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You can focus on serving your existing customer base by keeping your promises, understanding their needs and organically growing your constituency.
You can focus on acquiring another customer base, on making a different promise to a bigger or more attractive group.
Or you can focus on serving your muse, on making the song in your head real, regardless of who wants to hear it.
Worth noting that you can successfully choose among the three, as long as you're consistent in your actions and goals.
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Mish's Global Economic Trend Analysis |
Greek 1-Year Bond Yield Hits 1,006% Posted: 05 Mar 2012 05:28 PM PST As a matter of curiosity more than anything else, I occasionally take a peek at Greek bond yields. Today, the Greek 1-year yield topped 1,000% for the first time. The following chart courtesy of Bloomberg. To be specific, the yield is a nice 1,066.661% That yield reflects the idea that 1-year bonds will be nearly worthless before the month is over. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Posted: 05 Mar 2012 02:50 PM PST Report Shows Netherlands Would Benefit by Leaving Eurozone Inquiring minds are reading a 73 page detailed report The Netherlands & The Euro that explains country by country why Italy, Greece, Portugal, and Spain are going to need lots more money, and the Netherlands and Germany will end up footing the bill. The study highlights the fundamental flaws of the Economic and Monetary Union (EMU), the damage done by the euro to date to the Netherlands, and the potential costs down the road. The report conclusion is Netherlands should exit the EMU. Here are some snips from the report regarding the finances of Italy, Spain, and Portugal. Italian ProjectionsDutch Freedom Party Wants Euro Exit Referendum Bloomberg reports Dutch Freedom Party Wants Euro Exit Referendum The Dutch Freedom party wants voters in the Netherlands to decide in a referendum whether the country should return to the guilder, De Telegraaf reported today, citing an interview with party leader Geert Wilders.How Significant is the Dutch Freedom Party? Inquiring minds may be wondering how big and influential the Dutch Partij voor de Vrijheid ('PVV', the Party for Freedom) might be. It's a good question, too. The short answer is the PVV is a critical part of the coalition holding the Netherlands government together. Reuters explains in commentary from November, Analysis: Populists exploit euro zone crisis to gain influence In the Netherlands, eurosceptic politician Geert Wilders is staging a campaign which could push the minority government to the brink of collapse after barely a year in power.Critical Juncture for Eurozone This new report could very well topple the government of Dutch Prime Minister Mark Rutte. Put that bit of news together with the fact that French Presidential candidate wants to redo portions of the just signed "Merkozy" treaty. Polls show French president Nicolas Sarkozy will not survive the next set of elections. German chancellor Angela Merkel is rapidly losing support as well. Ironically, the breakup of Merkel's coalition might be to a coalition wanting to lend still more support the nanny-zone. Regardless, the net effect of the demise of the governments of Germany, France, and the Netherlands would be for far more feuding, adding to the overall pressure for a eurozone breakup. The eurozone is at a critical juncture now. If governments in the Netherlands, Germany, and France collapse, and I think they will, the eurozone could be nearing the inevitable breakup stage already. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Eurozone Services and Composite PMI Back in Contraction; Italy, Spain, France at New Lows Posted: 05 Mar 2012 10:58 AM PST Markit Eurozone Services and Composite PMIs show renewed contraction due to drop in services activity, making it extremely difficult to deny that Europe is in a recession. Let's take a look at some numbers. Markit Eurozone Composite PMI® The Markit Eurozone PMI® Composite Output Index fell from 50.4 in January to 49.3 in February, dropping below the earlier flash estimate of 49.7. The final reading confirmed that business activity contracted in February, having briefly returned to growth in January following four months of decline at the end of last year.Markit Eurozone Services PMI® Service sector weakness poses new recession riskProfit Squeeze Note that prices received fell for the fifth month in six, but prices paid rose for the twenty-seventh straight month. Let's take a look at the second biggest economy, France, to see what is coming up. Markit France Services PMI® French service sector output stagnates in February, despite rise in new business.Spain is in an economic depression as are Greece and Portugal. Italy is not in a depression but it is a basket case as shown by the business activity above. See that positive GDP in the France chart? Don't expect it to last because it won't. Moreover, austerity measures across the board coupled with a slowdown in Asia strongly indicate the vaunted German export machine is about to break down as well. The European recession will be both long and deep. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Posted: 05 Mar 2012 01:13 AM PST Late last month in ECRI Sticks with Recession Call on CNBC; More than a Bit of an Exaggeration by Achuthan to Make His Call? I questioned the ECRI's use of coincident indicators to make a claim regarding recession I count three instances between 1990 and 2000 where ECRI coincident indicators flagged a recession by the methodology Achuthan cited.Email Response From ECRI In response to that article, reader "Art" sent an email to the ECRI and received this email back from Melinda Hubman, ECRI Managing Director, Operations. Hi Art,Disingenuous Response I am rather amazed at the disingenuous response from the ECRI. The ECRI rounded down 1.94% to 1.9% then rounded up 2.06% to 2.1% to make their claim. Really! You cannot make this stuff up. The ECRI sent an excel spreadsheet to reader Art, and I took that exact spreadsheet and created a chart from it. Here is my chart. ECRI Year-Over-Year Percent Change in Coincident Indicators click on chart for sharper image Incredulous Defense Somehow the ECRI wants us to believe that a year-over-year plunge in coincident indicators from 3.71% to 1.94% (a 1.77 percentage point drop in 15 months) is more important than the 1995-1996 plunge from 5.23% to 2.06% (a whopping 3.17 percentage point drop in 12 months). I am not the only one in disbelief of this ridiculous position. Georg Vrba, P.E. wrote a pair of articles on Advisor Perspectives on the subject.
