miercuri, 3 decembrie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Yield Curve Casts Doubt on "Robust Recovery" Theory

Posted: 03 Dec 2014 04:33 PM PST

A week ago Fed Governor Dudley announced "U.S. Economic Outlook Looks Brighter". My response was Ring! Ring! Goes the Bell.

Today, Curve Watcher's Anonymous offers a few charts that show the bond market ringing a bell in disbelief of Dudley.

Yield Curve as of November 28, 2014



Curve Analysis

  • The yield curve flattened, then inverted prior to the last recession.
  • The yield curve steepened well ahead of the end of the recession.
  • Since then, the yield curve has steepened twice and flattened twice.

What's Next?

Starting at the beginning of 2014, short-term yields (2-year and 5-year) have risen while long-term (30-year and 10-year) have declined.

In a strengthening economy, yields on the long end of the curve typically rise faster than yields on the short end.

Those waiting for the typical recession indicator (an inverted yield curve where short-term bonds yield more than long-term bonds) may as well be waiting for Godot with the Fed holding 3-month rates near zero percent.


Nonetheless, expectations of a major Fed tightening cycle are pretty much the norm. If the Fed hikes (which I doubt), then I fully expect to see action similar to the first yield-curve flattening box in the above chart. If the Fed continues to hike, expect a quick inversion.

Regardless, the bond market does not believe this happy talk from the economic cheerleaders, and neither do I.

30-Year Yield Minus 5-Year Yield



10-Year Yield Minus 5-Year Yield



10-Year Yield Minus 2-Year Yield



The first chart shows two incidents since 2010, where declines in yield reversed. However, both occasions ended when the Fed stepped on the gas. 

If the Fed does so again, will the stock market respond the same way?

Feelin' lucky?

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

Enter the Carpetbaggers: Ukraine's New Finance Minister a US Citizen, New Economy Minister from Lithuania

Posted: 03 Dec 2014 09:29 AM PST

Carpetbaggers Take Over Ukraine

Now that Ukraine's gold has been sold off, the only thing left to complete the plundering is to send in the carpetbaggers. That process is now underway. Ukraine's just-named "Finance Minister" is a US citizen, and Ukraine's new "Economy Minister" is from Lithuania.

To get around legal issues associated with having foreigners in top level government positions, Ukraine made the appointees Ukrainian citizens.

Reuters explains Foreign Technocrats Given Ukrainian Citizenship Before Cabinet Vote.
Ukrainian President Petro Poroshenko on Tuesday granted citizenship to three foreign technocrats nominated for cabinet positions in a new government hoping to tackle severe economic and defense threats.

Parliament is expected to vote on nominees for cabinet positions on Tuesday with Kiev under pressure to form a new government quickly.

Ukraine has been offered billions of dollars in aid by international lenders if it implements a program of economic reform and Poroshenko said the administration would benefit from international specialist input.
Meet Your New Carpetbagger Technocrats

  • Natalie Jaresko, a U.S. citizen and chief executive of private equity group Horizon Capital, will take over as "Finance Minister". She has worked in Ukraine for more than 20 years after holding various economic positions in the U.S. State Department.
  •  
  • Aivaras Abromavicius, a Lithuanian citizen and a partner in investment firm East Capital, will take over as "Economy Minister".
  •  
  • Aleksander Kvitashvili, a Georgian citizen who has served as health minister and labor minister in Tbilisi will take over as "Health Minister"

Jacob Dreizin Comments

Reader Jacob Dreizin a US citizen who speaks Russian and reads Ukrainian offered these select comments.
Ukraine has a new finance minister, Natalie Jaresko. She is a former U.S. State Department official. After leaving State Department, she ran a Ukraine-based private equity firm. Her company site (Horizon Capital) is down now. I guess everyone was trying to look at her bio. She was only granted Ukrainian citizenship today, so she could legally hold the position.

The post of "Economy Minister" was just given to an asset management firm partner from Lithuania, and the "Health Minister" is from Georgia. The choice of nationality is not surprising. It's an attempt to give the EU direct access to Ukrainian economic policy, specifically "reforms" or lack thereof, as well as to poke a stick in Putin's eye.

