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luni, 13 ianuarie 2014

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SubmitStart · Trade Center · Kristian IV:s väg 3 · Halmstad 302 50 · Sweden

Seth's Blog : Who are your customers?

Who are your customers?

Answering, "anyone who pays us money," is a cop out.

Almost as bad is describing your customers by demographics. It's only a little interesting to know that they are, on average, 32 year old, white, male, lacrosse fans.

No, what we need to know is:

What do they believe?

Who do they trust?

What are they afraid of and who do they love?

What are they seeking?

Who are their friends?

What do they talk about?

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duminică, 12 ianuarie 2014

Mish's Global Economic Trend Analysis

When Will Interest on US National Debt Exceed $1 Trillion? When Will the Fed Hike Rates?

Posted: 12 Jan 2014 08:37 PM PST

With all the talk of tapering and expected hikes in interest rates by the Fed, inquiring minds are likely interested in what happens to interest on the national debt if the Fed ever does hike.

I asked ny friend Tim Wallace to graph that idea. The Following charts from Wallace provide a clear answer.

In these charts we make the assumption that the Congressional Budget Office (CBO) is accurate in its assessment of future budget deficits.

Neither Wallace nor I believe those estimates, nor do we believe the Fed is going to be in a position to tighten when they suggest they might, but here are the charts for discussion.

National Debt Trendline

Projected Interest at Various Rates

Hidden Agenda

The current blended rate of interest on the national debt is a mere 2.4% according to the CBO.

The "optimistic" projection of $668 billion assumes the rate will stay below 3.1% through 2020.

With that in mind, please consider the Fed's 'hidden agenda' behind money-printing.

One of the most important reasons the Fed is determined to keep interest rates low is one that is rarely talked about, and which comprises a dark economic foreboding that should frighten us all.

Let me start with a question: How would you feel if you knew that almost all of the money you pay in personal income tax went to pay just one bill, the interest on the debt? Chances are, you and millions of Americans would find that completely unacceptable and indeed they should.

But that is where we may be heading.

But isn't it fair to ask what the interest cost of our debt would be if interest rates returned to a more normal level? What's a normal level? How about the average interest rate the Treasury paid on U.S. debt over the last 20 years?

That rate is 5.7percent, not extravagantly high at all by historic standards.

Do the math: If we were to pay an average interest rate on our debt of 5.7 percent, rather than the 2.4 percent we pay today, in 2020 our debt service cost will be about $930 billion.

Now compare that to the amount the Internal Revenue Service collects from us in personal income taxes.

In 2012, that amount was $1.1 trillion, meaning that if interest rates went back to a more normal level of, say, 5.7 percent, 85 percent of all personal income taxes collected would go to servicing the debt. No wonder the Fed is worried.

The above article did not show the charts, but we just did.

Shifting Goalposts

Really think the Fed is going to hike? They know they can't, and the Fed is disingenuous as to why.

A year ago the Fed was discussing 6.5% as a trigger point.

In December, the Wall Street Journal noted the Fed's Shifting Unemployment Guideposts

Now, in the wake of a massive collapse in the labor force in which unemployment rate just dropped to 6.7% it's easy to understand why the goalposts shifted.

The Fed pretends its interest rate policy is about a dual mandate of jobs and GDP growth.

The above charts show the real reason for the shift: the Fed is in a box of its own making and it has no freaking idea how to get out of the box.

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

Google Strikes Back in Patent Wars; Decades Long Litigation; Return to the Beginning Fistfight

Posted: 12 Jan 2014 03:07 PM PST

Google wants to avoid "patent wars" but realistically speaking, what else can one call the massive "race to acquire patents"?

While pondering that question, please consider Google catches up in technology patent wars

Google was awarded nearly 2,000 patents in the US last year, almost double the number of all previous years combined, catapulting it into the top ranks of technology companies building stockpiles of legally-protected innovations.

The rapid growth, revealed by an analysis of patent office filings, is the latest sign of the internet search company's attempt to buttress a weak position in the smartphone industry's patent wars. It also highlights a race to stake out promising new technology markets, as fields such as "wearable" computing become the next frontiers for growth.

"Our hope is to avoid a war," said Allen Lo, Google's chief patent lawyer. "Hopefully we can learn from the smartphone litigation."

Google ranked only number 21 based on issued patents in 2012 and was not even in the top 50 in 2011, according to an annual ranking compiled by IFI Claims, a patent research company.

The jump partly reflects new products such as the Google Glass "smart" glasses and its development of driverless cars, said Mr Lo. "We're right at the cutting edge of newer areas we want to protect," he said.

Google was assigned 1,920 patents in 2013, according to a review of the US Patent and Trademark Office database. Based on IFI analysis of the previous year's data, it is likely to finish in the top 10, ahead of companies such as General Electric and LG Electronics.

The patent race among industry leaders has threatened to overwhelm smaller technology companies, forcing them to mount their own acquisition campaigns to defend themselves.

