vineri, 13 decembrie 2013

Seth's Blog : Getting lost on the shelf

 

Getting lost on the shelf

A friend got some feedback on a new project proposal recently. "It will have trouble standing out on a shelf that's already crowded."

The thing is, every shelf in every store and especially online is crowded. The long tail made the virtual shelves infinitely long, which means that every record, every widget, every job application, every book, every website, every non-profit... all of it... is on a crowded shelf.

And the problem with a crowded shelf is that your odds of getting found and getting picked are slim indeed, slimmer than ever before.

Which is why 'the shelf' can't be your goal. If you need to get picked from the shelf/slush pile/transom catchbasin then you've already lost.

The only opportunity (which of course, is the best opportunity ever for most of us) is to skip depending on being found on the shelf and go directly to people who care. To skip the shelf and get talked about. To skip the shelf and be the one and only dominator in a category of one, a category that couldn't really exist if you weren't in it.

That's hard to visualize, because it doesn't match what you've been taught and what our culture has (until recently) celebrated, but it's what's on offer now.

Shelf space is available to all of us, but by itself, it's insufficient for much of anything.

       

 

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joi, 12 decembrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Bank of Japan Vows to Stick with Easy Money Policy; If It Doesn't Work, Do More of It

Posted: 12 Dec 2013 06:06 PM PST

The massive number of Yen shorts may be a caution signal, but fundamentally, Japan's prime minister Shinzo Abe is out of his mind with his inflation policies.

Abe hijacked the Bank of Japan with policy appointments under his influence and now the BoJ vows to stick with easy money policy even though over 100% of the recorded inflation is due to the declining yen, not higher wages as Abe wants.

The Financial Times reports Bank of Japan Vows to Stick with Easy Money Policy.
The Bank of Japan will keep its highly expansionary monetary policy in place until inflation hits and stabilises at its 2 per cent target, the central bank's governor said on Thursday, adding it would take more easing measures if price rises flagged.

"We intend to achieve the 2 per cent inflation target and maintain that in a stable manner," Haruhiko Kuroda told the Financial Times, suggesting ultra-easy money could remain

"It's not good just to touch on 2 per cent inflation and then go down to 1 per cent or less than 1 per cent."in place well beyond the two-year timeframe the BoJ has given itself to reach the goal.

Since his appointment by Mr Abe this spring, Mr Kuroda has committed the BoJ to buying some Y50tn of Japanese government bonds a year – a far more aggressive policy than his predecessors' and enough to double the country's monetary base by the end of next year.

Yet sceptics have noted that much of the inflation generated has been the result of a steep fall in the value of the yen, which has pushed up the cost of imports, most notably oil and gas.

Mr Kuroda, a former finance ministry official, reiterated his support for tighter fiscal policy to rein in Japan's huge government debt, which is approaching two and a half years' economic output. He reiterated his support for a planned doubling of the national sales tax, to 10 per cent by 2015, and said further tax rises or spending cuts would be needed to meet a goal of eliminating the deficit, minus interest payments, by 2020.
Arrogance, Incompetence

It is a sign of arrogance as well as incompetence to believe desires take precedence over reality. And with Abe's appointments, the bank of Japan is clearly way out of control.

Doubling taxes in a recession is insane. Supposedly Abe will make up for it with fiscal stimulus.

But even if Japan allocated 100% of tax revenues to stimulus, a fundamental economic point is governments do not spend money wisely.

Forcing down interest rates harms those on fixed income. And given Japan's huge demographic problem, spending money on more infrastructure (or whatever else Abe wants to spend the stimulus on) is a pure waste of money.

Those on fixed income actually welcome falling prices, but Abe wants them higher. So far, Abe's trashing of the Yen has prices has translated into higher energy costs and food costs, not wage hikes that Abe wants.

Is he concerned? Apparently not. Abe's policy (as with most politicians) is "If It Doesn't Work, Do More of It".

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

Spain's Catalonia Region to Hold "Independence Referendum" November 2014; Madrid Vows to Block Vote; Independencia!

