Central Perk: 23 iun. 2012

sâmbătă, 23 iunie 2012

Mish's Global Economic Trend Analysis

Eurozone 1% Shell Game Stimulus Mirage; Meaning of Necessary; "Real" Stimulus
Three Key Reasons Housing Not Coming Back: Demographics, Student Debt, No Jobs
Greece Asks Troika For Moon; Time Means Money

Eurozone 1% Shell Game Stimulus Mirage; Meaning of Necessary; "Real" Stimulus

Posted: 23 Jun 2012 10:57 PM PDT

Germany, France, Italy, and Spain have agreed to spend 1% of GDP on new stimulus measures.

Where is the money coming from? They will not say. Most likely from somewhere else, better known as nowhere.

The Guardian reports Eurozone big four pledge 1% of GDP to underwrite banks and stimulate growth.

The leaders of the eurozone's biggest economies announced on Friday night that 1% of the European Union's GDP was to be set aside to help the continent grow its way out of the financial crisis. But doubts were immediately expressed as to what share of the package – said to be worth €130bn (£105m) – would be genuinely new money.

After several hours of apparently tense discussions, there was no immediate agreement on a plan outlined by Italy's prime minister, Mario Monti, on Thursday, aimed at stabilising Europe's banks and protecting countries under attack in the markets.

"There was an agreement between all of us to use any necessary mechanism to obtain financial stability in the eurozone," said Mariano Rajoy, the Spanish prime minister, afterwards.

But the German chancellor, Angela Merkel, insisted that the EU must take full advantage of the instruments already at its disposal. Her remark suggested she is wary of two new funds – to guarantee bank depositors and as a lender of last resort to ailing banks – understood to have been on the agenda at Friday's talks.

In a sign that tempers are becoming increasingly frayed before next week's crucial summit, the normally gentlemanly Monti used his closing remarks to attack France and Germany publicly.

Nicholas Spiro, of Spiro Sovereign Strategy, said: "The pact has a shuffling of the deckchairs feel to it."

Meaning of "Necessary"

I added emphasis to the word "necessary" in the above clip. However, I cannot take credit for it.

Instead, credit goes to Financial Times writer Martin Wolf for his column The G20 on the eurozone and fiscal policy

This week's G20 communiqué dealt with the eurozone. Let us examine it closely.

"Euro area members of the G20 will take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks."

The crucial word here is "necessary". We can safely say that agreement on what this means is altogether lacking.

Real Stimulus

There is no stimulus plan. It's a shell game. No new funds have been promised for stimulus. Rather, previously earmarked funds will simply be given that label.

Bear in mind that I am not in favor of stimulus plans anyway, at least monetary ones.

The best stimulus plan Europe and the US could possibly do is modify work rules making it easier to fire (and therefore hire) workers, scrap prevailing wage laws, end collective bargaining of public unions, scrap tariffs, and eliminate farm subsidies.

Instead, France is taking a giant step backwards as noted in Hollande About to Wreck France With Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Three Key Reasons Housing Not Coming Back: Demographics, Student Debt, No Jobs

Posted: 23 Jun 2012 11:34 AM PDT

Consumers Not Ready to Borrow Again

Ben Bernanke is trying like mad to stimulate credit and lending but to no avail. It's an uphill battle because of demographics, student debt, and lack of jobs.

Citing falling debt-service needs, some economists think consumers may be ready to go on a borrowing spree. They are badly mistaken.

I agree with Jed Graham on Investor's Business Daily who says falling debt-service needs is an illusion. Graham makes the case in Consumer Credit Impaired By Under-45 Job, Debt Woes.

Nearly four years after a borrowing binge gave way to financial crisis, have households slashed enough debt to take on new credit and start spending again?

Yes, says a growing chorus of economists, with some evidence to back them up. The Federal Reserve's ratio of debt service payments to disposable income is at its lowest level since 1994.

But that traditional measure is a poor guide today, as credit-hungry adults under 45 bear the brunt of the jobs, housing and student loan crises.

Considering where more of the income is coming from (government supports), who's earning a bigger share of wages (baby boomers) and which type of debt has been on the rise (student loans), re-leveraging may be a long way off.

