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marți, 11 noiembrie 2014

Seth's Blog : A Peter Corollary

A Peter Corollary

The original Peter Principle made perfect sense for the industrial age: "In a hierarchy, every employee tends to rise to their level of incompetence." In other words, organizations keep promoting people up the organization until the people they promote reach a job where they are now incompetent. Competence compounded until it turns into widespread incompentence.

Industrial organizations are built on competence, and the Peter Principle describes their undoing.

Consider a corollary, one for our times:

"To be promoted beyond your level of confidence."

Too often, the person who wrecks our work is us.

In every modern organization with upward mobility, good people are promoted until they get to the point where they lose their nerve.

You can check out the original Peter Principle here.

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luni, 10 noiembrie 2014

Mish's Global Economic Trend Analysis

"Brink" of a New Cold War? Another Cold War Already Started? Is McCain Brain Dead?

Posted: 10 Nov 2014 06:08 PM PST

Former Soviet Union leader Mikhail Gorbachev warned on Saturday that the Ukraine crisis had brought the world to the "Brink of a New Cold War".

"The world is on the brink of a new cold war. Some say it has already begun," said [Mikhail Gorbachev] the 83-year-old former Kremlin chief in a sombre speech delivered in Berlin at an event to mark the 25th anniversary of the fall of the Berlin Wall this weekend.

Mr Gorbachev accused the west, led by the US, of "triumphalism" after the fall of the Berlin Wall ended Soviet dominance in eastern Europe.

Trust between Russia and the west had "collapsed" in the last few months, he said, highlighting the damage done by the Ukraine crisis. He called for new initiatives to restore trust, including a lifting of personal sanctions imposed by the US and the EU on top Russian officials in response to Moscow's actions in Ukraine.

Mr Gorbachev clearly sees the west as the culprit in the crisis, having given his unequivocal backing to Mr Putin last week. He said, before arriving in Germany, that he was "absolutely convinced that Putin protects Russia's interests better than anyone else".

New Cold War Already Started

Count me in the group that says it's blatantly obvious a new cold war has already begun.

Inane sanctions by the US and Europe led by President Obama and fueled by warmongering hype from Senator John McCain and others provides sufficient evidence.

US Blowbacks and Russian Interests

The US once again is clueless when it comes to predicting global blowbacks to its inept foreign policy.

Gorbachev's statement he was "absolutely convinced that Putin protects Russia's interests better than anyone else" is well beyond reproach.

The US is not interested one iota in other country's best interests.

Arguably, the US shouldn't be.

The other side of the coin should be equally easy to see: Other countries have a need to protect their vested interests. And they will.

The US needs to understand that. It also needs to weigh the potential for blowbacks when it doesn't.

The blowbacks in Iraq, Ukraine, and Libya have been spectacular. Iran is on deck.

US Wakes Up Russian Bear

When the US meddled in the internal affairs of Ukraine, it woke up the Russian bear.

Threats to make Ukraine a member of NATO in spite of promises otherwise, then fomenting the overthrow of the prior Ukrainian government led by Viktor Yanukovych was too much for Russia to take.

The US does not like the annexation of Crimea that followed or the resultant civil war that will break Ukraine in two, although we helped cause those outcomes. (For further discussion, see Ukraine Split in Two; Expect Major Rebel Advance).

Even though the overthrow of Yanukovych was unconstitutional and the ensuing election a complete sham, the US accepted that vote. The US does not accept the vote in Crimea or the more recent rebel vote in Donetsk, labeling them "unconstitutional".

Why? The former suits US interests but the latter doesn't. That's all you need to know.

Fool's Mission to Teach Russia a Lesson

In a fool's mission to "teach Russia a lesson", the US initiated sanctions on Russia, then persuaded fools in Europe to go along. The fact of the matter is sanctions don't work.

Ironically, it was Russia who taught the US a lesson (except the US was to stupid to learn from it).

Sanctions Do Four Things (All Bad)

Cause a collapse in trade harming both sides
Cause retaliations, harming both sides
Cause public sentiment for the leader of the sanctioned country to rise
Increase the likelihood of war if economic pressure rise high enough

Is McCain Brain Dead?