Is There Something Magic About 2 Percent? I want to continue the discussion with a point Vrba missed, specifically the "magic" 2 percent threshold. Melinda Hubman, ECRI Managing Director, took great "rounding" pains to defend a dip below 2 percent as if a decline to 1.94 percent was significant but a far bigger percentage point decline to 2.06% was not. Indeed. Spotlight 2007 Please take a good look at that chart created using ECRI data, supplied by the ECRI. What I want you to focus on is the decline in March of 2006 from 3.76% to 1.80% in October of 2007, all the way to 1.05% in February of 2008. Please consider this image clip from the November-December 2007 ECRI Outlook (now conveniently redirected by the ECRI to another spot). Got that? The ECRI in its November-December 2007 Outlook, in spite of that massive drop in coincident indicators, in spite of a recession that I believe should have been obvious, actually said "this weakness is not pronounced, pervasive and persistent enough to be recessionary"! Coincident indicators did not appear to be a concern at all in 2007, now (out of the blue), they are paramount. Saturday, January 05, 2008 ECRI Says Fed Has Room To Cut Rates Despite Fears of Inflation "WLI growth is now at its worst reading since the 2001 recession. However, the WLI's recent decline is not based on pervasive weakness among its components, suggesting that a recession could still be averted," Achuthan said.Somehow a recession that had already started could be avoided. Friday, January 25, 2008 ECRI Says There Is A Window of Opportunity for the US Economy The U.S. economy is now in a clear window of vulnerability, given the plunge in ECRI's Weekly Leading Index (WLI) since last spring. Yet there is a brief window of opportunity within that window of vulnerability to avert a recession. That is why ECRI has not yet forecast a recession.Amazingly, in a recession that was now two months old, with coincident indicators all the way down to 1.05%, the ECRI saw a "Window of Opportunity" to avoid a recession. What's even more amazing is the ECRI's discussion of a "soft landing"! Friday, March 28, 2008 ECRI Calls it "A Recession of Choice" The U.S. economy is now on a recession track. Yet this is a recession that could have been averted. In January, given the plunge in the Weekly Leading Index, we declared that the economy had entered a clear window of vulnerability. Yet we emphasized the brief window of opportunity within that window of vulnerability for timely policy stimulus to head off a recession.ECRI Digs Deeper and Deeper Holes At the end of March the ECRI was still in denial about the recession that was then four months old! Amazingly, the ECRI has the unmitigated gall to claim a perfect track record at predicting recessions. By the way, according to the Excel spreadsheet sent to Art, the ECRI monthly coincident index was .62 on March 1, 2008 and .32 on April 1, 2008 (the ECRI having finally thrown in the towel just 4 days prior). In attempting to defend the indefensible, and by attempting "mind over indicators" the ECRI has dug a hole that is impossible to get out of. Does the ECRI Even Believe Its Own Indicators? I have to ask a serious question. Does the ECRI even believe its own indicators? If it does, then why did the ECRI refuse to see a recession in late 2007 that should have been blatantly obvious? If it does, then why all these contortions now? The only explanation I can come up with is Achuthan and the ECRI form an opinion, then twist and turn past history to defend it. In this case, the ECRI made extensive use of coincident indicators to make its point, having totally ignored coincident indicators in similar conditions as recently as 2007. When you do that, you miss things, serious things, as I pointed out above. As a result, the ECRI looks ridiculous. On Making Mistakes Regardless of how it may look, I do not have anything against the ECRI per se. Everyone makes mistakes. I have made dozens and I will make dozens more. The only way to not make mistakes is to not predict anything. However, I do have problems with people twisting facts and making claims known to be inaccurate. The problem the ECRI has is twofold.
One can only get away with each of those for so long. Indeed, on point number two, I would have to say the ECRI's interpretation has been good enough, long, enough, to generally mask the problem. However, repeated cover-ups eventually blowup in spectacular fashion, just as they have done now. About That 2012 Recession Call In spite of all the above, I happen to like the ECRI recession call. Yes, I am biased, but it is hard to find anyone who is not. I was way early in 2006 when the yield curve inverted, and I was early again this time, but never emphatic as was economist David Rosenberg with his June 13, 2011 "99% chance of US recession by 2012" To go out on a limb, I think GDP in 2012 is going to hugely surprise on the downside, and 1st Quarter GDP may be as low as zero to .5%. A negative number (or more likely a revised negative number) would not shock me in the least. If so, there is still room for the ECRI to be correct. The ECRI needs (by its own admission) a recession by mid-year to be correct. It will be interesting to see how much they twist and turn a few months from now. However, even if GDP tanks big time, the NBER (the official designator of recessions) may not acknowledge the recession for another six months to a year. In general, delayed NBER calls explain why the ECRI can also get away with late calls. However, it fails to explain why the ECRI stuck its neck out so early this time. The most likely explanation is as described earlier: "mind over indicators". I don't care that much, recognizing that perfection is simply impossible. However, it does pose a big problem to the ECRI because they pretend they are perfect even though facts prove otherwise. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
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Posted: 05 Mar 2012 04:18 PM PST |
6 Secret Multinational Giants [Infographic] Posted: 05 Mar 2012 02:38 PM PST Check out our latest infographic on the multinational giants that just don't care if you know their names or not. For me, the most impressive is the Taiwanese computer hardware producer, Quanta Computer. Quanta controls a huge marketshare and hauls in annual revenues higher than Amazon and Coca-Cola, but since they don't carry many branded products, we simply don't think of them as a sprawling multinational. Just consider that if you owned or gifted a Kindle Fire last year, it was manufactured at a Quanta plant in East Asia. And there's a high chance that some component of your laptop came from Quanta. Click on Image to Enlarge. Via: frugaldad |
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