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In fact, most people switch for better.
Without a doubt, there's a slot in every market for the cheap enough, good enough alternative.
But rapid growth and long-term loyalty come from being better instead.
When your product or your service doesn't measure up, the answer probably isn't to lower your price or offer a refund to the disappointed customer. Instead, the alternative is to invest in making it better. So much better that people can't help but talk about it—and so much better that they would truly miss it if it were gone.
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Posted: 09 Mar 2014 06:43 PM PDT Every day numerous people send links to articles, edit my typos, comment on the blog, monitor comments on my blog, translate articles, etc. It's a community and I appreciate the global involvement and global help. Each day I get between 50 and 200 emails from readers. I respond to most of them. But even though I spend 2 hours or more every day reading and answering emails, I cannot respond to all of them. Frequently, I offer a one word response: thanks. That does not do justice to how I feel, especially to those who send something every day or nearly every day. Unlike other bloggers, I seldom offer "hat tips" and the reason is simple. I tend to read emails LIFO (last in first out), and most often when someone sends me a link, another person already has. So here is my word of thanks. But I also need to do more. For those who contribute every day, I need to offer special thanks. Spell Checkers I have three mainstay spell checkers: Randy, Curt, and Mark. What one of them misses, another one of them will catch. The only problem is how long it takes me to find the email pointing out my error. Typically it's not spelling per se, as I spellcheck myself, but rather stuff like saying "an" when I mean "and" or vice versa. When you proof your own article you do not see such things. Content I am going to get in trouble over this one because I am sure to leave someone out. Apologies offered in advance. Every day I get emails from Bran in Spain. Every day, Richard sends numerous links I consider writing about. So does Mark the spellchecker. Tony, Brisbane Bear, Bigpond, and Hugh send frequent emails about Australia and Asia. Many others, including Dave, Bob, Joe, Tony, Donald, and Mayraj send so much content that it's hard for me to know where to stop listing names. Blog Monitoring I have one person, "fedwatcher", who monitors comments and removes anything inappropriate. I hope I touched all the bases here, but most likely I didn't. If I missed your name, please accept my apology. Thanks! Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 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: 09 Mar 2014 04:53 PM PDT In the name of saving jobs, the Spanish government has decided to change the rules as to whether or not a business is viable. In bankruptcy proceedings, companies will no longer be free to decide whether they prefer to liquidate the company. Instead, corporations will be obliged to accept debt restructuring offerings from creditors on creditor-proposed terms centered around debt-to-equity conversions. Via translation from El Economista. According to various judicial, legal and bankruptcy administration sources consulted by elEconomista, companies will no longer be free to decide whether they prefer to liquidate the company.Followup post by el Economista The Ministry of Economy approved the bankruptcy reform legislation to save viable businesses including a provision that transforms debt into equity.1.3 Trillion Euro Delinquencies in Play Via translation Libre Mercado discusses the number of potential forced debt-to-equity conversions. Deputy Prime Minister Soraya Saenz de Santamaria, said that the new law completes a package of measures that are aimed at companies that, despite their high debt, "can continue to run their business while maintaining their employment."Think these debt-to-equity terms will be extremely one-sided? Addendum Reader Bran who lives in Spain sent the following pertinent comment: "1.3 trillion is the total debt held by businesses. The article did not stipulate how much of that is delinquent, but it's at least the 10% they hope to save. Registered delinquent business debt has been rising towards 10%. If they talk of saving 10% there is a lot more at stake than the 130 billion euros they think they can save." Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 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: 09 Mar 2014 12:10 PM PDT The takeover of Crimea by Russia is nearly complete. All that remains is the final vote on March 16. There would not be a vote if the outcome was uncertain. Troops Install Minefields, Border Markers in Crimea Bloomberg reports Pro-Russia Forces Occupy Ukraine as Separatist Vote Looms. Pro-Russian forces advanced in Ukraine's Crimean peninsula, ignoring Western calls to halt a military takeover before the region's separatist referendum. The U.S. estimates Russia now has 20,000 troops confronting a smaller Ukrainian force there. Ukraine has stepped up its eastern border defenses in the worst standoff between it and the West since the Cold War.Russia Calls in $2 Billion Gas Debt, Gazprom Ups Price of Natural Gas 37%. A Bloomberg video claims Russia Calls in $2 Billion Gas Debt. In addition, Ukraine Sees Gazprom Charging 37% More for Gas in Second Quarter. Ukraine faces a 37 percent increase in the price it pays for Russian natural gas after OAO Gazprom canceled a discount and threatened to cut supplies, Ukrainian Energy Minister Yuri Prodan told reporters today.Minimal Sanctions It is likely the US issues some sanctions. They probably will not be meaningful. as noted on March 5, Russia Has Upper Hand in Ukraine, No Meaningful Sanctions Coming. It was easy enough to impose sanctions on Iran because there was no meaningful trade with Iran other than oil. And global oil supply can come from anywhere.Germany and the UK already rejected major sanctions. Europe gets much of its natural gas from Russia and hoarding supplies is now underway. See Natural Gas Hoarding in Europe Thanks to US Sanction Proposals; Boehner vs. McCain; LNG the Solution. The chart is from Gazprom and Morgan Stanley. It is mathematically impossible to be more than 100% dependent on a supplier, at least over the long-term. Certainly, for short periods of time imports can exceed usage, but over the long haul they cannot. That said, I do not know the timeframe for the chart. It's possible the chart is reflective of recent hoarding. Regardless, the chart shows the huge dependencies some European countries have for Russian natural gas. I feel sorry for those who will soon be living in a nation they do not feel part of. But there is little that can be done about it. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 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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Here are some laws rarely broken:
As an organization succeeds, it gets bigger.
As it gets bigger, the average amount of passion and initiative of the organization goes down (more people gets you closer to averge, which is another word for mediocre).
More people requires more formal communication, simple instructions to ensure consistent execution. It gets more and more difficult to say, "use your best judgment" and be able to count on the outcome.
Larger still means more bureaucracy, more people who manage and push for comformity, as opposed to do something new.
Success brings with it the fear of blowing it. With more to lose, there's more pressure not to lose it.
Mix all these things together and you discover that going forward, each decision pushes the organization toward do-ability, reliability, risk-proofing and safety.
And, worst of all, like a game of telephone, there will be transcription errors, mistakes in interpreting instructions and general random noise. And most of the time, these mutations don't make things wonderful, they lead to breakage.
Even really good people, really well-intentioned people, then, end up in organizations that plod toward mediocre, interrupted by random errors and dropped balls.
This can be fixed. It can be addressed, but only by a never-ending fight for greatness.
Greatness can't be a policy, and it's hard to delegate to bureaucrats. But yes, greatness is something that people can work for, create an insurgency around and once in a while, actually achieve. It's a commitment, not an event.
It's not easy, which is why it's rare, but it's worth it.
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Is Bitcoin Legal? Illegal? a Currency? a Commodity? Posted: 08 Mar 2014 12:01 PM PST Regulators in various countries are grappling with bitcoin. What the hell is it? It's a good question and answers vary widely. Bloomberg reports Japan Says Bitcoin Not Currency Amid Calls for Regulation. Japan's government said Bitcoin isn't a currency amid calls for its regulation a week after the bankruptcy of Mt. Gox, the Tokyo-based exchange that was once the world's biggest.The answer to my question is yes, no, don't know, and it depends (dependent on what country you are in). Newsweek Unmasks Bitcoin Inventor Two day ago, Newsweek unmasked Satoshi Nakamoto, The Face Behind Bitcoin. It's a fascinating article, and one well worth a look. Here's a paragraph that caught my attention. Andresen, a Silicon Valley refugee in Amherst, Mass., says he worked closely with the person "or entity" known as Satoshi Nakamoto on the development of Bitcoin from June 2010 to April 2011. This was before the rise of today's multibillion-dollar Bitcoin economy, boosted last year by the unexpected, if cautious, endorsement of outgoing Federal Reserve chair Ben Bernanke, who said virtual currencies "may hold long-term promise."Denial, Bizarre Media Road Chase The Guardian reports Satoshi Nakamoto: man denies being bitcoin inventor amid media frenzy. Dorian S Nakamoto, the Japanese-American man named as bitcoin inventor Satoshi Nakamoto, has denied any link to the digital currency amid a farcical media chase through Los Angeles.Followup Statement Newsweek issued a followup statement in regards to the denials ... "Newsweek stands strongly behind Ms. Goodman and her article. Ms. Goodman's reporting was motivated by a search for the truth surrounding a major business story, absent any other agenda. The facts as reported point toward Mr. Nakamoto's role in the founding of Bitcoin." I believe Newsweek has it correct. Leah McGrath Goodman did a fantsatic job of investigative reporting. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 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. |
