Seth's Blog : Simple thoughts about fair use

Simple thoughts about fair use

Copyright is not an absolute. Potato chips are absolute.

If this is my potato chip, then it's not yours. You can't touch it, eat it or use it for any reason whatsoever, not without asking first. Copyright doesn't work that way.

There is a ying to the yang of copyright protection, and it's called Fair Use. Fair use permits scholars to do their thing, permits those that would do parody or commentary or comparison to be heard. I'm not talking about taking someone's work to make it into a poster or some sort of endorsement--I'm talking about the need for us to be able to comment on each other's work.

Without fair use, it would be impossible to write a negative book review, or compare Shakespeare to the Simpsons. Without fair use, it becomes just about impossible to have a thoughtful discussion about anything that's been published since you were born.

Most web users should know a few simple guidelines, principles so simple that you can generally assume them to be rules. (Worth noting that whether you are in the right or not, a lawyer on retainer can still hassle you--not fair but true):

• You don't need to ask someone's permission to include a link to their site.
• You don't need to ask permission to include a screen shot of a website in a directory, comment on that site or parody it.
• You can quote hundreds of words from a book (for an article or book or on your website) without worrying about it and you certainly don't need a signed release from the original author or publisher. Poems and songs are special exceptions. Then you can worry.

There's a difference between being polite and observing the law. If you quote something (an idea, a notion, a recipe), the right thing to do is give credit.

Photos are a real issue, unless you are clearly commenting on the photo (as opposed to using the photo to make a point that a different photo could make as easily). When in doubt, be the person who took the picture. (Aside: Compfight has an easy to use setting--do a search and hit "commercial" in the left hand column and voila--CC licensed photos, ready to go.)

PS as soon as you make something and fix it in a tangible form, you own the copyright in it. No requirement that you register it with anyone. Putting a © notice is certainly a helpful way to let people know you consider it yours, but the law makes it clear that merely writing your creation down confers copyright to you. And... "all rights reserved" doesn't mean anything any more, just fyi.

 

