Central Perk

sâmbătă, 5 martie 2011

Your Weekly Address: Cutting Waste, Investing in the Future

Your Daily Snapshot for
Saturday, March 5, 2011

Your Weekly Address: Cutting Waste, Investing in the Future

The President calls for Democrats and Republicans to come together on a budget that cuts wasteful spending without sacrificing job-creating investments in education, innovation, and infrastructure.

Watch the video.

Weekly Wrap Up

On Education: This month, the President will be focused on his plan to improve American education through investments that focus on responsibility, reform, and results:

President Obama travels to Miami to visit a high school that has been an example of how federal support has turned around struggling schools.
John Legend encourages students to apply for the Race to the Top Commencement Challenge. One high school will be selected to have President Obama speak at its commencement this spring. The deadline to apply is March 11.
Oh, and Nick Jonas did too.
The First Lady and Secretary of Education Arne Duncan read to children at the Library of Congress as part of "Read Across America Day," and in celebration of Dr. Seuss' 107th birthday.

The Motown Sound: Continuing a favorite White House tradition, the President and First Lady welcome renowned musical artists to the White House to celebrate music that’s at the heart of the American story.

Giving States the Power to Innovate: In his address to the meeting of the National Governors' Association, President Obama called for giving states the flexibility to find the best ways to meet standards of care outlined in the Affordable Care Act. Secretary of Health and Human Services Kathleen Sebelius explained what that flexibility means for states across the country.

West Wing Week Video: "Green Eggs and Governors"

Focusing on Military Families: The First Lady and Dr. Biden speak to the National Governors' Association, promoting their continued efforts to serve our Nation's military families.

More Signs of Economic Growth: Austan Goolsbee, chairman of the Council of Economic Advisers, talks about the positive news from the February jobs report. Labor Secretary Hilda Solis shares photos from her trip to auto manufacturers in the Midwest, and Secretary of Transportation Ray LaHood posts a video from his trip to a clean-energy manufacturing plant in South Carolina.

Violence in Libya: President Obama discusses ongoing turmoil in Libya with UN Secretary General Ban Ki-Moon, and also addresses it during his joint press conference with Mexican President Felipe Calderon.

Innovation at ARPA-E: The Department of Energy hosts the ARPA-E Energy Innovation Summit, where scientists and business leaders came together to share ideas for developing the next generation of American energy technology.

Black History Month 2011: As February came to a close, WhiteHouse.gov wrapped up its Celebrating Black History Month series, and looked back on the events at the White House through the month.

Developing Rural Broadband: The USDA is using Recovery Act funds and working with Native Americans to bring high-speed broadband to rural America.

Remembering the Last Doughboy: Veterans Affairs commemorates the life of Frank Buckles, the last suriviving American World War One veteran, who died this week at 110.

Keeping Homes Affordable: The Department of the Treasury posts information about how terminating foreclosure prevention aid would seriously damage the still-fragile housing market.

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SEOptimise

Keyword Density – Finally Useful for SEOs and Penguins

Posted: 04 Mar 2011 06:29 AM PST

As it's a Friday afternoon and we're all winding down for the weekend, I thought it would be an appropriate time to reveal a lighthearted tale involving keyword density, penguins, and Sambuca that I recently admitted to the SEOptimise team – something terribly shameful…

A story of why keyword density is in fact not dead.

A few friends and I were playing the infamous 'Happy Feet drinking game' whereby each player is assigned a frequently mentioned word that whenever they hear whilst watching the film Happy Feet has to drink a shot. I was assigned the word 'fish' (which I wrongly assumed wouldn't be mentioned very much).

It was at that point that my geek instincts kicked in and I went to Google to download a script of the movie. I subsequently inputted it into a keyword density checker to identify the most frequently used keywords in the film so that I could strategically assign the most frequently mentioned words to the friends who I felt deserved the most Sambuca!

So there you are, whoever said keyword density is useless? It's only useless when optimising websites :-)

How to kick start your Friday with some Keyword Density Drinking Games:

1. Pick a film with characters renowned for frequently repeating specific words. My recommendations: Lord of the Rings, Star Wars, Gordon Ramsay's 'The F Word'.