McCain wants to send missiles to Eastern Europe and arms to Ukraine. And in spite of the complete foolishness of sanctions, he wants to increase them on Russia.

Besides wasting taxpayer money for the benefit of McCain's defense industry cronies, what good would any of that do? Would it increase or decrease the odds of war?

Is McCain simply too brain-dead to figure out sending missiles to Europe and weapons to Ukraine a bad idea? Another other possibility is that McCain simply does not care. A third possibility is McCain knows what he is doing and wants more wars regardless of cost.

I lean towards the idea that McCain is brain-dead, perhaps a result of captivity in Vietnam, but the question is certainly debatable.

Whatever your answer, Prepare for War: Obama Asks Congress for ISIS War Authorization; Republican Hawks Have War Plan Prepared.

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

"Stock Market Is Overvalued By 100%" Says John Hussman in Chris Martenson Interview; Financial Repression Revisited

Posted: 10 Nov 2014 11:19 AM PST

Guest Post from Peak Prosperity

In an exclusive interview of John Hussman by Peak Prosperity's Chris Martenson, Hussman says Stock Market Is Overvalued By 100%.

Chris Martenson: John Hussman is highly respected for his prodigious use of data and adherence to what it tells him about the state of the financial markets. His regular weekly market commentary is widely regarded as one of the best-researched, best-articulated publications available to money managers.

John's public appearances are rare, so we're especially grateful he made time to speak with us yesterday about the precarious state in which he sees global markets. Based on historical norms and averages, he calculates that the ZIRP and QE policies of the Fed and other world central banks have led to an overvaluation in the stock market where prices are 2 times higher than they should be:

John Hussman: What's interesting here is that if you think about equities, they're not a claim on next year's prediction of earnings by Wall Street analysts. A stock, in fact any security, is a claim on any long-term stream of cash flows that investors can expect to be delivered to them over a very long period of time.

When you look at equities you can calculate something called duration. It's essentially the effective life of a security over which you are collecting cash flows in return for the amount you pay. For the S&P 500 the duration is about 50 years. In other words it is a very, very long-term asset. The only reason you would want to price that asset based on your estimate of next year's earnings is if you were convinced that next year's earnings are actually representative of the very, very long-term stream -- and I'm talking 50 years or so of earnings that you're likely to get -- that those earnings are in a sense accurately proportional to the whole long-term stream.

What's amazing about that is that is it has never been true. It has never been true historically. If you look at corporate profits and especially corporate profit margins, they're one of the most cyclical and mean-reverting series in economics. Right now, we have corporate profits that are close to about 11% of GDP, but if you look at that series you will find that corporate profits as a share of GDP have always dropped back to about 5.5% or below in every single economic cycle including recent decades, including not only the financial crisis but 2002 and every other economic cycle we have been in.

Right now stocks as a multiple of last year's expected earnings may look only modestly over valued or modestly richly valued. Really if you look at the measures of valuation that are most correlated to the returns that stocks deliver over time say over seven years or over the next 10 years the S&P 500 in our estimation is about double the level of valuation that would give investors a normal rate of return.

So right now, we've got stocks valued at a point where we estimate the 10 year prospective return on the S&P 500 will be about 1.6 to 1.7% annualized -- talking right now with the S&P 500 at 2032 as of today's close.

Chris Martenson: I guess 1.6 or 7% doesn't sound bad if you are getting 0% on your risk-free money, I guess. But this says that any move by the Fed to normalize -- which means rates have to go up -- any move to drain liquidity from the system is going to have its own impact. If we held all things equal, a normalization effort is going to then basically expose that the stock market is roughly overvalued by 100%.

John Hussman: 100%, yes. I actually think the case is a little bit harsher than that; in fact, quite a bit harsher than that.

The idea that well, "1.7% isn't so bad" or "1.6% isn't so bad" ignores the fact that really in every market cycle and economic cycle we have had a point where stocks were fairly valued or undervalued.The only cycle in which we didn't see that was actually the 2002 low where stocks actually ended that decline at an overvalued level on a historical basis. But valuations were still relatively high on a historical basis in 2002. They got slightly undervalued in 2009, but not deeply.

