Central Perk

luni, 9 februarie 2015

Seth's Blog : Variance or deviance?

Variance or deviance?

If you see things that don't meet the norm as 'deviant', then you are approaching the world with a mindset of mass, of conformity, of obedience. You are assuming that you can be most effective and efficient when the market lines up in a straight line, when one size does fit all, because one size is cheaper to make and stock and distribute.

On the other hand, if you accept differences as merely variations, each acceptable, then you realize that there are many markets, many choices, many solutions.

Packaged goods, leadership or governance--when you expect (or demand) that people don't deviate, you're robbing them of their dignity and setting yourself up to be disappointed.

It's okay to say, "this thing we make, it's not for you," but I'm not sure it's productive to say, "you're not allowed to make the choices you've made."

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duminică, 8 februarie 2015

Mish's Global Economic Trend Analysis

Unexpected Collapse in Chinese Trade; Expect More Currency Manipulation Claims; Impact on US GDP

Posted: 08 Feb 2015 09:44 AM PST

Chalk up another unexpected data point for the slowing global economy: Economists expected Chinese exports to grow 5.9% in January. Instead exports declined by 3.3%. Imports declined a whopping -19.9% vs. an expectation of a 3.2% decline.

With imports down way more than exports, China Posted a Record Trade Surplus of $60 billion, in this case, not a sign of strength.

Year-Over-Year Data Points

Imports plunged 19.9% year-over-year vs. economist expectations of a 3.2% drop.
Exports fell 3.3% vs. economist expectations of 5.9% gain.
Crude oil imports fell 41.8%
Iron ore imports fell 50.3%
Coal imports fell 61.8%
Exports to the European Union fell 4.4%
Exports to the Hong Kong fell 10.9%
Exports to the Japan fell 20.4%
Exports to the Russia fell 20.4%

Imports declined from all major trade partners, including the European Union and the U.S.

Lunar New Year Holiday Affects Numbers

Trade numbers from China fluctuate widely in January and February depending on when a week-long new year lunar holiday begins. In 2015, the holiday begins in February making January numbers all the more alarming.

Very Strange Data

Reuters explains the lunar-cycle in China's imports slump, capping dismal January trade performance.

Chinese economic indicators in January and February are typically viewed with caution given the distortions caused by the shifting week-long Lunar New Year holiday, and while the analyst median estimate was for a rise, the range of estimates was extremely wide.

However the data - in particular the import data - is worrisome even after accounting for cyclical factors; last year the new year holiday idled factories and financial markets for a week in January, but this year the holiday comes in late February and January was a full month of business as usual.

"It's a very strange data print," said Andrew Polk, economist at the Conference Board in Beijing, noting that exports tended to be less effected by the holiday than other indicators, but added he was more concerned by the implications of the startlingly negative import figure.

Chinese officials had predicted that monetary easing measures in Europe would boost demand for Chinese goods, and analysts polled by Reuters had also been optimistic that signs of economic strengthening in the United States would support exports.

However, the data showed that while exports to the United States rose by 4.8 percent year-on-year to $35 billion, exports to the European Union slid 4.6 percent to $33 billion in the same period.

Expect More Currency Manipulation Claims

Chinese exports to the US rose. They fell nearly everywhere else. This state of affairs will no doubt have the protectionists in Congress screaming about China's currency manipulation once again.

GDP Numbers

Reuters notes that China is expected to lower its GDP target to around 7 percent this year, after posting 7.4 percent in 2014 - the slowest pace in 24 years. I will take the "under".

From a US perspective, US exports to China are falling while imports from China have risen.

Recall what I said on January 31, in Diving Into the GDP Report - Some Ominous Trends - Yellen Yap - Decoupling or Not?

Growth in fixed investment is falling rapidly. Equipment, industrial equipment, and transportation equipment are already in contraction.

Inventories added 0.82 percentage points to fourth quarter GDP. Over time, this series trends to zero, so expect a pull back next quarter.

Rising imports subtract from GDP. Imports actually took 1.39 percentage points from GDP. If oil prices head back up, even modestly, this number could get worse.

Exports added 0.37 percentage points to fourth quarter GDP. But note the trend.

Because of the rising US dollar, export growth is dwindling. Will exports add or subtract to GDP next quarter? ...

Decoupling or Not?

I remain amused by all the pundits who think the US has "decoupled" from the global economy and will grow stronger in 2015.

Let's return to a question I asked above: Will exports add or subtract to GDP next quarter?

I suggest the answer is subtract. Not only are US exports getting more expensive relative to Europe and Japan, the entire rest of the global economy is slowing rapidly. Our biggest trading partner is Canada and Canada is in recession, with a rapidly sinking loonie (Canadian dollar) on top of it.

US Recession

The US won't decouple, just as China did not decouple from the global economy in 2008-2009 (a widely-held thesis I also knocked at the time).

Indeed, now that virtually no economist expects a US recession, I believe we are finally on the cusp of one, just as the Fed seems committed to hike.

If you missed that analysis or if you need a recap, please take a look.

Expect More Alarming Data Points

From the Bloomberg link at the top: "The slump in imports means a slump in the overall situation of the economy," Hu Yifan, chief economist at Haitong International Securities Group Ltd., said yesterday in Hong Kong. "We are going to see more of these alarming data in the next few months."

That's precisely my position, for the global economy, not just China.

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

Seth's Blog : How we watch video now

How we watch video now

Forty years ago, Stanley Kubrick showed us 2001. The first 90 seconds are without dialogue and solid black. It's hard to imagine that working as the intro to a YouTube video today.

Instead, our finger is on the mouse trigger, ready to leave in a moment. Not only that, but instead of leaning forward, we've got our shields set to level 7, wary of what's to come. As the video begins, a series of questions arise, unbidden:

Who sent me here?

What do I expect?

What's this about?

What else is on? (10,000,000 choices, not three)

What does this remind me of?

Hey, isn't that Hugo Weaving's voice?

Wow, he's cute...

Are they selling me something?

What's the joke here?

Are those stock photos?

What will I tell my friends?

Who would love this that I should send it to?

Okay, yeah, I think I get it... Next.

Movies were scarce and long and special and deserved our attention. TV was shorter, with commercials, but still live (now or never) and thus special. But video--video is ubiquitous and short and everywhere. You can transfer a movie or a TV show to this new medium, but it will be consumed differently.

Everyone can publish video now, and in many ways, almost everyone is publishing video now. A video won't work because everyone watches it. It will work because the right people do, for the right reason. The occasional video viral hit has blinded us to the power of long-tail video to build the culture and change minds.

Everything that's watched has always been watched through the worldview of the watcher. And video (and before that, movies and TV) has driven the culture. That culture-driving ability now belongs to anyone who can make a video that the right people choose to watch.

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