luni, 2 ianuarie 2012

Search Industry Surprises of 2011

Posted: 01 Jan 2012 01:30 PM PST

It’s the 1^st of January 2012. You've been inundated with well-wishing SMS messages from numbers you don't have saved. You got up late and have only just showered. More than likely, you’re unbearably hungover. Like many others you have just begrudgingly thought about remedying the sour taste in your mouth...

worked out how much you have consumed over the last few days...

before hastily working out how you can fix the consequences...

and wondered how to get rid of the faded, malting shrub which has engulfed your living room.

Although quaint and mildly amusing, the seasonal nature of these search trends was easily predicted. The same is not true for much of 2011, which turned out to be a year filled with of change, uncertainty and amazement. Below is a lighthearted rundown of 10 of the most surprising search industry happenings of last year.

Tales of the Unexpected

1. We're actually using a social network created by Google

Google+ finishes the year with a user base claimed to be around the 62 million mark, indicating that this time, they may have just got it right.

Through comprehensive Integration with existing Google profiles and aggressive marketing across the main Google platform, G+ appears to have hit the ground running, despite uncertainty about where it will fit into our current framework of social sharing and networking in the long term.

While 2010 saw the announcement, launch and immediate critical dismissal of the ill-fated Google Buzz, Google+ spent most of 2011 being taunted, lauded and speculatively compared with Facebook in varying degrees of favourable and unfavourable comment. It seemed as if the world, uncontent with continuously arguing over the merits of differing smartphone operating systems, wanted nothing more than to see two digital networking platforms wage an all-out bloody battle against each other -- like some sort of contemporary Tron that wasn't as terrible as Tron Legacy.

As it turns out, G+ ends the year in an uncertain, but interesting territory; occupying a space somewhere between the open, public broadcast realm of Twitter and the restricted, personal networking of Facebook.

Negatively....Google+'s openness, its complex encircling system and the ability to encircle people without a G+ account, means it lacks the feelings of control and privacy valued in Facebook while offering fairly disparate and confusing methods of locating individuals you may wish to connect with. Going forward, we may find that actually, the vast majority of people don't see a great deal of value in the Circles system - finding fragmented and factional communication a level of complexity above their requirements.

Positively...Google+ pages for businesses and public figures could turn out to be incredibly valuable, as writers vie for rel="author" attribution and companies compete for ever expanding rich snippet opportunities. The +1 sharing system could herald the marriage of search and social, especially if social sharing data in SERPs begins to dramatically alter CTR. Google+ hangouts offer a beautifully designed feature which should really have been available on Facebook and the Circles system has merit for informal interaction across real-life companies and organisations. In the end, it may be that the smaller elements of Google+ become its ultimate virtue -- succeeding to unite presences across the web; acting as a résumé for an individual's personal and professional web activity.

2. MC Hammer announced the launch of a search Engine

Of all the high profile entrepreneurs one could have foreseen staking interest and venture capital in a search start-up - low down on the list was early 90's rapper and reality TV star - MC Hammer. Wiredoo, currently in pre-beta is planned to be a deep search engine - offering uses related information about their search query - as well as results. In 2012, we should see Wiredoo beta launched alongside Vanilla Ice's new social network - Stop, Collaborate & Listen.

3. Google crept in Flight Search and Hotel Search

In another blow to small-time affiliates, Google sneakily crept in their own flight and hotel information, allowing users to compare prices, dates and quotes without having to leave SERPs.

While worrying many SEOs, with the view that Google is moving into a place of monopolistic power with regards to consumer choice; the feature was generally welcomed by users who found it helpful, accurate and valuable. In 2012, we may see Google making the foray into more temporal searches, such as train times, museum opening hours and TV listings. Google Shopping will probably be given a further revamp in 2012.

4. Adobe abandoned development on Flash Player for Mobile Devices

Adobe realised that Flash was unlikely to stand strong in the future; with the expanding war on site-speed, lack of iOS compatibility and YouTube shift towards HTML5 amongst a multitude of factors. Seeing the writing on the wall, Adobe made the brave move to lose some staff and shift their focus towards HTML5 and AIR development, in order to maintain relevancy in an increasingly mobile internet space. Adobe Edge, HTML5 & CSS3 content creation software has been released in preview mode.

