luni, 20 septembrie 2010

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


Location-Based Social Networking for Events & Conferences - An Interview with Foursquare

Posted: 19 Sep 2010 01:40 PM PDT

Posted by Sam Crocker

Hi there folks!

Today we are going to take a look into Foursquare and, more specifically, we're going to check out how to use it for events and conferences and uncover some of the answers to the questions that aren't as easily avilable through the Foursquare site.
 

Quick Background on Foursquare

So, we're not going to waste too much time on an introduction to Foursquare, because hopefully you've already been focussing on ways to incorporate this into your marketing plan. The implications for any business with a storefront or actual address are fairly straightforward, though the implications for online brands are a bit more difficult to tap into.

It's Not just for Stalking! (Image via: Geek and Poke)

I had originally prepared a post dedicated to Foursquare and its impact on local and small businesses, however it seems SEO Doctor was one step ahead of me and produced this impressive guide before I was able to get my post out of the drafts folder here on SEOmoz. His post is extremely comprehensive though, so be sure to check it out!

I've been hearing loads of people talking about how "they don't get it" in reference to Foursquare and it's worth pointing out how many people were having trouble understanding Twitter as well. I would definitely recommend familiarising yourself with Foursquare now - especially if you work with any local companies.

The growth of Foursquare, Gowalla & Facebook Places has been extremely convincing, and the limited number of people making use of the "Specials" available by claiming your local business (for FREE) with Foursquare seems like an obvious missed opportunity - ignore Location-Based social media at your own peril.
 

Using Foursquare for Conferences and Events

At any rate, as you know, Distilled and SEOmoz have been busy over the last several months preparing for the #mozniar and the PRO seminar in London ( for which I would be remiss not to quickly let you know that tickets are still avaialble). In this preparation we have been looking heavily into ways to spice up the event.

Given my mild obsession with all ways to earn seemingly meaningless points and my new found hobby of Foursquare Roulette (jump off a tube station and randomly try whatever looks entertaining in the area) I proposed we look into Foursquare and what sort of things we might be able to do with it for the conference.

If any of you are as nerdy as I am, then I'm sure you will have noticed how some of the biggest brands as well as some of the largest events in the tech and music industries have been able to get their own Badges you can unlock by checking-in at various locations.

 

Screen Cap from Tony Felice

The first thing you'll notice is that these are not small affairs and there are potentially obvious reasons why these clients were potentially able to strike a deal to get a badge. You might also notice - if you've looked into this previously - that it can be fairly difficult to find any information about how these deals are struck, and it can be equally difficult to get in touch with the folks at Foursquare about striking up a deal.
 

Getting to the Source - An Interview with Eric F.

After enough prodding and digging through my own social networks for any potential "in" I consider myself very fortunate to have been able to get in touch with Eric, who happens to be the Director of Client Services - and was incredibly helpful and happy to speak to us.

Rather than be selfish with the responses I thought I would provide some of the answers he provided to my most burning questions about it all. Here are the responses I was able to dig up, I'll include a brief recap of the implications afterwards:

What would be your top tip(s) for making the most of Foursquare for conferences and Events?

EF: Setting up goals ahead of time is the best way to plan for a conference.  You may have a single-day event and encourage people to check-in early, or you may have an event spread out over a few days or weeks and have people check-in early, in the middle, and at the end.  We look at foursquare as a flexible platform, depending on event planners' needs.  Some folks have found success with contests or tips to visit different booths.  Others use foursquare as a way for attendees to connect and to see who else is at their event. 

One recent conference used foursquare to show which events had the most people attendants, and then gave the speakers a chance to connect to their audience via Twitter after the fact.

There is a very robust API available as well that give event organizers the ability to show live check-ins and other interesting data about the event in real time.

In the past we've have seen badges from events and conferences (e.g. CES, Bonnaroo, SXSW, etc.) in the past- how does that work? Is that a service that people pay for? Is there generally a threshold about how "big" or "cool" an event is? Or is it more just about getting in touch?

