miercuri, 6 iunie 2012

Let's Take This Meeting Outside

Your Daily Snapshot for
Wednesday, June 6, 2012

Let's Take This Meeting Outside

President Barack Obama talks with staff along the Colonnade of the White House, June 5, 2012. Pictured, clockwise from the President, are: Jennifer Palmieri, Deputy Director of Communications; Chief of Staff Jack Lew; Dan Pfeiffer, Director of Communications; Senior Advisor David Plouffe; and Press Secretary Jay Carney. (Official White House Photo by Pete Souza)

Seth's Blog : Forbidden to care

Forbidden to care

The rigid, measured, top down structure of big company customer service makes it almost impossible for the rep to care about you when you call.

One new trend is that if you have a complicated problem or a bit of attitude in your voice, the call center rep will 'accidentally' disconnect you. You're going to hurt his numbers. His yield will go down and it's just not worth it. Let someone else take the call...

When organizations take away all flexibility and power from their frontline employees, they're depriving the people with the highest leverage from doing the most important thing: caring.

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marți, 5 iunie 2012

Mish's Global Economic Trend Analysis

France, Italy, Spain Services PMI Show Continued Sharp Decreases; Eurozone Composite PMI Near 3-Year Low; Germany Services PMI at 6-Month Low
Gaming the Odds of a Greek Euro Exit With and Without Contagion
Oil Tanker Rates Lowest Since 1997 as Demand in Europe Plunges to 1996 Level, Production in US at 13-Year High; IMF Smoking Happy Dope

France, Italy, Spain Services PMI Show Continued Sharp Decreases; Eurozone Composite PMI Near 3-Year Low; Germany Services PMI at 6-Month Low

Posted: 05 Jun 2012 06:57 PM PDT

The Markit PMI data from Europe shows still more deterioration led by France, Italy, and Spain. Let's take a look at a few countries.

France: Business Activity Continues Contraction at Marked Pace

Key points:

Final Markit France Services Activity Index at 45.1 (45.2 in April), 7-month low.

Final Markit France Composite Output Index at 44.6 (45.9 in April), 37-month low.

Summary: French service providers registered another sharp decrease in business activity during May. Underlying the weak performance was a second successive fall in incoming new business, while backlogs of work fell further. Companies responded by cutting employment. Input price inflation eased to the slowest for over two years, allowing companies to reduce their charges further.

Italy: Services Activity Continues Contraction at Sharp Rate in May

Key Points:

Business activity and new work both decrease markedly

Employment falls at slowest rate for seven months

Cost inflation weakest since last November

Summary:

The health of the Italian service sector deteriorated during May, with steep falls in both output and new business recorded. Confidence with regards to activity in the forthcoming year dipped further, though employment levels fell at a slower rate. Cost inflation meanwhile eased to the weakest in six months, but still contrasted with a sustained drop in output prices.

Spain: Activity and new business both decline at faster rates

Key points:

Activity and new business both decline at faster rates

Job shedding intensifies

Sharp cuts in output prices as cost inflation eases

Summary:

The Spanish service sector fell further into contractionary territory during May as the economic crisis showed no signs of easing. Rates of decline in activity, new orders and employment all accelerated during the month. Meanwhile, input prices rose only slightly as companies attempted to reduce costs, and output prices were cut sharply again in response to strong competition and weak demand.

Germany: German Composite Output Index in Contraction

Key points:

Final Germany Services Business Activity Index(1) at 51.8 in May, down from 52.2 in April.

Final Germany Composite Output Index(2) at 49.3 in May, down from 50.5 in April.

Summary:

May data pointed to a renewed slowdown in German service sector growth, as falling levels of incoming new work continued to weigh on business activity levels. At 51.8, down from 52.2 in April, the final seasonally adjusted Germany Services Business Activity Index pointed to the slowest pace of expansion since November 2011. Higher levels of output have now been recorded for eight months running, but the pace of expansion in May was below the average seen since the survey began 15 years ago (53.0).

Eurozone: Composite PMI near-three year low in May

Key Points:

Final Eurozone Composite Output Index: 46.0 (Flash 45.9, April 46.7)

Final Eurozone Services Business Activity Index: 46.7 (Flash 46.5, April 46.9)

Widespread weakness across the currency union, with output falling across the big-four nations

Summary:

At 46.0 in May, down from 46.7 in April, the Markit Eurozone PMI® Composite Output Index signalled the steepest rate of decline in manufacturing and services output in the single currency area since June 2009. The headline index came in slightly above its flash estimate of 45.9, but remained below the neutral 50.0 mark for the fourth month running.