In 2012, we'll now see an enormous collective push towards providing exciting, search-engine friendly HTML5 & CSS3 content - with all major parties pulling in broadly similar directions. Now is the time to revamp any legacy Flash content and get on-board the HTML5 train.

5. Microsoft fixed Internet Explorer (sort of)

The haunting presences of archaic IE versions were offered an exorcism in 2011, after Microsoft announced that it would bring auto-update to IE. Starting in Brazil and Australia early this year, IE updates will be included within the wider Windows Update system. Those with auto-update on will be automatically upgraded to IE9. Assuming success in Brazil and Aus, the updates will likely roll out progressively to the rest of the world, allowing us to finally get really creative with all that nice HMTL5 & CSS3 business without worrying too much about old browser compatibility. On the downside, Internet Explorer will probably still be rubbish throughout 2012.

When this auto-update system comes into full force, we can expect complaints from thousands of IT and software companies who have made a good living out of offering pop-up blockers and Internet security systems. The United Kingdom Civil Service will also likely make some fuss as in a feat of unprecedented irony, they have so far refused to allow staff to use anything other than IE6 because of "security concerns".

6. Anonymous took down Visa.

Everyone's favourite V for Vendetta fans made a quite astonishing display of their capabilities in 2011, as they attacked both Mastercard and Visa under what was termed "Operation Payback" - a campaign to target firms the organisations viewed as being against Wiki-leaks. Who knows what we could see from this group in 2012....

7. Apple's voice search was xenophobic

Although pundits were expecting voice integration with the iPhone following Apple's purchase of Siri back in 2010, few expected it to make the huge leap above Google voice search into passive aggressive comments and sarcastic humour. Seemingly unable to effectively decipher the majority of non-north American accents, Siri patronisingly asks most Scottish people to repeat their request and currently refuses to give local search data outside of the US. In 2012, we might see a tempering of Siri's nationalistic bias, with yelp powered local search data offered in Europe and around the world. We'll also likely see Android produce a similar functionality for their handsets - perhaps with a more liberal, multicultural vibe.

8. Exact match domains became more powerful

Despite what i think will be a general consensus that the quality of Google SERPs improved dramatically over the past year, exact match domain names seemed to be ranking better and appearing in greater number, even for extremely competitive keywords.

This was, of course, extremely frustrating for those of us who hold a romantic vision of a world where spammy tactics are redundant and SEOs, clad entirely in white, run around meadows in harmony with Google; gaily laughing at the fools from paid-seo-friendly-links.com.

While we can assume and hope that this problem will eventually get fixed, we can take solace in the introduction of rich snippets and schema.org which also happened this past year - giving genuinely good sites another way to prove their worth in the SERPs.

9. Google stopped providing keyword referral data for logged in users

To the sounds of justified indignation and uproar from the SEO community, Google announced they would be blocking keyword referral information in Google Analytics for logged in users.

Will this affect the day-to-day SEO? I'm not sure. But we'll have to sit tight in 2012 in case any other nasty surprises come our way.

10. Digg fell to insignificancy while Reddit went exponential

Russ Jones spoke about the Fall of Digg and the rise of Reddit at his 2011 Linklove presentation, but few could have predicted how right on the money he was. As we move into 2012, Google Trends shows Reddit on an almost exponential rise while Digg trickles out to nothing.

and It's good news for SEOmoz, whose strong performance in 2011 suggests that they too may overtake Digg in 2012.

A happy and prosperous new year to you all!

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Seth's Blog : On creating a hassle

On creating a hassle

To quote Merlin Mann, "You don't let the guy with the broom control how many elephants are in the parade."

Harsh to say, but the fact is that great storytellers and artists and ruckus makers manage to insulate themselves from the people they're going to hassle. And the job of those that are being hassled by the commotion is to be hassled by the commotion. No commotion, no job.

