joi, 9 octombrie 2014

Damn Cool Pics

Damn Cool Pics


Facts You Probably Didn't Know About Gambling

Posted: 09 Oct 2014 06:07 PM PDT

Everyone loves gambling. You step up to a table with a little bit of money and high hopes that it becomes a lot of money. You can't get lucky every single time but you might be able to help your odds by remembering some of these fun facts about gambling.


















50 Fictional Places You Can Actually Visit [Infographic]

Posted: 09 Oct 2014 05:36 PM PDT

UK flight search website Just the Flight has created a fun infographic that shows you 50 fictional places you can actually visit.

From the peaceful Hobbit village of Shire in the Lord of the Rings to the town of Springfield in The Simpsons, the infographic reveals the real-life locations that inspired the settings in books, films and television shows.

Click on Image to Enlarge.


Jennifer Lawrence Talks About Her Leaked Nude Photos

Posted: 09 Oct 2014 05:25 PM PDT

The leaked nude photos of Jennifer Lawrence have started the Fappening craze. First time since then Jennifer talks about the stolen icloud photos.























The Worst Prisons In The World

Posted: 09 Oct 2014 02:56 PM PDT

Prison sounds pretty terrible in general but if you've got to serve time, it's going to be a whole lot worse if you're doing it in one of these prisons.






















SEO Teaching: Should SEO Be Taught at Universities?

SEO Teaching: Should SEO Be Taught at Universities?


SEO Teaching: Should SEO Be Taught at Universities?

Posted: 08 Oct 2014 05:08 PM PDT

Posted by Carla_Dawson

SEO is a concept that has been around for years and some universities have incorporated it into the curricula. A while back, I posted this question on Moz and noticed some very strong opinions on the idea that SEO should be part of formal education. Search Engine Journal also posted an article on the idea that SEO should not be taught in universities. We (I co-wrote this post with Aleksej Heinze, who also currently teaches SEO) obviously believe SEO should be taught in higher education and got together to discuss how it benefits the SEO industry and how SEO can be incorporated in higher education. Aleksej teaches SEO in the U.K.; I teach SEO in Argentina.

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Before I get started with the pros and cons, I want to share with you some opinions from people in industry on the topic of SEO in universities.


Wil Reynolds (Founder - Seer Interactive)

1. Do you believe universities or higher education institutions should equip students with the skills to meet industry needs?

Yes, people take BIG loans to go to the university in the U.S.; we should at least make sure when they graduate they have the skills that are in...demand in the workplace.

2. Are SEO skills something you believe are lacking in industry?

Not sure. "SEO skills" is a broad phrase.

3. Do you think teaching SEO in universities gives credibility to the profession?

Not really, I think the profession has credibility. Teaching SEO in universities gives a student a great platform to learn and to be prepared for one of the industries that is in desperate need of talent.

4. Do you think teaching SEO in universities benefits the industry?

Yes, but I think SEO is too narrow, according to many definitions. If you think about it, SEO is as much about technical as it is about link building [or] keyword research. To teach the broad definition of SEO you'd need a pretty multi-disciplinary group to teach it. Maybe we'd just teach it as part of a digital marketing rotation.

Stephen Lock (Head of Content & Inbound Marketing, Linkdex.com)

1. Do you believe universities or higher education institutions should equip students with the skills to meet industry needs?

Yes, it makes sense that universities, where appropriate, offer courses that are based heavily on industry demands, especially if the course/institution has been marketed as...tailored for employers.

2. Are SEO skills something you believe are lacking in industry?

They definitely are. There is a real shortage, and due to the fast-moving nature of the field, knowledge is quickly outdated, meaning even experienced practitioners aren't always great candidates.

3. Do you think teaching SEO in universities gives credibility to the profession?

I believe it does, although it is one of those fields where it's common for people to...come from a broad range of backgrounds. The skills required are so diverse that it's also understandable that people who have studied one field can adapt. From experience, employers are more interested in the person, their attitude and capacity to learn. However, SEO in universities can only be a good thing for the industry.

4. Do you think teaching SEO in universities benefits the industry?

Teaching SEO, I believe, would benefit the industry, as the skills shortage is so acute and it is so common for entry-level candidates to come from many different backgrounds. My final thoughts are that SEO is so broad as a discipline that calling it just SEO may not do it justice.