EF: We're still in the early days of this, and have been testing different approaches around partner and event-related badges. Sometimes, we choose a venue because of a cool use of the platform; other times, it's to reach a new audience

In the future we hope to roll out a more structured plan for event planners and conferences - but for now we are inspired by the ideas and implementations we have seen from these events.

Is this a market Foursquare has considered? There seem to be loads of conferences and events and it seems like partnerships (with badges and such) could be a real opportunity.

EF: We are concentrating on the best user experience possible.  If this comes at events and conferences, we are doing our job right.

What things can/should any event organiser do with Foursquare in the short-term? Obviously there is more to be done for a massive festival or conference, but what about one-off events or smaller time affairs?

EF: We look at our loyalty offers (in the form of special offers and mayor offers) as a big win for anyone with a physical location.  These reward people that go somewhere for the first time, or are loyal customers.  This also lets merchants track success with redemptions and foot traffic.

We know that business accounts are free, but how do your partnerships work with larger brands? Is there a general price range on these? How much does it cost for a brand to get their own badge? What if they want more than one?

 EF: All business partnerships with foursquare are totally free.  This includes someone with a single location such as a bar or restaurant, to a national retailer with 10,000 locations.  To be 100% clear, we offer the ability to see analytics, run specials, and interact with new and loyal customers totally right now.



Badge programs have either a monthly cost associated with them that is directly tied to promotional consideration and reach, as well as the longevity of the campaign.

Who should large brands try to get in touch with if they want to team up with Foursquare?

EF: We have a dedicated support area for businesses: http://support.foursquare.com/forums/177952-foursquare-for-business

This ensures that the proper person will be able to answer the proper question whether it comes in from a local merchant, large chain, agency representing a brand, event question, or anything else that may arise.

What about smaller brands?

EF: Same as above - funneling requests through one system ensure that someone on the team gets back to people quickly, correctly, and promptly.

Finally, any previews/things in the works for business/marketing uses of Foursquare you're willing to share?

EF: Knowing where events are happening, or where people are gathered, is a great metric of discovery. We're all about letting folks know when something is happening, and most importantly where it is happening.  We are looking at ways to empower users and businesses by giving them this knowledge at their fingertips.
 

Making Sense of it All

No surprise that the Foursquare team are keeping some of their cards fairly close to their chests, but there's definitely some key takeaways from this.

1. You don't have to be a global brand to get the hook-up. It seems pretty clear that any creative uses of the API are a definite way to grab attention from the folks at Foursquare, and is potentially a clever way to get your own badge.

2. There is no doubt that Foursquare and other location-based social media platforms are growing and now is the time to make sure that if you work with any local businesses: get on the ball, get your venue registered, and go to town. I would not be the least bit surprised if in some fashion or another this sort of data (rankings, tips, check-ins, etc) becomes quite valuable to the team over at Google when it comes to looking at local ranking factors.

3. If you decide to make location-based social networking part of your plan - let people know! There's no sense building the most incredible API to date to be used at your event, venue, etc. and not letting people know about it.

4. Even if you can't get your event/conference its own badge there is still plenty you can do to engage Foursquare users.

Examples for Short Conferences

  • Be sure to set up your venue(s) as locations
  • Create multiple venues for the same location (e.g. "Conference Room 1" "Bar" "Exhibition Hall" etc)
  • Rewards for check-ins (forget about Mayor's - focus on the short term)
  • Make use of Existing Apps. Check out ScreenScape, LocaModa, 2Know and if you're in London tell people to try out FourTap
  • Create a new App
  • Encourage early check-ins and sharing via Twitter
  • Splash some cash and get your event a badge


Examples for Longer Conferences

  • As above
  • Have incentives for multiple check-ins
  • Encourage check-ins from multiple venues
  • Offer a prize for the mayor of the conference

Where exactly we end up along the spectrum of "things you can do" for London PRO for this year is still a work in progress, but you can bet I'll be championing for meaningless points and our own spin on the thing - and you can be sure we'll let you know what we come up with.

A very big thank you to Eric F. and the Foursquare team for taking the time to answer our questions!

Please let us know your thoughts below and any successes/hiccups you all have had using location-based social networking in the comments section below.