These moves show that Ukraine is willing to be turned into a Western colony in exchange for whatever financial scraps can be tossed its way. While it's true that Ukraine is in desperate need of a total overhaul, any country that turns its economy over to foreigners wholesale is going to be pillaged wholesale. Greece is a perfect example. 

Finally, I should also mention that a number of Ukrainian power plants are down to their last few days of coal. And the winter is just starting.

Jacob
With Ukraine's gold long gone (see ZeroHedge report With Its Gold "Vaporized", A Furious Ukraine Turns On Its Central Bankers), the carpetbaggers will soon take control of anything worthwhile that is left remaining.

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

Just For Laughs Gags: "Golf Ball Machine Sprays All Over People" and more videos

Just For Laughs Gags: "Golf Ball Machine Sprays All Over People" and more videos

Mihai, check out the latest videos from your channel subscriptions for Dec 4, 2014.
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Damn Cool Pics

Damn Cool Pics


This Is What Happens When You Try to Rob a Pensioner

Posted: 03 Dec 2014 02:10 PM PST

This thief attempted to rob a pensioner with a knife but ended up in a very humiliating situation instead.

A 32-year-old man was caught attempting to rob an OAP in Chile



Crowd ripped his clothes off and tied him to a lamppost with clingfilm










Content Flow: The "Melodic" Fix for Your "Broken" Content Marketing Strategy

Content Flow: The "Melodic" Fix for Your "Broken" Content Marketing Strategy


Content Flow: The "Melodic" Fix for Your "Broken" Content Marketing Strategy

Posted: 02 Dec 2014 04:15 PM PST

Posted by SimonPenson

In a world now overflowing with 'content,' standing out is critical to breaking through.

And while almost all digital marketers are aware of the challenge that presents, the solution chosen simply extenuates the very issue it was designed to fix. Unfortunately, too many people see the answer to standing out and achieving reach as becoming a 'shout louder'. But that's an approach that misses so many critical strategic objectives.

Maturing markets, as the 'content market' now is, require subtlety of approach and refinement. A campaign plan based on an unconnected series of 'big bang' content is unconnected from the very audience for which it was really designed to attract and retain.

The answer to this disconnect lies in something I call 'content flow', or 'content dynamics', and this post is designed to share the concept to allow you to give it a go.

What is content flow?

"The whole is greater than the sum of its parts." - Aristotle

This quote eloquently 'sums' up the true value of content strategy. Your content marketing strategy is not hundreds or thousands of connected stories. It's one story with a lot of scenes.

The only way of creating any kind of long-term connection with your audience is to introduce variation into your content strategy and connect those important bigger campaigns, or pieces, together using smaller pieces. The best way of visualizing this is to imagine the smaller 'everyday' content pieces you produce as 'whispers' that keep the campaign alive in between the larger, campaign-led 'shouts'.

The music of content flow

To understand how to create the variation any good content strategy needs to work, we should look for a moment to some of the greatest content creators to have lived: classical music composers—the masters of the concept of 'whispering' and 'shouting' to create impact.

Listen to any 'great' piece and you will immediately notice that it has quieter periods followed by great crescendos, utilizing something called dynamic note velocity to create an absorbing 'journey' through the composition.

We can clearly see this is we look at the sound wave profile of such a piece. Below is a Beethoven composition with clear crescendos and diminuendos that make the piece so absorbing. This is why classical 'songs' can go on for so long without losing your interest.

If this were content strategy, or an editorial plan, the 'peaks' would be those 'big bang' campaign ideas, while the 'troughs' would be the 'everyday content' that glues your big ideas together in a seamless and absorbing way. The result is a coherent composition that allows the user to feel the full range of your content marketing strategy and still experience it as a whole.

Content dynamics in marketing

Given that we now understand how content flow works in a musical context, we must now look at how those key principles can be applied to content marketing. The first step in creating the right flow of content is in understanding its importance, but the second is in the planning and measurement of your own work.

To do this you should start at the beginning, with the ideation process. It's critical here to have a sound process for coming up with ideas that produced, consistently, enough of the right ideas that can fit the 'peak' and 'troughs' concept.