On a historical basis, what's interesting is that if you look at measures of valuation that correct for the level of profit margins, you actually get about a 90% correlation with subsequent 10 year returns. That relationship has held up even over the past several decades. It has held up even over the past 5 years where the expected return that you would have forecasted based on time-tested valuations turned out to be pretty close to what you would have forecasted 10 years earlier.

Right now, like I say, we are looking at stocks that have been pressed to long-term expected returns that are really dismal. But more important than that, in every market cycle that we've seen with the mild exception of 2002, we've seen stocks price revert back to normal rates of return. In order to get to that point from here, we would have to have equities drop by about half.

Audio Podcast

Greater Fool Speculation

On his November 3, 2014 weekly commentary, Hussman comments on QE and the Massive Speculative Carry Trade.

At present, the entire global financial system has been turned into a massive speculative carry trade. A carry trade involves buying some risky asset – regardless of price or valuation – so long as the current yield on that asset exceeds the short-term risk-free interest rate. Valuations don't matter to carry-trade speculators, because the central feature of those trades is the expectation that the securities can be sold to some greater fool when the "spread" (the difference between the yield on the speculative asset and the risk-free interest rate) narrows. The strategy relies on the willingness of market participants to equate current yield (interest rate or dividend yield) with total return, ignoring the impact of price changes, or simply assuming that price changes in risky assets must be positive because low risk-free interest rates offer "no other choice" but to take risk.

The narrative of overvalued carry trades ending in collapse is one that winds through all of financial history in countries around the globe. Yet the pattern repeats because the allure of "reaching for yield" is so strong. Again, to reach for yield, regardless of price or value, is a form of myopia that not only equates yield with total return, but eventually demands the sudden and magical appearance of a crowd of greater fools in order to exit successfully. The mortgage bubble was fundamentally one enormous carry trade focused on mortgage backed securities. Currency crises around the world generally have a similar origin. At present, the high-yield debt markets and equity markets around the world are no different.

As we've detailed previously, zero-interest rate policy has very little historical evidence or compelling theory to recommend it. Rather, the policy is based on 1) the misguided belief that people consume on the basis of fluctuations in volatile asset prices and other transitory forms of income (a concept that Milton Friedman won a Nobel Prize largely for debunking), and 2) a view of the global economy as nothing more than one big interest-sensitive demand curve. See Broken Links: Fed Policy and the Growing Gap Between Wall Street and Main Street to review the reasons why suppressed interest rates have had such weak impact on global growth, despite fueling the third equity market bubble in 15 years.

The fact is that financial repression – suppressing nominal interest rates and attempting to drive real interest rates to negative levels – does nothing to help the real economy. ...

Mish Take

I side with Hussman and have been in his camp for a number of years. Make calls like this and you look foolish until the bust happens.

To paraphrase John (I cannot find the exact historical quote) "The choice is whether one looks foolish during the runup, or during the inevitable decline."

Financial Repression Revisited

Fed policy certainly represents financial repression at its finest. It's very much behind the income inequality that Fed Chair Janet Yellen moans about all the time.

That was a central idea I presented in my interview with Gordon Long. See Gordon Long Video Interview of Mish: Topic - Financial Repression (and How to Defend Yourself From It).

Forcing stock, bond and other asset prices higher only helps those who hold stocks, bonds and assets (the wealthy, not the poor).

When stocks rise, it also drives CEO pay higher and higher via performance incentives and stock options. That money is not taken back when stocks crash.

The irony is stunning. If Yellen wants to understand the central cause of income inequality, all she has to do is look in a mirror.

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

Damn Cool Pics

Guy Does Hilarious Impressions Of Famous Female Celebrities

Posted: 10 Nov 2014 10:18 AM PST

17-year-old Liam Martin has 1.8 million Instagram and is dominating social media right now thanks to his ridiculous posts of him dressed up as female celebrities. Some of these are so close, you can't even tell them apart.