Comment:

Chris Williamson, Chief Economist at Markit said: "The final Eurozone PMI edged up on the flash reading in May, but nevertheless indicates that the economy is contracting at the fastest pace for around three years. Companies report business activity to have been hit by heightened political and economic uncertainty, which has exacerbated already weak demand both in the euro area and further afield. Based on these numbers, it would not be surprising to see GDP for the region contract by 0.5% in the second quarter, though an even steeper decline could be seen if the June data disappoint."

If the ECB is looking for an excuse to cut rates, it sure has one.

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

Gaming the Odds of a Greek Euro Exit With and Without Contagion

Posted: 05 Jun 2012 01:54 PM PDT

A key question on trader's minds is who will win the June 17th Greece election and whether it results in a Greek exit of the eurozone.

Deutsche Bank gives it assessment in a report called Probability weighting EUR views on Greece

Under a variety of assumptions, the market pricing looks consistent with: a) significant odds in favor of Greece remaining part of the EUR zone and EUR/USD trading between 1.25 and 1.30; and, b) a worst case Greek exit global contagion scenario taking EUR/USD to 1.10, but not to levels as low as parity.

After the Greek elections, there are 6 main scenarios that are worth considering:

A EUR friendly coalition probably led by New Democracy (ND) that does enough to keep Greece in the EUR.

A EUR friendly coalition probably led by ND that still leads to a Greek exit, but not a major global contagion event.

A EUR friendly coalition probably led by ND that still leads to a Greek exit (probably with a delay) because Greece fails to comply with the Troika program and this ends up in a major global contagion event

An anti-austerity led government, probably led by Syriza, that nonetheless compromises sufficiently, that Greece remains in the EUR at least through 2012.

An anti-austerity led government, that ends with Greece leaving the EUR but where contagion is relatively well contained.

An anti-austerity led government, that ends with Greece leaving the EUR which becomes a major global contagion event.

Deutsche Bank Probability Chart

click on chart for sharper image

Odds Not 50-50

Deutsche Bank thinks the probability that New Democracy or Syriza wins is equal, 50% each.

I think the odds Syriza wins is about a 2-1 favorite as explained in Greek Polling Ban In Effect Until Election; Latest Results Show SYRIZA Support at 31.5 percent, Well in the Lead Over New Democracy; Why I expect Syriza to Win

For an update, please see "Terror-Mongering" in Greece About to Backfire? Will Greeks Vote for "Complete Idiots"? Four Possibilities

Note that Deutsche Bank thinks that even if Syriza does win, Greece is as likely to remain in the eurozone as not. That strikes me as being far too optimistic. Even if Syriza stays in for a while, it will eventually run out of money.

Contagion Scenarios

Finally, please note that the Deutsche Bank contagion scenarios total a mere 28%.

What does "contagion" even mean? As I have explained before, Spain has problems of its own making not related to Greece at all.

Spain is not going to exit the eurozone solely or even significantly because of Greece.

True Contagion

The true contagion scenario is not what people think but rather the reverse. Greece exits the eurozone, recovers, and other countries decide to do the same.

In the context of the Deutsche Bank article, I fully expect Spain to exit the eurozone. Is that contagion? It depends on why and how you define the word.

Finally, even if New Democracy wins, the odds of a Greek exit do not drop to a mere 5% as the above table shows. I would say they are still 50% minimum and depending on your timeframe as high as 85%.

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

Oil Tanker Rates Lowest Since 1997 as Demand in Europe Plunges to 1996 Level, Production in US at 13-Year High; IMF Smoking Happy Dope

Posted: 05 Jun 2012 09:26 AM PDT

Bloomberg reports Oil Tankers Squeezed as Rates Drop to Lowest Since '97.

Aframaxes, already this year's worst- performing oil tankers, are poised for the lowest annual rates in at least 15 years as Europe's economic stagnation curbs demand, the region's most-accurate shipping analysts said.

The 800-foot vessels will make about $12,000 a day in 2012, the least since 1997, said Anders Karlsen, an analyst at Nordea Markets in Oslo. His recommendations on the industry returned 25 percent in the past year, more than any shipping analyst in Europe tracked by Bloomberg.

The vessels are struggling to win cargoes on all sides of the Atlantic, with European oil demand contracting for a sixth year at a time when the U.S. push for energy independence is driving down crude imports to the lowest since 1999. That's drawing more South American and West African supply to Asia on routes favoring very large crude carriers, displacing smaller Suezmaxes which in turn are competing with Aframaxes.