This is something I have worked on for the past ten years and the resulting process is something I have shared right here on Moz previously. Since that time, however, the process has been updated even further and you can find the latest version here.

This process is designed to ensure you have enough of each type of content to enable the second phase—editorial planning.

Building your editorial plan

Once you have enough content ideas from your brainstorm the next phase is to begin 'grading' them into either 'small', 'medium' or 'large' ideas. You can do this manually as I'm about to explain now, or make use of the free and brand-spanking-new Zazzle Media Content Flow Generator tool, which is designed to do the hard work for you.

Manual testing

To test out your best laid content plan is a simple process and it begins at the initial ideation phase.

Once you have your initial list of ideas, you should note them down in a simple Excel column. I've created an example below with some ideas for a fictional finance brand.

In the right hand column you will see a number. There is no 'science' here, just a simple scoring system to highlight the 'size' or, more precisely, the amount of time and resource that will go into the creation of each piece.

The purpose of this is to enable the plotting of your content on a chart that will allow you to understand how it flows.

The next stage is to then plot the suggested publication dates so you end up with something like this:

From here select the dates and scores and select the 'Charts' function from the menu bar of Excel (I'm using Mac in this example).

Select the 'Line' option and you should see the data in a chart that looks a little like this:

content flow chart

You can then use the various formatting options to make it more clear, or play with the numbers, more importantly, to get the 'flow' right.

The 'right' wave dynamic

Of course, you need to know what it is you are looking for to be able to decipher if your initial content plan is laid out correctly.

In simple terms there is no 'perfect' shape as every business has different objectives but whenever in doubt we should refer back to the initial learning from those classical pieces.

The strategy should be to create a handful of 'big bang' ideas per year surrounded by a cacophony of brilliant everyday content, which both entertains and informs and ties together your symphony.

The work above should then create something that looks like the chart below. The important part is in ensuring that the 'big bang' campaign ideas are evenly spaced and do not drown out the overall picture. There are few worse mistakes then simply creating a large number of 'big' ideas as we discussed earlier in the post.

The reason for that is simple and it comes back to the same rules as those that are applied to TV, radio and print when it comes to achieving perfect 'content flow'.

Learning from print

We can reverse engineer this in practice by taking a look at how something like a magazine is put together. Having worked in the industry for many years I know first hand how content works over the long term, and it's all about consistently delivering surprise and variation.

The best place to find this is on the cover. An example of this can be found below with this Men's Health cover:

You can clearly see how the cover lines correspond to the needs of the audience:

  1. Those that want to improve their body
  2. Those that want to improve their mind
  3. Those that want to be better lovers

And you can clearly see that the editorial team understands its audience in great detail and knows precisely how to deliver content in a way that keeps all elements of its readership entertained and informed.

That doesn't happen by accident. It starts with the persona creation process to segment the key interest sets. These then manifest themselves as regular 'cover sells' or 'content pillars' as I like to call them.

These concepts are then covered monthly within the editorial plan and how each key subject is covered will vary each time it is covered. So, in month one the 'improve your body' concept will be covered in a long form feature, looking at something like 'the science of muscle growth', while the next month it may be a quick-fire, shorter piece forming a 20-minute circuit training session. It's this variation that creates 'content flow'.

If you want to learn the tricks yourself all you have to do is reverse engineer a couple of magazines. To do that all you need is a 'flatplan' template – or the document many editors use to plan out the 'flow' of their issue.

You can then take a copy of the magazine from your sector and mark off the general schematic make-up of the edition a little like the example below:

You can then simply test that 'layout' for your own digital strategy.

Mobile

The testing phase shouldn't simply stop at your overall plan, however, as content consumption is quickly becoming a 'mobile first' game. That means that thinking about how you plan your strategy for the various devices is also critical to success to ensure that the way in which you cover your key 'pillars' creates a compelling mix of content types for ALL devices.

I wrote about this aspect of the content strategy in this earlier Moz post if you want some more detail.

Final plan

Like anything in digital there is no 'perfect' template to use when it comes to planning the right delivery for your brand but by sticking to the principle of 'ebb and flow' in your content flow and working hard on ideas you will quickly see how easy it is to grow a truly valuable, and engaged audience, over time for your site.

