vineri, 19 august 2011

West Wing Week: "Get on the Bus"

The White House Your Daily Snapshot for
Friday, August 19, 2011
 

West Wing Week: "Get on the Bus" 

West Wing Week is your video guide to everything that's happening at 1600 Pennsylvania Ave. This week, The President welcomed the Super Bowl Champion Green Bay Packers to the White House before embarking on a three day Rural Bus Tour across the Midwestern states of Minnesota, Iowa, and Illinois. During his tour, the President heard directly from small business owners, local families and private sector leaders while promoting the need to strengthen the middle class and accelerate hiring in towns across the nation.

Watch the video 



In Case You Missed It

Here are some of the top stories from the White House blog.

VP in Asia Day One: Beijing, China
Vice President Biden's trip to Asia officially began with an elaborate welcome ceremony in the Great Hall of the People

Office Hours 8/18/11 or "The Real Fix is the #DREAM Act": Cecilia Muñoz Answers Your Questions on Twitter
In a session of White House Office Hours, Cecilia Muñoz answers your questions on a new immigration strategy that focuses resources on public safety and national security.

INFOGRAPHIC: Record Judicial Diversity, Record Judicial Delays
American citizens are being denied the fair and timely judicial proceedings they deserve because of the chronic shortage of federal judges on the bench.

Today's Schedule 

All times are Eastern Daylight Time (EDT).

3:00 AM: Vice President Biden meets with Premier Wen Jiabao at the Leadership Compound, then meets with President Hu Jintao at the Great Hall of the People  

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SEOptimise

SEOptimise


Why Automating PPC Accounts Using APIs May Be a Bad Idea

Posted: 18 Aug 2011 06:40 AM PDT

Automating Google Adwords accounts using APIs is a great way to save time and improve efficiency on large and complex accounts. However in my opinion, the success of paid search campaigns lies in understanding the marketing goals of the organisation, having an understanding of the products offered by the organisation, and having an understanding of the target market. This information acts as a guide when researching highly relevant keywords, creating 'quality score friendly' keyword segmentations and generating compelling ad copy that communicates the product offerings clearly and concisely, enticing users to click on an ad. I believe that these tasks are done best through human input as opposed to automated feeds.

Automation is useful if there are over a thousand product offerings and the products offered change dynamically within a twenty four hour period. Large ecommerce websites focusing on a wide range of products (such as Amazon and eBay) have such a large variety of products that it is almost impossible to make changes to their accounts manually. Therefore, XML feeds make perfect business sense in making account level, ad group level and ad level adjustments on a live campaign.

However, businesses that offer less than a thousand products and have a pricing strategy that is fairly fixed throughout the year will benefit more from manual intervention, as there would be greater control over changes made to ad copy and it would also be more customer focused. This alone would be a competitive advantage over advertisers who resort to automated paid search campaigns, as there'd most likely be disparity between the adverts and the users' search query; this would lead to low levels of click through rates, which then lead to higher costs per click due to low quality scores.

For small to medium sized accounts, bulk changes could quite easily be done using Google Adwords Editor. Taking the extra time and effort into making sure every ad and every ad group is customised for the target user will pay more dividends through greater number of quality leads. This is an area that large ecommerce websites miss out on due to large amounts of automation, where the user's keyword does not correspond with the ad copy and the related landing page. This would prove to be counterproductive, as leads generated would be of low quality. Furthermore, you could apply rules in order to automate bid management and use conversion optimiser wherever it is applicable. These can easily be implemented without the need for XML feeds.

Although introducing XML feeds would make account management relatively easier, I strongly believe that managing small to medium sized accounts manually will lead to better quality ads, better quality leads and will result in low overall spend – which will hopefully convert into higher return on investment.

© SEOptimise - Download our free business guide to blogging whitepaper and sign-up for the SEOptimise monthly newsletter. Why Automating PPC Accounts Using APIs May Be a Bad Idea

Related posts:

  1. Improve Your Client Reporting with APIs
  2. How to Use Yahoo Pipes To Track Potential Questions on Yahoo Answers
  3. Google Webmaster Tools: A Beginner’s Guide to Installation

Seth's Blog : Is your anger is killing your art?

Is your anger is killing your art?