What we can see from these and other opinions we received for this article is views are still mixed since SEO education is not clearly defined. Where do you start with a subject area that touches such a broad range of disciplines, including technical, content and engagement? However, the vast majority of our respondents were positive about the need to integrate SEO in higher education!

Pros to teaching SEO in universities

Eli Overbey wrote a great article on this topic here, but me and Aleksej took some of the ideas one step further. Basically, we identified problems in industry and how teaching SEO in universities might help the industry.

How teaching SEO in universities may benefit the industry

Industry Problem How SEO in higher education might alive the problem?
Long sales cycles - Selling SEO is a lot about educating your potential client. Today's student is tomorrow's potential client.
Students who learn SEO formally (and not just on the job) are likely to have a broader understanding of its benefits, and therefore, be able to "sell" it more effectively to clients.
Lack of Credibility - Most SEOs learned SEO on the job, or through reading great books like "The Art of SEO" and reading great articles on the internet. However, few formal institutions recognize it as a valid marketing technique. SEO is not taught in many marketing related programs. Creating an educational standard for SEO increases the credibility of the field. Treating the discipline as if it was law, engineering, etc., would elevate SEO to a discipline seen as requiring a significant period of study before it can be practiced.
Everyone says they know SEO. Without a recognized standard for the field of SEO, anyone and everyone can say they know SEO.
Clients with bad experiences don't trust SEO companies.
Showing clients you have a certified person on your team may alleviate this situation.
Long recruiting cycles. Recruiters currently have to give SEO tests to verify that the job candidate in front of them really knows SEO. A certification or a degree does not guarantee you know the subject (this is true for lots of fields), but it is an excellent filter and a great starting point.
SEO is constantly changing, making it hard to keep up. Law, medicine and most other subject areas are also constantly changing, and content and concepts are updated accordingly. The same can be true for SEO in universities.
Clients challenge your techniques (ex. "Why don't you use the keyword meta tag?" or "Why are you using parallax scrolling when it is not SEO-friendly?")  This happens in all industries and being able to reference an independent institution and a high-quality article will probably reduce discussion time.
There is a high demand for SEO skills. Below you will find articles that mention demand for SEO skills in industry. Universities are in the business of creating professionals and satisfying workforce demands.Higher education institutions are often criticized for their lack of relevant educational courses that will equip students with the skills to meet specific industry needs.

SEO is relevant today and will be well into the foreseeable future.

Cons to teaching SEO in universities

We do see some negatives to teaching SEO in universities, but we see them more as issues to be mitigated. John Weber did a great job identifying the difficulties in teaching SEO in his article on searchenginejournal.com. We agree with several of the points in this article. However, we see them more as issues that can be alleviated through great program development.

Obstacles  Potential Solutions
Google makes changes to its algorithm constantly. This exact topic should be brought up in the classroom. Students get that what they learn in school is somewhat "academic" and may be slightly out-of-date, but is still useful.
(On a side note, laws change all the time, yet law is taught in school.) 
SEO is complex. It requires analytical and creative skills. Case studies are a great way to teach complex concepts and creativity. Law, perhaps, is similar to SEO in that it requires analytical and creative skills to be successful, and it is taught in universities.
No one absolutely knows "the magic formula." This exact topic should be brought up in the classroom. This is true with many professions. Medicine is not an exact science and continuously evolves. Physicians often prescribe differing treatments for the same diagnosis. 

Current flaws in academia

We also see lots of flaws within the academic world regarding SEO, specifically the fact that if the subject is taught, it is mostly taught as an extension (vocational) course or optional part of an MBA program.

Here are some universities that offer SEO:

We feel SEO should be included as part of many other degree programs.

Please note that mentioning the concept and explaining it is not the same as teaching how to do SEO. In some cases, the concept should be mentioned and included, and in other cases, SEO should be fully taught. For example at Salford Business School, students are expected to plan, execute and evaluate live SEO campaigns and report on their results. This kind of SEO learning helps in job interviews where students can show their own artefacts and discuss what they have done and learned from their practical SEO experience.The academic world has not incorporated the subject in a holistic manner.

