this growth, we opened an office in London in December 2011 designed to work as a satellite office and complement the existing team in Oxford. This London office formed Kevin's new company. Two people, with the addition of a third in January, were based in this office, while the core organisation remained in Oxford. At the time, this was an obvious move for the company, and one we will review again in the near future.

In the short-term, though, we decided to sell our London operation to Kevin, allowing SEOptimise to focus on our core skills and clients, the deal meant that we retained the majority of our business and the balance sheet didn't particularly suffer. As a business, we trade at some of our highest levels ever, and our ambition not just to continue to grow the business but to continue to lead the industry in best practise and quality, is greater than ever.

It's a parting of the ways that leaves us all in good shape. The experienced core members of the team remain with us, while our dedication to providing the best possible service for our clients is stronger than ever. While we don't believe in buzzwords and bandwagons, our focus has always been and always will be on creating the very best bespoke campaigns, that we adapt to the ever-changing market to get our clients the lasting results they want.

So, what are the key plans for us as a business moving forward? First and foremost, we've become even more focused on delivering the best service in the industry, continually reviewing what we offer to ensure that our clients get nothing but the very best for a long time to come. As part of this, we've invested even more in software, having already been one of the largest software investors in the industry, as well as developing our strategic relationships with the industry's best software providers, including becoming a Linkdex partner.

We've also invested in our PPC service by employing external consultants to assess and help us to develop our current offering, and we've done the same, utilising the experience within our own team for some of our other services, including technical SEO, content, link building and outreach. We've come up with new ways of approaching the development of our services, which was taking too long to complete prior to the London office sale, and we've started to implement structures to further improve the award-winning SEOptimise blog.

Another significant change is our increased focus on staff development. People are an agency's most important resource, and staff development has always been a key focus for me. The changes we've undergone have allowed us to put new processes in place, one of which is a new structure to the working week, with four days focused on client work, and one day a week for staff to work on personal development and company development projects. We've already grown as a business, with a number of client wins as well as recruiting two new members of staff , with a further two new recruits who will be joining the team during September.

And finally, we've been really busy, and really enjoying the progress we're making! The changes have been very positive for the company and morale is the highest it's been for a long time as we look forward to the exciting developments that lie ahead.

On that note, would you like to join us at this exciting time? With our new and improved structure, we're able to be more innovative as a company, and we're always looking to bring talented people into the team who can help us continue to move forward as a company. You can find current vacancies on our Careers page. If you don't see a role that suits you, but you think you can contribute to us moving forward, send me an email or pick up the phone!

Seth's Blog : Advertising's bumpy transition (and why it matters to you)

Advertising's bumpy transition (and why it matters to you)

Advertising has been around so long, they measure the prices in Roman numerals.

CPM is a mark of how much it costs to run an ad that appears in front of 1000 people (M is for thousand). Until recently, a full page ad in a national magazine that reached two million people could easily cost $80,000 ($40 cpm times 2000 thousand). (Much of what I say below applies to TV ads as well).

I started my career buying ads for $50,000 a pop and then made the transition to selling expensive online promotions to big brands. The opportunity was clear: find an audience, make a significant profit selling ads.

When the web was young, marketers like Yahoo said to P&G and Ford, "buy our banner ads, they cost about the same as a magazine ad, but people can click on them as a bonus." And so banner ads at the beginning were incredibly lucrative--easy to make, sell them for a lot.