• Email to a friend •

duminică, 1 ianuarie 2012

Mish's Global Economic Trend Analysis

Promises Go Out the Window as Spain Undertakes Huge Tax Increase Coupled With Biggest Budget Cut in History; Depression in Spain will Worsen

Posted: 01 Jan 2012 01:53 PM PST

Courtesy of Google Translate, please consider Rajoy approves the biggest cut in history and a large tax increase

Everyone knew it. Above all, Mariano Rajoy , who had already pointed to the environment for months that the deficit would be 8%. Not counted in public, but privately the PP did not talk about something else. And yet, throughout the campaign, and the investiture debate, said the PP government would not raise taxes. But at the moment of truth, the vice president, Soraya Saenz de Santamaria , and Rajoy, who avoided appearing, announced the second largest tax increase in recent history of Spain. And the biggest cut in public spending of democracy in one fell swoop: 8,900 million euros.

And that, he said, is only "the beginning of the beginning." The vice president announced that the estimated deficit will go to 8% , two points above the 6% expected, mainly because of the autonomous communities. She and the finance minister, Cristobal Montoro , dropped the previous government the responsibility for not having told what the situation was real to them or the Spanish.

This new deficit figure implies that the total cut to achieve the 4.4% in 2012, will be more than 36,000 million. It was the figure that ran for months in the PP-and well-published, but Rajoy made the debate with the official inauguration: 16,500 million. Before happened in Portugal, where the Conservatives won the election promising not to raise taxes and then did the opposite. Now comes Spain.

Rajoy promised until the last moment, even in the investiture debate , it would not raise taxes. "I will keep my election commitments," he repeated. "The greatest effort can not lie with the citizens, has to be from the Administrations" he said at the inauguration when asked if he would raise taxes.

Politically, the package is very measured to launch a very clear message: the cuts are huge, brutal, affect everyone and no doubt deepen the recession even Guindos ruled out reaching a fall of 2% of GDP, but to change the tax increases are progressive and are concentrated in high incomes.It has sought to tap equity without VAT, a tax is not progressive.

While the top rate of income tax in the new section to be created from 300,000 euros, up seven points at once, something unheard of, and will arrive in some autonomous-advancers his leg while the PSOE-ruled up to 55 %, a level high even by European standards. The Government also tried to point out that higher capital income is a six-point rise. And the rise in property tax is also designed especially for those with more expensive properties.

They are so strong that increases Guindos Montoro and insisted on trying to limit their impact: "They are temporary, are valid only in 2012 and 2013," he repeated.

Depression in Spain will Worsen

With those tax hikes and budget cuts, Spain is just back to where it claimed (lied) to be a couple months ago.

In theory these cuts will put Spain on target. In practice they won't. Unemployment rate is already 22.8% and it will rise. Spending will plunge and so will estimated revenues from VAT and other taxes. Expect more business bankruptcies as well, and those bankruptcies will impact the solvency of banks. In short, these moves will backfire and the depression in Spain will worsen.

Raising taxes at the onset of a depression or in a severe recession is one sure-fire way to make things worse.

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

sâmbătă, 31 decembrie 2011

Mish's Global Economic Trend Analysis

17 States Still Project Budget Deficits (It Will Get Much Worse); Moving Targets and the Slowing Global Economy

Posted: 31 Dec 2011 12:19 PM PST

State economies have partially recovered from the depths of 2009 and early 2010, but 17 states still project deficits. Moreover, there are no rainy day funds or untapped revenue sources, and some "temporary" tax hikes are set to expire. California is $13 billion in the hole but that is a huge improvement compared to the $40 billion hole previously.

Yahoo!Finance reports State revenue rises, but not enough to offset cuts

Twenty-nine states are spending less from their general funds today than they did before the recession, according to a recent joint survey from the National Governors Association and the National Association of State Budget Officers.

More than 30 states have raised taxes since the recession began, but some of those increases were temporary and are expiring soon, as in Arizona. With the economy slowly reviving and unemployment rates dipping, many governors and lawmakers say they don't want to jeopardize the recovery by raising taxes again.

But tax revenue is not expected to grow enough to make up for the impact of four years of dismal economic times. Rainy-day funds, internal transfers and other one-time sources have largely been tapped, so governors and lawmakers must look for new places to cut spending.