Not Ready to Borrow

Graham's analysis is correct. Here are some points from the article that will explain why.

Demographics

The number of full-time workers younger than 45 has fallen by 9 million, or more than one in seven, Labor Department data show.
The number of full-time workers ages 55 and older has climbed by 8.5 million.
The 35-44 population has shrunk by 4.5 million over the past 12 years.
The huge baby boomer cohort has aged while Generation X is unusually small.

Student Debt

Student debt has soared to nearly a trillion dollars. About two-thirds of it is held by those under 40.
Among those age 30-39, 25% have student loan debt, with an average balance of $28,500.
New York Fed research shows that of 37 million student loan borrowers last fall, only 39% were paying down their balances.

Jobs

To Graham's analysis I would add the jobs picture is bleak.

Unemployment insurance has expired for millions: 200,000 Lose Unemployment Benefits This Week, Nearly Half From California
Self-Employment desperation: 100% of U.S. Jobs Added Since 2010 Have Been Self-Employment, Contractor, or Other Jobs Without Unemployment Insurance Benefits
Last two jobs reports have been dismal: Another Payroll Disaster: Jobs +69,000, Employment Rate +.1 to 8.2%, April Jobs Revised Lower to +77,000; Long-term Unemployment +310,000
The 4-week moving average of weekly unemployment claims is at the highest rate of the year, at 386,250.

Those were points 7-10 in my analysis 12 Reasons US Recession Has Arrived (Or Will Shortly)

Housing

Let's put it all together and look at the picture from the point of view of housing.

Kids are graduating from college deep in debt with poor job prospects.
Those with too much debt and too little income are sharing apartments or moving back home, not buying homes and starting families.
Boomers are looking to downsize, not buy more toys and larger houses.
Shadow inventory of sellers waiting for higher prices is immense, yet generation X and Generation Y represent small pools of potential buyers

Factor in the rapidly slowing Chinese economy (China Manufacturing PMI 7-Month Low, Sharpest Decline in New Export Orders Since March 2009 coupled with Europe in the midst of a severe recession, and it's difficult if not impossible to see just where US growth will come from.

Nonetheless, I believe housing is bottoming. I made the case in New American Dream is Renting; Reflections on Renting Houses, Cars, Books, Clothes; Will Rentership Fuel the Next Boom? What About Home Prices?

However, even "if" housing is bottoming, don't expect either housing or the economy to go anywhere fast. Prospects for family formation are fundamentally very weak and overall economic fundamentals are very weak as well.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Greece Asks Troika For Moon; Time Means Money

Posted: 23 Jun 2012 08:42 AM PDT

It will be interesting to see how long the coalition in Greece will last after Germany shoots down Bailout Easing Proposals by Greece to ....

Cut the VAT
Freeze layoffs
Extend timeline to reduce its deficit by two years
Recapitalize lenders
Provide more help for the unemployed
Accelerate payments to providers of government services.

Bloomberg reports Greece Seeks at Least Two-Year Extension to Bailout Goals noting that "New Democracy, Pasok and the Democratic Left agree that plans to cut 150,000 public-sector jobs should be scrapped."

Loosening of Pledges Unacceptable

The coalition parties (New Democracy, Pasok, Democratic Left) can agree to whatever they want. They may as well agree the moon is made of green cheese while requesting slices on a platter.

Immediately following the election in Greece German chancellor Angela Merkel stated Greece must stick to commitments

German Chancellor Angela Merkel said on Monday a new Greek government had to meet commitments made to international lenders.

Speaking to reporters at a Group of 20 leaders' meeting, Merkel said any loosening of agreed reform pledges after Sunday's narrow election victory for Greece's pro-bailout parties would be unacceptable.

The Troika may agree to trivial changes, hoping to keep the coalition together. Don't expect that tactic to work for long as the Greek economy continues to implode.

Meanwhile, Alexis Tsipras, the "radical left" party leader, can comfortably sit back in opposition and say "I told you so".

Time Means Money

Not only will Greece not get any significant changes in the agreed upon terms, a key Merkel ally wants Greece to speed things up because "it has already wasted a lot of time due to the new elections."

