Central Perk

luni, 31 martie 2014

Seth's Blog : The cure or the story?

The cure or the story?

The plumber, the roofer and the electrician sell us a cure. They come to our house, fix the problem, and leave.

The consultant, the doctor (often) and the politician sell us the narrative. They don't always change things, but they give us a story, a way to think about what's happening. Often, that story helps us fix our problems on our own.

The best parents, of course, are in the story business. Teachers and bosses, too.

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duminică, 30 martie 2014

Mish's Global Economic Trend Analysis

E-Money Digital Payments Sweep Africa, Head for Europe and India

Posted: 30 Mar 2014 06:44 PM PDT

An interesting, but inaccurate headline appeared on the Financial Times today: Africa's digital money heads to Europe.

A close look reveals this has little to do with "digital money" per se, but rather with monetary payments made by phone. Nonetheless, the wave is about to spread.

The mobile payment system that has revolutionised business and banking in sub-Saharan Africa is to come to Europe as Vodafone seeks to spread the popular digital currency outside emerging markets.

Vodafone has acquired an e-money licence to operate financial services in Europe, with plans to launch M-Pesa (which means mobile money in Swahili) in Romania as a first step to potential expansion in the region.

M-Pesa has become so popular in parts of Africa that it is now a virtual currency, offering a secure means of payment for people who do not have easy access to banking services. A mobile phone text message is all that is needed to pay for everything from bills and schools fees to flights and fish, and means that the mobile phone can double as an office for the continent's smaller entrepreneurs.

Vodafone now hopes to win over an estimated 7m Romanians who mainly use cash.

Michael Joseph, Vodafone director of mobile money, said that the European e-money license would allow Vodafone to operate M-Pesa in other markets, although he indicated that the focus would be on central and eastern Europe.

"There are one or two [countries] we are looking at but [these are] unlikely to be in western Europe in the next year or so," he said, adding that countries with a large migrant population such as Italy were potential markets.

In Kenya, where M-Pesa launched in 2007, the platform is so widely used that a third of the country's $44bn economy washes through the system, sold by 79,000 agents nationwide. It has since been extended to Tanzania, Egypt, Lesotho and Mozambique.

More recently, M-Pesa has been introduced in India, where Vodafone is seeing rapid growth given the large numbers of people without bank accounts. More than 1m people have registered in India, although Vodafone expects that will accelerate if revised regulations being considered by the Reserve Bank of India ease restrictions on such money platforms.

Romanian M-Pesa customers will be able to transfer as little as one new Romanian leu (0.22 euro cents) up to 30,000 lei (€6,715) per day.

"The majority of people in Romania have at least one mobile device, but more than one-third of the population do not have access to conventional banking," Mr Joseph said.

M-Pesa had about 16.8m active customers at the end of last year, generating about €900m in transactions per month. While M-Pesa was originally conceived as a means to retain customers in Kenya's mobile phone market, it is now profitable in its own right with $143m in revenues from the 18.2m M-Pesa customers in Kenya alone, or about 18 per cent of overall country sales.

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

China Accelerates Bad Debt Writeoffs; Reflections on "Policies to Counter Economic Volatility"

Posted: 30 Mar 2014 11:23 AM PDT

Financial stress related to Ponzi financing and other bad debts in China is readily visible in numerous places. One result is China's Big Banks Double Bad-Loan Write-Offs.

China's biggest banks more than doubled the level of bad loans they wrote off last year, in a sign that financial strains are mounting as growth in the world's second-largest economy slows.

The five biggest Chinese banks, which account for more than half of all loans in the country, removed Rmb59bn ($9.5bn) from their books in debts that could not be collected, according to their 2013 results. That was up 127 per cent from 2012, and the highest since the banks were rescued from insolvency, recapitalised and publicly listed over the past decade.

