Central Perk

vineri, 17 iulie 2015

Seth's Blog : Raising money is not the same thing as making a sale

Raising money is not the same thing as making a sale

Both add to your bank balance...

But raising money (borrowing it or selling equity) creates an obligation, while selling something delivers value to a customer.

Raising money is hard to repeat. Selling something repeatedly is why you do this work.

If things are going well, it might be time to sell more things to even more customers, so you won't ever need to raise money.

And if things aren't going well, the money you'll be able to raise will come with expectations or a price you probably won't be happy to live with.

When in doubt, make a customer happy.

[My exception: it pays to borrow money to pay for something (an asset) that delivers significantly more value to more customers more profitably over time. In the right situation, it's an essential building block to significance, but it's too often used as a crutch.]

[A different myth, re book publishing.]

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joi, 16 iulie 2015

Mish's Global Economic Trend Analysis

Bailout Marches On, Decision Makers Ignore IMF; Schäuble Puts Grexit Back on Table; Banks to Open, With a Catch

Posted: 16 Jul 2015 04:02 PM PDT

As the Greek bailout marches on, no one that matters dares ask the pertinent question: How can Greece pay back over €400 billion, when they could not pay back either of the last two bailouts?

Paul Pays Peter to Pay Paul

Supposedly we have progress. After all, Greece will be able to make its required July 20 ECB repayment.

How?

Thanks to another €86 billion bailout, Greece will be handed the money and will hand it right back. The first installment will magically be just enough for Greece to repay the ECB.

Draghi Affirms Faith

In this faith-based, can-kicking exercise, Draghi Affirms Faith in Greece's Place in Euro.

Mario Draghi, head of the European Central Bank, affirmed his faith in Greece remaining in the euro as the central bank raised its limit on emergency loans to Greek banks by €900m over one week.

"The ECB continues to act on the assumption that Greece is and will remain a member of the euro area," Mr Draghi said.

Banks to Open, With a Catch

Greek banks purportedly will open on Monday after having been shut for about two weeks.

Is there a catch? You bet.

Banks will be open for "all services which do not give rise to capital flight" and capital controls will remain in place."

Want to make a deposit? Sure, that will be allowed. Want your money back? Well, you are going to have a problem getting it.

How big a problem? We find out Monday.

To give appearance to the idea that things are improving, I suspect customers will find they can take out another €10 euros or so, per day, perhaps €70 euros, up from the current €60.

If my guess is correct (and you are foolish enough to have €25,550 in the bank), it will take you a year to get your money, even if you religiously take out the maximum every day.

Of course, that assumes everyone else does not do the same. If they do, the ECB will put a halt to it.

Schäuble Says Grexit a Better Idea

Reuters reports Schäuble Casts Doubt on Chance of Greek Bailout Success.

German Finance Minister Wolfgang Schaeuble questioned whether Greece will ever get a third bailout programme on Thursday, a day after the Greek parliament passed a package of stringent measures required to open negotiations on financial aid.

Schaeuble has submitted a request to parliament to agree to opening talks, but he has said it would be hard to make Greece's debt sustainable without writing some of it off - an idea Berlin considers to be illegal as long as Greece remains within the euro zone.

Schaeuble, who has raised the idea that Greece take a "time-out" from the euro zone, said a haircut would be incompatible with the currency union's rules. "But this would perhaps be the better way for Greece," he said.

The proposal for a temporary 'Grexit' has already caused ructions in Merkel's ruling coalition, upsetting some senior Social Democrats.

Question of Haircuts

Schäuble's position, and that of the German constitution, is there can be no haircuts within the eurozone.

No one of any importance really cares about the German constitution or logical assumptions on debt sustainability.

Merkel will ram through the bailout package, oblivious to Schäuble's objections, and also oblivious to the IMF position that Greek debt is not remotely sustainable and haircuts are needed.

For details on the IMF's position, please see White Knight Irony: IMF Threatens to Walk Away From Bailout Deal Citing Unsustainable Debt.