Please consider Merkel Ally Rejects Bailout Concessions for Greece

As New Democracy tries to form a government in Greece, there have been suggestions that the terms of the EU bailout could be relaxed. But now a senior member of German Chancellor Merkel's conservatives has insisted the deal stands. Athens needs to "make up for lost time," he told SPIEGEL ONLINE.

In an interview with SPIEGEL ONLINE, Volker Kauder, 62, floor leader of the conservatives' parliamentary group, rejected granting concessions to Athens, saying that the country has already wasted a lot of time due to the new elections. "In the case of Greece, time can mean a lot of money," he said. "That's why I can't imagine that we could make changes in that regard."

"It would be appropriate if the new (Greek) government were to say: Yes, we will try to make up for lost time," Kauder said. The new government could, for example, try to speed up the pace of the privatization of state assets, he said.

Kauder implicitly criticized Westerwelle's suggestion that the bailout terms could be relaxed. The German government shouldn't "send any signal" that the agreed-upon austerity measures can be changed, he said.

The conservative politician also emphasized that all countries that have received EU-led bailouts should be treated the same. "The Irish and Portuguese can't come and demand to renegotiate (the bailout deals) as well," he said. "Agreements have to be adhered to."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Damn Cool Pics

Whale Rainbow [Video]
Instaglasses: Filters for Real Life
How To Get More Likes, Comments & Shares on Facebook [Infographic]

Whale Rainbow [Video]

Posted: 22 Jun 2012 10:20 PM PDT

A whale watcher caught the phenomenon on tape during a cruise in Nova Scotia. Video of the miraculous refraction has now gone viral.

"It looks as if the whale is blowing a rainbow out of its blowhole," rsean9000 posted along with the video on YouTube.

Instaglasses: Filters for Real Life

Posted: 22 Jun 2012 10:03 PM PDT

As all of you know Instagram is the photo sharing app with fun filters. German designer, Markus Gerke has come up with the idea of Instagram filters built into a pair of sunglasses. Since the proposal, many people have started working on the project, and we are eagerly waiting for these Instagramic sunglasses known as Instaglasses.

How To Get More Likes, Comments & Shares on Facebook [Infographic]

Posted: 22 Jun 2012 09:28 PM PDT

Social media data expert Dan Zarrella who tracked and analyzed more than 1.3 million posts from the 10,000 most-Liked Facebook pages has released details about which posts get the most likes, shares and comments on Facebook, from post type and length to the best time of day to add updates.

Photos bring in the highest number of engagement across the board, followed by text and video, according to Zarrella. News links bring in the least numbers of likes, shares and comments.

Click on Image to Enlarge.

Weekly Address: Congress Must Act on Transportation Bill and Student Loans

Your Daily Snapshot for
Saturday, June 23, 2012

Weekly Address: Congress Must Act on Transportation Bill and Student Loans

President Obama discusses the urgent need for Congress to act now on two common sense measures to help middle class families: preventing interest rates on federal student loans from going up and putting hundreds of thousands of construction workers back on the job.

Watch the President's weekly address:

President Barack Obama tapes the weekly address in the East Room of the White House, June 21, 2012. (Official White House Photo by Sonya N. Hebert)

Weekly Wrap Up

Your quick look at this week on Whitehouse.gov:

G-20 Summit: Earlier this week, the President attended the G-20 Summit in Los Cabos, Mexico. There, he and other world leaders met to discuss the world's economy and how best to promote growth, and a large focus of the conference was spent on the Euro Zone economic crisis. Outside the official sessions of the Summit, the President also met in bilateral meetings with world meetings, including President Putin of Russia.

Down to the Wire: Unless Congress takes action before July 1, interest rates on federal student loans are set to double. This will mean an additional $1,000 of student loan debt for more than 7 million students, which is why the President has called on Congress once again to step up in favor of America's young people and the economy overall. The President also asked Americans to help urge Congress to act, asking people to use the hashtag #DontDoubleMyRate to show their support.

40 Years of Fairness: On Wednesday, the White House Council on Women and Girls hosted an event celebrating the 40th anniversary of Title IX. Title IX bans sexual discrimination in all sports programs at schools around the country. The Obama administration is a firm believer in equality and that's why a new set of policies has been announced to increase the enforcement of full gender equity under Title IX.