Today, banner ads might sell for a tenth that, or, if we count ads on Facebook and the like, as little as 1% of the cost of a magazine ad on a per person basis. But of course, it's not a fair comparison, for a bunch of reasons:

Magazine ad pricing counts the entire circulation of a magazine, even though very few people read every single page of the magazine. Web ads, on the other hand, measure how many people look at that precise page.
A web ad salesperson can say, "well, even if one in a thousand people click on a web ad, it's still better than how many people click on a magazine ad." The problem with this is that while clicks are proof that something happened, they're rare indeed. Magazines don't offer advertisers clicks, but they do offer them hope, something advertisers love to buy.
Magazines have always embraced mass. Advertisers pay extra for big circulation magazines, even though that means less focus. Even a magazine that's focused on a given topic (surfing, say, or gardening) can't distinguish whether the ad is being seen by a man or a woman, or by someone who just bought a new car. The web offers all that and much more, but advertisers are radically undervaluing this focus, because they grew up in a world of mass. It's fine to have a very fine focus, but if you're selling to people with blurry vision, it doesn't help much.
And lastly, magazine ads were largely sold, not bought. Conde Nast and other big companies happily wined and dined ad executives for years to earn the huge buys (more than 700 pages in the new Vogue) that appeared in their magazines. Web sites, on the other hand, are inherently digital, and would like to be bought, not sold, which gives advertisers an enormous amount of choice and leverage.

The short version is that magazine ads were expensive because they were scarce, they worked (maybe) and they were sold, hard. Web ads have long been dramatically undervalued as measured media by people who don't want to measure, as focused media by people who want mass.

Magazine ads were great, a perfect industry, one that's being replaced by something impossible, something that doesn't work for all parties yet.

The result is that tonnage, huge ad inventories, inventory in the billions of impressions, are at the heart of much of what is currently paying the bills in web advertising. Which pushes advertisers to show you more pages, interrupt you when they can and try to keep you inside their site, clicking around. Most people are never going to click on an ad, even an ad that they will ultimately remember.

Google's Adwords is one exception to the tonnage rule, and, if it's not pushed to scale too much, opens the door for advertisers to start measuring the value of what they get when they buy a direct response web ad. Buy an ad for a dollar a click, and if you make $2 in profit, buy more ads! But this only moves the measurement argument forward, as these ads are only attractive to advertisers who measure their results. Most ads don't work because we click on them, though. They work because we remember them, or because they change our perception or tell us a story.

Until advertisers start to value the focused, memorable, impactful opportunity they have in buying the right ads in the right place for the right audience, web users are going to be stuck seeing irrelevant ads on sites that don't respect their time and attention as much as they should. We have salespeople and investors and agencies and buyers that come from a world of mass and scarcity, and the opportunities of focus and connection and abundance are taking a while to sink in.

Since advertising is paying for a big portion of the consumer web, it's being built to please advertisers. Right now, though, what advertisers are used to buying isn't what the web is good at building.

There's huge progress being made in perceptions, but there's a ways to go. Which is why, "we're ad supported" isn't as obvious a strategy as it should be.

• Email to a friend •

joi, 30 august 2012

Mish's Global Economic Trend Analysis

Japan Manufacturing PMI Hits 16 Month Low, New Orders Plunge
Reader Questions On Hyperinflation; Would Printing $50 Trillion Tomorrow Do Anything?
Eurozone Retail Sales Decline 15th Month, Plunge Led by Italy, France; German Sales Contract Slightly
France to Hire 150,000 Subsidized Workers With Zero Qualifications; Why Stop There?

Japan Manufacturing PMI Hits 16 Month Low, New Orders Plunge

Posted: 30 Aug 2012 11:10 PM PDT

Markit reports Japan Manufacturing PMI Hits 16 Month Low

Key Points:

Output and new orders down at accelerated rates
Near-stagnation of employment
Purchasing costs fall to greatest extent since November 2009

Markit/JMMA Manufacturing PMI

After adjusting for seasonal factors, the headline Markit/JMMA Purchasing Managers' Index™ (PMI™) posted 47.7 in August, down from 47.9 one month previously, signalling the sharpest worsening of Japanese manufacturing sector operating conditions since April 2011. Moreover, the latest deterioration in business conditions was broad-based across all three market groups.

Japanese manufacturing production declined further in August, with the rate of contraction accelerating to the fastest in 16 months. The latest reduction in factory output was the third in as many months.

Reflecting falling new orders and corresponding spare capacity, backlogs of work decreased further in August. The rate at which firms depleted work-in-hand (but not yet completed) was sharp, and the steepest since May 2009.