Changes to public employee retirement benefits and sweeping reforms to health care programs such as Medicaid are among the most likely targets.

At least 17 states project budget gaps for the next fiscal year, while a handful need to balance budgets in the remaining six months of the current budget year. The revenue of all 50 states combined remains $21 billion below 2008 levels, according to the National Governors Association-NASBO report.

Budget gaps in states projecting shortfalls in the 2012-13 fiscal year are estimated to total $40 billion. By comparison, California alone closed a deficit of $42 billion in 2009, during the worst of recession.

Democratic Gov. Jerry Brown and state lawmakers have fewer options to close the $13 billion shortfall that is projected over the next 18 months.

In December, Brown ordered $1 billion in midyear spending reductions to public schools, universities and social services because tax revenue did not meet projections. The state has given school districts the option of slicing another seven days from the current school year, now 175 days long. That already is five days shorter than before the recession.

Low-income seniors and the disabled will get less in-home care when the reductions start in January. School advocates warn that an estimated 1 million students will have trouble getting to class with a drop in home-to-school transportation funding.

"The cut to transportation is absolutely devastating," said Steve Henderson, a lobbyist for the California School Employees Association. "What that means is a lot of low-income and rural kids will not have the ability to get to school."

Brown has proposed a 2012 ballot initiative to raise $7 billion annually through 2016 by boosting income taxes on individuals making $250,000 or more a year and increasing the state sales tax by a half-cent. He also has submitted a plan to the Legislature to revamp public employee pensions.

Washington state is considering similar cuts to cope with its shortfall, including shortening its school year, eliminating medical programs for 55,000 low-income residents and letting some low- and moderate-risk offenders out of prison early.

Missouri is reducing funding for elementary and secondary education to close a mid-year budget deficit tied to tornado recovery. North Carolina Gov. Beverly Perdue, a Democrat, is warning of thousands of teacher layoffs next fall because federal aid to local school districts is running out.

Moving Targets and the Slowing Global Economy

Things look better than the depths of the recession, but there are two major problems

Moving Targets
Slowing Global Economy

Unlike 2011, the US will not be immune from slowing global economy, especially in the Eurozone and China. Europe will enter a massive recession and there will be spillover effects. I expect an outright recession in the US, but more certainly a profit recession.

In turn, this will mean states will face moving targets and revenues will not meet expectations, just as is happening in Europe right now.

Worse yet, there are no rainy day funds anywhere, and many feel states have already cut services to the bone. This time around, don't expect much help from Congress. It's simply not coming.

Finally, with the stock market flat in 2011, it's safe to assume state pension plans are deeper in the hole than a year ago. Most pension plan assumptions have expectations of 8% or 8.5% growth. It did not happen in 2011, and I expect 2012 to be much worse.

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

Correction: Weekly Address: Working Together in the New Year

Your Daily Snapshot for
Saturday, December 31, 2011

Correction: Weekly Address: Working Together in the New Year

President Obama tells the American people that, by joining together, we can move past the tough debates and help to create jobs and grow the economy in the new year.

Watch the video:

President Barack Obama tapes the weekly address in Kailua, Hawaii, Dec. 29, 2011. (Official White House Photo by Pete Souza)

Must-See White House Videos of 2011

All week, we've been sharing some highlights from 2011. Now it's time for another special list.

After much debate, the interns in the White House Office of Digital Strategy have decided on their 10 must-see videos of 2011. These funny, memorable, inspirational—and even quirky—videos highlight the best behind-the-scenes moments at the White House and feature sensational musical performances, holiday preparations, civil rights leaders, impressive young Americans, and more.

Take a closer look inside the White House and see the behind-the-scenes footage that you don’t want to miss.

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Weekly Address: Working Together in the New Year

Your Daily Snapshot for
Saturday, December 31, 2011

Weekly Address: Working Together in the New Year

President Obama tells the American people that, by joining together, we can move past the tough debates and help to create jobs and grow the economy in the new year.

Watch the video:

President Barack Obama tapes the weekly address in Kailua, Hawaii, Dec. 29, 2011. (Official White House Photo by Pete Souza)

Must-See White House Videos of 2011

All week, we've been sharing some highlights from 2011. Now it's time for another special list.