How could SEO be incorporated into higher education?

Degree focus SEO Concept (not to be confused with course) to be incorporated in program Comments
Master of Business Administration (MBA) How to use SEO as a business strategy for long term sustainability of business? Not many MBA courses recognize SEO as a strategic tool for developing value for their business. Hence a number of businesses are missing growth opportunities in the online world.
Advertising How to use SEO with viral marketing and word of mouth as an advertising technique?
Is Inbound Marketing an advertising technique?
Television ads are no longer as effective as those created for YouTube with viral sharing in mind.
Web design/ computer science Designing for Search Engines - Is SEO part of web design? SEO is not taught in many web design or computer science schools. This has major issues/benefits for agencies that try to turn a non-SEO-friendly website into one that can be crawled by search engines.
Marketing Organic search engine results are an important marketing channel, and this concept does not have visibility in the educational system.

Many marketing programs talk about SEO as if it is something that's useful to someone else. We are all individual brands who can learn and use SEO (e.g., integration of keyword research allows for better digital consumer profiling and learning about the digital personas to be engaged with in marketing mix).

Public Relations (PR) Synergies of online PR with content development strategies and long-term link building Many PR ignore the benefits of SEO and miss out on the mutual benefits that an integration of SEO and online PR could provide. 
Journalism Writing text for online readability and scanability (e.g., using headings, bullet points, etc.) Many journalism courses are still based on great headlines and catchy first paragraph, but these are great techniques when combined with SEO, too. Not thinking about the online audience means you miss a lot of reach with articles that are "thrown" onto the web without much consideration.

We argue for wider adoption of SEO at university teaching because of these three reasons:

Shaping the SEO industry

Starting with understanding SEO principles at the university-level, we are shaping the digital marketing professionals of the future. Recognizing the growing range of opportunities that digital marketing creates as a consequence of good SEO practices offers an invitation to the industry for new talent. Offering SEO at universities will not stop cowboy SEO practices, but at least it will reduce the use of such practices out of incompetence.

SEO is no longer a "dark art"

By demystifying the process of SEO, companies will be more likely to employ SEO professionals by recognizing and better appreciating the value they create. SEO is no longer perceived as a "black box" or "dark art" and individuals who might be supervising others will be more able to expect higher standards and discern whether someone is using unwelcome practices.

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Good SEO practices will make our industry sustainable

By integrating SEO into wider advertising, digital marketing, journalism, web design, PR and MBA courses, we are able to create a better long-term future for SEO as a profession. Having SEO skills applies to many disciplines, and business would be prepared to pay for these skills as soon as they recognise the return on investment that good SEO can create. By teaching SEO in higher education, SEO will appear more professional, which will lead to long-term sustainability.

Is there demand in the industry for SEO skills?

Universities have often been criticized for offering courses not relevant to industry needs. Students invest in higher education to broaden their horizons, but also to obtain skills that equip them better for their chosen profession. The underlying principle is that universities have to offer "universal knowledge and skills" to improve innovation and skills of the world we live in. So if an industry demands SEO skills, then perhaps it is time for higher education to respond? Here are some articles that show workforce demand related to SEO. 

2012 - Conductor - Demand for SEO Professionals Has Never Been Greater [Study]

2013 - Bruce Clay - Studies Reveal SEO Analysts are in High Demand

2013 - Search Engine Land - SEO Talent In High Demand — How To Hire An SEO

Here are some great stats from the articles above.

  • Studies show a 112 percent year-over-year increase in demand for SEO professionals, with salaries as high as $94,000, as reported by Conductor, an SEO technology company based in New York.
  • Search Engine Land surveyed the SEO industry and found that 93 percent of respondents expected their SEO business to grow by the end of 2013. It makes sense, then, that 82 percent of respondents also reported plans to hire additional SEO staff this year.
  • Digital Journal proclaimed "there is no doubt that a career in an SEO agency as an SEO professional can be an exciting and rewarding one. Stress levels would match the lows found in other online positions, while the employment opportunities in such a fast growing business are obvious … Mid-level strategist and management roles can earn from $60,000, while senior marketing directors can expect to approach six-figure sums."