Will the IMF do what they threaten?

Good question, but so far no one but Germany has done what they threatened.

Addendum: Grexit Back on Table

Shortly after I typed the above, the Financial Times provided more details in Germany's Wolfgang Schäuble Puts Grexit Back on the Agenda.

Days after Greece appeared to escape crashing out of the euro, hawkish German finance minister Wolfgang Schäuble has put Grexit back on the political agenda, raising tensions in Berlin and across the EU.

Speaking before a key Bundestag vote on Friday, Mr Schäuble said voluntary departure from the eurozone "could perhaps be a better way" for Greece than a proposed €86bn bailout package, which was painfully assembled at a marathon eurozone summit in Brussels over the weekend.

It is uncertain how much leeway he has been given by chancellor Angela Merkel to advance a historic rupture of the eurozone that he believes would ultimately strengthen both Greece and the single currency.

Mr Schäuble said in a radio interview there was widespread concern — including at the International Monetary Fund — that Greece needed a debt cut for the rescue to work. But, he noted, a "debt cut is incompatible with membership of the currency union".

Some EU officials believe Mr Schäuble's repeated insistence that the IMF, which has partnered the EU in previous rescues, be included in a new bailout may be intended to engineer an eventual Grexit.

Another Hour Another Twist

If Germany approves the bailout package, which seems overwhelmingly likely, then Merkel has a huge problem if the IMF insists on haircuts.

Clearly that is Schäuble's fear, and quite a reasonable one.

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

"Too Soon to Fret" Says ECRI, No Recession on Horizon: Another Blown ECRI Call?

Posted: 16 Jul 2015 12:49 PM PDT

After insisting for over a year that the US was on verge of recession if not in one (I made the same mistake), The ECRI now maintains Recoveries Remain Resilient.

Growing ranks of the great and the good are worried that the global economy, like Humpty Dumpty, will have a great fall, never to be put together again. We understand their apprehension, given our concern since the summer of 2008 about collapsing trend growth.

[Mish comment: what about the ECRI recession call made in September 2011?]

But in terms of our current assessment of global recession risk, we aren't ready to join in. This is because the major developed economies aren't yet in windows of vulnerability that our leading indexes are designed to detect.

Right now, no matter what the source of the potential shock – Greece, China or the Fed – the major developed economies are unlikely to be tipped into recession. No doubt this will change in time, and the U.S., in particular, bears close watching. But it's too soon to fret about recession just yet.

False Alarm

I was wondering if the ECRI ever admitted their mistake. I found it, on May 11, 2015, quite a few years late.

Doug Short on Advisor perspective writes ACHUTHAN: The US recession I've been warning about for years was actually a 'false alarm'

The ECRI finally admits to a bad recession call in September 2011, referring to it as a "false alarm". They describe the situation as "Greater Moderation", where the 2012-2013 downturn was the worst "non-recession" in 50 years and is unlikely to be repeated.

History of ECRI's 2011 Recession Call

ECRI's weekly leading index has become a major focus and source of controversy ever since September 30, 2011, when ECRI publicly announced that the U.S. is tipping into a recession, a call the Institute had announced to its private clients on September 21st.

Chronology of ECRI's Recession Call

September 30, 2011 : Recession Is "Inescapable"
February 24, 2012 : GDP Data Signals U.S. Recession
May 9, 2012 : Renewed U.S. Recession Call
July 10, 2012 : "We're in Recession Already"
September 13, 2012 : "U.S. Economy Is in a Recession"

Tipping Into Recession

Here's the September 30, 2011 U.S. Economy Tipping into Recession call.

Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there's nothing that policy makers can do to head it off.

ECRI's recession call isn't based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not "soft landings."

Why should ECRI's recession call be heeded? Perhaps because, as The Economist has noted, we've correctly called three recessions without any false alarms in-between.

Repeated Lies

Quite frankly that last statement is a lie as I have pointed out before. The ECRI called the 2007 recession way late.

In March of 2008, and when they finally did, they called it a "recession of choice".