Take a closer look inside the White House and see the behind-the-scenes footage that you don’t want to miss.

Get Updates

Stay Connected

vineri, 30 decembrie 2011

Mish's Global Economic Trend Analysis

Spain's Budget Minister says "Serious Budget Shortfalls in All 17 Autonomous Regions"; Primer Minister Announces $19.3 Billion Package of Tax Hikes; Cockroaches and the Theory of the Unexpected
Additional 2012 Predictions: Trade Wars, US Election, Precious Metals, Energy
Explaining Italian Christmas Season Sales (It's Far Worse Than Previously Reported); How Various Austerity Measures Will Affect Spending in 2012; Emails from Italian Readers; Massive European Recession On the Way
French Unemployment Hits 12-Year High (It's Going to Get Much Worse); Sarkozy Outlines Jobs Plan (Mathematically It Can't Work); Olli Rehn to Give Keynote Speech at Eurobond Seminar

Spain's Budget Minister says "Serious Budget Shortfalls in All 17 Autonomous Regions"; Primer Minister Announces $19.3 Billion Package of Tax Hikes; Cockroaches and the Theory of the Unexpected

Posted: 30 Dec 2011 11:16 PM PST

Spain's prime minister, Mariano Rajoy, has finally admitted three things I have been saying for a long time

Spain's regions were in deep fiscal trouble if not bankrupt
Spain could not possibly hit its deficit targets for 2012
It is mathematically impossible for Spain to meet deficit goals without raising taxes, no matter how much he insisted otherwise.

The truth (at least partial truth) is out today with an announcement from Rajoy regarding a major tax hike, and an announcement from the budget minister regarding "serious budget shortfalls in its 17 autonomous regions, which have spent recklessly in the past decade."

The budget deficit target is 6%, but the Prime Minister says it will "unexpectedly" be 8% so further austerity measures will be needed.

The New York Times reports Spending by Regions Makes Spain's Fiscal Picture Worse

Facing a wider then expected budget deficit, Spain's new government announced a $19.3 billion package of tax hikes and spending cuts Friday and admitted the picture was likely even worse than it appeared because of overspending by the country's autonomous regions.

The new budget minister, Cristóbal Montoro, made clear Friday: serious budget shortfalls in its 17 autonomous regions, which have spent recklessly in the past decade.

The Bank of Spain announced this month that regional debt had surged 22 percent, to $176 billion in September from $144 billion the year before. And some experts say that there remain tens of billions of dollars in "hidden" regional debt yet to be discovered.

That "hidden debt," most of it in unpaid bills, is not included in Spain's total national indebtedness of $915 billion. That could easily amount to $25 billion to $40 billion more, experts say.

Hidden Debt and Regional Problems

I have talked about hidden debt, hidden losses, hidden deficits, and various regional problems many times. Here is a sampling:

Cockroaches and the Theory of the Unexpected

Mariano Rajoy says this news is "unexpected". It cannot possibly be. I have been talking about these problems for many months. The admission by Rajoy simply means the problem is so bad that Spain can no longer hide all of the cockroaches.

The cockroach theory says that when you see one cockroach there are at least a hundred more. In this case, we see dozens of cockroaches openly scurrying about.

I suggest the problems are still far bigger than reported and the economic situation will get much worse.

Problems to Get Much Worse

Major tax hikes in the midst of a serious recession, with unemployment rate at 22.8% (and rising) makes no economic sense. Yet that is exactly the medicine prescribed by the EMU and agreed to by Rajoy.

Spain will find it impossible to meet its deficit target even after these hikes because of the resultant drop in economic activity.

Italy, Portugal, and Greece are in the same boat. And with all these slowdowns, precisely who is Germany going to export its products to?

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

Additional 2012 Predictions: Trade Wars, US Election, Precious Metals, Energy

Posted: 30 Dec 2011 03:00 PM PST

I inadvertently left off an item regarding trade wars that I intended to mention in Mish 2012 Predictions; 2011 Year in Review with Max Keiser. I also have some commentary on the US election, precious metals, and energy.