2. Download the subtitles for the film & input the text into a KW density checker.

3. Assign the most frequently mentioned words to those who deserve the most revenge.

4. Play! Enjoy.

Seth's Blog : Important/Measured

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

Important/Measured

Is something important because you measure it, or is it measured because it's important?

Does our new ability to see things with web data make the previously overlooked now visible, or are we giving weight to things merely because we''ve measured them?

• Email to a friend •

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vineri, 4 martie 2011

Mish's Global Economic Trend Analysis

Ben Bernanke is a Fiscal Moron
Record Gasoline Prices in Europe, Over $8 in UK, Italy, Germany; California Faces $4; Reflections on "Inflation"
BLS Jobs Report: Nonfarm Payroll +192,000, Unemployment Rate 8.9%; Reflections on the Jobs Report

Ben Bernanke is a Fiscal Moron

Posted: 04 Mar 2011 04:48 PM PST

Fed chairman Ben Bernanke likes to bitch about Congressional interference in Fed monetary policy yet Bernanke repeatedly tells Congress what to do regarding fiscal policy.

I think neither should tell the other what to do because the Fed should not exist at all.

With that remark out of the way, please consider Republicans, Fed Clash on Job Impact of Spending Cuts

"We need to address the deficit; that's very important," Bernanke told the House Financial Services Committee in a March 2 hearing. "But I think it would be most effective if we did that over a timeframe of 5 or 10 years and not try to do everything immediately."

The Fed chief said the House Republican plan to slash $61 billion from 2011 government spending could also subtract "a couple of tenths" of a percentage point from U.S. economic growth over several years.

An independent analysis released by Goldman Sachs last month found that the Republican proposal would reduce economic growth by 1.5 to 2 percentage points during the second and third quarters of this year.

Bernanke attributed the lower Federal Reserve estimates to some "differences in assumptions."

"We've tried to do a realistic analysis of what those cuts would do over a couple of years," he said.

Boehner called Zandi the "pet economist" of House Democratic Leader Nancy Pelosi of California, citing his support for an economic-stimulus bill that the White House once estimated would keep unemployment below 8 percent. Boehner cited a statement signed by 150 economists sent to President Barack Obama calling for spending cuts.

Stanford University economist John Taylor, a Treasury undersecretary under former President George W. Bush, says both Zandi and Goldman Sachs relied on a flawed methodology. He wrote that he found "no convincing evidence" that the budget-cutting bill would reduce employment or economic growth.

We have a freaking $1.4 trillion deficit and Bernanke is bitching about a Congress addressing mere $61 billion of it. Bernanke warns against attempts "to do everything immediately" hoping to spread that $61 billion out over a decade.

Bear in mind that $61 billion is a mere 4.36% of what needs to happen. Is Ben Bernanke a fiscal moron or what?

As an added bonus for those who may have missed it, please consider Hello Ben Bernanke, Meet "Stephanie"

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

Record Gasoline Prices in Europe, Over $8 in UK, Italy, Germany; California Faces $4; Reflections on "Inflation"

Posted: 04 Mar 2011 11:58 AM PST

Bloomberg reports Record Gasoline Grips Europe, California Faces $4 a Gallon.

Gasoline prices are setting records across Europe and exceeding $4 a gallon in California as the rise in crude oil caused by the conflict in Libya punishes companies and consumers.

Households are cutting back on travel, cinema visits and groceries in the U.K., where prices jumped to 130.68 pence a liter ($8.06 a gallon) yesterday, according to research from the Automobile Association, Britain's largest motoring organization. Prices set records in the Netherlands and Italy today. The current average U.S. gasoline price is near a two-year high at $3.81 a gallon, according to the AAA website.

The impact on consumer prices may push European Central Bank President Jean-Claude Trichet to raise interest rates as soon as next month to discourage higher wages and head off the threat of an inflationary spiral.

"Rising fuel costs are negative because they push inflation up and slow the economy down," said Philip Shaw, chief economist at Investec Securities in London. "It is essentially energy costs that have resulted in ECB putting its finger on the interest rate trigger."