I don't mind blown calls. I certainly have had a number of them. What I do mind is repeated lies about them.

A Look at ECRI's Recession Predicting Track Record

On October 13, 2009 I penned A Look at ECRI's Recession Predicting Track Record.

I pointed to the November-December 2007 ECRI Outlook. Unfortunately, the link I had no longer works, but I did capture this image.

Window of Opportunity

On January 25, 2008, the ECRI claimed There Is A Window of Opportunity for the US Economy.

The U.S. economy is now in a clear window of vulnerability, given the plunge in ECRI's Weekly Leading Index (WLI) since last spring. Yet there is a brief window of opportunity within that window of vulnerability to avert a recession. That is why ECRI has not yet forecast a recession.

If we have a recession this year, it will be the best advertised in history. Recently, several Wall Street houses joined the 70% of Americans who have been expecting a recession for the last few months. A number of other prominent economists boosted their estimates of the probability of a recession above 50%.

Yet such probability estimates imply that a recession is a matter of chance, whereas it is still a matter of choice. This is why, having correctly predicted the last two recessions in real time without crying wolf in between, we are not forecasting one yet.

ECRI Denial

The ECRI laid it on pretty thick, openly mocking the "best advertised [recession] in history" while claiming "This is why, having correctly predicted the last two recessions in real time without crying wolf in between, we are not forecasting one yet."

The irony is the recession was about 2 months old at the time.

Recession of Choice

Finally, on Friday, March 28, 2008 the ECRI pronounced a "A Recession of Choice".

The U.S. economy is now on a recession track. Yet this is a recession that could have been averted. In January, given the plunge in the Weekly Leading Index, we declared that the economy had entered a clear window of vulnerability. Yet we emphasized the brief window of opportunity within that window of vulnerability for timely policy stimulus to head off a recession.

The bottom line is that the outcome was not pre-ordained. Policy-makers had a choice about the speed with which stimulus took effect. If they had understood this, their actions could indeed have averted this recessionary downturn.

A Choice in 2008, but No Choice in 2011?

We are supposed to believe there was a choice in 2008 (two or three months into a recession), but no choice in 2011 for a recession that never happened!

Third Blown Call Coming Up?

And the ECRI still brags about not missing calls, while attempting to sweep two blown calls under the rug.

Is a third consecutive blown call on the way?

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

Damn Cool Pics

Fun And Interesting Facts About The Terminator Movies
A Quick Look At The Last 21 Years Of Scarlett Johansson's Career
If You Want A Cat That Stays A Kitten Forever You Need A Sand Cat
You'll Be Much Smarter After You Learn These Fun Facts

Fun And Interesting Facts About The Terminator Movies

Posted: 16 Jul 2015 07:05 PM PDT

The Terminator movies are like a juggernaut that just won't stop. The first film was released in 1984 and a new film "Terminator: Genisys" was just released a few weeks ago. Load up on Terminator knowledge with these fun facts.

The idea for the Terminator series came to James Cameron when he was in Rome during the release of his film 'Piranha II: The Spawning'. Cameron fell ill and had a fever-dream in his hotel room about "this metal death figure coming out of a fire … the implication was that it had been stripped of its skin by the fire and exposed for what it really was."

Cameron admits that the final design for the T-800 is identical to the 'death metal' figure he saw in his dream. Which is actually kind of…

…Terrifying.

Cameron had more than nine months before work began on 'The Terminator' movie as Arnold was busy with 'Conan The Destroyer'. Since he didn't have time to do a full movie, Cameron wrote the screenplay that later developed into the movie 'Aliens' .

Arnold was apprehensive of initially playing the T-800 as it was a villain's role. Cameron, however, convinced the actor that the movie will be shot in such a way that made audiences cheer the killing machine.

However, In Judgment Day, Arnold didn't like that T-800 would now be a good guy, and that he would not be killing people. So, he convinced James Cameron that the character would only stop killing when John Connor would ask him to.