Six steps to nail your content plan

For those that like steps to work to this is the general process I work to:

  1. Start with a data dig to establish your key audience personas. Utilize a good persona template to record the key information.
  2. Work through a structured content ideation process to ensure you create ideas pinned to the key audience need.
  3. Work this data into a content plan and record in a calendar.
  4. Test how that content 'flows' using the checker tool I mentioned earlier. You find help as to how to lay your content out from magazines.
  5. Run the plan over a six-month period and then review based on the changes you have seen in key engagement metrics such as bounce rate, returning visitor numbers, time on site, etc.
  6. Change and repeat, constantly looking for the right ebb and flow for your audience and commercial goals.

Having got this far, I genuinely hope you are now keen to integrate content flow checks into your overall content strategy and marketing process. With most content discussions surrounded by 'data' and 'ideas' it is useful sometime to step back and remember that it is, ultimately still an art form, and always will be. That means you must ensure that any strategy you create is focused in not just on the buzzwords but the foundation too. By doing this you'll turn your content creation process from a gaggle of ideas into a true symphony for your audience to enjoy.

And if you want to have a go yourself, here's a reminder of that free Content Flow Checker tool. Click below to try it out on your strategy and let me know how you get on.



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Seth's Blog : "You're right, we were wrong"

 

"You're right, we were wrong"

This is the most difficult sentence for companies that stumble in doing effective customer service.

By effective, I mean customer service that pays for itself, that is a rational expense on the way to building a loyal brand following and generating positive word of mouth.

When someone in your organization says, "You're right, we were wrong," they're not saying that you're always wrong, or that you were completely wrong, or even that, in a court of law with a sympathetic jury, you would lose. It certainly doesn't mean you didn't try.

No, all you're saying is that you made a promise or set an expectation and then failed to live up to it.

Owning that and saying it out loud does two things: it respects the customer and it allows you to make more promises in the future.

If it helps, you can remind yourself that this is investment in your ability to make a promise tomorrow.

       

 

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marți, 2 decembrie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Incredible Populist Positions in Podemos' "Economic Manifesto"; Populism Explained

Posted: 02 Dec 2014 01:09 PM PST

As noted last week, Spain's top-polling political party, Podemos, released an "Economic Manifesto" that called for "Debt Restructuring" and for Spain to "Abandon the Euro Trap".

The manifesto is 600 pages long and I did not dig into the details any further.

Via translation from Libre Mercado, here are some additional details to consider:

  • Public Banking: Credit and finance is an essential public service. Public banks will be subject to strict conditions to ensure their submission to the above principle.
  • Financial Transaction Tax: Transaction Tax on all financial transactions, progressive so as to weigh on shorter transactions.
  • Minimum Wage Rules: Minimum wage increase coupled with rules stipulating the maximum difference between the highest wages and the average wage in companies.
  • Labor Reform: Repeal recent labor reform.
  • Pension Reform: A minimum and maximum contribution base to ensure that the system is progressive and trading for real income in the case of autonomous and self-employed.
  • Higher Business Taxes: Extraordinary increase of corporate social contributions via higher taxes on businesses.
  • Work Rules: 35 hour work-week, retirement at 65, with flexibility in case someone wants to keep working longer.
  • Mortgage Reform: Restructuring household debt to provide the greatest possible stability to the system and repair the damage received by families in previous years.
  • Flat Tax on Everything: Improve income tax collection by having an extensive single rate tax on all types of income, but elimination of joint taxation of marriages.
  • Wealth Tax: Central government taxation of wealth.
  • Budget Rules: Delete Article 135 of the Constitution, the newly inscribed constitutional obligation limiting public deficit.
  • Work Sharing to Protect Women: We must change the pattern of distribution of working time paid by imposing shorter hours but also by regulating the distribution of housework and unpaid care. Unequal distribution is the main source of discrimination against women and one of the major impediments to advancing equality.
  • Cooperative Business Models: They want to democratize business by introducing co-management by employees.
  • Restructure Debt: Europe must adopt debt restructuring, especially in the peripheral countries to achieve sustainable debt levels.
  • Minimum Income: A guaranteed minimum income system as a subjective right of all people, to eradicate child poverty.
  • Universal Right to Nourishment: Recognition in the Constitution of the right to food as a universal human right.