Posted: 12 Dec 2013 09:48 AM PST

Political anxiety is heating up in Spain. In a direct challenge to Spain's central government the Wall Street Journal reports Catalonia Political Parties Agree to Hold Independence Referendum.
Political leaders in Spain's wealthy Catalonia region set Nov. 9, 2014 as a date for a referendum on declaring independence from Spain, but the national government immediately said it would move to block such a vote as unconstitutional.

The latest announcement from Catalonia, which has long chafed under what it calls economic and cultural dominance from Madrid, sets Spain's leading industrial region on a collision course with the central government, with enormous stakes for both sides and an outcome that is difficult to predict.

Catalan regional leader Artur Mas said on Thursday that major political parties had agreed on the wording of a two-part question to be put on a ballot next November. The first part is: "Do you want Catalonia to be a State?" The second part is: "Do you want Catalonia to be an independent State?" Mr. Mas, who had pledged the referendum after elections last year, said the question was "inclusive, and at the same time clear and concrete." He added that there would be more details in coming days on how the vote would be conducted. 

Recent polls indicate that around 80% of Catalonia's 7.5 million citizens favor a referendum. Some polls show a much narrower majority favoring independence, though how the question is phrased has an important bearing on the results.

Strains have long existed between Madrid and Catalonia, the country's leading export region, which has a distinctive language and culture.

But the economic crisis that has battered Spain since 2008 has further frayed the relationship, with Catalans complaining they pay much more in taxes than they receive in investments. Some 43 cents of every euro Catalonia pays in taxes doesn't come home, according to data compiled by the Catalan government. Another factor fueling Catalan discontent was a move by Spanish courts in 2010 to strike down key parts of a statute that would have given more autonomy to Catalonia.

This past Sept. 11, a regional holiday in Catalonia, more than a million pro-independence activists showed their strength by turning out to form a 250-mile human chain running the length of the region.



Activists calling for the independence of Catalonia, currently a region of Spain, take part in a 'human chain' during a protest on Wednesday. Agence France-Presse/Getty Images

Independencia!

Here's an interesting image from International Business Times.



Spain to Block Poll

ABC News reports Spain to Block Independence Poll
The president of Spain's regional government of Catalonia said Thursday he wants to hold an independence referendum on Nov. 9, 2014, but the Spanish government immediately said no.

Justice Minister Alberto Ruiz Gallardon responded to Mas' announcement, saying a referendum would be illegal and would not be allowed.

Spain's Constitution says only the central government in Madrid can call a referendum, and Prime Minister Mariano Rajoy recently rejected a request by Mas to allow one. The government has not said what it might do to prevent a ballot.

Mas said the referendum date was set almost a year away so as to give ample time for negotiations with Madrid on "the way to stage the consultation legally."

Scotland is staging an independence referendum next year, on Sept. 18. That vote has been approved by the British government.

Mas began pushing for a referendum after he failed to clinch a better financial pact for Catalonia with the central government in 2012. The referendum proposal got the support of some 1 million people who turned out at two demonstrations held since then.

The possibility of a region having the right to decide its future has stirred much political debate and raised questions as to whether it is time to reform the 1978 Constitution to ease territorial discontent. The Basque region, which has traditionally sought greater powers, failed in a bid to hold a self-determination referendum several years ago.

Catalonia is one of the country's most powerful regions and represents roughly a fifth of Spain's 1.1 trillion euro ($1.5 trillion) GDP. Its population of 7.5 million is greater than those of EU members such as Denmark, Ireland or Finland.

Spain has 17 regions, each with substantial autonomy but with no control over key areas such as defense, foreign affairs, ports and airports, and in the making of national economic and financial decisions.
Questions

Will the central government send in troops to block the vote? If so, how much economic and social damage would that cause?

It's difficult to say precisely what will happen, but things are heating up politically to go along with huge economic strife in Spain.

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

Moody's Puts Puerto Rico on Downgrade to Junk Review Citing Very High Debt, Pension Obligations, Chronic Deficits; Exodus Underway

Posted: 12 Dec 2013 08:58 AM PST

Deficit spending and untenable pension obligations frequently go together, and always cause problems when they do.