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Daily Snapshot: Town Hall Discussion on Jobs

The White House Your Daily Snapshot for
Monday, September 20, 2010
 

Photo of the Day

Photo of the Day

President Barack Obama fist bumps Vice President Joe Biden, with Senior Advisor Valerie Jarrett looking on, before a meeting in the Oval Office, Sept. 16, 2010. (Official White House Photo by Pete Souza)

Today's Schedule

In the morning, the President will receive the Presidential Daily Briefing then meet with senior advisors in the Oval Office. In the afternoon, the President will participate in a live CNBC town hall discussion on jobs and the economy.

All times are Eastern Daylight Time

9:30 AM: The Vice President delivers remarks at the U.S.-Japan Council’s Annual Conference WhiteHouse.gov/live

10:00 AM: The President receives the Presidential Daily Briefing

10:30 AM: The President meets with senior advisors

12:00 PM: The President participates in CNBC town hall discussion on jobs WhiteHouse.gov/live

12:30 PM: The Vice President attends an event for Governor Ted Strickland

3:00 PM: The President departs the White House

3:20 PM: The President departs Andrews Air Force Base

4:05 PM: The President arrives in Philadelphia, Pennsylvania

5:10 PM: The President delivers remarks at a finance reception for Congressman Sestak

5:45 PM: The Vice President delivers remarks at a rally for Governor Ted Strickland

6:05 PM: The President delivers remarks at a dinner reception for Congressman Sestak

7:20 PM: The President delivers remarks at a DNC dinner reception

8:15 PM: The President departs Philadelphia, Pennsylvania en route Andrews Air Force Base

8:55 PM: The President arrives at Andrews Air Force Base

9:05 PM: The President arrives at the White House

WhiteHouse.gov/live  Indicates Events that will be livestreamed on WhiteHouse.gov/live.

In Case You Missed It

Here are some of the top stories from the White House blog

No Excuse for Holding Middle Class Tax Cuts Hostage
Deputy Communications Director Jen Psaki debunks the House Republican's bogus attempt to hide behind small businesses as they pledge to block middle class tax cuts.

Hiring More Veterans to Keep Serving America
John Berry, Director of the U.S. Office of Personnel Management, discusses the Administration's commitment to keep veterans engaged in public service.

Weekly Address: The Republican Corporate Power Grab
The President explains how the most dire warnings about the Citizens United case have been proven valid.

Get Updates

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Seth's Blog : Questions or answers

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Questions or answers

You can add value in two ways:

  • You can know the answers.
  • You can offer the questions.

Relentlessly asking the right questions is a long term career, mostly because no one ever knows the right answer on a regular basis.

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duminică, 19 septembrie 2010

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Recently Introduced Actuarially Unsound Methods Hide Pension Mess in Illinois, Texas, Ohio; $3 Trillion Pension Deficit in Total

Posted: 19 Sep 2010 05:46 PM PDT

It's no secret that Illinois, New Jersey, and numerous other states have massively underfunded pension plans. The problem is far worse than it looks because of ridiculous assumptions like 8% or higher returns.

Moreover, states like Illinois, Texas, Rhode Island, and Ohio have gone one step further by recently adopting actuarially unsound methods specifically designed to disguise the mess.

The New York Times tackles the issue in The Illusion of Pension Savings
Earlier this year, Illinois said it had found a way to save billions of dollars. It would slash the pensions of workers it had not yet hired. The real-world savings would not materialize for decades, of course, but thanks to an actuarial trick, the state could start counting the savings this year and use it to help balance its budget.

Texas saved millions of dollars this year after raising its retirement age for future hires and barring them from counting unused sick leave in their pensions. More savings will appear in coming years. Rhode Island also raised its retirement age for future retirees last year, after being told it could save $90 million in the first year alone.

The technique is fairly innocuous in normal times, allowing governments to smooth out their labor costs over many years. But it becomes much riskier when pension funds have big shortfalls, when they need several decades to pay down their losses and when they are cutting benefits for future workers — precisely the conditions that exist today.