Trade Wars

Expect Global Trade Wars: Look for tit-for-tat trade wars to heat up in 2012 as noted previously in China to Impose Anti-Dumping Duties on GM; "Fair Trade" Idea is Self-Serving Scam; Proposal to Stop "Free Sunlight" Gains Support From Mitt Romney. Should Mitt Romney win the election, expect global trade to collapse in 2013. Trade wars will not be good for equity prices.

US Election

US Political Roadmap: If President Obama dumps Joe Biden for Hillary Clinton as his vice presidential candidate as Robert Reich suggests in My Political Prediction for 2012: It's Obama-Clinton, Obama will win re-election unless the Republican candidate is specifically Ron Paul. Clearly this is not an endorsement of Obama, it is a prediction. Some mistook my 2008 prediction for Obama as an endorsement. It wasn't. I wrote in Ron Paul in 2008 and will do so again unless he is the nominee. If Ron Paul is the Republican nominee I think Paul would draw enough crossover votes from independents and Democrats who are sick of war and big government to win. If it's Obama-Biden vs. Newt Gingrich or Mitt Romney then it's too close to call.

Energy

Oil is a wildcard. My prediction is cooler heads prevail. However, the election is 11 months away and that is a lot of time for someone to get carried away. The odds the US initiates an attack on Iran under Ron Paul are virtually zero. Unfortunately the same cannot be said for any of the other major candidates. Should the US or Israel attack Iran (I do not believe the US will), then the price of crude will quickly skyrocket by $50 or more. Such an oil shock would immediately send the entire global economy into a severe recession.

Precious Metals

Precious Metals Roadmap: What follows is more of an approach than a prediction. Gold remains a much safer play than silver, something I have said for years. Technically silver is flirting with a breakdown of major support at $27. If that low does not hold, a decline to the low-to-mid $20's is likely (something I said earlier this year when silver was near $50). I have no target for gold. The longer the US holds off quantitative easing and the ECB lets the sovereign debt crisis simmer without action, the bigger the potential drop in precious metals. Moreover, silver is likely to take a bigger hit than gold (percentage-wise) in a recession or global slowdown because silver is an industrial commodity and Chinese demand for industrial commodities is poised to plunge. Both gold and silver are more likely to be weaker earlier in the year as opposed to the second half given the Bernanke Fed does not look to launch QE3 any time soon. If the stock market and energy prices plunge in the first half of 2012, Bernanke will be more inclined to launch another QE program and that would be beneficial to precious metals.

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

Explaining Italian Christmas Season Sales (It's Far Worse Than Previously Reported); How Various Austerity Measures Will Affect Spending in 2012; Emails from Italian Readers; Massive European Recession On the Way

Posted: 30 Dec 2011 09:50 AM PST

In response to Italians Cut Spending in Worst Christmas in 10 Years; Harsh Times Ahead for All Europe (an article translated from Spanish that had me puzzled about a number of things even though I could tell spending fell dramatically), reader Andrea offers a very nice explanation of just how bad things are in Italy.

Hello Mish,

I can help your readers better understand the reported "spending cuts in Italy".

Coldiretti is the farmers lobby and they claim that for Christmas day dinner and lunch they spent 2.3 billion Euros, 18% less than last year and the lowest figure since 2001: Christmas day dinner and lunch (and generally speaking food) is typically a strong tradition that Italians wants to keep as much abundant and tasty as possible even through the worst times, this is why is such an important figure.

The other figure you mention ("The consumer group estimates "as much as 40 percent") is related to something completely different and it is an estimate. Just after the Christmas period (from the first days of January) in Italy and in Europe in general you have a "discounted sales", where retailers sell items at a discounted price to empty their stocks and of the items unsold during the normal season.

Typically this is a consistent part of the sales of the year and people used to rush in the shops since the very first hours of the first days to get the best bargains.

Codacons (one of the biggest consumer associations) estimates that the "discounted sales" this year will be 30%-40% less than last year. Federconsumatori (another consumer association) instead estimates a reduction of 19/20%, which is probably more close to reality (people have probably waited this season to buy something not urgent). If this happens, it will certainly be a huge sign that recession is beating hard.