Japan is in its third deflationary decade in spite of massive fiscal stimulus, massive monetary stimulus, and the major industrial world's highest debt-to-GDP ratio.

US demographics are not as bad, but US consumer debt overhang and student loans are worse. The deflationary forces facing Bernanke are massive.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Reader Questions On Hyperinflation; Would Printing $50 Trillion Tomorrow Do Anything?

Posted: 30 Aug 2012 05:16 PM PDT

In response to Economist Fired for Expressing Opinions on Max Keiser Show; Errors in Observation where I stated "The Fed Cannot Realistically Cause Hyperinflation" I received a couple of emails worth reviewing.

Reader Philip writes ...

I do not understand how you could say that the Fed cannot cause hyperinflation. The government has a huge debt. The debt is manageable at super low rates. But, if rates rise due to some inflation or even just caution from abroad then the government starts paying a very large sum in interest. That takes away from its obligations even more than the current deficit amount. Either the Fed has to step in and monetize the debt by printing more and more money spiraling out of control.

Definition of Terms

As always, before one can have a rational discussion, one must agree on definitions. Hyperinflation is a complete loss of faith in currency. In other words, currency becomes worthless in a short period of time.

Is there a risk of high interest rates? Yes. But I do not think that risk is high in the near future. Even assuming I am wrong, high rates are not the same as hyperinflation.

The US dollar is not headed to zero given the US has the largest stash of gold of any country. That alone would preclude hyperinflation. There are many other reasons that I have touched upon that suggest interest rates are not going up fast.

Credit Markets

The Fed has tried to revive the credit markets but has essentially failed, except for student loans. Making debt slaves out of students is actually a hugely deflationary force.

Moreover and as I have stated many times, the Fed cannot give money away, spend it, or force anyone to spend it. That is a very tough battle for the Fed with attitudes where they are (and as I have mentioned, attitudes are very important).

Banks do not want to lend, credit-worthy businesses do not want to borrow, and consumers are still deleveraging. Those are extremely deflationary forces.

Would Printing $50 Trillion Tomorrow Do Anything?

Ignoring interest on excess reserves (a proviso I mentioned), printing $50 trillion dollars tomorrow might not do anything.

Indeed, if $50 trillion printed tomorrow sat as excess reserves (the most likely event), it would have the same effect as if it was buried in the ground, or not printed at all. Such is the nature of a credit-based economy, and a point that has caused hugely inaccurate inflation forecasts from many Austrian economists.

As previously mentioned, such massive printing might briefly cause a temporary attitude change accompanied by a brief asset bubble of some sort (especially in long-dated treasuries given banks would put some of it to that use).

However, massive printing would collapse treasury rates, further destroying those on fixed income, and make it even harder for pension plans to meet assumptions.

Since printing $2 trillion did not spur credit expansion, pray tell why would $50 trillion?

Theory vs. Practice

Certainly we are guessing as to what printing $50 trillion might do. As a practical matter, the odds of finding out are essentially zero. The Fed is not going to print $50 trillion tomorrow.

More realistically, would printing $2 trillion a year for the next 10 years cause hyperinflation?

No, it won't.

So where is Fed induced hyperinflation going to come from? The answer is it isn't.

Government vs. the Fed

At this stage in the cycle, and in sharp contrast to what most believe, the Fed is essentially powerless (which is exactly why Bernanke is begging Congress to act)

In contrast to a Fed that cannot spend money (except to meet its payroll and expenses and pay interest on reserves, etc), the federal government could actually spend $50 trillion tomorrow. But it won't.

Hyperinflation? Even from a monetary aspect hyperinflation is nowhere in sight.

Hyperinflation is a Political Event, Not a Monetary Event

It's important to note that hyperinflation is not really a monetary event in the first place. Rather, hyperinflation is a political event caused by governments.

I responded that way in an email to reader Peter who replied "Sorry, but your theory is not based on the data. Read the literature on high and hyperinflation episodes."