Patent experts warn that the quality of a technology company's patents, rather than volume, is the most important issue affecting its legal defences. Apple has won the upper hand in its US legal battles against Samsung despite having a far smaller patent portfolio.

However, the sheer quantity of patent holdings also helps deter attack and has led to an intellectual property arms race.

Decades Long Litigation

You cannot avoid a war you are in.

Realistically, the hope is not to avoid a patent war, but rather an expensive litigation war.

In the "finally shake hands department", a Decades-Old Rambus Litigation Against Micron For RDRAM Tech Reaches Settlement this past December.

Similarly, C/Net reports Rambus bags last major litigation target Micron.

Micron Technology has finally settled with Rambus on DRAM memory patents, agreeing to pay up to $280 million over a period of seven years.

According to the agreement announced Tuesday, Micron can use any Rambus patent for the manufacture of "specified integrated circuit products."

The agreement requires quarterly royalty payments to Rambus over the next seven years capped at $10 million per quarter or $280 million during the initial term, the two companies said in a statement.

"This was our last major outstanding litigation," Rambus CEO Ron Black said in a conference call Tuesday. The two companies have been sparring for more than a decade.

As part of the settlement, Micron and Rambus have settled all outstanding patent and antitrust claims. The agreement also covers Japan-based Elpida, which Micron acquired earlier this year.

Rambus has settled with, or aggressively sued, every major player in the memory chip industry over the last 14 years.

Rambus has a long and convoluted history of lawsuits and legal action. In 2009, the Federal Trade Commission dropped its antitrust case against the company after the U.S. Supreme Court rejected an FTC appeal. This followed an appeals court decision that threw out the FTC's findings that Rambus intentionally withheld its patent plans from a standards body, which later sanctioned certain Rambus technology that is found in many PCs and servers around the world.

As DRAM standards evolved, Rambus has alleged that more and more patented Rambus inventions were being utilized and shipping in products.

The genesis of many of the legal proceedings was a Rambus claim that SDRAM and subsequent DDR memory types infringed Rambus patented inventions.

Return to the Beginning Fistfight

I have lost count of the huge number of verdicts that have been won, lost, and reversed between Rambus and other companies over computer memory patents.

Going back to the beginning, I recall a near fistfight incident between Rambus and Micron executives. My memory was correct.

A quick search for "Rambus Micron CEO Fistfight" located this September 2000 article: Micron, Rambus chiefs nearly came to blows.

Earlier this week we reported on first Micron, then Hyundai taking legal action against Rambus, so upping the ante on the continuing dispute over patents on double data rate (DDR) and synchronous DRAM memory.

Those legal actions have churned up heady debates on boards such as Silicon Investor and Raging Bull, no doubt prompted by people worried more about whether they're out of pocket than the technology per se.

And the debate has also churned up ancient (March 99) memories of a party held at Dan Niles' San Francisco home, where, according to The Street, Rambus CFO Gary Harmon and Micron CEO Steve Appleton nearly got into a fist fight over support for the RIMMs.

One telling statement in the piece on The Street is well worth re-airing. Harmon is quoted as saying that by March 2000, Micron would be giving Rambus its whole-hearted support.

Instead, Micron and Hyundai are taking Rambus to court, Intel has conceded that DDR is important for its Pentium 4, while stalinised benchmarks seem to suggest that those long on Rambus may well have been right.

This story has got everything, it seems, apart from sex. Unless, that is, you know differently, and want to slip us the details for our forthcoming book, tentatively called The Rambus Affair™

That is precisely the kind of war that Google hopes to avoid. And to avoid litigation fistfight wars, it instead engages in a more civil war of patent acquisition.

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

Seth's Blog : Less vs. more, give vs. take

Less vs. more, give vs. take

You could build a company dedicated to paying your employees ever more. Or you could build a company based on the strategy of paying them ever less.

You could create a business based on the idea of charging your customers the lowest possible prices, or you could set out to figure out how to charge them as much as possible.

Your organization could depend on ever increasing the amount of choice and privacy you give your users--or you could work daily to reduce them.

You could protect your users from interruption or you could decide to profit from interruption.

You could fight daily to tell those that are listening the truth, or you could fight daily to spin your story to have it seen as the truth.

It's tempting to view each of these extremes as merely an alternative to compromise, but compromise isn't a goal, it's a temporary tactic. Where are you headed?

We move the center when we become extremists in our goals.

Every day, we push against the status quo and make difficult choices. Every day, we seek to increase one metric at the expense of the other. The architecture of the successful organization depends on choosing and embracing these extremes.

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sâmbătă, 11 ianuarie 2014

Mish's Global Economic Trend Analysis

48.6% of Spaniards Aged 18-24 Would Take Any Job, Anywhere, for Low Wages; Ikea Spain Gets 100,000 Applicants for 400 Jobs; Walmart, McDonalds Comparison

Posted: 11 Jan 2014 05:49 PM PST

In contrast to McDonalds' workers in the US demanding $15 an hour wages, Almost half of young Spaniards accept any job, anywhere, despite low salary

48.6% of Spaniards aged 18 to 24 said they would accept any job, anywhere and even with a low income. 84.9% felt very or fairly likely to have to work on what is available, 61.7% considered it equally likely to have to go abroad, and 79.2% said they need to study more. Despite this, an overwhelming majority (80%) are convinced that, at least in the near future, will have to be financially dependent on their family.