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Fed to Announce Monetary Penalties for Robo-Signing and Unsafe Practices ; Another Whitewashing Move by the SEC Posted: 07 Jan 2012 11:24 AM PST The always behind-the-curve Fed seeks to fine mortgage servicers for unsafe practices and robo-signing with an amount dependent on allegedly independent review by consultants. Federal Reserve Governor Sarah Bloom Raskin on Saturday said the Fed must impose monetary penalties on banks who entered into an April agreement with regulators over how to fix problems in their mortgage servicing businesses. "The Federal Reserve and other federal regulators must impose penalties for deficiencies that resulted in unsafe and unsound practices or violations of federal law," Raskin said in remarks prepared for delivery to the Association of American Law Schools. "The Federal Reserve believes monetary sanctions in these cases are appropriate and plans to announce monetary penalties." In April, 14 mortgage servicers, including Bank of America and JPMorgan Chase entered into a settlement with the Fed, the Office of the Comptroller of the Currency and the now defunct Office of Thrift Supervision on steps that have to be taken to correct and improve their servicing practices, such as providing borrowers with a single point of contact for questions. As part of the agreement, these mortgage servicers have hired consultants to review foreclosures that took place in 2009 and 2010 to see if any were improper. Regulators have said these reviews will help determine the size of any penalties the servicers will have to pay. Expect Trivial Penalties, Spread a Mile Wide Don't expect this announcement to amount to much of anything. Penalties, if any will be trivial and the fines are nearly guaranteed to not benefit those harmed in any substantial way. Instead, expect fines to be spread out to include those not harmed at all. Another Whitewashing Move by the SEC Similarly, don't expect much of anything from this feeble announcement: SEC to demand admission of wrongdoing in some cases Securities regulators will no longer let companies settle civil cases without admitting or denying the charges if they have already admitted wrongdoing in parallel criminal cases. The policy change, announced by Securities and Exchange Commission Enforcement Director Robert Khuzami on Friday, applies only to instances where a defendant has already admitted to violating criminal laws. It comes just over a month after a federal judge in New York rejected a proposed $285 million settlement between the SEC and Citigroup, in part because the bank had not admitted to wrongdoing. However, in that case, no parallel criminal charges have been filed. It seemed "unnecessary" for the SEC to include its traditional "neither admit nor deny" approach if a defendant had already been criminally convicted of the same conduct, Khuzami said. In one of the most egregious examples, Bernard Madoff pleaded guilty for his role in a multi-billion dollar Ponzi scheme in 2009, but neither admitted nor denied the allegations in a settlement with the SEC. In rejecting the Citigroup accord, U.S. District Judge Jed Rakoff said the SEC's failure to require Citigroup to admit or deny its charges left him with no way to know whether the settlement was fair. Rakoff also called the $285 million payout "pocket change" for the third-largest U.S. bank. The Citigroup settlement was intended to resolve charges that the firm sold risky mortgage-linked securities in 2007 without telling investors that it was betting against the debt. "My take on things is it is all about managing the press," said James Cox, a professor at Duke Law School. The agency "looked pretty silly before Judge Rakoff the other day," he said. This policy "non-change" borders on the absurd. The ruling only applies to only to instances where a defendant has already admitted to violating criminal laws. Notice that the ruling does not even apply to the Citigroup case in which a Judge Blasted  the the SEC. "Doesn't the S.E.C. have an interest in what the truth is?" Judge Rakoff asked, in reference to the commission's longstanding practice of not forcing a defendant to admit any wrongdoing when settling a case. Judge Rakoff called the contempt power — a judge's ability to punish a party for disobeying a court order — "the backbone of the judiciary." He questioned whether the S.E.C. was really serious about ever seeking an injunction against repeat offenders. "It's just for show," Judge Rakoff said. "We're not saying that we will never use injunctive relief," said the S.E.C. lawyer. "Hope springs eternal," the judge replied. The S.E.C.'s current enforcement action against Citigroup is at least the fifth time that the commission has reached a settlement with the bank related to civil fraud accusations. SEC Fine vs. Citigroup Gain Please consider SEC Tired of Fighting Big Banks-Calls Federal Judge Rakoff Refusal to Approve Citigroup Settlement-Shortsighted. Estimates are that Citigroup made a $3.8 billion profit from the bogus investment portfolio. The investors lost over $700 million. The $285 million offer to settle is a joke. The Judge made clear he would not allow corporations to continue to buy their way out of fraud from "a cost of doing business" fund. The Judge demands the truth to be revealed and the public protected. Public service is a public trust. Federal employees have a duty to protect the public interest. Apparently, the SEC forgot their duties and the fact that the Court is the final arbiter. The legal team at the SEC that crafted the Citigroup deal need to remember they are federal service not bank employees. It's refreshing to see Judge Rakoff remind government workers who employs them. show.php?db=special&id=138 Rakoff's words to the SEC and big banks has been globally hailed as public policy genius. Thank you Judge Rakoff. The trial is scheduled for July 16, 2012. While essentially ignoring billions of dollars in repeated fraud allegations against Citigroup, the SEC brought full weight down on Martha Stewart over (drum roll please) ... $45,673. Martha Stewart went to prison and was fined $30,000. Since then, no one has gone to prison or even been criminally indicted in $trillions of dollars of fraud in the global financial crisis. And unless someone does admit criminal action, the SEC reserves the right to do more whitewashing without seeking admission of guilt. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

German Factory Orders Drop Most in Nearly 3 Years; Icing On the European Recession Cake Posted: 07 Jan 2012 12:31 AM PST It is amusing to see how other writers portray a story vs. what I would say about the same data. For example, Bloomberg columnist Rainer Buergin reports German Factory Orders Declined Most in Almost Three Years. Please consider Buergin's interpretation of the story vs. mine. Both follow. Bloomberg: German factory orders dropped the most in almost three years in November as the euro region economy edged toward a recession and global demand weakened. Mish: German factory orders dropped the most in almost three years in November as the European recession deepened. Bloomberg: Orders, adjusted for seasonal swings and inflation, slipped 4.8 percent from October, when they surged a revised 5 percent, the Economy Ministry in Berlin said in a statement today. That's the biggest drop since January 2009. Economists forecast a decline of 1.8 percent, according to the median of 25 estimates in a Bloomberg News survey. Comment: That paragraph is fine. Bloomberg: While the euro region's sovereign debt crisis has clouded the outlook and cooling global growth is hurting export orders, Europe's biggest economy may still avert a recession. Mish: The euro region's sovereign debt crisis, coupled with austerity measures and rising taxes in Greece, Spain, Italy, France has clarified the outlook, and it's not pretty. The European recession will be extremely harsh and Germany will not escape. Bloomberg: Unemployment at a two-decade low is helping to bolster consumer sentiment, service industries expanded in December and business confidence unexpectedly rose for a second month. Mish: German unemployment at a two-decade low has temporarily helped boost consumer sentiment. In addition, service industries expanded in December and business confidence unexpectedly rose for a second month. However, do not expect those conditions to last. Any notion that Germany will escape a brutal European recession is complete silliness. Indeed, Germany and the entire Eurozone is already in a recession. Conditions will worsen as tax hikes and austerity measures take an enormous toll. Fundamentally, hiking taxes in the midst of a recession is the worst possible thing to do, yet various officials, including Nicolas Sarkozy, the president of France are clamoring for still more tax hikes. Escalating trade wars between France and Spain are icing on the recession cake. For details please see ... "Social VAT" Trade Wars Heat Up Between Spain and France Brussels Recommends Sucking Spain Dry with Increased VAT; France to Raise Sales Tax to Protect Jobs; Is There Any Point or Reason for the Eurozone? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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Weekly Address: Continuing to Grow the Economy in the New Year