Thanks to reader "Bran" for some of the above translations.

Did Paul Krugman secretly write that manifesto? Regardless, this plan makes the socialist nannycrats in Brussels look like extreme right-wingers.

If Spain abandons the euro and adopts anything close to this platform, expect a complete collapse in the Spanish economy.

Populism Explained

These populist ideas are taking hold for the simple reason the burden of the euro crisis is falling on the average worker, while the banks, the bankers, and the political classes were bailed out.

It should be no wonder that with each passing day, radical left and radical right parties attract voters.

Eventually, there is going to be a revolt in Spain, Greece, or Italy. Podemos is a strong candidate to lead the opening salvo.

For the current setup in Greece, another strong candidate to lead a populist revolt, please see Greece Needs Another €10 Billion Bailout; Syriza Leader Prepares for Power

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

Greece Needs Another €10 Billion Bailout; Syriza Leader Prepares for Power

Posted: 02 Dec 2014 11:07 AM PST

Since the beginning of September, yield on the Greek 10-Year bond has gone from 5.53% to 8.05% with a spike high of 9.28%.



Inquiring minds may be wondering what's going on. More than likely yields are up for a number of factors.

  1. Rise of Syriza
  2. Chance of new elections
  3. Greece needs another bailout

Points number 1 and 2 go hand in hand.

Alexis Tsipras, head of the Greek radical-left party Syriza is in a substantial lead in the polls. Syriza wants to end austerity and threatens to renegotiate the bailout.

The next election for prime minister is not scheduled until June 2016, but a February 2015 presidential election (a largely ceremonial position) threatens to upset the cart. Greek law requires a backing of 180 members of parliament to nominate a president, but support for current prime minister Antonis Samaras has dwindled to only 150 seats.

If Samaras falls short, parliament will dissolve and then a new election for prime minister will take place.

Syriza Leader Prepares for Power

Given the above election backdrop, Syriza Leader Alexis Tsipras Prepares for Power.
Alexis Tsipras, leader of Greece's far-left Syriza party, recently traveled to Frankfurt and Rome to meet European leaders. He is softening his confrontational tone with Greece's international lenders. Tsipras has a drafted an agenda for the first 100 days of a future government.

The 40-year-old former student Communist is acting like a prime minister in waiting.

Syriza, once a fringe far-left movement, is now the most popular party in Greece, representing the many voters who feel punished by the country's EU/IMF bailout. Last May, Syriza won the European elections, beating the ruling center-right New Democracy, and putting into question its political legitimacy.

In May, the party easily won European elections and gained the governor's seat for Greece's most populous region. Today, it polls higher than any other party, leading by a margin of between 4 and 11 points over Prime Minister Antonis Samaras's conservatives. One poll shows Tsipras as the most popular political leader in the country.

"The big change has begun. The old is on its way out. The new is coming," Tsipras thundered in a recent speech to parliament. "No one can stop it."

Key to Syriza's ascent, party officials say privately, is a calculated effort to moderate the radical leftist rhetoric that prompted Der Spiegel to name Tsipras among the most dangerous men in Europe in 2012.

The party still rails against austerity measures and a bailout-driven "humanitarian crisis". It wants to reverse minimum wage cuts, freeze state layoffs and halt state asset sales.

But Syriza no longer threatens to tear up the bailout agreement or default on debt. Instead, officials say it supports the euro and wants to renegotiate the bailout by using the same pro-growth arguments of partners France and Italy.

Tackling Greece's mountainous debt remains at the top of the party's agenda. But talk of a debt "default" is gone, replaced with "renegotiation". Syriza wants Europe to write off a big chunk of Greece's 318 billion euros of debt - worth 175 percent of GDP - on a recognition that Greece's problem is Europe's problem too.

Other proposals include linking debt repayments to economic growth, an aggressive ECB policy of buying government bonds and excluding the roughly 38 billion euros spent to prop up Greek banks from national debt.