In Italy, gasoline prices reached 1.544 euros a liter and diesel climbed to 1.438 euros a liter ($8.17 a gallon), according to a chart published by web energy daily Quotidiano Energia. Gasoline prices in the Netherlands reached a record 1.697 euro a liter from 1.692 euro in June 2008, according to Paul van Selms, head of UnitedConsumers, a lobby group for consumers in the Netherlands.

The average price for super-grade gasoline in Germany, Europe's largest economy, was 1.55 euros per liter today, close to the 1.58 euro record from 2008.

Reflections on Inflation

I do not know if Trichet hikes short-term interest rates soon or not. It is conceivable it is the correct move.

However, the idea that something needs to be done in the face of a supply shock on top of overheating in China and peak oil constraints is ridiculous. Supply shocks are anything BUT inflationary.

If Europe or the US was on a rampage with credit expanding wildly it would be a different matter. However, credit expansion is not happening in the US or Europe.

Dumb things happen (in both directions) when central-planning jackasses view inflation in terms of prices rather than money supply and credit, then take (or fail to take) action because of prices.

For example, Greenspan ignited an enormous housing bubble by failure to consider reckless credit expansion. Instead, Greenspan foolishly focused on the CPI which suggested low inflation.

Such policies have central bankers forever-chasing their tails.

Where Should Rates Be?

Nothing above implies agreement with central bank rates set near zero.

The free market, not a bunch of bureaucrats, should set interest rates. None of the central bankers saw this crisis coming, so how the hell do they think they know what interest rates should be?

I don't know where they should be and they sure don't know either. At least one of us is smart enough to admit it.

For more on this line of thinking, please see Goldman's Blood-Sucking Leeches Model, Money Multipliers, Macroeconomic Dark Ages, the Taylor Rule, and Nonsense from Trichet.

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

BLS Jobs Report: Nonfarm Payroll +192,000, Unemployment Rate 8.9%; Reflections on the Jobs Report

Posted: 04 Mar 2011 08:54 AM PST

A Few Words Regarding the Jobs Report

This was a solid jobs report, not as measured by the typical recovery, but one of the better reports we have seen for years. Moreover, 30,000 government jobs bit the dust. The higher that number, the better off we will all be. +212,000 private jobs is a good number. However, I suspect this may be as good as it gets for a while.

At the current pace, the unemployment number would ordinarily drop, but not fast. However, many of those millions who dropped out of the workforce could start looking if they think jobs may be out there. Should that happen, the unemployment rate could rise, even if the economy adds jobs at this pace. It is very questionable if this pace of jobs keeps up. I rather doubt it in fact.

Bear in mind that the unemployment rate varies in accordance with the "household survey" not the reported headline jobs number.

In the last year, the civilian population rose by 1,853,000. Yet the labor force dropped by 312,000. Those not in the labor force rose by 2,165,000.

In January alone, a whopping 319,000 people dropped out of the workforce. In February (this months' report) another 87,000 people dropped out of the labor force.

Were it not for people dropping out of the labor force, the unemployment rate would be over 11%.

February 2011 Jobs Report

Please consider the Bureau of Labor Statistics (BLS) February 2011 Employment Report.

Nonfarm payroll employment increased by 192,000 in February, and the unemployment rate was little changed at 8.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in manufacturing, construction, professional and business services, health care, and transportation and
warehousing.

Unemployment Rate - Seasonally Adjusted

Bear in mind, were it not for millions of people allegedly dropping out of the labor force over the last year, the unemployment rate would be over 11% right now.

Nonfarm Payroll Employment - Seasonally Adjusted Changes

Nonfarm Payroll Employment - Seasonally Adjusted Total

Establishment Data

Employment in the private sector rose by 222,000 in February. In the past 12 months, the private sector has added 1.5 million jobs – an average of 127,000 per month.

Statistically, 127,000 jobs a month is enough to keep the unemployment rate flat.