Your Daily Snapshot for Saturday, January 7, 2012   Weekly Address: Continuing to Grow the Economy in the New Year President Obama shares his New Year's resolution: doing whatever it takes to move the economy forward and ensure that middle class families regain the security they've lost in the last decade. Watch the video: Weekly Wrap-Up Consumer Watchdog: After appointing Richard Cordray to lead the Consumer Financial Protection Bureau earlier this week, the President traveled to Shaker Heights, Ohio to talk about his decision -- and the fight to help secure a better future for the middle class. The CFPB is in place to ensure the integrity of the financial system and protect all American consumers from fraud and unfair play. The President said: “See, most people in the financial services industry do the right thing, but they're at a disadvantage if nobody is enforcing the rules. We can't let that happen. Now is not the time to play politics while people’s livelihoods are at stake. Now is the time to do everything we can to protect consumers, prevent financial crises like the one that we’ve been through from ever happening again. That starts with letting Richard do his job.” Jobs for Youth: ‘We Can’t Wait’ to help young Americans find jobs. The President announced Summer Jobs+, a new initiative that will create internship and job opportunities for America’s young people. It calls for businesses, non-profits and government to work together to provide pathways to employment for low-income and disconnected youth in the summer of 2012.  Employers are still signing on to commit jobs to the Summer Jobs+ Bank, a one-stop search tool for youth to access postings from participating employers that is targeted to launch in 60 days. Military Strategy: The President spoke at the Pentagon Thursday to outline a new global military strategy -- moving away from the expansive wars in Iraq and Afghanistan and toward a different posture that emphasizes a new focus for the future. He also reminded us of our duty here at home – to ensure that our troops returning from war receive the care and benefits they deserve. He Said: “We’re also going to keep faith with those who serve, by making sure our troops have the equipment and capabilities they need to succeed, and by prioritizing efforts that focus on wounded warriors, mental health and the well-being of our military families. And as our newest veterans rejoin civilian life, we’ll keep working to give our veterans the care, the benefits and job opportunities that they deserve and that they have earned.” Year in Photos: From his trip to Ireland to Sasha Obama’s basketball game, the White House photographers have captured it all.  Don’t miss some of the most memorable moments from 2011. Check out the slideshow. Get Updates Sign up for the Daily Snapshot Stay Connected     Facebook Twitter YouTube Flickr iTunes       This email was sent to e0nstar1.blog@gmail.com Manage Subscriptions for e0nstar1.blog@gmail.com Sign Up for Updates from the White House Unsubscribe this email address | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Seth's Blog : I was wrong

I was wrong

In 1993, I saw the web coming. I was hired to write the cover story for a now defunct computer magazine about the internet, and dismissed the new Mosaic browser in a single paragraph.

I figured the web was just like Prodigy, but slower, harder to use and without a business model.

About as expensive a wrong analysis as a single entrepreneur with an email company could make in 1993.

The reason it was an insanely valuable lesson: I got better at announcing that I was wrong, learning from it and doing the next thing.

Politicians, of course, are terrible at this. They are never wrong, apparently, and when they are, spin instead of admitting it. Which not only hurts their trustworthiness, it prevents them from learning anything.

Two elements of successful leadership: a willingness to be wrong and an eagerness to admit it.