It's rare to find a consistently creative or insightful person who is also an angry person.*

They can't occupy the same space, and if your anger moves in, generosity and creativity often move out. It's difficult to use revenge or animus to fuel great work.

Ironically, when you decide to teach someone a lesson they richly deserve, you often end up strangling the very source you were counting on.

(*Angry is not the same as being a jerk. For some reason, there are plenty of creative jerks--I think because they mistakenly believe that being a jerk is a useful way for some people to wrestle with their lizard brains).

 

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joi, 18 august 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Asia Stocks Lower Following Europe, US Bloodbath; Asia Pacific Index Erases All Gains Since January 2010

Posted: 18 Aug 2011 09:52 PM PDT

Amid heightened volatility in both directions with top-to-bottom swings of 8% or more on some days, Asia Pacific shares are only "modestly" lower tonight (Friday Morning in Asia) following a veritable bloodbath in Europe and the US on Thursday.

Europe 2011-08-18 Close



Asia Pacific 2011-08-19 Mid-Session



Charts courtesy of Yahoo!Finance Major World Indices.

Asia Pacific Index Erases All Gains Since January 2010

Bloomberg reports Asian Stocks Set to Erase 2010's Gains as World Economy Concern Deepening

Asian stocks fell, with the regional index revisiting levels from last week's global stock rout, amid signs the world economy is slowing and Europe's debt crisis will damage the banking system. South Korea's Kospi Index was set to drop the most since November 2009.

The MSCI Asia Pacific Index fell 2.4 percent to 120.17 as of 11:23 a.m. in Tokyo, set to erase all its gains since the start of 2010. The gauge is also headed for a fourth straight week of loss. About 20 stocks dropped for each that advanced on the index today. The Kospi Index (KOSPI) sank 4.4 percent, headed for its biggest slump since Nov. 27, 2009.

The MSCI Asia Pacific Index lost 11 percent this year through yesterday, compared with drops of 9.3 percent by the S&P 500 and 18 percent by the Stoxx Europe 600 Index.

Futures on the Standard & Poor's 500 Index slid 0.9 percent today. In New York, the index tumbled 4.5 percent yesterday on concern the global economy is slowing and speculation that European banks lack enough capital. The Stoxx Europe 600 Index plunged 4.8 percent in London yesterday, the biggest drop since March 2009.

"We have a fear-based, emotional-based market right now," Erik Ogard, director of multi-strategy investments at Russell Investments, which oversees $163.4 billion, said in an interview with Susan Li on Bloomberg Television's "First Up." "There are real economic things to be worried about, however it's the degree of the reaction that we think might just be a little overdone."
The Bloomberg article is from Japan, written on the 19th. That will explain the term "yesterday" in the second to last paragraph in the above blockquote.

Note that nearly everyone thinks the reaction is "overdone". They simply do not understand debt-deflation and how little the Fed can do about it.

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


"Lehman-Like" Credit Crunch Hits EU; ECB Will Not Disclose Affected Banks; Euro-Style Anxiety Spreads to U.S.

Posted: 18 Aug 2011 08:16 PM PDT

Signs of a Lehman-like borrowing crunch have hit the EU. Banks are distrustful of lending to each other in overnight operations. Interest rates are low, but not for every bank. Systemic stress reverberates.

Please consider European bank stocks hurt by borrowing crunch
European bank stocks tanked Thursday as fears mounted about their exposure to the region's debt crisis and weakening economy.

The stock prices of Britain's Barclays and France's Societe Generale led the way down, falling 11.5 percent and 12 percent, respectively. Germany's Commerzbank fell 10 percent.

Analysts said the plunge was partly a reaction to evidence that European banks are being forced to pay more for the short-term loans they need to finance day-to-day operations.

Some European banks with heavy exposure to the debts of Greece and other weak countries are relying on loans from the European Central Bank because other private banks are reluctant to do business with them. The ECB said one bank, which it didn't identify, had paid above-market rates to borrow $500 million a day for seven days.

No bank had requested such a loan for nearly six months. Analysts said fears about one bank's troubles are enough to spark concerns about the entire industry.

"These are worrying signs," said Neil MacKinnon, an economist at VTB Capital in London. "You could think of it as a mini-Lehman moment: There is the risk that a major eurozone bank might be a casualty."
Euro-Style Anxiety Spreads to US

The New York Times reports Euro-Style Anxiety Spreads
European banks are continuing to show signs of strain, making investors increasingly skittish about American financial institutions.