1 Is 2 Many: This week the White House teamed up with professional athletes and other male role models to deliver the message that dating violence is unacceptable. Take a look at the video that features David Beckham, Jeremy Lin, Eli Manning, Evan Longoria and Jimmy Rollins (among others) alongside President Obama and Vice President Biden

This week we are proud to present the first West Wing Week video produced in Spanish, available here.

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What kind of content will work for your site?

What kind of content will work for your site?

Posted: 22 Jun 2012 08:06 AM PDT

News stories, blog posts, dedicated product pages… Any SEO agency will tell you that you need compelling content on your site to boost your rankings.

But if you think your website already says everything you need it to then you might be a bit unsure about where you can add content, and how it will add value. Here's a rundown of some of the main options so you can see which will work best for you:

Landing pages

Landing pages have been around since the very first days of search engine optimisation (SEO). At their most basic, they simply consist of a description of a particular product or service, using the relevant keywords in prominent places.

With significant research done by conversion rate optimisers (CROs), including test creation, design, and understanding buying psychology, we know that there is significant return on investment in allocating resources in developing fresh landing pages.

Many website owners allocate a significant chunk of their budget to online advertising which help drive traffic, but with little or no consideration as to where traffic is directed. Therefore, it is imperative that website owners allocate resources in developing the most effective landing pages, which get visitors to take desired actions once they've found your site. Also, it helps keep your website content fresh if you regularly update product listings and prices.

Websites that make their revenue purely from advertising don’t really have landing pages in the traditional sense. This is particularly true for news and entertainment websites, where static content doesn't play a huge part in winning them traffic.

Blog posts

An increasing number of sites are growing their blogs rather than their static landing pages, and there are several good reasons for this.

Firstly, old blog posts (usually) don’t just vanish – your archive remains in place, growing with time, until your site contains potentially tens of thousands of search-visible pages.

Secondly, regularly updating your website shows Google (and your human visitors too) that your site is fresh and active – helping your search rankings and your appeal to readers.

Thirdly, blog posts are a little chattier than static content, giving you more freedom to relax the rules of grammar and tone of voice, which can help showcase a brand's personality and build loyalty.

In addition to the above three reasons, with Google's introduction of the authorship markup tag, blog authors are rewarded with their Google plus profile image being displayed alongside the search listing on SERPs, helping improve CTRs.

News updates

If you’re in a ‘professional’ discipline, and a relaxed, chatty blog wouldn’t be a good fit for your business, news updates can be a good alternative.

These give you the opportunity to comment on events and industry developments, and demonstrate that you have your finger on the pulse of your sector.

Like blog posts, they can be archived so that your site grows over time and they can have key phrases inserted into them to help with rankings.

Importantly, they can be promoted in several different ways – as part of an email newsletter, via RSS, as a headlines list on your homepage, or via Twitter and other social networks.

Multimedia content

Multimedia content is most often found in news and entertainment websites, but a welcome video or product demonstration is a fairly common feature of many ecommerce websites too.

Be careful about relying too heavily on multimedia – text is still the most search-visible format for your information to be in. Make sure each page has plain-text words for the search robots to index. A transcript can be a good way to do this, as well as being more accessible to visitors with hearing impairments.

Provided that you keep search visibility in mind, multimedia can add a new dimension to a website, giving a sense of interactivity and livening up an otherwise static page.

Just don’t force content upon your readers – unless it’s clearly the reason why they’re visiting the page, it may be wise to make sure that videos and audio clips do not auto-start.

Some people really dislike a noisy or fast-moving media clip that they did not expect to see, but it depends on your audience. Test pages to see what is most effective at keeping potential customers on the page.

Be innovative

Once your core website is up and running, don’t be afraid to try new things. Big brands often launch microsites which take nothing away from the main site, but offer information in a new or fresh way.

You can adopt a much more graphics-centric approach to microsites than you would for a main website or homepage, promote them to your social networking and email subscribers if their search visibility is not great, and generally use them as a testing ground for new ideas.

Remember, blog posts, tweets, and app-based gaming were all just somebody’s idea at some point; it’s not impossible that you might discover the Next Big Thing in internet content or gain viral support for a campaign.

Even if you don't, customers can appreciate a brand that takes the time to be playful and try new ideas.