 

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• Barnes & Noble in Trouble; What's the Next Chapter?
• Employment Trends Since 1955
• LPS Mortgage Monitor Shows Little Improvement in New Problem Loan Rates, First Time Delinquencies Slowly Rising Since April, Cures to Current Status Decline
• Nonfarm Payroll +200,000 ; Labor Force Drops Another 50,000 ; Those Not in Labor Force Rises by 194,000 ; Unemployment Rate 8.5%; Notes from Trim Tabs on the BLS Report
• Profit Warnings at Target, Kohl’s, J. C. Penney, American Eagle

Barnes & Noble in Trouble; What's the Next Chapter? Posted: 06 Jan 2012 04:45 PM PST Retail sales are up but profits are down as noted in Profit Warnings at Target, Kohl's, J. C. Penney, American Eagle However, shrinking profits are one thing, huge losses another. On Thursday, Barnes & Noble increased its projected loss per share for the current fiscal year to between $1.10 and $1.40, from the 30 cents to 70 cents it reaffirmed one month ago. I have commented before that brick-and-mortar book stores are in serious trouble. It's time to move Barnes & Noble to the top of the list. The Wall Street Journal reports Barnes & Noble Seeks Next Chapter The nation's largest bookstore chain warned Thursday it would lose twice as much money this fiscal year as it previously expected, and said it is weighing splitting off its growing Nook digital-book business from its aging bookstores. Ironically, Barnes & Noble had been one of the first to recognize the potential of digital books. In 1998, it invested in NuvoMedia Inc., maker of the Rocket eBook reader, and the bookseller actively supported digital-book sales. But in 2003, it exited the still-nascent business, saying there wasn't any profit in it. It wasn't until 2009 that Barnes & Noble re-entered the business, introducing its Nook e-reader. By then, Amazon had been selling its Kindle device for about two years, and was offering best sellers for $9.99, a fraction of what hardcover best sellers are priced at. Apple introduced its iPad tablet in January 2010. Amazon responded with its competing Kindle Fire tablet this past September, and in November, Barnes & Noble introduced its Nook Tablet. To promote the Nook, the retailer returned to national TV advertising in 2010, after a 14-year hiatus, buying spots on popular programs such as "American Idol." The heavy Nook investment has squeezed Barnes & Noble's bottom line. Barnes & Noble said in a statement on Thursday it was "in discussions with strategic partners including publishers, retailers and technology companies in international markets." It said that could lead to expanding the Nook business overseas. What's the "Next Chapter"? The Journal reports Barnes & Noble is also considering a plan to spin off its Nook business. If it does, can it make a profit selling books the old-fashioned way? If it doesn't, does if have the resources to compete against Amazon and Apple? Either way, the "Next Chapter" for Barnes & Noble just might be bankruptcy court. It took me a second to catch the play on words in the WSJ article because the first thought I had was "Chapter 7" and a word was missing. Bear in mind, even if that happens, it can take years to play out. GM was terminally ill for a decade before it succumbed to the inevitable. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Employment Trends Since 1955 Posted: 06 Jan 2012 11:41 AM PST Reader Tim Wallace sent some comments and a nice chart in response to Nonfarm Payroll +200,000 ; Labor Force Drops Another 50,000 ; Those Not in Labor Force Rises by 194,000 ; Unemployment Rate 8.5%; Notes from Trim Tabs on the BLS Report Wallace writes .... Hello Mish On today's labor report: Note how the labor force has flat lined for four years even though population growth has averaged 1.5 million for the past 55 years. From 1993 to 2007 population growth was 1.7 million per year! Thus, the labor force should not suddenly turn flat since retirements do not even come close to explaining the chart. Yet, suddenly the work force has just been frozen in time although the population continues on the same upward trend. The work force is literally one million smaller than during Bush's last year in office. This is statistically impossible, at least judging from historic trends. We also are still 5.6 million people below the employment number of the peak year in 2007. So, practically speaking we have approximately 11.6 million more people unemployed than in 2007. If we add the additional 6 million that should be counted as available for the labor force, the unemployment number at the U-3 level surges past 11% as you have said numerous times. Tim Employment Trends click on chart for sharper image Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