Regulators, bank executives and others continued to play down the risks on Thursday, emphasizing that this would not be a repeat of the 2008 financial crisis. In Europe, political leaders have vowed to prevent a Lehman-like collapse of a major bank, while American firms are better insulated from potential shocks than they were three years ago.

But on Thursday, shares of some big Wall Street banks sank to levels nearly as low as that in the months after the downfall of Lehman Brothers. Among investors, anxiety has been intensifying over the soundness of European banks despite repeated efforts to contain the sovereign debt crisis. The latest fears flared up after an unspecified lender tapped an emergency borrowing program set up by the European Central Bank to ensure that firms had ample funds in dollars.

On Wednesday the bank, which officials would not identify, borrowed $500 million, considered a relatively modest sum in global finance. But the move was widely viewed as a sign that Europe's financial problems were deepening, given that it was the first time a European bank had used the dollar pipeline since February.

In Europe, temporary bans on short-selling of financial stocks, imposed last week by regulators in France and several other European countries, provided only a bit of relief. Traders say the measures have caused them to place some negative bets on bank stocks in countries that did not impose such measures, like the United States and Britain.

European banks have amassed vast holdings of government and corporate bonds from Italy and Spain, two countries whose debts have worried investors. Doubts about the stability of these European institutions, in turn, are generating concerns about American banks, which are among their biggest lenders and trading partners. That is prompting investors on both sides of the Atlantic to unload their shares while also ratcheting up bank borrowing costs.

The short-term credit markets, where European banks turn for billions of dollars in financing, have been under serious strain, although nowhere near the levels of three years ago. Most European banks can borrow dollars only overnight or as long as a week; banks elsewhere can take out loans for as long as several months or more.

"A lot of this concern around the European banks is overstated," said Alex Roever, a short-term fixed income analyst at JPMorgan. "We are not looking at another 2009, although investors are obviously being cautious."
Overly Cautious?

The global financial system is bankrupt. There is no way loans that have been made can be paid back. That statement applies to the Eurozone, the US, the UK, China, Australia, Canada, and for that matter nearly everywhere one looks.

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


"Not a Minor Complication"

Posted: 18 Aug 2011 03:25 PM PDT

A recent post by the New York Times got me thinking about "Minor Complications", or rather the inverse. I will comment on the New York Times article shortly. First consider a list of items that are "Not a Minor Complication".

"Not a Minor Complication"



Collateral Requirements of Three Countries "Not a Minor Complication" to Greek Bailout

The New York Times reports Request by Some for Collateral Is New Hurdle for Greek Bailout
Greece's international bailout hit a new obstacle Thursday when three euro zone countries indicated they were likely to seek collateral in exchange for their loan. Finland earlier reached a similar deal with the debt-laden government in Athens.

Though the three countries — Austria, the Netherlands and Slovakia — are small or midsize economies, accounting for little more than 10 percent of the new bailout of 109 billion euros ($156 billion), their intervention presents a headache for policy makers.

"If this spreads as we fear it could, it is not a minor complication," said one European official who spoke on condition of anonymity.

In the deal between Athens and Helsinki, Greece is offering Finland a deposit to back loans, and Finland has said that this cash plus interest would be comparable to its contribution to the rescue.

It is likely that Athens would struggle to find the capital for similar deals with other countries.

But political pressure is growing in creditor countries. In the Netherlands this week, Parliament debated the Dutch contribution to the second Greek rescue. Such debate has made it difficult for governments to explain why Finland is receiving preferential treatment.

The Austrian Finance Ministry said that it had made its position clear before and that its latest comments were in line with what euro zone leaders agreed to at the July 21 meeting. "If there is to be a model for collateral, Austria would also make a claim," a spokesman, Harald Waiglein, said, according to Reuters.
I blasted the Finland deal on Tuesday in Amazingly Absurd Loan "Guarantee" Arrangement Between Finland and Greece

My blast above was fair, given the details as presented, notably the guarantee was "only a fraction of the money that Finland is contributing to the rescue package".

Upfront cash collateral simply reduces the size of the loan, as I stated.