Future is Black

Young Spaniards recognize enjoy the benefits of the welfare state far more than their parents, except as regards stability and security. They are also convinced that their children will live much worse than them.

Frustrated Expectations

Only 20% of young people believe things will improve in the next two or three years, compared to 36% who think it will get worse. Moreover, nearly three in four young people (71%) considered likely to find little or no work in the coming year.

Ikea Spain Gets 100,000 Applicants for 400 Jobs

Also via translation from El Economista, please consider Ikea Spain Gets 100,000 Applicants for 400 Jobs

The Swedish multinational Ikea will have work to select staff for a store in Valencia because 100,000 people submitted applications to fill 400 jobs.

Ika received a total of 100,000 job applications through a web page offering. In the first 48 hours of processing, Ikea received 20,000 applications.

The store, which will open in summer, will have a staff of 400 employees and also generate about 80 indirect jobs to cover services such as security, transport and cleaning, among others.

Walmart, McDonalds Comparison

To be fair, there is a major difference between McDonalds' employees and Spaniards seeking jobs.

The McDonalds' employees demanding higher wages have jobs. Those seeking jobs, don't.

However, every McDonalds' employee knew their wage when they were hired. Like Spaniards willing to accept low wages, they took the jobs anyway.

1 Million McDonalds Applicants

I cannot find anything recent on McDonalds, but on April 28, 2011, Bloomberg reported "McDonald's and its franchisees hired 62,000 people in the U.S. after receiving more than one million applications, the Oak Brook, Illinois-based company said today in an e-mailed statement. Previously, it said it planned to hire 50,000."

Walmart 23,000 Applicants for 600 Jobs

On November 19, 2013 NBC Washington reported Walmart to Open First D.C. Stores Dec. 4

Walmart's H Street and Georgia Avenue locations will open Dec. 4 at 8 a.m. Both the 103,000-square-foot Georgia Avenue store and the 74,000-square-foot H Street location will feature fresh produce, a deli, organic food items and a full-service pharmacy.

The stores will hire a combined 600 associates after combing through the more 23,000 applications its received from potential employees.

The arrival of Walmart has not been a smooth one. Both stores were on the verge of never opening after the retail giant threatened to pull its plans if Mayor Vincent Gray signed a living wage bill.

The Large Retailer Accountability Act, known colloquially as the "Walmart Bill," would have required the company -- and other big-box retailers -- to pay its employees a minimum of $12.50 an hour.

Gray vetoed the bill in September.

Minimum wage in the District currently stands at $8.25 an hour.

Reflections on Living Wages

Take a poll of those employees. I bet 100% of them are happier to have a job at $8.25 an hour vs. no job at some presumed "living wage" that they would not get because there were no jobs.

Of course, now that they have a job and should be happy, some union activist is going to try to convince them they shouldn't be happy.

The Real Problem

Other than a couple of like-minded Austrian bloggers, no one has bothered to complain about the real problem: The Fed pumping money supply like mad, while holding interest rates low.

Five Results

Prices rising faster than wages
Grossly distorted income inequalities
Non-existent price signals
Interest rates that encourage hardware and software solutions to eliminate employees
Equity and bond market bubbles

I blasted the Fed regarding these issues early Friday.

For details and truly educational reading, please see Money as Communication: A Purposely "Non-Educational" Fallacious Video by the Atlanta Fed.

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

Spaniards Expelled from Belgium for Abusing Illegal Immigrant Social Aid Handouts

Posted: 11 Jan 2014 12:53 PM PST

What would happen if the US suddenly kicked out illegal immigrants for abuse of free handouts and social aid?

Belgium did just that. The numbers are small, but the point is that it happened at all.

Via translation from Libre Mercado, please consider Spaniards, among Europeans expelled from Belgium's abuse of social aid programs.

The Aliens Office of Belgium withdrew permission of residence to 323 Spaniards in 2013 because they no longer meet the requirements, such as having an employment contract, being a student or have become self-employed, and thus prevent impose burdens exaggerated to the coffers of the Belgian Social Security. Spanish rank third in number of expulsions, behind only Romanians and Bulgarians.

In total, Belgium expelled a total of 2,712 European citizens for these reasons over the past year. This represents an increase from 2012, when it withdrew permission for 2,407 people to stay in the country.

European citizens have the right to freedom of movement within the territory of the European Union, but must meet certain requirements during your stay at a home outside the Member State.

The Belgian Foreign Office explained that the main reason for removing these permissions have to do with "unreasonable burden on the social system" involving these citizens, by not complying with the conditions required to Europeans.

Not only does this happen in Europe, it happens in spite of alleged freedom of movement clauses for Eurozone nations.

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