Coupled with a buildup of debt, and a very bloated public sector (which also go hand-in-hand) Puerto Rico is about to fall to junk level.

Please consider Moody's puts Puerto Rico on review for downgrade.
Citing Puerto Rico's weak finances and economy, Moody's Investors Service put the commonwealth's general obligation rating of Baa3, the company's lowest investment grade rating, on review for downgrade on Wednesday.

Moody's also placed ratings capped by or linked to Puerto Rico's general obligation rating on review, including the Puerto Rico Sales Tax Financing Corporation's senior and junior lien bonds.

The moves affect approximately $52 billion of rated debt, the rating agency said in a statement.

Moody's said it is concerned about Puerto Rico's "weakening liquidity, increasing reliance on external short-term debt, and constrained market access, within the context of a weakened and now sluggish economy."

"These developments exacerbate the longstanding financial strain brought by the commonwealth's very high debt load and pension obligations, as well as its chronic budget deficits," Moody's said.

A major issuer of municipal bonds, Puerto Rico has been in or near recession for eight years. It has suffered from a loss of U.S. federal government economic support, spending cuts by its own government, high oil prices and population decline.
Exodus Underway

The Washington Post reports Puerto Rico confronts a rising economic misery.
Boxes and wooden crates filled with household items bound for the U.S. mainland are stacked high in the Rosa del Monte moving company's cavernous warehouse, evidence of the historic rush of people abandoning this beautiful island.

Puerto Rico lost 54,000 residents — 1.5 percent of its population — between 2010 and 2012 alone. Since recession struck in 2006, the population has shrunk by more than 138,000 to 3.7 million, with the vast majority of the outflow headed to the mainland.

And while government workers make up about a quarter of the commonwealth's workforce — much higher than the U.S. average of 16 percent — their ranks are shrinking as the pervasive debt and economic problems careen toward a reckoning. Now, just over 41 percent of working-age Puerto Ricans are in a job or even looking for one.

As work has disappeared, more Puerto Ricans have relied on the government to survive: About a third of the commonwealth's population relies on food stamps, and residents of the island are twice as likely as those on the mainland to receive Social Security disability benefits, according to researchers.
Puerto Rico Unemployment Rate



Expect Default

On December 1, in Puerto Rico the Next Detroit? I said ...
Puerto Rico has been in recession for 8 years. The unemployment rate is 15% and debt has piled up to the tune of $70 billion. How did Puerto Rico get into trouble? The short answer is the same way as Detroit: loss of industry coupled with lavish pensions.

Job flight, high crime rates, and huge pension woes in Puerto Rico seem similar to the problems in Detroit. However, there is no constitutional provision that allows US states and Commonwealths to declare bankruptcy.

Compounding the problem, Puerto Rico passed a massive set of tax hikes including corporate taxes, a broadened sales tax and a new gross receipts levy, hoping to get its budget under control. Given that tax hikes in the middle of a recession are about the worst possible choice, the situation is ominous.

So how is Puerto Rico's debt going to be paid back? The answer is it won't. Although, bankruptcy is out of the question, nothing can stop a default except a bailout by the US. Given that handouts from this Republican Congress are unlikely, look for Puerto Rico to default.
Puerto Rico is Toast

Of $70 billion in debt, $52 billion is subject to a downgrade to junk status. The rest may not even be rated.

A close friend with ties to the region writes ...
Those leaving are predominantly from the upper end of society, as they see opportunity melting away and fear a dead end for their children. Upper middle class Puerto Ricans are educated, speak English, and are absolutely free to move to the US and find jobs. As you noted, the upper 40% pay 106% of the taxes. So the exodus is obliterating the tax base. The feds don't want a run out of Puerto Rico.

But ultimately, the feds will have to step in, Republican Congress or not. The same policy that makes it completely easy for Puerto Ricans to move to the US means that if a panicked "run out of Puerto Rico" starts, it will be a smoking ruin. That would be extremely harmful to US foreign policy.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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