First-hand experience - Aleksej Heinze

Salford Business School is currently leading a European project, a Joint European Masters in Digital and Social Media Marketing ( JEMSS). This project aims to develop the digital marketeers of the future. JEMSS is a partnership between five European Universities and two commercial organizations, one of which is a digital marketing recruitment agency based in Manchester, the UK.

As part of this project, an extensive consultation with digital agencies and in-house teams has been conducted across five European countries. This multi-stage research project started with a brainstorming session that included ten UK-based agencies in December 2013. They were looking at the top 10 digital marketing skills for international business. The key skill identified as part of this focus group was Search Engine Optimization.

The views from the UK-based agencies were also inline with the online survey results from students and potential students regarding digital marketing courses. The list of 25 skills was developed through the initial focus group with industry practitioners. We can clearly see that SEO tops the table of skills needed when developing knowledge and skills in the area of digital marketing. This online survey was completed by 712 respondents across several countries. We were interested to look at five countries taking part in the JEMSS project: Bulgaria, Greece, Lithuania, Poland and the UK. At least 50 respondents for each of these counties were collected to have a representative sample group.

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Do people want to learn SEO?

Looking at the generic searches related to learning SEO/SEO courses in various parts of the world we see some interesting trends:

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This Google Trends screenshot shows some of the main terms related to the popularity of SEO courses. We can see there is a major difference between "SEO training" and "SEO courses." This can mean most people are seeing SEO as a vocational skill and not an academic course. It is also interesting to note that the location for those interested in "SEO courses" tends to be in India, the U.K. and the U.S. More research should be done in to identify additional hot spots throughout the world.

First hand experience - Carla Dawson

My students are eager to learn about SEO. Many of them make comments like "Carla, we have been waiting for this class" or "This is the best class [in the] program." In the SEO class, I notice that students pay closer attention than they do in other classes. Multiple requests have been made by my students to "offer a second course or a seminar" so they can learn more about SEO. It almost seems as if the SEO course has more value than some of the other courses. In class, I get questions like "where can we learn more about SEO?" "What sources are reliable?" etc.

Conclusion

Long gone are the days gone where universities were run by nuns and monks and the main courses included Latin, metaphysics and theology. Most universities are becoming businesses that develop educational products, research and sell them.

If you believe that universities or higher education institutions should equip students with the skills to meet specific industry needs, then perhaps SEO or better yet "Search Marketing" is ideal for universities?

SEO touches so many fields and in our opinion it should be incorporated in various degrees not just offered as an extension course. We would love to hear the communities opinion on this topic so please comment below!

This article was co-authored with Aleksej Heinze from the University of Salford Manchester . You can find more information about Aleksej here.


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Seth's Blog : Four steps on the road to organizational growth, dominance or irrelevance

 

Four steps on the road to organizational growth, dominance or irrelevance

We see the same four steps, over and over:

Struggle: At the beginning, no one knows what you make or why they need it. They are unaware and distrustful too. Sometimes the struggle never ends, other times the story is so compelling and the value created so in demand that it appears to go by quickly. But the struggle is always there. Most marketing  (as opposed to advertising) lives in this stage, because you're starting from zero.

Servant: As a soon-to-be-successful organization gains traction, it has a choice. It can move to servant mode, delighting and connecting customers, exceeding expectations and performing what seems like miracles. Or it can take profits as soon as it can. The former leads to scale, the short-term approach usually results in more struggle.

Bully: As the organization gains power (and constituents) it is under pressure to increase profits and market share and lock in. The market power leads to more market power and the ability to cause customers or partners to shift their strategy in deference. (To be clear, I define a bully as an individual or organization that uses physical or other power to cause someone less powerful to act against their enlightened long-term self interest to satisfy their demands.) "We make the rules now."

Utility: No organization stays in bully mode forever. The step after this is utility, the organization that serves a function, makes a profit, and is often taken for granted.

Bitcoin is still in the struggle stage. Microsoft clearly went through all four of these stages a decade ago. Federal Express skipped the bully step, as far as I can tell, and moved straight to utility. AT&T also followed the four steps. So did Standard Oil. Religions that last more than a few generations go through these steps too. During their hyper-growth period, AOL had the chance to become a generations-long utility, but probably worked too hard to exercise their power to gain scale before moving to the utility stage. 

