duminică, 16 ianuarie 2011

Seth's Blog : Self-destructive instructions

[You're getting this note because you subscribed to Seth Godin's blog.]

Self-destructive instructions

If you ever have to say 'lighten up' to someone, you've failed twice. The first time, when you misjudged an interaction and the other person reacted in a way you're unhappy with, and the second time, when you issue this instruction, one that is guaranteed to evoke precisely the opposite reaction you're intending.

I'll add "I was joking," to this list, because it's an incredibly lame excuse for a failed interaction.

One more: Raising your voice while you say, "You're just going to have to calm down!" (And I'll add librarians yelling at kids to be quiet...)

It's completely valid to come to the conclusion that someone else can't be a worthy audience, conversation partner or otherwise interact with you. You can quietly say to yourself, "this guy is a stiff, I'm never going to be able to please him." But the minute you throw back instructions designed to 'cure' the other person, I fear you're going to get precisely the opposite of what you were hoping for.

(Generally speaking, the word "oh" is so neutral, it's a helpful go to pause while you wait for things to calm down.)

  • Email to a friend

More Recent Articles

Don't want to get this email anymore? Click the link below to unsubscribe.


Click here to safely unsubscribe now from "Seth's Blog" or change your subscription, view mailing archives or subscribe

Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498

 

sâmbătă, 15 ianuarie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Pimco CEO says "Europe is Kicking the Can, Bondholder Haircut Coming"

Posted: 15 Jan 2011 08:26 PM PST

Pimco co-CEO Mohammed El-Erian says European Bond Investors Must Accept Losses
"The main issue right now is the integrity of the eurozone is getting weaker and weaker as we delay the problem," El-Erian tells CNBC. "They are simply kicking the can down the road."

"Ultimately there will be a haircut to bonds issued by certain governments in the eurozone, and the longer we delay that recognition the bigger the problem and the more disorderly the process will be."

El-Erian believes U.S. municipal bonds are an especially interesting market now.

"We are in the midst of a massive adjustment in the state and local level that we're going to have to undertake," he says.

"The key issue when you invest in municipals is two things: It's not just in the rate risk, it's interest rate and credit risk, and therefore be highly differentiated. You want to be very high up in the credit curve."
In regards to Europe, El-Erian is not saying anything I did not say a year ago. In regards to Munis, he brings up several factors.

1. Rate Risk
2. Default Risk
3. Differentiation

I certainly agree. However, even if one can navigate number 3 (and I expect PIMCO to be able to do just that), you still have rate risk and you have something he did not mention, sentiment.

While sentiment will certainly impact rates, if several major municipalities blowup, or even if people think they might, there could be a massacre in munis across the board.

I see little reason to invest in munis until that happens. In the meantime, default risk is unappreciated in general, even though I disagree with Meredith Whitney who I believe overstates the problem.

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


Streaming Error

Posted: 15 Jan 2011 08:26 PM PST

In reference to Eddie & JoBo Show - WLS 890 - 8:05 PM Saturday - I'm on Discussing Governor Quinn Recall ...

Unfortunately there was a streaming error with the audio on WLS 980. WLS did not point to the live feed but a prior show. I am told this was only the second time it happened.

I may be able to get an MP3 of my segment. If so I will post it. I was on 18 minutes. Time went by very quickly.

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


Eddie & JoBo Show - WLS 890 - 8:05 PM Saturday - I 'm on Discussing Governor Quinn Recall

Posted: 15 Jan 2011 03:47 PM PST

I received an email moments ago from Eddie Volkman at WLS AM 890 Chicago asking me to be on for a live 18-20 minute segment tonight. The discussion will be on Governor Quinn, the tax hikes, how those tax hikes will impact the state of Illinois, and what we can do about it.
Hey Mike...

I'm Eddie Volkman from "The Eddie & JoBo Show" now on WLS-AM, 7-9pm Saturdays. Wondering if we could get you on with us to talk about your Quinn recall. The whole tax thing is obviously a huge topic right now and listeners are fuming. We'll be talking about it in the 7 o'clock hour tonight. Sorry for short notice but I came across your blog and it's quite intriguing! Thanks!

Eddie Volkman
Click here to listen live

Call in 312-591-8900
Or text "WLSAM" to 68683
or tweet to @wlsam890

Tune in, it should be fun.