LPS Mortgage Monitor Shows Little Improvement in New Problem Loan Rates, First Time Delinquencies Slowly Rising Since April, Cures to Current Status Decline Posted: 06 Jan 2012 10:39 AM PST The LPS' Mortgage Monitor Report Shows Halt in Delinquency Decline; Foreclosure Starts Down Nearly 30 Percent in November. Via Email ... JACKSONVILLE, Fla. - Jan. 6, 2012 - The November Mortgage Monitor report released by Lender Processing Services, Inc. hows that while mortgage delinquencies at the end of November 2011 were nearly 25 percent less than the January 2010 peak, the trend toward fewer loans becoming delinquent, which dominated 2010 and the first quarter of 2011, appears to have halted. At the same time, new problem loans - those loans seriously delinquent as of the end of November that were current six months prior - have not improved significantly in the last year. This degree of stagnation indicates that while the situation is not getting markedly worse, it is not improving either, and inventories of troubled loans remain significantly higher than pre-crisis levels across the board. Here are a sampling of charts from the December 2011 Mortgage Performance Observations click on any chart for sharper image Delinquencies vs. Foreclosures New Problem Loan Rates First Time Delinquencies Slowly Rising Cures to Current Decline Foreclosures back to 90+ Days Delinquent History suggests those rollbacks from foreclosure to 90+ days delinquent will soon be back in foreclosure and eventually REO (bank real estate owned). Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Nonfarm Payroll +200,000 ; Labor Force Drops Another 50,000 ; Those Not in Labor Force Rises by 194,000 ; Unemployment Rate 8.5%; Notes from Trim Tabs on the BLS Report Posted: 06 Jan 2012 08:20 AM PST Quick notes about the "falling" unemployment rate (Trim Tabs Comments Follow): In the last year, the civilian population rose by 1,695,000. Yet the labor force only rose by 274,000. Those not in the labor force rose by 1,421,000.  . In December, the Civilian Labor Force dropped by 50,000.   In December, those "Not in Labor Force" rose by a whopping 194,000, In November, those "Not in Labor Force"  rose by a staggering  290,000. If you are not in the labor force, you are not counted as unemployed.   Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%. Notes from Trim Tabs on the BLS Report Madeline Schnapp at Trim Tabs Pinged me with a few of her notes this AM. Hello Mish A couple of things to keep in mind re: the BLS employment December release. 1. December seasonals were -821,000 jobs (high, although not as high as January's will be, +2.1 million +/-). 2. The BLS survey reporting period contained five weeks in December as opposed to four. 3. The BLS survey is incomplete. The response rate in December was 71.5%. Best, Madeline Schnapp Director, Macroeconomic Research TrimTabs Investment Research For Trim Tabs estimate for today, please see Whoa! The 10x Difference Between TrimTabs December Jobs Estimate of 38,000 New Jobs and ADP's Estimate of 325,000 Begs an Explanation Revisions to November Report November Payrolls Revised lower from 120,000 to 100,000 November Unemployment Rate revised up from 8.6% to 8.7% November count of Those Not in Labor Force revised from 487,000 to 290,000 which helps explain the slight revision upward in November unemployment rate. Jobs Report at a Glance Here is an overview of December Jobs Report, today's release. US Payrolls +200,000 US Unemployment Rate Declined .2 (from revised number) to 8.5%  Civilian labor force fell by 50,000 Those Not in Labor Force rose by 194,000 Participation Rate steady at 64.0%, nearly matching a low last seen in 1984 Actual number of Employed (by Household Survey) rose by 176,000 Unemployment fell by 226,000 (194,000 of which comes from those dropping out of labor force) Civilian population rose by 143,000 Average workweek for all employees on private nonfarm payrolls was +.1 to 34.4 hours The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged higher 0.1 hour to 33.7 hours in November. Average hourly earnings for all employees in the private sector rose by 4 cents to $23.24 Government employment decreased by 12,000 The private sector has only recovered 36 percent of jobs lost in the peak-to-trough period of January 2008 to February 2010. Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data. After two months of increases, once again the labor force fell. This is not a good sign. Moreover, were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%. December 2011 Jobs Report Please consider the Bureau of Labor Statistics (BLS) December 2011 Employment Report. Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining. Unemployment Rate - Seasonally Adjusted Nonfarm Employment - Payroll Survey - Annual Look - Seasonally Adjusted Notice that actual employment is lower than it was nearly 10 years ago. Nonfarm Employment - Payroll Survey - Monthly Look - Seasonally Adjusted click on chart for sharper image Between January 2008 and February 2010, the U.S. economy lost 8.8 million jobs. In the last year of the weakest recovery on record, 2.5 years old, the economy averaged about 137,000 jobs a month. Statistically, 127,000 jobs a month is enough to keep the unemployment rate flat. Nonfarm Employment - Payroll Survey Monthly Details - Seasonally Adjusted Nonfarm Employment - Payroll Survey Annual Details - Seasonally Adjusted In 2011, the private sector added 1.9 million jobs, while government lost 280,000 jobs. Professional and business services had the largest employment gain (+452,000), followed by education and health services and leisure and hospitality (+427,000 and +268,000, respectively). These three industries contributed 60 percent of all private-sector job gains over the year. To put the net 1,640,000 jobs in perspective, it takes about 1,524,000 jobs to keep the unemployment rate flat. The unemployment rate is lower only because those not in the labor force rose by 1,421,000. Average Weekly Hours Index of Aggregate Weekly Hours Average Hourly Earnings vs. CPI "Success" of QE2 and Operation Twist Over the past year, average hourly earnings of all private-sector employees have increased by 2.1 percent. The Consumer Price Index for All Urban Consumers (CPI-U) was up 3.4 percent from November 2010 to November 2011.   