Regarding total spending during the holiday season, it is quite hard to find a comparison with the last year. The typical comparison reported by media is between the forecast of another consumer association (Federconsumatori) and the actual results: Federconsumatori forecast 4.4 billion and instead the total was 4 billion, so 10% less than forecast.

However, looking in the Federconsumatori Website I found the final result for last year: roughly 5 billion. Therefore, Italy had a 20% decline through Christmas, not the 9% cited in the link you referenced. That 9% drop was based on estimates that had already factored in some of the decline.

This was a massive spending reduction for a season that makes a big part of the revenues of the year. Please note that in Italy employees get the so-called "tredicesima", a thirteenth monthly salary just before the Christmas period, and this is cash that typically helped to lift sales during this period.

By the way, on Federconsumatori website you can find a lot of statistics about spending, prices and so on, unfortunately in Italian.

The most hit seem to be clothes and shoes sectors, which are by the way typical sectors that instead have a lot of sales during the "discount season".

Actually I have been in Italy a few days around Christmas and generally speaking the atmosphere is quite gloom: all the time on the media the main topic is austerity, how much it will affect the spending power, frugal Christmas and so on.

The tax hikes are quite massive : apart the tax on house ownership (which was canceled by Berlusconi government 3 years ago and so is just a comeback), there will be tax increase on revenues applied by each Italian region, there has been increase between 5 and 10% of fuel (petrol, diesel, propane and methane).

Federconsumatori estimates that the sum of the all the austerity budget laws passed this year (Berlusconi + Monti) will reduce the spending power of a typical family of 7.6%.

Best regards,

Andrea

Email from an Expatriate Living in Italy

Here is a second email from a reader. This one is from Mikkel, an expatriate who now lives in Italy.

Hi Mish
I am a expat living in Italy for the last 6 years.

Italy is a wonderful, but strange country. In a politically incorrect and stereotypical analysis of Italy's problems, the North produces, the South lives off the wealth created by the North, and the omnipotent elected assembly (where you do not vote for the candidate, but the party), allows the main politicians like Berlusconi to stay in office nearly forever.

Fortunately, Italy is a country of savers. However, huge fiscal pressure have forced over 60% the Italians to spend less. A liter of gas costs now 1.70 euros (over half is in taxes). That amounts to $8.35/gallon.

Assuming one has a job (official unemployment rate is 8.5%), the average salary is 1200 euro net/month or less, but you still need to pay 21% IVA on all goods, car insurance, gas + taxes, utilities, property and car taxes, etc. Gross salaries are on the order of 2500 euros/month. How much money do people have left to save and invest for the future?

It will be interesting to see what happens.
Thanks
Mikkel

Massive European Recession On the Way

As I have said numerous times, European countries are in dire need of work rule changes, less government spending, less bureaucracy, and fewer taxes. Unfortunately, bureaucrats have responded with increased taxes.

The recession in Europe, which has already started, will be massive.

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

French Unemployment Hits 12-Year High (It's Going to Get Much Worse); Sarkozy Outlines Jobs Plan (Mathematically It Can't Work); Olli Rehn to Give Keynote Speech at Eurobond Seminar

Posted: 30 Dec 2011 01:07 AM PST

The EU Observer reports France to hold jobs summit as unemployment hits 12-year high

A sharp rise in France's unemployment figures is putting pressure on President Nicolas Sarkozy to deliver, with over half the French population wanting the candidates for the spring presidential election to focus their energies on maintaining jobs.

Figures released by the labour ministry this week show that the number of those unemployed hit 2.85 million in November, a 12-year high and the seventh consecutive monthly increase.

The numbers have sparked a debate in France about the nature and future of employment with Sarkozy convening a jobs summit on 18 January.

Unemployment as an issue is a number-one priority on French voters' minds. According to a poll in La Croix newspaper, 52 percent of French people want the candidates for the April presidential elections to focus on responses that "maintain employment."

Of the main candidates in the running, socialist contender Francois Hollande is seen as proposing the best solutions to the daily problems of French citizens by 24 percent of those polled. Sarkozy comes in second with 20 percent and far-right politician Marine Le Pen in third place (16%).