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


Chinese Bank Lending Spree Continues; $75 Billion New Loans First Week in January Alone; Inflation Gone Amuck

Posted: 15 Jan 2011 11:10 AM PST

China wants to rein in inflation, or so it says. It also wants 10% growth per year as far as the eye can see. It does not want to float the Yuan, and it does not want to hike interest rates. Nor does China want to do anything about credit gone amuck.

In other words, China wants the proverbial "free lunch". Given there is no free lunch, China is overheating. Please consider China bank loans near 500 billion yuan in January
Chinese banks continued their lending frenzy in the beginning of the year, doling out 500 billion yuan ($75.6 billion) in new loans in the first week of January alone, putting fresh pressure on the central bank to tighten policy to put a lid on inflation.

The loan figure includes about 210 billion yuan extended by the "Big Four" state lenders, sources with direct knowledge of the figures told Reuters on Wednesday.

The overall lending figure would roughly equal the new loans extended during all of December. New lending in December reached 480.7 billion yuan, meaning China overshot the government's target of keeping bank loans to 7.5 trillion yuan in 2010.

Banks lent 7.95 trillion yuan ($1.2 trillion) in 2010, overshooting Beijing's target and highlighting the need for more decisive policy tightening. In the past, China used loan quotas to keep a handle on lending. This year, the central bank has pledged to refine that system with regular calibrations of reserve requirements.
Rampant, Understated Inflation

7.5 trillion yuan is about 1.14 trillion US dollars. You are not going to have that kind of credit expansion, while building entirely vacant cities in the process.

China's official inflation is 5%. Unofficially, estimates are 10% as noted in China's Foreign Exchange Reserves Jump by Record $199 Billion; Cost Push Inflation from China? Don't Count On It!

However, that does not count increases in home prices. It is an enormous mistake to ignore property bubbles, as the US found out, and as China, Australia, Canada, and the UK are going to find out.

China's Vacant Cities

In case you missed it, please consider Amazing Satellite Images Of The Ghost Cities Of China on the Business Insider.
"There's city after city full of empty streets and vast government buildings, some in the most inhospitable locations. It is the modern equivalent of building pyramids. With 20 new cities being built every year, we hope to be able to expand our list going forward."
More Vacant China City Stories


China property bubble will overheat until it implodes. In the meantime, regardless of what China reports on the CPI, inflation remains a huge problem. Once again, those looking for inflation can find it in China, not the US, where consumer credit is contracting.

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


Hello Mayor Daley ... About Your Plan to Poach Business from Oregon and Other States: No Business Owners in Their Right Mind Would Move to Illinois

Posted: 15 Jan 2011 12:34 AM PST

Mayor Daley had a plan to persuade businesses to come to Illinois. Unfortunately for Illinois, it was a horrendously executed plan. Mayor Daley forgot to lift a finger in the last election against Governor Quinn.

Now Daley is whining.

This is a piss poor time to be whining about higher taxes. Had Daley made any appropriate remarks regarding tax hikes by Quinn before the election, Illinois would have had a different governor.

About That Plan ...

Oregon Live reports So much for Chicago talk of poaching Oregon business
In the wake of the Measure 66 and 67 tax increases approved by Oregon voters a year ago, Chicago Mayor Richard Daley quickly said he'd be recruiting Oregon businesses to move to his own supposedly more business-friendly city.

Wonder what Daley is saying now that Illinois legislators have approved a stunning 66 percent increase in the state's income tax?

Here's some of the fine print, if you want to more deeply compare the two states: Under the new bill, the Illinois personal income-tax rate - 5 percent - will still be much lower than Oregon's. But Illinois has high sales taxes. In 2008, just as the recession was first hitting, the total state and local tax burden in Illinois $4,346 per capita compared to $3,719 in Oregon, according to the Tax Foundation. Because Oregon had a lower per capita income, however, Illinois residents paid 9.3 percent of their income in state and local taxes and Oregonians paid 9.4 percent.
Blatant Lies By Governor Quinn

The Daily Herald notes that On the campaign trail, Gov. Pat Quinn told voters he'd veto any income tax hike that would raise Illinois' rate over 4 percent.

I believe this is one of the fastest proven lies political history.

Sales Taxes

Illinois has a middle of the road sales tax, at least until you consider various local surtaxes.

Here is a nice table from Wikipedia.



Home Rule

With "Home Rule" Illinois has the top sales tax rate in the nation.

With that, inquiring minds might be wondering about "Home Rule". To help explain, please consider the following snip courtesy of the Illinois Department of Revenue.
Depending upon the location of the sale, the actual sales tax rate may be higher than the fundamental rate because of home rule, non-home rule, water commission, mass transit, park district, and county public safety sales taxes.
Lovely, isn't it. Note that sales taxes may rise because of home rule or non-home rule.