China Exports Decline Unexpectedly, Trade Balance Negative Posted: 08 Mar 2014 10:09 AM PST In yet another downside surprise, China February Exports Tumble Unexpectedly. China's exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world's second-largest economy despite the Lunar New Year holidays being blamed for the slide.Expect More Downward Surprises Why everyone expects a rosy global economic forecast led by the US, Europe, and developed countries in general is a mystery. I expect more downward surprises of all sorts. China Overtakes US in Trade By the way, back in January, the Financial Times reported China Overtakes US as World's Largest Goods Trader. China became the world's biggest trader in goods for the first time last year, overtaking the US for all of 2013 and finishing the year with record trade figures in December.In spite of obvious malinvestments in vacant cities, vacant malls, unused rail systems, etc., LaFemina thinks the boom will not peak for another 10 years. Amazing. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 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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European Border Changes Over Last 1000 Years Posted: 07 Mar 2014 01:57 PM PST To help put the Russia-Ukraine battle over Crimea in proper perspective, here's a long historical look at European borders. Link if video does not play: European Border Changes over Last 1000 Years Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 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. |
Nonfarm Payrolls +175,000, Household Survey +42,000; Unemployment Rate 6.7% Posted: 07 Mar 2014 07:59 AM PST Initial Reaction Nonfarm Payrolls rose by 175,000 vs. a Bloomberg consensus expectation of 150,000. The employment change for December 2013 was revised up by 9,000 (from +75,000 to +84,000), and the employment change for January 2014 was revised up by 16,000 (from +113,000 to +129,000). The overall effect was a modest two-month upward revision of +25,000. Beneath the surface, things look worse again. The household survey shows a gain of employment of only 42,000 while unemployment rose by 223,000. February BLS Jobs Statistics at a Glance
Additional Notes About the Unemployment Rate
The population rose by over 2 million, but the labor force fell by over 200,000. People dropping out of the work force accounts for much of the declining unemployment rate. February 2014 Employment Report Please consider the Bureau of Labor Statistics (BLS) February 2014 Employment Report. Total nonfarm payroll employment increased by 175,000 in February, and the unemployment rate was little changed at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services and in wholesale trade but declined in information. Click on Any Chart in this Report to See a Sharper Image Unemployment Rate - Seasonally Adjusted Nonfarm Employment January 2011 - February 2014 click on chart for sharper image Nonfarm Employment Change from Previous Month by Job Type Hours and Wages Average weekly hours of all private employees declined 0.1 hours at 34.2 hours. Average weekly hours of all private service-providing employees declined 0.2 hours to 33.0 hours. Average hourly earnings of private workers rose $0.09 to $20.50. Average hourly earnings of private service-providing employees rose $0.10 to $20.30. For further discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution? Birth Death Model Starting January, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I keep this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back. Table 15 BLS Alternate Measures of Unemployment click on chart for sharper image Table A-15 is where one can find a better approximation of what the unemployment rate really is. Notice I said "better" approximation not to be confused with "good" approximation. The official unemployment rate is 6.7%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. U-6 is much higher at 12.6%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years. Labor Force Factors
Were it not for people dropping out of the labor force, the unemployment rate would be well over 9%. Synopsis On the surface this month modestly beat expectation with a decent report of 175,000 jobs. Beneath the surface, things looked worse. Correction: I originally stated the March 2013 adjustment of 369,000 (made just last month) was to the household survey. It was to the establishment survey. Sections revised accordingly. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 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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