While all candidates will focus on combatting unemployment and there are set to be many proposals for economic growth, their hands will be tied by France's commitment to reduce its high budget deficit, as part of an overall plan to contain the eurozone debt crisis.

Sarkozy Outlines Jobs Plan Based on German Program (Mathematically It Can't Work)

The Wall Street Journal Reports Sarkozy Outlines Jobs Plan

Largely inspired by measures Germany relied on to navigate the 2009 economic recession, [Sarkozy's] draft plan calls for companies to retain all staff even if they are faced with a slump in orders, and for workers to accept lower pay. As an incentive and to help pay for the move, the government would kick in for some of the lost wages and social-security contributions, according to officials at the French Labor Ministry and union leaders who were briefed on the proposed pact.

Mr. Sarkozy intends to discuss both the job-saving scheme, and the flexibility idea at a meeting with labor and employer unions on Jan. 18. By then, the government must answer a key question: how to finance measures that officials say could cost more than €1 billion ($1.3 billion) next year.

Five months ahead of presidential elections, Mr. Sarkozy is already fighting on multiple fronts to reduce the budget deficit, preserve the country's triple-A debt rating and find a comprehensive solution to the protracted euro-zone debt crisis.

The unemployment rate—which rose to 9.7% of the active population in the third quarter—is the latest bad news on France's economic dashboard. The country's trade deficit is projected to widen to an all-time high of €75 billion this year, and the national statistics office, Insee, has forecast that the economy will likely contract in the current quarter and the first quarter of next year.

In France, the measure is likely to gather support from trade unions as long as the government commits to compensate pay cuts. "We're on board as long as the government puts some money on the table," said Jean-Claude Mailly, the head of Force Ouvrière, France's third-largest union.

The French government's idea to increase work-time and pay flexibility is likely to meet much more resistance.

"All labor unions will say 'No,' because that would amount to making workers pay for the economic downturn," said Mourad Rabhi, a leader at CGT, France's second-largest union. "And in France there isn't the same climate of mutual confidence between workers and companies, as in Germany."

Mathematically It Can't Work

The unions will agree to pay cuts as long as there are no pay cuts (government kicks in the rest). Moreover the unions will not agree to increase work-time and pay flexibility because "that would amount to making workers pay for the economic downturn"

Heaven forbid. Meanwhile, Sarkozy needs to trim the deficit, not increase it, and his proposal does the opposite.

Note that Hollande is widely predicted to beat Sarkozy in an election runoff, and Hollande is running on a platform to make changes to the agreement reached between Sarkozy and German Chancellor Angela Merkel.

Expect European Unemployment to Get Much Worse

Europe is already in a nasty recession. Austerity measures coupled with tax hikes in numerous countries but especially Italy, France, Spain, Portugal, and Greece will make matters much worse.

"United States of Europe" Author Hosts Eurobonds Seminar

The galling arrogance of Eurocrats is rather stunning. While reading the EU Observer article at the top, this Ad for a Eurobonds Seminar on January 10, 2011 popped up.

Olli Rehn is Vice President of the European Commission. Guy Verhofstadt MEP is the Leader of the Alliance of Liberals and Democrats for Europe and author of the book United States of Europe (2006), the New Age of Empires (2008) and How Europe can Save the World (2009).

Tireless, Dangerous Demagogues

Rehn and Verhofstadt are tireless, socialist fools as well as dangerous demagogues dedicated to the destruction of sovereign rights of every nation in the EMU. They ought to scare the bejeebies out of any sane person who is not in favor of a European Nanny-Zone.

Their brainwashing event, marketed as a seminar on eurobonds is already filled up.

The primary thing stopping these socialists and their nanny-zone ideal is the German supreme court.

This past Wednesday, German Constitutional Court Judge Udo Di Fabio said in a Spiegel interview "It's a Mistake To Pursue a United States of Europe".

Please note that Di Fabio sees Euro-bonds as illegal.

However, the judge proved his naiveté with his statement "no politician really intends to transfer their power of disposition over the substance of the national budget at an EU level".

On the contrary, the European Parliament is loaded with nanny-zone proponents who are conducting seminars on how to do just that.

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