Businesses moving into Illinois just might beware of moving into cities or counties with high "Home Rules".

Which places might that be?

Well Mayor Daley's Cook County of course, but it could be anywhere.

Gasoline Taxes January 2011



Diesel Taxes January 2011



Gasoline and Diesel Charts courtesy of the American Petroleum Institute.

Truckers, Take The South Central Route

As a courtesy to my trucker friends, it appears avoiding fillups in California, Illinois, Indiana, New York, and Pennsylvania is of paramount concern.



My advice to Wisconsin would be to drop Diesel taxes to match Missouri's 41.7 in order to secure the Northern fillup route.

Any trucker going cross country and filling up in Illinois, Indiana, New York, or Pennsylvania is clearly nuts. Truckers probably know this, but state legislatures don't.

Property Taxes

Fiscal insanity goes beyond massive personal income and corporate tax hikes. Cities in Illinois have among the highest property taxes in the nation. I pay over $14,000 a year on a home I think I could sell for $600,000.

Bear in mind about four years ago I challenged the assessment (and won), which reduced my taxes to about $12,500. My taxes are now back up to over $14,000. Does anyone think property valuations have risen in the last four years?

Gubernatorial Bribery, Corruption - Elect, Indict, Repeat

Illinois Issues Online is asking Will democracy, Illinois style, ever change?
Illinois' reputation for corruption is well-documented. Nine men have served as governor in the past 50 years. Two — Democrat Otto Kerner and Republican George Ryan — were convicted of crimes they committed while in office. (Ryan is appealing his conviction.) Democrat Dan Walker also was imprisoned after he left office, but for crimes unconnected to his tenure as governor. And Republican William Stratton was indicted for tax evasion in connection to his use of campaign funds, but he was ultimately acquitted.

As Democratic Gov. Rod Blagojevich begins his second term, federal investigations of his administration's hiring and contract practices continue. His fundraiser and political adviser Antoin "Tony" Rezko has been indicted for an influence-peddling scheme. Though Blagojevich has not been charged with any wrongdoing himself, based on the persistent federal prosecutor's previous record, it's fair to say that could change. It is possible, in other words, that the majority of Illinois governors who served during the past half century could end up being indicted on corruption charges.

That so many Illinoisans at state government's apex have been accused of crime raises the question of whether there is a culture of corruption.
Culture of Corruption

That article is from 2007 and is clearly out of date. Blagojevich was convicted on one of 24 counts so add Blago to the convicted list. He stands retrial on 23 deadlocked charges after a Judge Refuses to Overturn Rod Blagojevich Conviction.

That story is as of October 27, 2010. How Blago escaped conviction on 23 other charges is quite a mystery to me.

The official score is 3 out of the last 10 Illinois governors were convicted of crimes while in office and a 4th convicted after he left. A 5th was charged and acquitted.

Can any other state match that?

About That Corporate Tax Hike

Illinois hiked its corporate tax rate to 7% from the current 4.8%. Several people sent emails stating that 7% did not sound so bad.

However, they failed to consider that Illinois collects from all businesses a 2.5 percent "personal property replacement tax".
As a result of the decision, small businesses will now be paying a tax rate of 7 percent, up from the current 4.8 percent. However, added together with the 2.5 percent personal property replacement tax Illinois mandates, business owners' tax burden will now reach 9.5 percent.

"This will hurt business in the state," Steven Slack, president of Home State Bank, told the Northwest Herald. "I know several manufacturing clients being courted by other states; they could leave and take all those jobs with them."
No Business In Their Right Mind Would Move To Illinois

If you were a business owner would you want to move to Illinois in the face of huge corporate tax hikes, a whopping 67% personal income tax hike, massive property taxes, and a tax prone political liar as governor?

For every incoming business (they will all be trumped up), there will be dozens of corporate downsizings, and several complete exoduses (with little to no fanfare).

Illinois desperately needs jobs. However, a culture of corruption and high taxes is driving them away.

What You Can Do About It

If you are fed up with corruption, vote buying, and massive tax hikes then you need to take a stand.

Campaign To Recall Illinois Governor Pat Quinn Underway

My Campaign To Recall Illinois Governor Pat Quinn Is Underway
I have exciting news this morning. I am launching a campaign to recall Illinois governor Pat Quinn.

This is not a frivolous effort. It is a serious undertaking and one in which I intend to see to the end. It will take hard work and lots of volunteers but we will be successful.