While the easy examples to find are the famous, international ones, this can happen on the micro level, within industries or locations or sects as well.

I'd like to believe that the goal is to figure out how to live a life in the servant stage, to create an organization that doesn't become a bureaucratic haven or an avarice-focused engine of profit. As markets shift faster (networks grow faster now than ever before in human history) there's more opportunity to find a sweet spot that dances between servant and utility.

       

 

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miercuri, 8 octombrie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


RoboTrucks from Mercedes-Benz to Hit US Highways Within 10 Years; Mish Supply Chain Proposal

Posted: 08 Oct 2014 06:55 PM PDT

Mercedes-Benz has announced "Future Truck 2025″, a self-driving truck that it expects to be on the streets by that date. I expect sooner and will give my reasons in just a bit.

First, please consider Mercedes Is Making a Self-Driving Semi to Change the Future of Shipping by Wired.Com.
The latest truck concept from Mercedes-Benz doesn't look like anything crazy. Its design is a bit unusual, and it's loaded up with LEDs instead of headlights and cameras instead of side mirrors. But those modest tweaks to conventional design hide the fact that this is a serious bid to revolutionize the trucking industry. That's because the "Future Truck 2025″ drives itself. And while it's a prototype, Mercedes is serious about spending the next decade getting it—and us—ready for commercial use.

Autonomous driving is nothing new for trucks in agricultural and military applications, and should be available for passenger cars by 2020. But trucks that share our highways are tempting candidates for shedding their human component: Highway driving is easy for computers but dangerous for us, especially when big machines are involved. In 2012, according to NHTSA, 333,000 large trucks were in crashes in the US. Those accidents killed nearly 4,000 people, the vast majority of whom were riding in passenger vehicles. Regulators have trouble ensuring that drivers get adequate rest, and the trucking industry has fought back against regulation.

With the idea that humans who drive less cause less trouble, Mercedes equipped the Future Truck 2025 with the "Highway Pilot" automated system. "It never gets tired. It's always 100 percent and sharp. It's never angry; it's never distracted," says Dr. Wolfgang Bernhard, the Daimler board member for trucks and buses. "So this is a much safer system."

For an autonomous system, highway driving is far easier than navigating cities. There are no cyclists or pedestrians to watch out for, speeds are steady, and turns are minimal. The "Highway Pilot" system combines several established technologies that will maintain lane position and following distance using cameras and radar. The sensors have been fitted to provide full coverage of the truck's surroundings, and the assistance systems are linked.

The big addition vehicle-to-vehicle communication technology connecting the truck to other cars on the road, providing their exact locations and speeds. The truck doesn't need this data to drive autonomously, but it's helpful for things like moving aside for emergency vehicles or detecting stopped vehicles up ahead.

In the Future Truck, which Mercedes unveiled at a commercial vehicle conference last month, the driver becomes a "transport manager." He gets the truck onto the highway and merges into traffic. At 50 mph, he's prompted to activate the "Highway Pilot" and relax.
Time Flies Faster Than Expected

Mercedes-Benz calls the project "Future Truck 2025″. I confidently predict much sooner.

Wired states "Autonomous driving is nothing new for trucks in agricultural and military applications, and should be available for passenger cars by 2020."

The primary benefit to autonomous cars is elimination of the taxi driver. Otherwise, who wants to pay the cost of all the radar, mirrors, etc.?

I am sure such costs will come down over time because price of technology is the one thing the Fed and governments have the least influence over.

But where's the payback?

The primary payback is cost elimination. And where is that? It's in delivery. Delivery of pizzas, transporting people, and transporting trucks.

When it comes to pizza, costs dictate that mini-drone helicopters will win out over  autonomous cars. For delivering people to destinations,  autonomous taxis are in order.

But the biggest cost efficiency is in trucks.

Truck drivers make $40,000 to $80,000 a year. You can buy a lot of radar, cameras, and other driving technology for that price.

Wired says the driver will get the truck onto the highway , then at 50 mph, activate the "Highway Pilot" and relax. I suggest not quite.