The sharp acceleration in write-offs is the latest indication of the turbulence now buffeting China's financial system. The bond market suffered its first true default in March, two high-profile shadow bank investment products were spared from collapse by last-minute bailouts earlier this year, and a small rural lender suffered a brief bank run last week.

Data also point to a deeper economic downturn in the first quarter than expected, putting China on track this year for its slowest growth since 1990.

The deterioration has fueled expectations that Beijing will act soon to shore up the economy. "Increasing downward pressure on the economy should not be neglected," Li Keqiang, China's premier, said last week. "We have policies in store to counter economic volatility."

Anecdotes from China

There was an interesting post on the Motley Fool titled Random China Observation, by "GoCanucks" who was in China for a month on family business. He talks about the property bubbles and the readily apparent stress. He concluded ...

The bubble is so obvious (admittedly it felt that way 3 years ago), but when I asked my friends "what if", the common answer is "the government won't allow it to happen". And every time I hear that phrase, I can't help thinking of the following quote from Michael Lewis's essay on Irish RE bubble: "Real-estate bubbles never end with soft landings."

Policies to Counter Economic Volatility

Yes indeed, central banks have "policies in store to counter economic volatility", and they use them. It was those policies in the wake of the dotcom bust that led to an even bigger debt bubble and subsequent housing crash.

The Bernanke Fed created the biggest equity and corporate bond bubble in history in the wake of the housing crash.

China has acted at every turn to counter the slightest unwanted slowdown, while maintaining ridiculously high growth targets. Those growth targets led to Ponzi financing of cities that are vacant, the world's largest mall (yet devoid of customers), airports and trains that go unused.

These kinds of malinvestments are the direct result of "policies to counter economic volatility", yet China's premier, the Fed, the Bank of Japan, the People's Bank of China, the ECB, the Bank of England, the Bank of Canada, the Reserve Bank of Australia, etc, all arrogantly believe they can "counter economic volatility" without consequences.

Logic alone suggests the notion that anything can be centrally planned without huge damaging consequences is as ridiculous as it is arrogant. History proves it.

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

Seth's Blog : Who's responsible?

Who's responsible?

Who gets to determine how we react (or respond) to the things that happen to us?

Who chooses which media we consume?

Who gets to decide what we start, and what we quit?

Who decides what sort of learning to invest in (or not)?

Who gets to look for someone to blame?

Too much is out of our control, done to us, dealt to us, allocated unfairly. But in a culture in which more and more choice is taken away from those that identify as consumers or cogs, adults still own some of the most important responsibilities of all.

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sâmbătă, 29 martie 2014

Mish's Global Economic Trend Analysis

Spain Misses 2013 Budget Deficit Target in Spite of Massive Tax Increases; So Much Pain for Virtually No Reward

Posted: 29 Mar 2014 07:16 PM PDT

The official results are in. Spain missed its budget deficit target considerably by reasonable reporting, barely by another.

Spain's Budget Deficit Only Two Tenths Lower in 2013 Despite Massive Tax Increase

Via translation from Libre Mercado please consider Spain's Budget Deficit Only Two Tenths Lower in 2013 Despite Massive Tax Increase.

Spain's budget deficit fell from 6.84% of GDP in 2012 to 6.62% of GDP last year.

The budget goal was far less ambitious than previous, but still did not met the commitment to Brussels. The Government has published today the first official public deficit figure for the end of 2013, there will be new reviews in the coming months and a year, but Spain has deviated from the intended target.

Specifically, the government recorded a hole of 6.62% of GDP in 2013 (67.755 billion euros), one tenth of a percentage point above the limit of 6.5% agreed with the European Commission, according to Finance Minister Cristobal Montoro, in a press conference after the Council of Ministers. However, the announced figure does not include the cost of financial aid reported last year (0.46%), so that the actual deficit stood at 7.08% of GDP.

So Much Pain for Virtually No Reward

Via translation from Guru's blog, paraphrasing a bit because of a difficult translation, please consider So Much Pain for Virtually No Reward, Fire the CEO.