Not only are wages rising slower than the CPI, there is also a concern as to how those wage gains are distributed. BLS Birth-Death Model Black Box The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey. The BLS has moved to quarterly rather than annual adjustments to smooth out the numbers. For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch. The Birth-Death numbers are not seasonally adjusted while the reported headline number is. In the black box the BLS combines the two coming out with a total. The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance. Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way. Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions. Birth Death Model Adjustments For 2011 Birth-Death Notes Do NOT subtract the Birth-Death number from the reported headline number. That is statistically invalid. Historically, it has been exceptionally rare to see negative numbers in birth-death adjustments in months other than January and July. Data for much of this year actually seems reasonable. Household Survey Data click on chart for sharper image In the last year, the civilian population rose by 1,695,000. Yet the labor force only rose by 274,000. Those not in the labor force rose by 1,421,000. Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%. Table A-8 Part Time Status click on chart for sharper image Part-time status shows some improvement vs. a year ago but remains elevated and the data series is choppy. Table A-15 Table A-15 is where one can find a better approximation of what the unemployment rate really is. click on chart for sharper image Distorted Statistics Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers. Digging under the surface, the drop in the unemployment rate is nothing  but a statistical mirage. The official unemployment rate is 8.5%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. While the "official" unemployment rate is an unacceptable 8.6%, U-6 is much higher at 15.6%. Both numbers would be way higher were it not for millions dropping out of the labor force over the past few years. In the last year alone, the civilian population rose by 1,695,000. Yet the labor force only rose by 274,000. Those not in the labor force rose by 1,421,000. That puts a huge damper all all reported unemployment rate statistics. Things are much worse than the reported numbers would have you believe. The entire economic picture is on very thin ice given the clear slowdown in the global economy. Addendum: Please see a follow-up to this post: Employment Trends Since 1955 Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Profit Warnings at Target, Kohl’s, J. C. Penney, American Eagle Posted: 06 Jan 2012 12:24 AM PST It easy enough to increase sales if you discount enough. Profits are another matter as I have warned repeatedly throughout the Christmas season. Nordstrom and Macy's did well but 4th quarter earnings estimates missed guidance in a number of high-profile retailers. The New York Times reports Retail Sales Edged Up in December After Stores Cut Prices Sharply Sales at stores open at least a year at major retail chains rose 3.4 percent compared with December 2010, according to data compiled by Thomson Reuters, just above the 3.3 percent that analysts had expected. But the cost of propping up sales was high. Profits "were a mess" for many retailers, said Paul Lejuez, an analyst at Nomura Equity Research. Consumers were buying less than retailers had expected, and stores had to mark down inventory to get it out the door by Christmas. "Retailers came in with pretty conservative assumptions, and they were hoping to blow them out of the water — they really didn't," said David L. Bassuk, managing director and head of the retail practice at AlixPartners, a consulting firm. Retailers were resorting to promotions like " '50 percent off our whole store,' '60 percent off our whole store,' which is when you can see times are tough," he said. Thursday's Retail Earnings Announcements Target reduced its fourth-quarter earnings expectations to $1.35 to $1.43 a share from prior estimates of $1.43 to $1.53 a share. Kohl's reduced its fourth-quarter earnings expectations to $1.70 to $1.73 per share, from $1.93 to $2.04 a share. J. C. Penney reduced its fourth-quarter earnings expectations to $.65 to $.70 from $1.05 to $1.15 a share. American Eagle reduced its fourth-quarter earnings expectations to $.33 to $.35 per share from $.40 to $.44 cents.  Macy's raised fourth-quarter earnings expectations to $1.55 to $1.60 a share, up from $1.52 to $1.57 a share. Much of the chatter from Black Friday on was more hype than reality. The bottom line - profit - looks anemic at best at many major retail chains. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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