Some European officials say this is pie-in-the-sky thinking. Bailed out twice with over 240 billion euros over four years, Greece's prospects have improved since it nearly crashed out of the euro but it still needs aid and lacks full market access.

One senior EU official, speaking on condition of anonymity because of the sensitivity of discussions between Greece and its lenders, said that Greece is not in a position to negotiate.
Greece in Need of Third Bailout

Having already thrown €240 Billion at Greece over the last four years, the Greek patient is still quite ill as Europe Debates Third Bailout Package for Athens.
"The era of bailout packages is ending," Samaras promised in September during an appearance in Thessaloniki. "Greece is now welcoming the new Greece."

Samaras knew the line would guarantee him applause from his audience, but the promise also came a bit prematurely. Following the announcement, Greece got a small taste of what it might mean were Greece were released from the oversight of the troika, comprised of the European Commission, the European Central Bank (ECB) and the International Monetary Fund. The more often Samaras spoke of a "clean solution," the more yields rose on long-term Greek government bonds. At the beginning of September, the rates had been 5.8 percent, but they soon climbed to almost 9 percent.

It was the financial markets' way of hinting that it is still too early to grant Greece full fiscal independence.

€2 Billion Shortfall

Last Wednesday in Paris, there was a minor uproar when troika officials made it known that they felt Greece hadn't fulfilled conditions for the payout of the final tranche from the second bailout package. Athens' international creditors determined the country will fall around €2 billion ($2.5 billion) short of reaching its commitment of not exceeding a budget deficit of 3 percent of gross domestic product.

Inefficiency often associated with Greece remains a fact of life in many areas, despite massive European development aid. The country still lacks important institutions, including a reliable national land registry office where the size of properties and their owners can be registered in a legally binding way.

'We've Lost Another Year'

Ongoing uncertainty about property ownership is considered to be one of the greatest hindrances to development in Greece. In response, the EU dispatched experts from the Netherlands to help Greece establish a functioning system. Earlier this year, the project was put out to a public tender, but the Greeks later simply cancelled it. The financing of the land registry offices was also suddenly questioned, even though they could actually help generate revenues for the country.

"We've lost over a year once again," says one fatigued EU official in Brussels. Although the government had agreed it would make progress on the land registry offices, the official speculates that the plan likely fell afoul of one of the local oligarchs that pulls the strings in the background. The vaguer the better for black market dealings.

Third Bailout

Progress is slow and tedious, and German Finance Minister Wolfgang Schäuble believes it has to be safeguarded with a third bailout package for Greece. At the end of last week, a group of finance ministry deputies from the euro-zone countries met in Brussels to discuss a so-called precautionary credit line for Greece that would be provided by the Euro Stability Mechanism, the common currency's permanent backstop fund.

There is already broad agreement on the scope of the aid. Greece is expected to be granted around €10 billion, and the ESM will not be required to raise any additional funds for it. Some €10.8 billion is still left in the current aid package for Greece. That funding had been earmarked for shoring up the capital resources of Greek banks, but so far it hasn't been used.

Now this money is expected to be redirected so that it can be used to provide financing for the Greek national budget. But unanimous approval from the ESM's board of governors is required before that action can be taken.
Cost of Protection

To avoid the loss of €40 Billion or so, the Troika threw hundreds-of-billions of euros at Greece, and then when that failed, more hundreds-of-billions in a second bailout.

We now see that did not work, so to protect the €240 total thrown at Greece, the EU is debating another €10 Billion.

Room to Negotiate

Curiously, a senior EU official, speaking anonymously said that "Greece is not in a position to negotiate".

Really?!

Watch what happens when Tsipras wins the snap election and demands haircuts.

Greece is at or close to a current account surplus excluding interest on €240 bailouts. Thus, no longer needing foreign support for funding, Greece is in a strong position to tell the Troika to go to hell. And I encourage Greece to do just that.

The major problem is Greece still needs massive reforms to make an abandon-the-euro scheme work. Unfortunately, those are exactly the reforms Tsipras will fail to deliver. Of course Samaras failed to deliver any significant reforms either.

Thus, the entire setup is unstable. Nonetheless, when faced with the prospect of Greece walking away from €240 billion, I expect there is going to be plenty of room to negotiate.

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