Arnold Schwarzenegger and James Cameron violently disagreed on the former's iconic catchphrase, "I'll be back." Arnold wanted to say "I will be back" because he thought it sounded more machine-like, while "I'll" sounded too feminine. All Cameron had to say to that was "I don't tell you how to act, so don't tell me how to write."

Given Arnold Schwarzenegger's $15-million salary and his total of 700 words of dialog, he was paid $21,429 per word. "Hasta la vista, baby" cost $85,716.

In Poland, The Terminator was re-named, The Electronic Murderer. You see, in Polish "terminator" more or less means "an apprentice".

The Terminators famous laser pistol was a custom built Colt .45 longslide. The laser sight was custom-made for the movie, with a 10,000 volt power supply hidden in Arnold's pocket.

Surprisingly for a James Cameron film, 'The Terminator' had hardly any special effects. Most effects were created and shot in-camera while some other sequences used miniatures sets. In fact, the skulls being crushed in the opening sequence were about the size of marbles.

Cameron also shot most of the scenes of 'The Terminator' at night with streets that had mercury-vapour lamps that helped to keep the filming costs low. This later gave the film its neo-noir look.

Industrial Light and Magic's computer graphics department had to grow from six artists to almost 36 to accommodate all the work required to bring the T-1000 to life, costing $5.5 million and taking 8 months to produce, which ultimately amounted to 3.5 minutes of screen time.

The Terminators seen at the beginning of the movie were fully workable animatronic models.

In the movie's last scene at the steel mill, Linda Hamilton's twin sister Leslie doubled for her when the T-1000 acquires Sarah Connor's form.

At the time T2 was being shot, Edward Furlong (who plays a young John Conner) was only 13 years of age. Because of a sudden voice change, Furlong had to rerecord a substantial amount of his dialogue.

Arnold's 'gunflip' during the chase scene in Terminator 2: Judgement Day is arguably one of the most memorable scenes in the series. For that scene to materialize, however, the studio had to make a gun with a larger lever as doing it with a regular gun could have broken the actor's fingers.

For the scene where the naked T-1000 arrives and steals the cops clothes, the effects team had to digitally remove a sensitive part of Robert Patrick's anatomy.

'Terminator 2: Judgment Day' was the first film that cost more than $100 million to make. It was an investment well worth it. This movie also set a precedent for winning an Oscar award when its prequel was not even nominated.

More explicit shots of the arm cutting scene were removed as director James Cameron felt they were tasteless and unnecessary.

To make the Terminator seem more unsettling, Schwarzenegger refrained from blinking wherever possible and spent the majority of the film with his skin covered in a thin layer of Vaseline so that his face had a perpetually waxy appearance.

The damaged Terminator look in the climax of the film took five hours to apply and an hour to remove.

With the film's domestic box office adjusted for inflation, Terminator 2: Judgement Day is the top grossing R-rated action film of all time.

A Quick Look At The Last 21 Years Of Scarlett Johansson's Career

Posted: 16 Jul 2015 05:03 PM PDT

Scarlett Johansson has been lighting up our screens for 21 years now. See how much she's changed throughout the course of her career.

1994 - North

1995 - Just Cause

1996 - Manny & Lo

1997 - Home Alone 3

1998 - The Horse Whisperer

1999 - My Brother the Pig

2000 - An American Rhapsody

2001 - Ghost World

2002 - Eight Legged Freaks

2003 - Lost in Translation

2004 - In Good Company

2005 - Match Point

2006 - The Prestige

2007 - The Nanny Diaries

2008 - Vicky Cristina Barcelona

2009 - He's Just Not That Into You

2010 - Iron Man 2

2011 - We Bought a Zoo

2012 - The Avengers

2013 - Don Jon

2014 - Lucy

2015 - Avengers: Age of Ultron

If You Want A Cat That Stays A Kitten Forever You Need A Sand Cat

Posted: 15 Jul 2015 09:13 PM PDT

Cat owners often talk about how they want their cats to stay kittens forever. Well the good news is, that can happen you just need to get a sand cat.