"In a plan that is not well funded, I wouldn't recommend it," said Norm Jones, chief actuary for Gabriel Roeder Smith & Company, an actuarial firm that helps Illinois and a number of other states that have adopted the method. He said the firm's actuaries informed officials of the risks and it was the officials' decision to use the technique.

Cuts for workers not yet hired do not save much money in the present — but that's where actuaries can work their magic. They capture the future savings for use today by assuming, in essence, that 100 percent of today's work force is already earning tomorrow's skimpier benefits. When used in actuarial calculations, that assumption has a powerful effect. It reduces the amount a government must put into its workers' pension fund every year.

"Responsible funding methods do not work this way," said Jeremy Gold, an independent actuary in New York who has been outspoken about the distortions built into pension numbers. He said the technique was much like the mortgages with very low teaser rates that proliferated during the housing bubble.

Dubious pension numbers in Illinois are not easily shrugged off after a warning shot fired by the Securities and Exchange Commission in August. The S.E.C. accused New Jersey of securities fraud, saying the state had manipulated its pension numbers to look like a better credit risk, while selling some $26 billion worth of bonds.
Problem is Now

The problem is now. The only way to have savings now is to reduce benefits now.

Three states have acted now, at least in small ways. Colorado, South Dakota, and Minnesota all recently reduced pension benefits. All three states face legal battles.

Please see Uncharted Territory" in WA; Calpers Bargains with Schwarzenegger; "Fairy-Tale Promises" in NJ; "No Choice" in NY; Lawsuits in CO, SD, MN over Pensions for a partial list of the big mess we are in, and what a few states are doing about it.

Illinois, along with Texas, Ohio, Rhode Island, New Jersey, Arkansas, and for that matter every state but those three, are at best dealing with the current problem by making small changes that will matter 30 years from now.

The math does not work.

$3 Trillion Deficit

According to a report by the American Enterprise Institute, public pensions are underfunded by more than $3 trillion. Please see Interactive Map of Public Pension Plans; How Badly Underfunded are the Plans in Your State? for details.

Changing rules for new pension plan participants is a small step in the right direction, but even getting rid of them entirely would not cure the $3 trillion deficit today.

As always, Illinois refuses to tackle this massive issue, instead seeking solutions to hide the severity of its problems. Texas, New York, California, and New Jersey are not much better.

Hopefully the SEC will have something more to say about never-ending foolishness to mask the huge and growing public pension problems. Whether that stirs any brain waves in Springfield, Illinois or any other state capitols is unfortunately another matter.

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


New IRS Reporting Rules to Hit eBay and Paypal; Government Crackdown on Trinket Sellers; Campaign Bribes and Tax Policy

Posted: 19 Sep 2010 03:06 PM PDT

Inquiring minds are interested in 2011 tax policy changes that will affect sellers of merchandise on eBay. John R writes ....
Starting next year Paypal will have to start reporting to the IRS. The selling limits will be 200 items or $20K before they report. This tax change was part of the '08 stimulus.

Reporting on 200 items annually is a real killer. That's a mere 17 items a month. We've already shut our eBay business down. It's simply not worth the effort.

Most eBay/auction site margins are extremely low. Thus, I wonder how many people will set up a business, keep the books, pay state and federal taxes, just to make a few bucks.

Thanks,
John
New Form 1099-K will debut for 2011 tax year

John is discussing eBay Sellers and Tax Changes
Tax time is upon us again, and this year the IRS has a bit of a warning for eBay sellers: next year you'll be on the hook for the taxes you owe.

Enter the 2011 Form 1099-K

Though sellers won't have to change their filing habits in 2010, a new Form 1099-K for 2011 promises to change income reporting by online sellers. The draft Form 1099-K for 2011 implements payments reporting to the IRS for PayPal and credit card merchants, much as already happens with forms W-2 or 1099-MISC for employees and independent contractors.

Starting in 2011, therefore, sellers will be expected to report gross payments via online or credit card payments that coincide with reported 1099-K amounts, then to make adjustments to account for expenses and cash equivalents, fees, chargebacks, refunds, and so on.