Mish Supply Chain Proposal

  1. A paid driver will drive a loaded truck to a trucking hub near an expressway.
  2. The autonomous robo-driver will drive the truck to a trucking hub exit spot on an expressway or major highway near the final destination point.
  3. A paid driver will navigate city traffic and take the truck to its final destination, unload the truck, then return the truck to the closest expressway trucking hub.
  4. The autonomous robo-driver will drive the truck to its next pickup location on some other expressway where a paid driver takes over, driving the truck to its loading point. 
  5. Drivers report to the hub in their own vehicle. They only get paid to drive truck between the hub and local destinations.

The advantages of the above scheme are obvious as well as bullet-proof. All the miles truck drivers drive on expressways will soon vanish. Truck hubs will form near every major city and every major roadway.

At most, trucking jobs will consist of  driving trucks from hubs to final destinations and from final destinations back to the hubs.

Eventually, but it may take a lot more time, technology will be good enough to eliminate drivers altogether.

Regardless, truck driver jobs, as we know them now, will soon vanish .

For pizza delivery and bank services, please consider What Will Your Bank Look Like 5 Years From Now? How Will Pizzas Be Delivered? Do You Tip a Drone?

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

New Home Prices: Are they Really Up this Year? Homebuilder Freebies: Reduced Closing Costs, Free Pools; Housing Has Peaked This Cycle

Posted: 08 Oct 2014 01:30 PM PDT

Thanks to ultra-low interest rates, massive all-cash purchases by private equity funds, and Fed-sponsored financial speculation, home prices are now back in bubble territory.

Yet, builders that had an easy time of things for a few years now offer Freebies as U.S. Housing Markets Cool.
Joseph Beben wasn't in the market for a house until he heard about a year-old community in suburban Phoenix where 10 homebuilders are offering buyers incentives such as swimming pools, built-in barbecues and subsidized mortgage rates.

Beben, a 33-year-old general manager at Best Buy Co. (BBY), visited three of the sales offices flanking the main corridor of The Bridges at Gilbert, whose 17 subdivisions are among the about 200 locally that have opened since early last year. He settled on Woodside Homes' community within The Bridges after the builder agreed to cover as much as $10,000 of his closing costs, and throw in another extra he liked.

"When I saw this deal, it looked like a good business decision," said Beben, who will pay $332,000 for a 3,000-square-foot.
Not a Business Decision at All

It may, or may not turn out to be a good speculative move, but Beben is seriously misguided if he equates personal decisions as "business decisions" unless asset speculation is his business (which it clearly isn't).

Major City Sales Slowdown
"Phoenix is very slow, Sacramento is spotty," said John Burns, a housing consultant based in Irvine, California. "The investors came in and pushed prices a little too high. And then FHA rocked the new-home market really hard."

"Phoenix is a cautionary tale about raising prices too aggressively and opening up communities too aggressively," said Alex Barron, senior research analyst at Housing Research Center LLC in El Paso, Texas. "It's a bad combination where affordability got out of control and the FHA limit went down. Homes are unaffordable now, and all of a sudden there's a ton of supply."
FHA Reduced Limits
In January, the federal government, which is reducing its share of the mortgage market to lure back private capital, cut FHA loan sizes in 652 high-cost U.S. counties. In Phoenix, the limit dropped to $271,050 -- about $24,000 below the median prices of a new home -- from the previous maximum of $346,250. The limit shrunk by 28 percent in the Las Vegas region, and 18 percent in the Sacramento area.

"We were having a nice robust recovery and then that happened," said Buddy Satterfield, president of the Arizona division for Shea Homes, which has two communities in The Bridges and is opening one in Eastmark. "When you take the FHA limit down to $271,000, you hit us right in our sweet spot."

After jumping 32 percent in 2013, new-home sales in the Las Vegas area in the first eight months of this year fell 26 percent from a year earlier, he said. Smith said he recently spoke with a builder who lost a sale in the Las Vegas area to a competitor who cut the price by $17,000 and covered closing costs.

"It's a big adjustment," Smith said. "It's hard for builders to cut their pace when they've been trying to rejuvenate their numbers over the past five years."

In Phoenix, the supply increased 26 percent. Existing-home prices in the area rose 4.4 percent in August from a year earlier, compared with an increase of 6.4 percent nationally, property-information provider CoreLogic Inc. (CLGX) reported today.
Housing Has Peaked This Cycle

Supposedly, prices are up 4.4% from a year ago in Phoenix and over 6% nationally.