This Real Life “Back To The Future” DeLorean Is A Dream Come True

Posted: 10 Nov 2014 09:51 AM PST

Quick & Easy Guide to Tracking Across Multiple Domains & Subdomains in Google Analytics

Posted: 09 Nov 2014 04:13 PM PST

Posted by Tom.Capper

Out of the box, Google Analytics handles being deployed across multiple domains or subdomains extremely poorly. This is easily the most common critical problem in Google Analytics, despite its being relatively easy to fix.

Depending on your situation, one or more of a few simple steps may be appropriate. Look for the entry in the left-hand column below that best describes your situation, and make sure you've taken the steps listed on the right:

Situation	Implementation Check-list
Single subdomain	Standard Google Analytics
Multiple subdomains or domains, which are treated as separate sites	Separate tracking ID for each (sub)domain
Multiple subdomains on a single domain which are treated as a single site	Ignore self-referrals Prepend hostname to request URIs Ga.js / doubleclick.js only: set domain name
Multiple domains with one or more subdomains that are treated as a single site	Ignore self-referrals Prepend hostname to request URIs Cross domain linking

As a word of warning, several steps in this document differ according to the tracking code in use, and in these cases I suggest options for each tracking code type. If you're unsure of your current implementation:

ga.js / doubeclick.js: Your source code will contain several "_gaq.push" commands
analytics.js tracking code: Your source code will contain "ga('create'" and "ga('send'" commands
Google Tag Manager: You have an analytics tag in your Google Tag Manager account (which I will assume is set to "Universal Analytics")

If you have updated your Google Analytics interface to Universal Analytics but you're still using the old code, you should follow the recommendations for the old (ga.js / doubleclick.js) tracking code here.

Using separate tracking IDs

Tracking IDs are the unique codes that you're given when you create a Google Analytics property, and look something like "UA-123456-1". Any page with that tracking ID, regardless of the site it's on, will send data to that property.

While it is possible to use the same tracking ID across multiple domains or subdomains and then view them each in isolation using filtered views, the only advantage of doing so is having access to one aggregated view. For the data in this aggregated view to be meaningful, it will need to ignore self-referrals, and this is configured at the property level, meaning that all views will ignore self-referrals, thus leaving the (sub)domain-specific views with a load of "direct" traffic that actually came from sister sites.

This means that you end up choosing between incorrect data in your aggregate view and incorrect data in your specific view. If you do want to be able to have meaningful data in both specific and aggregate views, you could consider having one tracking ID that's used across all sites and additional tracking IDs for each individual site. For details on implementation, check Google's guidelines here (and also here if you use Google Tag Manager).

Ignoring self-referrals

A "self-referral" is when one of the sources of traffic to your own site is your own site. They make it very difficult to work out what channels are being effective in driving conversions, because they leave you with missing data for some sessions.

Self referrals don't just screw up your attribution data. They also trigger new sessions, thus ruining your key metrics and making it extremely hard to track the routes individuals take through your site. Fortunately, they're really easy to deal with.

If you have the old ga.js (or doubleclick.js) tracking code, simply add your domains as ignored referrers in your tracking code:

If you need to ignore multiple domains using ga.js or doubleclick.js tracking code, add multiple lines like this one. In either case, make sure that they come between the "setAccount" and "trackPageview" lines.

If you're using analytics.js tracking code, it's even easier:

Navigate to Admin -> Tracking Info -> Referral Exclusion list, and you can add any referrers you want to ignore. Note that although this feature can appear in your Google Analytics user interface even if you're using the old ga.js tracking code, it will only work with analytics.js.

Prepend hostname to request URIs

A "hostname" is the name that Google Analytics gives to the subdomain that a pageview originated from. Request URIs are the names you see in reports when you set a dimension like "landing page", "page" or "previous page path".

Any view that includes data from multiple domains or subdomains runs the risk of aggregating data from multiple pages and considering them the same page. For example, if your site includes "blog.example.com/index.html" and "example.com/index.html", these will be merged in reports under "/index.html", and you'll never have any idea how effective or otherwise your blog and homepage are.

You can overcome this using an advanced filter:

In the example, this means that we'd see "www.example.com/index.html" as a page in reports, rather than just "/index.html", and metrics that rely on telling the difference between the pages will report their real levels.