Well, I have read countless excerpts and Peter is badly mistaken.

Please consider Hyperinflation Nonsense in Multiple Places.

The entire post is worth a look for some remarkably silly predictions, but for the debate at hand, here is the pertinent snip:

Jeff Harding at the Daily Capitalist asks Why Does Hyperinflation Occur?

In every modern case of hyperinflation the decision to inflate was a political one, not an economic one. In almost every case hyperinflation followed a war or a coup or some massive political change such as the end of the Soviet empire or the rise of a dictator or a populist-socialist takeover, and other political unrest.

In the 20th Century there were quite a number of hyperinflationary events. I used the Wikipedia list of modern hyperinflations (Since WWI) and researched the political circumstances of each country. The circumstances can be put into three rough categories: post-war disruption, post-Soviet collapse, and socialist-populist regimes.

For example we all know what happened in Germany during after WWI when politicians, mostly socialists, blamed all their problems on reparations and continued to print so much money that it resulted in the famous cash-in-a-wheelbarrow photos. They literally had no clue what they were doing.

The post-Soviet empire collapse is easier to understand as former communist/socialist regimes fought for power and struggled with economic policy. Many of these countries have reformed or were forced to reform their monetary and fiscal policies.

Many of the socialist-Marxist regimes were Latin American populist governments who employed "revolutionary" anti-capitalist nostrums for economic policy. Chile (Allende) and Argentina are good examples. Argentina has had years of high inflation to hyperinflation since 1980. In Africa most countries were a mixture of strongmen with socialist-Marxist policies. I am not suggesting that these were pure socialist governments, but rather the typical situation where the government seizes or controls large parts of industry and issues regulations controlling much economic activity.

These hyperinflations all had one common denominator: during a period of instability, spending was used as a political tool and it got out of hand. I understand that the circumstances of each country were different and that it is perhaps unfair to say, lump Israel in with Argentina. But each country faced political factors that created instability or a national crisis; the government spent heavily to gain popular support, and resorted to the printing presses to pay for their spending.

Harding is correct. This is how I further elaborated...

Zimbabwe vs. Weimar

In Zimbabwe, the Mugabe government initiated a "land reform" program intended to correct the inequitable land distribution created by colonial rule. Ultimately, Mugabe's attempt to to bail out the poor at the expense of the wealthy is what triggered capital flight and loss of faith of the currency.

His reforms not only caused a flight of capital and human capital (the wealthy), they also led to sanctions by the US and Europe. In response, Mugabe turned on the printing presses but the loss of faith in the currency had already occurred.

In Weimar Germany, printing for war reparations kicked off hyperinflation. Wikipedia provides a good accounting in Inflation in the Weimar Republic.

It is certainly not impossible for there to be a complete loss of faith in the US dollar, however there odds are extremely remote.

Can The Fed Cause Hyperinflation?

I do not think the Fed itself can cause hyperinflation and more importantly I am sure they would not if they could. The reason is "Hyperinflation Would End The Game"

Hyperinflation by definition would destroy the currency and thus the banks

Hyperinflation would destroy the wealthy and all their corporate bond holding

Hyperinflation would destroy the Fed

Hyperinflation would destroy the wealthy political class

To understand how powerless the Fed is, one needs to understand the difference between credit and money, how much the former dwarfs the latter, and what the Fed's role is in getting banks to lend.

Hyperinflation Model is Complete Silliness

Those calling for hyperinflation are extremely misguided. It is not going to happen in any timeframe worth discussing.

On the political side, no country is going to force war reparations on the US. The US is not going to peg its currency to another, the Fed is not going to print $50 trillion (and it would not matter anyway unless Congress spent that much), government is not going to confiscate land to the point of causing massive human and capital flight, etc. etc.

Moreover, the US's gold holding, the fact the US has the largest capital and bond markets in the world coupled with ease in starting a business vs. nearly anyplace else in the world, absolutely 100% precludes a hyperinflationary outcome for the foreseeable future.