I have a question: Does that include reduced closing costs, free barbecues, and free $20,000 pools?

Downturns start with rising building inventory, competition, and freebies that do not immediately show up as price reductions.

I think this rebound in new home prices has peaked nationally even if  prices purportedly show nominal price increases for a while. 

In Beben's case, he got $10,000 off on closing costs and $22,000 towards a swimming pool pool according to Re/Max Solutions agent Tim Ehlen.

That's $32,000 off a home that would have sold last year for $364,000, a decline of 8.8%.

Taking freebees into consideration, it's safe to conclude new home prices in Phoenix are not up 4.4% on the year as reported. I suggest prices are likely down somewhere between 5% and 10%.

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

IMF Warns of Financial Crisis, Admits Low Interest Rates Spurred Asset Speculation Not Investment

Posted: 08 Oct 2014 12:19 PM PDT

The IMF finally had a "duh" moment in what should have been obvious years ago. The IMF finally realizes that almost zero borrowing costs has encouraged speculation rather than  a hoped-for pick up in investment.

Now, the IMF warns period of ultra-low interest rates poses fresh financial crisis threat.
The Washington-based IMF said that more than half a decade in which official borrowing costs have been close to zero had encouraged speculation rather than the hoped-for pick up in investment.

In its half-yearly global financial stability report, it said the risks to stability no longer came from the traditional banks but from the so-called shadow banking system – institutions such as hedge funds, money market funds and investment banks that do not take deposits from the public.

José Viñals, the IMF's financial counsellor, said: "Policymakers are facing a new global imbalance: not enough economic risk-taking in support of growth, but increasing excesses in financial risk-taking posing stability challenges."

Viñals said the IMF had analysed 300 large banks in advanced economies, making up the bulk of their banking system. It found that institutions representing almost 40% of total assets lacked the financial muscle to supply adequate credit in support of the recovery. In the eurozone, this proportion rose to about 70%.

"And risks are shifting to the shadow banking system in the form of rising market and liquidity risks," Viñals said. "If left unaddressed, these risks could compromise global financial stability."
IMF Wants More Regulation

Amusingly, the IMF concludes "The best way to safeguard financial stability and improve the balance between economic and financial risk taking is to put in place policies that enhance the transmission of monetary policy to the real economy – thus promoting economic risk taking – and address financial excesses through well-designed macroprudential measures."

The IMF wants tougher supervision of banks, requirements on them to hold more capital, and curbs on lending to specific sectors such as housing.

Curiously, low interest rates were the problem but the solution is low interest rates and more macro controls including "policies that enhance the transmission of monetary policy to the real economy – thus promoting economic risk taking".

It's a financial axiom that central banks can make money available and set the rates, but they cannot dictate were it goes. Yet, the IMF just now seems to be figuring that out.

As for central bank sponsored "risk taking", haven't we seen enough already?

Where the Money Went

  1. Junk bond speculation
  2. Stock market speculation
  3. Stock market buybacks at ludicrous prices
  4. Robots in lieu of hiring
  5. Free profit for banks thanks to interest on "excess reserves"
  6. Private equity firms buying up houses
  7. In Europe, banks loaded up on their own allegedly risk-free bonds
  8. In China, property bubbles and profitless SOEs

Where the Money Didn't Go

  1. Higher wages
  2. Infrastructure
  3. Investment

What Now?

Not only was the IMF late in figuring out central banks did little but encourage asset speculation, it remains clueless in regards to what to do about it.

Curiously, the IMF argues for raising the VAT in Europe which will take money out of the hands of people who will spend it. The IMF also has concerns about price deflation when the whole world could use lower prices.

The IMF still has not figured out it is asset deflation and speculative loans made on assets that is the problem, not price deflation on consumer goods.

To get money to flow where it perceives best, the IMF wants more regulation over what projects banks can or cannot lend to.

Want efficient allocation of capital? Then how about trying a free market in goods and services with a free market in interest rates as well?

Instead, the IMF proposes more central intervention as the solution. The IMF's proposal is economic stupidity at its finest.

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