I need volunteers to ...

  • Gather signatures
  • Talk to state legislative representatives to get them on board
  • Provide legal help
  • Design a website
  • Help with advertising

We need to be successful because Governor Quinn has plans that will destroy Illinois.

Will You Stand Up To The Injustice?

There are many tasks to be performed and I will need volunteers from every county to gather signatures. I estimate we need about 520,000 signatures. My goal is to get 700,000.

If you can volunteer, time, web design, advertising, legal help, or any kind of general assistance, I would appreciate it. We need to put a stop to Quinn's proposals that will drive businesses and jobs out of the state and massively raise your taxes as part of the bargain.
Call To Action

I wrote the above call to action post on Sunday, January 9, 2011. Since then I have had over 200 volunteers (up from a hundred a couple days ago). I have 10 web designers, 3 lawyers (up from 1), and numerous business owners volunteer as well.

Work on a website is underway. I have secured the appropriate domain names. One business owner who employs about 100 people graciously volunteered services of his legal department.

This is going to be a long slug, no doubt about it. Yet other than leave the state, there is little else we can do. I do need business owners to contact their legislative representatives and pressure them to sign the petition to Recall Quinn.

There are 118 state representatives and 59 state senators. To get started, all we need are 20 reps (10 each party), and 10 senators (5 each party), before we start the signature gathering process.

Please contact your representatives and get them on board. In the meantime, please email Recall Governor Pat Quinn Today (RecallQuinnToday@gmail.com) and lend your support to the effort to save the state of Illinois from Quinn's fiscal recklessness.

Please state in the email what you can do to help. If you live in Illinois or have friends in Illinois, please email this article to them.

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


Your Weekly Address: "Before We are Democrats or Republicans, We are Americans"

The White House Your Daily Snapshot for
Saturday, Jan. 15,  2011
 

Your Weekly Address: "Before We are Democrats or Republicans, We are Americans"

As Congress returns to work, the President calls on them -- and all of us -- to debate our differences vigorously but to live up to the spirit of common cause we felt following the tragedy in Arizona.

Watch the video.

Weekly Address

Weekly Wrap Up

Tragedy in Arizona: On Saturday, January 8th, 2011, senseless acts of violence committed in Tucson, Arizona claimed innocent lives. At a memorial event, President Obama asked Americans to channel their emotions toward the pursuit of a more perfect union, saying that "If this tragedy prompts reflection and debate -- as it should -- let’s make sure it’s worthy of those we have lost." Watch the video. View the photo gallery. Read an open letter to parents from the First Lady.

MLK Day: Find opportunities in your community to honor Dr. King and mark the 25th anniversary of the holiday by volunteering with a service project near you.

In Numbers: Less than a month after President Obama signs the tax cut compromise, millions of American workers are already seeing the impact show up in their paychecks from the payroll tax cut – here are some numbers to help you understand what that means.

Changes for Cuba and America: The President directs the Secretaries of State, Treasury, and Homeland Security to take a series of steps to continue efforts to reach out to the Cuban people in support of their desire to freely determine their country’s future. Read the announcement.

Honoring Holbrooke: The President joins countless others in honoring legend of American diplomacy Richard Holbrooke. Read the remarks.

West Wing Week: Preview of "Dispatches from Sudan": This week, an historic referendum took place in Sudan and West Wing Week takes you there. Join General Scott Gration, President Obama's Special Envoy to Sudan, for a unique look at the vote that could result in the world's newest nation. Watch the video.

VP Visits Afghanistan: Vice President Biden spends the week in Afghanistan to assess progress toward full independence for Afghanistan, meet with our partners, and commend our troops. Read the post. View the gallery.

Haiti: One Year Later: A statement from the President. A look back on the last year and on toward the future from the highest-ranking Haitian-American official in the Obama Administration.

Get Updates

Sign Up for the Daily Snapshot 

Stay Connected

 

 
 
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 e0nstar1.blog@gmail.com | 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 : The certainty premium

[You're getting this note because you subscribed to Seth Godin's blog.]

The certainty premium

How much would you pay for an envelope that had a 50% chance of containing $10 and a 50% chance of being empty?

Over time and in bulk, probably $4.99. But certainly not more than $5.

Here's where it gets interesting: how much extra would you pay for a plane that was guaranteed to be always on time, or a surgery that was always guaranteed to work? Suddenly, the same math that helped us value the envelope doesn't work so well. That's because we're often willing to pay a significant premium to avoid risk.