Details and Caveats

As a practical matter, if you're an eBay seller, this will affect you unless your gross sales are under $20,000 for the year or you receive fewer than 200 transactions. Reporting for small sellers at this level is not required.

Otherwise, if you exceed this volume, you'll be required to provide tax identification information (SSN or EIN number, for example) to payment processors like PayPal and will be expected by the IRS to account in your return for the amounts reported on your 1099-K form(s).

The 1099-K form wasn't introduced for the 2010 tax year, so as you do your taxes this year, enjoy the last year you'll report eBay income as a purely voluntary matter.
Government Crackdown on Trinket Sellers

How many hobbyists like John will just say the hell with it? If enough do, it could impact eBay's earnings. Imagine selling 20 items a month, earning a few hundred dollars a year or less in profit, and having to spend time and money keeping track of all the costs associated with the effort.

I am not trying to justify non-payment of taxes, I am simply looking at this from a practical standpoint.

Corporate Earnings Reported to Shareholders vs. Corporate Earnings Reported to the IRS

Just for grins, take a look at big corporation earnings reported to shareholders as compared to earnings as reported to the government. Which one is fiction and which one is real?

Is either legitimate? I doubt it, and in opposite directions. If I am correct, where should government be spending its time and energy?

Loopholes for the Little Guy vs. Loopholes for Large Corporations

Every conceivable loophole, no matter how small, is closed for the little guy, while major corporations have tax avoidance loopholes worth hundreds of billions of dollars.

For example, multinational corporations get to defer profits on taxes held overseas.

Adding insult to injury, there have been semi-regular "tax holidays" where corporations get to repatriate offshore accounts at low rates, to the major advantage of large corporations and huge disadvantage of small US based corporations.

Such policies encourage the flight of jobs and money from the US.

So, here we go again, cracking down on the little guy in attempts to pick up pennies to balance the budget, ignoring hundreds of billions of dollars over the years to large corporations.

Campaign Bribes and Tax Policy

Please note that I am in favor of lower corporate taxes as long as it is done fairly (right now multinationals and large corporations have huge advantages) and as long as we can afford it.

Instead, we have a system that rewards capital flight, rewards job flight, and punishes small businesses relative to larger corporations.

This mess happens because lobbyists for large corporations write our tax code, with politicians taking campaign contributions (bribes) in return for the favor.

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


Sunday Funnies 2010-09-19 Understanding Taxes

Posted: 19 Sep 2010 01:18 PM PDT



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


America's Lost Decade - Another One in Progress Now

Posted: 19 Sep 2010 12:48 AM PDT

The US used to point the finger at Japan's "Lost Decade" saying "It won't happen here." But it did. Median wages are nearly 5% lower in real terms than in 2000, the poverty rate is at a 15 year high, and the S&P 500 is about 20% lower than it was a decade ago.

Pleased consider the Wall Street Journal article Lost Decade for Family Income
The downturn that some have dubbed the "Great Recession" has trimmed the typical household's income significantly, new Census data show, following years of stagnant wage growth that made the past decade the worst for American families in at least half a century.

The bureau's annual snapshot of American living standards also found that the fraction of Americans living in poverty rose sharply to 14.3% from 13.2% in 2008—the highest since 1994. Some 43.6 million Americans were living below the official poverty threshold, but the measure doesn't fully capture the panoply of government antipoverty measures.

The inflation-adjusted income of the median household—smack in the middle of the populace—fell 4.8% between 2000 and 2009, even worse than the 1970s, when median income rose 1.9% despite high unemployment and inflation. Between 2007 and 2009, incomes fell 4.2%.
Lost Decade Lowlights

  • Americans living in poverty rose sharply to 14.3% from 13.2% in 2008
  • Poverty level is the highest since 1994
  • 43.6 million Americans are living below the official poverty threshold
  • Inflation-adjusted income of the median household fell 4.8% between 2000 and 2009
  • The number of 25-to-34-year-olds living with their parents rose 8.4% to 5.5 million in 2010 from 2008
  • Child poverty rose to 23.8% for kids under six in 2009, compared to 21.3% a year earlier

Census Bureau Charts

Here are a few select charts from Income, Poverty, and Health Insurance Coverage in
the United States: 2009
, Issued September 2010.

click on any chart for sharper image

Real Incomes 1967 to 2009



Real income for most groups is back to 1996 levels, a couple years higher for Asians.