Happy and content as a lark, Montoro proudly announcing that Spain "almost" met the deficit target.

The Spanish public deficit closed at 6.62% of GDP in 2013, slightly more than a tenth above the target of 6.5% agreed with the European Commission (well the first we agreed if I remember correctly was 4.5%)

Are you telling me that this is all we get for so much pain? Well, boys and girls, something has gone badly wrong.

I can tell you this: If I focus on the cold numbers, the deficit fell only 2 billion euros with a gap of almost 68 billion (excluding aid to banks). Please fired the CEO of this company.

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

Teaching Revolution: Online, Accredited, Free; Start Learning Now!

Posted: 29 Mar 2014 10:14 AM PDT

One of the things I staunchly believe is that the cost of education will drop sharply. It has to. The current path of graduating student loan zombies is simply not sustainable.

Eventually, online education will be both inexpensive and accredited. In turn that will drive down costs at brick-and-mortar colleges.

MOOCS Pick Up Steam

The Financial Times reports Teaching Revolution Gathers Pace.

Regina Herzlinger is a bit of a superstar. She was the first woman to be a tenured professor at Harvard Business School, and is now leading its march into Moocs – massive open online courses – which promise to revolutionise the world of higher education.

Professor Herzlinger, whose 11-week course on Innovating in Healthcare will start this month, is an advocate of this model of free online education. "I believe Moocs can democratise education," she says. "It's fantastic to reach so many people."

Harvard, MIT Sloan, the University of Virginia's Darden school and several other big-brand US business schools are experimenting with Moocs. The Wharton school at the University of Pennsylvania has gone so far as to put 10 per cent of its MBA core courses online for free access. Like Prof Herzlinger, Wharton's vice-dean of innovation Karl Ulrich believes the social impact of these programmes is a central reason for promoting Moocs. He cites the example of one Wharton Mooc that enrolled more than 130,000 students. "There's just a huge, huge take-up."

In Europe, business schools such as IE in Spain and Warwick in the UK have taught online MBA programmes alongside their highly ranked full-time programmes.

Now, top schools in the US, such as Kenan-Flagler at the University of North Carolina with its MBA@UNC, are validating the online mode of delivery.

Prof Anandalingam, formerly dean at the Smith school at the University of Maryland, says the technology is "state of the art compared with anything I have seen in the US. Students get a rich learning environment".

Khan Academy

Reader Philip writes ...

Mish,

I discovered your blog through the Khan Academy. Sal quotes you in some of the financial videos, and I have been a loyal daily reader ever since. I think his efforts are truly revolutionary in education-and thought it might be worth your time to create a link on your site or maybe do a posting or two so folks can get involved. His financial videos are top notch and cover most aspects of monetary policy, the federal reserve, banking, etc., but the real impact will be if he can truly affect change in the world education system. Read his book for more details on his plan for education reform-great stuff.

You hold a lot of eyeballs and influence, and any help you can direct to Sal and the Khan Academy, in my opinion, would be a direct extension of the values you promote.

Thanks! Keep up the great work,
Philip

It All Started With a 12-Year-Old Cousin

Phillip is talking about Salman Khan, the founder of the Khan Academy. The New York Times explains how Salman Khan Turned Family Tutoring Into Khan Academy.

In 2008, Salman Khan, then a young hedge-fund analyst with a master's in computer science from M.I.T., started the Khan Academy, offering free online courses mainly in the STEM subjects — science, technology, engineering and mathematics.

Today the free electronic schoolhouse reaches more than 10 million users around the world, with more than 5,000 courses, and the approach has been widely admired and copied. I spoke with Mr. Khan, 37, for more than two hours, in person and by telephone. What follows is a condensed and edited version of our conversations.