"Works every time" is a great promise to make to your boss. And it's the secret to Fedex's original success. Plenty of people send things by Fedex that don't need to get there superfast. They just need to get there for sure.

Doesn't work if you have to slip in the world 'almost' though.

  • Email to a friend

More Recent Articles

Don't want to get this email anymore? Click the link below to unsubscribe.


Click here to safely unsubscribe now from "Seth's Blog" or change your subscription, view mailing archives or subscribe

Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498

 

vineri, 14 ianuarie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Economic Outlook in "Stick Figures" that Anyone Can Understand

Posted: 14 Jan 2011 02:21 PM PST

Jason Leach, Director of Research and Portfolio Manager for Cravens Brothers sent me an interesting link to a book of pages he wrote, done with stick figures, to help explain "The Age of De-Leveraging", the "Botox Economy" and the "Accordion-Shaped Recovery", terms he coined about a year ago.

Page Two - Home Prices Collapse in "The Great Recession"



Page Six - European Sovereign Debt Whack-a-Mole "PIIGS"



Page Eight - Questions the Thesis "China Leads the Recovery"



Those are pages Two, Six, and Eight out of 12. Inquiring minds will want to read the entire "book". It may take a while (20 seconds or so) to load.

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


Junk Bonds and Leveraged Buyouts: Here We Go Again, with "Disturbingly High" Debt Issuance

Posted: 14 Jan 2011 12:31 PM PST

In the mad dash for yield it's a case of "here we go again". No one cares about risk, or valuation. It is doubtful anyone cares about relative values. In fact, it appears as if there is no care at all.

This is part of the reckless "success" Bernanke initiated with Quantitative Easing Part II that he is now bragging about.

Please consider Junk Borrowers Turn Tables With Looser Terms.
MGM Resorts International and CommScope Inc. are leading junk-rated companies selling debt with less protection for investors as high-yield bond offerings soar to more than double last year's weekly pace.

MGM's CityCenter Holdings LLC joint venture issued $600 million of notes that can pay interest in cash or additional debt, the largest such offering in more than a year, according to data compiled by Bloomberg. CommScope sold $1.5 billion of bonds with covenants that permit a "disturbingly high" amount of new debt, research firm Covenant Review LLC said.

"Credits that even a year ago, six months ago, would have had trouble coming, are having no trouble," said Marc Gross, a money manager in New York at RS Investments, which oversees $3 billion in its fixed-income funds.

Sales in the U.S. of junk bonds, rated below Baa3 by Moody's Investors Service and lower than BBB- by Standard & Poor's, rose to $13.3 billion, compared with the $5.41 billion weekly average in 2010, Bloomberg data show. Returns this month of 1.3 percent compare with 0.28 percent on investment-grade company bonds, according to Bank of America Merrill Lynch index data.

"There's a lot of funds going into high-yield and the people who are managing high-yield, they're sort of forced to put their money in something, and the broker-dealers are not their friends," said Adam Cohen, founder of New York-based Covenant Review, which analyzes investor safeguards included in corporate bond offerings.

Ally, a unit of the lender previously known as GMAC Inc., more than doubled the size of its offering of asset-backed securities from $500 million, according to a person familiar with the sale.

The largest top-rated portion, a $750 million slice maturing in 2.99 years, yields 87 basis points more than the benchmark swap rate, said the person, who declined to be identified because terms aren't public.

The bonds are backed by so-called floor-plan loans that car dealers use to buy inventory.

The difference between the yield premium on speculative- grade corporate bonds and investment-grade debt has tightened to 355 basis points and reached as low as 348 basis points on Jan. 5, the narrowest since November 2007, according to Bank of America Merrill Lynch index data.

Companies sold a record $286.7 billion of high-yield bonds last year, when issuance averaged $5.5 billion a week, Bloomberg data show. Investment-grade corporate bond offerings this week totaled $26.3 billion, 61 percent higher than the 2010 average of $16.3 billion.

Polymer Group Inc.'s $560 million of eight-year debt sold this week included a condition that allows the company to call 10 percent of the bonds at 103 cents on the dollar in each of the first four years, according to a person familiar with the transaction.

The offering shows Polymer Group is trying to lock in low interest rates while getting the flexibility to repay debt any time, as it would with a loan, RS Investments' Gross said.

"That is a very onerous feature," Gross said. "It is not a good sign that investors are not fighting back."
Junk is rising and retail investors are chasing it, in spite of "onerous features". This is supposed to work out well?

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