Poverty Rates 1959 to 2009



In general, the chart shows the "War on Poverty" was a failure regardless of what political party was in office. The odd pair of Clinton and Nixon did the best, while Carter and George W. Bush the worst. Reagan and George H. Bush both had roller coasters ending about where they started, while Ford essentially experienced a flatline.

Since the start of the "War on Poverty" in 1964, President Johnson did the best in absolute terms. However, a war on poverty via a "Guns and Butter" policy including an insane War in Vietnam can hardly be considered a success.

Ironically, and as is typical of government programs, we made far better progress before the "War on Poverty" started. Since then, some 46 years later, we are just about where we started.

Descent Into Poverty

The Minneapolis Star Tribune reports on a Descent Into Poverty For Millions
Ramsey County human services planner Jim Anderson didn't need Thursday's census report to know that poverty has climbed sharply since the economy collapsed in 2008.

Last month he turned away 59 adults with 126 children seeking emergency shelter for families.

In a report that confirmed what experts like Anderson have sensed, the U.S. Census Bureau said Thursday that the nation's poverty rate shot to 14.3 percent last year, the highest in 16 years, and that one in five American children were living below the poverty line.

With one in seven Americans in poverty, demand for emergency financial help has skyrocketed. Advocates across the Twin Cities say that homeless shelters are overflowing, food shelves are strapped and church basements are filling up.
Nikkei Monthly Chart



For the Japanese Nikkei Index it has been two lost decades going on three.

S&P 500 Monthly Chart



For the S&P 500 it has been one lost decade going on two.

Given the structural problems in the US, there is no strong reason to think this decade will be much better than the last.

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


Seth's Blog : Are you responsible for what you market?

[You're getting this note because you subscribed to Seth Godin's blog.]

Are you responsible for what you market?

Let's assert that marketing works.

The money and time and effort we put into marketing goods and services actually works. It gets people to change their minds. It cajoles some people into buying and using and voting for things that they otherwise wouldn't have chosen. (If it doesn't work, save your money).

If it works, then, are you responsible for what happens after that?

If you market cigarettes aggressively, are you responsible for people dying of lung cancer?

I think there are two ways to go here:

1. You're not responsible. The marketer is like a lawyer representing the obviously guilty client. Everyone is entitled to a lawyer, and it's up to the jury to decide. The lawyer's job is to do the best she can, not to decide on the outcome. Market the best you can and let buyers take responsibility.

2. You are responsible. Your insight and effort cause people to change, and without you, that change would never happen.

I'm not sure there's a middle ground. Either we should applaud the folks lobbying on behalf of causes we despise, the pornographers selling products that degrade our society and the politicians spinning and lying to get elected (because all these people are doing is giving us a choice for which we're responsible) or we should take responsibility for stuff we sell.

My take: if you're not proud of it, don't sell it.

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sâmbătă, 18 septembrie 2010

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


One Sided Policies

Posted: 18 Sep 2010 04:17 PM PDT

Here is an email from Robert who is wondering about the Fed's ability to inflate, and the consequences if they try. Robert writes ...
Hello Mish,

Something is bothering me.

I thought there would be inflation after the US government and FED's actions, but there has been no inflation. I was wrong and you were right. I understand why and I also agree with the concepts of "peak credit" and "peak consumption," as far as the West goes at least.

But this seems to mean that the government can sell vast quantities (1 -2 trillion per year) of debt directly to the FED and to other parties with few observable short or intermediate term consequences.

If everyone agrees that the economies of the West will be weak for many years (for a host of reasons) and everyone also agrees that the dollar will be the reserve currency for years to come then:

1) What is the problem with running 1.5 trillion dollar deficits per year as far out as the eye can see? ( I am not being facetious.)

2) What is the problem with using federal-government borrowed money to bail out state and local governments to keep them from near implosion and the likely associated social problems?