However, if Finland required other non-cash collateral, that changes the story. So does the fact that the Netherlands and Austria now want collateral for loans.

Why shouldn't there be collateral for loans?

The fact that Greece does not have enough collateral does not change the picture. It only means more bailout loans should not be made, and Greece will head for full default, not this alleged "temporary" default swindle the EU is attempting to parade as realistic, hoping to get taxpayers of all the Eurozone nations to bail out Greece instead of boldholders taking bigger haircuts.

This is certainly "Not a Minor Complication" and I commend any European nation that insists on real collateral for otherwise bogus loans.

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


Americans "Can't Get No Satisfaction"; National Sentiment Dips to 11%, Lowest Level Since 2008; Satisfaction with Obama, Congress at Record Lows

Posted: 18 Aug 2011 11:04 AM PDT

The collapse in sentiment of all kinds continues. Concern over jobs and unemployment are at the top of the list of worries.

Gallup report Americans' Satisfaction With National Conditions Dips to 11%
Americans' satisfaction with the way things are going in the United States has fallen back to 11%, the lowest level since December 2008 and just four percentage points above the all-time low recorded in October 2008.



Gallup began measuring Americans' satisfaction with national conditions in 1979. Since then, satisfaction has been lower than the current 11% in only a few measurements in the final months of 2008. The all-time low of 7% came in an Oct. 10-12, 2008, poll, conducted shortly after stock values plummeted following Congress' passage of the TARP legislation in response to the September 2008 financial crisis.

Economic Concerns Paramount in Americans' Minds

In all, 76% of Americans mention some economic issue as the most important problem facing the country, the highest percentage since April 2009.

Low national satisfaction ratings make incumbent politicians vulnerable to defeat, and Presidents Jimmy Carter and George H.W. Bush were defeated for re-election at times when Americans were largely dissatisfied with the state of the nation. Satisfaction ratings tend to be low when the economy is struggling, so economic progress over the next 15 months will be a crucial factor in determining whether Obama is elected to a second term.
Americans Not Satisfied with Obama

Gallup reports Obama's Weekly Job Approval at 40%, Lowest of Administration
President Obama's job approval rating dropped to 40% during the week spanning Aug. 8-14, the lowest weekly average of his administration. During this period, Obama's three-day rolling average also hit a new low of 39% for Aug. 11-13, the first such average below 40% since he took office, though it recovered to 41% for Aug. 12-14.



Although the new lows in Obama's job approval rating represent only a slight drop from his previous low readings, they symbolically underscore the weaker position the president is in as he begins a "listening tour" of the Midwest this week.

Ten incumbent presidents have sought re-election since World War II, and none has won a second term with final pre-election job approval ratings below 48%. The last two presidents who lost their re-election bids -- George H.W. Bush and Jimmy Carter -- had job approval ratings in the 30% range in the fall of the election year. Thus, Obama's challenge is not only to move his rating back above 40%, but also to push it close to or above 50%.
Just 26% Satisfied with Obama's Handling of Economy

Gallup reports New Low of 26% Approve of Obama on the Economy
August 17, 2011
A new low of 26% of Americans approve of President Barack Obama's handling of the economy, down 11 percentage points since Gallup last measured it in mid-May and well below his previous low of 35% in November 2010.




President Obama's approval rating has dwindled in recent weeks to the point that it is barely hugging the 40% line. Three months earlier, it approached or exceeded 50%. History will remember this period for the messy political debate in Washington over the debt ceiling, followed by distress on Wall Street and tragedy in Afghanistan. How much each of these factors is responsible for the overall decline in Obama's approval rating is unclear. But Americans' unhappiness with each of them is reflected in recent declines in Obama's specific job ratings for the economy, the federal budget deficit, and various foreign policy measures, as well as in his markedly low rating for creating jobs.
Satisfaction the Rolling Stones

There are numerous videos of Satisfaction but I like this one even though the video quality is poor. It captures the spirit of the era best.



Link if video does not play: http://www.youtube.com/watch?v=8_VbImuG71M

I took a look at various sentiment measures yesterday, including views from three different people in Sentiment Leads Consumption; Sentiment Four Ways: Chris Puplava, Calculated Risk, Consumer Metrics; Gallup

Congressional Approval 13% - What the Hell does it Take to Get Change?