"With the situation in Europe, the picture for Aframaxes is just abysmal," said Erik Nikolai Stavseth, an Oslo-based analyst at Arctic Securities ASA who anticipates an annual average of $10,000. "VLCCs are taking out Suezmaxes, and Suezmaxes are taking out Aframaxes," said Stavseth, whose recommendations returned 24 percent in the past year, the second-best performance in the region.

European oil demand will decline 2 percent to 14.7 million barrels a day this year, the lowest since at least 1996, the Paris-based International Energy Agency estimates. The region's refineries are shutting at the fastest pace in three decades as economies stagnate or contract and competition from U.S. rivals using cheaper grades of crude intensifies. Aframaxes get 48 percent of their cargoes from Europe, Clarkson estimates.

The U.S. is producing the most crude in 13 years after prices rose almost fourfold in a decade, Energy Department data show. Companies were drilling 2,329 wells last month, the most in a quarter century, the data show. Aframaxes rely on North America for about 14 percent of their cargoes, the same order of magnitude by which imports carried on the vessels will fall this year, according to Clarkson.

The slump in European demand may reverse as its economies strengthen, with the International Monetary Fund predicting 2013 growth of 0.9 percent in the 17-nation euro zone, from a 0.3 percent drop in 2012.

Comments From Tim Wallace

Reader Tim Wallace says ...

Hello Mish

EU demand is dropping along the same lines as USA, six consecutive years of decline, now equal to 1996 levels. USA oil consumption is at 1998 levels.

How can anyone not see the global economy never recovered from 2008? Only government debt spending has kept the economy from the abyss. As you know that is nothing but a misguided can-kicking exercise.

IMF Smoking Happy Dope

To that I would add the IMF is smoking "happy dope" to believe the eurozone will contract a mere .3% in 2012 and expand at .9% in 2013.

Moreover, the US economy is clearly slowing rapidly and is likely in recession right now.

I will have the latest US 3-month oil usage charts from Tim Wallace shortly.

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

Damn Cool Pics

I take pictures with my hands

I made this myself. What do you think? :)

Seth's Blog : The Dip, revisited, plus audio bonus

The Dip, revisited, plus audio bonus

Five years ago, I published a little book (little even by my standards) called The Dip.

I did a tour, built a small blog and shared what I could about it. It was a very risky book—certainly not for everyone.

Much to the surprise of some at my publishing house, it sold a ton of copies, entirely due to word of mouth.

The book makes a lot of people uncomfortable. Instead of giving a clear, actionable, step-by-step approach to guaranteed success, The Dip points out where we often get stuck, and leaves it to the reader to take the (difficult) steps necessary to move ahead.

It also talked about the short head (in contrast to Chris Anderson's not yet written Long Tail). There's a short head in every micro market, just waiting for someone to fill it.

Just yesterday, the rule of the Dip was demonstrated by Microsoft's overdue cancellation of the Zune, something that should have happened years ago.

As the web becomes every more relentless in separating the average from the exceptional, the simple idea this book uncovers (being the best in the world at your little niche) becomes ever more important.

This week, I got a bunch of mail about the book, and it prompted me to remind you that you might want to (re)read it. Jared wrote (italics mine):

It literally speaks to my heart and convinces me of changes I need to make in my life. I need to quit a bunch of stuff, and try to be the best.

I have a confession to make. This is my second time reading this book, and the first time I thought it was pretty basic and kind of stupid. But I decided to read it again (4 years later) and it is exactly what I need at this point in my life. I absolutely love it.

...

Anyways, I just want to say thank you for pushing through the dip.

And then, the next day, this graph showed up from Dan in Norway:

The red dot indicates the day he read the book. I'm not sure what this measures, but it looks good.

I hope the book resonates for you as well. Because it's not a brand new book, you can find used copies for less than $3. And a freebie...listen to the first 10% on audio:

The Dip, first sections

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miercuri, 6 iunie 2012

Let's Take This Meeting Outside

Seth's Blog : Forbidden to care

Forbidden to care

More Recent Articles

marți, 5 iunie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

I take pictures with my hands

Seth's Blog : The Dip, revisited, plus audio bonus

The Dip, revisited, plus audio bonus

More Recent Articles

Pagini

Persoane interesate

Arhivă blog

miercuri, 6 iunie 2012

More Recent Articles

marți, 5 iunie 2012

More Recent Articles

Pagini

Persoane interesate

Arhivă blog

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