Ga.js / doubleclick.js only: Set domain name

For users of the new analytics.js tracking code or a Universal Analytics tag in Google Tag Manager, this step is unnecessary: Unless configured to do otherwise, the cookie is now automatically stored at the highest level possible so as to avoid being subdomain-specific. However, when using the old tracking code, Google Analytics needs a cookie location to be set in the tracking code so that it doesn't lose it when moving between subdomains.

All this means in practice is a simple additional line in your tracking code, between the "_setAccount" and "_trackPageview" lines:

This should always be set to your domain without any subdomain - e.g. moz.com, distilled.net - not www.moz.com or www.distilled.net.

Cross-domain linking

By default, Google Analytics looks for a cookie on the same domain as the page. If it doesn't find one, it assumes that a new visit has just begun, and starts a new session. When moving between domains, the cookie cannot be transferred, so information about the session must be passed by "decorating" links with tracking information.

Don't panic; this recently got dozens of times easier with the advent of the autoLink plugin for analytics.js. If your site spans multiple domains and you're not already using Google's latest analytics tracking code, this feature should justify the upgrade on its own.

If you can't upgrade for any reason, I won't cover the necessary steps for the old ga.js tracking code in this post, but you can find Google's documentation here.

If you're using on-page analytics.js tracking code, you can implement the autoLink plugin by making some modifications to your tracking code:

Tells analytics.js to check whether the linker parameter exists in the URL and is less than 2 minutes old
Loads the autoLink plugin
The autoLink command is passed domains and two parameters. The first sets whether the linking parameters are in the anchor (rather than the query) portion of the URL, and the second enables form decoration (as well as link decoration).

In Google Tag Manager, it's easier still, and just requires two additional options in your Universal Analytics tag:

In conclusion

Setting up analytics to properly handle multiple domains or subdomains isn't difficult, and not bothering will invalidate your data. If you have any questions or tips, please share them in the comments below.

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

Seth's Blog : Choosing those that choose you

Choosing those that choose you

We have the privilege about being picky in who we expect/hope/count on/need to pick us.

Pity the foolish 8-year-old boy who gives a kid just a year older the power to make his day. In that moment, being picked for the kickball team is the most important thing in the world, and his dreams are in the hands of a kid with a demonstrated history of poor judgment. If you were walking by the playground and he yelled, "Hey Mister! Wanna be on our team?" it would (I hope) mean little to you. You're no longer willing to be judged by a kid who can't even ride a bike.

But what if your organization or your brand or your self esteem has chosen a chooser you can't rely on, or one you're not qualified to expect to have come through? If you say, "we need 100 of the top CIOs at the biggest companies in this region to choose our technology," you've made it clear who the choosers are. But if this group is swayed by bribes (which you won't pay) or local salespeople (which you don't have), you have a disconnect.

Or what if you "need" to be picked by the anonymous crowds on social networks, or picked by the apparently powerful editor or the bouncer at the club?

A huge swath of human unhappiness is generated by selecting someone to pick you, only to have that person abuse the power, let you down or otherwise seduce you into pursuing something that's not going to happen. Unchoose those people as choosers.

The person or organization you're seeking to be chosen by: Do they have a good track record? Do they choose wisely? Coherently? Reliably? Do they abuse their power, seducing you into acting against your interests? Do they make you miserable? Do they have good taste?

Do you have the resources and reputation necessary to be picked by someone like the person you're needing to be chosen by?

If you've signed up to be approved by, selected by, promoted by or otherwise chosen by someone who's not going to respond to your efforts, it's not a smart choice.

And one last thing: The ultimate privilege is to pick ourselves. To decide that the most important person to be chosen by is ourself.

If you pick yourself as the chooser, if you give yourself the power to say 'go', I hope you'll respect how much power you have, and not waste it.

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marți, 11 noiembrie 2014

Seth's Blog : A Peter Corollary

A Peter Corollary

More Recent Articles

luni, 10 noiembrie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Quick & Easy Guide to Tracking Across Multiple Domains & Subdomains in Google Analytics