I discussed the above question Congressional Approval 13%;Theory of Elections and Overcoming Huge Political Bureaucracies; What the Hell Does it take to Get Real Change?

One thing is clear, people are not satisfied with anything.

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


Collapse in Philly Fed Manufacturing Index to -30.7; Treasury Yields at Record Low; Stocks Sink, Gold Soars

Posted: 18 Aug 2011 09:14 AM PDT

The Philadelphia Fed Business Outlook Survey plunged to -30.7 with all indicators in decline.
The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a slightly positive reading of 3.2 in July to -30.7 in August. The index is now at its lowest level since March 2009 (see Chart). The demand for manufactured goods, as measured by the current new orders index, paralleled the decline in the general activity index, falling 27 points. The current shipments index fell 18 points and recorded its first negative reading since September of last year. Suggesting weakening activity, indexes for inventories, unfilled orders, and delivery times were all in negative territory this month.

Firms' responses suggest a deterioration in the labor market compared with July. The current employment index fell 14 points, recording its first negative reading in 12 months. About 18 percent of the firms reported an increase in employment, but 23 percent reported a decrease. The percentage of firms reporting a shorter workweek (28 percent) was greater than the percentage reporting a longer one (14 percent). The workweek index fell 9 points.
Current and Future Activity


click on chart for sharper image

Activity



click on chart for sharper image

As you can see, new orders, shipments, unfilled orders, and inventories are all in contraction. What's not? Prices paid. This represents a price squeeze on manufacturers.

Carnage in Equities



Futures are a bit off their lows but the S&P 500 is down 3.63%, Nasdaq 100 Index, 3.76%. The Dow is down 392 points, and the Nasdaq composite 101 points.

Yield Curve as of 2011-08-18



$IRX = 03-Mo Treasuries - Brown
$FVX = 05-Yr Treasuries - Blue
$TNX = 10-Yr Treasuries Orange
$TYX = 30-Yr Treasuries - Green

All but 30-year treasuries are at or near new all-time lows today.

Meanwhile, a quick check shows gold is +25.6 to $1817, having hit an all-time high of 1828 in the session.

If you thought the US is going to have a miracle second-half recovery you were clearly wrong. The US is likely in recession now.

Moreover, if you think gold is measuring "inflation" you are fooling yourself.

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


Sentiment Leads Consumption; Sentiment Four Ways: Chris Puplava, Calculated Risk, Consumer Metrics; Gallup

Posted: 18 Aug 2011 01:13 AM PDT

Chris Puplava at Financial Sense put together an excellent series of charts last week in Economic Indicators Show Recession As Early As Next Month.

Puplava's prognosis that the "Global Economic Train Is Coming Off the Tracks".

My commentary below pertains to one topic of Puplava's post, namely consumer sentiment. I will add to his commentary with additional charts and commentary of my own and from others.
Sentiment Leads Consumption



Today we were treated to the August reading for the University of Michigan Consumer Sentiment report which showed a reading of 54.9, the third worst reading in history and well below the median estimate of 62.0. This has been the case now for the past month in which economists have been way off the mark in terms of their estimates and reality. This often occurs at major tipping points (both bearish and bullish) as economists often extrapolate past results into the future and thus overshoot at economic peaks and undershoot at economic troughs. The string of overshoots in estimates from the ISM Manufacturing Index to GDP to consumer sentiment indicates we are yet at another economic inflection point in which the economy is rolling over. What is troubling about the Michigan Consumer Sentiment reading is that it often leads turns in consumption trends. First consumer's moods change and then spending patterns follow suit. The sharp drop in consumer sentiment suggests consumers are likely to pullback sharply on spending in the months ahead.
Consumer Metrics

Puplava's call for a consumer spending pullback piqued my interest because Consumer Metrics Institute's Contraction Watch online spending chart suggests something different.

Consumer Metrics tracks online internet sales in the US, where the transactions are conducted in English.

Here is Consumer Metrics latest consumer spending "Contraction Watch" chart.



click on chart for sharper image

The chart is confusing in that there is no blue-red crossover. The red line represents days since the 2008 contraction and the blue line is days since a 2010 contraction. The word "contraction" is in reference to Consumer Metrics' proprietary indicator of online sales.