The hyperinflation model is absolute complete silliness.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Eurozone Retail Sales Decline 15th Month, Plunge Led by Italy, France; German Sales Contract Slightly

Posted: 30 Aug 2012 08:48 AM PDT

Once again there is grim data from Europe. The safe thing to do is expect grim data every time European data is reported. Except for an occasional outlier, you will not be too far off.

Eurozone Retail Sales Decline 15th Month

Markit Reports Eurozone retail downturn deepens in August

Key points:

Revenue contraction extends to tenth month

German sales flat; sharper falls in France and Italy

Inflationary pressures build up

Retail sales in the Eurozone continued to fall sharply on an annual basis in August. The rate of contraction accelerated to the fastest since May, and extended the current sequence of continuous decline to 15 months. This was despite a further year-on-year increase in Germany, and reflected substantial declines in both France and Italy.

Employment Declines 5th Month

Employment at retailers in the Eurozone declined for the fifth month running in August. The rate of job shedding remained modest, reflecting sustained workforce growth in the German retail sector. French retailers posted the steepest job cuts for over three years, while the rate of contraction in Italy eased since July.

Prices Paid Rise

The Prices Paid Index rose for the third month running from May's 19-month low in August, signalling a strengthening rate of inflation of wholesale prices in the Eurozone. Sector data signalled that clothing & footwear and food & drink drove cost pressures in August.

Gross Margins Drop

Retailers' gross margins continued to fall sharply in August. The rate of deterioration eased since July, but was still among the fastest registered to date. Reflecting the relative strength of demand, Italian retailers posted the steepest drop in margins, and German retailers the weakest.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

France to Hire 150,000 Subsidized Workers With Zero Qualifications; Why Stop There?

Posted: 30 Aug 2012 08:19 AM PDT

Looking for a loony idea to address unemployment in France? Look no further because I have a doozie.

Via Google Translate from El Economista, France will create 150,000 jobs for young people without qualifications

The French Government has today adopted a draft law providing for the creation of 150,000 subsidized jobs for young people with little or no qualifications, which are most affected by unemployment and employability harder.

The beneficiaries of these so called "jobs of tomorrow" will work for municipalities, hospitals, schools, social organizations, associations or, exceptionally, in private companies, and will receive a grant of up to 75% of their compensation.

The estimated cost is 500 million euros in 2013 and "more than 1,500 million" next year by the state budget, said Labor Minister Michel Sapin, at a press conference.

"We want contracts defined privilege" said Sapin, who nevertheless admitted that the storms are also accepted, and said that public support will be maintained in each case between one and three years, provided that employers provide a "accompaniment" to "very great difficulty youth push" to which they are targeted.

He insisted that the "accompaniment", which may include training for classical channels is "fundamental" to the 500,000 eligible people likely to have between 16 and 25 years, lack of skills and work.

Why Stop at 150,000?

The second half of that translation is a bit choppy but the bill clearly targets "500,000 eligible people" between 16 and 25 with no skills and no qualifications.

So, why stop at 150,000? Why not hire them all? And why stop at age 25? Why not hire everyone with no skills and no qualifications regardless of age?

Hopefully the answers are so obvious that hiring even 5,000 with no qualifications seems preposterous.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

vineri, 31 august 2012

It's Summer Mailbag Time!

Changes at SEOptimise

Changes at SEOptimise

Seth's Blog : Advertising's bumpy transition (and why it matters to you)

Advertising's bumpy transition (and why it matters to you)

More Recent Articles

joi, 30 august 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Pagini

Persoane interesate

Arhivă blog

vineri, 31 august 2012

It's Summer Mailbag Time!

Changes at SEOptimise

Changes at SEOptimise

Seth's Blog : Advertising's bumpy transition (and why it matters to you)

Advertising's bumpy transition (and why it matters to you)

More Recent Articles

joi, 30 august 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Pagini

Persoane interesate

Arhivă blog

Subscribe to