Index of Aggregate Weekly Hours

During February, the average workweek for all employees on private nonfarm payrolls was unchanged at 34.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.1 hour to 33.5 hours. The index of aggregate weekly hours for all employees rose by 0.2 percent over the month. Since reaching a low point in October 2009, the index has increased by 2.4 percent.

Average Hourly Earnings vs. CPI

Average hourly earnings of all employees in the private sector were changed little in February, following a 9-cent gain in January. Hourly earnings are up 1.7 percent over the year. Between January 2010 and January 2011, the consumer price index for all urban consumers (CPI-U) increased by 1.7 percent.

The big question here is how those wages are being distributed. I think we know the answer to that.

BLS Birth-Death Model Black Box

The big news in the BLS Birth/Death Model is the BLS has moved to quarterly rather than annual adjustments.

Effective with the release of January 2011 data on February 4, 2011, the establishment survey will begin estimating net business birth/death adjustment factors on a quarterly basis, replacing the current practice of estimating the factors annually. This will allow the establishment survey to incorporate information from the Quarterly Census of Employment and Wages into the birth/death adjustment factors as soon as it becomes available and thereby improve the factors.

For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey

In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.

It is possible that the BLS model is now back in sync with the real world. Moreover, quarterly rather than annual adjustments can only help the process.

The Birth-Death numbers are not seasonally adjusted while the reported headline number is. In the black box the BLS combines the two coming out with a total.

The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.

Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Birth-Death Number Revisions

Inquiring minds note enormous backward revisions in Birth-Death reporting.

Birth Death Model (as reported in January)

Birth Death Model Revisions 2010 (as reported February)

Is this new model going to reflect reality going forward?

That's hard to say, but things were so screwed up before that it is unlikely to be any worse. One encouraging sign is several negative numbers in the recent chart. January would have been negative too, had they shown it. Historically there were only 2 negative number every year, January and July. That anomaly broke November of 2010.

Birth Death Model Revisions 2011 (March)

Do NOT subtract that 112,000 from the headline number. That is statistically invalid.

Household Data

In the last year, the civilian population rose by 1,853,000. Yet the labor force dropped by 312,000. Those not in the labor force rose by 2,165,000.

In January alone, a whopping 319,000 people dropped out of the workforce. In February (this months' report) another 87,000 people dropped out of the labor force.

Were it not for people dropping out of the labor force, the unemployment rate would be over 11%.

Households Stats

The number of unemployed persons (13.7 million) and the unemployment rate (8.9 percent) changed little in February. The labor force was about unchanged over the month. The jobless rate was down by 0.9 percentage point since November 2010.
The number of long-term unemployed (those jobless for 27 weeks or more) was 6.0 million and accounted for 43.9 percent of the unemployed.
Both the civilian labor force participation rate, at 64.2 percent, and the employment-population ratio, at 58.4 percent, were unchanged in February.
The number of persons employed part time for economic reasons was essentially unchanged at 8.3 million in February. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
In February, 2.7 million persons were marginally attached to the labor force, up from 2.5 million a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the
survey.

Table A-8 Part Time Status

click on chart for sharper image

There are now 8,340,000 workers whose hours may rise before those companies start hiring more workers.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

click on chart for sharper image

Grim Statistics

Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is hard to discuss the numbers.

The official unemployment rate is 8.9%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

While the "official" unemployment rate is an unacceptable 8.9%, U-6 is much higher at 15.9%. Moreover, both the official rate and U-6 would be much higher were it not for huge numbers of people dropping out of the workforce.

Things are much worse than the reported numbers would have you believe.

That said, this was a solid jobs report, not as measured by the typical recovery, but one of the better reports we have seen for years. +212,000 private jobs is a good number.

At the current pace, the unemployment number would ordinarily drop, but not fast. However, many of those millions who dropped out of the workforce could start looking if they think jobs may be out there. Should that happen, the unemployment rate could rise, even if the economy adds jobs at this pace. It is very questionable if this pace of jobs keeps up. I rather doubt it in fact.

Looking ahead I strongly doubt the reports will be this good over the course of a year.

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

sâmbătă, 5 martie 2011