The 2010 contraction started in January 2010. Interestingly the 2008 contraction did not start until May.

Note that the first time in approximately 560 days, consumer spending as tracked by Consumer Metrics crossed the zero line.

Keeping Perspective

Consumer Metrics reports ....
It is very important to remember that our Daily Growth Index (and its precursor Weighted Composite Index) measure year-over-year changes in consumer demand for on-line discretionary durable goods. In other words, the indexes measure the slope of the demand curve, not the actual demand itself. When the indexes first cross into neutral territory (a reading of 0 for the Daily Growth Index and 100 for the Weighted Composite Index) it only means that the actual "absolute" on-line demand is no longer getting worse -- i.e., it has just reached rock bottom.
Sampling Error Bias

The following paragraph from Consumer Metrics Methodology discloses potential sampling error problems.
We understand that there are biases in our data:
  • We are monitoring only U.S. consumers who are transacting in English on the internet. This causes demographic sampling biases that means that our consumers may be educationally, economically and socially skewed relative to the entire U.S. population and economy.
  • We are tracking only discretionary durable goods ordered, purchased, or financed via the internet. This means that we are not capturing many significant sources of spending: groceries, non-discretionary medical services, some utilities, gasoline, non-reserved entertainment or dining, items ordered by phone or mail, bills paid by conventional check, etc. That being said, we are convinced that the portion of the consumer economy we monitor (major discretionary durable goods) represents the most volatile and stimulating component of the entire economy, and that our internet-only sample of that component is a sufficient proxy for the whole.
  • We use GDP quarterly growth tables since 1947 to gain perspective on how the economy is performing, i.e., how 'normal' it is. We're not very convinced that the over sixty years represented in the tables is truly representative of the U.S. economy over the past twenty years.
The potential biggest flaw is the first bullet point regarding internet sales and how sales are captured.

Consumers Shift to Online Purchases

Please consider the following news story posted a few days ago by Marketing Bit: Online Retail Sales sees 14 Percent Increase
ComScore released its Q2 2011 U.S. retail e-commerce sales estimates, which showed that online retail spending reached $37.5 billion for the quarter, up 14 percent versus year ago. This growth rate represented the seventh consecutive quarter of positive year-over-year growth and third consecutive quarter of double-digit growth rates.

Per comScore Chairman, Gian Fulgoni, these double digit increases infer that

"Consumers are continuing to shift to the online channel, with almost $1 in every $10 of discretionary spending now occurring online. E-commerce's benefits of convenience and lower prices continue to be the drivers of the shift. At the same time, we are constantly reminded of an overall macroeconomic situation that is not indicative of a strong recovery. With economic growth remaining soft, the unemployment rate stubbornly high and financial markets in turmoil, consumers are less optimistic today than they have been in preceding quarters, which raises concerns for the future. We believe the third quarter will be an important indicator of which direction this economy is really headed and what that will mean for consumer spending."

Reasons for Increased Online Spending

  • Cheaper prices
  • No sales taxes
  • Save time
  • Easier to make comparisons
  • Save gasoline and driving costs

Discussion With Rick Davis at Consumer Metrics

I had a discussion with Rick Davis at Consumer Metrics over the concern that rising online sales in general accounts for some of the rise in Consumer Metrics' indicator.

However, Davis replied that Consumer Metrics adjusts for the rising percentage of sales coming from the internet. That alleviates one concern assuming the adjustment is accurate. However, there are other issues.

The discussion revealed that Consumer Metrics tracks online sales by IP address in a per-capita basis. IP addresses will change when someone buys a new computer. Families can share computers. Some heavily used sites, primarily businesses with a fixed IP address and hundreds of employees all shopping online during lunch breaks (if not regular hours), might skew interpretations.

In response to questions about IP Addresses, Rick Davis replied via Email.
1) If consumers consistently share the same computers or IP addresses (a family) we end up with a "profile" of a collective shopper. As long as the shoppers within that profile are the same over time, the fact that we have a "family" profile instead of an "individual" profile is statistically irrelevant.

However consumers shopping at work can represent an out-sized family, and for some large corporations a single IP address can end up representing thousands of workers in dozens of locations. Not to mention publicly shared IP addresses for hotels or coffee shops. For that reason (and several others) we toss out the 10% of the IP addresses with the heaviest traffic.