If I am missing something, what is it?

Robert
Fed's Primary Mission Failed

Hello Robert

First off, congratulations for understanding the Fed's attempt at producing inflation has failed. Many do not see it that way, but it depends on the definition of inflation, and an understanding of what the Fed is really attempting to do.

The Fed's primary goal is not to get prices to rise (regardless of what they say), but rather to get banks lending, consumers spending, and businesses hiring. The Fed and Congress have failed on all three scores.

One Sided Policies

The Fed did not produce inflation, but there is a huge price to pay to pay for the Fed's One sided policies.

  • The rich get richer and the poor get poorer.
  • When the rich make a mistake they get bailed out.
  • When the poor make a mistake they get tossed to the dogs.

One needs to look at things not just from the recent "stabilization" of banks, but as an ongoing affair that has killed the middle class. Inflation was running rampant (in terms of credit in general and mortgage lending in particular). Wages did not keep up with prices and people plowed into assets as a means of savings.

The bailouts did not produce inflation, but the middle class bailed out the banks and got nothing in return but higher taxes, fewer services, and looking ahead, years of stagnation.

Moreover, the bondholders (such as China, Japan, and PIMCO) were made whole, while the homeowners are still mired in debt. Adding to the misery, banks lord it over on homeowners with total nonsense about the morality of walking away.

We will all suffer the consequences of these one sided moral-hazard policies for a decade to come. Quantitative easing, bailouts, extend-and-pretend schemes, and the alphabet soup of lending facilities all have very real consequences.

Near-term or intermediate-term (a few years out) inflation are not likely in the mix, but the distortions caused by the Fed and Congress will still affect us for a decade to come. Those distortions (caused by one-sided policies that favor banks and the wealthy) have killed and will continue to kill the middle class.

Robert, that is what you sensed, even if you could not put your finger on it.

Those who missed it should read Myths About "What's Economically Important" for a discussion about how and why credit, not prices is the key to the mess we are in.

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


Fort Worth, Texas Insolvent

Posted: 18 Sep 2010 02:24 AM PDT

The Star-Telegram reports Fort Worth pension bubble will blow up in our faces.
To understand why Fort Worth's pension system is such a financial disaster, look at one month's list of recent retirements.

In January, a 53-year-old policeman retired with an annual benefit of $90,312 for life, plus $256,000 in a lump sum payment. Another policeman, 57, got almost $74,000 annually, plus $313,000 in a lump sum. A 54-year-old firefighter got an annual pension of $90,130, plus $178,000 in cash.

With an average age of 50 for the police and 54 for the firemen in this group, they're likely to spend more years in retirement than they worked. An analysis for the City Council, presented in July, projected that the retiring policemen would collect $3.1 million in pension pay.

You don't have to be an actuary to know that this pension plan will end badly. The technical phrase is "trending toward insolvency."

Except that the city is on the hook for all the promised benefits. Taxpayers will have to pony up hefty contributions for years, even generations, and the city may have to cut services to afford it. The pension for city employees is currently projected to pay out $432 million more than it brings in over the next 30 years.

And that's the optimistic scenario. If investment returns average 7 percent, rather than the dreamy 8.5 percent in the assumptions, the unfunded liability could approach $1 billion.

The pension will require $60 million in city funds next year, and it's already a drag on a strapped city budget that has to close swimming pools and libraries and impose furloughs. Every year, the pension hole grows, because the benefits keep piling up.

"This is the elephant in the room," Mayor Mike Moncrief told the council in late July. "Not only for this budget, but for all the budgets to come."

The city manager appointed an ad hoc committee to look at the pension problem. It had a few businessmen, but most were employees -- a mix of police, fire and general workers. Imagine they had a little conflict?

They recommended that the city contribute an additional 6 percent of employee pay into the plan.
This is what it always comes down to: corrupt politicians pandering to public unions to win votes for reelection. Moreover, the result is always the same, greedy public unions wanting to raise taxes to pay for their exorbitant wages and benefits.

Fort Worth is now bankrupt. The only solution is to fire the city manager, declare bankruptcy, and resolve the issue of benefits in court.

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