Q. How did the Kahn Academy begin?

A. In 2004, my 12-year-old cousin Nadia visited with my wife and me in Boston. She's from New Orleans, where I grew up.

It turned out Nadia was having trouble in math. She was getting tracked into a slower math class. I don't think she or her parents realized the repercussions if she'd stayed on the slower track. I said, "I want to work with you, if you are willing." When Nadia went home, we began tutoring by telephone.

Did you have background as a math educator?

No, though I've had a passion for math my whole life. It got me to M.I.T. and enabled me to get multiple degrees in math and engineering. Long story shortened: Nadia got through what she thought she couldn't. Soon word got around the family that "free tutoring" was going on, and I found myself working on the phone with about 15 cousins.

To make it manageable, I hacked together a website where my cousins could go to practice problems and I could suggest things for them to work on. When I'd tutor them over the telephone, I'd use Yahoo Doodle, a program that was part of Yahoo Messenger, so they could visualize the calculations on their computers while we talked.

The Internet videos started two years later when a friend asked, "How are you scaling your lessons?" I said, "I'm not." He said, "Why don't you make some videos of the tutorials and post them on YouTube?" I said, "That's a horrible idea. YouTube is for cats playing piano."
Continue reading the main story

Still, I gave it try. Soon my cousins said they liked me more on YouTube than in person. They were really saying that they found my explanations more valuable when they could have them on demand and where no one would judge them. And soon many people who were not my cousins were watching. By 2008, I was reaching tens of thousands every month. ....

Start Learning Now!

The mission page of the Kahn Academy says "Start learning now. Completely free, forever".

Those are words sure to soothe any deflationist's heart, while striking fear into the hearts of central bankers and misguided inflationists who think prices "need" to go up.

For further discussion of who benefits from central bank sponsored inflation, here is my own free refresher course.

Sal, if you catch this drop me a note. I would like to chat.

For everyone in school, or with kids in school, do yourself a favor and check out the academy.

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

Raise the Minimum Wage: It's the Right Thing to Do for Hardworking Americans

Featured

Weekly Address: Raise the Minimum Wage -- It's the Right Thing to Do for Hardworking Americans

In this week's address, Vice President Biden discusses the importance of raising the federal minimum wage. It's good for workers, it's good for business, and it would help close the gender pay gap, as women make up more than half of the workers who stand to benefit from a raise. And as the Vice President highlights, Congress should boost the federal minimum wage because it’s what a majority of the American people want.

Click here to watch this week's Weekly Address.

Weekly Wrap Up

FLOTUS Shows Us How She Moves in China

While visiting Xi'an, China, First Lady Michelle Obama was greeted by local kids and students performing music, double dutch jump roping, flying kites, and more. Of course, the First Lady couldn't resist getting in on the fun and showing the kids how she moves.

READ MORE

Six Days, Five Countries, One POTUS

President Obama spent this week across the pond, meeting with European leaders in the Netherlands, Belgium, Italy, and Vatican City, before traveling to Saudi Arabia to meet with King Abdullah. Deputy National Security Advisor for Strategic Communications Ben Rhodes took some time earlier this week to go over the President's schedule and the goals of the trip.

While in Vatican City, President Obama had an audience with His Holiness Pope Francis. Here's what the President said about their meeting, "I would say that the largest bulk of the time was discussing two central concerns of his. One is the issues of the poor, the marginalized, those without opportunity, and growing inequality. ... And then we spent a lot of time talking about the challenges of conflict and how elusive peace is around the world."

Extra! Extra! Read all about it! Over six million Americans have signed up for private health insurance plans.

Are you one of the six million? If not, what are you doing? There's only TWO days left to get covered before open enrollment ends on March 31. Head over to HealthCare.gov to get covered now!

GET COVERED

As always, to see even more of this week's events, watch this week's episode of West Wing Week:

WATCH NOW

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How your competitors may be outranking you with black-hat SEO techniques

Posted: 28 Mar 2014 06:12 AM PDT

Black-hat SEO has been around as long as search engines, and many of the SEO techniques that were previously seen as white-hat and used by many, have gradually moved through the grey area to black-hat.