2) The second problem that you listed could end up improving our data. In fact, occasionally the changing IP addresses assigned by the broadband carriers is the limiting factor in the span of time that we can do our "same shopper metrics," and one of the major reasons we start out with year-over-year data. Longer term use of unchanging IP addresses would be a major help.
Consumer Metrics discards the top 10% of IP addresses. Is that valid? I do not know. Is per-capita capture the best way of looking at things? I do not know. Are Consumer Metrics' adjustment factors including demographics correct? Again, I do not know.

There are a lot of variables and adjustments in play and maybe they cancel each other out or maybe they don't.

Absolute Demand Index

Let's look at Consumer Metrics data another way.



That chart conveys a completely different impression than the first chart.

This is why in reference to the first chart Davis cautioned "The indexes measure the slope of the demand curve, not the actual demand itself."

Event Driven Declines

Calculated Risk discusses Event Driven Declines in Consumer Sentiment
On Friday, Reuters and the University of Michigan released the preliminary consumer sentiment index for August. This showed a sharp decline in sentiment to 54.9, the lowest level in 30 years (see graph below).

My reaction was the decline in sentiment was related to the heavy coverage of the debt ceiling debate, and not due to the usual suspects: gasoline prices or a weakening labor market. Of course consumer sentiment was already low because of high gasoline prices and a weak labor market, but gasoline prices are now falling and initial weekly unemployment claims have declined recently (the key for sentiment is that neither appears to be getting worse rapidly).

I looked at some of the previous spikes down in sentiment due to fairly short term events: 1) the 1987 market crash, 2) the Gulf War, 3) 9/11, 4) the Iraq Invasion, and 5) Hurricane Katrina. These events are apparent on the following graph (along with plenty of noise):

My feeling is the debt ceiling decline - assuming the decline was due to the insanity in D.C. - is most similar to the 1987 stock market crash (that scared everyone, but had little impact on the economy) and to Hurricane Katrina (although Katrina led to higher oil prices and a direct impact on consumption in several gulf states).

Event Driven Declines in Consumer Sentiment
Event Date Bounce BackImpact on ConsumptionOther Factors
1987 Market CrashOct-872 MonthsNoneNone
Gulf WarAug-906 MonthsPCE declinedRecession, Oil Prices Doubled
9/11Sep-014 monthsPCE declined 3 out of 4 monthsRecession
Iraq InvasionMar-032 MonthsNoneOil Prices increased 10%+
Hurricane KatrinaAug-053 MonthsPCE declined 2 monthsOil Prices increased 10%+
Debt CeilingAug-11 --- ---European Crisis, Weak Recovery


If I'm correct, then sentiment should bounce back fairly quickly - but only to an already low level. And the impact on consumption should be minimal. Of course sentiment could have declined because of other factors (weak labor market, European financial crisis, etc), and then sentiment will probably not bounce back quickly.
So, which interpretation is correct?

It is possible they all are or none of them are. I am happy they all publish their ideas for free, for everyone to review.

Can they all be valid? Sure. Pulpava can be correct about a sharp pullback in spending even if consumer sentiment snaps back a bit from extremes. Consumer Metrics data can change at any time but the Absolute Demand chart looks pathetic now. Durable goods (notably appliances may simply be skirting along the bottom).

In terms of effect on the economy, a pickup in new home sales is far more important than existing home sales. Davis does track housing but cannot distinguish between existing homes and new homes.

Gallup

Sentiment-wise I note a deterioration in Congressional approval ratings to a record low of 13% and a new all-time low approval rating of Obama at 26%.

Please see Congressional Approval 13%;Theory of Elections and Overcoming Huge Political Bureaucracies; What the Hell Does it take to Get Real Change? for my thoughts on Congressional Approval Ratings.

Yesterday, Gallup came out with a new poll that shows 26% Approve of Obama on the Economy.

These are post-debt-ceiling polls. The debt-ceiling may have been increased, but on the political side, no one seems any happier about it.

Conclusion

Given the weak data everywhere I look, coupled with increasingly sour sentiment on the economy and political leaders, it appears the US is headed for recession if not in one. Thus, I am inclined to agree with Puplava that the "Global Economic Train Is Coming Off the Tracks" regardless of near-term consumer spending patterns or online sales.

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