While many of these techniques are now likely to cause you more harm than good, it's frustrating to still see sites benefitting from old school black-hat tricks in a post-panda/penguin era.

Comment Spam and Track/pingback

This is something that we are all familiar with – you write a blog post and get lots of attention from people saying how useful they found it, only to find that their name appears as a suspicious keyword and they have added a link back to an unrelated website. It then becomes clear that the sole motivation for making the comment was for the link.

But the worst part about this is that, despite this form of spam being the main reason for Google to release the no 'nofollow' tag (which prevents any value from being passed through links), comment spam still appears to be working as well as ever.

Some examples

In the case below, the offending site ranks on page one for the term 'Karen Millen Outlet' – a brand that often has results removed after complaints are filed under the US digital Millennium Copyright Act. The exact same comment appears in over 560 posts:

I found that many of the spam links appearing on various blogs included terms such as "Louis Vuitton bags" and "Hermes Outlet". So, I did a quick search for "Hermes Outlet" and found this page ranking at number 3 http://chrisweaver.co.nz/hermes-bags-outlet-online-5179.asp. This page is pretty horrible, with a huge amount of keyword stuffing and a very poor design. It doesn't appear to have been live for long and has 566 backlinks that were built in the last 9 weeks, almost all of which are through comment spam.

While many of the linked sites above are no longer live, it's surprising how many of them do rank for the linked terms. For example, one site – sellyourcatsdirect.com ranks on page one for the linked term 'sell used catalytic converter'. Catalytic converters contain precious metals, so this industry is big business and black-hatters are cashing in.

HR Software

One particular area that I found has adopted this kind of spam is the HR software industry. For example, if you search “Pingback: HR Software” you will find hundreds of unrelated blog posts containing hundreds of spam links that point to a number of sites that succeed in ranking in the top positions for the term “HR Software”.

The same goes for spam comments. I searched “HR Software Says” “reply” (based on the format of a blog comment) and quickly found posts containing comments with exact match anchor text links to the same HR websites.

Payday Loans

Next, I looked at one of the most competitive keywords in search – 'Payday loans'. The number 1 & 2 organic results were: http://www.ocics.co.uk/ and gayhomestays.co.uk/

After clicking both of these results, I was presented with the same content, branded as 'Monkey Payday Loan' on different domains (although gayhomestays.co.uk/ redirects to http://www.discopaydayloans.co.uk/)

So, at this point, any users that aren't paying much attention believe they have landed on a website called 'Monkey Payday Loan'. After entering their details and clicking 'Get Cash', they are redirected to the real site – https://www.monkeypaydayloan.co.uk/ (which does not appear in Google's index), then after filling in your personal details you are redirected again to the loan provider via a referral link, so visits are tracked and commission is paid.

However, after checking again a day later, these sites were no longer ranking and had been completely removed from Google's index. I did some further searching and found that http://www.ocics.co.uk/ was previously 'The Oxford/Cambridge International Chronicles Symposium', and still has links from several Universities, which would no doubt have helped it to rank, based on their high authority.

I also found several other domains with the same 'Monkey Payday Loan' content, for example www.autovana.net, so I'm expecting this site to make a brief appearance in the same space in the not too distant future.

This is hardly a long-term strategy, but such a highly searched term is likely to generate thousands of pounds a day, so I'm quite sure that the spamming will go on!

To summarise

While this type of link building is still helping many sites to rank, it's only a matter of time before they are caught out, so we would never recommend making it part of your SEO strategy.

If you make genuine comments on industry related blogs that include real comments from others, then add a link back to your site (avoid messing around with the anchor text), but stay away from sites that accept suspicious looking comments.

If you're concerned that one (or more) of your competitors is taking part in black-hat activities, there are ways to report them to Google – https://www.google.com/webmasters/tools/spamreport although this isn't necessarily going to work, so don't expect them to be penalised instantly.